AN ACT Relating to the eligibility of nonprofit
homes for the aging for exemption from property taxation; amending RCW
84.36.041; and creating a new section.
BE
IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1.
RCW 84.36.041 and 1992 c 213 s 1 are each amended to read as follows:
(1) All real and personal property used by a
nonprofit home for the aging that is reasonably necessary for the purposes of
the home is exempt from taxation if the benefit of the exemption inures to the
home and:
(a) At least fifty percent of the occupied
dwelling units in the home are occupied by eligible residents; or
(b) The home is subsidized under a federal
department of housing and urban development program. The department of revenue
shall provide by rule a definition of homes eligible for exemption under this
subsection (b), consistent with the purposes of this section.
(2) All real and personal property used by a
nonprofit home for the aging that is reasonably necessary for the purposes of
the home is exempt from taxation if the benefit of the exemption inures to the
home and the construction, rehabilitation, acquisition, or refinancing of the
home is financed under a program using bonds exempt from federal income tax if
at least seventy-five percent of the total amount financed uses the tax exempt
bonds and the financing program requires the home to reserve a percentage of
all dwelling units so financed for low-income residents. The initial term of
the exemption under this subsection shall equal the term of the tax exempt bond
used in connection with the financing program, or the term of the requirement
to reserve dwelling units for low-income residents, whichever is shorter. If
the financing program involves less than the entire home, only those dwelling
units included in the financing program are eligible for total exemption. The
department of revenue shall provide by rule the requirements for monitoring
compliance with the provisions of this subsection and the requirements for
exemption including:
(a) The number or percentage of dwelling
units required to be occupied by low-income residents, and a definition of
low-income;
(b) The type and character of the dwelling
units, whether independent units or otherwise; and
(c) Any particular requirements for
continuing care retirement communities.
(3) A home for the aging is eligible for
a partial exemption on the real property and a total exemption for the
home's personal property if the home does not meet the requirements of subsection
(1) of this section because fewer than fifty percent of the occupied dwelling
units are occupied by eligible residents((.)), as follows:
(a) A partial exemption shall be allowed for
each dwelling unit in a home occupied by a resident requiring assistance with
activities of daily living.
(b) A partial exemption shall be allowed for
each dwelling unit in a home occupied by an eligible resident.
(c) A partial exemption shall be allowed for
an area jointly used by a home for the aging and by a nonprofit organization,
association, or corporation currently exempt from property taxation under one
of the other provisions of this chapter. The shared area must be reasonably
necessary for the purposes of the nonprofit organization, association, or corporation
exempt from property taxation under one of the other provisions of this
chapter, such as kitchen, dining, and laundry areas.
(d) The amount of exemption shall be
calculated by multiplying the assessed value of the property reasonably
necessary for the purposes of the home, less the assessed value of any area
exempt under (c) of this subsection, by a fraction. The numerator of the
fraction is the number of dwelling units occupied by eligible ((persons
multiplied by two)) residents and by residents requiring assistance with
activities of daily living. The denominator of the fraction is the total
number of occupied dwelling units as of January 1st of the year for which
exemption is claimed. ((The fraction shall never exceed one.
(3))) (4)
To be exempt under this section, the property must be used exclusively for the
purposes for which the exemption is granted, except as provided in RCW
84.36.805.
(((4))) (5) A home for the aging
is exempt from taxation only if the organization operating the home is exempt
from income tax under section 501(c) of the federal internal revenue code as
existing on January 1, 1989, or such subsequent date as the director may
provide by rule consistent with the purposes of this section.
(((5))) (6) In order for the home to
be eligible for exemption under subsections (1)(a) and (2)(b) of this section,
each eligible resident of a home for the aging shall submit ((the form
required under RCW 84.36.385)) an income verification form to the
county assessor by July 1st of the assessment year in which the application
for exemption is made. The income verification form shall be prescribed and
furnished by the department of revenue. An eligible resident who has filed
a form for a previous year need not file a new form until there is a change in
status affecting the person's eligibility.
(((6))) (7) In determining the
true and fair value of a home for the aging for purposes of the partial
exemption provided by subsection (((2))) (3) of this section, the
assessor shall apply the computation method provided by RCW 84.34.060 and shall
consider only the use to which such property is applied during the years for
which such partial exemptions are available and shall not consider potential
uses of such property.
(((7))) (8) A home for the aging
that was exempt or partially exempt for taxes levied in 1993 for
collection in ((1990 and)) 1994 is partially exempt for taxes
levied in 1994 for collection in 1995, has an increase in taxable value for
taxes levied in 1994 for collection in 1995 due to the change prescribed by
chapter . . ., Laws of 1993 (this act) with respect to the numerator
of the fraction used to determine the amount of a partial exemption, and is
not fully exempt under this section is entitled to partial exemptions as
follows:
(a) For taxes levied in 1994 for
collection in ((1991 and 1992, two-thirds of the assessed value that would
otherwise be subject to tax under this section is exempt from taxation)) 1995,
the home shall pay taxes based upon the taxable value in 1993 plus one-third of
the increase in the taxable value from 1993 to the nonexempt value calculated
under subsection (3)(d) of this section for 1994.
