H-1414.3
SUBSTITUTE HOUSE BILL 1494
State of Washington 67th Legislature 2021 Regular Session
By House Finance (originally sponsored by Representatives Harris-
Talley, Berg, Davis, Wicks, Peterson, Ortiz-Self, Orwall, Gregerson,
Chapman, Ramel, Simmons, Berry, Lekanoff, Frame, Hackney, Slatter,
Duerr, Kirby, Thai, Valdez, Ormsby, and Morgan)
READ FIRST TIME 04/01/21.
1 AN ACT Relating to providing housing safety, security, and
2 protection for Washington families by creating the antidisplacement
3 property tax exemption; amending RCW 84.48.010, 84.48.110, and
4 84.69.020; adding new sections to chapter 84.36 RCW; adding a new
5 section to chapter 84.52 RCW; creating new sections; and providing a
6 contingent effective date.
7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
8 NEW SECTION. Sec. 1. (1) The legislature finds that home and
9 housing security is more important to Washingtonians than ever
10 before. The COVID-19 pandemic prompted Washington governor Jay Inslee
11 to institute a stay-at-home order in March 2020, obliging millions of
12 nonessential employees to remain at home. Governor Inslee also
13 declared a statewide emergency in September 2020, when west coast
14 wildfires destroyed 181 homes in Washington state and made outdoor
15 air unbreathable for many weeks, leading millions to seek refuge
16 indoors and in their homes.
17 (2) The legislature further finds that: Homeownership is the main
18 mechanism for building wealth for individuals and families in the
19 middle class; owning a home is a way to create wealth and pass it on
20 generationally; and institutional class and racial biases limits
21 access to home ownership for many Washingtonians.
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 1 (3) The legislature further finds that middle class families have
2 disproportionate tax responsibility due, in part, to property tax
3 liability.
4 (4) The legislature further finds that our paramount duty to fund
5 common schools and increase equity in education relies on tax revenue
6 that is disproportionately reliant on taxes paid by middle class
7 property and homeowners, and that the inequities in our tax code
8 limits access and sustainability of homeownership for working
9 families, black, indigenous, and people of color homeowners, and
10 elders, who are those age 65 and older, due, in part, to this over
11 reliance on property taxes pricing them out of their homes.
12 (5) The legislature further finds that we are living through a
13 new civil rights moment, a moment of reflection and remedy of racial
14 disparity in policing, employment, schools, and housing, and
15 recognizes the link to racial and class bias in economic systems of
16 capitalism. In 2018, the national assessment of education and
17 progress found that Washington state ranked last among all fifty
18 states in closing the white-black achievement gap among eighth
19 graders between 2003 and 2017. In Washington state, black Americans
20 earn 76 cents on the dollar of their white counterparts.
21 (6) The legislature recognizes that working families, black,
22 indigenous, and people of color communities, and elders in Washington
23 state are subject to more displacement and gentrification than other
24 homeowners, and that racial justice cannot be realized without
25 economic justice and access to housing and land, and that the
26 enforcement of property tax laws has a socioeconomic and racial
27 disparity impact generationally.
28 (7) The legislature further finds a loss of homeownership for
29 working families has been extraordinary, particularly homeownership
30 rates in black, indigenous, and people of color communities,
31 including in King county, which has the largest concentration of
32 black families in the state. Black family homeownership in King
33 county since 1970, when the rate of black homeownership was at 49
34 percent, versus 64.2 percent for white families, has fallen by 2015
35 to 28 percent versus 63 percent for white families, as reported in
36 the Seattle Times.
37 (8) The legislature further finds that working families, black,
38 indigenous, and people of color families, and elders experience more
39 home foreclosure and forfeiture than other homeowners in Washington
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 1 state, and that many home foreclosures are due to owing back property
2 taxes.
3 (9) The legislature further finds that many Washingtonians are
4 vulnerable to foreclosure by mortgage holders and other secured
5 creditors, despite the homestead exemption limited in bankruptcy
6 statute, RCW 6.13.030, which is a tool to protect the head of
7 household from having their homes confiscated and sold to satisfy
8 debts from unsecured creditors.
9 (10) Therefore, it is the intent of the legislature to prevent
10 more loss of real property and the displacement of working families,
11 black, indigenous, and people of color communities, and elders. By
12 exempting a portion of tax of one's primary residence, we can lower
13 the inequities of cost of homeownership and responsibility of
14 taxation, with the goal of making sure individuals can reside, raise
15 their families, age in place, and stay in the communities they call
16 home, without fear of displacement due to crises and/or increase in
17 land and home value assessment. This is a means of providing equity
18 in the tax code and serves as an antidisplacement tool for community
19 land trusts, cooperative owners, and homeowners across Washington.
