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(124th General Assembly)
(Substitute House Bill Number 416)
AN ACT
To amend sections 5701.13 and 5709.12 of the Revised
Code to provide property tax exemption for
retirement or nursing homes belonging to tax-exempt
organizations and occupied by persons who have
retired from uncompensated service to a charitable,
religious, fraternal, or educational institution.
Be it enacted by the General Assembly of the State of Ohio:
SECTION 1. That sections 5701.13 and 5709.12 of the Revised
Code be amended to read as follows:
Sec. 5701.13. (A) As used in this section: (1) "Nursing home" means a nursing home or a home for the
aging, as those terms are defined in section 3721.01 of the
Revised Code, that is issued a license pursuant to section
3721.02
of the Revised Code. (2) "Residential care facility" means a residential care
facility, as defined in section
3721.01 of the Revised Code, that
is issued a license pursuant to
section 3721.02 of the Revised
Code. (3) "Adult care facility" means an adult care facility as
defined in section 3722.01 of the Revised Code that is issued a
license pursuant to section 3722.04 of the Revised Code. (B) As used in Title LVII of the Revised Code, and for the
purpose of other sections of the Revised Code that refer
specifically to Chapter 5701. or section 5701.13 of the Revised
Code, a "home for the aged" means
a
either of the following: (1) A place of residence for aged
and infirm persons that
satisfies divisions (B)(1)(a) to (e) of this section: (a) It is
either a nursing home,
residential care facility,
or
adult care facility
and that meets
all of the following
standards:. (1)(b) It is owned by a corporation, unincorporated
association, or trust of a charitable, religious, or fraternal
nature, which is organized and operated not for profit, which is
not formed for the pecuniary gain or profit of, and whose net
earnings or any part of whose net earnings is not distributable
to, its members, trustees, officers, or other private persons,
and
which is exempt from federal income taxation under section
501 of
the "Internal Revenue Code of 1986," 100 Stat. 2085, 26
U.S.C. 1.
(2)(c) It is open to the public without regard to race,
color, or national origin;.
(3)(d) It does not pay, directly or indirectly, compensation
for services rendered, interest on debts incurred, or purchase
price for land, building, equipment, supplies, or other goods or
chattels, which compensation, interest, or purchase price is
unreasonably high;.
(4)(e) It provides services for the life of each resident
without regard to
his
the resident's ability to continue payment
for the full cost of the services.
(2) A place of residence that satisfies divisions (B)(1)(b),
(d),
and (e) of this section; that satisfies the definition of
"nursing home," "residential care facility," or "adult care
facility" under section 3721.01 or 3722.01 of the Revised Code
regardless of whether it is licensed as such a home or facility;
and that is
provided at no
charge to individuals on account of
their service
without compensation to a
charitable, religious,
fraternal, or
educational institution, which individuals are aged
or infirm and
are members of the
corporation, association, or
trust that owns
the place of
residence. For the purposes of
division (B)(2) of this section, "compensation" does not include
furnishing room and board, clothing, health care, or other
necessities, or stipends or other de minimis payments to defray
the cost thereof. Exemption from taxation shall be accorded, on proper
application, only to those homes or parts of homes which meet the
standards and provide the services specified in this section. Nothing in this section shall be construed as preventing a
home from requiring a resident with financial need to apply for
any applicable financial assistance or requiring a home to retain
a resident who willfully refuses to pay for services for which
he
the resident has contracted even though
he
the resident
has
sufficient resources to do so. (C)(1) If a corporation, unincorporated association, or
trust described in division (B)(1)(b) of this section is granted a
certificate of need pursuant to section 3702.52 of the Revised
Code to construct, add to, or otherwise modify a nursing home, or
is given approval pursuant to section 3791.04 of the Revised Code
to construct, add to, or otherwise modify a residential
care
facility or adult
care facility and if the corporation,
association, or trust
submits an affidavit to the tax commissioner
stating that,
commencing on the date of licensure and continuing
thereafter,
the home or facility will be operated in accordance
with the
requirements of divisions (B)(1), (2), (3), and (4)(a) to
(e) of this
section, the corporation, association, or trust shall
be
considered to be operating a "home for the aged" within the
meaning of division (B)(1) of this section, beginning on the first
day of January of the year in which such certificate is granted
or
approval is given. (2) If a corporation, association, or trust is considered
to
be operating a "home for the aged" pursuant to division (C)(1)
of
this section, the corporation, association, or trust shall
notify
the tax commissioner in writing upon the occurrence of any
of the
following events: (a) The corporation, association, or trust no longer
intends
to complete the construction of, addition to, or
modification of
the home or facility, to obtain the appropriate
license for the
home or facility, or to commence operation of the
home or facility
in accordance with the requirements of divisions
(B)(1), (2), (3),
and (4)(a) to (e) of this section; (b) The certificate of approval referred to in division
(C)(1) of this section expires, is revoked, or is otherwise
terminated prior to the completion of the construction of,
addition to, or modification of the home or facility; (c) The license to operate the home or facility is not
granted by the director of health within one year following
completion of the construction of, addition to, or modification
of
the home or facility; (d) The license to operate the home or facility is not
granted by the director of health within four years following the
date upon which the certificate or approval referred to in
division (C)(1) of this section was granted or given; (e) The home or facility is granted a license to operate
as
a nursing home, residential care facility, or adult
care facility. (3) Upon the occurrence of any of the events referred to
in
divisions (C)(2)(a), (b), (c), (d),
or
and (e) of this section,
the
corporation, association, or trust shall no longer be
considered
to be operating a "home for the aged" pursuant to
division (C)(1)
of this section, except that the tax
commissioner,
for good cause
shown and to the extent
he
the
commissioner
considers appropriate,
may extend the time period specified
in
division (C)(2)(c) or (d)
of this section, or both. Nothing in
division
(C)(3) of this
section shall be construed to prevent a
nursing
home, residential
care facility, or adult care facility
from qualifying as a
"home
for the aged" if, upon proper
application made pursuant to
division (B) of this section, it is
found to meet the
requirements
of divisions (A) and (B) of this
section.
