BILL REQ. #:  S-4990.2 

READ FIRST TIME 02/24/12.   

     AN ACT Relating to property tax exemptions for nonprofit fair associations in rural counties; amending RCW 84.36.480; reenacting and amending RCW 84.36.805; creating a new section; and providing an expiration date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 84.36.480 and 1984 c 220 s 6 are each amended to read as follows:
     (1) The following property ((shall be)) is exempt from taxation: The real and personal property of a nonprofit fair association that sponsors or conducts a fair or fairs which receive support from revenues collected pursuant to RCW 67.16.100 and allocated by the director of the department of agriculture. To be exempt under this section, the property must be used exclusively for fair purposes, except as provided in subsection (2) of this section and in RCW 84.36.805. However, the loan or rental of property otherwise exempt under this section to a private concessionaire or to any person for use as a concession in conjunction with activities permitted under this section ((shall)) do not nullify the exemption if the concession charges are subject to agreement and the rental income, if any, is reasonable and is devoted solely to the operation and maintenance of the property.
     (2) The exemption in subsection (1) of this section is not nullified if property of a nonprofit fair association, which received support from the fair fund created in RCW 15.76.115 that was allocated by the director of the department of agriculture by the effective date of this section, is used by entities not eligible for a property tax exemption under this chapter for periods of not more than fifty days in the calendar year.
     (3) If the use described in subsection (2) of this section exceeds fifty days in a calendar year and the use only occurs in a portion of the property, then that portion of the property can be segregated and made taxable without nullifying the exemption in subsection (1) of this section for the remaining property of the qualified nonprofit fair association.

Sec. 2   RCW 84.36.805 and 2006 c 319 s 1 and 2006 c 226 s 3 are each reenacted and amended to read as follows:
     (1) In order to qualify for an exemption under this chapter, 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), 84.36.037, 84.36.050, and 84.36.060(1) (a) and (b), and except as otherwise provided in RCW 84.36.480 (2) and (3), 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 facilities and services must be available to all regardless of race, color, national origin or ancestry.
     (4) The organization, association, or corporation must be duly licensed or certified where such licensing or certification is required by law or regulation.
     (5) Property sold to organizations, associations, or corporations with an option to be repurchased by the seller ((shall)) does 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.
     (6) The department ((shall)) must have access to its books in order to determine whether the nonprofit organization, association, or corporation is exempt from taxes under this chapter.
     (7) This section does not apply to exemptions granted under RCW 84.36.020, 84.36.032, 84.36.250, and 84.36.260.

NEW SECTION.  Sec. 3   This act applies to taxes levied for collection in 2013 and 2014.

NEW SECTION.  Sec. 4   This act expires January 1, 2015.