BILL REQ. #:  S-2130.2 

READ FIRST TIME 02/25/09.   

     AN ACT Relating to state funding for low-income housing; amending RCW 43.185.020, 43.185.050, 43.180.020, and 43.180.080; and adding a new section to chapter 36.22 RCW.

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

Sec. 1   RCW 43.185.020 and 1995 c 399 s 101 are each amended to read as follows:
     (1) "Department" means the department of community, trade, and economic development. "Director" means the director of the department of community, trade, and economic development.
     (2) "Life-cycle cost analysis" means an analysis of the total discounted dollar cost of owning, operating, maintaining, and disposing of a building or building system.

Sec. 2   RCW 43.185.050 and 2006 c 371 s 236 are each amended to read as follows:
     (1) The department shall use moneys from the housing trust fund and other legislative appropriations to finance in whole or in part any loans or grant projects that will provide housing for persons and families with special housing needs and with incomes at or below fifty percent of the median family income for the county or standard metropolitan statistical area where the project is located. At least thirty percent of these moneys used in any given funding cycle shall be for the benefit of projects located in rural areas of the state as defined by the department. If the department determines that it has not received an adequate number of suitable applications for rural projects during any given funding cycle, the department may allocate unused moneys for projects in nonrural areas of the state.
     (2) Activities eligible for assistance from the housing trust fund and other legislative appropriations include, but are not limited to:
     (a) New construction, rehabilitation, or acquisition of low and very low-income housing units;
     (b) Rent subsidies;
     (c) Matching funds for social services directly related to providing housing for special-need tenants in assisted projects;
     (d) Technical assistance, design and finance services and consultation, and administrative costs for eligible nonprofit community or neighborhood-based organizations;
     (e) Administrative costs for housing assistance groups or organizations when such grant or loan will substantially increase the recipient's access to housing funds other than those available under this chapter;
     (f) Shelters and related services for the homeless, including emergency shelters and overnight youth shelters;
     (g) Mortgage subsidies, including temporary rental and mortgage payment subsidies to prevent homelessness;
     (h) Mortgage insurance guarantee or payments for eligible projects;
     (i) Down payment or closing cost assistance for eligible first-time home buyers;
     (j) Acquisition of housing units for the purpose of preservation as low-income or very low-income housing; and
     (k) Projects making housing more accessible to families with members who have disabilities((; and
     (l) During the 2005-2007 fiscal biennium, a manufactured/mobile home landlord-tenant ombudsman conflict resolution and park registration program)).
     (3) ((During the 2005-2007 fiscal biennium, revenues generated under RCW 36.22.178 may be used for the development of affordable housing projects and other activities funded in section 108, chapter 371, Laws of 2006.
     (4))) Legislative appropriations from capital bond proceeds may be used only for the costs of projects authorized under subsection (2)(a), (i), and (j) of this section, and not for the administrative costs of the department.
     (((5))) (4) Moneys from repayment of loans from appropriations from capital bond proceeds may be used for all activities necessary for the proper functioning of the housing assistance program except for activities authorized under subsection (2)(b) and (c) of this section.
     (((6))) (5) Administrative costs of the department shall not exceed five percent of the annual funds available for the housing assistance program.     
     (6) The department shall include a life-cycle cost analysis in its process for evaluating proposals for state funding.

