FINAL BILL REPORT

                E2SHB 2109

                         C 187 L 00

                     Synopsis as Enacted

Brief Description:  Authorizing tax, levy, and execution exemptions for properties of Indian housing authorities designated for low-income housing program uses.

Sponsors:  By House Committee on Finance (originally sponsored by Representatives Van Luven, Thomas, Dunshee, Pennington, Dunn, Cairnes, Veloria, Buck, G. Chandler and Haigh).

House Committee on Economic Development, Housing & Trade

House Committee on Finance

Senate Committee on Ways & Means

Background:

All real property in Washington is subject to property tax each year based on the property's value, unless specifically exempted by law.  Real property owned by the United States, the state, its counties, school districts, and other municipal corporations is exempt from tax by the state constitution, as is land held in trust by the United States for Indian tribes.  The state constitution also permits the Legislature to exempt other property from taxation.

The Legislature has exempted the property of housing authorities from state and local taxes and special assessments.  A housing authority may, however, agree to reimburse a governing authority for improvements, services, and facilities furnished by the authority for the benefit of the housing authority.  The payments may not exceed the amount of the property tax that had been levied on the property prior to its acquisition by the housing authority.  The real property of a housing authority is exempt from levy of execution and, generally, no lien can be placed upon its real property.

The federal Native American Housing Assistance and Self-Determination Act of 1996 provides grants on behalf of Indian tribes to carry out affordable housing activities.  In addition to other grant eligibility requirements, the affordable housing assisted with the grant moneys must be exempt from all real and personal property taxes imposed by a state, tribe, or local government, and the tribe must pay user fees to compensate the local governing body for the cost of providing government services, such as police and fire protection, roads, and water, sewerage, and utilities systems, unless the local governing  body agrees to waive the user fees or payments in lieu of taxes.  A grant recipient that does not meet this tax exempt requirement may still be eligible for a grant under the act, but only if the local governing body in which the affordable housing development is located contributes, in the form of cash or tax remission, the amount by which the taxes paid with respect to the development exceed the user fees.

Summary of Bill:

The real property of tribal housing authorities and inter-tribal housing authorities is exempt from all state and local taxes and special assessments.  The property must be used for housing for  persons of low income and senior citizens for and on behalf of the federally recognized Indian tribe.

The tribal housing authority or inter-tribal housing authority may agree to make a payment to a city, county, or other political subdivision for improvements, services, or facilities that are furnished for the benefit of a tribal housing project.  The payment must be based on the fair share of the costs of the services.  Reimbursements may not exceed the amount of tax imposed upon the property prior to its acquisition by the tribal housing authority or inter-tribal housing authority or payments made by other low-income users for the same services.

Votes on Final Passage:

House960

Senate430

Effective:July 1, 2000