(b) For taxes levied in 1995 for
collection in ((1993)) 1996, ((one-third of the assessed value
that would otherwise be subject to tax under this section is exempt from
taxation)) the home shall pay taxes based upon the taxable value for
1994 as calculated in (a) of this subsection plus one-half of the increase in
the taxable value from 1994 to the nonexempt value calculated under subsection
(3)(d) of this section for 1995. For taxes levied in 1996 for collection in
1997 and for taxes levied thereafter, this subsection (8) does not apply, and
the home shall pay taxes without reference to this subsection (8).
(c) For purposes of this subsection (8),
"taxable value" means the value of the home upon which the tax rate
is applied in order to determine the amount of taxes due.
(((8))) (9) As used in this
section:
(a) "Eligible resident" means a person
who ((would be eligible for an exemption of property taxes under RCW
84.36.381 (1) through (4) if the person owned a single-family dwelling and)):
(i) Occupied the dwelling unit as a
principal place of residence as of January 1st of the year for which the
exemption is claimed. Confinement of the person to a hospital or nursing home
does not disqualify the claim of exemption if the dwelling unit is temporarily
unoccupied or if the dwelling unit is occupied by a spouse, a person
financially dependent on the claimant for support, or both; and
(ii) Is sixty-one years of age or older on
December 31st of the year in which the exemption claim is filed, or is, at the
time of filing, retired from regular gainful employment by reason of physical
disability. Any surviving spouse of a person who was receiving an exemption at
the time of the person's death shall qualify if the surviving spouse is
fifty-seven years of age or older and otherwise meets the requirements of this
subsection; and
(iii) Has a combined disposable income((,
as defined in RCW 84.36.383,)) of no more than the greater of
twenty-two thousand dollars ((or less)) or eighty percent of the
median income adjusted for family size as most recently determined by the
federal department of housing and urban development for the county in which the
person resides. For the purposes of determining eligibility under this
section, a "cotenant" ((as used in RCW 84.36.383)) means a
person who resides with an eligible resident and who shares personal financial
resources with the eligible resident.
(b) "Combined disposable income"
means the disposable income of the person submitting the income verification
form, plus the disposable income of his or her spouse, and the disposable
income of each cotenant occupying the dwelling unit for the preceding calendar
year, less amounts paid by the person submitting the income verification form
or his or her spouse or cotenant during the previous year for the treatment or
care of either person received in the dwelling unit or in a nursing home. If
the person submitting the income verification form was retired for two months
or more of the preceding year, the combined disposable income of such person
shall be calculated by multiplying the average monthly combined disposable income
of such person during the months such person was retired by twelve. If the
income of the person submitting the income verification form is reduced for two
or more months of the preceding year by reason of the death of the person's
spouse, the combined disposable income of such person shall be calculated by
multiplying the average monthly combined disposable income of such person after
the death of the spouse by twelve.
(c) "Disposable income" means
adjusted gross income as defined in the federal internal revenue code, as
amended prior to January 1, 1989, or such subsequent date as the director may
provide by rule consistent with the purpose of this section, plus all of the
following items to the extent they are not included in or have been deducted from
adjusted gross income:
(i) Capital gains, other than nonrecognized
gain on the sale of a principal residence under section 1034 of the federal
internal revenue code, or gain excluded from income under section 121 of the
federal internal revenue code to the extent it is reinvested in a new principal
residence;
(ii) Amounts deducted for loss;
(iii) Amounts deducted for depreciation;
(iv) Pension and annuity receipts;
(v) Military pay and benefits other than
attendant-care and medical-aid payments;
(vi) Veterans benefits other than
attendant-care and medical-aid payments;
(vii) Federal social security act and
railroad retirement benefits;
(viii) Dividend receipts; and
(ix) Interest received on state and
municipal bonds.
(d) "Resident requiring assistance with
activities of daily living" means a person who requires significant
assistance with the activities of daily living and who would be at risk of
nursing home placement without this assistance.
(e) "Home for the aging" means
a residential housing facility that (i) provides a housing arrangement chosen
voluntarily by the resident, the resident's guardian or conservator, or another
responsible person; (ii) has only residents who are at least ((sixty-two))
sixty-one years of age or who have needs for care generally compatible
with persons who are at least ((sixty-two)) sixty-one years of
age; and (iii) provides varying levels of care and supervision, as agreed to at
the time of admission or as determined necessary at subsequent times of
reappraisal.
(((9))) (10) A for-profit home
for the aging that converts to nonprofit status after June 11, 1992, and would
otherwise be eligible for tax exemption under this section may not receive the
tax exemption until five years have elapsed since the conversion. The
exemption shall then be ratably granted over the next five years.
NEW SECTION. Sec. 2.
This act shall be effective for taxes levied in 1994 for collection in 1995 and
for taxes levied thereafter.
