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AN ACT Relating to the replacement of low-income housing; amending RCW 35.21.685, 36.32.415, 35A.37.010, 82.02.010, and 82.02.020; and adding a new section to chapter 82.20 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. RCW 35.21.685 and 1986 c 248 s 1 are each amended to read as follows:

A city or town may assist in the development or preservation of publicly or privately owned housing for persons of low income or very low income by providing loans or grants of general municipal funds to the owners or developers of the housing. The loans or grants shall be authorized by the legislative authority of the city or town. They may be made to finance all or a portion of the cost of construction, reconstruction, acquisition, or rehabilitation of housing that will be occupied by a person or family of low income or very low income. In addition, each city or town shall establish and maintain a housing replacement fund for financing all or a portion of the cost of construction, reconstruction, acquisition, or rehabilitation of housing that will be occupied by a person or family of low income or very low income, in accordance with section 6 of this act. As used in this section, "low income" means income that exceeds fifty percent but does not exceed eighty percent of the median income for the standard metropolitan statistical area in which the city or town is located and "very low income" means income that does not exceed fifty percent of the median income for the standard metropolitan statistical area in which the city or town is located. Housing constructed with loans or grants made under this section shall not be considered public works or improvements subject to competitive bidding or a purchase of services subject to the prohibition against advance payment for services: PROVIDED, That whenever feasible the borrower or grantee shall make every reasonable and practicable effort to utilize a competitive public bidding process.

Sec. 2. RCW 36.32.415 and 1986 c 248 s 2 are each amended to read as follows:

A county may assist in the development or preservation of publicly or privately owned housing for persons of low income or very low income by providing loans or grants of general county funds to the owners or developers of the housing. The loans or grants shall be authorized by the legislative authority of a county. They may be made to finance all or a portion of the cost of construction, reconstruction, acquisition, or rehabilitation of housing that will be occupied by a person or family of low income or very low income. In addition, each county shall establish and maintain a housing replacement fund for financing all or a portion of the cost of construction, reconstruction, acquisition, or rehabilitation of housing that will be occupied by a person or family of low income or very low income, in accordance with section 6 of this act. As used in this section, "low income" means income that exceeds fifty percent but does not exceed eighty percent of the median income for the standard metropolitan statistical area in which the county is located and "very low income" means income that does not exceed fifty percent of the median income for the standard metropolitan statistical area in which the county is located. Housing constructed with loans or grants made under this section shall not be considered public works or improvements subject to competitive bidding or a purchase of services subject to the prohibition against advance payment for services: PROVIDED, That whenever feasible the borrower or grantee shall make every reasonable and practicable effort to utilize a competitive public bidding process.

Sec. 3. RCW 35A.37.010 and 1983 c 3 s 62 are each amended to read as follows:

Code cities shall establish such funds for the segregation, budgeting, expenditure and accounting for moneys received for special purposes as are required by general law applicable to such cities' activities and the officers thereof shall pay into, expend from, and account for such moneys in the manner provided therefor including but not limited to the requirements of the following:

(1) Accounting funds as required by RCW 35.37.010;

(2) Annexation and consolidation fund as required by chapters 35.10 and 35.13 RCW;

(3) Assessment fund as required by RCW 8.12.480;

(4) Equipment rental fund as authorized by RCW 35.21.088;

(5) Current expense fund as required by RCW 35.37.010, usually referred to as the general fund;

(6) Local improvement guaranty fund as required by RCW 35.54.010;

(7) An indebtedness and sinking fund, together with separate funds for utilities and institutions as required by RCW 35.37.020;

(8) Local improvement district fund and revolving fund as required by RCW 35.45.130 and 35.48.010;

(9) City street fund as required by chapter 35.76 RCW and RCW 47.24.040;

(10) Firemen's relief and pension fund as required by chapters 41.16 and 41.18 RCW;

(11) Policemen's relief and pension fund as required by RCW 41.20.130 and 63.32.030;

(12) First class cities' employees retirement and pension system as authorized by chapter 41.28 RCW;

(13) Applicable rules of the division of municipal corporations office of state auditor. RCW 43.09.190 through 43.09.282;

(14) Housing replacement fund as required by section 6 of this act.

