h-3743.1 representatives white, rolfes, armstrong, haler ... · house bill 2402 _____ state of...

H-3743.1 _____________________________________________HOUSE BILL 2402

_____________________________________________State of Washington 61st Legislature 2010 Regular SessionBy Representatives White, Rolfes, Armstrong, Haler, Nelson, Roberts,Maxwell, Dickerson, Crouse, Jacks, Walsh, Wallace, Sells, Ormsby,Kenney, Williams, Blake, Chase, Morris, Campbell, Appleton, Carlyle,Conway, Bailey, Hope, and HaighPrefiled 12/07/09. Read first time 01/11/10. Referred to Committee onFinance.

1 AN ACT Relating to a property tax exemption for property owned by 2 a nonprofit organization and used for the purpose of a farmers market; 3 amending RCW 84.36.037; and creating a new section.

4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

5 Sec. 1. RCW 84.36.037 and 2006 c 305 s 3 are each amended to read 6 as follows: 7 (1) Real or personal property owned by a nonprofit organization, 8 association, or corporation in connection with the operation of a 9 public assembly hall ((or)), meeting place, or farmers market is exempt10 from taxation. The area exempt under this section includes the11 building or buildings, the land under the buildings, and an additional12 area necessary for parking, not exceeding a total of one acre. When13 property for which exemption is sought is essentially unimproved except14 for restroom facilities and structures and this property has been used15 primarily for annual community celebration events for at least ten16 years, the exempt property shall not exceed twenty-nine acres.17 (2) To qualify for this exemption the property must be used18 exclusively for public gatherings or activities consistent with a19 farmers market and must be available to all organizations or persons

p. 1 HB 2402

1 desiring to use the property, but the owner may impose conditions and 2 restrictions which are necessary for the safekeeping of the property 3 and promote the purposes of this exemption. Membership shall not be a 4 prerequisite for the use of the property. 5 (3) The use of the property for pecuniary gain or for business 6 activities, except as provided in this section, nullifies the exemption 7 otherwise available for the property for the assessment year. The 8 exemption is not nullified by: 9 (a) The collection of rent or donations if all funds collected are10 used for capital improvements to the exempt property, maintenance and11 operation of the exempt property, or for exempt purposes.12 (b) Fund-raising activities conducted by a nonprofit organization.13 (c)(i) Except as provided in (c)(ii) of this subsection, the use of14 the property for pecuniary gain, for business activities for periods of15 not more than fifteen days each assessment year so long as all income16 received from rental or use of the exempt property is used for capital17 improvements to the exempt property, maintenance and operation of the18 exempt property, or for exempt purposes.19 (ii) The use of the property for pecuniary gain or for business20 activities, where the property is used for activities related to a21 qualifying farmers market, as defined in RCW 66.24.170, as long as all22 income received from rental or use of the exempt property is used for23 capital improvements to the exempt property, maintenance and operation24 of the exempt property, or exempt purposes.25 (d) In a county with a population of less than twenty thousand, the26 use of the property to promote the following business activities:27 Dance lessons, art classes, or music lessons.28 (e) An inadvertent use of the property in a manner inconsistent29 with the purpose for which exemption is granted, if the inadvertent use30 is not part of a pattern of use. A pattern of use is presumed when an31 inadvertent use is repeated in the same assessment year or in two or32 more successive assessment years.33 (4) The department of revenue ((shall)) must narrowly construe this34 exemption.

35 NEW SECTION. Sec. 2. This act applies to taxes levied for

HB 2402 p. 2

1 collection in 2011 and thereafter.

--- END ---

p. 3 HB 2402

2402 AMH FIN MITC 438 1

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2402 AMH FIN MITC 438

By Representative Hunter

HB 2402 - H COMM AMD

By Committee on Finance

On page 1, after line 4, strike all of sections 1 and 2 and insert

the following:

"Sec. 1. RCW 84.36.037 and 2006 c 305 s 3 are each amended to

read as follows:

(1) Real or personal property owned by a nonprofit organization,

association, or corporation in connection with the operation of a

public assembly hall or meeting place is exempt from taxation. The

area exempt under this section includes the building or buildings, the

land under the buildings, and an additional area necessary for

parking, not exceeding a total of one acre. When property for which

exemption is sought is essentially unimproved except for restroom

facilities and structures and this property has been used primarily

for annual community celebration events for at least ten years, the

exempt property shall not exceed twenty-nine acres.

