BILL REQ. #: Z-0512.2
| State of Washington | 63rd Legislature | 2014 Regular Session |
Read first time 01/23/14. Referred to Committee on Ways & Means.
AN ACT Relating to providing greater consistency in how nonprofit tax-exempt property may be used without jeopardizing the property's tax-exempt status; amending RCW 84.36.020, 84.36.020, 84.36.030, 84.36.032, 84.36.035, 84.36.037, 84.36.037, 84.36.050, 84.36.060, 84.36.260, 84.36.264, and 84.36.805; creating new sections; providing an effective date; and providing an expiration date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 The legislature finds that tax-exempt
property of nonprofit organizations may generally be used for nonexempt
purposes on a limited basis. However, the legislature further finds
that these allowable nonexempt uses, and the conditions applicable to
such uses, vary depending on the specific exemption. The legislature
further finds that these inconsistencies create inequities and
confusion for nonprofits, leads to piecemeal legislation, and
complicates the administration of nonprofit property tax exemptions.
Therefore, this act is intended to address these problems by providing
greater consistency with respect to how nonprofits may use their tax-exempt property for nonexempt purposes. This act is not intended to
place any additional limits or restrictions on any existing statutorily
authorized nonexempt uses of exempt property of nonprofit
organizations.
Sec. 2 RCW 84.36.020 and 2010 c 186 s 2 are each amended to read
as follows:
The following real and personal property is exempt from taxation:
(1) All lands, buildings, and personal property required for
necessary administration and maintenance, used, or to the extent used,
exclusively for public burying grounds or cemeteries without
discrimination as to race, color, national origin or ancestry;
(2)(a) All churches, personal property, and the ground, not
exceeding five acres in area, upon which a church of any nonprofit
recognized religious denomination is or will be built, together with a
parsonage, convent, and buildings and improvements required for the
maintenance and safeguarding of such property. The area exempted in
any case includes all ground covered by the church, parsonage, convent,
and buildings and improvements required for the maintenance and
safeguarding of such property and the structures and ground necessary
for street access, parking, light, and ventilation, but the area of
unoccupied ground exempted in such cases, in connection with church,
parsonage, convent, and buildings and improvements required for the
maintenance and safeguarding of such property, does not exceed the
equivalent of one hundred twenty by one hundred twenty feet except
where additional unoccupied land may be required to conform with state
or local codes, zoning, or licensing requirements. The parsonage and
convent need not be on land contiguous to the church property. Except
as otherwise provided in this subsection, to be exempt the property
must be wholly used for church purposes.
(b) If the rental income or donations, if applicable, are
reasonable and do not exceed the maintenance and operation expenses
attributable to the portion of the property loaned or rented, the
exemption provided by this subsection (2) is not nullified by:
(i) The loan or rental of property otherwise exempt under this
subsection to a nonprofit organization, association, or corporation, or
school ((for use for)) to conduct an eleemosynary activity or ((for use
for)) to conduct activities related to a farmers market((, does not
nullify the exemption provided in this subsection if the rental income,
if any, is reasonable and is devoted solely to the operation and
maintenance of the property)). However, activities related to a
farmers market may not occur on the property more than fifty-three days
each assessment year. For the purposes of this section, "farmers
market" has the same meaning as "qualifying farmers market" as defined
in RCW 66.24.170;
(ii) The rental or use of the property by any individual, group, or
entity, where such rental or use is not otherwise authorized by this
subsection (2), for not more than fifty days in each calendar year, and
the property is not used for pecuniary gain or to promote business
activities for more than fifteen of the fifty days in each calendar
year. The fifty and fifteen-day limitations provided in this
subsection (2)(b)(ii) do not include days used for setup and takedown
activities preceding or following a meeting or other event by an
individual, group, or entity using the property as provided in this
subsection (2)(b)(ii); or
(iii) An inadvertent use of the property in a manner inconsistent
with the purpose for which exemption is granted, if the inadvertent use
is not part of a pattern of use. A pattern of use is presumed when an
inadvertent use is repeated in the same assessment year or in two or
more successive assessment years.
