BP BHEAD INT S [atlas:bill]

AN ACT Relating to the business and occupation tax; adding a new section to chapter 82.04 RCW; adding a new chapter to Title 82 RCW; creating a new section; and providing an effective date.

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

NEW SECTION. Sec. 1. It is the policy of the state to contribute to the state's general welfare by assisting in making affordable, decent, and service-enriched housing available to low-income seniors and persons with disabilities. Housing production stimulates general economic growth and strengthens the general tax base. Providing affordable, decent, and service-enriched housing for low-income seniors and persons with disabilities helps protect the health and safety needs of those persons and reduces their dependency upon state welfare and medical assistance while contributing to the health of neighborhoods, families, and communities. The state recognizes that providing housing for very low-income seniors and persons with disabilities requires additional resources and support.

The legislature intends to establish a business and occupation tax credit, providing a source of capital to expand the financing options available to preserve, rehabilitate, and construct housing for low-income seniors and persons with disabilities. An investment of state resources is needed to overcome cutbacks in federal assistance for housing for low-income seniors and persons with disabilities, the unique financing needs of housing for these groups, and the increasing problems low-income seniors and persons with disabilities are having finding affordable, decent, and service-enriched housing. The legislature supports an expanded state commitment to long-term housing for low-income seniors and persons with disabilities.

It is the purpose of this chapter to establish a pool of funds to increase investment in affordable housing for low-income seniors and persons with disabilities through the creation of a limited tax credit.

NEW SECTION. Sec. 2. (1) A person shall be allowed a credit against taxes due under chapter 82.04 RCW of an amount purchased by the person in an auction of credit for that purpose.

(2) A person claiming the credit shall file an affidavit on a form prescribed by the department, including the amount of the credit claimed and additional information as the department may require.

(3) A person qualifying for the credit must take the credit against taxes due within two years of the date of qualification, or the credit is no longer valid.

(4) The department shall allow accrual of tax credits to a successor if the business or firm is sold, assigned, conveyed, or otherwise transferred.

(5) The amount of the tax credit auctioned to persons may not exceed seventy-five million dollars for the two-year period during which the credit may be taken.

NEW SECTION. Sec. 3. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Person" has the meaning given in RCW 82.04.030.

(2) "Sale date" means the date the tax credit is auctioned to qualified persons.

(3) "Low-income senior" means a person sixty-two years of age or older who has an income below eighty percent of the median income in the county in which he or she resides or the state median income, whichever is higher.

(4) "Person with disabilities" means a person who is impaired in one or more life functions.

(5) "Auction" means the sale of a business and occupation tax credit through sealed bid, conducted by the housing finance commission on the sale date. The commission may establish a minimum bid requirement for the credit to be sold at auction.

(6) "Trust account" means an account with a qualified financial institution, established by the housing finance commission for the deposit of the proceeds of the auction.

(7) "Advisory board" means the task force created under section 2, chapter 383, Laws of 1997, which shall be continued as the advisory board to recommend the use of the funds earned from the auction.

(8) "Department" means the department of revenue.

NEW SECTION. Sec. 4. Chapter 82.32 RCW governs the administration of this chapter.

NEW SECTION. Sec. 5. (1) The housing finance commission shall act as the repository for the funds earned through the auction of the tax credit and placed in the trust account. The commission shall disburse the funds only for purposes and programs benefiting low-income seniors and persons with disabilities, consistent with the recommendations of the advisory board and approved by the commission and the director of the department of community, trade, and economic development, including, but not limited to the following:

(a) Providing funds for new construction;

(b) Providing funds for rehabilitation and repair;

(d) Providing funds to preserve existing federally assisted housing;

(e) Providing funds for a rental voucher demonstration program;

(f) Providing operating funds for a pilot home equity program; and

(g) Establishing a housing guarantee program to ensure taxable and tax-exempt debt financing.

(2) Programs established under this chapter shall be administered by the housing finance commission, the department of community, trade, and economic development, or the state investment board. However, the home equity program may be administered by a state-wide nonprofit organization.

(3) Any interest earned on the trust account or funds returned through the repayment of a loan shall accrue to the trust account and may be reallocated for the same purposes as the funds earned from the sale of the tax credit, or to create new programs, thereby creating a revolving fund.

NEW SECTION. Sec. 6. The department, the housing finance commission, the department of community, trade, and economic development, the state investment board, and the advisory board shall evaluate the results of all programs allocated funds from the trust account and shall report the findings to the governor and the legislature by December 1, 2000. The evaluation must consider the effect of the programs in meeting the purposes of this chapter, the financing options available to create or preserve housing for low-income seniors and persons with disabilities, and the impact of the credit on the state economy and revenues.

NEW SECTION. Sec. 7. Purchase of a tax credit by a financial institution qualifies as an investment in affordable housing for purposes of the community reinvestment act under Titles 30 and 32 RCW.

NEW SECTION. Sec. 8. A new section is added to chapter 82.04 RCW to read as follows:

Chapter 82.-- RCW (sections 1 through 7 of this act) applies to this chapter.

NEW SECTION. Sec. 9. If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state.

NEW SECTION. Sec. 10. 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.

NEW SECTION. Sec. 11. Sections 1 through 7 of this act constitute a new chapter in Title 82 RCW.

NEW SECTION. Sec. 12. This act takes effect July 1, 1998.