"NEW SECTION.  Sec. 1   The legislature recognizes that many local governmental entities are experiencing financial challenges, and understands the multiple needs of local governmental entities to provide important services. It is the intent of the legislature to provide flexibility to local governmental entities regarding the disposition of surplus property for the development of affordable housing and to allow sufficient discretion to local governmental entities to balance these competing needs.

NEW SECTION.  Sec. 2   (1) A governmental entity may sell, lease, or exchange surplus property to an eligible organization at a price that is less than fair market value, or may create beneficial sales terms including, but not limited to, extended closings, if the affordable housing to be developed on the property will be occupied primarily by extremely low-income, very low-income, federally qualified low-income, or low-income households. The governmental entity must document that the amount of any sale, lease, or exchange that is less than fair market value is commensurate with the level of affordable housing provided on the property.
     (2) A governmental entity disposing of surplus property under subsection (1) of this section must: (a) Enter into a recorded covenant with the eligible organization or a loan note in the name of the governmental entity, to ensure that the property will meet the required income, rent, and sales price restrictions; and (b) monitor compliance with the covenant or loan note.
     (3) An eligible organization may obtain surplus property through purchase, lease, or exchange, under reasonable option and conveyance conditions, in return for: (a) A recorded covenant to provide rental housing for extremely low-income, very low-income, federally qualified low-income, or low-income households for at least forty years; or (b) a loan note in the name of a governmental entity for homeownership programs in which the homeowners are extremely low-income, very low-income, federally qualified low-income, or low-income.
     (4) As an alternative to the requirements of this section, counties, cities, and towns may sell surplus property at a discount for affordable housing that may be part of mixed-income or mixed-use developments, provided that the affordable housing complies with the guidelines for affordable housing, income levels, affordable rents, affordable sales prices, and minimum terms of affordability under RCW 36.70A.540 for affordable housing incentive programs.
     (5) The authority granted to counties, cities, and towns in this section is in addition to, and must not be construed to limit, any existing authority.

NEW SECTION.  Sec. 3   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Affordable housing" means residential housing that is rented or owned by a person who qualifies as an extremely low-income, very low-income, federally qualified low-income, or low-income household or who is from a special needs population, and for which monthly housing costs, including utilities other than telephone, do not exceed thirty percent of the household's maximum allowed monthly income for the housing unit. "Affordable housing" also means farmworker housing.
     (2) "Eligible organization" means a county, city, or town government, local housing authority, public development authority, community renewal agency, nonprofit community or neighborhood-based organization, federally recognized Indian tribe in the state of Washington, or nonprofit housing assistance organization, including such entities materially participating as a general partner or managing members of a partnership, limited liability company, or equivalent organization.
     (3) "Extremely low-income household" means a single person, family, or unrelated persons living together whose income is at or below thirty percent of the county area median income where the affordable housing is located, adjusted for household size.
     (4) "Federally qualified low-income household" means a single person, family, or unrelated persons living together whose income is more than fifty percent but is at or below sixty percent of the county area median income where the affordable housing is located, adjusted for household size.
     (5) "Governmental entity" means a county, city, or town government, or regional transit authority.
     (6) "Low-income household" means a single person, family, or unrelated persons living together whose income is more than sixty percent but is at or below eighty percent of the county area median income where the affordable housing is located, adjusted for household size.
     (7) "Moderate-income household" means a single person, family, or unrelated persons living together whose income is more than eighty percent but is at or below one hundred fifteen percent of the county area median income where the affordable housing is located.
     (8) "Primarily" means fifty-one percent or more.
     (9) "Real property" means land, buildings, or buildings and land. "Real property" also includes air rights.
     (10) "Surplus property" means real property, or any interest in real property, that is not required for the governmental entity's needs or the discharge of its responsibilities. "Surplus property" includes, but is not limited to, real property, or any interest in real property, declared surplus by a governmental entity under that entity's own policies and procedures. However, "surplus property" does not include real property, or any interest in real property, that is subject to federal prohibitions on the governmental entity's authority to sell, lease, or exchange the property at a price that is less than fair market value.
     (11) "Very low-income household" means a single person, family, or unrelated persons living together whose income is at or below fifty percent of the county area median income for the county where the affordable housing is located, adjusted for household size.

