|Passed by the House March 22, 2010|
Speaker of the House of Representatives
Passed by the Senate March 20, 2010
President of the Senate
I, Barbara Baker, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is ENGROSSED SUBSTITUTE HOUSE BILL 2753 as passed by the House of Representatives and the Senate on the dates hereon set forth.
Governor of the State of Washington
Secretary of State
State of Washington
|State of Washington||61st Legislature||2010 Regular Session|
READ FIRST TIME 01/25/10.
AN ACT Relating to the creation of a workforce housing program; amending RCW 43.180.160, 39.86.100, 39.86.120, 39.86.130, 39.86.140, 39.86.150, 39.86.170, and 39.86.190; reenacting and amending RCW 39.86.110; adding a new section to chapter 39.86 RCW; creating a new section; and repealing RCW 39.86.200.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 This act may be known and cited as the
Washington works housing act of 2010.
Sec. 2 RCW 43.180.160 and 2009 c 291 s 1 are each amended to read
(1) The total amount of outstanding indebtedness of the commission may not exceed six billion dollars at any time. The calculation of outstanding indebtedness shall include the initial principal amount of an issue and shall not include interest that is either currently payable or that accrues as a part of the face amount of an issue payable at maturity or earlier redemption. Outstanding indebtedness shall not include notes or bonds as to which the obligation of the commission has been satisfied and discharged by refunding or for which payment has been provided by reserves or otherwise.
(2)(a) The Washington works housing program is created to increase opportunities for nonprofit organizations and public agencies to purchase, acquire, build, and own real property to be used for affordable housing for low and moderate-income households. The Washington works housing program is intended to provide access to new funding mechanisms and build long-term community equity by increasing the stock of permanently affordable housing owned by nonprofit organizations and public agencies.
(b) The Washington works housing program is intended to provide these opportunities for public agencies and nonprofit organizations, including those materially participating as a managing member or general partner of a partnership, limited liability company, or equivalent organization, through the issuance of tax exempt or taxable revenue bonds issued by the commission in conjunction with a subsidy necessary to make bond issues to finance affordable housing properties financially feasible. The program is intended to provide financing for affordable housing that will meet the following income and rent restrictions during the period of initial bond indebtedness and thereafter:
(c) During the period of initial bond indebtedness under the program, the owner of the property must meet one of the following requirements: A minimum of twenty percent of the units will be occupied by households earning less than fifty percent of area median income and an additional thirty-one percent of the units will be occupied by persons earning less than eighty percent of area median income; or forty percent of the units will be occupied by households earning less than sixty percent of area median income and an additional eleven percent of the units will be occupied by households earning less than eighty percent of area median income.
(d) After the initial bond indebtedness is retired, the rents charged for units in the project will be adjusted to be sufficient to pay reasonable operation and maintenance expenses, including necessary capital needs, and to make reasonable deposits into a reserve account with the intent of providing affordable housing to very low or low-income households for the remaining useful life of the property. The reasonableness of the rent levels must be periodically approved by the commission based on information provided by the owner of the property about income, expenses, and necessary reserve levels. The determination of the commission regarding the reasonableness of the rent levels will be final.
(e) The commission will enter into a recorded regulatory agreement with the borrower at the time of the issuance of bonds under the program for the purpose of ensuring that the property will meet the income and rent restrictions established in this section. The commission may charge such compliance fees as necessary to ensure enforcement of the income and rent restrictions during the useful life of the property.
(3) One billion dollars of the outstanding indebtedness of the commission is for the primary purpose of implementing the Washington works housing program.
(4) If no subsidies are available to make the program in subsection (2) of this section feasible; then the commission may pass a resolution stating these facts and authorize the use of a portion of the one billion dollars of indebtedness intended for the program to support its other bond programs until such time as the one billion dollars is exhausted or subsidies are available to make the program feasible.
