BILL REQ. #:  Z-0230.3 

Read first time 02/05/13.   Referred to Committee on Financial Institutions, Housing & Insurance.

     AN ACT Relating to the disposition of surplus property for the development of affordable housing; amending RCW 43.63A.510, 43.20A.037, 72.09.055, 43.19.19201, 79A.05.170, 79A.05.175, 79.11.005, 47.12.064, 53.08.090, 53.08.091, and 81.112.080; adding a new section to chapter 36.34 RCW; and adding a new section to chapter 35.21 RCW.

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

Sec. 1   RCW 43.63A.510 and 1993 c 461 s 2 are each amended to read as follows:
     (1) The department ((shall)) may work with ((the departments of natural resources, transportation, social and health services, corrections, and general administration to identify and catalog under-utilized, state-owned land and property)) state and local governmental entities that choose to utilize real property, including air rights, owned by these governmental entities suitable for the development of affordable housing for extremely low-income, very low-income, federally qualified low-income, or low-income ((or moderate-income)) households. The state and local governmental entities subject to the requirements of this section are the departments of natural resources, transportation, social and health services, corrections, and ((general administration shall provide an inventory of real property that is owned or administered by each agency and is available for lease or sale. The inventories shall be provided to the department by November 1, 1993, with inventory revisions provided each November 1 thereafter.
     (2) Upon written request, the department shall provide a copy of the inventory of state-owned and publicly owned lands and buildings to parties interested in developing the sites for affordable housing.
     (3))) enterprise services, public lands except for state forest lands, the state parks and recreation commission, counties, cities, towns, port districts, and regional transit authorities.
     (2) A governmental entity that sells or leases real property, including air rights, to an eligible organization under this section may do so at a price that is less than fair market value, provided that the housing developed on the property is occupied primarily by individuals or households who are extremely low-income, very low-income, federally qualified low-income, or low-income.
     (3) A governmental entity that sells or leases real property, including air rights, to an eligible organization under this section may create beneficial sales terms including, but not limited to, extended closings, provided that the housing developed on the property is occupied primarily by individuals or households who are extremely low-income, very low-income, federally qualified low-income, or low-income.
     (4) An eligible organization may obtain these surplus properties through purchase, lease, exchange, or donation, under reasonable option and conveyance conditions, in return for (a) a recorded covenant to provide rental housing for extremely low-income, very low-income, or federally qualified low-income households for at least forty years; or (b) a loan note in the name of a governmental entity for homeownership programs in which the homeowners are extremely low-income, very low-income, federally qualified low-income, or low-income.
     (5) Each governmental entity must (a) enter into a recorded covenant with the purchaser of the surplus property or a loan note in the name of the governmental entity, to ensure that the property will meet the required income restrictions; and (b) monitor compliance with the covenant or loan note.
     (6) As an alternative to the requirements of this section, counties, cities, and towns may sell surplus property at a discount for affordable housing that may be part of mixed-income or mixed-use developments, provided that the affordable housing complies with the guidelines for affordable housing, income levels, affordable rents, affordable sales prices, and minimum terms of affordability under RCW 36.70A.540 for affordable housing incentive programs.
     (7) As used in this section:
     (a) "Affordable housing" means residential housing that is rented or owned by a person who qualifies as ((a)) an extremely low-income, very low-income, federally qualified low-income, or low-income((, or moderate-income)) household or who is from a special needs population, and whose monthly housing costs, including utilities other than telephone, do not exceed thirty percent of the household's monthly income.
     (b) "Very low-income household" means a single person, family, or unrelated persons living together whose income is at or below fifty percent of the county area median income((, adjusted for household size,)) for the county where the affordable housing is located, adjusted for household size.
     (c) "Low-income household" means a single person, family, or unrelated persons living together whose income is more than ((fifty)) sixty percent but is at or below eighty percent of the county area median income where the affordable housing is located, adjusted for household size.
     (d) (("Moderate-income household" means a single person, family, or unrelated persons living together whose income is more than eighty percent but is at or below one hundred fifteen percent of the median income where the affordable housing is located)) "Eligible organization" means any city, town, or county government, local housing authority, public development authority, community renewal agency, regional support network established under chapter 71.24 RCW, nonprofit community or neighborhood-based organization, federally recognized Indian tribe in the state of Washington, or regional or statewide nonprofit housing assistance organization, including such entities materially participating as a general partner or managing members of a partnership, limited liability company, or equivalent organization.
     (e) "Extremely low-income household" means a single person, family, or unrelated persons living together whose income is at or below thirty percent of the county area median income where the affordable housing is located, adjusted for household size.
     (f) "Federally qualified low-income household" means a single person, family, or unrelated persons living together whose income is more than fifty percent but is at or below sixty percent of the county area median income where the affordable housing is located, adjusted for household size.
     (g) "Primarily" means fifty-one percent or more.
     (h) "Real property" means land, buildings, or buildings and land.

