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H0154...............................................by REVENUE AND TAXATION
HOSPITALS - PROPERTY TAX EXEMPTION - Amends existing law to define
hospital; to provide a property tax exemption for certain hospital
property; to provide for taxation of land being prepared for use as a
hospital but to exempt improvements to and construction on the land; to
define the phrase "prepared for use as a hospital"; to provide a three year
limit on the exemptions provided for improvements; to provide an exemption
for the entire real property upon completion of construction and obtaining
a certificate of occupancy; to require organization as a nonprofit
corporation and receipt of federal tax exemption; to provide for issuance
of an exemption by the board of equalization; to provide for taxation of
certain property; and to require certain hospital corporations to file
community benefits reports.
02/03 House intro - 1st rdg - to printing
02/04 Rpt prt - to Rev/Tax
02/18 Rpt out - rec d/p - to 2nd rdg
02/19 2nd rdg - to 3rd rdg
02/22 3rd rdg - PASSED - 59-9-2
AYES -- Alltus, Barraclough, Barrett, Bell, Black, Bruneel,
Callister, Campbell, Chase, Clark, Crow, Cuddy, Deal, Denney,
Ellsworth, Field(13), Field(20), Geddes, Gould, Hadley, Hammond,
Hansen(23), Hansen(29), Henbest, Hornbeck, Jaquet, Jones, Kellogg,
Kempton, Kendell, Kunz, Lake, Limbaugh, Loertscher, Mader, McKague,
Meyer, Montgomery, Mortensen, Pischner, Pomeroy, Reynolds, Ridinger,
Ringo, Schaefer, Sellman, Smith, Smylie, Stevenson, Stone,
Taylor(Taylor), Tilman, Tippets, Trail, Wheeler, Williams, Wood,
Zimmermann, Mr Speaker
NAYS -- Bieter, Boe, Gagner, Judd, Marley, Moyle, Robison, Sali,
Stoicheff
Absent and excused -- Linford, Watson
Floor Sponsor - Lake
Title apvd - to Senate
02/23 Senate intro - 1st rdg - to Loc Gov
03/05 Rpt out - rec d/p - to 2nd rdg
03/08 2nd rdg - to 3rd rdg
03/09 3rd rdg - PASSED - 31-3-1
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Danielson, Darrington, Davis, Frasure, Geddes, Hawkins, Ingram,
Ipsen, Keough, King, Lee, McLaughlin, Noh, Richardson, Risch, Sandy,
Schroeder, Sorensen, Stegner, Stennett, Thorne, Twiggs, Wheeler,
Whitworth
NAYS--Deide, Dunklin, Riggs
Absent and excused--Parry
Floor Sponsor - Ipsen
Title apvd - to House
03/10 To enrol
03/11 Rpt enrol - Sp signed
03/12 Pres signed
03/15 To Governor
03/19 Governor signed
Session Law Chapter 126
Effective: 01/01/99 or
01/01/96 under certain circumstances
H0154|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 154 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO PROPERTY TAX EXEMPTIONS FOR HOSPITALS; AMENDING SECTION 63-602D, 3 IDAHO CODE, TO DEFINE HOSPITAL, TO PROVIDE A PROPERTY TAX EXEMPTION FOR 4 CERTAIN HOSPITAL PROPERTY, TO PROVIDE FOR TAXATION OF LAND BEING PREPARED 5 FOR USE AS A HOSPITAL BUT TO EXEMPT IMPROVEMENTS TO AND CONSTRUCTION ON 6 THE LAND, TO DEFINE THE PHRASE "PREPARED FOR USE AS A HOSPITAL," TO PRO- 7 VIDE A THREE YEAR LIMIT ON THE EXEMPTIONS PROVIDED FOR IMPROVEMENTS, TO 8 PROVIDE AN EXEMPTION FOR THE ENTIRE REAL PROPERTY UPON COMPLETION OF CON- 9 STRUCTION AND OBTAINING A CERTIFICATE OF OCCUPANCY, TO REQUIRE ORGANIZA- 10 TION AS A NONPROFIT CORPORATION AND RECEIPT OF FEDERAL TAX EXEMPTION, TO 11 PROVIDE FOR ISSUANCE OF AN EXEMPTION BY THE BOARD OF EQUALIZATION, TO PRO- 12 VIDE FOR TAXATION OF CERTAIN PROPERTY AND TO REQUIRE CERTAIN HOSPITAL COR- 13 PORATIONS TO FILE COMMUNITY BENEFITS REPORTS; DECLARING AN EMERGENCY AND 14 PROVIDING RETROACTIVE APPLICATION. 15 Be It Enacted by the Legislature of the State of Idaho: 16 SECTION 1. That Section 63-602D, Idaho Code, be, and the same is hereby 17 amended to read as follows: 18 63-602D. PROPERTY EXEMPT FROM TAXATION -- CERTAIN HOSPITALS . 19AND REFUGE HOMES.(1) For the purposes of this section, 20 "hospital" means a hospital as defined by chapter 13, title 39, Idaho Code, 21 and includes one (1) or more acute care, outreach, satellite, outpatient, 22 ancillary or support facilities of such hospital whether or not any such indi- 23 vidual facility would independently satisfy the definition of hospital. 24 (2) The following property is exempt from taxation: the real 25 property owned and personal property, including medical equipment, owned or 26 leased by a hospital corporation which is operated as a hospitals27and refuge homes, their furniture and equipment, owned, operated and con-28trolled, and medical equipment leased, by any religious or benevolent corpora-29tion or society withand the necessary grounds used 30 therewith, and from which no gain or profit is derived by reason of31their operation. 32 (3) If real property, not currently exempt from taxation, is being 33 prepared for use as a hospital, the value of the bare land only shall be taxed 34 while the property is being prepared for use as a hospital. All improvements 35 to and construction on the real property, while it is being prepared for use 36 as a hospital, shall be exempt from taxation. For purposes of this section, 37 property is being "prepared for use as a hospital" if the corporation has 38 begun construction of a hospital project as evidenced by obtaining a building 39 permit that will, on completion, qualify such property for an exemption and, 40 as of the assessment date, has not abandoned the construction. Construction 41 shall not be considered abandoned if it has been delayed by causes and circum- 42 stances beyond the corporation's control or when delay is caused by an event 43 that has occurred in the absence of the corporation's willful neglect or 2 1 intentional acts, omissions or practices engaged in by the corporation for the 2 purpose of impeding progress. Notwithstanding the foregoing, in no event shall 3 improvements to property that is being prepared for use as a hospital qualify 4 for an exemption from ad valorem property tax under this subsection for more 5 than three (3) consecutive tax years; upon completion of construction and 6 obtaining a certificate of occupancy, the entire real property shall be exempt 7 from taxation if the corporation meets the requirements of subsection (4) of 8 this section; provided, property already exempt or eligible for exemption 9 shall not be affected by the provisions of this subsection. 