AN ACT Relating to property tax exemptions for homes for the aged; amending RCW 84.36.040 and 84.36.815; creating a new section; and declaring an emergency.

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

Sec. 1. Section 84.36.040, chapter 15, Laws of 1961 as last amended by section 1, chapter 31, Laws of 1987 and RCW 84.36.040 are each amended to read as follows:

(1) The real and personal property used by nonprofit ((~~(1)~~)) (a) day care centers as defined pursuant to RCW 74.15.020 as now or hereafter amended; ((~~(2)~~)) (b) free public libraries; ((~~(3)~~)) (c) orphanages and orphan asylums; ((~~(4)~~)) (d) homes for the aged; ((~~(5)~~)) (e) homes for the sick or infirm; ((~~(6)~~)) (f) hospitals for the sick; and ((~~(7)~~)) (g) outpatient dialysis facilities, which are used for the purposes of such organizations shall be exempt from taxation: PROVIDED, That the benefit of the exemption inures to the user.

(2) To be exempt under this section, the property must be used exclusively for the purposes for which exemption is granted, except as provided in RCW 84.36.805.

(3) To be exempt under this section, a home for the aged must satisfy one or more of the conditions in (a) through (c) of this subsection:

(a) The property has been continuously exempt from property taxes as a home for the aged for taxes levied for collection during 1986 and thereafter.

(b) The home is owned and operated by an eligible nonprofit organization which has been exempt from income tax under section 501(c) of the Internal Revenue Code for at least five years before the date of application for exemption under this section.

(c) On January 1st of the assessment year, or the date of initial application for exemption of the home, whichever is later, sixty percent or more of the dwelling units in the home are occupied by persons who meet the requirements for an exemption under RCW 84.36.381, other than the requirements that the residence be a single family dwelling and the resident own the residence.

(4) As used in this section:

(a) "Eligible nonprofit organization" means an organization which satisfies all of the conditions in (a)(i) through (iii) of this subsection.

(i) The organization must be nonprofit within the meaning of RCW 84.36.800.

(ii) The organization must have received a ruling or determination from the federal internal revenue service that it is exempt from income tax under section 501(c) of the Internal Revenue Code.

(iii) Upon initial application for exemption under this section, the organization must certify to the department that no officer, director, trustee, or employee of the organization has had any ownership or financial interest in the property within five years before the date of application for exemption under this section.

(b) "Internal Revenue Code" means the federal Internal Revenue Code, as in effect on or before January 1, 1988.

Sec. 2. Section 9, chapter 40, Laws of 1973 2nd ex. sess. as last amended by section 10, chapter 220, Laws of 1984 and RCW 84.36.815 are each amended to read as follows:

(1) In order to qualify for exempt status for real or personal property pursuant to the provisions of chapter 84.36 RCW, as now or hereafter amended, all foreign national governments, churches, cemeteries, nongovernmental nonprofit corporations, organizations, and associations, private schools or colleges, and soil and water conservation districts shall file an initial application on or before March 31 with the state department of revenue. All applications shall be filed on forms prescribed by the department and shall be signed by an authorized agent of the applicant.

(2) In order to requalify for exempt status, such applicants except nonprofit cemeteries shall file a renewal application on or before March 31 of the fourth year following the date of such initial application and on or before March 31 of every fourth year thereafter. An applicant previously granted exemption shall annually file, on forms prescribed by the department, an affidavit certifying the exempt status of the real or personal property owned by the exempt organization. When an organization acquires real property qualified for exemption or converts real property to exempt status, such organization shall file an initial application for the property within sixty days following the acquisition or conversion. If the application is filed after the expiration of the sixty-day period a late filing penalty shall be imposed pursuant to RCW 84.36.825, as now or hereafter amended.

(3)(a) Except for initial applications for homes for the aged under RCW 84.36.040, when organizations acquire real property qualified for exemption or convert real property to an exempt use, the property, upon approval of the application for exemption, is entitled to a cancellation of the pro rata portion of taxes payable for the remaining portion of the year from the date of acquisition or conversion plus exemption for the following year. If the owner has paid taxes allocable to that portion of the year subsequent to the date of acquisition or conversion, the owner is entitled to a pro rata refund of the amount paid on the property so acquired or converted.

(b) Exemptions for homes for the aged under RCW 84.36.040 are first effective for taxes levied for collection during the year after the filing of the initial application.

NEW SECTION. Sec. 3. (1) This act shall be effective for taxes levied for collection in 1987 and thereafter.

(2) The department shall require new initial applications for exemption in respect to property which in the judgment of the department may be taxable under this act, notwithstanding when a renewal application is next required under RCW 84.36.815.

NEW SECTION. Sec. 4. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 5. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect immediately.