NEW SECTION.  Sec. 4   A new section is added to chapter 35.21 RCW to read as follows:
     Every city and town, including every code city operating under Title 35A RCW, may sell, lease, or exchange surplus property to an eligible organization for the purpose of affordable housing as specified in chapter 39.-- RCW (the new chapter created in section 10 of this act). The authority granted to cities and towns, including code cities, in this section is in addition to, and must not be construed to limit, any existing authority.

NEW SECTION.  Sec. 5   A new section is added to chapter 36.34 RCW to read as follows:
     Every county may sell, lease, or exchange surplus property to an eligible organization for the purpose of affordable housing as specified in chapter 39.-- RCW (the new chapter created in section 10 of this act). The authority granted to counties in this section is in addition to, and must not be construed to limit, any existing authority.

Sec. 6   RCW 81.112.080 and 1992 c 101 s 8 are each amended to read as follows:
     An authority shall have the following powers in addition to the general powers granted by this chapter:
     (1) To carry out the planning processes set forth in RCW 81.104.100;
     (2) To acquire by purchase, condemnation, gift, or grant and to lease, construct, add to, improve, replace, repair, maintain, operate, and regulate the use of high capacity transportation facilities and properties within authority boundaries including surface, underground, or overhead railways, tramways, busways, buses, bus sets, entrained and linked buses, ferries, or other means of local transportation except taxis, and including escalators, moving sidewalks, personal rapid transit systems or other people-moving systems, passenger terminal and parking facilities and properties, and such other facilities and properties as may be necessary for passenger, vehicular, and vessel access to and from such people-moving systems, terminal and parking facilities and properties, together with all lands, rights-of-way, property, equipment, and accessories necessary for such high capacity transportation systems. When developing specifications for high capacity transportation system operating equipment, an authority shall take into account efforts to establish or sustain a domestic manufacturing capacity for such equipment. The right of eminent domain shall be exercised by an authority in the same manner and by the same procedure as or may be provided by law for cities of the first class, except insofar as such laws may be inconsistent with the provisions of this chapter. Public transportation facilities and properties which are owned by any city, county, county transportation authority, public transportation benefit area, or metropolitan municipal corporation may be acquired or used by an authority only with the consent of the agency owning such facilities. Such agencies are hereby authorized to convey or lease such facilities to an authority or to contract for their joint use on such terms as may be fixed by agreement between the agency and the authority.
     The facilities and properties of an authority whose vehicles will operate primarily within the rights-of-way of public streets, roads, or highways, may be acquired, developed, and operated without the corridor and design hearings that are required by RCW 35.58.273 for mass transit facilities operating on a separate right-of-way;
     (3) To dispose of any real or personal property acquired in connection with any authority function and that is no longer required for the purposes of the authority, in the same manner as provided for cities of the first class. When an authority determines that a facility or any part thereof that has been acquired from any public agency without compensation is no longer required for authority purposes, but is required by the agency from which it was acquired, the authority shall by resolution transfer it to such agency;
     (4) To sell, lease, or exchange surplus property to an eligible organization for the purpose of affordable housing as specified in chapter 39.-- RCW (the new chapter created in section 10 of this act);
     (5) To fix rates, tolls, fares, and charges for the use of such facilities and to establish various routes and classes of service. Fares or charges may be adjusted or eliminated for any distinguishable class of users.

Sec. 7   RCW 36.34.135 and 1993 c 461 s 6 are each amended to read as follows:
     If a county owns property that is located anywhere within the county, including within the limits of a city or town, and that is suitable for affordable housing, the legislative authority of the county may, by negotiation, lease the property for affordable housing for a term not to exceed seventy-five years to any public housing authority or nonprofit organization that has demonstrated its ability to construct or operate housing for very low-income, low-income, or moderate-income households as defined in ((RCW 43.63A.510)) section 3 of this act and special needs populations. Leases for housing for very low-income, low-income, or moderate-income households and special needs populations shall not be subject to any requirement of periodic rental adjustments, as provided in RCW 36.34.180, but shall provide for such fixed annual rents as appear reasonable considering the public, social, and health benefits to be derived by providing an adequate supply of safe and sanitary housing for very low-income, low-income, or moderate-income households and special needs populations.

