BILL REQ. #:  S-2138.1 

READ FIRST TIME 02/25/09.   

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

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) The definitions in this subsection apply to this section.
     (a) "Qualifying buyer" means a buyer that meets the criteria of either (a)(i) or (ii) of this subsection.
     (i) The buyer is a nonprofit organization that is:
     (A) A tax exempt organization under Title 26 U.S.C. Sec. 501(c)(3) of the federal internal revenue code;
     (B) Primarily engaged in the business of developing, building, or rehabilitating residential housing units; and
     (C) Exercising an option to repurchase the qualifying residential housing unit.
     (ii) The buyer is an individual and his or her spouse or domestic partner:
     (A) Whose adjusted income is at or below eighty percent of the median family income, adjusted for household size, for the county where the qualifying residential housing unit is located;
     (B) Who has not owned a home during the preceding three-year period;
     (C) Who is acquiring the qualifying residential housing unit through a fixed-rate mortgage; and
     (D) Who has completed a home buyer education seminar.
     (b) "Qualifying residential housing unit" means a single-family home, condominium, or townhome, including the land upon which the home, condominium, or townhome is located, that is either new or has been foreclosed and is unoccupied due to the foreclosure.
     (2)(a) A sale of a qualifying residential housing unit to a qualifying buyer is exempt from tax under this chapter, subject to the provisions of this section.
     (b) The exemption applies only if it is adopted as a resolution or ordinance by a city or county that imposes taxes under chapter 82.46 RCW and the qualifying residential housing unit is located in the city or county which has adopted the resolution or ordinance. The exemption authorized under this section takes effect on the first day of the month, but no less than thirty days, following the adoption of the resolution or ordinance.
     (c) To claim the exemption, a form prescribed by the department must be attached to the affidavit required under RCW 82.45.150, on which form the Washington state housing finance commission or a housing counseling agency certified by the department of housing and urban development certifies that under subsection (1) of this section the residential unit is a qualifying residential housing unit and the buyer is a qualifying buyer. The commission or agency must also transmit a copy of the form directly to the department.
     (3) When the amount of real estate excise taxes exempted under this section 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 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.
     (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. 3   A new section is added to chapter 82.46 RCW to read as follows:
     A city or county that imposes taxes under this chapter may by ordinance or resolution adopt the exemption authorized in section 2 of this act in respect to such taxes.