BILL REQ. #:  S-2221.1 

READ FIRST TIME 02/26/07.   

     AN ACT Relating to providing incentives for the preservation of manufactured/mobile home communities; 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) 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. 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. 2   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 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 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.
     (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. 3   (1) An application for preliminary approval for a tax credit under section 4 of this act must be made by a financial institution to the Washington state housing finance commission, and preliminary approval must be received by that financial institution, before a financial institution provides financial assistance to an eligible organization interested in purchasing an affordable housing manufactured/mobile home community. The application must be made in a form and manner prescribed by 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 Washington state housing finance commission may require additional information in order to determine eligibility under this act.
     (2) The Washington state housing finance commission shall provide a preliminary approval, contingent on its certification of the financial assistance, to those applications which meet the requirements of the tax credit program so long as the total amount of preliminarily approved 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 4 of this act.
     (4) The Washington state housing finance commission may not accept any applications before September 1, 2007.

NEW SECTION.  Sec. 4   (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 Washington state housing finance commission. 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 eligible organization to purchase an affordable housing manufactured/mobile home community. Upon verification that the financial institution qualifies for the tax credit, the Washington state housing finance commission shall approve the application and issue a certification to the financial institution which it must provide to the department when claiming the tax credit. The Washington state housing finance commission shall notify the department of each approved application within thirty days after the certification is issued.
     (3) The tax credit allowed under this section is limited to an amount equal to ten percent of the total financial assistance.
     (4) 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 application was approved by the Washington state housing finance commission. 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.
     (5) 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. 5   Chapter 82.32 RCW applies to the administration of this chapter.

NEW SECTION.  Sec. 6   Sections 2 through 5 of this act constitute a new chapter in Title 82 RCW.

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.