(2) To qualify for this exemption the property must be used

exclusively for public gatherings and must be available to all

organizations or persons desiring to use the property, but the owner

may impose conditions and restrictions which are necessary for the

safekeeping of the property and promote the purposes of this

exemption. Membership shall not be a prerequisite for the use of the

property.

(3) The use of the property for pecuniary gain or for business

activities, except as provided in this section, nullifies the

exemption otherwise available for the property for the assessment

year. The exemption is not nullified by:


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(a) The collection of rent or donations if all funds collected are

used for capital improvements to the exempt property, maintenance and

operation of the exempt property, or for exempt purposes.

(b) Fund-raising activities conducted by a nonprofit organization.

(c)(i) Except as provided in (c)(ii) of this subsection, the use

of the property for pecuniary gain, for business activities for

periods of not more than fifteen days each assessment year so long as

all income received from rental or use of the exempt property is used

for capital improvements to the exempt property, maintenance and

operation of the exempt property, or for exempt purposes.

(ii) The use of the property for pecuniary gain or for business

activities if the property is used for activities related to a

qualifying farmers market, as defined in RCW 66.24.170, for not more

than fifty-three days each assessment year, and all income received

from rental or use of the exempt property is used for capital

improvements to the exempt property, maintenance and operation of the

exempt property, or exempt purposes.

(d) In a county with a population of less than twenty thousand,

the use of the property to promote the following business activities:

Dance lessons, art classes, or music lessons.

(e) An inadvertent use of the property in a manner inconsistent

with the purpose for which exemption is granted, if the inadvertent

use is not part of a pattern of use. A pattern of use is presumed

when an inadvertent use is repeated in the same assessment year or in

two or more successive assessment years.

(4) The department of revenue ((shall)) must narrowly construe

this exemption.

NEW SECTION. Sec. 2. This act applies to taxes levied for

collection in 2011 through 2020.

NEW SECTION. Sec. 3. This act expires December 31, 2020."

Correct the title


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EFFECT: Limits the use of property for farmers' market

activities to 53 days a year. Limits the exemption for farmers'

market activities to 10 years.

--- END ---

Washington StateHouse of RepresentativesOffice of Program Research

BILLANALYSIS

Finance Committee

HB 2402Brief Description: Concerning a property tax exemption for property owned by a nonprofit

organization and used for the purpose of a farmers market.

Sponsors: Representatives White, Rolfes, Armstrong, Haler, Nelson, Roberts, Maxwell, Dickerson, Crouse, Jacks, Walsh, Wallace, Sells, Ormsby, Kenney, Williams, Blake, Chase, Morris, Campbell, Appleton, Carlyle, Conway, Bailey, Hope and Haigh.

Brief Summary of Bill

� Exempts from property tax the real and personal property owned by a nonprofit entity that is used for the purpose of a farmers market.

Hearing Date: 1/15/10

Staff: Susan Howson (786-7142).

Background:

All property in Washington is subject to property tax each year based on the property's value unless a specific exemption is provided by law.

Nonprofit public assembly halls or meeting places are exempt from property taxes. To qualify for the exemption the property must be used for public gatherings and be available to all organizations or persons desiring to use the property.

Generally, the property cannot be rented out for a business purpose (pecuniary gain) except for no more than 15 days each year. The collection of rent, donations, or income received from the use of the property for pecuniary gain must be used for capital improvements of the exempt property, maintenance and operations, or exempt purposes. The tax exempt status of the property is not affected by use of the property for fundraising activities conducted by a nonprofit organization.

