(i)__The institution consistently applies a formula to all individuals requesting consideration of reduced fees that is in part based on individual or family income;

(ii)__At least 20% of the individuals receiving goods or services from the institution do not pay a fee or pay a fee that is substantially lower than the cost of the goods or services provided by the institution;

(iii)__At least 10% of the individuals receiving goods or services from the institution, not including the individuals described in subdivision (ii), receive a reduction in fees of at least 10% of the cost of the goods or services provided to them; and

(iv)__Individuals receiving goods or services from the institution do not pay a fee that is equal to or greater than the cost of the goods or services provided to those individuals or the goods or services provided to the individuals described in subdivision (ii) are comparable in quality and quantity to the goods or services provided to those individuals who pay a fee that is equal to or greater than the cost of the goods or services provided to them;

(c)__Wholly gratuitous goods or services to at least 5% of those receiving goods or services similar to those goods or services provided in division (b) from the institution;

(d)__Uncompensated goods or services that in the aggregate are equal to at least 5% of the institution's costs of providing goods or services; or

(e)__Goods or services at no fee or reduced fees to nonprofit agencies or goods and services to

individuals eligible for government programs, if any of the following applies:

(i)__The nonprofit agency is exempt from income taxation pursuant to Section 501(c)(3) of the Code and is licensed by the Department of Human Services or the Department of Mental Health, Mental Retardation and Substance Abuse Services as a nonprofit nursing home, nonprofit boarding home, nonprofit boarding care facility or nonprofit child care center pursuant to Title 22, chapter 1665 and Title 34-B, chapter 3;

(ii)__The nonprofit agency receives 75% or more of its gross operating revenue from grants or fee-for-service payments by government agencies and the aggregate amount of the fee-for-service payments from government agencies does not exceed 95% of the nonprofit agency's costs of providing goods or services to the individuals for whom the fee-for-service payments are made; or

(iii)__The nonprofit agency provides goods or services to individuals with mental retardation, to individuals who need mental health services or to members of such an individual's family or guardian in support of those goods or services or to individuals who are dependent, neglected or delinquent children, as long as the institution performs duties that would otherwise be the responsibility of government and the nonprofit agency is restricted in its ability to retain revenue over expenses or voluntary contributions by any one of the following statutes or regulations or by contractual limitations with any state agency:__the Social Security Act, Sections 1905(d) and 1915(c); 42 Code of Federal Regulations, 440.150 relating to intermediate care facilities services; or 42 Code of Federal Regulations, Part 483, Subchapter I, relating to conditions of participation for intermediate care facilities for the mentally retarded.

For purposes of this division, "nonprofit agency" means an entity exempt from taxation under Section 501(c)(3) of the Code.

(2)__An institution may elect to average the applicable data for its 5 most recently completed fiscal years for the purposes of calculating any formula to meet any quantitative standard in subparagraph (1).

(3)__As used in this paragraph, unless the context otherwise indicates, the following terms have the following meanings.

(a)__"Net operating income" means the amount of funds remaining after all operating expenses related to the provision of goods or services associated with an institution's charitable purpose are deducted from payments received for providing those goods or services, as determined in accordance with generally accepted accounting principles applicable to the institution.

(b)__"Total operating expenses" means the costs related to the provision of goods or services associated with an institution's charitable purpose, as determined in accordance with generally accepted accounting principles applicable to the institution.

(c)__"Uncompensated goods or services" means the following:

(i)__The full cost of all goods and services provided by an institution for which the institution has not received monetary compensation or the difference between the full cost and any lesser fee received for the goods and services, including the cost of the goods or services provided to individuals unable to pay;

(ii)__The difference between the full cost of education and research programs provided by or participated in by an institution and the payments made to the institution to support the education and research programs;

(iii)__The difference between the full cost of providing the goods or services and the

payment made to an institution under any government program, including goods or services provided to individuals covered by Medicare or Medicaid;

(iv)__The difference between the full cost of the community services that an institution provides or participates in and the payment made to the institution to support those community services;

(v)__The reasonable value of any money, property, goods or services donated by a primary donor to an institution or the reasonable value of the net donation made by a secondary donor to a primary donor.__As used in this subdivision, "net donation" means, in the case of a donation of money, property, identical goods or services made by a secondary donor, the difference between the value of the donation made by the secondary donor and the value of the donation made by the primary donor, as long as the value is positive; "primary donor" means an entity that makes a donation of money, property, goods or services to an institution of purely public charity; and "secondary donor" means an entity that receives a donation of any money, property, goods or services from a primary donor and then makes a donation back to that primary donor within 3 years of having received such a donation;

(vi)__The reasonable value of volunteer assistance donated by individuals who are involved or assist in the provision of goods or services by an institution.__The reasonable value of volunteer assistance, computed on an hourly basis, may not exceed the statewide average weekly wage as calculated by the Department of Labor, Bureau of Labor Standards; and

(vii)__The cost of goods or services provided by an institution licensed by the Department of Human Services or the Department of Mental Health, Mental Retardation and Substance Abuse Services to individuals who are unable to pay, as long as reasonable and customary

collection efforts have been made by the institution.

SUMMARY

This bill provides a property tax exemption to a nonprofit benevolent and charitable institution only if it donates or renders gratuitously a substantial portion of its services. The charitable organization can meet that standard in one of 5 ways. The 5 alternative ways to meet the primary standard are:

1. The institution must provide goods and services to all who seek them without regard to ability to pay;

2. The institution must provide goods and services for fees that are based on the recipients' ability to pay;

3. The institution must provide wholly gratuitous goods and services to least 5% of those receiving similar goods and services from the institution;

4. The institution must provide uncompensated goods or services that in the aggregate are equal to at least 5% of the institution's cost of providing goods or services; or

5. The institution must provide goods or services at no fee or a reduced fee to nonprofit agencies or individuals eligible for government programs.