AN ACT Relating to the
exemption from taxation of housing for very low-income households; amending RCW
84.36.560; and reenacting and amending RCW 84.36.805.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
Sec. 1. RCW 84.36.560 and 1999 c
203 s 1 are each amended to read as follows:
(1) The real and
personal property owned or used by a nonprofit entity in providing
rental housing for very low-income households or used to provide space for
the placement of a mobile home for a very low-income household within a mobile
home park is exempt from taxation if:
(a) The benefit of the
exemption inures to the nonprofit ((organization, association, or
corporation)) entity;
(b) At least
seventy-five percent of the occupied dwelling units in the rental housing or
lots in a mobile home park are occupied by a very low-income
household((s)); and
(c) The rental housing
((was)) or lots in a mobile home park were insured, financed, or
assisted in whole or in part through:
(i) A federal or state
housing program administered by the department of community, trade, and
economic development; or
(ii) An affordable
housing levy authorized under RCW 84.52.105.
(2) If less than
seventy-five percent of the occupied dwelling units within the rental
housing or lots in the mobile home park are occupied by very low-income
households, the rental housing ((used to provide housing for very low-income
households)) or mobile home park is eligible for a partial exemption
on the real property and a total exemption of the housing's or park's
personal property as follows:
(a) ((The)) A
partial exemption shall be allowed for each dwelling unit in the rental housing
or for each lot in a mobile home park occupied by a very
low-income household((s)).
(b) The amount of
exemption shall be calculated by multiplying the assessed value of the property
reasonably necessary to provide the rental housing or to operate the mobile
home park by a fraction. The numerator of the fraction is the number of
dwelling units or lots occupied by very low-income households as of December
31st of the first assessment year in which the rental housing or mobile home park
becomes operational or on January 1st of ((the)) each subsequent
assessment year for which the exemption is claimed. The denominator of the
fraction is the total number of ((occupied)) dwelling units ((as of))
or lots occupied as of December 31st of the first assessment year the rental
housing or mobile home park becomes operational and January 1st of ((the))
each subsequent assessment year for which exemption is claimed.
(3) ((Rental housing
for very low-income households is exempt from property taxation only if the
nonprofit operating the housing is exempt from income tax under section 501(c)
of the federal internal revenue code)) If a currently exempt rental
housing unit in a facility with ten units or fewer or mobile home lot in a
mobile home park with ten lots or fewer was occupied by a very low-income
household at the time the exemption was granted and the income of the household
subsequently rises above fifty percent of the median income but remains at or
below eighty percent of the median income, the exemption will continue as long
as the housing continues to meet the certification requirements of a very
low-income housing program administered by the department of community, trade,
and economic development or the affordable housing levy under RCW 84.52.105.
For purposes of this section, median income, as most recently determined by the
federal department of housing and urban development for the county in which the
rental housing or mobile home park is located, shall be adjusted for family
size. However, if a dwelling unit or a lot becomes vacant and is subsequently
re-rented, the income of the new household must be at or below fifty 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
rental housing or mobile home park is located to remain exempt from property
tax.
(4) If at the time
of initial application the property is unoccupied, or subsequent to the initial
application the property is unoccupied because of renovations, and the property
is not currently being used for the exempt purpose authorized by this section
but will be used for the exempt purpose within two assessment years, the
property shall be eligible for a property tax exemption for the assessment year
in which the claim for exemption is submitted under the following conditions:
(a) A commitment for
financing to acquire, construct, renovate, or otherwise convert the property to
provide housing for very low-income households has been obtained, in whole or
in part, by the nonprofit entity claiming the exemption from:
(i) A federal or
state housing program administered by the department of community, trade, and
economic development; or
(ii) An affordable
housing levy authorized under RCW 84.52.105;
(b) The nonprofit
entity has manifested its intent in writing to construct, remodel, or otherwise
convert the property to housing for very low-income households; and
(c) Only the portion
of property that will be used to provide housing or lots for very low-income
households shall be exempt under this section.
(((4))) (5)
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.
(((5))) (6)
The nonprofit entity qualifying for ((the)) a property tax
exemption under this section ((by providing rental housing for very
low-income households)) may agree to make payments to the city, county, or
other political subdivision for improvements, services, and facilities
furnished by the city, county, or political subdivision for the benefit of the
rental housing. However, these payments shall not exceed the amount last
levied as the annual tax of the city, county, or political subdivision upon the
property prior to exemption.
