AN
ACT Relating to the property taxation of nonprofit organizations providing
demonstration farms with research and extension facilities, public
agricultural museums, and educational tour sites; amending RCW 84.34.108;
reenacting and amending RCW 84.36.805 and 84.36.810; and adding a new section
to chapter 84.36 RCW.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW
SECTION. Sec. 1. A
new section is added to chapter 84.36 RCW to read as follows:
(1)
All real and personal property owned by a nonprofit organization, corporation,
or association to provide a demonstration farm with research and extension
facilities, a public agricultural museum, and an educational tour site, which
is used by a state university for agricultural research and education programs,
is exempt from property taxation. This exemption includes all real and
personal property that may be used in the production and sale of agricultural
products, not to exceed fifty acres, if the income is used to further the
purposes of the organization, corporation, or association.
(2)
To qualify for this exemption:
(a)
The nonprofit organization, corporation, or association must be qualified for
exemption under section 501(c)(3) of the internal revenue code of 1986 (26
U.S.C. Sec. 501(c)(3)); and
(b)
The property must be used exclusively for the purposes for which the exemption
is granted, except as provided in RCW 84.36.805.
Sec.
2. RCW
84.34.108 and 1992 c 69 s 12 are each amended to read as follows:
(1)
When land has once been classified under this chapter, a notation of such
classification shall be made each year upon the assessment and tax rolls and
such land shall be valued pursuant to RCW 84.34.060 or 84.34.065 until removal
of all or a portion of such classification by the assessor upon occurrence of
any of the following:
(a)
Receipt of notice from the owner to remove all or a portion of such
classification;
(b)
Sale or transfer to an ownership, except a transfer that resulted from a
default in loan payments made to or secured by a governmental agency that
intends to or is required by law or regulation to resell the property for the
same use as before, making all or a portion of such land exempt from ad valorem
taxation;
(c)
Sale or transfer of all or a portion of such land to a new owner, unless the
new owner has signed a notice of classification continuance, except transfer to
an owner who is an heir or devisee of a deceased owner shall not, by itself,
result in removal of classification. The signed notice of continuance shall be
attached to the real estate excise tax affidavit provided for in RCW ((82.45.120,
as now or hereafter amended)) 82.45.150. The notice of continuance
shall be on a form prepared by the department of revenue. If the notice of
continuance is not signed by the new owner and attached to the real estate
excise tax affidavit, all additional taxes calculated pursuant to subsection
(3) of this section shall become due and payable by the seller or transferor at
time of sale. The county auditor shall not accept an instrument of conveyance
of classified land for filing or recording unless the new owner has signed the
notice of continuance or the additional tax has been paid. The seller,
transferor, or new owner may appeal the new assessed valuation calculated under
subsection (3) of this section to the county board of equalization.
Jurisdiction is hereby conferred on the county board of equalization to hear
these appeals;
(d)
Determination by the assessor, after giving the owner written notice and an
opportunity to be heard, that all or a portion of such land no longer meets the
criteria for classification under this chapter. The criteria for
classification pursuant to this chapter continue to apply after classification
has been granted.
The
granting authority, upon request of an assessor, shall provide reasonable
assistance to the assessor in making a determination whether such land continues
to meet the qualifications of RCW 84.34.020 (1) or (3). The assistance shall
be provided within thirty days of receipt of the request.
(2)
Within thirty days after such removal of all or a portion of such land from
current use classification, the assessor shall notify the owner in writing,
setting forth the reasons for such removal. The seller, transferor, or owner
may appeal such removal to the county board of equalization.
(3)
Unless the removal is reversed on appeal, the assessor shall revalue the
affected land with reference to full market value on the date of removal from
classification. Both the assessed valuation before and after the removal of
classification shall be listed and taxes shall be allocated according to that
part of the year to which each assessed valuation applies. Except as provided
in subsection (5) of this section, an additional tax, applicable interest, and
penalty shall be imposed which shall be due and payable to the county treasurer
thirty days after the owner is notified of the amount of the additional tax.