Sec. 3 RCW 84.36.020 and 1994 c 124 s 16 are each amended to read
as follows:
The following real and personal property shall be exempt from
taxation:
(1) All lands, buildings, and personal property required for
necessary administration and maintenance, used, or to the extent used,
exclusively for public burying grounds or cemeteries without
discrimination as to race, color, national origin or ancestry;
(2)(a) All churches, personal property, and the ground, not
exceeding five acres in area, upon which a church of any nonprofit
recognized religious denomination is or ((shall)) must be built,
together with a parsonage, convent, and buildings and improvements
required for the maintenance and safeguarding of such property. The
area exempted ((shall)) must in any case include all ground covered by
the church, parsonage, convent, and buildings and improvements required
for the maintenance and safeguarding of such property and the
structures and ground necessary for street access, parking, light, and
ventilation, but the area of unoccupied ground exempted in such cases,
in connection with church, parsonage, convent, and buildings and
improvements required for the maintenance and safeguarding of such
property, shall not exceed the equivalent of one hundred twenty by one
hundred twenty feet except where additional unoccupied land may be
required to conform with state or local codes, zoning, or licensing
requirements. The parsonage and convent need not be on land contiguous
to the church property. Except as otherwise provided in this
subsection, to be exempt the property must be wholly used for church
purposes((: PROVIDED, That)).
(b) If the rental income or donations, if applicable, are
reasonable and do not exceed the maintenance and operation expenses
attributable to the portion of the property loaned or rented, the
exemption provided by this subsection (2) is not nullified by:
(i) The loan or rental of property otherwise exempt under this
((paragraph)) subsection (2) to a nonprofit organization, association,
or corporation, or school ((for use for)) to conduct an eleemosynary
activity ((shall not nullify the exemption provided in this paragraph
if the rental income, if any, is reasonable and is devoted solely to
the operation and maintenance of the property));
(ii) The rental or use of the property by any individual, group, or
entity, where such rental or use is not otherwise authorized by this
subsection (2), for not more than fifty days in each calendar year, and
the property is not used for pecuniary gain or to promote business
activities for more than fifteen of the fifty days in each calendar
year. The fifty and fifteen-day limitations provided in this
subsection (2)(b)(ii) do not include days during which setup and
takedown activities take place immediately preceding or following a
meeting or other event by an individual, group, or entity using the
property as provided in this subsection (2)(b)(ii); or
(iii) An inadvertent use of the property in a manner inconsistent
with the purpose for which exemption is granted, if the inadvertent use
is not part of a pattern of use. A pattern of use is presumed when an
inadvertent use is repeated in the same assessment year or in two or
more successive assessment years.
Sec. 4 RCW 84.36.030 and 2006 c 305 s 1 are each amended to read
as follows:
The following real and personal property ((shall be)) is exempt
from taxation:
(1)(a) Property owned by nonprofit organizations or associations,
organized and conducted for nonsectarian purposes, which shall be used
for character-building, benevolent, protective or rehabilitative social
services directed at persons of all ages.
(b) The sale of donated merchandise ((shall)) is not ((be))
considered a ((commercial)) nonexempt use of the property under this
section if the proceeds are devoted to the furtherance of the purposes
of the selling organization or association as specified in this
subsection (1).
(((c) In a county with a population of less than twenty thousand,
the rental or use of property, owned by a nonprofit organization or
association described in (a) of this subsection, by a person, group, or
organization in one of the following ways shall not nullify the
exemption:))
(i) The property may be rented or used for pecuniary gain or for
business activities or by individuals, groups, and organizations for
private purposes if the rental or use:
(A) Does not exceed fifteen days each assessment year;
(B) No comparable private for-profit facility exists within ten
miles of the property that could be used for the same purpose for which
the property is loaned or rented; and
(C) All income from the rental or use of the exempt property is
used for capital improvements to the exempt property, maintenance and
operation of the exempt property, or for exempt purposes; or
(ii) The property is rented or used by a nonprofit community group
or other nonprofit organization that might not qualify for exemption if
it owned the property as long as the rental or use of the property:
(A) Does not exceed fifteen days each assessment year;
(B) Does not result in pecuniary gain;
(C) Does not involve business activities;
(D) Is always for the general public good; and
(E) All income from the rental or use of the exempt property is
used for capital improvements to the exempt property, maintenance and
operation of the exempt property, or for exempt purposes.