Sec. 3   RCW 43.180.020 and 1990 c 167 s 1 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Bonds" means the bonds, notes, or other evidences of indebtedness of the commission, the interest paid on which may or may not qualify for tax exemption.
     (2) "Code" means the federal internal revenue code of 1954, as now or hereafter amended, and the regulations and rulings promulgated thereunder.
     (3) "Commission" means the Washington state housing finance commission or any board, body, commission, department, or officer succeeding to the principal functions thereof or to whom the powers conferred upon the commission shall be given by law.
     (4) "Costs of housing" means all costs related to the development, design, acquisition, construction, reconstruction, leasing, rehabilitation, and other improvements of housing, as determined by the commission.
     (5) "Eligible person" means a person or family eligible in accordance with standards promulgated by the commission. Such persons shall include those persons whose income is insufficient to obtain at a reasonable cost, without financial assistance, decent, safe, and sanitary housing in the area in which the person or family resides, and may include such other persons whom the commission determines to be eligible.
     (6) "Housing" means specific new, existing, or improved residential dwellings within this state or dwellings to be constructed within this state. The term includes land, buildings, and manufactured dwellings, and improvements, furnishings, and equipment, and such other nonhousing facilities, furnishings, equipment, and costs as may be incidental or appurtenant thereto if in the judgment of the commission the facilities, furnishings, equipment and costs are an integral part of the project. Housing may consist of single-family or multifamily dwellings in one or more structures located on contiguous or noncontiguous parcels or any combination thereof. Improvements may include such equipment and materials as are appropriate to accomplish energy efficiency within a dwelling. The term also includes a dwelling constructed by a person who occupies and owns the dwelling, and nursing homes licensed under chapter 18.51 RCW.
     (7) "Life-cycle cost analysis" means an analysis of the total discounted dollar cost of owning, operating, maintaining, and disposing of a building or building system.
     (8) "Mortgage" means a mortgage, mortgage deed, deed of trust, security agreement, or other instrument securing a mortgage loan and constituting a lien on or security interest in housing. The property may be held in fee simple or on a leasehold under a lease having a remaining term, at the time the mortgage is acquired, of not less than the term of repayment of the mortgage loan secured by the mortgage. The property may also be housing which is evidenced by an interest in a cooperative association or corporation if ownership of the interest entitles the owner of the interest to occupancy of a dwelling owned by the association or corporation.
     (((8))) (9) "Mortgage lender" means any of the following entities which customarily provide service or otherwise aid in the financing of housing and which are approved as a mortgage lender by the commission: A bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, mortgage banker, mortgage company, credit union, life insurance company, or any other financial institution, governmental agency, municipal corporation, or any holding company for any of the entities specified in this subsection.
     (((9))) (10) "Mortgage loan" means an interest-bearing loan or a participation therein, made to a borrower, for the purpose of financing the costs of housing, evidenced by a promissory note, and which may or may not be secured (a) under a mortgage agreement, (b) under any other security agreement, regardless of whether the collateral is personal or real property, or (c) by insurance or a loan guarantee of a third party. However, an unsecured loan shall not be considered a mortgage loan under this definition unless the amount of the loan is under two thousand five hundred dollars.

