BILL REQ. #: S-1317.1
| State of Washington | 61st Legislature | 2009 Regular Session |
Read first time 02/04/09. Referred to Committee on Financial Institutions, Housing & Insurance.
AN ACT Relating to affordable housing financing; adding a new section to chapter 82.14 RCW; and adding a new chapter to Title 43 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 (1) The legislature recognizes that
household incomes have not kept pace with rising housing costs in many
areas of the state. The legislature further recognizes that there are
many factors contributing to the escalation in housing costs that
include the rapid development or redevelopment within specific
geographic areas that have been identified for increased population and
employment growth in regional and local growth management plans. The
legislature further recognizes that the escalation in housing costs,
particularly in high cost areas, has forced many low-income and
moderate-income households to use excessive amounts of their income to
pay for housing, commute long distances from home to work, or delay
their opportunity for homeownership. The legislature further
recognizes that the state benefits from increased tax revenues from
development or redevelopment activity in these locations.
(2) The legislature finds that the provision of affordable housing
meets one of the stated planning goals of the state's growth management
act to encourage the availability of affordable housing to all economic
segments in locations close to jobs, transportation, and services. The
legislature further finds that housing needed to accommodate new
households in locations close to jobs, transportation, and services
will largely be provided through new construction and, without specific
public policies, incentives, and investments, this housing will often
be unaffordable to low and moderate-income households who are employed
in these locations or who rely on public transit provided in these
locations. Therefore, the legislature further finds that it is in the
public interest to create an affordable housing financing program
focused on high-growth areas that creates or preserves affordable
housing by leveraging local government funding for affordable housing
with state revenues through a local sales and use tax that is credited
against the state sales and use tax.
NEW SECTION. Sec. 2 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Affordable housing" means housing that is affordable to and
rented by an eligible household. For the purposes of housing intended
for owner occupancy, "affordable housing" means housing that is
affordable to and purchased by an eligible household.
(2) "Annual state contribution limit" means fifteen million dollars
statewide per fiscal year.
(3) "Department" means the department of community, trade, and
economic development.
(4) "Designated area" means a compact identifiable geographic
subarea that is located within the boundaries of a local government's
urban growth area and where commercial and residential growth is
projected. A designated area must contain a mixture of commercial and
residential uses and must have high capacity transit or frequent
transit service, or both.
(5) "Eligible household" means a single person, family, or
unrelated persons living together whose adjusted income is at or below
eighty percent of the median family income, adjusted for family size,
that is in effect for the county where the project is located.
(6) "Local government" means a city or town. "Local government"
also includes a joint application for funding under this chapter by a
city or town and the county in which the city or town is located.
(7) "Local public sources" means the local government's financial
contribution dedicated to the financing of affordable housing under
this chapter. "Local public sources" includes, but is not limited to:
The local government's portion of the property tax, including amounts
from a property tax levy imposed by the local government that is
dedicated to financing affordable housing under this chapter; the local
government's sales and use tax; and proceeds from bonds issued by the
local government that are used to finance affordable housing under this
chapter. "Local public sources" also includes expenditures by the
local government associated with the administration of affordable
housing programs under this chapter. "Local public sources" does not
include: Federal funds received by the local government; local sales
and use taxes that are authorized under section 10 of this act; or
funds generated from the surcharges authorized under RCW 36.22.178,
36.22.179, and 36.22.1791.
(8) "Project award" means the amount of state contribution awarded
to a local government for affordable housing activities eligible under
section 4 of this act.
NEW SECTION. Sec. 3 The housing everyone financing tool program
is created in the department for the purpose of making project awards
to local governments for the financing of affordable housing within the
local government's designated area or areas. The program must be
developed and administered by the department with advice and input from
the affordable housing advisory board established in RCW 43.185B.020.
NEW SECTION. Sec. 4 (1) Beginning July 1, 2011, the department
shall make project awards to local governments to assist in the
financing of affordable housing within the local government's
designated area or areas.