(((6))) (7)
As used in this section:
(a) "Group
home" means a single-family dwelling financed, in whole or in part, by the
department of community, trade, and economic development or by an affordable
housing levy under RCW 84.52.105. The residents of a group home shall not be
considered to jointly constitute a household, but each resident shall be
considered to be a separate household occupying a separate dwelling unit. The
individual incomes of the residents shall not be aggregated for purposes of
this exemption;
(b) "Mobile
home lot" or "mobile home park" means the same as these terms
are defined in RCW 59.20.030;
(c)
"Occupied dwelling unit" means a living unit that is occupied by
an individual or household as of December 31st of the first assessment year the
rental housing becomes operational or is occupied by an individual or household
on January 1st of ((the)) each subsequent assessment year in
which the claim for exemption is submitted. If the housing facility is
comprised of three or fewer dwelling units and there are any unoccupied units
on January 1st, the department shall base the amount of the exemption upon the
number of occupied dwelling units as of December 31st of the first assessment
year the rental housing becomes operational and on May 1st of each subsequent
assessment year in which the claim for exemption is submitted;
(((b))) (d)
"Rental housing" means a residential housing facility or
group home that is occupied but not owned by very low-income households;
(((c))) (e)
"Very low-income household((s))" means a single person,
family, or unrelated persons living together whose income is at or below fifty
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 rental housing is located and in effect as of January 1st of the
year the application for exemption is submitted; and
(((d))) (f)
"Nonprofit entity" means a:
(i) Nonprofit as
defined in RCW 84.36.800 ((and includes a)) that is exempt from
income tax under section 501(c) of the federal internal revenue code;
(ii) Limited
partnership where ((the)) a nonprofit ((or)) as defined
in RCW 84.36.800 that is exempt from income tax under section 501(c) of the
federal internal revenue code, a public corporation established under RCW
35.21.660, 35.21.670, ((and)) or 35.21.730, a housing
authority created under RCW 35.82.030 or 35.82.300, or a housing authority
meeting the definition in RCW 35.82.210(2)(a) is a general partner((,));
or ((a))
(iii) Limited
liability company where ((the)) a nonprofit ((or the)) as
defined in RCW 84.36.800 that is exempt from income tax under section 501(c) of
the federal internal revenue code, a public corporation established
under RCW 35.21.660, 35.21.670, or 35.21.730, a housing authority established
under RCW 35.82.030 or 35.82.300, or a housing authority meeting the definition
in RCW 35.82.210(2)(a) is a managing member.
Sec. 2. RCW 84.36.805 and 1999 c
203 s 2 and 1999 c 139 s 3 are each reenacted and amended to read as follows:
(1) In order to qualify
for an exemption under this chapter and RCW 84.36.560, 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, except:
(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) and 84.36.037, 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 activities does not subject the property to tax if the
fund-raising activities are consistent with the purposes for which the
exemption is granted.
(3) The property must
be irrevocably dedicated to the purpose for which exemption has been granted,
and on the liquidation, dissolution, or abandonment by said organization,
association, or corporation, said property will not inure directly or
indirectly to the benefit of any shareholder or individual, except a nonprofit
organization, association, or corporation which too would be entitled to
property tax exemption. This property need not be irrevocably dedicated if it
is leased or rented to those qualified for exemption under this chapter or RCW
84.36.560 for leased property, but only if under the terms of the lease or
rental agreement the nonprofit organization, association, or corporation
receives the benefit of the exemption.
(4) The facilities and
services must be available to all regardless of race, color, national origin or
ancestry.
(5) The organization,
association, or corporation must be duly licensed or certified where such
licensing or certification is required by law or regulation.
(6) Property sold to
organizations, associations, or corporations with an option to be repurchased
by the seller shall 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 section 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.
(7) The department
shall have access to its books in order to determine whether the nonprofit
organization, association, or corporation is exempt from taxes under this
chapter and RCW 84.36.560.
(8) This
section does not apply to exemptions granted under RCW 84.36.020, 84.36.032,
84.36.250, and 84.36.260.
