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CERTIFICATION OF ENROLLMENT
SUBSTITUTE HOUSE BILL 1406
Chapter 338, Laws of 2019
66th Legislature
2019 Regular Session
AFFORDABLE AND SUPPORTIVE HOUSING--LOCAL SALES AND USE TAX
EFFECTIVE DATE July 28, 2019
Passed by the House April 28, 2019 CERTIFICATE
Yeas 62 Nays 36
I, Bernard Dean, Chief Clerk of the
House of Representatives of the
FRANK CHOPP State of Washington, do hereby
Speaker of the House of Representatives certify that the attached is
SUBSTITUTE HOUSE BILL 1406 as
passed by the House of
Representatives and the Senate on
Passed by the Senate April 28, 2019 the dates hereon set forth
Yeas 33 Nays 15
CYRUS HABIB BERNARD DEAN
President of the Senate Chief Clerk
Approved May 9, 2019 2.51 PM FILED
May 13, 2019
Secretary of State
JAY INSLEE State of Washington
Governor of the State of Washington
SUBSTITUTE HOUSE BILL 1406
AS AMENDED BY THE SENATE
Passed Legislature - 2019 Regular Session
State of Washington 66th Legislature 2019 Regular Session
By House Housing, Community Development & Veterans (originally
sponsored by Representatives Robinson, Macri, Chapman, Valdez, Senn,
Peterson, Kloba, Tharinger, Gregerson, Stanford, Walen, Doglio,
Frame, Jinkins, Riccelli, Slatter, Ormsby, and Santos)
READ FIRST TIME 02/08/19.
1 AN ACT Relating to encouraging investments in affordable and
2 supportive housing; and adding a new section to chapter 82 14 RCW
3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON
4 NEW SECTION Sec. 1 A new section is added to chapter 82 14
5 RCW to read as follows
6 (1) The definitions in this subsection apply throughout this
7 section unless the context clearly requires otherwise
8 (a) "Nonparticipating city" is a city that does not impose a
9 sales and use tax in accordance with the terms of this section
10 (b) "Nonparticipating county" is a county that does not impose a
1l sales and use tax in accordance with the terms of this section
12 (c) "Participating city" is a city that imposes a sales and use
13 tax in accordance with the terms of this section
14 (d) "Participating county" is a county that imposes a sales and
15 use tax in accordance with the terms of this section
16 (e) "Qualifying local tax" means the following tax sources, if
17 the tax source is instated no later than twelve months after the
18 effective date of this section
19 (1) The affordable housing levy authorized under RCW 84 52 105,
p 1 SHB 1406 SL
1 (ii) The sales and use tax for housing and related services
2 authorized under RCW 82 . 14 .530, provided the city has imposed the tax
3 at a minimum or at least half of the authorized rate,
4 (iii) The sales tax for chemical dependency and mental health
5 treatment services or therapeutic courts authorized under RCW
6 82 14 460 imposed by a city, and
7 (iv) The levy authorized under RCW 84 55 050, if used solely for
8 affordable housing
9 (2) (a) A county or city legislative authority may authorize, fix,
10 and impose a sales and use tax in accordance with the terms of this
11 section.
12 (b) The tax under this section is assessed on the selling price
13 in the case of a sales tax, or value of the article used, in the case
14 of a use tax
15 (c) The rate of the tax under this section for an individual
16 participating city and an individual participating county may not
17 exceed
18 (i) Beginning on the effective date of this section until twelve
19 months after the effective date of this section
20 (A) 0 0073 percent for a
21 (I) Participating city, unless the participating city levies a
22 qualifying local tax, and
23 (II) Participating county, within the limits of nonparticipating
24 cities within the county and within participating cities that do not
25 currently levy a qualifying tax,
26 (B) 0 0146 percent for a
27 (I) Participating city that currently levies a qualifying local
28 tax;
29 (II) Participating city if the county in which it is located
30 declares they will not levy the sales and use tax authorized under
31 this section or does not adopt a resolution in accordance with this
32 section; and
33 (III) Participating county within the unincorporated areas of the
34 county and any city that declares they will not levy the sales and
35 use tax authorized under this section or does not adopt a resolution
36 in accordance with this section,
37 (ii) Beginning twelve months after the effective date of this
38 section.