(2) Property owned by any nonprofit church, denomination, group of
churches, or an organization or association, the membership of which is
comprised solely of churches or their qualified representatives, which
is utilized as a camp facility if used for organized and supervised
recreational activities and church purposes as related to such camp
facilities. The exemption provided by this paragraph shall apply to a
maximum of two hundred acres of any such camp as selected by the
church, including buildings and other improvements thereon.
(3) Property, including buildings and improvements required for the
maintenance and safeguarding of such property, owned by nonprofit
organizations or associations engaged in character building of boys and
girls under eighteen years of age, and used for such purposes and uses,
provided such purposes and uses are for the general public good:
PROVIDED, That if existing charters provide that organizations or
associations, which would otherwise qualify under the provisions of
this paragraph, serve boys and girls up to the age of twenty-one years,
then such organizations or associations shall be deemed qualified
pursuant to this section.
(4)(((a))) Property owned by all organizations and societies of
veterans of any war of the United States, recognized as such by the
department of defense, which shall have national charters, and which
shall have for their general purposes and objects the preservation of
the memories and associations incident to their war service and the
consecration of the efforts of their members to mutual helpfulness and
to patriotic and community service to state and nation. To be exempt
such property must be used in such manner as may be reasonably
necessary to carry out the purposes and objects of such societies.
(((b) The use of the property for pecuniary gain or for business
activities, except as provided in this subsection (4), nullifies the
exemption otherwise available for the property for the assessment year.
The exemption is not nullified by:))
(i) The collection of rent or donations if the amount is reasonable
and does not exceed maintenance and operation expenses.
(ii) Fund-raising activities conducted by a nonprofit organization.
(iii) The use of the property for pecuniary gain for periods of not
more than fifteen days in a year.
(c) An inadvertent use of the property in a manner inconsistent
with the purpose for which exemption is granted, if the inadvertent use
is not part of a pattern of use. A pattern of use is presumed when an
inadvertent use is repeated in the same assessment year or in two or
more successive assessment years.
(5) Property owned by all corporations, incorporated under any act
of congress, whose principal purposes are to furnish volunteer aid to
members of the armed forces of the United States and also to carry on
a system of national and international relief and to apply the same in
mitigating the sufferings caused by pestilence, famine, fire, floods,
and other national calamities and to devise and carry on measures for
preventing the same.
(6) Property owned by nonprofit organizations exempt from federal
income tax under section 501(c)(3) of the internal revenue code of
1954, as amended, that are guarantee agencies under the federal
guaranteed student loan program or that issue debt to provide or
acquire student loans.
(7) To be exempt under this section, the property must be used
exclusively for the purposes for which exemption is granted, except as
otherwise provided in this section or RCW 84.36.805.
(8) For the purposes of this section, "general public good" means
members of the community derive a benefit from the rental or use of the
property by the nonprofit community group or organization.
Sec. 5 RCW 84.36.032 and 1975 1st ex.s. c 291 s 13 are each
amended to read as follows:
The real and personal property of the administrative offices of
nonprofit recognized religious organizations shall be exempt to the
extent that the property is used for the administration of the
religious programs of the organization and such other programs as would
be exempt under RCW 84.36.020 and 84.36.030 as now or hereafter
amended. The provisions of RCW 84.36.020(2)(b) apply to this section.
Sec. 6 RCW 84.36.035 and 2004 c 82 s 4 are each amended to read
as follows:
(1) The following property ((shall be)) is exempt from taxation:
All property, whether real or personal, belonging to or leased by
any nonprofit corporation or association and used exclusively in the
business of a qualifying blood bank, a qualifying tissue bank, or a
qualifying blood and tissue bank, or in the administration of these
businesses. If the real or personal property is leased, the benefit of
the exemption shall inure to the nonprofit corporation or association.
