HOUSE BILL REPORT

                  SB 5452

                       As Passed House

                       April 10, 1997

Title:  An act relating to the property taxation of nonprofit cancer clinics.

Brief Description:  Exempting nonprofit cancer centers from property tax.

Sponsors:  Senators Hale, Loveland, West, Winsley, Rasmussen and Oke.

Brief History:

Committee Activity:

Finance:  4/1/97, 4/7/97 [DP].

Floor Activity:

Passed House:  4/10/97, 98‑0.

HOUSE COMMITTEE ON FINANCE

Majority Report:  Do pass.  Signed by 14 members:  Representatives B. Thomas, Chairman; Carrell, Vice Chairman; Mulliken, Vice Chairman; Dunshee, Ranking Minority Member; Dickerson, Assistant Ranking Minority Member; Boldt; Butler; Conway; Kastama; Morris; Pennington; Schoesler; Thompson and Van Luven.

Staff:  Linda Brooks (786-7153).

Background:  All property in this state is subject to the property tax each year based on the property=s value unless a specific exemption is provided by law.

Several property tax exemptions exist for nonprofit organizations.  Some exemptions apply only to property owned by a nonprofit organization, and other exemptions apply to property either owned or leased by a nonprofit.  Examples of some nonprofit property tax exemptions are depicted in the following table:

PROPERTY TAX EXEMPTIONS FOR NONPROFIT ORGANIZATIONS

Exempt on Owned Property Only Exempt on Owned or Leased

Property

$  Character Building, Benevolent, Protective$  Free Public Libraries

or Rehabilitative Social Service Organizations

$  Churches and Church Camps      $  Orphanages

$  Youth Character Building Organizations       $  Nursing Homes

$  War Veterans= Organizations    $  Hospitals

$  Water Distribution Property        $  Homes for the Aging

$  Nonprofit Nature Conservancy Organization$  Schools and Colleges

$  Public Assembly Halls          $  Day Care Centers

$  Medical Research or Training facilities      $  Radio/TV Rebroadcast Facilities

$  Art, Scientific, or Historical Collections        $  Performing Arts Property

 or Facilities               

$  Sheltered Workshops            $  Homeless Shelters

$  Fair Associations              $  Outpatient Dialysis Facilities

$  Humane Societies               $  Blood Banks

Summary of Bill:  All real or personal property owned or leased by a nonprofit organization in connection with a nonprofit cancer clinic is exempt from property tax.  To receive an exemption, the following conditions must be met:

1) the clinic must be comprised of or have been formed by an organization qualified for exemption under section 501(c)(3) of the federal Internal Revenue Code, by a municipal hospital corporation, or by both;

2) the clinic must be operated by an organization qualified for exemption under section 501(c)(3) of the federal Internal Revenue Code;

3) the property must be primarily used for prevention, detection, and treatment of cancer; and

4) if the property is leased, the nonprofit organization must receive the benefit of the exemption (instead of the property owner).

This property tax exemption applies not only to the medical facilities but also to administrative offices located within a clinic that are used exclusively in conjunction with the cancer treatment services provided.

This property tax exemption applies to taxes levied in 1998 or thereafter.

Appropriation:  None.

Fiscal Note:  Available.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  This bill benefits a small cancer clinic in the Tri-Cities.  The clinic could have qualified for a property tax exemption as a nonprofit hospital except for the fact that patients do not stay overnight.  To make it clear that the clinic qualifies for a property tax exemption, a legislative solution is being sought.

Testimony Against:  None.

Testified:  Senator Hale, prime sponsor.