Sec. 3 RCW 39.86.100 and 2001 c 330 s 1 are each amended to read
The federal ((
tax reform act)) internal revenue code of 1986, as
amended imposes (( an annual)) ceilings on the aggregate amount of
(( federally tax-exempt private activity)) certain types of bonds,
including tax-exempt private activity bonds (( for housing, student
loans, exempt facilities, small issue industrial, redevelopment, and
certain public utility projects)) and other types, that may be issued
during any calendar year by or on behalf of states and their political
subdivisions. (( In 2001, the ceiling will be increased to sixty-two
dollars and fifty cents per capita and in 2002 the ceiling will be
increased to seventy-five dollars per capita, to be indexed annually,
for 2003 and every year thereafter. However, a study by the department
of community development indicates that the dollar amount of the state
ceiling is considerably less than the anticipated dollar amount for
which issuers would need an allocation from the state ceiling.)) The
(( tax reform act of 1986)) code provides a formula for allocating the
annual tax-exempt private activity bond ceiling among various issuers
of private activity bonds for housing, student loans, exempt
facilities, and redevelopment projects within a state, but permits each
state to enact a different allocation method that is appropriate to
that state's needs. In addition, congress might, from time to time,
amend the code by authorizing state ceilings on additional types of
bonds. The purpose of this chapter is to provide a flexible and
efficient method of allocating the annual state ceiling in Washington
in a manner that recognizes the need of the state and its political
subdivisions to finance activities or projects that satisfy a
substantial public purpose.
Sec. 4 RCW 39.86.110 and 2009 c 565 s 23 are each reenacted and
amended to read as follows:
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Agency" means the department of commerce.
"Board" means the community economic revitalization board
established under chapter 43.160 RCW.)) "Bond use category" means: (a) Any of the following
categories of bonds which are subject to the annual state tax-exempt
private activity bond ceiling: ((
(a))) (i) Housing, (( (b))) (ii)
student loans, (( (c))) (iii) small issue, (( (d))) (iv) exempt facility,
(( (e))) (v) redevelopment, (( (f) public utility; and (g))) and (vi)
remainder; and (b) any other categories of bonds described in the code
for which there is a separate ceiling, with the exception of bonds
designated solely for school district purposes.
(4))) (3) "Bonds" means bonds, notes, or other obligations of an
(5))) (4) "Carryforward" is an allocation or reallocation of the
state ceiling which is carried from one calendar year to a later year,
in accordance with the code.
(6))) (5) "Code" means the federal internal revenue code of 1986
(( as it exists on May 8, 1987. It also means the code as amended after
May 8, 1987, but only if the amendments are approved by the agency
under RCW 39.86.180)), as amended.
(7))) (6) "Director" means the director of the agency or the
(8))) (7) "Exempt facility" means the bond use category which
includes all bonds which are exempt facility bonds as described in the
code, except those for qualified residential rental projects.
(9))) (8) "Firm and convincing evidence" means documentation that
satisfies the director that the issuer is committed to the prompt
financing of, and will issue (( tax exempt)) bonds for, the project or
program for which it requests an allocation from the state ceiling.
(10))) (9) "Housing" means the bond use category which includes:
(a) Mortgage revenue bonds and mortgage credit certificates as
described in the code; and (b) exempt facility bonds for qualified
residential rental projects as described in the code.
(11))) (10) "Initial allocation" means the portion or dollar
value of the annual state tax-exempt private activity bond ceiling
which initially in each calendar year is allocated to a bond use
category for the issuance of private activity bonds, in accordance with
(12))) (11) "Issuer" means the state, any agency or
instrumentality of the state, any political subdivision, or any other
entity authorized to issue (( private activity)) bonds under state law.
(12) "Original allocation" means any allocation of bond authority by a mandatory formula in the code, except for the initial allocations of the annual state ceiling on tax-exempt private activity bonds.
(13) "Private activity bonds" means obligations that are private activity bonds as defined in the code or bonds for purposes described in section 1317(25) of the ((
tax reform act)) federal internal revenue
code of 1986, as amended.
(14) "Program" means the activities for which housing bonds ((
student loan bonds)) may be issued.
"Public utility" means the bond use category which includes
those bonds described in section 1317(25) of the tax reform act of
1986.)) "Redevelopment" means the bond use category which includes
qualified redevelopment bonds as described in the code.
(17))) (16) "Remainder" means that portion of the annual state
tax-exempt private activity bond ceiling remaining after initial
allocations are made under RCW 39.86.120 for any other bond use
(18))) (17) "Small issue" means the bond use category which
includes all industrial development bonds that constitute qualified
small issue bonds, as described in the code.