Sec. 8   RCW 39.102.020 and 2010 c 164 s 11 are each amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Annual state contribution limit" means seven million five hundred thousand dollars statewide per fiscal year.
     (2) "Assessed value" means the valuation of taxable real property as placed on the last completed assessment roll.
     (3) "Board" means the community economic revitalization board under chapter 43.160 RCW.
     (4) "Demonstration project" means one of the following projects:
     (a) Bellingham waterfront redevelopment project;
     (b) Spokane river district project at Liberty Lake; and
     (c) Vancouver riverwest project.
     (5) "Department" means the department of revenue.
     (6) "Fiscal year" means the twelve-month period beginning July 1st and ending the following June 30th.
     (7) "Local excise tax allocation revenue" means an amount of local excise taxes equal to some or all of the sponsoring local government's local excise tax increment, amounts of local excise taxes equal to some or all of any participating local government's excise tax increment as agreed upon in the written agreement under RCW 39.102.080(1), or both, and dedicated to local infrastructure financing.
     (8) "Local excise tax increment" means an amount equal to the estimated annual increase in local excise taxes in each calendar year following the approval of the revenue development area by the board from taxable activity within the revenue development area, as set forth in the application provided to the board under RCW 39.102.040, and updated in accordance with RCW 39.102.140(1)(f).
     (9) "Local excise taxes" means local revenues derived from the imposition of sales and use taxes authorized in RCW 82.14.030.
     (10) "Local government" means any city, town, county, port district, and any federally recognized Indian tribe.
     (11) "Local infrastructure financing" means the use of revenues received from local excise tax allocation revenues, local property tax allocation revenues, other revenues from local public sources, and revenues received from the local option sales and use tax authorized in RCW 82.14.475, dedicated to pay either the principal and interest on bonds authorized under RCW 39.102.150 or to pay public improvement costs on a pay-as-you-go basis subject to RCW 39.102.195, or both.
     (12) "Local property tax allocation revenue" means those tax revenues derived from the receipt of regular property taxes levied on the property tax allocation revenue value and used for local infrastructure financing.
     (13) "Low-income housing" means residential housing for low-income persons or families who lack the means which is necessary to enable them, without financial assistance, to live in decent, safe, and sanitary dwellings, without overcrowding. For the purposes of this subsection, "low income" means income that does not exceed eighty percent of the median family income for the standard metropolitan statistical area in which the revenue development area is located.
     (14) "Ordinance" means any appropriate method of taking legislative action by a local government.
     (15) "Participating local government" means a local government having a revenue development area within its geographic boundaries that has entered into a written agreement with a sponsoring local government as provided in RCW 39.102.080 to allow the use of all or some of its local excise tax allocation revenues or other revenues from local public sources dedicated for local infrastructure financing.
     (16) "Participating taxing district" means a local government having a revenue development area within its geographic boundaries that has entered into a written agreement with a sponsoring local government as provided in RCW 39.102.080 to allow the use of some or all of its local property tax allocation revenues or other revenues from local public sources dedicated for local infrastructure financing.
     (17) "Property tax allocation revenue base value" means the assessed value of real property located within a revenue development area less the property tax allocation revenue value.
     (18)(a)(i) "Property tax allocation revenue value" means seventy-five percent of any increase in the assessed value of real property in a revenue development area resulting from:
     (A) The placement of new construction, improvements to property, or both, on the assessment roll, where the new construction and improvements are initiated after the revenue development area is approved by the board;
     (B) The cost of new housing construction, conversion, and rehabilitation improvements, when such cost is treated as new construction for purposes of chapter 84.55 RCW as provided in RCW 84.14.020, and the new housing construction, conversion, and rehabilitation improvements are initiated after the revenue development area is approved by the board;
     (C) The cost of rehabilitation of historic property, when such cost is treated as new construction for purposes of chapter 84.55 RCW as provided in RCW 84.26.070, and the rehabilitation is initiated after the revenue development area is approved by the board.
