BILL REQ. #:  H-0192.1 

Prefiled 12/20/10. Read first time 01/10/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to providing a property tax exemption for property held under lease, sublease, or lease-purchase by a nonprofit organization that provides job training, placement, or preemployment services; adding a new section to chapter 84.36 RCW; and providing an effective date.

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) Real property of a taxable owner held under lease, sublease, or lease-purchase agreement by a nonprofit organization is exempt from taxation if:
     (a) The property is used in a manner that otherwise qualifies for an exemption from taxation under this chapter by a nonprofit organization lessee or a nonprofit organization's sublessee; and
     (b) It is expressly agreed within the lease, sublease, or lease-purchase agreement that the nonprofit organization lessee or sublessee is required to pay any property taxes for the leased or subleased property.
     (2) The nonprofit organization lessee or the nonprofit organization's sublessee must file a claim for exemption under this section, in the form and manner determined by the department, which must include:
     (a) A complete description of the property for which an exemption is claimed under this section;
     (b) All facts relating to the use of the property by the lessee or sublessee;
     (c) A true copy of the lease, sublease, or lease-purchase agreement covering the property for which exemption is claimed under this section; and
     (d) Any other information required by the department to determine eligibility for the exemption under this section.
     (3)(a) A claim for exemption under this section must be filed on or before April 1st, unless the lease, sublease, or lease-purchase agreement is entered into after March 1st, but not later than June 30th, then the claim must be filed within thirty days after the date the lease, sublease, or lease-purchase agreement is entered into, if the exemption is claimed for that year.
     (b)(i) The exemption applies for the tax year beginning July 1st of the year for which the claim is filed.
     (ii) The exemption continues as long as the use of the property remains unchanged during the period of the lease, sublease, or lease-purchase agreement. If the property use changes, the nonprofit organization lessee must file a new claim with the department. If the use changes due to sublease of the property or any portion of the property, from a nonprofit organization lessee to another nonprofit organization, the nonprofit organization's sublessee must file a new claim.
     (iii) If the lease, sublease, or lease-purchase agreement expires before July 1st of any year, the exemption under this section expires as of January 1st of the same calendar year.
     (4) For the purposes of this section, "nonprofit organization" means an organization that:
     (a) Is exempt from federal income taxation under 26 U.S.C. Sec. 501(c)(3) of the federal internal revenue code; and
     (b) Has a primary activity of providing job training, placement, or preemployment services.

NEW SECTION.  Sec. 2   This act takes effect January 1, 2012.