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Evergreen Ledger

SSB 5516

Signed

Senate

Community centers/prop. tax

Modifying the property tax exemption for community centers.

How does a bill become law?
  1. Introduced: The bill is filed and assigned a number.
  2. Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
  3. Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
  4. Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
  5. Governor: The Governor reviews the bill and decides whether to sign or veto it.
  6. Signed: The bill has been signed into law.
Introduced: February 12, 2025
Last Action: May 17, 2025
Status: C 340 L 25
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AI Analysis

This analysis was generated by AI and may contain errors. It is not legal advice. Always refer to the official bill text for authoritative information.
People & CommunitiesPeople-leaningCorporate & Wealthy Interests

This bill extends and clarifies the property tax exemption for community centers, allowing qualifying nonprofits to operate community centers on surplus school or nonprofit university property without paying property taxes for up to 40 years—but only for properties acquired between 2026 and 2035. It also broadens eligibility to include nonprofit universities and defines what counts as a community center and essential government services.

  • Extends the property tax exemption for community centers from 40 years after acquisition to cover properties acquired starting in 2026 through 2035—previously, the exemption applied only to properties acquired before 2026 under older law.
  • Expands eligibility: community centers can now be operated on property previously owned by a nonprofit university (that is exempt from property taxes under RCW 84.36.050) in addition to surplus school district property.
  • Clarifies that a 'community center' must be acquired by a nonprofit organization to convert surplus property into facilities offering nonresidential coordinated services (e.g., education, health, job training, youth programs).
  • Allows community centers to rent or loan space to businesses or individuals, as long as the primary purpose remains delivering community services.
  • Requires the local school district or nonprofit university board to formally determine the property is 'surplus' before it can be sold to a nonprofit for community center use.

Who is affected

  • Nonprofit organizations operating community centers — Nonprofit organizations that purchase or acquire surplus school district or nonprofit university property to operate community centers may benefit from property tax exemptions for up to 40 years after acquisition.
  • Local school districts and nonprofit universities — Local school districts and nonprofit universities that sell surplus property to nonprofits for community use may see reduced property tax revenue, but the bill does not require them to repay taxes or provide compensation.
  • Local governments — Local governments (counties, cities, special districts) that rely on property tax revenue may experience reduced revenue during the exemption period (2026–2035) for qualifying community center properties.
  • Community members using local services — Residents and community members who use services offered at community centers—such as after-school programs, job training, health services, or senior activities—may benefit from expanded access to coordinated, nonresidential services.
Effective: July 24, 2025Fiscal impact: The bill may reduce property tax revenue for local governments during the exemption period (2026–2035) for qualifying community center properties, though the exact amount is not specified. The exemption applies for up to 40 years after acquisition, but the new funding impact applies only for tax years 2026 through 2035.
Model: Intel/Qwen3-Coder-Next-int4-AutoRoundGenerated: Mar 19, 2026 at 9:01 PM

Pro/Con Analysis

Potential Benefits (5)

  • By allowing nonprofit universities to contribute surplus property for community centers, the bill expands access to coordinated services (e.g., after-school programs, job training, health services) in areas where universities may have underutilized land—potentially increasing access to critical support for students, families, and broader community members, especially in underserved regions.

    EducationPeopleRef: Sec. 1(2)(a) (expansion to nonprofit universities); Sec. 1(2)(a) (‘community center’ definition)

  • The explicit authorization for community centers to rent or loan space to individuals or businesses—while maintaining nonprofit status—creates flexibility for service providers to generate ancillary revenue (e.g., charging for meeting space, hosting small business incubators), which can help sustain operations and expand service reach without relying solely on donations or grants.

    Business & EmploymentPeopleRef: Sec. 1(2)(a) (rental/loan provision); Sec. 1(2)(a) (‘community center’ definition)

  • The bill’s inclusion of nonprofit universities as eligible property owners may increase the pool of available surplus land for community centers, potentially enabling more locations in areas where school districts have already consolidated or closed facilities—thereby improving geographic access to services in transitioning or underserved communities.

    HousingPeopleRef: Sec. 1(2)(a) (expansion to nonprofit universities); Sec. 1(2)(a) (‘surplus’ determination requirement)

  • By codifying that community centers may deliver ‘nonresidential coordinated services’ (including health services), the bill strengthens the legal basis for integrating public health, mental health, and preventive care into community hubs—potentially improving access for vulnerable populations who rely on centralized, low-barrier services.

