Washington State

House of Representatives

Office of Program Research

BILL

ANALYSIS

Community Development, Housing & Tribal Affairs Committee

HB 1995

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Description: Concerning the rehabilitation of historic buildings.

Sponsors: Representatives Pettigrew, Macri and Santos.

Brief Summary of Bill

  • Creates a two year pilot program to provide loans and grants for rehabilitating historic buildings within a selected municipality.

  • Creates an account to receive loan repayments to be used for other rehabilitation projects, and appropriates $10 million from the capital budget for the program.

Hearing Date: 2/14/17

Staff: Sean Flynn (786-7124).

Background:

Department of Commerce. The Department of Commerce (Department) serves the state's interests regarding community and economic development as well as trade and business expansion. The department administers various federal, state, and local capital project funding programs related to affordable housing development, economic development, and local infrastructure.

Historic Buildings. The Department of Archeology and Historic Preservation (DAHP) maintains the Washington Heritage Register (Register), which includes a list of buildings, structures, sites, and objects of historical, architectural, archeological, or cultural state significance. The DAHP also administers the National Register of Historic Places for the state.

Summary of Bill:

The Historic Building Rehabilitation Financing Pilot Program (Program) is created to preserve the viability of historical buildings in the state and to protect public safety around historical buildings during and after a natural disaster. The Department must choose a municipality in which to implement this program, and select a certified nonprofit community development financial institution to implement the program within the selected jurisdiction.

The rehabilitation projects include infrastructure for safety and security purposes, such as fire protection and reinforcement, as well as for habitability and code compliance. To be eligible for program funding a historic building must be at least 50 years old and must retain historical characteristics, contribute to the economic vitality of the area, and meet eligibility for listing on the National Register of Historic Places or be designated as a landmark by a local preservation board or other similar entity.

The Department and the selected community development financial institution must evaluate potential projects based on whether they preserve historical heritage, protect public safety and health around historic buildings, and contribute to economic stability. Other evaluation criteria include how much funding has been leveraged from other lenders and available tax credits, the extent of the owner's financial investment, and how much the project will address seismic retrofitting or other protections from natural disasters. The evaluation also must include an assessment by the DAHP of which proposed projects involve historically significant buildings and whether the rehabilitation plans are consistent with federal standards.

The program is authorized to provide gap financing for rehabilitation projects on eligible historic properties through low interest loans, forgivable loans, and grants. The building owner must provide at least 5 percent of the total project cost in cash in order to qualify for financing.

Loan repayment is deposited into the Historic Building Rehabilitation Revolving Loan Fund. The revenue from the account must be used to fund other projects in the program.

The Department must report to the Legislature evaluating the program and providing recommendations on the opportunity and potential for expanding the program to other jurisdictions, or statewide. An appropriation of $10 million is made from the capital budget State Taxable Building Construction Account.

Appropriation: The sum of $10 Million.

Fiscal Note: Requested on 2/12/17.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.