SB 6220
In CommitteeSenate
Nonprofit housing providers
Ensuring nonprofit housing providers qualify for a property tax exemption when the property is temporarily used for certain community purposes other than affordable housing.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill expands flexibility for nonprofit housing providers to use their tax-exempt properties for temporary community purposes (e.g., meetings, events) without losing their property tax exemption, while maintaining strict rules to ensure properties remain primarily used for affordable housing. It also extends the exemption period for qualifying projects and tightens reporting and compliance requirements.
- Nonprofit housing providers may use exempt property for up to 50 days per year for non-qualifying purposes (e.g., community meetings, events) without losing property tax exemption, provided such use is not for profit or business promotion more than 15 days, and setup/takedown days don’t count toward the limit.
- Nonprofits can temporarily loan or rent exempt property for fund-raising or other purposes without triggering tax liability, if rent/donations cover only maintenance and operation costs and the recipient would also qualify for exemption.
- The property tax exemption under RCW 84.36.049 (for affordable housing development) now expires after 10 years (instead of 7) if a three-year extension is filed and approved, with a filing fee of at least $200.
- Nonprofits must notify the Department of Revenue when properties become occupied or are sold to low-income households, and provide annual financial data to JLARC upon request.
- If a nonprofit fails to transfer property to a low-income household by the deadline or repurposes the property, it loses the exemption and must pay back taxes plus interest — treated as a lien with priority over mortgages and other claims.
Who is affected
- Nonprofit housing providers — Nonprofit housing providers that develop or redevelop affordable housing for low-income households may now temporarily use their exempt properties for community purposes (e.g., meetings, events) for up to 50 days per year without losing their property tax exemption, as long as the use is not for profit or business promotion more than 15 days and meets other conditions.
- Local governments and county treasurers — Local governments and county treasurers may collect additional taxes and interest if a nonprofit loses its property tax exemption due to misuse or failure to meet conditions, including conversion of property to non-qualifying uses.
- Low-income households — Low-income households benefit indirectly by helping ensure more stable, long-term availability of affordable housing through support for nonprofit developers who can retain tax-exempt status while using properties flexibly for community needs.
- State agencies (Department of Revenue, JLARC) — The state Department of Revenue and the Joint Legislative Audit and Review Committee (JLARC) gain new reporting and oversight responsibilities to monitor compliance and effectiveness of the tax exemption program.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Allowing up to 50 days/year (including 15 for non-charitable events) of flexible use for community meetings, events, or fundraising without losing tax-exempt status helps nonprofits sustain operations—reducing financial pressure that often leads to selling exempt properties to market-rate developers, thereby preserving long-term affordable housing supply.
HousingPeopleRef: Sec. 1(8)(a) & Sec. 2(8)(a)Permitting nonprofits to loan/rent property for fundraising (if revenue covers only maintenance/operation costs and recipient would also qualify for exemption) strengthens financial sustainability of affordable housing providers, enabling them to reinvest in development rather than seek commercial tenants or sell assets.
HousingPeopleRef: Sec. 1(2)(a) & Sec. 2(2)(a)Extending the property tax exemption period from 7 to 10 years (with approval and $200+ fee) gives nonprofits more time to complete developments and transfer units to low-income households—reducing pressure to rush sales or abandon projects due to deadline constraints.
HousingPeopleRef: Sec. 3(2)(c)Strengthened enforcement mechanisms—including mandatory repayment of back taxes with lien priority over mortgages—ensure that tax exemptions remain tied to actual affordable housing outcomes, reducing abuse and preserving public trust in the program while protecting public investment in housing.
HousingPeopleRef: Sec. 3(5)(a)-(d)Mandating occupancy/sale notifications to the Department of Revenue—and sharing data with JLARC—improves transparency and accountability, enabling better oversight of whether units actually reach low-income households and supporting evidence-based program improvements.
HousingPeopleRef: Sec. 3(7)(a)-(c) & Sec. 4(5)
Potential Concerns (5)
Expanding allowable non-housing use of tax-exempt property to up to 50 days/year (including 15 days for profit/business promotion) may reduce property tax revenue for local governments, especially in jurisdictions where nonprofits hold significant exempt land; though the fiscal impact summary notes this is likely modest, the cumulative effect across many jurisdictions is uncertain.
Local GovernmentRef: Sec. 1(8)(a) & Sec. 2(8)(a)While the bill strengthens enforcement by requiring repayment of back taxes plus interest (with lien priority over mortgages) if nonprofits fail to meet deadlines or repurpose property, this creates administrative burden and potential litigation risk for county treasurers and auditors—especially when enforcing liens against financially strained nonprofits.
Local GovernmentLean peopleRef: Sec. 3(4) & Sec. 3(5)(a)-(d)The $200+ filing fee for extensions (capped at 0.1% of property value) may disproportionately burden smaller nonprofits with fewer resources, potentially discouraging participation in the affordable housing program despite the longer exemption period.
Business & EmploymentLean peopleRef: Sec. 3(4)Mandating immediate notification of occupancy/sale to the Department of Revenue—and sharing that data with JLARC—increases reporting burden on both nonprofits and local assessors, potentially delaying assessments or triggering audits if notices are late or incomplete.
Local GovernmentRef: Sec. 3(7)(a)-(c) & Sec. 4(5)The bill does not address building, fire, or safety standards for properties used for temporary community events, which could create liability or risk if nonprofits host large gatherings without proper oversight.
Public SafetyRef: Sec. 3(2)(c) & Sec. 3(2)(d)
Who Is Most Affected
Nonprofits benefit significantly: they gain flexibility to host events and fundraise without risking tax exemption, extend exemption periods, and reduce financial strain—enabling more stable affordable housing development. However, smaller nonprofits may struggle with the $200 filing fee and reporting requirements.
Local governments may experience modest short-term revenue loss from expanded flexible use, but gain stronger enforcement tools to reclaim taxes if nonprofits misuse property—potentially increasing long-term revenue stability. County treasurers and auditors face added compliance and enforcement duties.
Low-income households benefit indirectly but significantly: the bill strengthens the financial viability of nonprofits developing affordable housing, reduces pressure to sell to market-rate developers, and improves oversight to ensure units reach qualifying households.
The Department of Revenue gains new reporting and verification responsibilities but also gains stronger enforcement authority to reclaim lost revenue. JLARC gains data access for oversight—enhancing accountability but increasing administrative demands.
For-profit developers and real estate investors are largely unaffected directly, but may face reduced competition for properties if nonprofits can sustain operations longer without selling. Some may view the strengthened enforcement as increasing risk in partnering with nonprofits.