Multiple Agency Fiscal Note Summary — Bill 1967 S HB, Nonprofits/property tax, Final
Summary
A Multiple Agency Fiscal Note Summary for Bill Number 1967 S HB, titled Nonprofits/property tax, marked Final 2/18/2022 and prepared by Cheri Keller, OFM. The rollup lists the Department of Revenue at 0 estimated operating and capital expenditures. It is followed by a Department of Revenue fiscal note and a Department of Commerce local government fiscal note, which checks No fiscal impacts. The Revenue note describes a proposal to reinstate the provision allowing churches and public assembly halls to host farmers' markets for 53 days per assessment year, with an effective date beginning with property taxes collected in Calendar Year 2023. It estimates approximately $595 for 10 hours of work in the first year and approximately $1,785 for 30 hours in the second year, absorbed within current funding.
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“Multiple Agency Fiscal Note Summary — Bill 1967 S HB, Nonprofits/property tax, Final.”
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Multiple Agency Fiscal Note Summary
Bill Number: 1967 S HB Title: Nonprofits/property tax
Estimated Cash Receipts
NONE
Agency Name 2021-23 2023-25 2025-27
GF- State Total GF- State Total GF- State Total
Local Gov. Courts
Loc School dist-SPI
Local Gov. Other No fiscal impact
Local Gov. Total
Estimated Operating Expenditures
Agency Name 2021-23 2023-25 2025-27
FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total
Department of .0 0 0 0 .0 0 0 0 .0 0 0 0
Revenue
Total $ 0.0 0 0 0 0.0 0 0 0 0.0 0 0 0
Agency Name 2021-23 2023-25 2025-27
FTEs GF-State Total FTEs GF-State Total FTEs GF-State Total
Local Gov. Courts
Loc School dist-SPI
Local Gov. Other No fiscal impact
Local Gov. Total
Estimated Capital Budget Expenditures
Agency Name 2021-23 2023-25 2025-27
FTEs Bonds Total FTEs Bonds Total FTEs Bonds Total
Department of Revenue .0 0 0 .0 0 0 .0 0 0
Total $ 0.0 0 0 0.0 0 0 0.0 0 0
Agency Name 2021-23 2023-25 2025-27
FTEs GF-State Total FTEs GF-State Total FTEs GF-State Total
Local Gov. Courts
Loc School dist-SPI
Local Gov. Other No fiscal impact
Local Gov. Total
Estimated Capital Budget Breakout
NONE
FNPID 64977
:
FNS029 Multi Agency rollup
Prepared by: Cheri Keller, OFM Phone: Date Published:
(360) 584-2207 Final 2/18/2022
FNPID 64977
:
FNS029 Multi Agency rollup
Department of Revenue Fiscal Note
Bill Number: 1967 S HB Title: Nonprofits/property tax Agency: 140-Department of Revenue
Part I: Estimates
No Fiscal Impact
Estimated Cash Receipts to:
NONE
Estimated Expenditures from:
NONE
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact . Factors impacting the precision of these estimates ,
and alternate ranges (if appropriate ), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50 ,000 per fiscal year in the current biennium or in subsequent biennia , complete entire fiscal note
form Parts I-V.
X If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia , complete this page only (Part I).
X Capital budget impact, complete Part IV.
Requires new rule making, complete Part V.
Legislative Contact: Dawn Eychaner 360-786-7135
Phone: Date: 02/10/2022
Agency Preparation: Mark Studer 360-534-1507
Phone: Date: 02/17/2022
Agency Approval: Valerie Torres 360-534-1521
Phone: Date: 02/17/2022
OFM Review: Cheri Keller (360) 584-2207
Phone: Date: 02/17/2022
Request # 1967-2-1
Form FN (Rev 1/00) 176,133.00 1 Bill # 1967 S HB
FNS062 Department of Revenue Fiscal Note
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Briefly describe, by section number, the significant provisions of the bill , and any related workload or policy assumptions , that have revenue or
expenditure impact on the responding agency .
Note: This fiscal note reflects language in SHB 1967, 2022 Legislative Session.
