AN
ACT Relating to the property tax exemption for nonprofit homes for the aging;
amending RCW 84.36.041; and declaring an emergency.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
84.36.041 and 1998 c 311 s 20 are each amended to read as follows:
(1)
All real and personal property used by a nonprofit home for the aging that is
reasonably necessary for the purposes of the home is exempt from taxation if
the benefit of the exemption inures to the home and:
(a)
At least fifty percent of the occupied dwelling units in the home are occupied
by eligible residents; or
(b)
The home is subsidized under a federal department of housing and urban
development program. The department of revenue shall provide by rule a
definition of homes eligible for exemption under this subsection (1)(b),
consistent with the purposes of this section.
(2)
All real and personal property used by a nonprofit home for the aging that is
reasonably necessary for the purposes of the home is exempt from taxation if
the benefit of the exemption inures to the home and the construction,
rehabilitation, acquisition, or refinancing of the home is financed under a
program using bonds exempt from federal income tax if at least seventy-five
percent of the total amount financed uses the tax exempt bonds and the
financing program requires the home to reserve a percentage of all dwelling
units so financed for low-income residents. The initial term of the exemption
under this subsection shall equal the term of the tax exempt bond used in
connection with the financing program, or the term of the requirement to reserve
dwelling units for low-income residents, whichever is shorter. If the
financing program involves less than the entire home, only those dwelling units
included in the financing program are eligible for total exemption. The
department of revenue shall provide by rule the requirements for monitoring
compliance with the provisions of this subsection and the requirements for
exemption including:
(a)
The number or percentage of dwelling units required to be occupied by
low-income residents, and a definition of low income;
(b)
The type and character of the dwelling units, whether independent units or
otherwise; and
(c)
Any particular requirements for continuing care retirement communities.
(3)
A home for the aging is eligible for a partial exemption on the real property
and a total exemption for the home's personal property if the home does not
meet the requirements of subsection (1) of this section because fewer than
fifty percent of the occupied dwelling units are occupied by eligible
residents, as follows:
(a)
A partial exemption shall be allowed for each dwelling unit in a home occupied
by a resident requiring assistance with activities of daily living.
(b)
A partial exemption shall be allowed for each dwelling unit in a home occupied
by an eligible resident.
(c)
A partial exemption shall be allowed for an area jointly used by a home for the
aging and by a nonprofit organization, association, or corporation currently
exempt from property taxation under one of the other provisions of this
chapter. The shared area must be reasonably necessary for the purposes of the
nonprofit organization, association, or corporation exempt from property
taxation under one of the other provisions of this chapter, such as kitchen,
dining, and laundry areas.
(d)
The amount of exemption shall be calculated by multiplying the assessed value
of the property reasonably necessary for the purposes of the home, less the
assessed value of any area exempt under (c) of this subsection, by a fraction.
The numerator of the fraction is the number of dwelling units occupied by
eligible residents and by residents requiring assistance with activities of
daily living. The denominator of the fraction is the total number of occupied
dwelling units as of December 31st of the first assessment year the home
becomes operational for which exemption is claimed and January 1st of ((the))
each subsequent assessment year for which exemption is claimed.
(4)
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)
A home for the aging is exempt from taxation only if the organization operating
the home is exempt from income tax under section 501(c) of the federal internal
revenue code as existing on January 1, 1989, or such subsequent date as the
director may provide by rule consistent with the purposes of this section.
(6)
In order for the home to be eligible for exemption under subsections (1)(a) and
(((2))) (3)(b) of this section, each eligible resident of a home
for the aging shall submit an income verification form to the county assessor
by July 1st of the assessment year ((in which the application for exemption
is made)) for which exemption is claimed. However, during the first
year a home becomes operational, the county assessor shall accept income
verification forms from eligible residents up to December 31st of the
assessment year. The income verification form shall be prescribed and
furnished by the department of revenue. An eligible resident who has filed a
form for a previous year need not file a new form until there is a change in
status affecting the person's eligibility.