––––––––––––––––––––––

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

House Bill Analysis HB 2402- 1 -

Current law defines "qualifying farmers market" for the purpose of the sale of wine manufactured in Washington and sold at farmers markets.

Summary of Bill:

The real and personal property of nonprofit organizations that is used for the purpose of a farmers market is exempt from property tax.

Use of the property for a qualifying farmers market does not count against the 15 day pecuniary gain limit. All income received from rental or use of the property must be used for capital improvements to the exempt property, maintenance and operations, or exempt purposes.

A "qualifying farmers market" is the same as defined in current law for domestic wine sales at farmers markets. A qualifying farmers market is an entity that sponsors a regular assembly of vendors at a defined location for the purpose of promoting the sale of agricultural products grown or produced in Washington directly to the consumer. Several minimum requirements must be met including: 1) at least five participating vendors are farmers selling their own agricultural products; 2) the total combined gross annual sales of vendors who are farmers must exceed the total combined gross annual sales of vendors who are processors or resellers; 3) the total combined gross annual sales of vendors who are farmers, processors, or resellers must exceed the total combined gross annual sales of vendors who are not farmers, processors, or resellers; 4) the sale of imported items and secondhand items by any vendor is prohibited; and 5) no vendor is a franchisee.

The tax exemption applies to taxes levied for collection beginning in 2011 and thereafter.

Appropriation: None.

Fiscal Note: Requested.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.

House Bill Analysis HB 2402- 2 -

Bill Number: 2402 HB Title: Farmers market/property tax

Multiple Agency Fiscal Note Summary

Estimated Cash Receipts

Agency Name 2009-11 2011-13 2013-15

GF- State Total GF- State GF- StateTotal Total

(21,000) (21,000) (43,000) (43,000) (47,000) (47,000)Department of Revenue

Total $ (21,000) (21,000) (43,000) (43,000) (47,000) (47,000)

Local Gov. Courts *

Local Gov. Other ** Fiscal note not available

Local Gov. Total

Agency Name 2009-11 2011-13 2013-15

FTEs GF-State Total FTEs FTEsGF-State GF-StateTotal Total 15,900 .1 Department of Revenue 15,900 .0 0 0 .0 0 0

Total 0.1 $15,900 $15,900 0.0 $0 $0 0.0 $0 $0

Estimated Expenditures

Local Gov. Courts *

Local Gov. Other ** Fiscal note not available

Local Gov. Total

Estimated Capital Budget Impact

Agency Name

Total $

Prepared by: Ryan Black, OFM Phone: Date Published:

360-902-0417 Preliminary

* See Office of the Administrator for the Courts judicial fiscal note

** See local government fiscal note

FNPID

:

24811

FNS029 Multi Agency rollup

Department of Revenue Fiscal Note

Farmers market/property taxBill Number: 140-Department of

Revenue

Title: Agency:2402 HB

Part I: Estimates

No Fiscal Impact

Estimated Cash Receipts to:

Account 2013-152011-132009-11FY 2011FY 2010

(21,000) (43,000) (47,000)(21,000)GF-State-State

01 - Taxes 59 - Leasehold Excise Tax

Total $ (43,000) (47,000)(21,000)(21,000)

Estimated Expenditures from:

FY 2010 FY 2011 2009-11 2011-13 2013-15

FTE Staff Years 0.1 0.1

Account

GF-STATE-State 001-1 15,900 15,900

Total $ 15,900 15,900

The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,

and alternate ranges (if appropriate), are explained in Part II.

Check applicable boxes and follow corresponding instructions:

If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note

form Parts I-V.

If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).X

Capital budget impact, complete Part IV.

Requires new rule making, complete Part V. X

Susan Howson Phone: 360-786-7142 Date: 01/06/2010

Agency Preparation:

Agency Approval:

OFM Review:

Phone:

Phone:

Phone:

Date:

Date:

Date:

Valerie Torres

Don Gutmann

Ryan Black

360-5706084

360-570-6073

360-902-0417

01/14/2010

01/14/2010

01/14/2010

Legislative Contact:

1Form FN (Rev 1/00)

Request # 2402-1-1

Bill # 2402 HB

FNS062 Department of Revenue Fiscal Note

Part II: Narrative Explanation

II. A - Brief Description Of What The Measure Does That Has Fiscal Impact

Briefly describe, by section number, the significant provisions of the bill, and any related workload or policy assumptions, that have revenue or

expenditure impact on the responding agency.