39 (A) 0 0073 percent for a
p. 2 SHB 1406 SL
1 (I) Participating city that is located within a participating
2 county if the participating city is not levying a qualifying local
3 tax, and
4 (II) Participating county, within the limits of a participating
5 city if the participating city is not levying a qualifying local tax,
6 (B) 0 0146 percent within the limits of a
7 (I) Participating city that is levying a qualifying local tax,
8 and
9 (II) Participating county within the unincorporated area of the
10 county and within the limits of any nonparticipating city that is
11 located within the county
12 (d) A county may not levy the tax authorized under this section
13 within the limits of a participating city that levies a qualifying
14 local tax
15 (e) (i) In order for a county or city legislative authority to
16 impose the tax under this section, the authority must adopt
17 (A) A resolution of intent to adopt legislation to authorize the
18 maximum capacity of the tax in this section within six months of the
19 date in which this section takes effect; and
20 (B) Legislation to authorize the maximum capacity of the tax in
21 this section within one year of the date on which this section takes
22 effect
23 (ii) Adoption of the resolution of intent and legislation
24 requires simple majority approval of the enacting legislative
25 authority
26 (iii) If a county or city has not adopted a resolution of intent
27 in accordance with the terms of this section, the county or city may
28 not authorize, fix, and impose the tax
29 (3) The tax imposed under this section must be deducted from the
30 amount of tax otherwise required to be collected or paid to the
31 department of revenue under chapter 82 08 or 82 12 RCW The
32 department must perform the collection of such taxes on behalf of the
33 county or city at no cost to the county or city
34 (4) By December 31, 2019, or within thirty days of a county or
35 city authorizing the tax under this section, whichever is later, the
36 department must calculate the maximum amount of tax distributions for
37 each county and city authorizing the tax under this section as
38 follows
39 (a) The maximum amount for a participating county equals the
40 taxable retail sales within the county in state fiscal year 2019
p 3 SHB 1406 SL
1 multiplied by the tax rate imposed under this section If a county
2 imposes a tax authorized under this section after a city located in
3 that county has imposed the tax, the taxable retail sales within the
4 city in state fiscal year 2019 must be subtracted from the taxable
5 retail sales within the county for the calculation of the maximum
6 amount, and
7 (b) The maximum amount for a city equals the taxable retail sales
8 within the city in state fiscal year 2019 multiplied by the tax rate
9 imposed under subsection (1) of this section
10 (5) The tax must cease to be distributed to a county or city for
11 the remainder of any fiscal year in which the amount of tax exceeds
12 the maximum amount in subsection (4) of this section The department
13 must remit any annual tax revenues above the maximum to the state
14 treasurer for deposit in the general fund Distributions to a county
15 or city meeting the maximum amount must resume at the beginning of
16 the next fiscal year
17 (6) (a) If a county has a population greater than four hundred
18 thousand or a city has a population greater than one hundred
19 thousand, the moneys collected or bonds issued under this section may
20 only be used for the following purposes
21 (i) Acquiring, rehabilitating, or constructing affordable
22 housing, which may include new units of affordable housing within an
23 existing structure or facilities providing supportive housing
24 services under RCW 71 24 385, or
25 (ii) Funding the operations and maintenance costs of new units of
26 affordable or supportive housing
27 (b) If a county has a population of four hundred thousand or less
28 or a city has a population of one hundred thousand or less, the
29 moneys collected under this section may only be used for the purposes
30 provided in (a) of this subsection or for providing rental assistance
31 to tenants
32 (7) The housing and services provided pursuant to subsection (6)
33 of this section may only be provided to persons whose income is at or
34 below sixty percent of the median income of the county or city
35 imposing the tax
36 (8) In determining the use of funds under subsection (6) of this
37 section, a county or city must consider the income of the individuals
38 and families to be served, the leveraging of the resources made
39 available under this section, and the housing needs within the
40 jurisdiction of the taxing authority
p 4 SHB 1406 SL
1 (9) To carry out the purposes of this section including, but not
2 limited to, financing loans or grants to nonprofit organizations or