(19))) (18) "State" means the state of Washington.
(20))) (19) "State ceiling" means the volume limitation for each
calendar year on (( tax-exempt private activity)) specific bond(( s))
types, including tax-exempt private activity bonds and other bonds, as
imposed by the code.
(21))) (20) "Student loans" means the bond use category which
includes qualified student loan bonds as described in the code.
NEW SECTION. Sec. 5 A new section is added to chapter 39.86 RCW
to read as follows:
Original allocations or any reallocations of state bond ceilings other than the tax-exempt private activity bond ceiling must be determined by formula as provided in the code, or by department rule if no formula is provided in the code.
Sec. 6 RCW 39.86.120 and 2001 c 330 s 2 are each amended to read
(1) Except as provided in subsections (2) and (4) of this section, the initial allocation of the state ceiling shall be for each year as follows:
Sec. 7 RCW 39.86.130 and 1987 c 297 s 4 are each amended to read
(1) In granting an allocation, reallocation, or carryforward of the state ceiling as provided in this chapter, the agency shall consider existing state priorities and other such criteria, including but not limited to, the following criteria:
(a) Need of issuers to issue ((
private activity)) bonds within a
bond use category subject to a state ceiling;
(b) Amount of the state ceiling available;
(c) Public benefit and purpose to be satisfied, including economic development, educational opportunity, and public health, safety, or welfare;
(d) Cost or availability of alternative methods of financing for the project or program; and
(e) Certainty of using the allocation which is being requested.
(2) In determining whether to allocate an amount of the state ceiling to an issuer within any bond use category, the agency shall consider, but is not limited to, the following criteria for each of the bond use categories:
(a) Housing: Criteria which comply with RCW 43.180.200.
(b) Student loans: Criteria which comply with the applicable provisions of Title 28B RCW and rules adopted by the higher education coordinating board or applicable state agency dealing with student financial aid.
(c) Small issue: ((
Recommendation by the board regarding how the
amount of the state ceiling set aside for the small issue bond use
category shall be allocated among issuers.)) Factors which may
(i) The number of employment opportunities the project is likely to create or retain in relation to the amount of the bond issuance;
(ii) The level of unemployment existing in the geographic area likely to be affected by the project;
(iii) A commitment to providing employment opportunities to low-income persons in cooperation with the employment security department;
(iv) Geographic distribution of projects;
(v) The number of persons who will benefit from the project;
(vi) Consistency with criteria identified in subsection (1) of this section; and
(vii) Order in which requests were received((
(viii) Requirements of the board's umbrella bond program
(d) Exempt facility or redevelopment: Factors which may include:
(i) State issuance needs;
(ii) Consistency with criteria identified in subsection (1) of this section;
(iii) Order in which requests were received;
(iv) The proportionate number of persons in relationship to the size of the community who will benefit from the project; and
(v) The unique timing and issuance needs of large scale projects that may require allocations in more than one year.
(e) Public utility: Factors which may include:
(i) Consistency with criteria identified in subsection (1) of this section; and
(ii) Timing needs for issuance of bonds over a multi-year period.
Sec. 8 RCW 39.86.140 and 1987 c 297 s 5 are each amended to read
(1) No issuer may receive an allocation of the state ceiling without a certificate of approval from the agency.
(a))) For each state ceiling allocation request, an issuer
shall submit to the agency, no sooner than ninety days prior to the
beginning of a calendar year for which an allocation of the state
ceiling is being requested, a form identifying:
(i))) (a) The amount of the allocation sought;
(ii))) (b) The bond use category from which the allocation sought
would be made;
(iii))) (c) The project or program for which the allocation is
(iv))) (d) The financing schedule for which the allocation is
(v))) (e) Any other such information required by the agency,
including information which corresponds to the allocation criteria of
(b) Nothing in (a) of this subsection precludes a public utility
issuer from filing and the agency from considering a request at such
times as may be appropriate in order to meet the criteria set forth in
(3) The agency may approve or deny an allocation for all or a portion of the issuer's request. Any denied request, however, shall remain on file with the agency for the remainder of the calendar year and shall be considered for receiving any allocation, reallocation, or carryforward of unused portions of the state ceiling during that period.