(2) Activities eligible for assistance under this chapter include,
but are not limited to:
(a) New construction, rehabilitation, or acquisition of affordable
housing including, but not limited to, public improvements directly
related to the affordable housing financed under this chapter and
planning, engineering, architectural, and financial services associated
with affordable housing financed under this chapter;
(b) Acquisition of existing housing units for resale or rent as
affordable housing; and
(c) Acquisition of land that will be used for affordable housing.
(3) A local government approved for a project award shall enter
into agreements with the project developer receiving funds under this
chapter that specifies, at a minimum, the number of affordable housing
units to be provided, the income of households to be served, affordable
rent or prices, and other requirements as determined. Agreements must
ensure that housing financed under this chapter will be maintained as
affordable housing for a minimum of fifty years.
(4) A local government approved for a project award shall report
annually to the department regarding the status of affordable housing
development in the designated area, the use of the state award funds
and local public sources, and affordability agreements entered into
with project developers. The local government shall continue to
provide annual reports to the department until all state award funds
are expended and all housing developments receiving state award funds
have completed one year of operation.
NEW SECTION. Sec. 5 (1) As a condition to imposing a sales and
use tax under section 10 of this act, a local government must apply to
the department and be approved for a project award. The application
must be in a form and manner prescribed by the department and include,
but not be limited to:
(a) Information on the designated area or areas, including area
boundaries; current land uses and other characteristics; availability
of high capacity transit or frequent transit service, or both; and a
survey of any existing affordable housing, including a plan for
preserving or replacing the housing or assisting low-income tenants who
may be displaced;
(b) Information on projected construction-related development or
redevelopment activity within the designated area or areas and the
anticipated increase in state revenues generated by the imposition of
taxes under Title 84 RCW and chapters 82.08 and 82.12 RCW that is
expected to occur as a result of projected construction-related
development or redevelopment activity;
(c) Information on the type and number of affordable housing units
that are expected to be constructed or preserved under this chapter
within the designated area or areas and the anticipated timeline for
completion of affordable housing development;
(d) The amount of local public sources that will be dedicated to
affordable housing financed under this chapter;
(e) The amount of state award funds requested to be dedicated to
affordable housing financed under this chapter and how the state award
funds will be used;
(f) The anticipated effective date for imposing the local sales and
use tax under section 10 of this act, subject to RCW 82.14.055(2), and
the estimated number of years that the tax will need to be imposed, but
not to exceed twenty-five years; and
(g) Other information the department deems necessary.
(2) In evaluating applications for project awards, the department
shall give priority consideration to applications from a local
government that propose to:
(a) Provide financing for moderate or high density residential
development, or both, including mixed residential-commercial
developments;
(b) Provide financing for affordable housing that is within one-half mile walking distance of a high capacity transportation station or
within one-quarter mile walking distance of high frequency transit
service;
(c) Maximize the affordability to low and very low-income
households;
(d) Leverage other available public and private fund sources for
the development and operation of affordable housing;
(e) Maintain the affordability of the housing for the greatest
period of time; and
(f) Demonstrate a readiness to proceed.
(3) The department may not approve a project award amount that
exceeds the amount dedicated as the local public source by the local
government for the financing of affordable housing.
(4)(a) Once the department has approved the local government to use
housing everyone financing tool financing, notification of a project
award must be sent by the department to the local government
authorizing the local government to impose the local sales and use tax
authorized and subject to the conditions under section 10 of this act.
The department must also send notification of project awards to the
department of revenue.
(b) A notice of approval to use housing everyone financing tool
financing must contain a project award letter that states the amount
available to a local government each fiscal year for financing
affordable housing under this chapter, for a period not to exceed
twenty-five years.
(c) A determination of a project award by the department is final.
(5) The department shall monitor the use of a project award by the
local government and the status of affordable housing production. If
the local government fails to produce affordable housing as specified
in the notice of approval, the department may require repayment of the
project award.
NEW SECTION. Sec. 6 The department shall periodically report on
the implementation of the housing everyone financing tool program to
the governor and the legislature as the department deems appropriate,
and recommend amendments to, changes in, and modifications to this
chapter when appropriate.
NEW SECTION. Sec. 7 The department may adopt rules under chapter
34.05 RCW necessary for the administration of this chapter.
NEW SECTION. Sec. 8 This act may be known and cited as the
housing everyone financing tool act.