Sec. 2   RCW 43.20A.037 and 1995 c 399 s 65 are each amended to read as follows:
     (((1) The department shall identify and catalog real property that is no longer required for department purposes and is suitable for the development of affordable housing for very low-income, and moderate-income households as defined in RCW 43.63A.510. The inventory shall include the location, approximate size, and current zoning classification of the property. The department shall provide a copy of the inventory to the department of community, trade, and economic development by November 1, 1993, and every November 1 thereafter.
     (2) By November 1 of each year, beginning in 1994, the department shall purge the inventory of real property of sites that are no longer available for the development of affordable housing. The department shall include an updated listing of real property that has become available since the last update. As used in this section, "real property" means buildings, land, or buildings and land.))
     The department may sell, lease, or exchange real property for less than fair market value to an eligible organization as defined in RCW 43.63A.510, or may create beneficial sales terms including, but not limited to, extended closings, if the affordable housing to be developed on the property is to be occupied primarily by extremely low-income, very low-income, federally qualified low-income, or low-income households as provided in RCW 43.63A.510.

Sec. 3   RCW 72.09.055 and 1995 c 399 s 202 are each amended to read as follows:
     (((1) The department shall identify and catalog real property that is no longer required for department purposes and is suitable for the development of affordable housing for very low-income, low-income, and moderate-income households as defined in RCW 43.63A.510. The inventory shall include the location, approximate size, and current zoning classification of the property. The department shall provide a copy of the inventory to the department of community, trade, and economic development by November 1, 1993, and every November 1 thereafter.
     (2) By November 1 of each year, beginning in 1994, the department shall purge the inventory of real property of sites that are no longer available for the development of affordable housing. The department shall include an updated listing of real property that has become available since the last update. As used in this section, "real property" means buildings, land, or buildings and land.))
     The department may sell, lease, or exchange real property for less than fair market value to an eligible organization as defined in RCW 43.63A.510, or may create beneficial sales terms including, but not limited to, extended closings, if the affordable housing to be developed on the property is to be occupied primarily by extremely low-income, very low-income, federally qualified low-income, or low-income households as provided in RCW 43.63A.510.

Sec. 4   RCW 43.19.19201 and 2011 1st sp.s. c 43 s 218 are each amended to read as follows:
     (((1) The department shall identify and catalog real property that is no longer required for department purposes and is suitable for the development of affordable housing for very low-income, low-income, and moderate-income households as defined in RCW 43.63A.510. The inventory shall include the location, approximate size, and current zoning classification of the property. The department shall provide a copy of the inventory to the department of commerce by November 1, 1993, and every November 1 thereafter.
     (2) By November 1 of each year, beginning in 1994, the department shall purge the inventory of real property of sites that are no longer available for the development of affordable housing. The department shall include an updated listing of real property that has become available since the last update. As used in this section, "real property" means buildings, land, or buildings and land.))
     The department may sell, lease, or exchange real property for less than fair market value to an eligible organization as defined in RCW 43.63A.510, or may create beneficial sales terms including, but not limited to, extended closings, if the affordable housing to be developed on the property is to be occupied primarily by extremely low-income, very low-income, federally qualified low-income, or low-income households as provided in RCW 43.63A.510.

