Brief Description: Providing a limited property tax exemption for the use of facilities by artistic, scientific, and historical organizations.

Sponsors: Representatives Springer, Orcutt, Ormsby, Wallace, Sells, Roberts, Kelley, Santos and Goodman.

Hearing Date: 1/30/08

Staff: Rick Peterson (786-7150).

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 non-profit organizations. Examples of non-profit property tax exemptions are: character building, benevolent, protective or rehabilitative social service organizations; churches and church camps; youth character building organizations; war veterans organizations; national and international relief organizations; federal guaranteed student loan organizations; blood, bone, and tissue banks; public assembly halls; medical research or training facilities; art, scientific, and historical collections; sheltered workshops; fair associations; humane societies; water distribution property; schools and colleges; radio/television rebroadcast facilities; fire company property; daycare centers; free public libraries; orphanages; nursing homes; hospitals; outpatient dialysis facilities; homes for the aging; day care centers; performing arts properties; homeless shelters; and blood banks.

Property tax exempt property must be used exclusively for the actual operation of the activity for which the exemption was granted. Generally the property may be loaned or rented if: (a) the rent received for the use of the property is reasonable and does not exceed maintenance and operation expenses, and; (b) the organization renting the property would be exempt from tax if it owned the property.

Exemptions for renting the property to nonexempt organizations is provided for public assembly halls(use for pecuniary gain limited to 15 days a year); war veterans organizations(use for pecuniary gain limited to 15 days a year); character building, benevolent, protective or rehabilitative social service organizations(all non exempt users limited to 15 days for organizations located in counties with population less than 20,000); schools and colleges(use for pecuniary gain limited to 7 days a year); scientific, and historical collections and performing arts properties(all non exempt users limited to 25 days of which 7 can be for pecuniary gain).

To qualify for the exception, scientific, and historical collections and performing arts properties property must be rented for artistic, scientific, or historic purposes, for the production and performance of musical, dance, artistic, dramatic, or literary works, or for community gatherings or assembly, or meetings.

Summary of Bill:

Nonprofit associations that maintain and exhibit historical, scientific, or artistic collections and performing arts associations may retain their property tax exemption when they allow another organization that does not qualify for the property tax exemption to use or rent their exempt property. The number of days that property may be used for these purposes is increased from 25 to 50 days per year. The number of days the property may be used for profit making business activities is increased from seven days to 15 days.

Appropriation: None.

Fiscal Note: Available.

Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.