Sec. 4. RCW 82.02.010 and 1979 c 107 s 9 are each amended to read as follows:

For the purpose of this title, unless otherwise required by the context:

(1) "Affordable rent for low-income households" means that the rent paid by the household does not exceed thirty percent of eighty percent of the median income, adjusted for household size, for the standard metropolitan statistical area in which the household is located;

(2) "Affordable rent for very low-income households" means that the rent paid by the household does not exceed thirty percent of fifty percent of the median income, adjusted for household size, for the standard metropolitan statistical area in which the household is located;

(3) "Change of use" means the conversion of any dwelling unit or mobile home lot from a residential use to a nonresidential use or conversion from one residential use to another residential use that results in the dwelling unit no longer being offered at affordable rent for low-income or very low-income households. "Change of use" includes any discontinuance of residential use regardless of whether the discontinuance of residential use constitutes an abandonment;

(4) "Demolition" means the destruction of any dwelling unit or the relocation of an existing dwelling unit or units to another site;

(5) "Department" means the department of revenue of the state of Washington;

((~~(2)~~)) (6) The word "director" means the director of the department of revenue of the state of Washington;

((~~(3) The word~~)) (7) "Dwelling unit" means a structure or that part of a structure that is used as a home, residence, or sleeping place by one person or by two or more persons maintaining a common household, including but not limited to single-family residences and units of multiplexes, apartment buildings, and mobile homes. Where two or more persons occupy a dwelling unit, but have separate rental agreements for use of part of the structure as a sleeping place, those sleeping places and any shared common areas shall be considered separate dwelling units as to each occupant;

(8) "Local jurisdiction" means a city, town, or county;

(9) "Low-income dwelling unit" and "low-income household" mean the total combined income of the dwelling unit is more than fifty percent but is at or below eighty percent of the median income, adjusted for family size, for the standard metropolitan statistical area in which the dwelling unit is located;

(10) "Low-income housing development" means four or more attached dwelling units or detached dwelling units on adjacent lots of which at least twenty percent are offered at an affordable rent for low-income households or of which at least twenty percent had been offered at an affordable rent for low-income households at any time within the two years preceding the date on which the dwelling units are subject to demolition or change of use;

(11) "Mobile home lot" means a portion of a mobile home park designated as the location of one mobile home and its accessory buildings, and intended for the exclusive use as a primary residence by the occupants of that mobile home;

(12) "Mobile home park" means any real property that is rented or held out for rent to others for the placement of two or more mobile homes for the primary purpose of production of income, except where such real property is rented or held out for rent for seasonal recreational purpose only and is not intended for year-round occupancy;

(13) "Owner" means one or more persons, jointly or severally, in whom is vested:

(a) All or any part of the legal title to property; or

(b) All or part of the beneficial ownership, and a right to present occupancy and enjoyment of the property;

(14) "Rental agreement" means all oral or written agreements that establish or modify the terms, conditions, rules, regulations, or any other provisions concerning the use and occupancy of a dwelling unit or mobile home lot. For purposes of this chapter, "rental agreement" does not include any agreement relating to the purchase, sale, or transfer of ownership of a dwelling unit;

(15) "Taxpayer" includes any individual, group of individuals, corporation, or association liable for any tax or the collection of any tax hereunder, or who engages in any business or performs any act for which a tax is imposed by this title;

((~~(4)~~)) (16) "Tenant" means a tenant, subtenant, lessee, sublessee, or other person occupying a dwelling unit or mobile home lot under a rental agreement;

(17) "Very low-income dwelling unit" and "very low-income household" mean the total combined income of the dwelling unit is at or below fifty percent of the median income, adjusted for family size, for the standard metropolitan statistical area in which the dwelling unit is located;

(18) "Very low-income housing development" means four or more attached dwelling units or detached dwelling units on adjacent lots of which at least twenty percent are offered at an affordable rent for very low-income households or of which at least twenty percent had been offered at an affordable rent for very low-income households at any time within the two years preceding the date on which the dwelling units are subject to demolition or change of use;

(19) Words in the singular number shall include the plural and the plural shall include the singular. Words in one gender shall include all other genders.