Sec. 5   RCW 79A.05.170 and 1991 sp.s. c 13 s 23 are each amended to read as follows:
     (1) The commission may sell, lease, or exchange real property for less than fair market value to an eligible organization as defined in RCW 43.63A.510, or may create beneficial sales terms including, but not limited to, extended closings, if the affordable housing to be developed on the property is to be occupied primarily by extremely low-income, very low-income, federally qualified low-income, or low-income households as provided in RCW 43.63A.510.
     (2) Except for those lands subject to RCW 43.63A.510, any lands owned by the ((state parks and recreation)) commission, which are determined to be surplus to the needs of the state for development for state park purposes and which the commission proposes to deed to a local government or other entity, shall be accompanied by a clause requiring that if the land is not used for outdoor recreation purposes, ownership of the land shall revert to the ((state parks and recreation)) commission.
     (((2) The state parks and recreation commission,)) (a) In cases where land subject to such a reversionary clause is proposed for use or disposal for purposes other than recreation, the commission shall require that, if the land is surplus to the needs of the commission for park purposes at the time the commission becomes aware of its proposed use for nonrecreation purposes, the holder of the land or property shall reimburse the commission for the release of the reversionary interest in the land. The reimbursement shall be in the amount of the fair market value of the reversionary interest as determined by a qualified appraiser agreeable to the commission. Appraisal costs shall be borne by the local entity which holds title to the land.
     (((3))) (b) Any funds generated under a reimbursement under this section shall be deposited in the parkland acquisition account which is hereby created in the state treasury. Moneys in this account are to be used solely for the purchase or acquisition of property for use as state park property by the commission, as directed by the legislature; all such funds shall be subject to legislative appropriation.

Sec. 6   RCW 79A.05.175 and 2007 c 145 s 1 are each amended to read as follows:
     Except for those lands subject to RCW 43.63A.510 and 79A.05.170(1), whenever the commission finds that any land under its control cannot advantageously be used for park purposes, it is authorized to dispose of such land by the method provided in this section or by the method provided in RCW 79A.05.170. If such lands are school or other grant lands, control thereof shall be relinquished by resolution of the commission to the proper state officials. If such lands were acquired under restrictive conveyances by which the state may hold them only so long as they are used for park purposes, they may be returned to the donor or grantors by the commission. All other such lands may be either sold by the commission to the highest bidder or exchanged for other lands of equal value by the commission, and all conveyance documents shall be executed by the governor. All such exchanges shall be accompanied by a transfer fee, to be set by the commission and paid by the other party to the transfer; such fee shall be paid into the parkland acquisition account established under RCW 79A.05.170. The commission may accept sealed bids, electronic bids, or oral bids at auction. Bids on all sales shall be solicited at least twenty days in advance of the sale date by an advertisement appearing at least once a week for two consecutive weeks in a newspaper of general circulation in the county in which the land to be sold is located. If the commission feels that no bid received adequately reflects the fair value of the land to be sold, it may reject all bids, and may call for new bids. All proceeds derived from the sale of such park property shall be paid into the park land acquisition account. All land considered for exchange shall be evaluated by the commission to determine its adaptability to park usage. The equal value of all lands exchanged shall first be determined by the appraisals to the satisfaction of the commission. No sale or exchange of state park lands shall be made without the unanimous consent of the commission.

Sec. 7   RCW 79.11.005 and 2003 c 334 s 201 are each amended to read as follows:
     (1) Subject to RCW 43.63A.510, the department is authorized to sell any real property not designated or acquired as state forest lands, but acquired by the state, either in the name of the forest board, the forestry board, or the division of forestry, for administrative sites, lien foreclosures, or other purposes whenever it shall determine that the lands are no longer or not necessary for public use.
     (2) The department may sell, lease, or exchange real property for less than fair market value to an eligible organization as defined in RCW 43.63A.510, or may create beneficial sales terms including, but not limited to, extended closings, if the affordable housing to be developed on the property is to be occupied primarily by extremely low-income, very low-income, federally qualified low-income, or low-income households as provided in RCW 43.63A.510.
     (3) Except as otherwise provided under RCW 43.63A.510, the sale may be made after public notice to the highest bidder for such a price as approved by the governor, but not less than the fair market value of the real property, plus the value of improvements thereon. Any instruments necessary to convey title must be executed by the governor in a form approved by the attorney general.
     (((3))) (4) All amounts received from the sale must be credited to the fund of the department of government that is responsible for the acquisition and maintenance of the property sold.

