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2004 SESSION

042555432
HOUSE BILL NO. 473
Offered January 14, 2004
Prefiled January 13, 2004
A BILL to amend and reenact § 58.1-3651 of the Code of Virginia, relating to property tax exemptions for certain charitable organizations.
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Patron-- Nixon
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Referred to Committee on Finance
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Be it enacted by the General Assembly of Virginia:

1. That § 58.1-3651 of the Code of Virginia is amended and reenacted as follows:

§ 58.1-3651. Property exempt from taxation by classification or designation by ordinance adopted by local governing body on or after January 1, 2003.

A. Pursuant to subsection 6 (a) (6) of Article X of the Constitution of Virginia, on and after January 1, 2003, any county, city, or town may by designation or classification exempt from real or personal property taxes, or both, by ordinance adopted by the local governing body, the real or personal property, or both, owned by a nonprofit organization that uses such property for religious, charitable, patriotic, historical, benevolent, cultural, or public park and playground purposes. The ordinance shall state the specific use on which the exemption is based, and continuance of the exemption shall be contingent on the continued use of the property in accordance with the purpose for which the organization is classified or designated. No exemption shall be provided to any organization that has any rule, regulation, policy, or practice that unlawfully discriminates on the basis of religious conviction, race, color, sex, or national origin.

B. The ordinance exempting property pursuant to subsection A shall be adopted only after holding a public hearing with respect thereto, at which citizens shall have an opportunity to be heard. The local governing body shall publish notice of the hearing once in a newspaper of general circulation in the county, city, or town where the real property is located. The notice shall include the assessed value of the real and tangible personal property for which an exemption is requested as well as the property taxes assessed against such property. The public hearing shall not be held until at least five days after the notice is published in the newspaper. The local governing body may collect the cost of publication from the organization requesting the property tax exemption. Before adopting any such ordinance the governing body shall consider the following questions:

1. Whether the organization is exempt from taxation pursuant to § 501 (c) of the Internal Revenue Code of 1954;

2. Whether a current annual alcoholic beverage license for serving alcoholic beverages has been issued by the Virginia Alcoholic Beverage Control Board to such organization, for use on such property;

3. Whether any director, officer, or employee of the organization is paid compensation in excess of a reasonable allowance for salaries or other compensation for personal services which such director, officer, or employee actually renders;

4. Whether any part of the net earnings of such organization inures to the benefit of any individual, and whether any significant portion of the service provided by such organization is generated by funds received from donations, contributions, or local, state or federal grants. As used in this subsection, donations shall include the providing of personal services or the contribution of in-kind or other material services;

5. Whether the organization provides services for the common good of the public;

6. Whether a substantial part of the activities of the organization involves carrying on propaganda, or otherwise attempting to influence legislation and whether the organization participates in, or intervenes in, any political campaign on behalf of any candidate for public office;

7. The revenue impact to the locality and its taxpayers of exempting the property; and

8. Any other criteria, facts and circumstances that the governing body deems pertinent to the adoption of such resolution.

C. Exemptions of property from taxation under this article shall be strictly construed in accordance with Article X, Section 6 (f) of the Constitution of Virginia.

D. Nothing in this section or in any ordinance adopted pursuant to this section shall affect the validity of a classification exemption claimed by an organization, or a designation exemption granted by the General Assembly, prior to January 1, 2003, that was still effective on December 31, 2002, pursuant to Article 3 (§ 58.1-3609 et seq.) or 4 (§ 58.1-3650 et seq.) of this chapter, and no locality shall recognize a classification exemption first claimed by an organization pursuant to Article 3 (§ 58.1-3609 et seq.) of this chapter for a tax assessment date that falls on or after January 1, 2003. An exemption granted pursuant to Article 4 (§ 58.1-3650 et seq.) of this chapter may be revoked in accordance with the provisions of § 58.1-3605. For purposes of this subsection "a classification exemption claimed by an organization" as of January 1, 2003, means: (i) that the organization owns property in a locality that is was not being taxed by the locality on December 31, 2002, the last tax assessment date that precedes January 1, 2003, by virtue of a classification exemption provided under Article 3 (§ 58.1-3609 et seq.) of this chapter, or (ii) that the organization owns property with respect to which it is finally determined by a court of competent jurisdiction that the property was not taxable on the last tax assessment day that preceded January 1, 2003, by virtue of a classification exemption provided under Article 3 (§ 58.1-3609 et seq.) of this chapter. Such claim of exemption applies to each such locality in which such an organization owns property that is not being taxed on with respect to which the claim was made by the organization on or before December 31, 2002, and only to each such locality.