Under current law, real and personal property owned by a non-profit organization running a public assembly hall or meeting

place is exempt from property taxes. The exemption is nullified if the property is used for monetary gain or business

activities for more than 15 days each assessment year.

This bill exempts real and personal property owned by a non-profit organization running a farmer's market from property

taxes. Use of the property for monetary gain or business activities does not nullify the exemption if the income received is

used:

for the capital improvements to the property,

maintenance and improvements to the property, or

exempt purposes.

If passed, this bill would apply to property taxes levied for collection in 2011 and thereafter.

II. B - Cash receipts Impact

Briefly describe and quantify the cash receipts impact of the legislation on the responding agency, identifying the cash receipts provisions by section

number and when appropriate the detail of the revenue sources. Briefly describe the factual basis of the assumptions and the method by which the

cash receipts impact is derived. Explain how workload assumptions translate into estimates. Distinguish between one time and ongoing functions.

ASSUMPTIONS/DATA SOURCES

County property tax data

Department of Revenue leasehold excise tax data

2006 USDA Farmers Market Survey

Individual Farmer Market Websites

This estimate assumes while the bill addresses exempting property taxes that leasehold excise tax would also be exempted

because leasehold excise tax is paid in lieu of property taxes.

This estimate assumes 3 farmers markets will have exclusive use of public facilities and incur leasehold excise tax on the

rental of these facilities.

This estimate assumes private property which is used for farmers markets will continue to be owned by private businesses

rather than being turned over to a non-profit connected with the operation of a farmers market.

This estimate assumes any non-profit connected with the operation of a farmers market would only have personal property.

Only the 11 farmers markets with some sort of permanent structure are assumed to have personal property which would

result in paying property taxes.

This estimate assumes this legislation is effective 90 days after the legislative session adjourns, resulting in 12 months of

impacted collections in Fiscal Year 2011 for leasehold excise taxes.

REVENUE ESTIMATES

There are over 150 farmers markets in Washington and approximately 96 percent of these are either run by a non-profit or

are connected to a non-profit organization. Farmers markets can be found in 30 of Washington's 39 counties.

2Form FN (Rev 1/00)

Request # 2402-1-1

Bill # 2402 HB


The state property tax levy is predicted to remain below the $3.60 limit throughout the 2013-15 Biennium. Therefore, there

will be no loss to the state school levy. This legislation will result in a minimal state levy shift to other taxpayers.

This legislation will result in local property taxes of $1,000 shifting to other taxpayers in Fiscal Year 2011 and $2,000 shifting

to other taxpayers in Fiscal Year 2012, the first full fiscal year.

State leasehold excise tax revenues losses are estimated to be $21,000 for Fiscal Year 2011.

Local leasehold excise tax revenues losses are estimated to be $18,000 for Fiscal Year 2011.

TOTAL REVENUE IMPACT:

State Government (cash basis, $000):

FY 2010 - $ 0

FY 2011 - $ (21)

FY 2012 - $ (21)

FY 2013 - $ (22)

FY 2014 - $ (23)

FY 2015 - $ (24)

Local Government, if applicable (cash basis, $000):

FY 2010 - $ 0

FY 2011 - $ (18)

FY 2012 - $ (19)

FY 2013 - $ (19)

FY 2014 - $ (20)

FY 2015 - $ (21)

DETAIL OF REVENUE IMPACT FOR PROPERTY TAX BILLS, Calendar Year Basis

State Government, Impact on Revenues ($000): None

State Government, ($000), Shift of Tax Burden: Minimal

Local Government, Impact on Revenues ($000): Minimal

Local Government, ($000), Shift of Tax Burden

CY 2010 - $ 0

CY 2011 - $ 1

CY 2012 - $ 2

CY 2013 - $ 2

CY 2014 - $ 2

CY 2015 - $ 2

3Form FN (Rev 1/00)