10 (4) The corporation must show that the hospital: 11 (a) Is organized as a nonprofit corporation pursuant to chapter 3, 12 title 30, Idaho Code, or pursuant to equivalent laws in its state of 13 incorporation; 14 (b) Has received an exemption from taxation from the Internal Reve- 15 nue Service pursuant to section 501(c)(3) of the Internal Revenue Code. 16 (5) The board of equalization shall grant an exemption to the property of 17 any hospital corporation meeting the criteria provided in subsection (4) of 18 this section. 19 (6) If a hospital corporation uses property for business purposes from 20 which a revenue is derived which is not directly related to the hospital 21 corporation's exempt purposes, then the property shall be assessed and taxed 22 as any other property. If property is used in part by a hospital corporation 23 for such purposes, then the assessor shall determine the value of the entire 24 property and the value of the part used that is not directly related to the 25 hospital corporation's exempt purposes. If the value of the part which is not 26 directly related to the hospital corporation's exempt purposes is determined 27 to be three percent (3%) or less than the value of the entire property, then 28 the property shall remain exempt. If the value of the part which is not 29 directly related to the hospital corporation's exempt purposes is determined 30 to be more than three percent (3%) of the value of the entire property, then 31 the assessor shall assess the proportionate part of the property, including 32 the value of the real estate used for such purposes. 33 (7) A hospital corporation issued an exemption from property taxation 34 pursuant to this section and operating a hospital having one hundred fifty 35 (150) or more patient beds shall prepare a community benefits report to be 36 filed with the board of equalization by December 31 of each year. The report 37 shall itemize the hospital's amount of unreimbursed services for the prior 38 year (including charity care, bad debt, and underreimbursed care covered 39 through government programs); special services and programs the hospital pro- 40 vides below its actual cost; donated time, funds, subsidies and in-kind ser- 41 vices; additions to capital such as physical plant and equipment; and indica- 42 tion of the process the hospital has used to determine general community needs 43 which coincide with the hospital's mission. The report shall be provided as a 44 matter of community information. Neither the submission of the report nor the 45 contents shall be a basis for the approval or denial of a corporation's prop- 46 erty tax exemption. 47 SECTION 2. An emergency existing therefor, which emergency is hereby 48 declared to exist, this act shall be in full force and effect on and after its 49 passage and approval. This act shall apply retroactively for all property tax 50 purposes commencing January 1, 1999, and shall further apply retroactively for 51 purposes of property tax assessments, equalization proceedings, exemption pro- 52 ceedings, appeals and court actions which are now pending or that are com- 53 menced or arise after the effective date of this act for all tax years com- 54 mencing on and after January 1, 1996, notwithstanding that the period for 3 1 which an exemption is claimed is before the effective date of this act.
STATEMENT OF PURPOSE
RS08656C1
The purpose of this legislation is to clarify existing laws
regarding exemptions from property taxes for non-profit hospitals.
The clarification begins by defining "hospital" and delineating
what hospital property is exempt. It further clarifies that for
property not currently exempt from taxation that is being prepared
for use as a hospital, the value of the bare land only will be
taxed until the project is completed.
For hospital property to be exempt, it must be shown that it is
organized as a non-profit corporation under Idaho law and is
exempt from taxation according to section 501 (c)(3) of the
Internal Revenue Code. There is further clarification in the
proposal that recognizes that some property may be used for
business purposes and is not directly related to the hospital's
exempt purposes and is therefore assessed and taxed as any other
property. Exempt hospitals with over one hundred fifty (150)
patient beds are required to prepared a community benefits report
and submit it to the board of equalization annually.
FISCAL NOTE
There is no fiscal impact to the state general fund.
CONTACT: Steven A. Millard, Pres.
Idaho Hospital Assn. 338-5100 Ext. 203
Rep. Dennis Lake 332-1000
Sen. Clyde Boatright 332-1000
STATEMENT OF PURPOSE/ FISCAL NOTE Bill No. H 154