HOUSE BILL REPORT

HB 2996

BYRepresentatives Leonard, Winsley, Anderson, Nutley, Holland, Wineberry and Nelson

Modifying property tax exemptions for leased homeless shelters.

House Committe on Revenue

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (13)

      Signed by Representatives Wang, Chair; Pruitt, Vice Chair; Holland, Ranking Republican Member; Horn, Assistant Ranking Republican Member; Appelwick, Brumsickle, Fraser, Fuhrman, Haugen, Morris, Phillips, Rust and Silver.

House Staff:Rick Wickman (786-7150)

AS REPORTED BY COMMITTEE ON REVENUE FEBRUARY 3, 1990

BACKGROUND:

A property tax exemption is provided for real and personal property of a nonprofit organization used in providing nonpermanent shelter to indigent homeless persons.  The exemption is subject to the following conditions:  1) the organization must apply to the Department of Revenue; 2) the charge for shelter must not exceed the actual costs of operating and maintaining the shelter facility;  3) the property must be used exclusively for the actual operation of the activity for which the exemption is granted; 4) the property must be irrevocably dedicated to the purpose of the exemption; and 5) the facilities and services must be available to all regardless of race, color, national origin, or ancestry.

If the tax exemption is terminated due to a change in the approved use, the county treasurer is directed to collect all taxes that would have been paid had the property not been exempt during the preceding three years or the life of the exemption, if less than three years, plus interest at the same rate and computed as delinquent property.  However, if the exemption has been granted for more than 10 years, then back taxes and interest are not collected.

SUMMARY:

SUBSTITUTE BILL:  The real and personal property exemption for homeless shelters is extended to leased facilities, for taxes due in 1990 through 1998 only.  The benefit of the exemption must accrue to the nonprofit organization.  There is no requirement that back taxes be repaid if the lease is cancelled for a leased shelter.

For both owned and leased facilities, the qualification standard of "indigent" is changed to "low-income," and defined as persons with income that does not exceed 80 percent of the median income for the standard metropolitan statistical area in which the shelter is located.  The qualification standard is also expanded to include victims of domestic violence who are homeless for personal safety reasons.

SUBSTITUTE BILL COMPARED TO ORIGINAL: The original bill contained only the provision extending exemption to leased facilities.

Revenue:    The bill has a revenue impact.

Fiscal Note:      Requested January 29, 1990.

House Committee ‑ Testified For:    Representative Leonard, prime sponsor.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    A property tax exemption already exists for property owned by a nonprofit organization for nonpermanent shelter purposes.  The tax exemption is needed for property that is leased or rented.  The exemption benefit should inure to the user in order to reduce costs of providing homeless shelter services.

House Committee - Testimony Against:      None.