Request # 2402-1-1

Bill # 2402 HB


II. C - Expenditures

Briefly describe the agency expenditures necessary to implement this legislation (or savings resulting from this legislation), identifying by section

number the provisions of the legislation that result in the expenditures (or savings). Briefly describe the factual basis of the assumptions and the method

by which the expenditure impact is derived. Explain how workload assumptions translate into cost estimates. Distinguish between one time and ongoing

There will be some cost for the Department of Revenue resulting from this legislation. The amounts shown reflect costs of

revising two administrative rules - WAC 458-16-165 and 458-16-300. In addition, there would be some costs to update

application forms and renewal information; these costs would be absorbed by the agency.

Part III: Expenditure Detail III. A - Expenditures by Object Or Purpose

FY 2010 FY 2011 2009-11 2011-13 2013-15


A-Salaries and Wages 9,500 9,500

B-Employee Benefits 2,400 2,400

E-Goods and Services 3,100 3,100

J-Capital Outlays 900 900

Total $ $15,900 $15,900

III. B - Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in Part I

and Part IIIA

Job Classification FY 2010 FY 2011 2009-11 2011-13 2013-15Salary

HEARINGS SCHEDULER 32,688 0.0 0.0

TAX POLICY SP 2 61,628 0.0 0.0

TAX POLICY SP 3 69,756 0.1 0.1

WMS BAND 3 88,546 0.0 0.0

Total FTE's 0.1 0.1 252,618

Part IV: Capital Budget Impact

NONE.

Part V: New Rule Making Required

Identify provisions of the measure that require the agency to adopt new administrative rules or repeal/revise existing rules.

The Department of Revenue would use the standard rule-making process to revise WAC 458-18-020. Persons interested in

the rule-making will be senior citizens and disabled homeowners, as well as county assessors and their staff.

4Form FN (Rev 1/00)

Request # 2402-1-1

Bill # 2402 HB


Bill Number: 2402 HB Title: Farmers market/property tax

Multiple Agency Fiscal Note Summary

Estimated Cash Receipts

Agency Name 2009-11 2011-13 2013-15

GF- State Total GF- State GF- StateTotal Total

(21,000) (21,000) (43,000) (43,000) (47,000) (47,000)Department of Revenue

Total $ (21,000) (21,000) (43,000) (43,000) (47,000) (47,000)

Local Gov. Courts *

Local Gov. Other ** (41,000)(37,998)(17,999)

Local Gov. Total (41,000)(37,998)(17,999)

Agency Name 2009-11 2011-13 2013-15

FTEs GF-State Total FTEs FTEsGF-State GF-StateTotal Total 15,900 .1 Department of Revenue 15,900 .0 0 0 .0 0 0

Total 0.1 $15,900 $15,900 0.0 $0 $0 0.0 $0 $0

Estimated Expenditures

Local Gov. Courts *

Local Gov. Other **

Local Gov. Total

Estimated Capital Budget Impact

Agency Name

Total $

Prepared by: Ryan Black, OFM Phone: Date Published:

360-902-0417 Final

* See Office of the Administrator for the Courts judicial fiscal note

** See local government fiscal note

FNPID

:

24839

FNS029 Multi Agency rollup

Department of Revenue Fiscal Note

Farmers market/property taxBill Number: 140-Department of

Revenue

Title: Agency:2402 HB

Part I: Estimates

No Fiscal Impact

Estimated Cash Receipts to:

Account 2013-152011-132009-11FY 2011FY 2010

(21,000) (43,000) (47,000)(21,000)GF-State-State

01 - Taxes 59 - Leasehold Excise Tax

Total $ (43,000) (47,000)(21,000)(21,000)

Estimated Expenditures from:

FY 2010 FY 2011 2009-11 2011-13 2013-15


Account

GF-STATE-State 001-1 15,900 15,900

Total $ 15,900 15,900

The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,

and alternate ranges (if appropriate), are explained in Part II.

