HOUSE BILL REPORT

HB 1386

BYRepresentatives Sanders, Nutley, Padden, J. Williams, Leonard, Wineberry, Todd, Lux and Brekke

Providing rental assistance to single-parent households receiving aid to families with dependent children.

House Committe on Housing

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (6)

      Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Armstrong, Sanders, Todd and J. Williams.

Minority Report:  Do not pass.  (1)

      Signed by Representative Barnes.

House Staff:Kenny Pittman (786-7392)

AS REPORTED BY COMMITTEE ON HOUSING FEBRUARY 2, 1988

BACKGROUND:

The Aid to Families with Dependent Children Program (AFDC) was created by the Social Security Act of 1935 as a response to the poverty created by the Depression, and as an ongoing source of support for those who are unable to support themselves.

The Department of Social and Health Services administers the AFDC program in the state.  It has been estimated, in the state of Washington, that over fifty thousand households receive AFDC. There are single parent households that rely on AFDC, as their sole source of income.  This group of households have traditionally applied for other types of federal housing assistance to meet their basic shelter needs.  The available housing assistance has not been able to meet the demand in recent years.

In 1987, the Legislature included deposits into the housing trust fund as an one of six allowed uses of moneys from the state lottery account.  Previously, the five allowed uses were: (a) the payment of prizes to winning ticket holders; (b) the making of deposits into the reserve account and for the administration of the lottery; (c) the making of deposits into the state general fund; (d) the purchase and promotion of lottery games and game-related services; and (e) the payment of agent compensation.

SUMMARY:

SUBSTITUTE BILL:  The Rental Housing Allowance program is established as a three-year pilot program in the Department of Community Development (DCD).  It is intended to assist very low-income single parent households, that rely on AFDC as their sole source of income, to obtain adequate basic shelter by providing a monthly fixed allowance that is applied toward the household's rent.

DCD is required to select up to eight local governing bodies for participation in the three-year pilot program.  DCD will award grants to those selected local governing bodies for the purpose of developing local pilot programs.

In awarding funds, DCD shall consider factors it deems appropriate, including but not limited to: (a) the number of eligible households in the jurisdiction; (b) the availability of suitable housing; and (c) the local governing bodies' contribution toward administrative costs.  DCD shall provide for a geographic distribution of local pilot programs.

DCD shall administer the pilot program with the local governing bodies through existing organizations that administer local housing assistance programs.

DCD is required to establish: (a) the maximum rent, unit size, and fixed monthly allowance payment by household size; and (b) the minimum quality standards for the housing.

The local governing body is required to: (a) insure the housing meets the standards required by DCD; (b) approve the lease between the owner and the eligible household; (c) enter into a contract with the owner of the housing to make the fixed monthly allowance payments on behalf of the eligible household, if terms and conditions are met; and (d) make fixed monthly allowance payments to the owner of the leased unit.

The contract to the owner for fixed monthly allowance payments on behalf of an eligible households shall be equal to the terms of the lease, not to exceed twelve months.  Assistance is limited to future appropriations to the rental housing allowance program.

The payment of prizes to the holders of winning tickets or shares is not less than forty-five percent of the gross annual revenue from such lottery, less amounts of unclaimed prizes after one hundred and eighty days, that are deposited in the Washington housing trust fund.

DCD may adopt rules necessary to carry out the program.

DCD is required to report to the Governor and the appropriate legislative committees on the results of the rental housing allowance program and make recommendations for improvement or continuation.

The rental housing allowance program expires on June 30, 1991.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Language was added to clarify that the payment of prizes to the holders of winning Washington State Lottery tickets or shares is not less than forty-five percent of the gross annual revenue from such lottery, less amounts of unclaimed prizes after one hundred and eighty days, that are deposited in the Washington housing trust fund.

Appropriation:    $3 million is appropriated from the state general fund and $2 million is appropriated from the housing trust fund to the Department of Community Development.

Fiscal Note:      Requested January 25, 1988.

Effective Date:The bill provides that the Department of Community Development take steps to ensure implementation on its July 1, 1988 effective date.

House Committee ‑ Testified For:    Sylvie McGee, Washington State Coalition for the Homeless; and Evelyn Sun, Washington State Lottery (Testified at request of the Committee, not for or against bill).

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    A single parent household, whose sole source of income is Aid to Families with Dependent Children (AFDC) have a hard time in making rent payments, due to the low AFDC payment standards and rising cost of housing.  An economic crisis could cause many of these families to become homeless. Assistance to help the single parent households on AFDC meet the cost of housing is needed.  Staff Note:  The following testimony was provided by Evelyn Sun, Washington State Lottery Commission, in response to Committee questions.  The Committee should be aware of the impact of using unclaimed prizes from the lottery as partial funding for the program. These unclaimed prizes support other games of the lottery, and act as a jackpot guarantee to the existing lotto's and scratch games. The loss of the unclaimed prize fund could impact the operation of the second lotto and scratch game, thereby having a negative impact on the revenue generated from the lottery games.

House Committee - Testimony Against:      None Presented.