Sec. 4   RCW 43.180.080 and 1997 c 163 s 1 are each amended to read as follows:
     In addition to other powers and duties specified in this chapter, the commission may:
     (1) Establish in resolutions relating to any issuance of bonds, or in any financing documents relating to such issuance, such standards and requirements applicable to the purchase of mortgages and mortgage loans or the making of loans to mortgage lenders as the commission deems necessary or desirable, including but not limited to: (a) The time within which mortgage lenders must make commitments and disbursements for mortgages or mortgage loans; (b) the location and other characteristics of single-family housing or multifamily housing to be financed by mortgages and mortgage loans; (c) the terms and conditions of mortgages and mortgage loans to be acquired; (d) the amounts and types of insurance coverage required on mortgages, mortgage loans, and bonds; (e) the representations and warranties of mortgage lenders confirming compliance with such standards and requirements; (f) restrictions as to interest rate and other terms of mortgages or mortgage loans or the return realized therefrom by mortgage lenders; (g) the type and amount of collateral security to be provided to assure repayment of any loans from the commission and to assure repayment of bonds; and (h) any other matters related to the purchase of mortgages or mortgage loans or the making of loans to lending institutions as shall be deemed relevant by the commission;
     (2) Sue and be sued in its own name;
     (3) Make and execute contracts and all other instruments necessary or convenient for the exercise of its purposes or powers, including but not limited to contracts or agreements for the origination, servicing, and administration of mortgages or mortgage loans, and the borrowing of money;
     (4) Procure such insurance, including but not limited to insurance: (a) Against any loss in connection with its property and other assets, including but not limited to mortgages or mortgage loans, in such amounts and from such insurers as the commission deems desirable, and (b) to indemnify members of the commission for acts done in the course of their duties;
     (5) Provide for the investment of any funds, including funds held in reserve, not required for immediate disbursement, and provide for the selection of investments;
     (6) Fix, revise, and collect fees and charges in connection with the investigation and financing of housing or in connection with assignments, contracts, purchases of mortgages or mortgage loans, or any other actions permitted under this chapter or by the commission; and receive grants and contributions;
     (7) Make such expenditures as are appropriate for paying the administrative costs of the commission and for carrying out the provisions of this chapter. These expenditures may be made only from funds consisting of the commission's receipts from fees and charges, grants and contributions, the proceeds of bonds issued by the commission, and other revenues; these expenditures shall not be made from funds of the state of Washington;
     (8) Establish such special funds, and controls on deposits to and disbursements from them, as it finds convenient for the implementation of this chapter;
     (9) Conduct such investigations and feasibility studies as it deems appropriate;
     (10) Proceed with foreclosure actions or accept deeds in lieu of foreclosure together with the assignments of leases and rentals incidental thereto. Any properties acquired by the commission through such actions shall be sold as soon as practicable through persons licensed under chapter 18.85 RCW or at public auction, or by transfer to a public agency. In preparation for the disposition of the properties, the commission may own, lease, clear, construct, reconstruct, rehabilitate, repair, maintain, manage, operate, assign, or encumber the properties;
     (11) Take assignments of leases and rentals;
     (12) Subject to any provisions of the commission's contracts with the holders of obligations of the commission, consent to any modification with respect to rate of interest, time, and payment of any installment of principal or interest or any other term of any contract, mortgage, mortgage loan, mortgage loan commitment, contract, or agreement of any kind;
     (13) Subject to provisions of the commission's contracts with the holders of bonds, permit the reduction of rental or carrying charges to persons unable to pay the regular rent or schedule of charges if, by reason of other income of the commission or by reason of payment by any department, agency, or instrumentality of the United States or of this state, the reduction can be made without jeopardizing the economic stability of the housing being financed;
     (14) Sell, at public or private sale, with or without public bidding, any mortgage, mortgage loan, or other instrument or asset held by the commission;
     (15) Employ, contract with, or engage engineers, architects, attorneys, financial advisors, bond underwriters, mortgage lenders, mortgage administrators, housing construction or financing experts, other technical or professional assistants, and such other personnel as are necessary. The commission may delegate to the appropriate persons the power to execute legal instruments on its behalf;
     (16) Receive contributions or grants from any source unless otherwise prohibited;
     (17) Impose covenants running with the land in order to satisfy and enforce the requirements of applicable state and federal law and commission policy with respect to housing or other facilities financed by the commission or assisted by federal, state, or local programs administered by the commission, by executing and recording regulatory agreements or other covenants between the commission and the person or entity to be bound. These regulatory agreements and covenants shall run with the land and be enforceable by the commission or its successors or assigns against the person or entity making the regulatory agreement or covenants or its successors or assigns, even though there may be no privity of estate or privity of contract between the commission or its successors or assigns and the person or entity against whom enforcement is sought. The term of any such covenant shall be set forth in the recorded agreement containing the covenant. This subsection shall apply to regulatory agreements and covenants previously entered into by the commission as well as regulatory agreements and covenants entered into by the commission on or after July 27, 1997;
     (18) Include a life-cycle cost analysis in its process for evaluating proposals for competitive multifamily project funding;
     (19) Delegate any of its powers and duties if consistent with the purposes of this chapter;
     (((19))) (20) Exercise any other power reasonably required to implement the purposes of this chapter.

NEW SECTION.  Sec. 5   A new section is added to chapter 36.22 RCW to read as follows:
     (1) By September 30th of each year, a county receiving funding authorized under RCW 36.22.178 (1) and (2), 36.22.179(1) (a) and (b), and 36.22.1791(1) (a) and (b) shall submit to the department of community, trade, and economic development a report describing the distribution of funds for the preceding fiscal year. The report must include:
     (a) A description of the process used by the county for allocating funds;
     (b) The use of funds including, but not limited to, housing vouchers, program services, and housing projects; and
     (c) The criteria used for making funding allocation decisions.
     (2) By December 1st of each year, the department of community, trade, and economic development shall prepare a report to the legislature and the office of financial management compiling the reports submitted under subsection (1) of this section. For the funds collected under subsection (1) of this section and allocated by the department to entities other than counties, this report must also include:
     (a) A description of the process used by the department for allocating funds;
     (b) The use of funds including, but not limited to, housing vouchers, program services, and housing projects; and
     (c) The criteria used for making funding allocation decisions.