(2) The definitions in RCW 82.04.324 apply to this section.
(3) To be exempt under this section, the property must be used
exclusively for the purposes for which exemption is granted, except as
provided in RCW 84.36.805.
Sec. 7 RCW 84.36.037 and 2010 c 186 s 1 are each amended to read
as follows:
(1) Real or personal property owned by a nonprofit organization,
association, or corporation in connection with the operation of a
public assembly hall or meeting place is exempt from taxation. The
area exempt under this section includes the building or buildings, the
land under the buildings, and an additional area necessary for parking,
not exceeding a total of one acre. When property for which exemption
is sought is essentially unimproved except for restroom facilities and
structures and this property has been used primarily for annual
community celebration events for at least ten years, the exempt
property ((shall)) may not exceed twenty-nine acres.
(2) To qualify for this exemption the property must be used
exclusively for public gatherings and must be available to all
organizations or persons desiring to use the property, but the owner
may impose conditions and restrictions which are necessary for the
safekeeping of the property and promote the purposes of this exemption.
Membership shall not be a prerequisite for the use of the property.
(3) The use of the property for pecuniary gain or for business
activities, except as provided in this section and RCW 84.36.805,
nullifies the exemption otherwise available for the property for the
assessment year. If all income received from rental or use of the
exempt property is used for capital improvements to the exempt
property, maintenance and operation of the exempt property, or exempt
purposes, the exemption is not nullified as provided by RCW 84.36.805
or by:
(a) ((The collection of rent or donations if all funds collected
are used for capital improvements to the exempt property, maintenance
and operation of the exempt property, or for exempt purposes.)) The use of the property ((
(b) Fund-raising activities conducted by a nonprofit organization.
(c)(i) Except as provided in (c)(ii) of this subsection, the use of
the property for pecuniary gain, for business activities for periods of
not more than fifteen days each assessment year so long as all income
received from rental or use of the exempt property is used for capital
improvements to the exempt property, maintenance and operation of the
exempt property, or for exempt purposes.
(ii)for pecuniary gain or for business
activities if the property is used for activities related)) to conduct
a qualifying farmers market, as defined in RCW 66.24.170, for not more
than fifty-three days each assessment year, ((and all income received
from rental or use of the exempt property is used for capital
improvements to the exempt property, maintenance and operation of the
exempt property, or exempt purposes.)) if the rental income or donations, if any, are reasonable and
do not exceed the maintenance and operation expenses attributable to
the portion of the property loaned or rented; or
(d)
(b) In a county with a population of less than twenty thousand, the
use of the property to promote the following business activities, if
the rental income or donations, if any, are reasonable and do not
exceed the maintenance and operation expenses attributable to the
portion of the property loaned or rented: Dance lessons, art classes,
or music lessons.
(((e) An inadvertent use of the property in a manner inconsistent
with the purpose for which exemption is granted, if the inadvertent use
is not part of a pattern of use. A pattern of use is presumed when an
inadvertent use is repeated in the same assessment year or in two or
more successive assessment years.))
(4) The department of revenue must narrowly construe this
exemption.
Sec. 8 RCW 84.36.037 and 2006 c 305 s 3 are each amended to read
as follows:
(1) Real or personal property owned by a nonprofit organization,
association, or corporation in connection with the operation of a
public assembly hall or meeting place is exempt from taxation. The
area exempt under this section includes the building or buildings, the
land under the buildings, and an additional area necessary for parking,
not exceeding a total of one acre. When property for which exemption
is sought is essentially unimproved except for restroom facilities and
structures and this property has been used primarily for annual
community celebration events for at least ten years, the exempt
property shall not exceed twenty-nine acres.
