H‑1317.1   _____________________________________________






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.




_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.


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_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

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_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.

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_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

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_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 ‑‑‑

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