Sec. 5. RCW 82.02.020 and 1990 1st ex.s. c 17 s 42 are each amended to read as follows:

Except only as expressly provided in RCW 67.28.180 and 67.28.190 and the provisions of chapter 82.14 RCW, the state preempts the field of imposing taxes upon retail sales of tangible personal property, the use of tangible personal property, parimutuel wagering authorized pursuant to RCW 67.16.060, conveyances, and cigarettes, and no county, town, or other municipal subdivision shall have the right to impose taxes of that nature. Except as provided in RCW 82.02.050 through 82.02.090, no county, city, town, or other municipal corporation shall impose any tax, fee, or charge, either direct or indirect, on the construction or reconstruction of residential buildings, commercial buildings, industrial buildings, or on any other building or building space or appurtenance thereto, or on the development, subdivision, classification, or reclassification of land. However, this section does not preclude dedications of land or easements within the proposed development or plat which the county, city, town, or other municipal corporation can demonstrate are reasonably necessary as a direct result of the proposed development or plat to which the dedication of land or easement is to apply.

This section does not prohibit voluntary agreements with counties, cities, towns, or other municipal corporations that allow a payment in lieu of a dedication of land or to mitigate a direct impact that has been identified as a consequence of a proposed development, subdivision, or plat. A local government shall not use such voluntary agreements for local off-site transportation improvements within the geographic boundaries of the area or areas covered by an adopted transportation program authorized by chapter 39.92 RCW. Any such voluntary agreement is subject to the following provisions:

(1) The payment shall be held in a reserve account and may only be expended to fund a capital improvement agreed upon by the parties to mitigate the identified, direct impact;

(2) The payment shall be expended in all cases within five years of collection; and

(3) Any payment not so expended shall be refunded with interest at the rate applied to judgments to the property owners of record at the time of the refund; however, if the payment is not expended within five years due to delay attributable to the developer, the payment shall be refunded without interest.

No county, city, town, or other municipal corporation shall require any payment as part of such a voluntary agreement which the county, city, town, or other municipal corporation cannot establish is reasonably necessary as a direct result of the proposed development or plat.

Nothing in this section prohibits cities, towns, counties, or other municipal corporations from collecting reasonable fees from an applicant for a permit or other governmental approval to cover the cost to the city, town, county, or other municipal corporation of processing applications, inspecting and reviewing plans, or preparing detailed statements required by chapter 43.21C RCW.

This section does not limit the existing authority of any county, city, town, or other municipal corporation to impose special assessments on property specifically benefitted thereby in the manner prescribed by law.

Nothing in this section prohibits counties, cities, or towns from imposing or permits counties, cities, or towns to impose water, sewer, natural gas, drainage utility, and drainage system charges: PROVIDED, That no such charge shall exceed the proportionate share of such utility or system's capital costs which the county, city, or town can demonstrate are attributable to the property being charged: PROVIDED FURTHER, That these provisions shall not be interpreted to expand or contract any existing authority of counties, cities, or towns to impose such charges.

Nothing in this section prohibits a transportation benefit district from imposing fees or charges authorized in RCW 36.73.120 nor prohibits the legislative authority of a county, city, or town from approving the imposition of such fees within a transportation benefit district.

Nothing in this section prohibits counties, cities, or towns from imposing transportation impact fees authorized pursuant to chapter 39.92 RCW.

Nothing in this section prohibits counties, cities, or towns from requiring property owners to provide relocation assistance to tenants under RCW 59.18.440 and 59.18.450.

Nothing in this section prohibits local jurisdictions from imposing housing replacement fees authorized pursuant to section 6 of this act.