(2) To qualify for this exemption the property must be used
exclusively for public gatherings and be available to all organizations
or persons desiring to use the property, but the owner may impose
conditions and restrictions which are necessary for the safekeeping of
the property and promote the purposes of this exemption. Membership
shall not be a prerequisite for the use of the property.
(3) The use of the property for pecuniary gain or for business
activities, except as provided in this section and RCW 84.36.805,
nullifies the exemption otherwise available for the property for the
assessment year. If all income received from rental or use of the
exempt property is used for capital improvements to the exempt
property, maintenance and operation of the exempt property, or exempt
purposes, the exemption is not nullified ((by:)) as provided by RCW 84.36.805 or by the use of the property,
in a county with a population of less than twenty thousand, ((
(a) The collection of rent or donations if all funds collected are
used for capital improvements to the exempt property, maintenance and
operation of the exempt property, or for exempt purposes.
(b) Fund-raising activities conducted by a nonprofit organization.
(c) The use of the property for pecuniary gain, for business
activities for periods of not more than fifteen days each assessment
year so long as all income received from rental or use of the exempt
property is used for capital improvements to the exempt property,
maintenance and operation of the exempt property, or for exempt
purposes.
(d)the use
of the property)) to promote the following business activities, if the
rental income or donations, if any, are reasonable and do not exceed
the maintenance and operation expenses attributable to the portion of
the property loaned or rented: Dance lessons, art classes, or music
lessons.
(((e) An inadvertent use of the property in a manner inconsistent
with the purpose for which exemption is granted, if the inadvertent use
is not part of a pattern of use. A pattern of use is presumed when an
inadvertent use is repeated in the same assessment year or in two or
more successive assessment years.))
(4) The department of revenue ((shall)) must narrowly construe this
exemption.
Sec. 9 RCW 84.36.050 and 2006 c 226 s 2 are each amended to read
as follows:
The following property is exempt from taxation:
(1) Property owned or used by or for any nonprofit school or
college in this state for educational purposes or cultural or art
educational programs as defined in RCW 82.04.4328. Real property so
exempt ((shall)) may not exceed four hundred acres including, but not
limited to, buildings and grounds designed for the educational,
athletic, or social programs of the institution, the housing of
students, religious faculty, and the chief administrator, athletic
buildings, and all other school or college facilities, the need for
which would be nonexistent but for the presence of the school or
college. The property must be principally designed to further the
educational, athletic, or social functions of the college or school.
If the property is leased, the benefit of the exemption must inure to
such school or college.
(2) Real or personal property owned by a not-for-profit foundation
that is established for the exclusive support of an institution of
higher education, as defined in RCW 28B.10.016. If the property is
leased to and used by the institution for college or campus purposes,
it must be principally designed to further the educational, athletic,
or social functions of the institution. The exemption is only
available for property actively utilized by currently enrolled
students. The benefit of the exemption must inure to the college.
(3) Subject to ((subsection (4) of this section)) RCW
84.36.805(2)(a)(i), if the property exempt under subsection (1) or (2)
of this section is used by an individual or organization not entitled
to a property tax exemption, except as provided in this subsection, the
exemption is nullified for the assessment year in which such use
occurs. The exemption is not nullified as a result of any of the uses
listed in (a) or (b) of this subsection or RCW 84.36.805(8):
(a) The property is used by students, alumni, faculty, staff, or
other persons or entities in a manner consistent with the educational,
social, or athletic programs, including property used for related
administrative and support functions, of the school or college and not
for pecuniary gain or to promote business activities. Notwithstanding
the foregoing, the school or college may contract with and permit the
use of school or college property by persons or entities to provide
school or college-related programs or services including, but not
limited to, the provision of food services to students, faculty, and
staff, the operation of a bookstore on campus, and the provision to the
school or college of maintenance, operational, or administrative
services without nullifying the exemption; or
(b) The property is used for pecuniary gain or to promote business
activities ((for not more than seven days in the calendar year)) as
authorized by RCW 84.36.805, such uses to be measured separately with
respect to each specific portion of such property. If exempt property
is used as a sports or educational camp or program taught, operated, or
conducted by a faculty member who is required or permitted to do so as
part of his or her compensation package, the days when the property is
so used will not be ((included in calculating the seven day limitation
of this subsection (3)(b).)) considered to be days when the
property is used for nonexempt purposes.