20 NEW SECTION. Sec. 2. A new section is added to chapter 84.36
21 RCW to read as follows:
22 (1)(a) Subject to the conditions in this section, a portion of
23 the assessed value of a qualified residence is exempt from the state
24 levy but not from property taxes levied by any local taxing district.
25 Subject to the adjustments and limitations in subsection (2) of this
26 section, the antidisplacement property exemption from the state levy
27 is equal to:
28 (i) For taxes levied for collection in 2024 and thereafter:
29 (A) Up to the lesser of the maximum exemption amount, or the
30 amount calculated pursuant to section 3 of this act, of the assessed
31 valuation of each qualified residential tax parcel consisting of
32 fewer than three residences; and
33 (B) Up to the lesser of the maximum exemption amount, or the
34 amount calculated pursuant to section 3 of this act, of the assessed
35 valuation of each qualified residence within a multiunit residential
36 dwelling wherein each residence is owned and taxed separately or is
37 owned by members of a cooperative housing association, corporation,
38 or partnership; and
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 1 (ii) For taxes levied for collection in 2026 and each subsequent
2 year, the maximum amount of antidisplacement property tax exemption
3 may be increased from the prior year's maximum exemption amount. The
4 amount of such increase for a year is equal to the percentage growth
5 in the state levy between the state levy for collection in the
6 preceding year as compared to the state levy for collection two years
7 ago. The department is responsible for making a determination of any
8 increase in the amount of the antidisplacement property tax exemption
9 and may round the dollar amount of the exemption to the nearest
10 $1,000.
11 (b) For purposes of (a) of this subsection, "maximum amount of
12 antidisplacement property tax exemption" and "maximum exemption
13 amount" mean:
14 (i) $250,000 for taxes levied for collection in 2024 and 2025;
15 and
16 (ii) For taxes levied for collection in each subsequent year, the
17 full exemption amount under (a) of this subsection, notwithstanding
18 any reduction in the exemption amount required under section 3 of
19 this act.
20 (2)(a) The county assessor must multiply the amount of the
21 antidisplacement property tax exemption for a tax year by the
22 combined indicated ratio fixed by the department for the county in
23 which the qualified residence is located and used by the department
24 to determine the equalized state levy for that county for that tax
25 year.
26 (b) The amount of the antidisplacement property tax exemption for
27 a qualified residence may not result in a tax reduction that exceeds
28 the amount of state property taxes that would otherwise be levied on
29 that qualified residence.
30 (3) The antidisplacement property tax exemption is in addition to
31 the exemption provided in RCW 84.36.379 through 84.36.389.
32 (4)(a)(i) The antidisplacement property tax exemption must be
33 claimed by filing an application with the department by April 30th of
34 the calendar year prior to the year for which the exemption will be
35 received.
36 (ii) The department shall provide the means for claimants to
37 annually claim the antidisplacement property tax exemption for their
38 primary qualified residence online. The department must also make
39 paper applications available to claimants upon request. Each county
40 assessor must also make applications available at the assessor's
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 1 office, on the assessor's official website, and by mail or email upon
2 request.
3 (iii) The department shall determine whether claimants have
4 applied for an exemption for only a single qualified residence for
5 the applicable calendar year. As resources allow, the department must
6 notify claimants who appear to have applied for more than one
7 residence or when the department is unable to confirm that the
8 claimant applied for an exemption for only a single qualified
9 residence. Such notification may be provided electronically and
10 include a request for additional information needed to confirm that
11 the claimant has applied for only a single qualified residence.
12 (iv) By August 1st each year, the department must provide each
13 county assessor a list of all claimants, parcels, and other
14 information necessary for the assessor to determine if a claimant
15 meets the eligibility requirements for the antidisplacement property
16 tax exemption. Such list must indicate the department's determination
17 whether or not the claimant has applied for a single qualified
18 residence or whether the department is unable to determine whether
19 the claimant has applied for a single qualified residence. County
20 assessors have the sole authority to approve or deny claims for the
21 antidisplacement property tax exemption.
22 (b) The claimant or the claimant's designated agent or legal
23 guardian must sign the application declaring that the property for
24 which the antidisplacement property tax exemption is sought is the
25 claimant's principal qualified residence within the meaning of
26 subsection (5)(a) and (b) of this section. If the claimant resides in
27 a cooperative housing association, corporation, or partnership, the
28 application must also be signed by the authorized agent of such
29 cooperative. If the claimant holds a life estate in the qualified
30 residence for which the antidisplacement property tax exemption is
31 claimed and the claimant is not shown on the tax rolls as the
32 taxpayer for that qualified residence, the remainderman or other
33 person shown on the tax rolls as the taxpayer must also sign the
34 application. All signatures on an application must be made under
35 penalty of perjury as provided in RCW 9A.72.085.
