The bill allows the governing body of a municipality to impose fees or a limited real estate tax on each exempt property. The governing body may impose an essential services fee annually on each property for which an exemption from real property tax is claimed by an institution of purely public charity. The fee shall not exceed $100 per every 1,000 square feet of any and all structures on a parcel claimed to be exempt, except that the fee shall not be imposed on the first 5,000 square feet of all structures, in the aggregate, on such a parcel. The governing body may, in its discretion, increase the fee on an annual basis by an amount not to exceed 5%. The fee imposed can’t exceed 50% of the property’s total real estate tax liability. 

 

Also, the governing body may choose to impose a real estate tax on real property purchased by an institution of purely public charity after December 31, 2009. If a real estate tax is instituted by the governing body, then there is a very clear schedule for implementation with gradually greater portions of the assessed value of the property taxed over a five year period with 10% in the 1^st taxable year, then 20%, 30%, 40% and 50% in subsequent years.

 

Commonwealth or any political subdivision of the Commonwealth or local authorities is exempt property. Property owned by police, fire, public works and emergency services are exempt. Property of the federal government is exempt and property subject to partial taxation under section 7.2 is exempt. 

 

The essential services fee and limited real estate tax shall apply to all institution of purely public charity owning tax-exempt property within the municipality. Existing voluntary agreements would not be impacted by the enactment of these requirements.

 

 

Introduced by Rep. Tim Solobay (D-Washington), HB 2192 differs from the Senate bill in that it does not discuss a limited real estate tax option but focuses on the essential services fee.

 

The fee would not exceed the amount of tax that would be imposed on 25% of the assessed value of the property on a parcel claimed to be exempt. The fee would not be imposed on the first 5,000 square fee in the aggregate. The language regarding regulatory, uniformity, exemption and impact on existing voluntary agreements is identical to SB 1175.

 

Recommendation 

 

AICUP has opened a dialogue with the League of Cities and Municipalities to seek opportunities to work with the League to find and advocate for solutions for fiscally distressed municipalities and other local governments. AICUP wants to be a partner in finding long-term, real solutions to these fiscal challenges because the health of our cities will affect the health of our institutions. However, AICUP staff recommends that AICUP strongly oppose any amendment to Act 55 which removes the tax exempt status of our colleges and universities. This tax exempt status is fundamental to our institutions’ fiscal health and identity as charitable organizations providing education and research charitable services, as well as a recognition that our colleges and universities are relieving the government of a burden and should be afforded the same tax treatment as public universities. Since the proposals in these bills for an essential services fee and the limited real estate tax remove this tax exemption, they should be opposed.

 

 

 

 

 

 

 

 

 

 

 

 

 

The bill allows the governing body of a municipality to impose fees or a limited real estate tax on each exempt property. The governing body may impose an essential services fee annually on each property for which an exemption from real property tax is claimed by an institution of purely public charity. The fee shall not exceed $100 per every 1,000 square feet of any and all structures on a parcel claimed to be exempt, except that the fee shall not be imposed on the first 5,000 square feet of all structures, in the aggregate, on such a parcel. The governing body may, in its discretion, increase the fee on an annual basis by an amount not to exceed 5%. The fee imposed can’t exceed 50% of the property’s total real estate tax liability. 

 

Also, the governing body may choose to impose a real estate tax on real property purchased by an institution of purely public charity after December 31, 2009. If a real estate tax is instituted by the governing body, then there is a very clear schedule for implementation with gradually greater portions of the assessed value of the property taxed over a five year period with 10% in the 1^st taxable year, then 20%, 30%, 40% and 50% in subsequent years.

 

Commonwealth or any political subdivision of the Commonwealth or local authorities is exempt property. Property owned by police, fire, public works and emergency services are exempt. Property of the federal government is exempt and property subject to partial taxation under section 7.2 is exempt. 

 

The essential services fee and limited real estate tax shall apply to all institution of purely public charity owning tax-exempt property within the municipality. Existing voluntary agreements would not be impacted by the enactment of these requirements.

 

 

Introduced by Rep. Tim Solobay (D-Washington), HB 2192 differs from the Senate bill in that it does not discuss a limited real estate tax option but focuses on the essential services fee.

 

The fee would not exceed the amount of tax that would be imposed on 25% of the assessed value of the property on a parcel claimed to be exempt. The fee would not be imposed on the first 5,000 square fee in the aggregate. The language regarding regulatory, uniformity, exemption and impact on existing voluntary agreements is identical to SB 1175.

 

Recommendation 

 

AICUP has opened a dialogue with the League of Cities and Municipalities to seek opportunities to work with the League to find and advocate for solutions for fiscally distressed municipalities and other local governments. AICUP wants to be a partner in finding long-term, real solutions to these fiscal challenges because the health of our cities will affect the health of our institutions. However, AICUP staff recommends that AICUP strongly oppose any amendment to Act 55 which removes the tax exempt status of our colleges and universities. This tax exempt status is fundamental to our institutions’ fiscal health and identity as charitable organizations providing education and research charitable services, as well as a recognition that our colleges and universities are relieving the government of a burden and should be afforded the same tax treatment as public universities. Since the proposals in these bills for an essential services fee and the limited real estate tax remove this tax exemption, they should be opposed.