Background: Duties and Authority of County Auditors. The county auditor is responsible for the recording of specified documents required by law to be maintained as part of the public record kept by a county. The documents that must be recorded by a county auditor include judgments, liens, deeds, mortgages, and many other categories of documents pertaining to property ownership and real estate transactions.

State law specifies requirements that must be met by an auditor when exercising recording duties, including the collection of specified fees when a document is recorded.

These fees include three document recording surcharges currently totaling $48 used for the funding of state and local programs to provide affordable housing for low-income persons and housing assistance for the homeless: (1) an Affordable Housing for All surcharge of $10; (2) a surcharge for local homeless housing and assistance which is currently $30; and (3) an additional surcharge for local homeless housing and assistance of $8.

Each of the three document recording surcharges includes a portion which is provided to counties and a portion which is provided for state administered housing and homeless programs.

The state's portion of the first of the surcharges noted above is deposited into the Affordable Housing for All Account. The state's portion of the remaining two surcharges is deposited into the Home Security Fund.

Homeless Housing and Assistance Act (Act). The Legislature enacted the Act in 2005, with the goal of reducing homelessness by 50 percent statewide and in each county by 2015. The Department of Commerce (Commerce), with the support of the Interagency Council on Homelessness and the Affordable Housing Advisory Board, is responsible for preparing and publishing a ten-year homeless housing strategic plan with statewide goals and performance measures, and providing biennial progress reports to the Governor and the Legislature. Local areas must also have ten-year plans that are substantially consistent with the state plan.

The $30 surcharge for local homeless housing and assistance was originally authorized in 2005 as a $10 surcharge under the Act. In 2009 legislation enacted increased the surcharge to $30 during the 2009-11 and 2011-13 biennia.

he Legislature has authorized expenditures from the Home Security Fund to support the following programs administered by Commerce and the Department of Social and Health Services (DSHS):

the Homeless Housing Program (Commerce);
Homeless Family Shelters (Commerce);
Independent Youth Housing (Commerce);
Housing Division Administration (Commerce);
the Transitional Housing Operating and Rent Program (Commerce);
Secure Crisis Residential Centers (DSHS);
Crisis Residential Centers (DSHS);
Hope Centers (DSHS); and
Grants and vouchers designated for victims of human trafficking and their families (Commerce).

Washington Quality Award Council (WQAC). WQAC was created by the Legislature in 1994 and modeled after the Baldrige National Quality Awards. Organized as a private 501(c)(3) corporation, WQAC's purpose is to set standards of excellence for organizations, encourage self-assessment, and promote a commitment to continuous quality improvement in all economic sectors. WQAC oversees the Washington State Quality Award program which is presented annually by the Governor to high-performing work organizations. For-profit, not-for-profit, health care, public, and education sectors are eligible to apply. WQAC is authorized by statute to conduct public information, research, education, and assistance programs. According to information on its website, WQAC provides consulting, workshops, conferences, on-line survey tools and presentations for organizations on topics including: Lean, Six Sigma, process improvement and reengineering, and strategic planning.

Summary of Bill (Proposed Amendment): The $30 surcharge for local homeless housing and assistance increases to $40 from September 1, 2011, through June 30, 2015; becomes $30 from July 1, 2015, to June 30, 2017; and returns to $10, beginning July 1, 2017.

Through June 30, 2017, any local government that has the authority to issue housing vouchers, paid for with funds obtained from document recording fees, must:

maintain an interested landlord list, which at a minimum includes information on rental properties in buildings with fewer than 50 units, updated quarterly;
distribute the list to agencies providing services to those receiving housing vouchers and making the list available online;
semi-annually convene interested landlords and agencies that provide services to households receiving housing vouchers to identify successes, barriers, and process improvements; and
develop and submit annual data, in consultation with landlords and agencies, on specified expenditures made and services provided with document recording fees to Commerce. If such data are not readily available, the local government may request that Commerce obtain the information by using a sampling methodology.

Commerce must:

require its contractors to distribute the interested landlord list;
annually convene local governments, landlord association representatives, and agencies to identify successes, barriers, and process improvements;
develop a sampling methodology to obtain required data when a local government or contractor does not have such information readily available; and
develop and submit an annual report to the Legislature that is developed in consultation with local governments, landlord association representatives, and agencies that includes specified expenditures made and services provided with document recording fees.

Cities and counties receiving more than $3,500,000 in document recording surcharges must receive a Washington State Quality Award program or similar assessment every two years.

The initial assessment may be a lite assessment. Commerce is to work with local governments and the Washington State Quality Award program on scheduling required assessments.

By August 31, 2011, each county auditor must produce and submit to Commerce a list of documents that are subject to the affordable housing surcharges.

Housing vouchers are defined as payments funded by one of the three housing-related document recording surcharges that are made by a local government or contractor to secure a rental unit on behalf of an individual tenant, or a block of units on behalf of multiple tenants.

Housing placement payments are defined as one-time payments funded by document recording surcharges that are made to secure a unit on behalf of a tenant.

Interested landlord list is defined as a list of landlords who have indicated to a local government or contractor interest in renting to individuals or households receiving a housing voucher funded by document recording surcharges.

The changes to the Act's surcharge are null and void if the provisions regarding new requirements for Commerce and local governments that have the authority to issue housing vouchers are not enacted. The additional requirements for Commerce and local governments that have the authority to issue housing vouchers are null and void if the Act's surcharge changes are not enacted.

Staff Summary of Public Testimony: PRO: Homelessness is up, especially for children in school. This bill helps families before they become homeless, while also providing resources for the homeless. The funds from the surcharge also help survivors of domestic violence, youth exiting foster care without resources, and others in need. Currently, funds are down due to the lack of recording, which is the reason for the fee increase. Federal funding has decreased and there is little state funding, so this source of funding is vital for affordable housing services, and often the money is leveraged for other funding. The other part of the bill addresses working with landlords and utilizing vouchers through a partnership. There are already audits in place, so the Baldrige is not necessary and would be duplicative.

CON: Not opposed to funding affordable housing, but recording fees are not the proper vehicle. The actual cost of recording is only $5. The affordable housing surcharge is currently $48.