Sec. 8   RCW 47.12.064 and 1995 c 399 s 121 are each amended to read as follows:
     (((1) The department shall identify and catalog real property that is no longer required for department purposes and is suitable for the development of affordable housing for very low-income, low-income, and moderate-income households as defined in RCW 43.63A.510. The inventory shall include the location, approximate size, and current zoning classification of the property. The department shall provide a copy of the inventory to the department of community, trade, and economic development by November 1, 1993, and every November 1 thereafter.
     (2) By November 1 of each year, beginning in 1994, the department shall purge the inventory of real property of sites that are no longer available for the development of affordable housing. The department shall include an updated listing of real property that has become available since the last update. As used in this section, "real property" means buildings, land, or buildings and land.))
     The department may sell, lease, or exchange real property for less than fair market value to an eligible organization as defined in RCW 43.63A.510, or may create beneficial sales terms including, but not limited to, extended closings, if the affordable housing to be developed on the property is to be occupied primarily by extremely low-income, very low-income, federally qualified low-income, or low-income households as provided in RCW 43.63A.510.

Sec. 9   RCW 53.08.090 and 1994 c 26 s 1 are each amended to read as follows:
     (1) A port commission may sell, lease, or exchange real property for less than fair market value to an eligible organization as defined in RCW 43.63A.510, or may create beneficial sales terms including, but not limited to, extended closings, if the affordable housing to be developed on the property is to be occupied primarily by extremely low-income, very low-income, federally qualified low-income, or low-income households as provided in RCW 43.63A.510.
     (2) Except for those lands subject to RCW 43.63A.510, a port commission may, by resolution, authorize the managing official of a port district to sell and convey port district property of ten thousand dollars or less in value. The authority shall be in force for not more than one calendar year from the date of resolution and may be renewed from year to year. Prior to any such sale or conveyance the managing official shall itemize and list the property to be sold and make written certification to the commission that the listed property is no longer needed for district purposes. Any large block of the property having a value in excess of ten thousand dollars shall not be broken down into components of ten thousand dollars or less value and sold in the smaller components unless the smaller components be sold by public competitive bid. A port district may sell and convey any of its real or personal property valued at more than ten thousand dollars when the port commission has, by resolution, declared the property to be no longer needed for district purposes, but no property which is a part of the comprehensive plan of improvement or modification thereof shall be disposed of until the comprehensive plan has been modified to find the property surplus to port needs. The comprehensive plan shall be modified only after public notice and hearing provided by RCW 53.20.010.
     (3) Nothing in this section shall be deemed to repeal or modify procedures for property sales within industrial development districts as set forth in chapter 53.25 RCW.
     (((2))) (4) The ten thousand dollar figures in subsection (((1))) (2) of this section shall be adjusted annually based upon the governmental price index established by the department of revenue under RCW 82.14.200.

Sec. 10   RCW 53.08.091 and 2010 c 8 s 16001 are each amended to read as follows:
     Except for those lands subject to RCW 43.63A.510 and 53.08.090(1), or in cases where the full purchase price is paid at the time of the purchase, every sale of real property or personal property under authority of RCW 53.08.090 or 53.25.110 shall be subject to the following terms and conditions:
     (1) The purchaser shall enter into a contract with the district in which the purchaser shall covenant that he or she will make the payments of principal and interest when due, and that he or she will pay all taxes and assessments on such property. Upon failure to make payments of principal, interest, assessments, or taxes when due all rights of the purchaser under said contract may, at the election of the district, after notice to said purchaser, be declared to be forfeited. When the rights of the purchaser are declared forfeited, the district shall be released from all obligation to convey land covered by the contract, and in the case of personal property, the district shall have all rights granted to a secured party under chapter 62A.9 RCW;
     (2) The district may, as it deems advisable, extend the time for payment of principal and interest due or to become due;
     (3) The district shall notify the purchaser in each instance when payment is overdue, and that the purchaser is liable to forfeiture if payment is not made within thirty days from the time the same became due, unless the time be extended by the district;
     (4) Not less than four percent of the total purchase price shall be paid on the date of execution of the contract for sale and not less than four percent shall be paid annually thereafter until the full purchase price has been paid, but any purchaser may make full payment at any time. All unpaid deferred payments shall draw interest at a rate not less than six percent per annum.
     Nothing in this section shall be deemed to supersede other provisions of law more specifically governing sales of port district property. It is the purpose of this section to provide additional authority and procedures for sale of port district property no longer needed for port purposes.

