§ 105-278.6A. Qualified retirement facility. - North Carolina Statutes

§ 105‑278.6A.  Qualifiedretirement facility.

(a)        Classification. –Buildings, the land they actually occupy, additional adjacent land reasonablynecessary for the convenient use of the buildings, and personal property ownedby a qualified retirement facility and used in the operation of that facilityare designated a special class of property under Section 2(2) of Article V ofthe North Carolina Constitution and are excluded from taxation to the extentprovided in this section.

(b)        Definitions. – Thefollowing definitions apply in section:

(1)        Charity care. – Theunreimbursed costs to the facility of providing health care, housing, or otherservices to a resident who is uninsured, underinsured, or otherwise unable topay for all or part of the services rendered.

(2)        Community benefits.– The unreimbursed costs to the facility of providing the following:

a.         Services, includinghealth, recreation, community research, and education activities provided tothe community at large, including the elderly.

b.         Charitabledonations.

c.         Donated volunteerservices.

d.         Donations andvoluntary payments to government agencies.

(3)        Financial reportingperiod. – The calendar year or tax year ending prior to the date the retirementfacility applies for an exclusion under this section.

(4)        Resident revenue. –Annual revenue paid by a resident for goods and services and one year's shareof the initial resident fee amortized in accordance with generally acceptedaccounting principles.

(5)        Retirement facility.– A community that meets all of the following conditions:

a.         It is licensed underArticle 64 of Chapter 58 of the General Statutes.

b.         It is designed forelderly residents.

c.         It includesindependent living units for elderly residents.

d.         It includes askilled nursing facility or an adult care facility.

(6)        Unreimbursed costs.– The costs a facility incurs for providing charity care or community benefitsafter subtracting payment or reimbursement received from any source for thecare or benefits. Unreimbursed costs include costs paid from funds generated bya program described in subdivision (c)(5) of this section.

(c)        Total Exclusion. –A retirement facility qualifies for total exclusion under this section if itmeets all of the following conditions:

(1)        It is exempt fromtax under Article 4 of this Chapter and private shareholders do not benefitfrom its operations.

(2)        All of its revenues,less operating and capital expenses, are applied to providing uncompensatedgoods and services to the elderly and to the local community, or are applied toan endowment or a reserve for these purposes.

(3)        Its charter providesthat in the event of dissolution, its assets will revert or be conveyed to anentity that is organized exclusively for charitable, educational, scientific,or religious purposes, and is an exempt organization under section 501(c)(3) ofthe Code.

(4)        Repealed by SessionLaws 2001‑17, s. 1.

(5)        It has an activeprogram to generate funds through one or more sources, such as gifts, grants,trusts, bequests, endowment, or an annual giving program, to assist theretirement facility in serving persons who might not be able to reside therewithout financial assistance or subsidy.

(6)        It meets at leastone of the following conditions:

a.         The facility servesall residents without regard to the residents' ability to pay.

b.         At least fivepercent (5%) of the facility's resident revenue for the financial reportingperiod is provided in charity care to its residents, in community benefits, orin both.

(d)        Partial Exclusion.– A retirement facility qualifies for a partial exclusion under this subsectionif it meets conditions under subdivisions (c)(1) through (c)(5) of this sectionand at least one percent (1%) of the facility's resident revenue for thefinancial reporting period is provided in charity care to its residents, incommunity benefits, or in both. The percentage of the retirement facility'sassessed value that is excluded from taxation is the applicable percentageprovided in the following table, based on the minimum percentage of thefacility's resident revenue that it provides in charity care to its residents,in community benefits, or in both:

Minimum Percentage of

PartialExclusion                                                                 ResidentRevenue

            80%                                                                                          4%

            60%                                                                                          3%

            40%                                                                                          2%

            20%                                                                                          1%

(e)        Application forExclusion. – The application requirements of G.S. 105‑282.1 apply to thissection. (1939,c. 310, s. 303; 1961, c. 1169, s. 8; 1967, c. 1185; 1971, c. 806, s. 1; c.1121, s. 3; 1973, cc. 290, 451; c. 476, s. 128; c. 484; c. 695, s. 1; c. 790,s. 1; cc. 904, 962, 1028, 1034, 1077; c. 1262, s. 23; c. 1264, s. 1; 1975, cc.566, 755; c. 764, s. 6; 1977, c. 771, s. 4; c. 782, s. 2; c. 1001, ss. 1, 2;1977, 2nd Sess., c. 1200, s. 4; 1979, c. 200, s. 1; 1979, 2nd Sess., c. 1092;1981, c. 86, s. 1; 1981 (Reg. Sess., 1982), c. 1244, ss. 1, 2; 1983, c. 643,ss. 1, 2; c. 693; 1983 (Reg. Sess., 1984), c. 1060; 1985, c. 510, s. 1; c. 656,s. 37; 1985 (Reg. Sess., 1986), c. 982, s. 18; 1987, c. 356; c. 622, s. 2; c.747, s. 8; c. 777, s. 6; c. 813, ss. 5, 6, 22; c. 850, s. 17; 1987 (Reg. Sess.,1988), c. 1041, s. 1.1; 1989, c. 148, s. 4; c. 168, s. 6; c. 705; c. 723, s. 1;c. 727, ss. 28, 29; 1991, c. 717, s. 1; 1991 (Reg. Sess., 1992), c. 975, s. 2;1993, c. 459, s. 2; 1993 (Reg. Sess., 1994), c. 745, s. 39; 1995, c. 41, s. 2;c. 509, s. 51; 1995 (Reg. Sess., 1996), c. 646, s. 12; 1997‑23, ss. 1, 3,9; 1997‑443, s. 11A.119(a); 1997‑456, s. 27; 1998‑55, ss. 10,18; 1998‑212, s. 29A.18(a); 1999‑191, s. 1; 2000‑20, s. 2;2001‑17, s. 1.)