S-3055.1

1949-S.E AMS LAW S3055.1

ESHB 1949 - S COMM AMD

By Committee on Law & Justice

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature finds that exemption from property tax is granted to certain types of organizations because their organizational purposes are basically altruistic, religious, or educational. Further, the Washington State Constitution Article I, section 11, mandates absolute freedom of conscience for religious organizations and prohibits attempts by the state to restrict that freedom. The legislature recognizes that nonprofit organizations provide community services and community benefit. It is in recognition of this contribution to a stable, quality community that exemption from property tax is granted. The legislature further finds that, because of the nature of the state's tax system, many essential services, such as education, and police and fire protection, are paid by the citizens through their 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 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 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 intervention in a political campaign on behalf of, in support of, or in opposition to, a ballot proposition, 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 ballot proposition, 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 ballot proposition, 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 ballot proposition, 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 ballot proposition, 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 ballot proposition, 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 ballot proposition, a political candidate, or a group of political candidates;

(vii) Disbursing funds in the form of dues or membership fees to an entity that uses any portion of the dues or membership fees on behalf of, in support of, or in opposition to a ballot proposition, a political candidate, or a group of political candidates;

(viii) 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 ballot proposition, a political candidate, or a group of political candidates; and

(ix) 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 ballot proposition, 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 34.05.410 through 34.05.494.

(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 34.05.410 through 34.05.494. A further appeal from an adverse decision of the department may be made de novo 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.

(7) The property tax exemption of a nonprofit organization, association, or corporation shall not be jeopardized under this section if the exempt property is rented to another organization for an event or rally on behalf of, in support of, or in opposition to, a political candidate or group of political candidates if the rent received for the use of the property represents the normal and standard rate for the maintenance and operation expenses associated with such use of the property and does not exceed the maintenance and operation expenses attributable to the portion of the property rented, and the rental of the property otherwise complies with the provisions of RCW 84.36.805.

NEW SECTION. Sec. 3. No provision of this act may be applied, construed, or interpreted, in any way, to be more restrictive than the application, construction, or interpretation of the provisions of 26 U.S.C. Sec. 501(c)(3) of the internal revenue code as they apply to political activities by tax-exempt, nonprofit organizations and the loss of tax-exempt status by such organizations."

ESHB 1949 - S COMM AMD

By Committee on Law & Justice

On page 1, line 2 of the title, after "taxes;" strike the remainder of the title and insert "adding a new section to chapter 84.36 RCW; and creating new sections."