"NEW SECTION.  Sec. 3   The office of the insurance commissioner, in collaboration with the department of community, trade, and economic development and, when necessary, in consultation with the office of financial management and the office of the attorney general, must, by December 1, 2008, present specific recommendations for strategies to reduce construction liability and earthquake insurance costs for affordable housing projects funded by the Washington housing trust fund under chapters 43.185 and 43.185A RCW, with a specific emphasis on identifying strategies to reduce construction liability insurance costs, to the appropriate committees of the legislature. Recommendations must include any changes to existing statutory or regulatory language necessary for the state or for eligible organizations with affordable housing projects funded by the housing trust fund to pursue recommended strategies.

NEW SECTION.  Sec. 4   A new section is added to chapter 43.185 RCW to read as follows:
     Affordable housing developments receiving financing by the Washington housing trust fund under this chapter and chapter 43.185A RCW that were not acquired by eminent domain are exempt from the requirements of and rules adopted for chapter 8.26 RCW. All projects receiving financing from the housing trust fund must comply with any relocation standards and requirements and real property acquisition policies established by the department as a condition of housing trust fund assistance.

NEW SECTION.  Sec. 5   A new section is added to chapter 43.185 RCW to read as follows:
     (1) The housing communities program is created within the department to provide technical assistance and organizational capacity building programs to private, community-based nonprofit organizations that primarily serve communities of color or multilingual communities. The housing communities program must provide organizational training and technical assistance on housing development issues, including asset management, resource acquisition, and other general housing development topics, with the goal of assisting nonprofit organizations to add affordable housing development into their organizational missions and workplans, or expand their current affordable housing programs to further meet the needs of their communities.
     (2) The department shall contract with two or more experienced housing nonprofit organizations that have the capacity to implement the housing communities program throughout the state.

NEW SECTION.  Sec. 6   A new section is added to chapter 43.185 RCW to read as follows:
     (1) The housing infrastructure program is created in the department to provide loans for public infrastructure that supports affordable rental housing or affordable owner-occupied housing.
     (2) The department is authorized to make direct loans to eligible organizations for the cost of public works projects that support affordable rental housing or affordable owner-occupied housing, including the planning, construction, repair, reconstruction, replacement, rehabilitation, or improvement of sidewalks, streets and roads, bridges, power utilities, water systems, storm and sanitary sewage systems, and solid waste facilities. The department may also provide loans for the acquisition of real property when the acquisition is directly related to the development of public works projects for affordable rental or owner-occupied housing.
     (3) Loan interest rates shall not exceed one-half of one percent per annum. The department must provide reasonable terms and conditions for repayment of loans, including partial forgiveness of loan principal and interest payments.
     (4) The department shall conduct a statewide request for public works project applications and shall establish a competitive process for loan awards. The department shall review and prioritize proposals in consultation with the public works board, the community economic revitalization board, and the transportation improvement board. The following criteria must be used in the evaluation and ranking of public works project applications:
     (a) The public works projects must support affordable rental housing or affordable owner-occupied housing; and
     (b) The public works projects must demonstrate convincing evidence that (i) additional residential or mixed-use development will occur in an urban growth area designated under RCW 36.70A.110; (ii) the proposed mixed-use residential development is within one-half mile of a public transportation passenger terminal or major transit passenger stop; or (iii) that either moderate or high-density housing developments, or both, will be constructed.
     (5) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Affordable owner-occupied housing" means housing affordable to and occupied by households with incomes not exceeding one hundred fifteen percent of the median income for housing located outside of high-cost areas or one hundred fifty percent of the median income for housing located within high-cost areas.
     (b) "Affordable rental housing" means rental housing units affordable to and occupied by households with incomes not exceeding eighty percent of the median income for housing located outside of high-cost areas, or equal to the median income for housing located within high-cost areas.
     (c)"High-cost area" means a county where the third quarter median house price for the previous year, as reported by the Washington center for real estate research at Washington State University, is equal to or greater than one hundred thirty percent of the statewide median house price published during the same time period.

NEW SECTION.  Sec. 7   A new section is added to chapter 43.185 RCW to read as follows:
     The affordable housing infrastructure account is created in the state treasury. All receipts from appropriations made to the account, repayments of loans made under section 6 of this act, and other sources identified by the legislature must be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for the purposes identified in section 6 of this act."

"NEW SECTION.  Sec. 4   If specific funding for the purposes of sections 1 and 2 of this act, referencing sections 1 and 2 of this act by bill or chapter number and section number, is not provided by June 30, 2008, in the omnibus appropriations act, sections 1 and 2 of this act are null and void."