BILL REQ. #:  H-1722.1 

Read first time 02/07/2007.   Referred to Committee on Housing.

     AN ACT Relating to providing incentives for the preservation of manufactured/mobile home communities; amending RCW 43.185A.050; adding a new section to chapter 43.185A RCW; adding a new section to chapter 43.180 RCW; adding a new chapter to Title 82 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that:
     (a) Manufactured/mobile home communities provide a significant source of homeownership opportunities for Washington residents. However, the increasing closure and conversion of manufactured/mobile home communities to other uses, combined with increasing manufactured/mobile home lot rents, low vacancy rates in existing manufactured/mobile home communities, and the extremely high cost of moving homes when manufactured/mobile home communities close, increasingly make manufactured/mobile home community living insecure for manufactured/mobile home tenants.
     (b) Many tenants who reside in manufactured/mobile home communities are low-income households and senior citizens and are, therefore, those residents most in need of reasonable security in the siting of their manufactured/mobile homes because of the adverse impacts on the health, safety, and welfare of tenants forced to move due to closure, change of use, or discontinuance of manufactured/mobile home communities.
     (c) Manufactured/mobile home communities are a crucial component of low-income housing as they represent one of the few opportunities for low-income households to own a home, typically without the assistance of public subsidies. Furthermore, the preservation of manufactured/mobile home communities:
     (i) Is a more economical alternative than providing new replacement housing units for tenants who are displaced from closing manufactured/mobile home communities;
     (ii) Is a strategy by which all local governments can meet the affordable housing needs of their residents; and
     (iii) Is a strategy by which local governments planning under RCW 36.70A.040 may meet the housing element of their comprehensive plans as it relates to the provision of housing affordable to all economic sectors.
     (d) Providing financial assistance in the form of grants and loans, and also creating incentives to encourage private financial institutions to provide financial assistance to organizations seeking to purchase manufactured/mobile home communities for the purpose of the preservation of affordable housing for low-income and elderly households confers a valuable benefit on the public that constitutes consideration for such assistance and incentives subject to restrictions that provide continued protection of the public interest.
     (2) It is the intent of the legislature to encourage and facilitate the preservation of existing manufactured/mobile home communities and, to the extent necessary and possible, to assist manufactured/mobile home community resident organizations or eligible organizations representing residents in the preservation of manufactured/mobile home communities.

Sec. 2   RCW 43.185A.050 and 1991 c 356 s 14 are each amended to read as follows:
     (1) Except as provided in section 3 of this act, during each calendar year in which funds are available for use by the department for the affordable housing program, the department shall announce to all known interested parties, and through major media throughout the state, a grant and loan application period of at least ninety days' duration. This announcement shall be made as often as the director deems appropriate for proper utilization of resources. The department shall then promptly grant as many applications as will utilize available funds less appropriate administrative costs of the department, not to exceed five percent of moneys appropriated to the affordable housing program.
     (2) The department shall develop, with advice and input from the ((low-income [housing] assistance advisory committee established in RCW 43.185.110)) affordable housing advisory board, criteria to evaluate applications for assistance under this chapter.
     (3) The department shall give a high priority to applications for projects and activities, which utilize existing privately owned housing stock or privately owned land on which privately owned housing stock exists, including privately owned land or housing stock purchased by nonprofit public development authorities, public housing authorities as created in chapter 35.82 RCW, manufactured/mobile home resident organizations as defined by RCW 59.22.020, which also qualify for assistance as eligible organizations under RCW 43.185.060, and other eligible organizations.