     (ii) Increases in the assessed value of real property in a revenue development area resulting from (a)(i)(A) through (C) of this subsection are included in the property tax allocation revenue value in the initial year. These same amounts are also included in the property tax allocation revenue value in subsequent years unless the property becomes exempt from property taxation.
     (b) "Property tax allocation revenue value" includes seventy-five percent of any increase in the assessed value of new construction consisting of an entire building in the years following the initial year, unless the building becomes exempt from property taxation.
     (c) Except as provided in (b) of this subsection, "property tax allocation revenue value" does not include any increase in the assessed value of real property after the initial year.
     (d) There is no property tax allocation revenue value if the assessed value of real property in a revenue development area has not increased as a result of any of the reasons specified in (a)(i)(A) through (C) of this subsection.
     (e) For purposes of this subsection, "initial year" means:
     (i) For new construction and improvements to property added to the assessment roll, the year during which the new construction and improvements are initially placed on the assessment roll;
     (ii) For the cost of new housing construction, conversion, and rehabilitation improvements, when such cost is treated as new construction for purposes of chapter 84.55 RCW, the year when such cost is treated as new construction for purposes of levying taxes for collection in the following year; and
     (iii) For the cost of rehabilitation of historic property, when such cost is treated as new construction for purposes of chapter 84.55 RCW, the year when such cost is treated as new construction for purposes of levying taxes for collection in the following year.
     (19) "Public improvement costs" means the cost of: (a) Design, planning, acquisition including land acquisition, site preparation including land clearing, construction, reconstruction, rehabilitation, improvement, and installation of public improvements; (b) demolishing, relocating, maintaining, and operating property pending construction of public improvements; (c) the local government's portion of relocating utilities as a result of public improvements; (d) financing public improvements, including interest during construction, legal and other professional services, taxes, insurance, principal and interest costs on general indebtedness issued to finance public improvements, and any necessary reserves for general indebtedness; (e) assessments incurred in revaluing real property for the purpose of determining the property tax allocation revenue base value that are in excess of costs incurred by the assessor in accordance with the revaluation plan under chapter 84.41 RCW, and the costs of apportioning the taxes and complying with this chapter and other applicable law; (f) administrative expenses and feasibility studies reasonably necessary and related to these costs; and (g) any of the above-described costs that may have been incurred before adoption of the ordinance authorizing the public improvements and the use of local infrastructure financing to fund the costs of the public improvements.
     (20) "Public improvements" means:
     (a) Infrastructure improvements within the revenue development area that include:
     (i) Street, bridge, and road construction and maintenance, including highway interchange construction;
     (ii) Water and sewer system construction and improvements, including wastewater reuse facilities;
     (iii) Sidewalks, traffic controls, and streetlights;
     (iv) Parking, terminal, and dock facilities;
     (v) Park and ride facilities of a transit authority;
     (vi) Park facilities and recreational areas, including trails; and
     (vii) Storm water and drainage management systems;
     (b) Expenditures for facilities and improvements that support affordable housing as defined in ((RCW 43.63A.510)) section 3 of this act.
     (21) "Real property" has the same meaning as in RCW 84.04.090 and also includes any privately owned improvements located on publicly owned land that are subject to property taxation.
     (22) "Regular property taxes" means regular property taxes as defined in RCW 84.04.140, except: (a) Regular property taxes levied by public utility districts specifically for the purpose of making required payments of principal and interest on general indebtedness; (b) regular property taxes levied by the state for the support of the common schools under RCW 84.52.065; and (c) regular property taxes authorized by RCW 84.55.050 that are limited to a specific purpose. "Regular property taxes" do not include excess property tax levies that are exempt from the aggregate limits for junior and senior taxing districts as provided in RCW 84.52.043.