CURRENT LAW:
Nonprofit organizations may be eligible for an exemption from property tax. However, in most situations, nonprofit
ownership is required to qualify for an exemption, and the organization must use and conduct an activity specified in statute.
The use of the property determines the exemption, and not all nonprofit organizations qualify for an exemption.
Nonprofit organizations are further restricted from using the exempt property for business purposes, except for no more than
15 days each year. The nonprofit is also restricted to loan or rental of the property to individuals or organizations for
non-exempt purposes for up to 50 days per year (excluding set-up and take down days). The rent or donation received must
not exceed the maintenance and operation costs attributable to the portion of the property loaned or rented.
RCW 84.36.020 provides a property tax exemption for real or personal property owned by a nonprofit religious organization
and used as a church. The property tax exemption available for churches is limited to five acres including grounds covered
by the church, parsonage, convent, maintenance buildings, and parking.
RCW 84.36.037 provides a property tax exemption for real or personal property owned by nonprofit organization used for
the operation of a public assembly hall or meeting place. The property tax exemption available for a public assembly hall is
limited to one acre in size and must be used for public gatherings 51% of the total time used.
For property taxes levied for collection in 2011 through 2020, a provision existed to allow churches and public assembly halls
to host farmers’ markets for an additional 53 days a year without losing its property tax exemption. That provision expired
on December 31, 2020.
COMPARISON OF THE SUBSTITUTE BILL WITH THE ORIGINAL:
The substitute bill removes the requirement that the Department of Revenue convene a workgroup to identify and
categorize:
- Non-profits in the state that do not benefit from the current property exemptions; and
- Non-profits that find the current exemption structure administratively cumbersome.
PROPOSAL:
Reinstates the provision to allow churches and public assembly halls to use their exempt property for the purposes of a
farmers’ market for 53 days per assessment year in addition to 15 days commercial use and 50 days nonexempt use
restrictions for nonprofit organizations.
The tax preference provisions do not apply to this act.
EFFECTIVE DATE:
This bill takes effect beginning with property taxes collected in Calendar Year 2023.
II. B - Cash receipts Impact
Briefly describe and quantify the cash receipts impact of the legislation on the responding agency , identifying the cash receipts provisions by section
number and when appropriate the detail of the revenue sources . Briefly describe the factual basis of the assumptions and the method by which the
cash receipts impact is derived . Explain how workload assumptions translate into estimates . Distinguish between one time and ongoing functions .
ASSUMPTIONS:
Request # 1967-2-1
Form FN (Rev 1/00) 176,133.00 2 Bill # 1967 S HB
FNS062 Department of Revenue Fiscal Note
- Churches and assembly halls will not risk losing their property tax exemption and will cease hosting farmers’ markets.
- Since no properties lost their exemption when the prior exemption expired December 31, 2020, it is assumed no additional
exemptions will be granted as a result of reinstating the provision to allow churches and public assembly halls to host
farmers’ markets for up to 53 days per year.
DATA SOURCES
- Property Tax
REVENUE ESTIMATES
This legislation results in no revenue impact to the state property tax levy and no impact to local property tax levies.
II. C - Expenditures
Briefly describe the agency expenditures necessary to implement this legislation (or savings resulting from this legislation ), identifying by section
number the provisions of the legislation that result in the expenditures (or savings). Briefly describe the factual basis of the assumptions and the method
by which the expenditure impact is derived . Explain how workload assumptions translate into cost estimates. Distinguish between one time and ongoing
FIRST YEAR COSTS:
The Department will have minimal costs of approximately $595 for 10 hours of work by a property acquisition specialist to
implement this legislation and will absorb within current funding.
SECOND YEAR COSTS:
The Department will have minimal costs of approximately $1,785 for 30 hours of work by a property acquisition specialist to
implement this legislation and will absorb within current funding.
ONGOING COSTS:
There are no ongoing costs.