Check applicable boxes and follow corresponding instructions:

If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note

form Parts I-V.

If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).X

Capital budget impact, complete Part IV.

Requires new rule making, complete Part V. X

Susan Howson Phone: 360-786-7142 Date: 01/06/2010

Agency Preparation:

Agency Approval:

OFM Review:

Phone:

Phone:

Phone:

Date:

Date:

Date:

Valerie Torres

Don Gutmann

Ryan Black

360-5706084

360-570-6073

360-902-0417

01/14/2010

01/14/2010

01/14/2010

Legislative Contact:

1Form FN (Rev 1/00)

Request # 2402-1-1

Bill # 2402 HB


Part II: Narrative Explanation

II. A - Brief Description Of What The Measure Does That Has Fiscal Impact

Briefly describe, by section number, the significant provisions of the bill, and any related workload or policy assumptions, that have revenue or

expenditure impact on the responding agency.

Under current law, real and personal property owned by a non-profit organization running a public assembly hall or meeting

place is exempt from property taxes. The exemption is nullified if the property is used for monetary gain or business

activities for more than 15 days each assessment year.

This bill exempts real and personal property owned by a non-profit organization running a farmer's market from property

taxes. Use of the property for monetary gain or business activities does not nullify the exemption if the income received is

used:

for the capital improvements to the property,

maintenance and improvements to the property, or

exempt purposes.

If passed, this bill would apply to property taxes levied for collection in 2011 and thereafter.

II. B - Cash receipts Impact

Briefly describe and quantify the cash receipts impact of the legislation on the responding agency, identifying the cash receipts provisions by section

number and when appropriate the detail of the revenue sources. Briefly describe the factual basis of the assumptions and the method by which the

cash receipts impact is derived. Explain how workload assumptions translate into estimates. Distinguish between one time and ongoing functions.

ASSUMPTIONS/DATA SOURCES

County property tax data

Department of Revenue leasehold excise tax data

2006 USDA Farmers Market Survey

Individual Farmer Market Websites

This estimate assumes while the bill addresses exempting property taxes that leasehold excise tax would also be exempted

because leasehold excise tax is paid in lieu of property taxes.

This estimate assumes 3 farmers markets will have exclusive use of public facilities and incur leasehold excise tax on the

rental of these facilities.

This estimate assumes private property which is used for farmers markets will continue to be owned by private businesses

rather than being turned over to a non-profit connected with the operation of a farmers market.

This estimate assumes any non-profit connected with the operation of a farmers market would only have personal property.

Only the 11 farmers markets with some sort of permanent structure are assumed to have personal property which would

result in paying property taxes.

This estimate assumes this legislation is effective 90 days after the legislative session adjourns, resulting in 12 months of

impacted collections in Fiscal Year 2011 for leasehold excise taxes.

REVENUE ESTIMATES

There are over 150 farmers markets in Washington and approximately 96 percent of these are either run by a non-profit or

are connected to a non-profit organization. Farmers markets can be found in 30 of Washington's 39 counties.

2Form FN (Rev 1/00)

Request # 2402-1-1

Bill # 2402 HB


The state property tax levy is predicted to remain below the $3.60 limit throughout the 2013-15 Biennium. Therefore, there

will be no loss to the state school levy. This legislation will result in a minimal state levy shift to other taxpayers.

This legislation will result in local property taxes of $1,000 shifting to other taxpayers in Fiscal Year 2011 and $2,000 shifting

to other taxpayers in Fiscal Year 2012, the first full fiscal year.

State leasehold excise tax revenues losses are estimated to be $21,000 for Fiscal Year 2011.

Local leasehold excise tax revenues losses are estimated to be $18,000 for Fiscal Year 2011.

