BP BHEAD INT H

AN ACT Relating to political activities of organizations exempt from property taxes; adding a new section to chapter 84.36 RCW; and creating a new section.

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

NEW SECTION. Sec. 1. The legislature finds that exemption from property tax is a privilege granted to certain types of organizations because their organizational purposes are basically altruistic, religious, or educational. The legislature further finds that, because of the nature of the state's property tax system, the exemption for the nonprofit organization is a form of subsidy because the amount exempted is redistributed to other citizens' property tax bills. They, in turn, pay the cost of public services provided to the tax exempt organizations.

The legislature further finds that in exchange for the privilege of exemption from property taxes certain prohibitions on activities of tax exempt organizations are fair and appropriate. Nonprofit exempt organizations, associations, or corporations, in order to continue to receive the form of public subsidy represented by a property tax exemption, and in order to continue to provide service to the general public, should remain neutral with respect to activities that affect political campaigns on behalf of, in support of, or in opposition to, a political candidate or group of political candidates.

NEW SECTION. Sec. 2. A new section is added to chapter 84.36 RCW to read as follows:

(1) Except as specified in subsection (4) of this section, a nonprofit organization, association, or corporation exempt from property tax under any of the provisions of this chapter shall not use its financial or physical resources to engage in prohibited political activities. If any such nonprofit organization, association, or corporation engages in prohibited political activity, the real and personal property of the nonprofit organization, association, or corporation is subject to taxation. For purposes of this section, the following definitions apply:

(a) "Prohibited political activities" means direct or indirect intervention in a political campaign on behalf of, in support of, or in opposition to, a political candidate or group of political candidates and includes but is not limited to:

(i) Displaying or distributing posters, pamphlets, or signs on behalf of, in support of, or in opposition to a political candidate or a group of political candidates;

(ii) Soliciting funds or other resources to be used on behalf of, in support of, or in opposition to a political candidate or a group of political candidates;

(iii) Contributing funds or other resources to be used on behalf of, in support of, or in opposition to a political candidate or a group of political candidates;

(iv) Printing or distributing written or printed materials on behalf of, in support of, or in opposition to a political candidate or a group of political candidates;

(v) Using bulletins, newsletters, or other written or printed materials of an exempt organization, association, or corporation to promote, or to support, promote, or oppose a political candidate or a group of political candidates;

(vi) Using a vehicle of an exempt organization, association, or corporation to transport members or others to an event or rally on behalf of, in support of, or in opposition to a political candidate or a group of political candidates;

(vii) Using tax exempt property as an assembly site or gathering area for an event or rally, on behalf of, in support of, or in opposition to a political candidate or a group of political candidates; and

(viii) Using equipment or supplies of an exempt organization, association, or corporation to produce, reproduce, or distribute written or printed materials on behalf of, in support of, or in opposition to a political candidate or a group of political candidates.

(b) "Political candidate" means an individual who offers himself or herself, or is proposed by others, as a contestant for an elective office, whether such office is national, state, or local.

(2) An exempt organization, association, or corporation's property tax exemption will not be revoked as the result of an inadvertent violation of the provisions of this section, if the inadvertent violation is not part of a pattern of violation. An inadvertent violation repeated in the same or successive assessment years is presumed to be a pattern of violation.

(3) If an exempt organization, association, or corporation engages in prohibited political activity, the following sanctions shall apply:

(a) Upon any violation of this section, the department of revenue shall issue a notice in writing to the exempt organization, association, or corporation indicating the nature of the alleged violation. The organization shall have thirty days to respond. If, after considering relevant information, the department of revenue finds that the exempt organization, association, or corporation has engaged in prohibited activity, the department shall issue a notice in writing. The notice shall indicate the nature of the violation and a warning that further or additional violation of this section shall result in revocation of exemption. The exempt organization, association, or corporation may appeal the department's finding in accordance with the provisions of RCW 34.05.413 through 34.05.476.

(b) A further or additional violation of this section after the warning has been issued shall result in revocation of exemption.

(c) An appeal from the revocation decision of the department shall be made to the department within thirty days of mailing of the decision. The department shall provide by rule for hearing of the appeal in accordance with the provisions of RCW 34.05.413 through 34.05.476. A further appeal from an adverse decision of the department may be made in accordance with RCW 84.36.850.

(d) The nonprofit organization, association, or corporation shall not be allowed to reapply for property tax exemption during the remainder of the year in which the revocation decision under this section was issued, and for one additional assessment year.

(4) Organizations exempt from taxation under RCW 84.36.050 are exempt from subsection (1) of this section.

(5) Nothing in this section may be construed to prohibit political activity or limit freedom of speech of individual members of a nonprofit organization, association, or corporation exempt under this chapter.

(6) Nothing in this section may be construed as a prohibition on an exempt organization's ability to hold candidate forums where all candidates are given equal opportunity to express their views and distribute materials.