SENATE BILL REPORT
E2SHB 1359
This analysis was prepared by non-partisan legislative staff for the use of legislative members in
their deliberations. This analysis is not a part of the legislation nor does it constitute a
statement of legislative intent.
As Reported By Senate Committee On:
Consumer Protection & Housing, March 29, 2007
Ways & Means, April 2, 2007
Title: An act relating to providing affordable housing for all.
Brief Description: Creating an affordable housing for all program.
Sponsors: House Committee on Appropriations (originally sponsored by Representatives Miloscia, Chase, Hasegawa, Pettigrew, Springer, Ormsby, Roberts, Darneille, Goodman and Santos).
Brief History: Passed House: 3/10/07, 57-39.
Committee Activity: Consumer Protection & Housing: 3/22/07, 3/29/07 [DPA-WM, DNP].
Ways & Means: 4/02/07 [DPA, DNP, w/oRec].
SENATE COMMITTEE ON CONSUMER PROTECTION & HOUSING
Majority Report: Do pass as amended and be referred to Committee on Ways & Means.Signed by Senators Weinstein, Chair; Kauffman, Vice Chair; Haugen, Jacobsen, Kilmer and Tom.
Minority Report: Do not pass.Signed by Senators Honeyford, Ranking Minority Member and McCaslin.
Staff: Alison Mendiola (786-7483)
SENATE COMMITTEE ON WAYS & MEANS
Majority Report: Do pass as amended.Signed by Senators Prentice, Chair; Fraser, Vice Chair, Capital Budget Chair; Pridemore, Vice Chair, Operating Budget; Fairley, Hobbs, Keiser, Kohl-Welles, Oemig, Rasmussen, Regala and Rockefeller.
Minority Report: Do not pass.Signed by Senators Honeyford and Tom.
Minority Report: That it be referred without recommendation.Signed by Senators Zarelli, Ranking Minority Member; Brandland, Carrell, Roach and Schoesler.
Staff: Richard Ramsey (786-7412)
Background: Existing Low Income Housing Surcharge: (RCW 36.22.178) County auditors are
required by statute to record deeds and other instruments that are filed and recorded. A $10
surcharge is charged for recording certain documents to support low-income housing projects.
The county is allowed to keep up to 5 percent of the $10 surcharge for the collection,
administration, and local distribution of the funds. Of the remaining funds, 40 percent is
transmitted into the Housing Trust Account administered by Department of Community, Trade
and Economic Development (CTED) to be used for the support operation and maintenance of
extremely low-income housing projects and to support homeless programs. The remainder of the
revenue generated is retained by the counties for low-income housing programs and projects
which serve households making at or below 50 percent of the area median income.
Homeless Housing and Assistance Act: The Legislature enacted the Homeless Housing and
Assistance Act in 2005, the goal of which is to reduce homelessness by 50 percent statewide and
in each county by July 1, 2015. This goal is to be achieved through the creation of plans to
address the causes of homelessness and the implementation of solutions to homelessness through
state and county homeless housing programs. Thirty-seven county governments are participating
in the Homeless Housing and Assistance program.
Homeless Housing and Assistance Program Funding: The Homeless Housing and Assistance
Program is funded by a $10 surcharge for certain documents recorded by the county auditor. Of
that $10 surcharge:
Approximately $16 million in new funding for homelessness is produced each year through the homeless document recording fee.
Summary of Engrossed Second Substitute Bill: Part I: Affordable Housing for All Program:
Creates the Affordable Housing For All Program and establishes a state goal of ensuring a decent,
appropriate, and affordable home in a healthy, safe environment for every very low-income
household by 2020.
Affordable Housing for All Surcharge: RCW 36.22.178 is renamed the Affordable Housing for
All (AHFA) Surcharge. The portion of revenue due to the state will be remitted to the Home
Security Fund Account. All counties must report on their use of county funds to CTED.
County Participation in Affordable Housing for All Program: Counties may decline to participate
in the AHFA program. In doing so, they continue to collect and have use of the AHFA surcharge
(in RCW 36.22.178); however, they are not eligible for monies from any additional state
appropriations. Counties that do choose to participate in the program are required to fulfill the
following responsibilities:
City Participation in Affordable Housing for All Program: A city may participate in the AHFA
program if the county in which it is located declines to participate.
CTED Responsibilities of the Affordable Housing for All Program:
Additional Affordable Housing for All Program Components:
Part II: Homeless Housing and Assistance Act Program Funding Revisions:
$10 Surcharge: CTED's share of revenue from the $10 homeless housing surcharge will be
deposited into the Home Security Fund and may be used for:
$8 Surcharge: An additional $8 document recording fee surcharge is established of which 90 percent may be used for:
The Departments of Revenue, Labor and Industries, and ESD are exempt from the $8
surcharge.
Additional Homeless Program, Reporting, and Evaluation Requirements:
Responsibilities of CTED:
Responsibilities of Local Governments:
Other Engrossed Second Substitute Bill Components: JLARC will audit the Ending
Homelessness program every four years beginning in 2009.
CTED will contract with ESD to develop two self-sufficiency income standards.
