S-2056

AN ACT Relating to authorizing the housing finance commission to provide a revenue source for farm worker housing through the auction sale of tax credits; adding new sections to chapter 82.04 RCW; adding a new section to chapter 82.16 RCW; creating new sections; providing an effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1. It is the policy of the state to contribute to the state's general welfare by assisting in making affordable and decent housing available to farm workers. Providing affordable and decent housing for farm workers helps protect the health and safety needs of those persons.

It is the purpose of this act to establish a pool of funds to provide a source of revenue for farm worker housing through the creation of a tax credit to be used against the business and occupation or public utility tax.

NEW SECTION. Sec. 2. A new section is added to chapter 82.04 RCW to read as follows:

(1) Subject to the limitations and conditions of this section, a person shall be allowed a credit against taxes due under this chapter equal to the face value of credit purchased in an auction under this section.

(2) The commission is authorized to conduct auctions of tax credits to be used against the business and occupation or public utility tax. The commission shall establish the procedures under which the auctions will be conducted. The commission shall not accept a bid less than seventy-five percent of the value of the credit. The commission may establish a minimum bid higher than this seventy-five percent statutory minimum. No more than ten million dollars worth of credit may be auctioned by the commission each biennium.

(3) A person purchasing a credit shall complete a registration form at the time of purchase. The commission shall develop and provide the form. The form shall include: An identifying number; the time period during which the credit must be used; in a conspicuous manner, the conditions under which the credit may be claimed; and the amount of credit purchased by the buyer. The identifying number on the form will be discrete as to each purchase. The commission shall maintain a registry of tax credits purchased at auction and shall provide the department electronic access to the file.

(4) No application is necessary for the use of the tax credit. The person must claim the credit on the combined excise tax reporting form. The person claiming the credit must keep records necessary for the department to verify eligibility under this section. The person or its successor must keep a copy of the registration form.

(5) No applicant is eligible for tax credits under this section in excess of the amount of tax that would otherwise be due under this chapter. A credit must be used during the biennium in which it was purchased or it expires. Refunds will not be given in place of credits.

(6) If at any time the department finds that a person is not eligible for tax credit under this section, the amount of taxes for which a credit has been used shall be immediately due. The department shall assess interest, but not penalties, on the credited taxes for which the person is not eligible. The interest shall be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, be assessed retroactively to the date the tax credit was taken, and accrue until the taxes for which a credit has been used are repaid.

(7) The commission shall deposit all of the proceeds from the auction into a trust account. The trust account shall be an account with a qualified financial institution, established by the commission for the deposit of the proceeds of the auction.

(8) The proceeds and earnings in the trust account shall be used by the commission for the benefit of nonprofit organizations that provide housing for farm workers. Subject to the joint approval of the commission and the director of the department of community, trade, and economic development, the commission may allocate funds which include, but are not limited to, the following purposes:

(a) Providing funds for new construction;

(b) Providing funds for rehabilitation and repair;

(d) Providing funds for farm worker housing infrastructure, such as sewer, water, and electricity.

(9) Programs established under subsection (8) of this section shall be administered by the commission or the department of community, trade, and economic development.

(10) Unless the context clearly requires otherwise, the following definitions apply to this section.

(a) "Commission" means the housing finance commission.

(b) "Auction" means the sale of a business and occupation or public utility tax credit through sealed bid, conducted by the commission.

NEW SECTION. Sec. 3. A new section is added to chapter 82.04 RCW to read as follows:

Purchase of a tax credit by a financial institution qualifies as an investment in affordable housing for purposes of the community reinvestment act under Titles 30 and 32 RCW.

NEW SECTION. Sec. 4. A new section is added to chapter 82.16 RCW to read as follows:

A credit purchased at the auction under section 2 of this act may be used against tax due under this chapter. If a person has used a credit against tax due under chapter 82.04 RCW, the person may not use the same credit for tax due under this chapter.

NEW SECTION. Sec. 5. The department of revenue, the housing finance commission, and the department of community, trade, and economic development shall evaluate the results of all programs allocated funds from the trust account and report the findings to the governor and the legislature by December 1, 2001. The evaluation must consider the effect of the programs in meeting the purposes of this act, the financing options available to create or preserve housing for farm workers, and the impact of the credit on the state economy and revenues.

NEW SECTION. Sec. 6. If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state.

NEW SECTION. Sec. 7. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 8. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 1999.