TOTAL REVENUE IMPACT:

State Government (cash basis, $000):

FY 2010 - $ 0

FY 2011 - $ (21)

FY 2012 - $ (21)

FY 2013 - $ (22)

FY 2014 - $ (23)

FY 2015 - $ (24)

Local Government, if applicable (cash basis, $000):

FY 2010 - $ 0

FY 2011 - $ (18)

FY 2012 - $ (19)

FY 2013 - $ (19)

FY 2014 - $ (20)

FY 2015 - $ (21)

DETAIL OF REVENUE IMPACT FOR PROPERTY TAX BILLS, Calendar Year Basis

State Government, Impact on Revenues ($000): None

State Government, ($000), Shift of Tax Burden: Minimal

Local Government, Impact on Revenues ($000): Minimal

Local Government, ($000), Shift of Tax Burden

CY 2010 - $ 0

CY 2011 - $ 1

CY 2012 - $ 2

CY 2013 - $ 2

CY 2014 - $ 2

CY 2015 - $ 2

3Form FN (Rev 1/00)

Request # 2402-1-1

Bill # 2402 HB


II. C - Expenditures

Briefly describe the agency expenditures necessary to implement this legislation (or savings resulting from this legislation), identifying by section

number the provisions of the legislation that result in the expenditures (or savings). Briefly describe the factual basis of the assumptions and the method

by which the expenditure impact is derived. Explain how workload assumptions translate into cost estimates. Distinguish between one time and ongoing

There will be some cost for the Department of Revenue resulting from this legislation. The amounts shown reflect costs of

revising two administrative rules - WAC 458-16-165 and 458-16-300. In addition, there would be some costs to update

application forms and renewal information; these costs would be absorbed by the agency.

Part III: Expenditure Detail III. A - Expenditures by Object Or Purpose

FY 2010 FY 2011 2009-11 2011-13 2013-15


A-Salaries and Wages 9,500 9,500

B-Employee Benefits 2,400 2,400

E-Goods and Services 3,100 3,100

J-Capital Outlays 900 900

Total $ $15,900 $15,900

III. B - Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in Part I

and Part IIIA

Job Classification FY 2010 FY 2011 2009-11 2011-13 2013-15Salary

HEARINGS SCHEDULER 32,688 0.0 0.0

TAX POLICY SP 2 61,628 0.0 0.0

TAX POLICY SP 3 69,756 0.1 0.1

WMS BAND 3 88,546 0.0 0.0

Total FTE's 0.1 0.1 252,618

Part IV: Capital Budget Impact

NONE.

Part V: New Rule Making Required

Identify provisions of the measure that require the agency to adopt new administrative rules or repeal/revise existing rules.

The Department of Revenue would use the standard rule-making process to revise WAC 458-18-020. Persons interested in

the rule-making will be senior citizens and disabled homeowners, as well as county assessors and their staff.

4Form FN (Rev 1/00)

Request # 2402-1-1

Bill # 2402 HB


LOCAL GOVERNMENT FISCAL NOTEDepartment of Community, Trade and Economic Development

Bill Number: Title: 2402 HB Farmers market/property tax

Part I: Jurisdiction-Location, type or status of political subdivision defines range of fiscal impacts.

Legislation Impacts:

X Cities: Minor (less than 50,000 annually) tax decrease and shift

X Counties: Minor (less than 50,000 annually) tax decrease and shift

X Special Districts: Minor (less than 50,000 annually) tax decrease and shift

Specific jurisdictions only:

Variance occurs due to:

Part II: Estimates

No fiscal impacts.

