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:
2402 AMH FIN MITC 438 2
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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
2402 AMH FIN MITC 438 3
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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
FNS062 Department of Revenue Fiscal Note
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
FNS062 Department of Revenue Fiscal Note
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
FTE Staff Years 0.1 0.1
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
FNS062 Department of Revenue Fiscal Note
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
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
FNS062 Department of Revenue Fiscal Note
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
FNS062 Department of Revenue Fiscal Note
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
FTE Staff Years 0.1 0.1
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
FNS062 Department of Revenue Fiscal Note
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
Page 2 of 3 Bill Number: 2402 HB
FNS060 Local Government Fiscal Note
DOR Property Tax Statistics 2009
Page 3 of 3 Bill Number: 2402 HB
FNS060 Local Government Fiscal Note