NEW SECTION.  Sec. 3   A new section is added to chapter 43.185A RCW to read as follows:
     (1)(a) During each calendar year in which funds are available for use by the department for the affordable housing program, the department shall accept applications for financial assistance in the form of loans and grants for the preservation of affordable housing manufactured/mobile home communities which are at risk of closure and conversion to another use.
     (b) For the purpose of this section, "affordable housing manufactured/mobile home communities" means any real property which is rented or held out for rent to others for the placement of two or more mobile homes, manufactured homes, or park models for the primary purpose of production of income where greater than fifty percent of the tenants are low-income households or are over sixty years of age, except where such real property is rented or held out for rent for seasonal recreational purposes only and is not intended for year-round occupancy.
     (2) Applications shall be accepted on an on-going basis throughout the year and the review process for such applications may be expedited as necessary to take into consideration the time sensitivity of each individual situation.
     (3) The department may develop specific criteria which manufactured/mobile home community preservation projects must meet in order to be eligible for financial assistance. Criteria must include, at a minimum, that:
     (a) A specific percentage, that must be greater than fifty percent, of existing community tenants must be low income or over sixty years of age; and
     (b) The applicant organization is able to sufficiently demonstrate its intent and organizational capacity to preserve the property as a manufactured/mobile home community which will house, for a minimum of twenty-five years, a majority percentage of low-income tenants or tenants who are over sixty years of age.
     (4) The department may give preference to manufactured/mobile home preservation loan and grant applications submitted by or on behalf of resident organizations defined under RCW 59.22.020, which are also eligible organizations under this chapter, or any other eligible organization, which commits to preserving the property for the greatest period of time. Preference must be given to projects serving the greatest numbers or percentages of low-income tenants or tenants who are over sixty years of age.
     (5) Assistance shall be in the form of low or no-interest loans, which also may be deferred loans, or grants. Loan repayments must be deposited into the Washington housing trust fund and used for the same purpose as described in this section.
     (6) In the event a manufactured/mobile home community, which has received a loan or grant from the affordable housing program changes use or is otherwise not in compliance with tenant income or other requirements, the recipient organization is required to repay an amount consisting of the full amount of the principal of the original loan, or the grant, plus compounded interest calculated at the current market rate which shall be determined by the department at the time of the original loan or grant and noted in the original loan or grant documents.
     (7) No more than ten percent of available affordable housing program moneys during each biennium may be used for the purpose of this section.

NEW SECTION.  Sec. 4   A new section is added to chapter 43.180 RCW to read as follows:
     (1) The Washington state housing finance commission may issue bonds to be used for the sole purpose of providing loans to eligible organizations or manufactured/mobile home resident organizations for the purpose of purchasing and preserving affordable housing manufactured/mobile home communities. Bonds issued under this section shall state that they are a general obligation of the state of Washington, shall pledge the full faith and credit of the state to the payment of the principal thereof and the interest thereon, and shall contain an unconditional promise to pay the principal and interest as the same shall become due.
     (2) For the purpose of this section:
     (a) "Affordable housing manufactured/mobile home communities" means the same as in section 3 of this act.
     (b) "Low-income household" means the same as in RCW 43.185A.010(5).
     (c) "Manufactured/mobile home community resident organization" means the same as "resident organization" in RCW 59.22.020.
     (d) "Eligible organizations" means the same as in RCW 43.185A.040.
     (3) The Washington state housing finance commission shall coordinate with the state treasurer regarding the issuance of bonds under this section and will establish with the treasurer a method of recording and tracking the obligations of the state for this purpose.

NEW SECTION.  Sec. 5   (1) It is the previously declared public policy of the state to assist in making affordable housing available throughout the state. The legislature recognizes that manufactured/mobile home communities represent affordable housing opportunities for many low-income households and elderly persons. However, the increasing closure and conversion of manufactured/mobile home communities to other uses and the extremely high cost of moving homes when manufactured/mobile home communities close, increasingly make manufactured/mobile home community living insecure for manufactured/mobile home tenants.
     (2) It is the intent of the legislature to encourage and facilitate the preservation of existing affordable housing manufactured/mobile home communities and, to the extent necessary and possible, to involve affordable housing manufactured/mobile home community resident organizations or an eligible organization representing tenants, such as a nonprofit organization, housing authority, or local government, in the preservation of affordable housing manufactured/mobile home communities. The legislature hereby establishes tax credits for financial institutions who provide financial assistance to eligible organizations by making below market rate loans or by purchasing bonds issued by the Washington state housing finance commission in order that the eligible organization may purchase and preserve an affordable housing manufactured/mobile home community.

