Z‑0400.2   _____________________________________________

 

SENATE BILL 6092

 

           _____________________________________________

 

State of Washington      57th Legislature     2001 Regular Session

 

By Senators Kohl‑Welles, Costa and Oke; by request of Department of Revenue

 

Read first time 02/20/2001.  Referred to Committee on Ways & Means.

_1      AN ACT Relating to the exemption from taxation of housing for

_2  very low-income households; amending RCW 84.36.560; and reenacting

_3  and amending RCW 84.36.805.

     

_4  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

     

_5      Sec. 1.  RCW 84.36.560 and 1999 c 203 s 1 are each amended to read

_6  as follows:

_7      (1) The real and personal property owned or used by a nonprofit

_8  entity in providing rental housing for very low-income households

_9  or used to provide space for the placement of a mobile home for a

10  very low-income household within a mobile home park is exempt from

11  taxation if:

12      (a) The benefit of the exemption inures to the nonprofit

13  ((organization, association, or corporation)) entity;

14      (b) At least seventy-five percent of the occupied dwelling

15  units in the rental housing or lots in a mobile home park are

16  occupied by a very low-income household((s)); and

17      (c) The rental housing ((was)) or lots in a mobile home park

18  were insured, financed, or assisted in whole or in part through:

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_1      (i) A federal or state housing program administered by the

_2  department of community, trade, and economic development; or

_3      (ii) An affordable housing levy authorized under RCW 84.52.105.

_4      (2) If less than seventy-five percent of the occupied dwelling

_5  units within the rental housing or lots in the mobile home park

_6  are occupied by very low-income households, the rental housing

_7  ((used to provide housing for very low-income households)) or

_8  mobile home park is eligible for a partial exemption on the real

_9  property and a total exemption of the housing's or park's personal

10  property as follows:

11      (a) ((The)) A partial exemption shall be allowed for each

12  dwelling unit in the rental housing or for each lot in a mobile

13  home park occupied by a very low-income household((s)).

14      (b) The amount of exemption shall be calculated by multiplying

15  the assessed value of the property reasonably necessary to provide

16  the rental housing or to operate the mobile home park by a

17  fraction.  The numerator of the fraction is the number of dwelling

18  units or lots occupied by very low-income households as of

19  December 31st of the first assessment year in which the rental

20  housing or mobile home park becomes operational or on January 1st

21  of ((the)) each subsequent assessment year for which the exemption

22  is claimed.  The denominator of the fraction is the total number of

23  ((occupied)) dwelling units ((as of)) or lots occupied as of

24  December 31st of the first assessment year the rental housing or

25  mobile home park becomes operational and January 1st of ((the))

26  each subsequent assessment year for which exemption is claimed.

27      (3) ((Rental housing for very low-income households is exempt

28  from property taxation only if the nonprofit operating the housing

29  is exempt from income tax under section 501(c) of the federal

30  internal revenue code)) If a currently exempt rental housing unit

31  or mobile home lot was occupied by a very low-income household at

32  the time the exemption was granted, and the income of the

33  household subsequently rises above fifty percent of the median

34  income but remains at or below eighty percent of median income

35  adjusted for family size as most recently determined by the

36  federal department of housing and urban development for the county

37  in which the rental housing or mobile home park is located, the

38  exemption will continue as long as the housing continues to meet

SB 6092                        p. 2

_1  the certification requirements of a very low-income housing

_2  program administered by the department of community, trade, and

_3  economic development or the affordable housing levy under RCW

_4  84.52.105.  However, if a dwelling unit or a lot becomes vacant and

_5  is subsequently re-rented, the income of the new household must be

_6  at or below fifty percent of the median income adjusted for family

_7  size as most recently determined by the federal department of

_8  housing and urban development for the county in which the rental

_9  housing or mobile home park is located to remain exempt from

10  property tax.

11      (4) If at the time of initial application the property is

12  unoccupied, or subsequent to the initial application the property

13  is unoccupied because of renovations, and the property is not

14  currently being used for the exempt purpose authorized by this

15  section but will be used for the exempt purpose within two

16  assessment years, the property shall be eligible for a property

17  tax exemption for the assessment year in which the claim for

18  exemption is submitted under the following conditions:

19      (a) A commitment for financing to acquire, construct, renovate,

20  or otherwise convert the property to provide housing for very low-

21  income households has been obtained, in whole or in part, by the

22  nonprofit entity claiming the exemption from:

23      (i) A federal or state housing program administered by the

24  department of community, trade, and economic development; or

25      (ii) An affordable housing levy authorized under RCW 84.52.105;

26      (b) The nonprofit entity has manifested its intent in writing

27  to construct, remodel, or otherwise convert the property to

28  housing for very low-income households; and

29      (c) Only the portion of property that will be used to provide

30  housing or lots for very low-income households shall be exempt

31  under this section.

32      (((4))) (5) To be exempt under this section, the property must

33  be used exclusively for the purposes for which the exemption is

34  granted, except as provided in RCW 84.36.805.

35      (((5))) (6) The nonprofit entity qualifying for ((the)) a

36  property tax exemption under this section ((by providing rental

37  housing for very low-income households)) may agree to make

38  payments to the city, county, or other political subdivision for

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_1  improvements, services, and facilities furnished by the city,

_2  county, or political subdivision for the benefit of the rental

_3  housing.  However, these payments shall not exceed the amount last

_4  levied as the annual tax of the city, county, or political

_5  subdivision upon the property prior to exemption.

