BILL REQ. #:  S-1824.1 

Read first time 02/24/2005.   Referred to Committee on Financial Institutions, Housing & Consumer Protection.

     AN ACT Relating to housing assistance for low-income persons; amending RCW 36.22.178; and adding a new chapter to Title 36 RCW.

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

Sec. 1   RCW 36.22.178 and 2002 c 294 s 2 are each amended to read as follows:
     (1) Except as provided in subsection (2) of this section, a surcharge of ten dollars per instrument shall be charged by the county auditor for each document recorded, which will be in addition to any other charge authorized by law. The ((auditor)) county may retain up to five percent of these funds collected ((to administer)) solely for the collection, administration, and local distribution of these funds. Of the remaining funds, forty percent of the revenue generated through this surcharge will be transmitted monthly to the state treasurer who will deposit the funds into the Washington housing trust account. The office of community development of the department of community, trade, and economic development will develop guidelines for the use of these funds to support building operation and maintenance costs of housing projects or units within housing projects that are affordable to extremely low-income persons with incomes at or below thirty percent of the area median income, and that require a supplement to rent income to cover ongoing operating expenses. ((Sixty percent of the revenue)) All of the remaining funds generated by this surcharge will be retained by the county and be deposited into a fund that must be used by the county and its cities and towns for housing projects or units within housing projects that are affordable to very low-income persons with incomes at or below fifty percent of the area median income. The portion of the surcharge retained by a county shall be allocated to very low-income housing projects or units within such housing projects in the county and the cities within a county according to an interlocal agreement between the county and the cities within the county, consistent with countywide and local housing needs and policies. The funds generated with this surcharge shall not be used for construction of new housing if at any time the vacancy rate for available low-income housing within the county rises above ten percent. The vacancy rate for each county shall be developed using the state low-income vacancy rate standard developed under subsection (3) of this section. ((Permissible)) Uses of these local funds are limited to:
     (a) Acquisition, construction, or rehabilitation of housing projects or units within housing projects that are affordable to very low-income persons with incomes at or below fifty percent of the area median income;
     (b) Supporting building operation and maintenance costs of housing projects or units within housing projects ((built with)) eligible to receive housing trust funds, that are affordable to very low-income persons with incomes at or below fifty percent of the area median income, and that require a supplement to rent income to cover ongoing operating expenses;
     (c) At least twenty percent of these local funds shall be used for rental assistance vouchers ((for housing projects or units within housing projects that are affordable to very low-income persons with incomes at or below fifty percent of the area median income, to be administered by a local public housing authority or other local organization that has an existing rental assistance voucher program, consistent with the United States department of housing and urban development's section 8 rental assistance voucher program standards; and)), as set forth in chapter 36.-- RCW (sections 2 through 5 of this act);
     (d) Supporting building operation and maintenance costs of housing projects or units within housing projects eligible to receive, but not built with, housing trust funds, that are affordable to very low-income persons with incomes at or below thirty percent of the area median income, and that require a supplement to rent income to cover ongoing operating expenses; and
     (e) Operating costs for emergency shelters and licensed overnight youth shelters.
     (2) The surcharge imposed in this section does not apply to assignments or substitutions of previously recorded deeds of trust.
     (3) The real estate research center at Washington State University shall develop a vacancy rate standard, including apartment, mobile, manufactured, and single-family residential housing, for low-income housing in the state as described in RCW 18.85.540(1)(i).

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Administering agency" means the agency designated by the county to administer the Washington rental assistance program. Organizations eligible for designation as an administering agency include local community action agencies, local housing authorities, and other local, nonprofit organizations with experience within the past two years of operating tenant-based rental assistance programs.
     (2) "Community action agency" means a nonprofit private or public organization established under the economic opportunity act of 1964.
     (3) "County" means a corporate body having the corporate powers set forth in chapter 36.01 RCW. For the purposes of administering the Washington rental assistance program, a county may be either metropolitan or nonmetropolitan. Metropolitan counties are designated by the federal office of management and budget and are included within standard metropolitan statistical areas. Nonmetropolitan counties are not included within standard metropolitan statistical areas.
     (4) "Fair market rent" means the rent, including the cost of utilities, except telephone, as established by the United States department of housing and urban development for units of varying sizes, as determined by number of bedrooms, that must be paid in the housing market area to rent privately owned, existing, decent, safe, and sanitary rental housing of a modest, nonluxury nature with suitable amenities. The unit size utilized by the recipient will be determined by existing local administrative practice.
     (5) "Housing authority" means any of the public corporations created by chapter 35.82 RCW.
     (6) "Income" means money earned from work, including wages, tips, gratuities, and income from the operation of a business, and money received from other sources such as social security, supplemental security income, worker's compensation, unemployment benefits, tribal revenue sharing, dividends, interest, child support, alimony, friends, and relatives. Support or maintenance furnished in cash or in kind by any party, including rent or discounted rent, shall constitute income, except as set forth in this subsection. "Income" does not include food stamps, prescription drug discounts, medicare, medicare transitional assistance, free food or clothing, and income earned by children under eighteen.
     (7) "Landlord" means the owner, lessor, or sublessor of a dwelling unit or the property on which a dwelling unit or manufactured or mobile home pad is located. "Landlord" also includes any person designated by the owner, lessor, or sublessor as his or her representative.
     (8) "Local preference" means the population, group, or subgroup with defining characteristics identified by an administering agency, through a public process, to receive priority service or accommodation. Preferences may include, but are not limited to, victims of domestic violence, individuals with terminal illness, and homeless families participating in a program of community and therapeutic support.
     (9) "Performance outcome assessment" means an assessment of an organization's performance, including but not limited to measures of productivity, effectiveness, quality, and timeliness. The counties shall have authority and responsibility for conducting performance outcome assessments.
     (10) "Recipient" means any individual or household with a gross annual income of less than forty percent of the annual median income of the county of residence and who receives tenant-based rental assistance under the Washington rental assistance program.
     (11) "Rent reasonableness" means that the maximum contract rent for any unit to be leased is (a) reasonable in relation to rents currently being charged for comparable units in the private unassisted market; and (b) not in excess of rents currently being charged for most of the owner's comparable unassisted units.
     (12) "Tenant" means any person who is entitled to occupy a dwelling unit primarily for living or dwelling purposes under a rental agreement.
     (13) "Dwelling unit" means a structure or that part of a structure which is used as a home, residence, or sleeping place by one person or by two or more persons maintaining a common household, including but not limited to single-family residences, manufactured and mobile homes, and units of multiplexes and apartment buildings.