(7)
In determining the ((assessed)) true and fair value of a home for
the aging for purposes of the partial exemption provided by subsection (3) of
this section, the assessor shall apply the computation method provided by RCW
84.34.060 and shall consider only the use to which such property is applied
during the years for which such partial exemptions are available and shall not
consider potential uses of such property.
(8)
As used in this section:
(a)
"Eligible resident" means a person who:
(i)
Occupied the dwelling unit as a principal place of residence as of ((January
1st)) December 31st of the first assessment year the home
becomes operational. In each subsequent year, the eligible resident must
occupy the dwelling unit as a principal place of residence as of January 1st of
the assessment year for which the exemption is claimed. Confinement of the
person to a hospital or nursing home does not disqualify the claim of exemption
if the dwelling unit is temporarily unoccupied or if the dwelling unit is
occupied by a spouse, a person financially dependent on the claimant for
support, or both; and
(ii)
Is sixty-one years of age or older on December 31st of the year in which the
exemption claim is filed, or is, at the time of filing, retired from regular
gainful employment by reason of physical disability. Any surviving spouse of a
person who was receiving an exemption at the time of the person's death shall
qualify if the surviving spouse is fifty-seven years of age or older and
otherwise meets the requirements of this subsection; and
(iii)
Has a combined disposable income of no more than the greater of twenty-two
thousand dollars or eighty 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 person resides. For the purposes of
determining eligibility under this section, a "cotenant" means a
person who resides with an eligible resident and who shares personal financial
resources with the eligible resident.
(b)
"Combined disposable income" means the disposable income of the
person submitting the income verification form, plus the disposable income of
his or her spouse, and the disposable income of each cotenant occupying the
dwelling unit for the preceding calendar year, less amounts paid by the person
submitting the income verification form or his or her spouse or cotenant during
the previous year for the treatment or care of either person received in the
dwelling unit or in a nursing home. If the person submitting the income
verification form was retired for two months or more of the preceding year, the
combined disposable income of such person shall be calculated by multiplying
the average monthly combined disposable income of such person during the months
such person was retired by twelve. If the income of the person submitting the
income verification form is reduced for two or more months of the preceding
year by reason of the death of the person's spouse, the combined disposable
income of such person shall be calculated by multiplying the average monthly
combined disposable income of such person after the death of the spouse by
twelve.
(c)
"Disposable income" means adjusted gross income as defined in the
federal internal revenue code, as amended prior to January 1, 1989, or such
subsequent date as the director may provide by rule consistent with the purpose
of this section, plus all of the following items to the extent they are not
included in or have been deducted from adjusted gross income:
(i)
Capital gains, other than ((nonrecognized gain on the sale of a principal
residence under section 1034 of the federal internal revenue code, or))
gain excluded from income under section 121 of the federal internal revenue
code to the extent it is reinvested in a new principal residence;
(ii)
Amounts deducted for loss;
(iii)
Amounts deducted for depreciation;
(iv)
Pension and annuity receipts;
(v)
Military pay and benefits other than attendant-care and medical-aid payments;
(vi)
Veterans benefits other than attendant-care and medical-aid payments;
(vii)
Federal social security act and railroad retirement benefits;
(viii)
Dividend receipts; and
(ix)
Interest received on state and municipal bonds.
(d)
"Resident requiring assistance with activities of daily living" means
a person who requires significant assistance with the activities of daily
living and who would be at risk of nursing home placement without this
assistance.
(e)
"Home for the aging" means a residential housing facility that (i)
provides a housing arrangement chosen voluntarily by the resident, the
resident's guardian or conservator, or another responsible person; (ii) has
only residents who are at least sixty-one years of age or who have needs for
care generally compatible with persons who are at least sixty-one years of age;
and (iii) provides varying levels of care and supervision, as agreed to at the
time of admission or as determined necessary at subsequent times of
reappraisal.
(9)
A for-profit home for the aging that converts to nonprofit status after June
11, 1992, and would otherwise be eligible for tax exemption under this section
may not receive the tax exemption until five years have elapsed since the
conversion. The exemption shall then be ratably granted over the next five
years.
NEW SECTION. Sec. 2. This
act is necessary for the immediate preservation of the public peace, health, or
safety, or support of the state government and its existing public
institutions, and takes effect immediately.