     (23) "Relocating a business" means the closing of a business and the reopening of that business, or the opening of a new business that engages in the same activities as the previous business, in a different location within a one-year period, when an individual or entity has an ownership interest in the business at the time of closure and at the time of opening or reopening. "Relocating a business" does not include the closing and reopening of a business in a new location where the business has been acquired and is under entirely new ownership at the new location, or the closing and reopening of a business in a new location as a result of the exercise of the power of eminent domain.
     (24) "Revenue development area" means the geographic area adopted by a sponsoring local government and approved by the board, from which local excise and property tax allocation revenues are derived for local infrastructure financing.
     (25)(a) "Revenues from local public sources" means:
     (i) Amounts of local excise tax allocation revenues and local property tax allocation revenues, dedicated by sponsoring local governments, participating local governments, and participating taxing districts, for local infrastructure financing; and
     (ii) Any other local revenues, except as provided in (b) of this subsection, including revenues derived from federal and private sources.
     (b) Revenues from local public sources do not include any local funds derived from state grants, state loans, or any other state moneys including any local sales and use taxes credited against the state sales and use taxes imposed under chapter 82.08 or 82.12 RCW.
     (26) "Small business" has the same meaning as provided in RCW 19.85.020.
     (27) "Sponsoring local government" means a city, town, or county, and for the purpose of this chapter a federally recognized Indian tribe or any combination thereof, that adopts a revenue development area and applies to the board to use local infrastructure financing.
     (28) "State contribution" means the lesser of:
     (a) One million dollars;
     (b) The total amount of local excise tax allocation revenues, local property tax allocation revenues, and other revenues from local public sources, that are dedicated by a sponsoring local government, any participating local governments, and participating taxing districts, in the preceding calendar year to the payment of principal and interest on bonds issued under RCW 39.102.150 or to pay public improvement costs on a pay-as-you-go basis subject to RCW 39.102.195, or both;
     (c) The amount of project award granted by the board in the notice of approval to use local infrastructure financing under RCW 39.102.040; or
     (d) The highest amount of state excise tax allocation revenues and state property tax allocation revenues for any one calendar year as determined by the sponsoring local government and reported to the board and the department as required by RCW 39.102.140.
     (29) "State excise tax allocation revenue" means an amount equal to the annual increase in state excise taxes estimated to be received by the state in each calendar year following the approval of the revenue development area by the board, from taxable activity within the revenue development area as set forth in the application provided to the board under RCW 39.102.040 and periodically updated and reported as required in RCW 39.102.140(1)(f).
     (30) "State excise taxes" means revenues derived from state retail sales and use taxes under RCW 82.08.020(1) and 82.12.020 at the rate provided in RCW 82.08.020(1), less the amount of tax distributions from all local retail sales and use taxes, other than the local sales and use taxes authorized by RCW 82.14.475 for the applicable revenue development area, imposed on the same taxable events that are credited against the state retail sales and use taxes under chapters 82.08 and 82.12 RCW.
     (31) "State property tax allocation revenue" means an amount equal to the estimated tax revenues derived from the imposition of property taxes levied by the state for the support of common schools under RCW 84.52.065 on the property tax allocation revenue value, as set forth in the application submitted to the board under RCW 39.102.040 and updated annually in the report required under RCW 39.102.140(1)(f).
     (32) "Taxing district" means a government entity that levies or has levied for it regular property taxes upon real property located within a proposed or approved revenue development area.

NEW SECTION.  Sec. 9   The following acts or parts of acts are each repealed:
     (1) RCW 43.19.19201 (Affordable housing -- Inventory of suitable property) and 2011 1st sp.s. c 43 s 218, 1995 c 399 s 64, & 1993 c 461 s 7;
     (2) RCW 43.20A.037 (Affordable housing -- Inventory of suitable housing) and 1995 c 399 s 65 & 1993 c 461 s 8;
     (3) RCW 43.63A.510 (Affordable housing -- Inventory of state-owned land) and 1993 c 461 s 2 & 1990 c 253 s 6;
     (4) RCW 47.12.064 (Affordable housing -- Inventory of suitable property) and 1995 c 399 s 121 & 1993 c 461 s 10; and
     (5) RCW 72.09.055 (Affordable housing--Inventory of suitable property) and 1995 c 399 s 202 & 1993 c 461 s 12.

NEW SECTION.  Sec. 10   Sections 1 through 3 of this act constitute a new chapter in Title 39 RCW."