NEW SECTION. Sec. 9 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. 10 A new section is added to chapter 82.14 RCW
to read as follows:
(1) A local government that has been approved by the department of
community, trade, and economic development to use housing everyone
financing tool financing under chapter 43.-- RCW (the new chapter
created in section 11 of this act) may impose a sales and use tax in
accordance with the terms of this chapter and subject to the criteria
set forth in this section. Except as provided in this section, the tax
is in addition to other taxes authorized by law and shall be collected
from those persons who are taxable by the state under chapters 82.08
and 82.12 RCW upon the occurrence of any taxable event within the
taxing jurisdiction of the local government. The rate of tax may not
exceed the rate provided in RCW 82.08.020(1), less the aggregate rates
of any other local sales and use taxes imposed by any local government
on the same taxable events that are credited against the state sales
and use taxes imposed under chapters 82.08 and 82.12 RCW. The tax rate
must be no higher than what is reasonably necessary for the local
government to receive its entire project award for any fiscal year in
a ten-month period of time. The rate of tax may be changed only on the
first day of a fiscal year as needed. Notice of rate changes must be
provided to the department on the first day of March to be effective on
July 1st of the next fiscal year.
(2) The tax authorized under subsection (1) of this section shall
be credited against the state taxes imposed under chapter 82.08 or
82.12 RCW. The department shall perform the collection of such taxes
on behalf of the local government at no cost to the local government
and shall remit the taxes as provided in RCW 82.14.060.
(3)(a) A tax may not be imposed under the authority of this
section:
(i) Before July 1, 2012; and
(ii) Before approval by the department of community, trade, and
economic development of the local government's application for housing
everyone financing tool financing under chapter 43.-- RCW (the new
chapter created in section 11 of this act).
(b)(i) The tax imposed under this section expires on the earlier
of: (A) The first day of the month following the month that the local
government's bonds issued to finance affordable housing under chapter
43.-- RCW (the new chapter created in section 11 of this act) are
retired; (B) the first day of the month following the month that the
local government has received the entire amount of the project award
from the distributions of the taxes imposed under the authority of this
section for the number of years indicated in the project award
notification from the department of community, trade, and economic
development; or (C) twenty-five years after the tax is imposed.
(ii) The local government must give the department at least thirty
days' notice before the expiration of the tax imposed under the
authority of this section.
(4) An ordinance adopted by the legislative authority of a local
government imposing a tax under this section must provide that:
(a) The tax must first be imposed on the first day of a fiscal
year;
(b) The cumulative amount of tax received by the local government
in any fiscal year may not exceed the amount of the project award for
that fiscal year;
(c) The tax must cease to be distributed for the remainder of any
fiscal year in which the amount of tax received by the local government
equals the amount of the project award for that fiscal year;
(d) The tax must be distributed again, should it cease to be
distributed as provided in (c) of this subsection, at the beginning of
the next fiscal year, subject to the restrictions in this section; and
(e) The state is entitled to any revenue generated by the tax in
excess of the project award.
(5) The department shall determine when tax distributions for the
fiscal year equal the amount of the project award for that fiscal year
as provided in subsection (6) of this section. Determinations by the
department of the amount of tax distributions attributable to each
local government are final and may not be used to challenge the
validity of any tax imposed under this section. The department shall
remit any tax receipts in excess of the project award to the state
treasurer who shall deposit the money in the general fund.
(6) The amount of tax distributions received in any fiscal year
from taxes imposed under the authority of this section by all local
governments may not exceed the annual state contribution limit.
(7) Subject to chapter 43.-- RCW (the new chapter created in
section 11 of this act), the tax imposed under the authority of this
section may be applied to provide for the payment of debt service on
bonds issued by the local government to finance affordable housing
under chapter 43.-- RCW (the new chapter created in section 11 of this
act) or to pay affordable housing costs on a pay-as-you-go basis, or
both.
(8) For the purposes of this section, "affordable housing," "annual
state contribution limit," "local government," and "project award" all
have the same meaning as in section 2 of this act.
NEW SECTION. Sec. 11 Sections 1 through 9 of this act constitute
a new chapter in Title