CERTIFICATION OF ENROLLMENT

 

                        HOUSE BILL 2098

 

 

                    Chapter 7, Laws of 2001

 

 

                        57th Legislature

             2001 First Special Legislative Session

 

 

TAXATION--HOUSING FOR LOW-INCOME HOUSEHOLDS

 

 

 

                    EFFECTIVE DATE:  8/23/01

Passed by the House May 24, 2001

  Yeas 96   Nays 0

 

 

              FRANK CHOPP

Speaker of the House of Representatives

     

 

 

             CLYDE BALLARD

Speaker of the House of Representatives

 

 

 

Passed by the Senate May 24, 2001

  Yeas 44   Nays 0

             CERTIFICATE

 

We, Timothy A. Martin and Cynthia Zehnder, Co-Chief Clerks of the House of Representatives of the State of Washington, do hereby certify that the attached is HOUSE BILL 2098 as passed by the House of Representatives and the Senate on the dates hereon set forth.

 

 

 

          TIMOTHY A. MARTIN

                          Chief Clerk

 

 

           CYNTHIA ZEHNDER

                          Chief Clerk

               BRAD OWEN

President of the Senate

 

 

 

Approved June 11, 2001 Place Style On Codes above, and Style Off Codes below.                

                                FILED                

 

            June 11, 2001 - 3:07 p.m.

 

              GARY LOCKE

Governor of the State of Washington

                 Secretary of State

                 State of Washington


           _____________________________________________

 

                          HOUSE BILL 2098

           _____________________________________________

 

                     AS AMENDED BY THE SENATE

 

          Passed Legislature - 2001 First Special Session

 

State of Washington      57th Legislature     2001 Regular Session

 

By Representatives Edmonds, Pennington, McIntire, Jarrett, Morris, Cairnes, Santos and Conway; by request of Department of Revenue

 

Read first time 02/14/2001.  Referred to Committee on Finance.

  Changing the property tax exemption for very low‑income households.       


    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.


    Passed the House May 24, 2001.

    Passed the Senate May 24, 2001.

Approved by the Governor June 11, 2001.

    Filed in Office of Secretary of State June 11, 2001.