36 (c) Notice of the antidisplacement property tax exemption and
37 where to obtain further information about the exemption must be
38 included on or with property tax statements and revaluation notices
39 for residential property. The department and each county assessor are
40 required to publicize the qualifications and manner of making claims
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 1 for the antidisplacement property tax exemption, including such paid
2 advertisements or notices as deemed appropriate in the sole
3 discretion of the department and county assessors. The department and
4 county assessors must make the antidisplacement property tax
5 exemption information available in all languages required for voter
6 ballot outreach at the state level.
7 (5) The following conditions apply to the antidisplacement
8 property tax exemption:
9 (a) The qualified residence must be occupied by the claimant as
10 the claimant's principal place of residence as of the date of the
11 signed application under subsection (4) of this section. A claimant
12 who sells, transfers, or is displaced from the claimant's qualified
13 residence may transfer the claimant's exemption status to a
14 replacement qualified residence, but no claimant may receive the
15 antidisplacement property tax exemption on more than one qualified
16 residence in any calendar year. However, the confinement of the
17 claimant to a hospital, nursing home, assisted living facility, or
18 adult family home will not disqualify the claim of exemption if:
19 (i) The qualified residence is temporarily unoccupied;
20 (ii) The qualified residence is occupied by either a spouse,
21 state registered domestic partner, or a person financially dependent
22 on the claimant for support, or both; or
23 (iii) The qualified residence is rented for the purpose of paying
24 the claimant's costs of a nursing home, hospital, assisted living
25 facility, or adult family home.
26 (b) At the time of signing the application:
27 (i) The claimant must have owned, in fee or by contract purchase,
28 or have held a life estate in, the qualified residence for which the
29 antidisplacement property tax exemption is claimed; or
30 (ii) If the claimant resides in a cooperative housing
31 association, corporation, or partnership, including a mobile home
32 park cooperative or manufactured housing cooperative, the claimant
33 must own a share in the cooperative representing the unit or dwelling
34 in which the claimant resides or the lot on which the claimant's
35 manufactured/mobile home or park model is situated.
36 (c) For purposes of this section, a qualified residence owned by
37 a marital community, state registered domestic partners, or cotenants
38 is deemed to be owned by each spouse, domestic partner, or cotenant,
39 and any lease for life or 99 years of a single-family dwelling unit
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 1 or the land upon which it stands is deemed a life estate in the
2 qualified residence.
3 (d)(i) The assessed value of a dwelling owned by a cooperative
4 housing association, corporation, or partnership must be reduced, for
5 purposes of state property taxes levied on the dwelling, by the
6 amount of the antidisplacement property tax exemption to which a
7 claimant residing in that dwelling is entitled. The cooperative must
8 pass the full amount of its property tax savings under this section
9 to its members in proportion to each member's antidisplacement
10 property tax exemption. The cooperative may meet its obligation under
11 this subsection (5)(d)(i) by reducing the amount owed by the members
12 to the cooperative or, if no amount be owed, by making payment to the
13 members.
14 (ii) A mobile home park cooperative or manufactured housing
15 cooperative is entitled to any unused portion of the antidisplacement
16 property tax exemption of its members. A mobile home park cooperative
17 or manufactured housing cooperative receiving the unused portion of
18 the antidisplacement property tax exemption of its members must pass
19 the full amount of its property tax savings to its members in
20 proportion to each member's unused antidisplacement property tax
21 exemption. The cooperative may meet its obligation under this
22 subsection (5)(d)(ii) by reducing the amount owed by the members to
23 the cooperative or, if no amount be owed, by making payment to the
24 members. For purposes of this subsection (5)(d)(ii), "unused portion
25 of the antidisplacement property tax exemption" means the amount by
26 which the maximum allowable primary residence exemption exceeds the
27 assessed value of the manufactured/mobile home or park model owned by
28 a member of the mobile home park cooperative or manufactured housing
29 cooperative.
30 (e) A claimant granted an antidisplacement property tax exemption
31 must immediately inform the county assessor, on forms created or
32 approved by the department, of any change in status affecting the
33 claimant's entitlement to an antidisplacement property tax exemption.
34 (f)(i) Where a claimant has a life estate in the single-family
35 dwelling unit, the land upon which it sits, or both, which comprise
36 the claimant's qualified residence, and a remainderman or other
37 person would have otherwise paid the state property tax exempted on
38 the qualified residence, or portion of the qualified residence, as a
39 result of the claimant's antidisplacement property tax exemption,
40 such remainderman or other person must reduce the amount owed by the
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 1 claimant to the remainderman or other person by the amount of the tax
2 savings from the claimant's antidisplacement property tax exemption.
3 If no amount is owed by the claimant to the remainderman or other
4 person, the remainderman or other person must make payment to the