Part III: Expenditure Detail
III. A - Expenditures by Object Or Purpose
NONE
III. B - Detail: List FTEs by classification and corresponding annual compensation . Totals need to agree with total FTEs in Part I
and Part IIIA
NONE
III. C - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE
IV. B - Expenditures by Object Or Purpose
NONE
Request # 1967-2-1
Form FN (Rev 1/00) 176,133.00 3 Bill # 1967 S HB
FNS062 Department of Revenue Fiscal Note
IV. C - Capital Budget Breakout
Identify acquisition and construction costs not reflected elsewhere on the fiscal note and dexcribe potential financing methods
NONE
None.
Part V: New Rule Making Required
Request # 1967-2-1
Form FN (Rev 1/00) 176,133.00 4 Bill # 1967 S HB
FNS062 Department of Revenue Fiscal Note
LOCAL GOVERNMENT FISCAL NOTE
Department of Commerce
Bill Number: 1967 S HB Title: Nonprofits/property tax
Part I: Jurisdiction-Location, type or status of political subdivision defines range of fiscal impacts.
Legislation Impacts:
Cities:
Counties:
Special Districts:
Specific jurisdictions only:
Variance occurs due to:
Part II: Estimates
X No fiscal impacts.
Expenditures represent one-time costs:
Legislation provides local option:
Key variables cannot be estimated with certainty at this time:
Estimated revenue impacts to:
None
Estimated expenditure impacts to:
None
Part III: Preparation and Approval
Fiscal Note Analyst: Angie Hong Phone: 360-725-5041 Date: 02/18/2022
Leg. Committee Contact: Dawn Eychaner Phone: 360-786-7135 Date: 02/10/2022
Agency Approval: Allan Johnson Phone: 360-725-5033 Date: 02/18/2022
OFM Review: Cheri Keller Phone: (360) 584-2207 Date: 02/18/2022
Page 1 of 2 Bill Number: 1967 S HB
FNS060 Local Government Fiscal Note
Part IV: Analysis
A. SUMMARY OF BILL
Provide a clear, succinct description of the bill with an emphasis on how it impacts local government .
CHANGES TO THIS BILL VERSION FROM PREVIOUS BILL VERSION
This substitute bill removes the requirement that the Dept. of Revenue convene a workgroup to produce a report for the
legislature.
SUMMARY OF CURRENT BILL VERSION
Section 1 amends RCW 84.36.020 (Property tax exemptions for cemeteries, churches, parsonages, convents, and
grounds) to specify that activities (related to a farmers market) upon certain property tax-exempt properties do not nullify
the property tax exemption.
Section 2 amends RCW 84.36.037 (Property tax exemptions for nonprofit with property connection with operation of
public assembly hall or meetings) to specify that uses involving conducting a qualifying farmers market upon certain
property-tax-exempt properties do not nullify the property tax exemption. “Qualifying farmers market” is defined in RCW
66.24.170.
This act will apply to taxes levied for collection in 2023 and thereafter.
Performance statement and tax preference expiration do not apply to this act.
B. SUMMARY OF EXPENDITURE IMPACTS
Briefly describe and quantify the expenditure impacts of the legislation on local governments , identifying the expenditure provisions by
section number, and when appropriate, the detail of expenditures. Delineate between city, county and special district impacts.
This substitute bill will not impact local government expenditures.
C. SUMMARY OF REVENUE IMPACTS
Briefly describe and quantify the revenue impacts of the legislation on local governments , identifying the revenue provisions by section
number, and when appropriate, the detail of revenue sources. Delineate between city, county and special district impacts.
This substitute bill will not impact local government revenues, according to the Washington State Dept. of Revenue.
DOR ASSUMPTIONS
- Churches and assembly halls will not risk losing their property tax exemption and will cease hosting farmers’ markets.
- Since no properties lost their exemption when the prior exemption expired December 31, 2020, it is assumed no
additional exemptions will be granted as a result of reinstating the provision to allow churches and public assembly halls to
host farmers’ markets for up to 53 days per year.
SOURCES
Washington State Dept. of Revenue Fiscal Note Draft
Washington Association of County Officials
Page 2 of 2 Bill Number: 1967 S HB
FNS060 Local Government Fiscal Note
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