S-0946.1  _______________________________________________

                         SENATE BILL 5582

          _______________________________________________

State of Washington      54th Legislature     1995 Regular Session

By Senators Spanel, Sellar, McAuliffe, Hargrove, Loveland, Long, Winsley, Moyer and Haugen

Read first time 01/27/95.  Referred to Committee on Ways & Means.

Providing tax exemptions for entities providing services to children.

    AN ACT Relating to tax status of child care providers and nonprofit organizations that provide services to children and families; amending RCW 82.04.339 and 82.04.431; adding a new section to chapter 82.04 RCW; providing an effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1.  A new section is added to chapter 82.04 RCW to read as follows:

    This chapter does not apply to nonprofit organizations in respect to amounts derived from provision of the following services:

    (1) Child care resource and referral services;

    (2) Services related to the adoption of minor children; and

    (3) Child placement services, including recruitment and training of foster parents and care of orphans or foster children.

    Sec. 2.  RCW 82.04.339 and 1992 c 81 s 1 are each amended to read as follows:

    This chapter shall not apply to amounts derived ((by a church that is exempt from property tax under RCW 84.36.020)) from the provision of care for children for periods of less than twenty-four hours.

    Sec. 3.  RCW 82.04.431 and 1986 c 261 s 6 are each amended to read as follows:

    (1) For the purposes of RCW 82.04.4297, the term "health or social welfare organization" means an organization, including any community action council, which renders health or social welfare services as defined in subsection (2) of this section, which is a not-for-profit corporation under chapter 24.03 RCW and which is managed by a governing board of not less than eight individuals none of whom is a paid employee of the organization or which is a corporation sole under chapter 24.12 RCW.  Health or social welfare organization does not include a corporation providing professional services as authorized in chapter 18.100 RCW.  In addition a corporation in order to be exempt under RCW 82.04.4297 shall satisfy the following conditions:

    (a) No part of its income may be paid directly or indirectly to its members, stockholders, officers, directors, or trustees except in the form of services rendered by the corporation in accordance with its purposes and bylaws;

    (b) Salary or compensation paid to its officers and executives must be only for actual services rendered, and at levels comparable to the salary or compensation of like positions within the public service of the state;

    (c) Assets of the corporation must be irrevocably dedicated to the activities for which the exemption is granted and, on the liquidation, dissolution, or abandonment by the corporation, may not inure directly or indirectly to the benefit of any member or individual except a nonprofit organization, association, or corporation which also would be entitled to the exemption;

    (d) The corporation must be duly licensed or certified where licensing or certification is required by law or regulation;

    (e) The amounts received qualifying for exemption must be used for the activities for which the exemption is granted;

    (f) Services must be available regardless of race, color, national origin, or ancestry; and

    (g) The director of revenue shall have access to its books in order to determine whether the corporation is exempt from taxes within the intent of RCW 82.04.4297 and this section.

    (2) The term "health or social welfare services" includes and is limited to:

    (a) Mental health, drug, or alcoholism counseling or treatment;

    (b) Family counseling;

    (c) Health care services;

    (d) Therapeutic, diagnostic, rehabilitative, or restorative services for the care of the sick, aged, or physically, developmentally, or emotionally-disabled individuals;

    (e) Activities which are for the purpose of preventing or ameliorating juvenile delinquency or child abuse, including recreational activities for those purposes;

    (f) ((Care of orphans or foster children)) Family support services, including child care resource and referral, foster care, adoption services, and child placement services;

    (g) ((Day care of children;

    (h))) Employment development, training, and placement;

    (((i))) (h) Legal services to the indigent;

    (((j))) (i) Weatherization assistance or minor home repair for low-income homeowners or renters;

    (((k))) (j) Assistance to low-income homeowners and renters to offset the cost of home heating energy, through direct benefits to eligible households or to fuel vendors on behalf of eligible households; and

    (((l))) (k) Community services to low-income individuals, families, and groups, which are designed to have a measurable and potentially major impact on causes of poverty in communities of the state.

NEW SECTION. Sec. 4.  This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1995.

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