EFFECT OF CHANGES MADE BY RECOMMENDED AMENDMENT(S) AS PASSED
COMMITTEE (Consumer Protection & Housing): Part 1: State Affordable Housing for All
Program: The county role completely eliminated (including the county Affordable Housing for
All plans and task forces). The State Affordable Housing for All plan is still due every five years
versus annually as proposed in E2SHB 1359, with reduced data gathering. The existing $10
recording surcharge is renamed the "Affordable Housing for All" surcharge. The state's portion
of the surcharge is deposited into the Affordable Housing for All account. Counties report use
of their part of the surcharge (approximately 60 percent) annually to CTED. JLARC is to conduct
a performance audit of the program every five (instead of four) years. Additional quality
management requirements for cities and counties are eliminated. If specific funding is not
provided for this program, then sections 1 to 13 become null and void.
Part II: Homeless Housing Program: The new $8 recording surcharge, together with the existing
"2163" homeless $10 surcharge, is deposited in the Home Security Fund. Costs associated with
the new planning, evaluation, and reporting requirements may be funded by the $8 surcharge, but
not the existing surcharge.
Part III: GMA Amendment: (1) amends the housing and land use elements of local
comprehensive plans to clarify that counties and cities must designate a sufficient quantity of land
to accommodate the housing needed to accommodate growth; (2) amends the countywide
planning policies for "buildable lands counties" (King, Pierce, Snohomish, Kitsap, Thurston, and
Clark) to include policies for providing a supply of housing sufficient to accommodate anticipated
employment growth and performance measures that regularly review progress towards
accommodating projected growth; and (3) amends the CTED's reporting requirements of the
buildable lands evaluation to include: a list of methods used by counties and cities to comply
with the Growth Management Act; information comparing estimated employment changes with
estimated housing unit changes; growth patterns; the density, types, and net number of housing
units; the amount of land developed for residential, commercial, and industrial uses; estimated
net number of new jobs created; whether there is sufficient buildable land available to meet
needs; a list of jurisdictions that have identified inconsistencies between what has occurred and
what was envisioned in their planning goals; a summary of the inconsistencies identified and
reasonable measures adopted to increase consistency; and recommendations for legislation to
increase effectiveness of managing growth.
Part IV: Other: Technical changes as a result of engrossing the bill.
EFFECT OF CHANGES MADE BY RECOMMENDED AMENDMENT(S) AS PASSED
COMMITTEE (Ways & Means): The following changes are recommended:
Affordable Housing for All:
Homeless Housing and Assistance Act:
Other Changes:
Appropriation: None.
Fiscal Note: Available.
Committee/Commission/Task Force Created: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.
Staff Summary of Public Testimony (Consumer Protection & Housing): PRO: Part of this
bill builds upon the homeless bills from a few sessions ago and expands the support to homeless
programs by adding an $8 surcharge on recorded documents. The surcharge generates a lot of
revenue for these programs without much of a burden on the person paying the fee. The money
is truly making a difference; for example, King County has a had a drop in homelessness.
Homelessness is both an urban and rural issue. This bill addresses the difficult but solvable
problem of homelessness. While this bill seeks to ensure affordable housing for all, it doesn't
address middle-income earners. There is not an adequate supply of housing, so housing prices
shoot up creating a situation where middle- income earners are buying houses that traditionally
would be for lower-income earners. Part of the funding provides for the option of rental vouchers
which are an efficient and quick way to provide housing to people who need housing right away.
CON: Counties are concerned about the recording surcharge. It is taxing one particular class of
people with little nexus between the fee and funding of such programs. The list of performance
measures puts a great burden on smaller counties, which is significant since 30 of our counties
are rural.
OTHER: CTED has made great strides in ending homelessness by 2015 which is a daunting task.
This bill combines revenue from three sources into one account, which is hard to track when you
mix the money together: (1) $10 for homeless programs; (2) $10 for affordable housing; (3) and
now under this bill another $8 for homelessness. This bill puts a lot of responsibility on the state
and if the counties opt-out, the state still has to do the planning. Currently, reporting is every five
years and this bill drops that down to annual reporting.
Persons Testifying (Consumer Protection & Housing): PRO: Representative Miloscia, prime
sponsor; Mike Flynn, Jeanette McKague, Washington Realtors; Corine Knudsen, Theresa
Slusher, Washington State Coalition for the Homeless; Bill Block, Committee to End
Homelessness; Alison Eisinger, Seattle-King County Coalition on Homelessness; Darlene
Pennoch, Washington Apartment Association; Reverend Bill Kirlin-Hackett, Interfaith Task
Force on Homelessness, Church Council of Greater Seattle; Greg Provenzano, Columbia Legal
Services; Bill Hallerman, Archdiocesan Housing Authority; Mike Lowry, private citizen; Ben
Gitenstein, Washington Low-Income Housing Alliance.
CON: Jean Wessman, Washington State Association of Counties.
OTHER: Marie Sullivan, CTED; Dave Williams, Association of Washington Cities.
Staff Summary of Public Testimony (Ways & Means): PRO: This bill creates funding that
is critical to end homelessness by 2015. Local government and businesses have come together
around this bill. Counties are making good use of funds generated by the existing surcharges on
document recording. The additional $8 surcharge will generate $13 million for the state and
counties. The source of the fee is appropriate because it takes advantage of a hot housing market,
which is one of the factors that contributes to homelessness.
CON: The Association of Counties has supported the surcharge on document recording in the
past and is supportive of the concept of the bill, but opposes the additional burden created by this
bill.
Persons Testifying (Ways & Means): PRO: Corine Knudsen, Washington State Coalition for
Homeless; Theresa Slusher, Thurston County Housing Task Force.
CON: Jean Wessman, Washington Association of Counties.