HOUSE BILL REPORT

                  HB 2598

             As Reported By House Committee On:

                           Finance

Title:  An act relating to property tax exemptions for nonprofit organizations.

Brief Description:  Modifying property tax exemptions for nonprofit organizations.

Sponsors:  Representatives Radcliff, McDonald, Pennington, Dickerson, Mastin, Dunshee, O'Brien, Mulliken, Cole, Conway, Mason, Wood and Ogden.

Brief History:

  Committee Activity:

Finance:  2/3/98, 2/9/98 [DP].

HOUSE COMMITTEE ON FINANCE

Staff:  Linda Brooks (786-7153).

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 nonprofit organizations.   Some exemptions apply only to property owned by a nonprofit organization, and other exemptions apply to property either owned or leased by a nonprofit.  When a nonprofit organization receives a tax exemption for leased property, the benefit of the property tax reduction, in the form of reduced lease rents, must inure to the nonprofit organization.  Examples of some nonprofit property tax exemptions are:

PROPERTY TAX EXEMPTIONS FOR NONPROFIT ORGANIZATIONS

Exempt on Owned Property Only     Exempt on Owned or Leased

Property

$  Character Building, Benevolent, Protective$  Free Public Libraries

or Rehabilitative Social Service Organizations$  Orphanages

$  Churches and Church Camps      $  Nursing Homes

$  Youth Character Building Organizations       $  Hospitals

$  War Veterans' Organizations        $  Homes for the Aging

$  Water Distribution Property        $  Schools and Colleges

$  Nonprofit Nature Conservancy Organization

$  Public Assembly Halls          $  Day Care Centers

$  Medical Research or Training  Facilities$  Radio/TV Rebroadcast Facilities

$  Art, Scientific, or Historical Collections        $  Performing Arts Properties

$  Sheltered Workshops            $  Homeless Shelters

$  Fair Associations              $  Outpatient Dialysis Facilities

$  Humane Societies$  Blood Banks

Real or personal property owned by a nonprofit organization and used for emergency or transitional housing for low-income persons or victims of domestic violence is exempt from property taxes.   This exemption for owned property does not expire.

Real or personal property leased by a nonprofit organization and used for emergency or transitional housing for low-income persons or victims of domestic violence is also exempt from property taxes for a limited period of time.   This exemption for leased property only applies to property taxes levied for collection in 1991 through 1999.

Summary of Bill:  The property tax exemption granted for real or personal property leased by a nonprofit organization and used for emergency or transitional housing for low-income persons or victims of domestic violence is made permanent.

Appropriation:  None.

Fiscal Note:  Available.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  Nonprofit organizations such as the Lutheran Compass Center in King County benefit from this tax exemption for leased property.  The Compass Center houses 125 persons each night in two facilities that are leased.   Residents in some of these transitional housing facilities are among the poorest of the poor.  These transitional housing facilities also often operate on tight margins.  The savings that this tax exemption provides is extremely helpful.

Testimony Against:  None.

Testified:  Representative Radcliff, sponsor; Lucinda Jackson, The Compass Center (pro); Eric Paige, Washington State Catholic Conference (pro);  and Sharon Case, Washington State Coalition Against Domestic Violence (pro).