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Dear Friends and Neighbors,
I am working with Rep. Jacquelin Maycumber, R-Republic, to draft landmark legislation that would expedite new assessments on properties impacted by the Hirst decision. You can read the details below.
Democratic leaders stall Hirst fix in House committee
First, there's breaking news this morning that Democratic leaders in the House are refusing to move Senate Bill 5239 out of the House Agriculture and Natural Resources Committee. This is Sen. Judy Warnick's Hirst “fix” bill that would ensure water is available to support development. Without passage of this measure, all the adverse effects of Hirst I have been warning about will kick in.
I discussed those effects in my Feb. 13 email update, entitled “A frank discussion about potential impacts of a Washington State Supreme Court decision on water rights.”
Hirst background
In Whatcom County vs. Hirst, Futurewise, et al. decision, the court ruled 6-3 on Oct. 6 that Whatcom County failed to comply with the Growth Management Act (GMA) requirements to protect water resources. The Hirst decision effectively eliminates the category of permit-exempt wells and will make it much harder, if not impossible, for landowners to dig wells. Without water, there is no development.
Similar Skagit ruling previews what we can expect
A similar state Supreme Court decision in 2013 ruled in favor of a lawsuit by the Swinomish Tribe challenging Skagit River minimum instream flow rules. An instream flow is a water right for a river or a stream that protects and preserves instream resources like fish habitat. On Tuesday, Skagit County Commissioner Ron Wesen testified before the House Agriculture and Natural Resources Committee about the impacts of that ruling.
“We have people who put wells in the ground during that time period that now, if their well was not used for beneficial use before 2001, we cannot issue a building permit. Our assessor in 2014 went back and looked at 785 parcels. And those 785 parcels, because they do not have water available for development, he went back and reduced the assessed value by 70 percent of those properties. So our assessed in that area was reduced by over 22-million-dollars, and that directly affected Skagit County and those different areas,” said Wesen.
Wesen added that banks will not issue loans on those properties, so “those properties are basically worthless.”
You can watch that testimony here.
Call the Skagit County case “the canary in the coal mine.” It gives us a credible and important preview of the affects the Hirst decision will have on ALL properties across the state of Washington. Unless the Legislature takes action this session, the Hirst decision will mean landowners in every county in the state could be prevented from drilling a well because even taking one drop of water that could affect instream flows would violate the court ruling. As Commissioner Wesen said, without water, “properties are basically worthless!”
With Hirst, 'shift' happens!
It also means that as the value of those properties are reduced, it is less money the county can collect in taxes from those properties. So it forces a “tax shift,” meaning every landowner with water will be paying higher property taxes to the counties to compensate for those diminished values of land without water.
Koster-Maycumber legislation would expedite true value assessments on Hirst-affected properties
As I noted in the beginning of this update, I am working with Rep. Jacquelin Maycumber, who represents the 7th District — one of the most rural districts in Washington — to draft legislation that would provide expedited property tax relief for landowners whose property is adversely affected by the Hirst decision.
We feel if a property owner's land has been devalued as a result of a water ruling, that owner should not be taxed at the rate before devaluation. Under our draft legislation, “If water supply to any real property placed upon the assessment roll of that year is impacted by a water ruling, the true and fair value of such property shall be reduced for that assessment year. . .”
Reassessments are traditionally conducted every three- to six years, depending upon the county. Our legislation would require a reassessment within a one-year period after a water ruling that impacts a person's ability to withdraw water from the property. If taxes have been paid at the higher rate, the legislation requires the difference to be refunded. The state would be required to pay counties for the costs of reassessment, a report of the number of parcels with reduced value, and the extent of the tax shift.
This legislation would effectively accomplish two things:
- It would ensure immediate property tax relief to the landowner affected by the ruling, reflecting the true value of that property once the water ruling has taken effect.
- As a property tax shift begins to take effect, it would bring greater public awareness to all property owners about the effects of such rulings that diminish property values on rural and undeveloped land.
Since we are still working on writing details of this bill, it has not been introduced yet and therefore has not been assigned a bill number. However, we expect to submit this bill to the Code Reviser's office within a few days.
Your input is welcome!
I invite your comments on the Hirst decision, the refusal of Democrats to allow passage of a “fix,” and your thoughts about our legislation to provide immediate tax relief to affected landowners. You will find my contact information below.
Thank you for allowing me the honor to serve and represent you!
Sincerely,
John Koster