Sec. 11   RCW 81.112.080 and 1992 c 101 s 8 are each amended to read as follows:
     An authority shall have the following powers in addition to the general powers granted by this chapter:
     (1) To carry out the planning processes set forth in RCW 81.104.100;
     (2) To acquire by purchase, condemnation, gift, or grant and to lease, construct, add to, improve, replace, repair, maintain, operate, and regulate the use of high capacity transportation facilities and properties within authority boundaries including surface, underground, or overhead railways, tramways, busways, buses, bus sets, entrained and linked buses, ferries, or other means of local transportation except taxis, and including escalators, moving sidewalks, personal rapid transit systems or other people-moving systems, passenger terminal and parking facilities and properties, and such other facilities and properties as may be necessary for passenger, vehicular, and vessel access to and from such people-moving systems, terminal and parking facilities and properties, together with all lands, rights-of-way, property, equipment, and accessories necessary for such high capacity transportation systems. When developing specifications for high capacity transportation system operating equipment, an authority shall take into account efforts to establish or sustain a domestic manufacturing capacity for such equipment. The right of eminent domain shall be exercised by an authority in the same manner and by the same procedure as or may be provided by law for cities of the first class, except insofar as such laws may be inconsistent with the provisions of this chapter. Public transportation facilities and properties which are owned by any city, county, county transportation authority, public transportation benefit area, or metropolitan municipal corporation may be acquired or used by an authority only with the consent of the agency owning such facilities. Such agencies are hereby authorized to convey or lease such facilities to an authority or to contract for their joint use on such terms as may be fixed by agreement between the agency and the authority.
     The facilities and properties of an authority whose vehicles will operate primarily within the rights-of-way of public streets, roads, or highways, may be acquired, developed, and operated without the corridor and design hearings that are required by RCW 35.58.273 for mass transit facilities operating on a separate right-of-way;
     (3) To dispose of any real or personal property acquired in connection with any authority function and that is no longer required for the purposes of the authority, in the same manner as provided for cities of the first class. When an authority determines that a facility or any part thereof that has been acquired from any public agency without compensation is no longer required for authority purposes, but is required by the agency from which it was acquired, the authority shall by resolution transfer it to such agency;
     (4) An authority may sell, lease, or exchange real property for less than fair market value to an eligible organization as defined in RCW 43.63A.510, or may create beneficial sales terms including, but not limited to, extended closings, if the affordable housing to be developed on the property is to be occupied primarily by extremely low-income, very low-income, federally qualified low-income, or low-income households as provided in RCW 43.63A.510;
     (5) To fix rates, tolls, fares, and charges for the use of such facilities and to establish various routes and classes of service. Fares or charges may be adjusted or eliminated for any distinguishable class of users.

NEW SECTION.  Sec. 12   A new section is added to chapter 36.34 RCW to read as follows:
     As an alternative to the powers provided in RCW 43.63A.510, a county may sell surplus property at a discount for affordable housing that may be part of mixed-income or mixed-use developments, provided that the affordable housing complies with the guidelines for affordable housing, income levels, affordable rents, affordable sales prices, and minimum terms of affordability under RCW 36.70A.540 for affordable housing incentive programs.

NEW SECTION.  Sec. 13   A new section is added to chapter 35.21 RCW to read as follows:
     As an alternative to the powers provided in RCW 43.63A.510, every city and town, including every code city operating under Title 35A RCW, may sell surplus property at a discount for affordable housing that may be part of mixed-income or mixed-use developments, provided that the affordable housing complies with the guidelines for affordable housing, income levels, affordable rents, affordable sales prices, and minimum terms of affordability under RCW 36.70A.540 for affordable housing incentive programs.