NEW SECTION.  Sec. 6   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Applicant" means a financial institution applying for a tax credit under this chapter.
     (2) "Financial institution" means a bank, trust company, mutual savings bank, savings and loan association, or credit union authorized by federal or state law to accept deposits in this state.
     (3) "Department" means the department of revenue.
     (4) "Financial assistance" means a below market rate loan or the purchase of bonds issued by the Washington state housing finance commission for the purpose of assisting an eligible organization to purchase and preserve an affordable housing manufactured/mobile home community.
     (5) "Market rate" and "below market rate" shall be defined by the department in consultation with the department of community, trade, and economic development and the Washington state housing finance commission and the definition shall be provided to any financial institution wishing to make application under this chapter.
     (6) "Affordable housing manufactured/mobile home community" means the same as in section 3 of this act.
     (7) "Low-income household" means the same as in RCW 43.185A.010(5).
     (8) "Eligible organization" means the same as in RCW 43.185A.040.
     (9) "Manufactured/mobile home community resident organization" means the same as "resident organization" in RCW 59.22.020.
     (10) "Tenant" or "resident" means a person who rents a manufactured/mobile home lot for a term of one month or longer and who owns the manufactured/mobile home on the lot.

NEW SECTION.  Sec. 7   (1) An application for a tax credit under section 8 of this act must be made to the department before providing financial assistance to an organization interested in purchasing an affordable housing manufactured/mobile home community. The application must be made in a form and manner prescribed by the department. The application shall be developed by the department in consultation with the department of community, trade, and economic development and the Washington state housing finance commission. The application must contain information regarding the proposed amount and any applicable terms of the loan or bonds purchased. The department may require additional information in order to determine eligibility under this act.
     (2) The department shall provide a preliminary approval, contingent on certification of the financial assistance, to those applications which meet the requirements of the tax credit program so long as the total amount of preapproved tax credits statewide does not exceed ten million dollars in any calendar year. Applications must receive preapproval status on a first-come basis.
     (3) The financial institution must provide the financial assistance described in the approved application by the end of the calendar year in which the application is preapproved to claim a credit allowed under section 8 of this act.
     (4) The department may not accept any applications before September 1, 2007.

NEW SECTION.  Sec. 8   (1) Subject to the limitations in this chapter, a credit is allowed against the tax imposed by chapter 82.04 RCW for approved financial assistance, certified as described in subsection (2) of this section, that is made by a financial institution to an eligible organization for the purpose of affordable housing manufactured/mobile home community purchase and preservation.
     (2) To receive the tax credit, after providing the financial assistance as described in the preapproved application, the financial institution must file copies of the loan documents or the bond purchasing contract with the department and either the department of community, trade, and economic development or the Washington state housing finance commission. The department of community, trade, and economic development or the Washington state housing finance commission shall verify the amount and terms of the financial assistance and shall verify that the financial assistance was provided to an affordable housing manufactured/mobile home community. Upon verification that the financial assistance qualifies for the tax credit, the department of community, trade, and economic development or the Washington state housing finance commission will issue a certification to the financial institution which it must provide to the department when claiming the tax credit. The department shall approve certified applications on a first-come basis.
     (3) The tax credit allowed under this section is limited to an amount equal to ten percent of the total financial assistance.
     (4) The department shall maintain a total of all tax credits approved under this chapter for each calendar year. The department must not preapprove or ultimately issue any tax credits under this section that would cause the total amount of approved tax credits statewide to exceed ten million dollars in any calendar year.
     (5) The tax credit may be claimed against the tax due under chapter 82.04 RCW only in the calendar year immediately following the calendar year in which the financial assistance was made to the eligible organization and the tax credit was approved by the department. Approved tax credits may not exceed the tax liability of the financial institution for any tax reporting period, but may be carried over for up to three subsequent years. No refunds may be granted for credits under this chapter.
     (6) To claim a credit under this chapter, a financial institution must electronically file with the department all returns, forms, and other information that the department requires in an electronic format as provided or approved by the department. Any return, form, or information required to be filed in an electronic format under this section is not filed until received by the department in an electronic format. As used in this section, "returns" has the same meaning as "return" in RCW 82.32.050.

NEW SECTION.  Sec. 9   Chapter 82.32 RCW applies to the administration of this chapter.

NEW SECTION.  Sec. 10   Sections 5 through 9 of this act constitute a new chapter in Title 82 RCW.

NEW SECTION.  Sec. 11   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.