Sec. 5709.12. (A) As used in this section, "independent
living facilities" means any residential housing facilities and
related property that are not a nursing home, residential
care
facility, or adult
care facility as defined in division (A) of
section 5701.13 of
the Revised Code. (B) Lands, houses, and other buildings belonging to a
county, township, or municipal corporation and used exclusively
for the accommodation or support of the poor, or leased to the
state or any political subdivision for public purposes shall be
exempt from taxation. Real and tangible personal property
belonging to institutions that is used exclusively for charitable
purposes shall be exempt from taxation, including real property
belonging to an institution that is a nonprofit corporation that
receives a grant under
the Thomas Alva Edison
grant program
authorized
by division (C) of
section 122.33 of the Revised Code
at any time
during the tax year
and being held for leasing or
resale to
others. If, at any time during a tax year for which
such property
is exempted from taxation, the corporation ceases to
quality
qualify for
such a grant, the director of development
shall notify the tax
commissioner, and the tax commissioner shall
cause the property to
be restored to the tax list beginning with
the following tax year.
All property owned and
used by a nonprofit
organization
exclusively for a home for the
aged, as defined in
section 5701.13
of the Revised Code, also
shall be exempt from
taxation. (C)(1) If a home for the aged
described in division (B)(1)
of section 5701.13 of the Revised Code is operated in conjunction
with
or at the same site as independent living facilities, the
exemption granted in division (B) of this section shall include
kitchen, dining room, clinic, entry ways, maintenance and storage
areas, and land necessary for access commonly used by both
residents of the home for the aged and residents of the
independent living facilities. Other facilities commonly used by
both residents of the home for the aged and residents of
independent living units shall be exempt from taxation only if
the
other facilities are used primarily by the residents of the
home
for the aged. Vacant land currently unused by the home, and
independent living facilities and the lands connected with them
are not exempt from taxation. Except as provided in division (A)
of section 5709.121 of the Revised Code, property of a home
leased
for nonresidential purposes is not exempt from taxation.
(2) Independent living facilities are exempt from taxation
if they are operated in conjunction with or at the same site as a
home for the aged described in division (B)(2) of section 5701.13
of the Revised Code; operated by a corporation, association, or
trust described in division (B)(1)(b) of that section; operated
exclusively for the benefit of members of the corporation,
association, or trust who are retired, aged, or infirm; and
provided to those members without charge in consideration of their
service, without compensation, to a charitable, religious,
fraternal, or educational institution. For the purposes of
division (C)(2) of this section, "compensation" does not include
furnishing room and board, clothing, health care, or other
necessities, or stipends or other de minimis payments to defray
the cost thereof. (D)(1) A private corporation established under federal law,
defined in 36 U.S.C. 1101, Pub. L. No. 102-199, 105
Stat.
1629, as
amended, the objects of which include encouraging the advancement
of science generally, or of a particular branch of science, the
promotion of scientific research, the improvement of the
qualifications and usefulness of scientists, or the increase and
diffusion of scientific knowledge is conclusively presumed to be
a
charitable or educational institution. A private corporation
established as a nonprofit corporation under the laws of a state,
that is exempt from federal income taxation under section
501(c)(3) of the Internal Revenue Code of 1986, 100 Stat. 2085,
26
U.S.C.A. 1, as amended, and has as its principal purpose one
or
more of the foregoing objects, also is conclusively presumed
to be
a charitable or educational institution. The fact that an organization described in this division
operates in a manner that results in an excess of revenues over
expenses shall not be used to deny the exemption granted by this
section, provided such excess is used, or is held for use, for
exempt purposes or to establish a reserve against future
contingencies; and, provided further, that such excess may not be
distributed to individual persons or to entities that would not
be
entitled to the tax exemptions provided by this chapter. Nor
shall the fact that any scientific information diffused by the
organization is of particular interest or benefit to any of its
individual members be used to deny the exemption granted by this
section, provided that such scientific information is available
to
the public for purchase or otherwise.
