AN
ACT Relating to the exemption from taxation of housing for very low-income
households; amending RCW 84.36.560; and reenacting and amending RCW 84.36.805.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
84.36.560 and 1999 c 203 s 1 are each amended to read as follows:
(1)
The real and personal property owned or used by a nonprofit entity in
providing rental housing for very low-income households or used to provide
space for the placement of a mobile home for a very low-income household within
a mobile home park is exempt from taxation if:
(a)
The benefit of the exemption inures to the nonprofit ((organization,
association, or corporation)) entity;
(b)
At least seventy-five percent of the occupied dwelling units in the rental
housing or lots in a mobile home park are occupied by a very
low-income household((s)); and
(c)
The rental housing ((was)) or lots in a mobile home park were
insured, financed, or assisted in whole or in part through:
(i)
A federal or state housing program administered by the department of community,
trade, and economic development; or
(ii)
An affordable housing levy authorized under RCW 84.52.105.
(2)
If less than seventy-five percent of the occupied dwelling units within
the rental housing or lots in the mobile home park are occupied by very
low-income households, the rental housing ((used to provide housing for very
low-income households)) or mobile home park is eligible for a
partial exemption on the real property and a total exemption of the housing's or
park's personal property as follows:
(a)
((The)) A partial exemption shall be allowed for each dwelling
unit in the rental housing or for each lot in a mobile home park
occupied by a very low-income household((s)).
(b)
The amount of exemption shall be calculated by multiplying the assessed value
of the property reasonably necessary to provide the rental housing or to
operate the mobile home park by a fraction. The numerator of the fraction
is the number of dwelling units or lots occupied by very low-income
households as of December 31st of the first assessment year in which the
rental housing or mobile home park becomes operational or on January 1st of
((the)) each subsequent assessment year for which the exemption
is claimed. The denominator of the fraction is the total number of ((occupied))
dwelling units ((as of)) or lots occupied as of December 31st of the
first assessment year the rental housing or mobile home park becomes
operational and January 1st of ((the)) each subsequent assessment
year for which exemption is claimed.
(3)
((Rental housing for very low-income households is exempt from property
taxation only if the nonprofit operating the housing is exempt from income tax
under section 501(c) of the federal internal revenue code)) If a
currently exempt rental housing unit in a facility with ten units or fewer or
mobile home lot in a mobile home park with ten lots or fewer was occupied by a
very low-income household at the time the exemption was granted and the income
of the household subsequently rises above fifty percent of the median income but
remains at or below eighty percent of the median income, the exemption will
continue as long as the housing continues to meet the certification
requirements of a very low-income housing program administered by the
department of community, trade, and economic development or the affordable
housing levy under RCW 84.52.105. For purposes of this section, median income,
as most recently determined by the federal department of housing and urban
development for the county in which the rental housing or mobile home park is
located, shall be adjusted for family size. However, if a dwelling unit or a
lot becomes vacant and is subsequently re-rented, the income of the new
household must be at or below fifty 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 rental housing or mobile home
park is located to remain exempt from property tax.
(4)
If at the time of initial application the property is unoccupied, or subsequent
to the initial application the property is unoccupied because of renovations,
and the property is not currently being used for the exempt purpose authorized
by this section but will be used for the exempt purpose within two assessment years,
the property shall be eligible for a property tax exemption for the assessment
year in which the claim for exemption is submitted under the following
conditions:
(a)
A commitment for financing to acquire, construct, renovate, or otherwise
convert the property to provide housing for very low-income households has been
obtained, in whole or in part, by the nonprofit entity claiming the exemption
from:
(i)
A federal or state housing program administered by the department of community,
trade, and economic development; or
(ii)
An affordable housing levy authorized under RCW 84.52.105;
(b)
The nonprofit entity has manifested its intent in writing to construct,
remodel, or otherwise convert the property to housing for very low-income
households; and
(c)
Only the portion of property that will be used to provide housing or lots for
very low-income households shall be exempt under this section.
(((4)))
(5) 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)))
(6) The nonprofit entity qualifying for ((the)) a
property tax exemption under this section ((by providing rental housing
for very low-income households)) may agree to make payments to the city,
county, or other political subdivision for improvements, services, and
facilities furnished by the city, county, or political subdivision for the
benefit of the rental housing. However, these payments shall not exceed the
amount last levied as the annual tax of the city, county, or political
subdivision upon the property prior to exemption.