Expenditures represent one-time costs:

Legislation provides local option:

Key variables cannot be estimated with certainty at this time:

Estimated revenue impacts to:

Jurisdiction FY 2010 FY 2011 2009-11 2011-13 2013-15

City (5,258) (5,258) (11,100) (11,978)

County (6,514) (6,514) (13,752) (14,838)

Special District (6,227) (6,227) (13,146) (14,184)

TOTAL $

GRAND TOTAL $

(17,999) (17,999) (37,998) (41,000)

(96,997)

Estimated expenditure impacts to:

Jurisdiction FY 2010 FY 2011 2009-11 2011-13 2013-15

City

County

Special District

TOTAL $

GRAND TOTAL $ 0

Part III: Preparation and Approval

Fiscal Note Analyst:

Leg. Committee Contact:

Agency Approval:

OFM Review:

Darleen Muhly

Susan Howson

Steve Salmi

Ryan Black

Phone:

Phone:

Phone:

Phone:

Date:

Date:

Date:

Date:

(360) 725-5030

360-786-7142

(360) 725 5034

360-902-0417

01/15/2010

01/06/2010

01/15/2010

01/15/2010

Page 1 of 3 Bill Number: 2402 HB

FNS060 Local Government Fiscal Note

Part IV: Analysis

A. SUMMARY OF BILL

Provide a clear, succinct description of the bill with an emphasis on how it impacts local government.

This bill would provide a property tax exemption for real and personal property owned by a nonprofit organization running a farmer's market.

Use of the property for monetary gain or business activities does not nullify the exemption if the income received is used for the capital

improvements to the property, maintenance and improvements to the property, or exempt purposes.

B. SUMMARY OF EXPENDITURE IMPACTS

Briefly describe and quantify the expenditure impacts of the legislation on local governments, identifying the expenditure provisions by section number, and

when appropriate, the detail of expenditures. Delineate between city, county and special district impacts.

The Department of Revenue assumes three farmers markets will have exclusive use of public facilities and incur leasehold excise tax on the

rental of these facilities. Due to the small number of taxpayers, this exemption is not expected to have expenditure impact to county

assessors.

C. SUMMARY OF REVENUE IMPACTS

Briefly describe and quantify the revenue impacts of the legislation on local governments, identifying the revenue provisions by section number, and when

appropriate, the detail of revenue sources. Delineate between city, county and special district impacts.

Department of Revenue (DOR) assumes that, while the bill addresses exempting property taxes, leasehold excise tax would also be exempted

because leasehold excise tax is paid in lieu of property taxes. This would result in the following loss and tax shifts to local governments:

Local Government Revenue Loss by Fiscal Year:

COUNTIES CITIES SPECIAL DISTRICT

FY 2011 -6514 -5258 -6227

FY 2012 -6876 -5550 -6573

FY 2013 -6876 -5550 -6573

FY 2014 -7238 -5843 -6919

FY 2015 -7600 -6135 -7265

Local Government Tax Shift by Calendar Year:

COUNTIES CITIES SPECIAL DISTRICT

CY 2011 211 170 619

CY 2012 421 340 1239

CY 2013 421 340 1239

CY 2014 421 340 1239

CY 2015 421 340 1239

ASSUMPTIONS & METHODOLOGY:

Tax Shift and Revenue Loss:

Tax exemptions lower the taxable value against which taxing districts levy their taxes. When exemptions are enacted, taxing districts may

compensate for the loss in taxable value by increasing the tax rate for taxpayers who are not eligible for the exemptions. Consequently,

taxpayers who do not benefit from the exemption would pay a higher tax. This higher tax results in a tax shift from the exempt taxpayers to the

non-exempt taxpayers. However, when a taxing district is restricted from increasing the tax rate due to a levy limit, the taxing district incurs a

revenue loss. Local government revenue losses were computed by taking the DOR fiscal note data and multiplying the result by the property

tax distribution for counties, cities and special districts. These percentages are derived from the DOR publication, Property Tax Statistics

2009.

Calendar Year vs. Fiscal Year:

Note that a tax shift is presented by calendar year (CY) and a revenue loss is presented by fiscal year (FY). Taxes are assessed and collected

by the counties on a calendar-year basis. When a tax shift occurs, it is computed for the calendar year. Because revenue and expenditures

are reported on a fiscal year basis, the revenue loss is also for a fiscal year.

SOURCES:

Department of Revenue fiscal note



DOR Property Tax Statistics 2009



h-3743.1 representatives white, rolfes, armstrong, haler ... · house bill 2402 _____ state of...

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