(2) Division (D)(2) of this section does not apply to real
property exempted from taxation under this section and division
(C) of section 5709.121 of the Revised Code and belonging to a
nonprofit corporation described in division (D)(1) of this section
that has received a grant under the Thomas Alva Edison grant
program authorized by division (C) of section 122.33 of the
Revised Code during any of the tax years the property was exempted
from taxation. When a private corporation
described in
division
(D)(1) of
this section
sells all or any portion of a tract, lot,
or parcel
of real
estate that has been exempt from taxation under
this
section and
section 5709.121 of the Revised Code, the portion
sold
shall be
restored to the tax list for the year following the
year
of the
sale and a charge shall be levied against the sold
property
in an
amount equal to the tax savings on such property
during the
four
tax years preceding the year the property is
placed on the
tax
list. The tax savings equals the amount of the
additional
taxes
that would have been levied if such property had
not been
exempt
from taxation. The charge constitutes a lien of the state upon such
property
as of the first day of January of the tax year in which
the charge
is levied and continues until discharged as provided
by law. The
charge may also be remitted for all or any portion
of such
property that the tax commissioner determines is entitled
to
exemption from real property taxation for the year such
property
is restored to the tax list under any provision of the
Revised
Code, other than sections 725.02, 1728.10, 3735.67,
5709.40,
5709.41, 5709.62, 5709.63, 5709.71, 5709.73, 5709.78,
and 5709.84,
upon an application for exemption covering the year
such property
is restored to the tax list filed under section
5715.27 of the
Revised Code. (E) Real property held by an
organization organized and
operated exclusively for charitable
purposes as described under
section 501(c)(3) of the
Internal Revenue Code and exempt from
federal
taxation under section 501(a) of the Internal
Revenue
Code, 26 U.S.C.A. 501(a) and
(c)(3), as
amended, for the purpose
of constructing or rehabilitating
residences for eventual transfer
to qualified low-income
families through sale, lease, or land
installment contract,
shall be exempt from taxation. The exemption shall commence on the day title to
the property
is transferred to the organization
and shall continue to the end
of the tax year in which
the organization transfers title to the
property to a
qualified low-income family. In no case shall the
exemption extend beyond the
second succeeding tax year following
the year in which the title was
transferred to the organization.
If the title is transferred to the
organization and from the
organization to a qualified low-income family in the
same tax
year, the exemption shall continue to the end of that tax year.
The
proportionate amount of taxes that are a
lien but not yet
determined, assessed, and levied for the tax year in which
title
is transferred to the organization shall be remitted by the
county
auditor for each day of the year that title is held by the
organization. Upon transferring the title to another person, the
organization shall file
with the county auditor an affidavit
affirming that the title was transferred
to a qualified low-income
family or that the title was not transferred to a
qualified
low-income family, as the case may be; if the title was
transferred to a qualified low-income family, the affidavit shall
identify the
transferee by name. If the organization transfers
title to the property
to anyone other than a
qualified low-income
family, the exemption, if it has not previously expired,
shall
terminate, and the property shall be restored to the tax list for
the
year following the year of the transfer and a charge shall be
levied against
the property in an amount equal to the amount of
additional taxes that would
have been levied if such property had
not been exempt from taxation. The
charge constitutes a lien of
the state upon such property as of the first day
of January of the
tax year in which the charge is levied and
continues until
discharged as provided by law. The application for exemption shall be filed as otherwise
required
under section 5715.27 of the Revised Code, except that
the
organization holding the property shall file with its
application documentation substantiating its status as an
organization organized and operated exclusively for charitable
purposes under section 501(c)(3) of the
Internal Revenue Code and
its qualification for
exemption from federal taxation under
section 501(a)
of the Internal Revenue Code, and affirming its
intention to construct or rehabilitate the property for the
eventual transfer to qualified low-income families. As used in this division, "qualified low-income family"
means
a family whose income does not exceed two hundred per cent
of the
official federal poverty guidelines as revised annually
in
accordance with section 673(2) of the "Omnibus Budget
Reconciliation Act of 1981," 95 Stat. 511, 42
U.S.C.A. 9902, as
amended, for a family size equal to the size of the
family whose
income is being determined.
SECTION 2. That existing sections 5701.13 and 5709.12 of the
Revised Code are hereby repealed.
SECTION 3. The amendment by this act of sections 5701.13
and
5709.12 of the Revised Code applies to tax year 2002 and
thereafter.
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