(4) The amount of rent or donations, if any, received by the
college or school for such uses described in subsection (3)(a) or (b)
of this section, or by an organization entitled to a property tax
exemption, must be reasonable and not exceed maintenance and operation
expenses associated with the use by such user.
(5) The exemption under this section will not be nullified by an
inadvertent use of the property in a manner inconsistent with the
purpose for which exemption is granted, if the inadvertent use is not
part of a pattern of use. A pattern of use is presumed when an
inadvertent use is repeated in the same assessment year or in two or
more successive assessment years
Sec. 10 RCW 84.36.060 and 2009 c 58 s 1 are each amended to read
as follows:
(1) The following property ((shall be)) is exempt from taxation:
(a) All art, scientific, or historical collections of associations
maintaining and exhibiting such collections for the benefit of the
general public and not for profit, together with all real and personal
property of such associations used exclusively for the safekeeping,
maintaining and exhibiting of such collections;
(b) All the real and personal property owned by or leased to
associations engaged in the production and performance of musical,
dance, artistic, dramatic, or literary works for the benefit of the
general public and not for profit, which real and personal property is
used exclusively for this production or performance;
(c) All fire engines and other implements used for the
extinguishment of fire, and the buildings used exclusively for their
safekeeping, and for meetings of fire companies, as long as the
property belongs to any city or town or to a fire company; and
(d) All property owned by humane societies in this state in actual
use by the societies.
(2) To receive an exemption under subsection (1)(a) or (b) of this
section:
(a) An organization must be organized and operated exclusively for
artistic, scientific, historical, literary, musical, dance, dramatic,
or educational purposes and receive a substantial part of its support
(exclusive of income received in the exercise or performance by such
organization of its purpose or function) from the United States or any
state or any political subdivision thereof or from direct or indirect
contributions from the general public.
(b) If the property is not currently being used for an exempt
purpose but will be used for an exempt purpose within a reasonable
period of time, the nonprofit organization, association, or corporation
claiming the exemption must submit proof that a reasonably specific and
active program is being carried out to construct, remodel, or otherwise
enable the property to be used for an exempt purpose. The property
does not qualify for an exemption during this interim period if the
property is used by, loaned to, or rented to a for-profit organization
or business enterprise. Proof of a specific and active program to
build or remodel the property so it may be used for an exempt purpose
may include, but is not limited to:
(i) Affirmative action by the board of directors, trustees, or
governing body of the nonprofit organization, association, or
corporation toward an active program of construction or remodeling;
(ii) Itemized reasons for the proposed construction or remodeling;
(iii) Clearly established plans for financing the construction or
remodeling; or
(iv) Building permits.
(3) The use of property exempt under subsection (1)(a) or (b) of
this section by entities not eligible for a property tax exemption
under this chapter, except as provided in ((this section)) RCW
84.36.805, nullifies the exemption otherwise available for the property
for the assessment year. ((The exemption is not nullified if:))
(a) The property 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;
(b) The property is not used for pecuniary gain or to promote
business activities for more than fifteen of the fifty days in the
calendar year; and
(c) The property is used for artistic, scientific, or historic
purposes, for the production and performance of musical, dance,
artistic, dramatic, or literary works, or for community gatherings or
assembly, or meetings.
(4) The fifty and fifteen-day limitations in subsection (3) of this
section do not include days used for setup and takedown activities
preceding or following a meeting or other event by an entity using the
property as provided in subsection (3) of this section.
