H 1317

H‑1317.1 _____________________________________________

HOUSE BILL 2152

_____________________________________________

State of Washington 57th Legislature 2001 Regular Session

By Representatives Ogden, Dunshee, Jarrett, Murray, McIntire, D. Schmidt, Schual‑Berke, Santos and Fromhold

Read first time 02/19/2001. Referred to Committee on Local Government & Housing.

_1 AN ACT Relating to authorizing the housing finance commission

_2 to provide a revenue source for home ownership assistance for

_3 first-time homebuyers through the auction sale of tax credits;

_4 adding new sections to chapter 82.04 RCW; adding a new section to

_5 chapter 82.16 RCW; creating new sections; providing an effective

_6 date; and declaring an emergency.

_7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

_8 NEW SECTION. Sec. 1. It is the policy of the state to

_9 contribute to the state's general welfare by assisting in making

10 affordable and decent housing available to low and moderate-income

11 persons. Providing affordable home ownership opportunities for such

12 persons helps protect the health and safety needs of those

13 persons.

14 It is the purpose of this act to establish a pool of funds to

15 provide a source of revenue for home ownership assistance for

16 first-time buyers through the creation of a tax credit to be used

17 against the business and occupation or public utility tax.

p. 1 HB 2152

_1 NEW SECTION. Sec. 2. A new section is added to chapter 82.04

_2 RCW to read as follows:

_3 (1) Subject to the limitations and conditions of this section,

_4 a person is allowed a credit against taxes due under this chapter

_5 equal to the face value of credit purchased in an auction under

_6 this section.

_7 (2) The commission is authorized to conduct auctions of tax

_8 credits to be used against the business and occupation or public

_9 utility tax. The commission will establish the procedures under

10 which the auctions will be conducted. The commission will not

11 accept a bid less than fifty percent of the value of the

12 credit. The commission may establish a minimum bid higher than this

13 fifty percent statutory, minimum. No more than ten million dollars

14 worth of credit may be auctioned by the commission for the current

15 biennium.

16 (3) A person purchasing a credit must complete a registration

17 form at the time of purchase. The commission will develop and

18 provide the form. The form must include: An identifying number; the

19 time period during which the credit must be used; in a conspicuous

20 manner, the conditions under which the credit may be claimed; and

21 the amount of credit purchased by the buyer. The identifying number

22 on the form will be discrete as to each purchase. The commission

23 will maintain a registry of tax credits purchased at auction and

24 will provide the department electronic access to the file.

25 (4) No application is necessary for the use of the tax

26 credit. The person must claim the credit on the combined excise tax

27 reporting form. The person claiming the credit must keep records

28 necessary for the department to verify eligibility under this

29 section. The person or its successor must keep a copy of the

30 registration form.

31 (5) No applicant is eligible for tax credits under this section

32 in excess of the amount of tax that would otherwise be due under

33 this chapter. A credit must be used during the biennium in which it

34 was purchased or it expires. Refunds will not be given in place of

35 credits.

36 (6) If at any time the department finds that a person is not

37 eligible for a tax credit under this section, the amount of taxes

38 for which a credit has been used are immediately due. The

HB 2152 p. 2

_1 department will assess interest, but not penalties, on the

_2 credited taxes for which the person is not eligible. The interest

_3 will be assessed at the rate provided for delinquent excise taxes

_4 under chapter 82.32 RCW, be assessed retroactively to the date the

_5 tax credit was taken, and accrue until the taxes for which a

_6 credit has been used are repaid.

_7 (7) The commission must deposit all of the proceeds from the

_8 auction into a trust account. The trust account must be an account

_9 with a qualified financial institution, established by the

10 commission for the deposit of the proceeds of the auction.

11 (8) The proceeds and earnings in the trust account must be used

12 by the commission for the benefit of low and moderate-income

13 persons buying their first home. The commission may allocate funds

14 which include, but are not limited to, the following purposes:

15 (a) Providing funds for down payment and closing cost

16 assistance;

17 (b) Providing funds for reducing the amount of initial

18 mortgage;

19 (c) Providing funds for reducing the interest rate on mortgage

20 loans or down payment assistance loans;

21 (d) Providing funds for the costs of issuing taxable or tax-

22 exempt bonds in furtherance of the purpose of this act; and

23 (e) Providing funds for reducing other costs of home ownership

24 for eligible families that may include, but not be limited to,

25 principal or interest write-downs, land banking, providing

26 guarantees, and other necessary activities to fulfill the purpose

27 of this act.

28 (9) Programs established under subsection (8) of this section

29 will be administered by the commission and the commission may

30 adopt rules and guidelines as necessary to implement and

31 administer this section.

32 (10) Unless the context clearly requires otherwise, the

33 following definitions apply to this section.

34 (a) "Commission" means the housing finance commission.

35 (b) "Auction" means the sale of a business and occupation or

36 public utility tax credit through sealed bid, conducted by the

37 commission.

p. 3 HB 2152

_1 (c) "First-time homebuyer" means a person or household who has

_2 not previously owned its own personal residence in the last three

_3 years.

_4 (d) "Eligible person or household" means a person or household

_5 with a combined income of less than one hundred fifteen percent of

_6 the median income in the county in which the home is located or

_7 the state median income, whichever is higher.

_8 NEW SECTION. Sec. 3. A new section is added to chapter 82.04

_9 RCW to read as follows:

10 Purchase of a tax credit by a financial institution qualifies

11 as an investment in affordable housing for purposes of the

12 community reinvestment act under Titles 30 and 32 RCW.

13 NEW SECTION. Sec. 4. A new section is added to chapter 82.16

14 RCW to read as follows:

15 A credit purchased at the auction under section 2 of this act

16 may be used against tax due under this chapter. If a person has

17 used a credit against tax due under chapter 82.04 RCW, the person

18 may not use the same credit for tax due under this chapter.

19 NEW SECTION. Sec. 5. The amount of credit specified in section

20 2 of this act is exempt from RCW 43.135.035 for the purposes of

21 determining and adjusting the state expenditure limit.

22 NEW SECTION. Sec. 6. The department of revenue and the housing

23 finance commission will evaluate the results of all programs

24 allocated funds from the trust account and report the findings to

25 the governor and the legislature by December 1, 2002. The

26 evaluation must consider the effect of the programs in meeting the

27 purposes of this act, the financing options available for similar

28 purposes and the effectiveness of the programs to create home

29 ownership opportunities for eligible families.

30 NEW SECTION. Sec. 7. If any part of this act is found to be in

31 conflict with federal requirements that are a prescribed condition

32 to the allocation of federal funds to the state, the conflicting

33 part of this act is inoperative solely to the extent of the

HB 2152 p. 4

_1 conflict and with respect to the agencies directly affected, and

_2 this finding does not affect the operation of the remainder of

_3 this act in its application to the agencies concerned. Rules

_4 adopted under this act must meet federal requirements that are a

_5 necessary condition to the receipt of federal funds by the state.

_6 NEW SECTION. Sec. 8. If any provision of this act or its

_7 application to any person or circumstance is held invalid, the

_8 remainder of the act or the application of the provision to other

_9 persons or circumstances is not affected.

10 NEW SECTION. Sec. 9. This act is necessary for the immediate

11 preservation of the public peace, health, or safety, or support of

12 the state government and its existing public institutions, and

13 takes effect July 1, 2001.

‑‑‑ END ‑‑‑

p. 5 HB 2152