_6      (((6))) (7) As used in this section:

_7      (a) "Group home" means a single-family dwelling financed, in

_8  whole or in part, by the department of community, trade, and

_9  economic development or by an affordable housing levy under RCW

10  84.52.105.  The residents of a group home shall not be considered to

11  jointly constitute a household, but each resident shall be

12  considered to be a separate household occupying a separate

13  dwelling unit.  The individual incomes of the residents shall not be

14  aggregated for purposes of this exemption;

15      (b) "Mobile home lot" or "mobile home park" means the same as

16  these terms are defined in RCW 59.20.030;

17      (c) "Occupied dwelling unit" means a living unit that is

18  occupied by an individual or household as of December 31st of the

19  first assessment year the rental housing becomes operational or is

20  occupied by an individual or household on January 1st of ((the))

21  each subsequent assessment year in which the claim for exemption

22  is submitted.  If the housing facility is comprised of three or

23  fewer dwelling units and there are any unoccupied units on January

24  1st, the department shall base the amount of the exemption upon

25  the number of occupied dwelling units as of December 31st of the

26  first assessment year the rental housing becomes operational and

27  on May 1st of each subsequent assessment year in which the claim

28  for exemption is submitted;

29      (((b))) (d) "Rental housing" means a residential housing

30  facility or group home that is occupied but not owned by very low-

31  income households;

32      (((c))) (e) "Very low-income household((s))" means a single

33  person, family, or unrelated persons living together whose income

34  is at or below fifty percent of the median income adjusted for

35  family size as most recently determined by the federal department

36  of housing and urban development for the county in which the

37  rental housing is located and in effect as of January 1st of the

38  year the application for exemption is submitted; and

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_1      (((d))) (f) "Nonprofit entity" means a:

_2      (i) Nonprofit as defined in RCW 84.36.800 ((and includes a))

_3  that is exempt from income tax under section 501(c) of the federal

_4  internal revenue code;

_5      (ii) Limited partnership where ((the)) a nonprofit ((or)) as

_6  defined in RCW 84.36.800 that is exempt from income tax under

_7  section 501(c) of the federal internal revenue code, a public

_8  corporation established under RCW 35.21.660, 35.21.670, ((and)) or

_9  35.21.730, a housing authority created under RCW 35.82.030 or

10  35.82.300, or a housing authority meeting the definition in RCW

11  35.82.210(2)(a) is a general partner((,)); or ((a))

12      (iii) Limited liability company where ((the)) a nonprofit ((or

13  the)) as defined in RCW 84.36.800 that is exempt from income tax

14  under section 501(c) of the federal internal revenue code, a

15  public corporation established under RCW 35.21.660, 35.21.670, or

16  35.21.730, a housing authority established under RCW 35.82.030 or

17  35.82.300, or a housing authority meeting the definition in RCW

18  35.82.210(2)(a) is a managing member.

     

19      Sec. 2.  RCW 84.36.805 and 1999 c 203 s 2 and 1999 c 139 s 3 are

20  each reenacted and amended to read as follows:

21      (1) In order to qualify for an exemption under this chapter and

22  RCW 84.36.560, the nonprofit organizations, associations, or

23  corporations must satisfy the conditions in this section.

24      (2) The property must be used exclusively for the actual

25  operation of the activity for which exemption is granted, unless

26  otherwise provided, and does not exceed an amount reasonably

27  necessary for that purpose, except:

28      (a) The loan or rental of the property does not subject the

29  property to tax if:

30      (i) The rents and donations received for the use of the portion

31  of the property are reasonable and do not exceed the maintenance

32  and operation expenses attributable to the portion of the property

33  loaned or rented; and

34      (ii) Except for the exemptions under RCW 84.36.030(4) and

35  84.36.037, the property would be exempt from tax if owned by the

36  organization to which it is loaned or rented;

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_1      (b) The use of the property for fund-raising activities does

_2  not subject the property to tax if the fund-raising activities are

_3  consistent with the purposes for which the exemption is granted.

_4      (3) The property must be irrevocably dedicated to the purpose

_5  for which exemption has been granted, and on the liquidation,

_6  dissolution, or abandonment by said organization, association, or

_7  corporation, said property will not inure directly or indirectly

_8  to the benefit of any shareholder or individual, except a

_9  nonprofit organization, association, or corporation which too

10  would be entitled to property tax exemption.  This property need not

11  be irrevocably dedicated if it is leased or rented to those

12  qualified for exemption under this chapter or RCW 84.36.560 for

13  leased property, but only if under the terms of the lease or

14  rental agreement the nonprofit organization, association, or

15  corporation receives the benefit of the exemption.

16      (4) The facilities and services must be available to all

17  regardless of race, color, national origin or ancestry.

18      (5) The organization, association, or corporation must be duly

19  licensed or certified where such licensing or certification is

20  required by law or regulation.

21      (6) Property sold to organizations, associations, or

22  corporations with an option to be repurchased by the seller shall

23  not qualify for exempt status.  This subsection does not apply to

24  property sold to a nonprofit entity, as defined in RCW

25  84.36.560(7), by:

26      (a) A nonprofit as defined in RCW 84.36.800 that is exempt from

27  income tax under section 501(c) of the federal internal revenue

28  code;

29      (b) A governmental entity established under RCW 35.21.660,

30  35.21.670, or 35.21.730;

31      (c) A housing authority created under RCW 35.82.030;

32      (d) A housing authority meeting the definition in RCW

33  35.82.210(2)(a); or

34      (e) A housing authority established under RCW 35.82.300.

35      (7) The department shall have access to its books in order to

36  determine whether the nonprofit organization, association, or

37  corporation is exempt from taxes under this chapter and RCW

38  84.36.560.

SB 6092                        p. 6

 

_1      (8) This section does not apply to exemptions granted under RCW

_2  84.36.020, 84.36.032, 84.36.250, and 84.36.260.

 

‑‑‑ END ‑‑‑

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