State of Washington
65th Legislature
2017 Regular Session
By House Finance (originally sponsored by Representatives DeBolt and Orcutt)
AN ACT Relating to a property tax exemption for land owned by a nonprofit organization and designated as a master planned location for major industrial activity; amending RCW 84.36.805; adding a new section to chapter 84.36 RCW; and creating new sections.
NEW SECTION.  Sec. 1.  (1) The legislature finds that a four thousand four hundred acre industrial site in Lewis county was formerly a surface coal mining operation. The legislature further finds that coal removal operations ended in 2006. The legislature further finds that it designated areas of this reclaimed mine site as a new industrial park in state law (RCW 36.70A.368). The legislature further finds that this site has good access to both air and water ports as well as major north-south and east-west truck and rail corridors. The legislature further finds that this site is an ideal location for major industrial investment while also located in an area which enjoys open space, with wild and scenic beauty. The legislature further finds that the industrial park at Transalta (IPAT), a 501(c)(3) nonprofit organization, currently owns one thousand of the four thousand four hundred acre industrial site and works with the state department of commerce to market and develop the entire four thousand four hundred acre site for industrial activity. The legislature further finds that IPAT, unlike many nonprofits, is paying property taxes on the property that it is seeking to sell to third parties for industrial development pursuant to its nonprofit mission. The legislature further finds that these property taxes amount to approximately eight percent of operating expenses.
(2)(a) This section is the tax preference performance statement for the property tax exemption contained in section 2, chapter . . ., Laws of 2017 (section 2 of this act). This performance statement is only intended to be used for subsequent evaluation of the tax preferences. It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
(b) The legislature categorizes these tax preferences as intended to improve industry competitiveness and create or retain jobs, as indicated in RCW 82.32.808(2) (b) and (c).
(c) It is the legislature's specific public policy objective to provide a property tax exemption for land owned by a nonprofit organization that seeks to market and sell its land holdings for industrial development to fulfill a mission recognized in state law to redevelop land formerly used for coal mining activity.
(d) The joint legislative audit and review committee will review the number of parcels that received the tax preferences provided in this act that have been leased, sold, or gifted within seven years after the enactment of the tax preference. In order to obtain the data necessary to perform the review, the joint legislative audit and review committee may refer to data sources including county assessor property records.
NEW SECTION.  Sec. 2.  A new section is added to chapter 84.36 RCW to read as follows:
(1) All real property owned by a nonprofit organization and within an area designated as a master planned location for major industrial activity outside urban growth areas on lands formerly used or designated for surface coal mining and supporting uses, as provided in RCW 36.70A.368, is exempt from property taxation. Property otherwise eligible for an exemption from property taxation under this section ceases to be exempt as of the date that the nonprofit organization leases, gifts, sells, or transfers ownership of the property to any other person.
(2) A claim for an exemption under this section must be filed with the county assessor on forms prescribed by the department and furnished by the assessor.
Sec. 3.  RCW 84.36.805 and 2016 c 217 s 3 are each amended to read as follows:
(1) In order to qualify for an exemption under this chapter, the nonprofit organizations, associations, or corporations must satisfy the conditions in this section.
(2) The property must be used exclusively for the actual operation of the activity for which exemption is granted, unless otherwise provided, and does not exceed an amount reasonably necessary for that purpose. Notwithstanding anything to the contrary in this section:
(a) The loan or rental of the property does not subject the property to tax if:
(i) The rents and donations received for the use of the portion of the property are reasonable and do not exceed the maintenance and operation expenses attributable to the portion of the property loaned or rented; and
(ii) Except for the exemptions under RCW 84.36.030(4), 84.36.037, 84.36.050, and 84.36.060(1) (a) and (b), the property would be exempt from tax if owned by the organization to which it is loaned or rented;
(b) The use of the property for fund-raising events does not subject the property to tax if the fund-raising events are consistent with the purposes for which the exemption is granted or are conducted by a nonprofit organization. If the property is loaned or rented to conduct a fund-raising event, the requirements of (a) of this subsection (2) apply;
(c) An inadvertent use of the property in a manner inconsistent with the purpose for which exemption is granted does not subject the property to tax, 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.
(3) The facilities and services must be available to all regardless of race, color, national origin or ancestry.
(4) The organization, association, or corporation must be duly licensed or certified where such licensing or certification is required by law or regulation.
(5) Property sold to organizations, associations, or corporations with an option to be repurchased by the seller does not qualify for exempt status. This subsection does not apply to property sold to a nonprofit entity, as defined in RCW 84.36.560(7), by:
(a) A nonprofit as defined in RCW 84.36.800 that is exempt from income tax under 26 U.S.C. Sec. 501(c) of the federal internal revenue code;
(b) A governmental entity established under RCW 35.21.660, 35.21.670, or 35.21.730;
(c) A housing authority created under RCW 35.82.030;
(d) A housing authority meeting the definition in RCW 35.82.210(2)(a); or
(e) A housing authority established under RCW 35.82.300.
(6) The department must have access to its books in order to determine whether the nonprofit organization, association, or corporation is exempt from taxes under this chapter.
(7) This section does not apply to exemptions granted under RCW 84.36.020, 84.36.032, 84.36.250, 84.36.049, ((and)) 84.36.480(2), and section 2 of this act.
(8)(a) The use of property exempt under this chapter, other than as specifically authorized by this chapter, nullifies the exemption otherwise available for the property for the assessment year. However, the exemption is not nullified by the use of the property by any individual, group, or entity, where such use is not otherwise authorized by this chapter, for not more than fifty days in each calendar year, and the property is not used for pecuniary gain or to promote business activities for more than fifteen of the fifty days in each calendar year. The fifty and fifteen-day limitations provided in this subsection (8)(a) do not include days during which setup and takedown activities take place immediately preceding or following a meeting or other event by an individual, group, or entity using the property as provided in this subsection (8)(a).
(b) If uses of the exempt property exceed the fifty and fifteen-day limitations provided in (a) of this subsection (8) during an assessment year, the exemption is removed for the affected portion of the property for that assessment year.
NEW SECTION.  Sec. 4.  This act applies to taxes levied for collection in 2018 and thereafter.
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