This section does not apply to special purpose districts formed and acting pursuant to Titles 54, 56, 57, or 87 RCW, nor is the authority conferred by these titles affected.

NEW SECTION. Sec. 6. A new section is added to chapter 82.02 RCW to read as follows:

(1) Each local jurisdiction shall provide for the payment of a housing replacement fee into the local jurisdiction's housing replacement fund each time a dwelling unit in a low-income or very low-income housing development within that jurisdiction is subject to demolition or change of use. The payment of the housing replacement fee shall be in accordance with subsection (2) of this section.

(2) The payment of the housing replacement fee shall be made in one of the following ways:

(a) The local jurisdiction shall pay moneys into its housing replacement fund in an amount equal to fifty percent of the current cost of constructing an equal number of replacement dwelling units for low-income or very low-income households in the same area. The moneys paid by the local jurisdiction into its housing replacement fund shall be in addition to any federal, state, or local funds available on the effective date of this section to the local jurisdiction for the acquisition, construction, reconstruction, or rehabilitation of housing for low-income or very low-income households;

(b) The local jurisdiction shall require that the owner of the low-income or very low-income housing development that is subject to demolition or change of use pay moneys into the local jurisdiction's housing replacement fund in an amount equal to fifty percent of the current cost of constructing an equal number of replacement dwelling units for low-income or very low-income households in the same area; or

(c) The local jurisdiction shall pay moneys into its housing replacement fund and also require that the owner of the low-income or very low-income housing development that is subject to demolition or change of use pay moneys into the same housing replacement fund. The total amount paid into the local jurisdiction housing replacement fund shall equal fifty percent of the current cost of constructing an equal number of replacement dwelling units for low-income or very low-income households in the same area. The moneys paid by the local jurisdiction into its housing replacement fund shall be in addition to any federal, state, or local funds currently available to the local jurisdiction for the acquisition, construction, reconstruction, or rehabilitation of housing for low-income or very low-income households.

(3) The moneys paid into the local jurisdiction's housing replacement fund shall be expended by the local jurisdiction within five years from the date of deposit and shall be expended for the acquisition, construction, reconstruction, or rehabilitation of replacement dwelling units for very low-income or low-income households within one square mile of the low-income or very low-income dwelling units that were subject to demolition or change of use, or as close thereto as possible. The replacement dwelling units shall be offered for rent at rent levels that do not exceed one hundred twenty percent of the lowest rent level that had been offered in the low-income or very low-income housing development subject to demolition or change of use during the two-year period preceding the demolition or change of use. Beginning one year after the acquisition, construction, reconstruction, or rehabilitation of the replacement dwelling units is complete, annual adjustments may be made to the rent levels of the replacement dwelling units in order to reflect any changes in the housing component of the consumer price index as published by the United States department of labor, bureau of labor statistics. The local jurisdiction shall require that the dwelling units acquired, constructed, reconstructed, or rehabilitated for low-income households with funds expended from the local jurisdiction's housing replacement fund be maintained as low-income dwelling units offered at affordable rent for low-income households for a period of not less than thirty years and that the dwelling units acquired, constructed, reconstructed, or rehabilitated for very low-income households with funds expended from the local jurisdiction's housing replacement fund be maintained as very low-income dwelling units offered at affordable rent for very low-income households for a period of not less than thirty years.

(4) Each local jurisdiction shall publish an annual report setting forth, at a minimum, the amount and source of each payment made into the local jurisdiction's housing replacement fund during the preceding year, the amount, source, and nature of any expenditures made from the local jurisdiction's housing replacement fund during the preceding year, and a plan for expenditures to be made during the coming year.

(5) The housing replacement fee shall be calculated by each local jurisdiction in accordance with standards adopted by ordinance or regulation.

(6) This section shall not apply to the demolition of dwelling units ordered by the local jurisdiction because of damage beyond the owner's control, including that caused by civil commotion, malicious mischief, vandalism, tenant waste, natural disaster, or other destruction beyond the owner's control.

NEW SECTION. Sec. 7. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.