(4) After receiving an allocation request, the agency shall mail to the requesting issuer a written certificate of approval or notice of denial for an allocation amount, by a date no later than the latest of the following:
Forty-five days from May 8, 1987;)) February 1st of the calendar year((
, other than 1987,)) for
which the request is made;
(c))) (b) Fifteen days from the date the agency receives an
allocation request; or
(d))) (c) Fifteen days from the date the agency receives a
recommendation by the board with regard to a small issue allocation
request, should the board choose to review individual requests.
(5)(a) For requests of the state ceiling of any calendar year, the following applies to all bond use categories except housing and student loans:
(i) Except for housing and student loans, any allocations granted prior to April 1st, for which bonds have not been issued by ((
1)) July 1st of the same calendar year, shall revert to the agency on
(( September 1)) July 1st of the same calendar year for reallocation
unless an extension or carryforward is granted;
(ii) Except for housing and student loans, any allocations granted on or after April 1st, for which bonds have not been issued by ((
December 15)) October 15th of the same calendar year, shall revert to
the agency on (( December 15)) October 15th of the same calendar year
for reallocation unless an extension or carryforward is granted.
(b) For each calendar year, any housing or student loan allocations, for which bonds have not been issued by December 15th of the same calendar year, shall revert to the agency on December 15th of the same calendar year for reallocation unless an extension or carryforward is granted.
(6) An extension of the deadlines provided by subsection (5) of this section may be granted by the agency for the approved allocation amount or a portion thereof, based on:
(a) Firm and convincing evidence that the bonds will be issued before the end of the calendar year if the extension is granted; and
(b) Any other criteria the agency deems appropriate.
(7) If an issuer determines that bonds subject to the state ceiling will not be issued for the project or program for which an allocation was granted, the issuer shall promptly notify the agency in writing so that the allocation may be canceled and the amount may be available for reallocation.
(8) Bonds subject to the state ceiling may be issued only to finance the project or program for which a certificate of approval is granted.
(9) Within three business days of the date that bonds for which an allocation of the state ceiling is granted have been delivered to the original purchasers, the issuer shall mail to the agency a written notification of the bond issuance. In accordance with chapter 39.44 RCW, the issuer shall also complete bond issuance information on the form provided by the agency.
(10) If the total amount of ((
tax-exempt)) bonds issued under the
authority of a state ceiling for a project or program is less than the
amount allocated, the remaining portion of the allocation shall revert
to the agency for reallocation in accordance with the criteria in RCW
39.86.130. If the amount of (( tax-exempt)) bonds actually issued under
the authority of a state ceiling is greater than the amount allocated,
the entire allocation shall be disallowed.
Sec. 9 RCW 39.86.150 and 1987 c 297 s 6 are each amended to read
(1) Beginning ((
September 1)) July 1st of each calendar year, the
agency may allocate or reallocate any portions of the annual state tax-exempt private activity bond ceiling for which no certificate of
approval is in effect. Reallocations may also be made from the
remainder category at any time during the year.
(2) Prior to the end of each calendar year, the agency shall allocate or reallocate any unused portions of the state ceiling among one or more issuers as carryforward, to be used within three years, in accordance with the code and relevant criteria described in RCW 39.86.130.
(3) Reallocations of state bond ceilings other than the annual tax-exempt private activity bond ceiling may be made by the agency in accordance with the code or as established in agency rule when not specified in the code.
Sec. 10 RCW 39.86.170 and 1987 c 297 s 8 are each amended to read
A fee schedule shall be established by rule by the agency to assist in support of bond allocation activities. Fees shall reflect costs actually incurred or expected to be incurred by the agency in its bond allocation and bond users clearinghouse activities.
Sec. 11 RCW 39.86.190 and 2009 c 518 s 19 are each amended to
read as follows:
By February 1st of each even-numbered year, the agency shall summarize for the legislature each previous year's bond allocation requests and issuance. Beginning in ((
June of 1988)) February 2010 and
thereafter in (( June)) February of each even-numbered year, the agency
shall also submit a biennial report summarizing usage of the bond
allocation proceeds and any policy concerns for future bond
NEW SECTION. Sec. 12 RCW 39.86.200 (Ratification) and 1987 c 297
s 11 are each repealed.