BILL REQ. #:  H-1874.1 

READ FIRST TIME 02/17/09.   

     AN ACT Relating to real estate excise tax exemptions to stabilize neighborhoods; adding new sections to chapter 82.45 RCW; adding a new section to chapter 82.46 RCW; creating a new section; and providing expiration dates.

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

NEW SECTION.  Sec. 1   The legislature finds that there is a substantial inventory of unsold or foreclosed vacant homes on the market that is driving property values down and destabilizing neighborhoods. These homes also present an opportunity to provide affordable homes to low-income families, addressing some of the unmet need for affordable housing in the state of Washington. The legislature also finds that providing targeted incentives to housing developers will stimulate the sale of these vacant homes to low-income buyers now and stabilize neighborhoods affected by this growing inventory. The legislature intends to provide such incentives through excise tax relief on sales of homes to low-income first-time home buyers.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.45 RCW to read as follows:
     (1) A sale of a qualifying residential housing unit to a buyer meeting the conditions and requirements of this section is exempt from tax under this chapter.
     (2) A buyer must acquire the qualifying residential housing unit through a fixed-rate mortgage.
     (3) The Washington state housing finance commission or a housing counseling agency certified by the department of housing and urban development must certify that the following conditions under this subsection have been satisfied:
     (a) The buyer and the buyer's spouse or domestic partner have not owned a home during the three-year period prior to purchase of the home;
     (b) The buyer has completed a home buyer education seminar; and
     (c) The buyer is part of a low-income household.
     (4) When the amount of state real estate excise taxes exempted under this section and section 3 of this act exceeds seven hundred fifty thousand dollars in any fiscal year, the department must contact all county treasurers to notify them that the exemption authorized under this section and section 3 of this act is disallowed for real estate sales occurring on or after the first day of the second month following the transmittal month to the state treasurer under RCW 82.45.180 where the seven hundred fifty thousand dollar limit was determined by the department to be exceeded. The disallowance of the exemption under this subsection applies for the remainder of the state fiscal year unless the effective date of the disallowance occurs in the following fiscal year, in which case this subsection does not apply.
     (5) The definitions in this subsection apply to this section.
     (a) "First-time home buyer" means an individual or his or her spouse or domestic partner, who has not owned a home during the three-year period prior to purchase of a home.
     (b) "Low-income household" means an individual and his or her spouse or domestic partner, whose adjusted income is at or below eighty percent of the median family income, adjusted for household size, for the county where the project is located, and who is a first-time home buyer.
     (c) "Qualifying residential housing unit" means a new residential housing unit or a residential housing unit that has been foreclosed and is unoccupied due to the foreclosure.
     (d) "Residential housing unit" or "unit" means a single-family home, condominium, or townhome, and includes the land upon which the home, condominium, or townhome is located.
     (6) An exemption may not be claimed under this section for sales occurring on or after January 1, 2013.
     (7) This section expires July 1, 2013.

NEW SECTION.  Sec. 3   A new section is added to chapter 82.45 RCW to read as follows:
     (1)(a) A sale to a qualifying organization where the organization is exercising an option to repurchase the property is exempt from tax under this chapter.
     (b) A sale by a qualifying organization to a qualifying buyer is exempt from tax under this chapter.
     (2) When the amount of state real estate excise taxes exempted under this section and section 2 of this act exceeds seven hundred fifty thousand dollars in any fiscal year, the department must contact all county treasurers to notify them that the exemption authorized under this section and section 2 of this act is disallowed for real estate sales occurring on or after the first day of the second month following the transmittal month to the state treasurer under RCW 82.45.180 where the seven hundred fifty thousand dollar limit was determined by the department to be exceeded. The disallowance of the exemption under this subsection applies for the remainder of the state fiscal year unless the effective date of the disallowance occurs in the following fiscal year, in which case this subsection does not apply.
     (3) The definitions in this subsection apply to this section.
     (a) "Qualifying buyer" means a buyer meeting the requirements of sections 2(2) and (3) of this act.
     (b) "Qualifying organization" means a nonprofit organization that is: (i) A tax exempt organization under Title 26 U.S.C. Sec. 501(c)(3) of the federal internal revenue code; and (ii) primarily engaged in the business of developing, building, or rehabilitating residential housing units.
     (4) An exemption may not be claimed under this section for sales occurring on or after January 1, 2013.
     (5) This section expires July 1, 2013.

NEW SECTION.  Sec. 4   A new section is added to chapter 82.46 RCW to read as follows:
     The exemptions in sections 2 and 3 of this act do not apply to taxes imposed under this chapter unless a city or county has adopted a resolution or ordinance authorizing the exemptions for purposes of city or county real estate excise taxes.