HOUSE BILL REPORT

EHB 1553

BYRepresentatives Nutley, J. Williams, Leonard, Sanders and Padden

Limiting grants and loans from the housing trust fund.

House Committe on Housing

Majority Report:  Do pass.  (6)

      Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Armstrong, Barnes, Sanders and J. Williams.

House Staff:Kenny Pittman (786-7392)

Rereferred House Committee on Ways & Means/Appropriations

Majority Report:  Do pass with amendment.  (19)

      Signed by Representatives Locke, Chair; Belcher, Braddock, Brekke, Bristow, Butterfield, Ebersole, Grant, Grimm, Hine, Holland, McLean, Nealey, Silver, H. Sommers, Spanel, Sprenkle, Wang and B. Williams.

House Staff:      Susan Kavanaugh (786-7136)

AS PASSED HOUSE FEBRUARY 12, 1988

BACKGROUND:

The Washington Housing Trust Fund (Trust Fund) was created in 1986 to assist in meeting the basic housing needs of low- income persons, persons in rural areas and persons with special housing needs.  The Department of Community Development (DCD) is responsible for the administration of the trust fund program.

The Legislature authorized initial funding, through interest on short-term and nominal real estate earnest money deposits, for the trust fund to start on January 1, 1988.  Additional funding through the capital construction budget is authorized to start on July 1, 1988.

The present law authorizes DCD to use up to five percent of the annual revenue in the trust fund account for its administrative costs.  The current revenue level in the housing trust fund account is inadequate to fund the administrative costs to operate the program.  As additional annual revenue is generated from the funding sources, the five percent limit on administrative cost will be adequate.

SUMMARY:

The five percent limit on administrative costs in the Washington State Housing Trust Fund is removed for a two year period.  To provide the necessary funds for program start-up, the Department of Community Development (DCD) is authorized to utilize up to thirty-seven thousand five hundred dollars in the fiscal year ending June 30, 1988 and up to seventy-five thousand dollars in the fiscal year ending June 30, 1989, from annual revenues in the trust fund.

Beginning in fiscal year 1990, the five percent limit on administrative costs, based on annual revenues in the trust fund account, is back in effect.

EFFECT OF SENATE AMENDMENT(S):  Studies on homelessness and preservation of low-income housing are considered appropriate administrative costs of the housing trust fund.  Fifty percent of the unclaimed prizes from the state lottery, in an amount not to exceed one million dollars in any fiscal year, is deposited quarterly in the housing trust fund. The remaining money from the unclaimed prizes is retained in the state lottery account for further use as prizes.  The unclaimed prizes deposited into the housing trust fund shall be used for eligible housing trust fund activities to benefit the homeless. An emergency clause is added.

Fiscal Note:      Requested January 26, 1988.

Effective Date:The bill contains an emergency clause and takes effect immediately.

House Committee ‑ Testified For:    (Housing)  Ben Bonkowski, Department of Community Development (Testified at request of Committee Chair, not for or against bill).

Ways & Means/Appropriations)  None Presented.

House Committee - Testified Against:      (Housing)  None Presented.

(Ways & Means/Appropriations)  None Presented.

House Committee - Testimony For:    (Housing)  (In response to Committee questions)  The present funding sources for the housing trust fund have just started.  There is presently no funds in the trust fund account.  However, to implement this program there is a need for funding. This bill will allow the department the ability to expend funds from the trust fund, as they are collected, necessary to implement the program.

(Ways & Means/Appropriations)  None Presented.

House Committee - Testimony Against:      (Housing)  None Presented.

(Ways and Means/Appropriations)  None Presented.

VOTE ON FINAL PASSAGE:

      Yeas 97; Excused 1

Excused:    Representative Allen