Sec. 11 RCW 84.36.260 and 2009 c 549 s 1034 are each amended to
read as follows:
(1) All real property interests, including fee simple or any lesser
interest, development rights, easements, covenants and conservation
futures, as that latter term is defined in RCW 84.34.220 as now or
hereafter amended, used exclusively for the conservation of ecological
systems, natural resources, or open space, including park lands, held
by any nonprofit corporation or association the primary purpose of
which is the conducting or facilitating of scientific research or the
conserving of natural resources or open space for the general public,
shall be exempt from ad valorem taxation if either of the following
conditions are met:
(((1))) (a) To the extent feasible considering the nature of the
property interest involved, such property interests shall be used and
effectively dedicated primarily for the purpose of providing scientific
research or educational opportunities for the general public or the
preservation of native plants or animals, or biotic communities, or
works of ancient human beings or geological or geographical formations,
of distinct scientific and educational interest, and not for the
pecuniary benefit of any person or company, as defined in RCW
82.04.030, and shall be open to the general public for educational and
scientific research purposes subject to reasonable restrictions
designed for its protection; or
(((2))) (b) Such property interests ((shall be)) are subject to an
option, accepted in writing by the state, a city or a county, or
department of the United States government, for the purchase thereof by
the state, a city or a county, or the United States, at a price not
exceeding the lesser of the following amounts: (((a))) (i) The sum of
the original purchase cost to such nonprofit corporation or association
plus interest from the date of acquisition by such corporation or
association at the rate of six percent per annum compounded annually to
the date of the exercise of the option; or (((b))) (ii) the appraised
value of the property at the time of the granting of the option, as
determined by the department of revenue or when the option is held by
the United States, or by an appropriate agency thereof.
(2) To be exempt under this section, the property must be used
exclusively for the purposes for which exemption is granted, except as
provided by RCW 84.36.805.
Sec. 12 RCW 84.36.264 and 1994 c 124 s 17 are each amended to
read as follows:
Owners of property desiring tax exempt status pursuant to the
provisions of RCW 84.36.260 ((shall)) must make an application for the
exemption with the department. If such property qualifies pursuant to
RCW 84.36.260(((2))) (1)(b), a copy of the option ((shall)) must also
be submitted to the department. Such option ((shall)) must clearly
state the purchase price pursuant to the option or the appraisal value
as determined by the department of revenue.
Sec. 13 RCW 84.36.805 and 2013 c 212 s 3 are each 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)). Notwithstanding anything to the contrary in this
section:
(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), 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)) events
does not subject the property to tax if the fund-raising ((activities))
events are consistent with the purposes for which the exemption is
granted or are conducted by a nonprofit organization. If the property
is loaned or rented to conduct a fund-raising event, the requirements
of (a) of this subsection (2) apply;
(c) An inadvertent use of the property in a manner inconsistent
with the purpose for which exemption is granted does not subject the
property to tax, if the inadvertent use is not part of a pattern of
use. A pattern of use is presumed when an inadvertent use is repeated
in the same assessment year or in two or more successive assessment
years.
(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 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 26 U.S.C. Sec. 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 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, ((84.36.260,)) and 84.36.480(2).
(8)(a) The use of property exempt under this chapter, other than as
specifically authorized by this chapter, nullifies the exemption
otherwise available for the property for the assessment year. However,
the exemption is not nullified by the use of the property by any
individual, group, or entity, where such use is not otherwise
authorized by this chapter, for not more than fifty days in each
calendar year, and the property is not used for pecuniary gain or to
promote business activities for more than fifteen of the fifty days in
each calendar year. The fifty and fifteen-day limitations provided in
this subsection (8)(a) do not include days during which setup and
takedown activities take place immediately preceding or following a
meeting or other event by an individual, group, or entity using the
property as provided in this subsection (8)(a).
(b) If uses of the exempt property exceed the fifty and fifteen-day
limitations provided in (a) of this subsection (8) during an assessment
year, the exemption is removed for the affected portion of the property
for that assessment year.
NEW SECTION. Sec. 14 Sections 1701 and 1702, chapter 13, Laws of
2013 2nd sp. sess. do not apply to this act.
NEW SECTION. Sec. 15 Sections 3 and 8 of this act take effect
December 31, 2020.
NEW SECTION. Sec. 16 Sections 2 and 7 of this act expire
December 31, 2020.