As soon as possible, the assessor shall compute the amount of such an
additional tax, applicable interest, and penalty and the treasurer shall mail
notice to the owner of the amount thereof and the date on which payment is
due. The amount of such additional tax, applicable interest, and penalty shall
be determined as follows:
(a)
The amount of additional tax shall be equal to the difference between the
property tax paid as "open space land", "farm and agricultural land",
or "timber land" and the amount of property tax otherwise due and
payable for the seven years last past had the land not been so classified;
(b)
The amount of applicable interest shall be equal to the interest upon the
amounts of such additional tax paid at the same statutory rate charged on
delinquent property taxes from the dates on which such additional tax could
have been paid without penalty if the land had been assessed at a value without
regard to this chapter;
(c)
The amount of the penalty shall be as provided in RCW 84.34.080. The penalty
shall not be imposed if the removal satisfies the conditions of RCW 84.34.070.
(4)
Additional tax, applicable interest, and penalty, shall become a lien on such
land which shall attach at the time such land is removed from classification
under this chapter and shall have priority to and shall be fully paid and
satisfied before any recognizance, mortgage, judgment, debt, obligation or
responsibility to or with which such land may become charged or liable. Such
lien may be foreclosed upon expiration of the same period after delinquency and
in the same manner provided by law for foreclosure of liens for delinquent real
property taxes as provided in RCW 84.64.050 now or as hereafter amended. Any
additional tax unpaid on its due date shall thereupon become delinquent. From
the date of delinquency until paid, interest shall be charged at the same rate
applied by law to delinquent ad valorem property taxes.
(5)
The additional tax, applicable interest, and penalty specified in subsection
(3) of this section shall not be imposed if the removal of classification
pursuant to subsection (1) of this section resulted solely from:
(a)
Transfer to a government entity in exchange for other land located within the
state of Washington;
(b)(i)
A taking through the exercise of the power of eminent domain, or (ii) sale or
transfer to an entity having the power of eminent domain in anticipation of the
exercise of such power, said entity having manifested its intent in writing or
by other official action;
(c)
A natural disaster such as a flood, windstorm, earthquake, or other such
calamity rather than by virtue of the act of the landowner changing the use of
such property;
(d)
Official action by an agency of the state of Washington or by the county or
city within which the land is located which disallows the present use of such
land;
(e)
Transfer of land to a church when such land would qualify for exemption
pursuant to RCW 84.36.020;
(f)
Acquisition of property interests by state agencies or agencies or
organizations qualified under RCW 84.34.210 and 64.04.130 for the purposes
enumerated in those sections: PROVIDED, That at such time as these property
interests are not used for the purposes enumerated in RCW 84.34.210 and
64.04.130 the additional tax specified in subsection (3) of this section shall
be imposed; ((or))
(g)
Removal of land classified as farm and agricultural land under RCW
84.34.020(2)(d); or
(h)
Removal of land from classification after enactment of a statutory exemption
that qualifies the land for exemption and receipt of notice from the owner to
remove the land from classification.
Sec.
3. RCW
84.36.805 and 1998 c 311 s 25, 1998 c 202 s 3, and 1998 c 184 s 2 are each
reenacted and amended to read as follows:
(1)
In order to ((be exempt pursuant to RCW 84.36.030, 84.36.035, 84.36.037,
84.36.040, 84.36.041, 84.36.043, 84.36.045, 84.36.046, 84.36.047, 84.36.050,
84.36.060, 84.36.350, 84.36.480, 84.36.550, and 84.36.042)) qualify for
an exemption under this chapter, the nonprofit organizations, associations,
or corporations ((shall)) must satisfy the ((following))
conditions((:)) in this section.
(((1)))
(2) The property ((is)) must be used exclusively for the
actual operation of the activity for which exemption is granted, unless
otherwise provided, and does not exceed an amount reasonably necessary for that
purpose, except:
(a)
The loan or rental of the property does not subject the property to tax if:
(i)
The rents and donations received for the use of the portion of the property are
reasonable and do not exceed the maintenance and operation expenses
attributable to the portion of the property loaned or rented; and
(ii)
Except for the exemptions under RCW 84.36.030(4) and 84.36.037, the property
would be exempt from tax if owned by the organization to which it is loaned or
rented;
(b)
The use of the property for fund-raising activities does not subject the
property to tax if the fund-raising activities are consistent with the purposes
for which the exemption is granted((;)).