    HealthcarePeopleRef: Sec. 1(2)(a) (‘community center’ definition); Sec. 2

  • The bill formalizes a process for local school districts and nonprofit universities to transfer surplus property to nonprofits for community use, potentially reducing blight, repurposing underused assets, and fostering interagency collaboration—while preserving public oversight through formal ‘surplus’ determinations and nonprofit eligibility requirements.

    Local GovernmentPeopleRef: Sec. 1(2)(a) (exemption for properties acquired 2026–2035); Sec. 2
Potential Concerns (5)

  • The bill reduces property tax revenue for local governments (counties, cities, school districts, and special districts) during the 2026–2035 window for qualifying community center properties, with no statutory offset or compensation. While only properties acquired *between 2026 and 2035* trigger the new exemption period, the 40-year exemption duration means revenue losses could extend well beyond that window for later-acquired properties—creating long-term fiscal uncertainty for local services.

    Local GovernmentPeopleRef: Sec. 1(2)(a) (2026–2035 provision); Sec. 2

  • By reducing local property tax revenue without specifying how the loss will be offset, the bill may strain local budgets for public safety (e.g., police, fire, emergency response) if municipalities cannot find alternative revenue sources—especially in districts already under fiscal pressure or with limited tax base flexibility.

    Public SafetyPeopleRef: Sec. 1(2)(a) (definition of 'community center'); Sec. 2

  • The bill permits community centers to rent or loan space to businesses or individuals, potentially blurring the line between nonprofit service delivery and commercial activity. While this may support some micro-enterprises, it also creates ambiguity about fair competition—especially for small for-profit businesses that cannot access tax-exempt space at no cost, potentially distorting local markets.

    Business & EmploymentLean peopleRef: Sec. 1(2)(a) (rental/loan provision); Sec. 1(2)(a) (‘community center’ definition)

  • The bill does not require that surplus properties be used for affordable housing or low-income services—only for ‘nonresidential coordinated services’—and there is no enforceable requirement that services be targeted to low- or moderate-income residents. This risks allowing high-income neighborhoods or well-resourced nonprofits to capture tax-exempt assets for services that may not reach the most vulnerable populations.

    HousingPeopleRef: Sec. 1(2)(a) (‘surplus’ determination requirement); Sec. 2

  • The bill’s 40-year exemption for properties acquired only in 2026–2035 creates a time-limited opportunity for nonprofits to acquire tax-exempt real estate, but the narrow acquisition window may disproportionately benefit larger, better-resourced nonprofits with the capacity to move quickly—while smaller, community-based groups may be excluded due to capacity, legal, or timing constraints.

    FinancialLean peopleRef: Sec. 1(2)(a) (exemption for properties acquired 2026–2035); Sec. 2

Who Is Most Affected

Nonprofit organizations operating community centersPositive Impact

Nonprofits operating community centers benefit significantly: they gain access to tax-exempt real estate for up to 40 years, enabling long-term planning and service expansion. However, only those with capacity to acquire property between 2026–2035 and meet the ‘surplus’ determination process will qualify—potentially excluding smaller, grassroots groups.

Local governments (counties, cities, school districts, special districts)Negative Impact

Local governments face direct revenue losses during the exemption period (2026–2035), with no statutory mechanism to recover lost funds. While school districts and nonprofit universities may benefit from finding new uses for surplus assets, they still lose future property tax revenue on those parcels—potentially straining budgets for schools, roads, and public safety.

Residents using community center servicesMixed Impact

Community members—especially low-income, youth, seniors, and immigrants—may benefit from expanded access to coordinated services (health, education, job training) at lower cost. However, the bill lacks enforceable equity requirements, so service access may skew toward neighborhoods with existing infrastructure and political capacity.

Nonprofit universitiesMixed Impact

Nonprofit universities gain flexibility to repurpose underutilized land for community benefit while retaining their tax-exempt status. However, they face no requirement to ensure services are targeted to low-income residents, and they may lose long-term revenue from land sales or leases that could have funded academic programs.

Small for-profit service providersNegative Impact

For-profit small businesses (e.g., childcare providers, job training firms, health clinics) may benefit indirectly if community centers rent space to them—but they face unfair competition if those nonprofits use tax-exempt space to underprice them. The bill does not require transparency about commercial rentals, raising fairness concerns.