BILL REQ. #:  H-0423.2 

Read first time 01/18/2007.   Referred to Committee on Housing.

     AN ACT Relating to land acquisition for affordable housing development; adding new sections to chapter 43.185A RCW; creating a new section; and making an appropriation.

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

NEW SECTION.  Sec. 1   The legislature finds that protecting the public health, safety, and welfare by providing affordable housing resources to needy or vulnerable persons is a fundamental purpose of government. The legislature further finds that assisting eligible organizations to purchase land for affordable housing development and related supportive services facilities confers a valuable benefit on the public that constitutes consideration for financing assistance to eligible organizations in the form of low-interest loans, subject to restrictions that provide continued protection of the public interest.

NEW SECTION.  Sec. 2   A new section is added to chapter 43.185A RCW to read as follows:
     (1) The affordable housing land acquisition program is created in the department to establish a revolving loan fund to be used for land acquisition by eligible organizations described under RCW 43.185A.040. The department shall contract with the Washington state housing finance commission to implement and manage the program.
     (2) As used in this chapter, "market rate" means the current average market interest rate that is determined at the time any individual loan is closed upon using a widely recognized current market interest rate measurement to be selected for use by the Washington state housing finance commission with the department's approval. This interest rate must be noted in an attachment to the closing documents for each loan.
     (3) Under the affordable housing land acquisition program:
     (a) Property loans from the affordable housing land acquisition program may be made to purchase land on which to develop affordable housing. In addition to affordable housing, facilities intended to provide supportive services to affordable housing residents and low-income households in the nearby community may be developed on the land.
     (b) Eligible organizations applying for an affordable housing land acquisition program loan must include in the loan application a proposed affordable housing development plan indicating the number of affordable housing units planned, a description of any other facilities being considered for the property, and an estimated timeline for completion of the development. The Washington state housing finance commission may require additional information from loan applicants and may consider the efficient use of land, project readiness, and other factors as criteria in awarding loans.
     (c) A property loan recipient must develop affordable housing on a property for which a loan has been made and place the affordable housing into service within eight years of receiving an affordable housing land acquisition program loan.
     (d) Within five years of receiving a loan under this section, a property loan recipient must present the Washington state housing finance commission with an updated development plan, including a proposed development design, committed and anticipated additional financial resources to be dedicated to the development, and an estimated development schedule, which indicates completion of the development within eight years of loan receipt. This updated development plan must be substantially consistent with the development plan submitted as part of the original loan application as required in (b) of this subsection
     (e) A property loan recipient must maintain affordable housing developed on property acquired under this section as affordable housing for a minimum of thirty years.
     (4) If a property loan recipient does not place affordable housing into service on a property for which a loan has been received under this section within the eight-year period specified in subsection (3)(c) of this section, or if a property loan recipient fails to use the property for the intended affordable housing purpose consistent with the loan recipient's original affordable housing development plan, then the loan recipient must pay to the department an amount consisting of the principal of the original property loan plus compounded interest calculated at the current market rate. The Washington state housing finance commission may grant a partial or total exemption from this repayment requirement if it determines that a development is substantially complete or that the property has been substantially used in keeping with the original affordable housing purpose of the loan. Any repayment funds received as a result of noncompliance with loan requirements shall be deposited into the affordable housing land acquisition account created in section 3 of this act.
     (5) The Washington state housing finance commission, in collaboration with the department, may adopt guidelines and requirements that are necessary to administer the revolving loan fund under the affordable housing land acquisition program.
     (6) Interest rates on property loans granted under this section may not exceed one percent.
     (7) The Washington state housing finance commission, in collaboration with the department, must develop performance measures for the program including, at a minimum, measures related to:
     (a) The ability of eligible organizations to access land for affordable housing development; and
     (b) The total number of dwelling units by housing type and total square footage of affordable housing created and the total number of very low-income households and persons served.
     (8) By December 1st of each year, beginning in 2007, the Washington state housing finance commission shall report to the department and the appropriate committees of the legislature using the performance measures developed under subsection (7) of this section.

NEW SECTION.  Sec. 3   A new section is added to chapter 43.185A RCW to read as follows:
     The affordable housing land acquisition account is created in the custody of the state treasurer. Expenditures from the account may be used solely for the purpose of the affordable housing land acquisition program as described in section 2 of this act. Only the director of the department or the director's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

NEW SECTION.  Sec. 4   The sum of five million dollars is appropriated for the fiscal year ending June 30, 2008, from the general fund solely for deposit in the affordable housing land acquisition account created in section 3 of this act for the purposes of this act.