(((6)))
(7) As used in this section:
(a)
"Group home" means a single-family dwelling financed, in whole or
in part, by the department of community, trade, and economic development or by
an affordable housing levy under RCW 84.52.105. The residents of a group home
shall not be considered to jointly constitute a household, but each resident
shall be considered to be a separate household occupying a separate dwelling
unit. The individual incomes of the residents shall not be aggregated for
purposes of this exemption;
(b)
"Mobile home lot" or "mobile home park" means the same as
these terms are defined in RCW 59.20.030;
(c)
"Occupied dwelling unit" means a living unit that is occupied by
an individual or household as of December 31st of the first assessment year the
rental housing becomes operational or is occupied by an individual or household
on January 1st of ((the)) each subsequent assessment year in
which the claim for exemption is submitted. If the housing facility is
comprised of three or fewer dwelling units and there are any unoccupied units
on January 1st, the department shall base the amount of the exemption upon the
number of occupied dwelling units as of December 31st of the first assessment
year the rental housing becomes operational and on May 1st of each subsequent
assessment year in which the claim for exemption is submitted;
(((b)))
(d) "Rental housing" means a residential housing facility
or group home that is occupied but not owned by very low-income households;
(((c)))
(e) "Very low-income household((s))" means a single
person, family, or unrelated persons living together whose income is at or
below fifty 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 rental housing is located and in effect as of
January 1st of the year the application for exemption is submitted; and
(((d)))
(f) "Nonprofit entity" means a:
(i)
Nonprofit as defined in RCW 84.36.800 ((and includes a)) that is
exempt from income tax under section 501(c) of the federal internal revenue
code;
(ii)
Limited partnership where ((the)) a nonprofit ((or)) as
defined in RCW 84.36.800 that is exempt from income tax under section 501(c) of
the federal internal revenue code, a public corporation established under
RCW 35.21.660, 35.21.670, ((and)) or 35.21.730, a housing
authority created under RCW 35.82.030 or 35.82.300, or a housing authority
meeting the definition in RCW 35.82.210(2)(a) is a general partner((,));
or ((a))
(iii)
Limited liability company where ((the)) a nonprofit ((or
the)) as defined in RCW 84.36.800 that is exempt from income tax under
section 501(c) of the federal internal revenue code, a public corporation established
under RCW 35.21.660, 35.21.670, or 35.21.730, a housing authority established
under RCW 35.82.030 or 35.82.300, or a housing authority meeting the definition
in RCW 35.82.210(2)(a) is a managing member.
Sec.
2. RCW
84.36.805 and 1999 c 203 s 2 and 1999 c 139 s 3 are each reenacted and amended
to read as follows:
(1)
In order to qualify for an exemption under this chapter and RCW 84.36.560, the
nonprofit organizations, associations, or corporations must satisfy the
conditions in this section.
(2)
The property 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.
(3)
The property 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 under this
chapter or RCW 84.36.560 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.
(4)
The facilities and services must be available to all regardless of race, color,
national origin or ancestry.
(5)
The organization, association, or corporation must be duly licensed or certified
where such licensing or certification is required by law or regulation.
(6)
Property sold to organizations, associations, or corporations with an option to
be repurchased by the seller shall not qualify for exempt status. This
subsection does not apply to property sold to a nonprofit entity, as defined in
RCW 84.36.560(7), by:
(a)
A nonprofit as defined in RCW 84.36.800 that is exempt from income tax under
section 501(c) of the federal internal revenue code;
(b)
A governmental entity established under RCW 35.21.660, 35.21.670, or 35.21.730;
(c)
A housing authority created under RCW 35.82.030;
(d)
A housing authority meeting the definition in RCW 35.82.210(2)(a); or
(e)
A housing authority established under RCW 35.82.300.
(7)
The department shall have access to its books in order to determine whether the
nonprofit organization, association, or corporation is exempt from taxes under
this chapter and RCW 84.36.560.
(8)
This section does not apply to exemptions granted under RCW 84.36.020,
84.36.032, 84.36.250, and 84.36.260.