NEW SECTION.  Sec. 3   (1) The Washington rental assistance program is established to provide tenant-based rental assistance in the form of rental assistance vouchers, payable to the landlord, including vouchers for first and last month's rent and security and other deposits, except pet deposits, required of all other new tenants by a landlord, on behalf of low-income single persons, families, or unrelated persons living together:
     (a) Whose income is at or below forty percent of the median income, adjusted for household size, for the county of residence, as determined by the federal department of housing and urban development; and
     (b) Who are not receiving such assistance through a program authorized by section 8 of the United States housing act of 1937, 42 U.S.C. Sec. 1437f or any other federal, state, or local rental assistance program.
     (2) A minimum of seventy percent of the dwelling units occupied by Washington rental assistance program recipients shall be privately owned units that are not operating under any program licensed by the state of Washington.
     (3) Emergency/short-term assistance may be used for rental assistance up to three months to prevent eviction. Such assistance may also be used for first and last month's rent or for security or utility deposits to help the homeless obtain housing. Assistance for deposits cannot exceed the amount of one month's rent or the usual and customary charges charged other tenants for the same type of deposits, whichever is less.
     (4) Longer-term tenant-based rental assistance may be provided up to a maximum term of two years, unless extended consistent with a local preference. The amount of longer-term tenant-based rental assistance shall be equal to fifty percent of the fair market value.
     (5) Rental assistance available under this program may be used for rent of a dwelling unit or a manufactured or mobile home pad.
     (6) Rental assistance under this program is portable only within the county in which the application for rental assistance was made and approved.

NEW SECTION.  Sec. 4   (1) In metropolitan counties, the county department, division, or agency charged with community development shall convene the providers of tenant-based rental assistance in the jurisdiction, both emergency/short-term and longer-term tenant-based rental assistance providers, to determine the administering agency for the emergency/short-term program and for the tenant-based rental assistance program. More than one entity may be selected to administer different parts of the Washington rental assistance program, e.g., a housing authority could be selected to operate the longer-term tenant-based rental assistance program and a community action agency could be selected to administer the emergency/short-term program. In nonmetropolitan counties, the housing authority will convene providers for the purpose of determining the administering agency.
     (2) Administering agencies must be selected in a timely manner with disbursement of funds under this program beginning no later than January 31, 2006.
     (3) An administering agency may charge an administrative fee, which fee is to be paid by the county from the five percent retained by the county for collection, administration, and local distribution as set forth in RCW 36.22.178.
     (4) An administering agency shall:
     (a) Verify that an applicant's income is at or below forty percent of the median income, adjusted for household size, for the county as determined by the federal department of housing and urban development;
     (b) Verify that an applicant is not receiving assistance through a program authorized by section 8 of the United States housing act of 1937, 42 U.S.C. Sec. 1437f, or other federal, state, or local rental assistance program;
     (c) Determine the monthly rental assistance for each eligible applicant which shall be based upon a formula of fifty percent of fair market rent as published by the federal department of housing and urban development based upon the bedroom size for the household and the jurisdiction in which the dwelling unit is located;
     (d) Ensure, through an inspection process that uses the inspection criteria identified by the federal department of housing and urban development in its housing quality standards, that dwellings for which Washington rental assistance program moneys are used are decent, safe, and sanitary. However, these inspections are not required for emergency rental assistance;
     (e) Ensure that an appropriate lease is executed between landlord and tenant that complies with all of the terms of chapters 59.18 and 59.20 RCW and that the initial lease is for a term of at least six months with month-to-month tenancy permissible thereafter;
     (f) Ensure that a minimum of seventy percent of Washington rental assistance program assistance is allocated to recipients residing within privately owned dwelling units;
     (g) Establish local preferences, if any, through a public process;
     (h) Distribute rental assistance and implement any local preferences; and
     (i) Provide the county with annual financial reports that separately account for Washington rental assistance program funds.

NEW SECTION.  Sec. 5   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. 6   Sections 2 through 5 of this act constitute a new chapter in Title 36 RCW.