(((2)))
(3) The property ((is)) must be irrevocably dedicated to
the purpose for which exemption has been granted, and on the liquidation,
dissolution, or abandonment by said organization, association, or corporation,
said property will not inure directly or indirectly to the benefit of any
shareholder or individual, except a nonprofit organization, association, or
corporation which too would be entitled to property tax exemption. This
property need not be irrevocably dedicated if it is leased or rented to those
qualified for exemption ((pursuant to RCW 84.36.035, 84.36.040, 84.36.041,
84.36.043, 84.36.045, 84.36.046, or 84.36.042 or those qualified for exemption
as an association engaged in the production or performance of musical, dance,
artistic, dramatic, or literary works pursuant to RCW 84.36.060)) under
this chapter for leased property, but only if under the terms of the lease
or rental agreement the nonprofit organization, association, or corporation
receives the benefit of the exemption((;)).
(((3)))
(4) The facilities and services ((are)) must be available
to all regardless of race, color, national origin or ancestry((;)).
(((4)))
(5) The organization, association, or corporation ((is)) must
be duly licensed or certified where such licensing or certification is
required by law or regulation((;)).
(((5)))
(6) Property sold to organizations, associations, or corporations with
an option to be repurchased by the seller shall not qualify for exempt status((;)).
(((6)))
(7) The ((director of the)) department ((of revenue))
shall have access to its books in order to determine whether ((such)) the
nonprofit organization, association, or corporation is exempt from taxes ((within
the intent of RCW 84.36.030, 84.36.035, 84.36.037, 84.36.040, 84.36.041,
84.36.043, 84.36.045, 84.36.046, 84.36.047, 84.36.050, 84.36.060, 84.36.350,
84.36.480, and 84.36.042)) under this chapter.
(8)
This section does not apply to exemptions granted under RCW 84.36.020,
84.36.032, 84.36.250, and 84.36.260.
Sec.
4. RCW
84.36.810 and 1998 c 311 s 26 and 1998 c 202 s 4 are each reenacted and amended
to read as follows:
(1)
Upon cessation of a use under which an exemption has been granted pursuant to
RCW 84.36.030, 84.36.037, 84.36.040, 84.36.041, 84.36.042, 84.36.043,
84.36.046, 84.36.050, 84.36.060, 84.36.550, and ((84.36.042)) section
1 of this act, the county treasurer shall collect all taxes which would
have been paid had the property not been exempt during the three years
preceding, or the life of such exemption, if such be less, together with the
interest at the same rate and computed in the same way as that upon delinquent
property taxes. ((Where)) If the property has been granted an
exemption for more than ten consecutive years, taxes and interest shall
not be assessed under this section.
(2)
Subsection (1) of this section applies only when ownership of the property is
transferred or when fifty-one percent or more of the area of the property ((has
lost)) loses its exempt status. The additional tax under subsection
(1) of this section shall not be imposed if the cessation of use resulted
solely from:
(a)
Transfer to a nonprofit organization, association, or corporation for a use
which also qualifies and is granted exemption under ((the provisions of))
this chapter ((84.36 RCW));
(b)
A taking through the exercise of the power of eminent domain, or sale or
transfer to an entity having the power of eminent domain in anticipation of the
exercise of such power;
(c)
Official action by an agency of the state of Washington or by the county or
city within which the property is located which disallows the present use of
such property;
(d)
A natural disaster such as a flood, windstorm, earthquake, or other such
calamity rather than by virtue of the act of the organization, association, or
corporation changing the use of such property;
(e)
Relocation of the activity and use of another location or site except for
undeveloped properties of camp facilities exempted under RCW 84.36.030;
(f)
Cancellation of a lease on leased property that had been exempt under ((RCW
84.36.040, 84.36.041, 84.36.043, 84.36.046, 84.36.060, or 84.36.042)) this
chapter; or
(g)
A change in the exempt portion of a home for the aging under RCW 84.36.041(3),
as long as some portion of the home remains exempt((;
(h)
The conversion of a full exemption of a home for the aging to a partial
exemption or taxable status or the conversion of a partial exemption to taxable
status under RCW 84.36.041(8))).