3 public housing authorities, the legislative authority of the county
4 or city imposing the tax has the authority to issue general
5 obligation or revenue bonds within the limitations now or hereafter
6 prescribed by the laws of this state, and may use, and is authorized
7 to pledge, the moneys collected under this section for repayment of
8 such bonds
9 (10) A county or city may enter into an interlocal agreement with
10 one or more counties, cities, or public housing authorities in
11 accordance with chapter 39. 34 RCW. The agreement may include, but is
12 not limited to, pooling the tax receipts received under this section,
13 pledging those taxes to bonds issued by one or more parties to the
14 agreement, and allocating the proceeds of the taxes levied or the
15 bonds issued in accordance with such interlocal agreement and this
16 section
17 (11) Counties and cities imposing the tax under this section must
18 report annually to the department of commerce on the collection and
19 use of the revenue The department of commerce must adopt rules
20 prescribing content of such reports By December 1, 2019, and
21 annually thereafter, and in compliance with RCW 43 01 036, the
22 department of commerce must submit a report annually to the
23 appropriate legislative committees with regard to such uses
24 (12) The tax imposed by a county or city under this section
25 expires twenty years after the date on which the tax is first
26 imposed
Passed by the House April 28, 2019
Passed by the Senate April 28, 2019
Approved by the Governor May 9, 2019.
Filed in Office of Secretary of State May 13, 2019
--- END ---
p 5 SHB 1406 SL
7/7/2019 Newly passed affordable housing bills require city action on tight timelines
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OF WASHINGTON
CiTiES
Advocacy
Published on Jun 14, 2019
Related
Newly passed affordable housing bills
require city action on tight timelines Check out
AWC's 2019
Contact Carl Schroeder, Shannon McClelland Legislative
Priorities
Two major housing-related bills that passed the 2019 Legislature
promise significant benefits, but only if your city acts within strict
timelines
,n.
Don't miss out on twenty years of revenue from the state to
support city housing needs
In HB 1406, the state approved a revenue sharing program for local
governments The program provides up to 0 0146% in local sales and
use tax credited against the state sales tax for housing investments
The tax credit is available in increments of 0 0073%, depending on
the imposition of other local taxes and whether your county also
takes advantage of the credit The tax credit is in place for up to 20
years and can be used for acquiring, rehabilitating or constructing
affordable housing, operations and maintenance of new affordable or
supportive housing facilities, and, for smaller cities, rental assistance
The funding must be spent on projects that serve persons whose
income is at or below sixty percent of the area median income Cities
can also issue bonds to finance the authorized projects
This local sales tax authority is a credit against the state sales tax, so
it does not increase the sales tax for the consumer There are tight
timelines that must be met to access this funding source — the
first is January 31, 2020 to pass a resolution of intent. The tax
.....I: .�...<.� �4...., h.. ...�....�...� h. 1..1.. 77 ')A')/l 4., ......I:f.• C. .- .,
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7/7/201 Newly passed affordable housing bills require city action on tight timelines
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There are tight timelines
that must be met to access
this funding source - the
first is January 31 , 2020 to
pass a resolution of intent.
The tax ordinance must
then be adopted by July
27, 2020 to qualify for a
credit.
Pacifica Law Group has helpfully provided a sample resolution of
intent you can use to take the first step of this process Please make
plans to adopt a resolution of intent before the January 31 deadline,
preserving your opportunity to access these new resources for
housing in your city
AWC will be providing additional educational materials and guidance
throughout the rest of the year, starting at the AWC Annual
Conference in Spokane at the end of this month Stay tuned!
Time-limited opportunity for financial support to develop local
housing action plans and adopt ordinances to increase
residential capacity
HB 1923 was the result of a long series of conversations about what
it would take to help cities better accommodate coming growth while
providing a greater variety of housing types The legislation provides
https://wacities.org/advocacylNews/advocacy-news/2019/06!14/newly-passed-afford able-housi ng-bi ll s-require-city-action-on-tight-timelines?fbclid=lwA. 2/4
.7/7/2019 Newly passed affordable housing bills require city action on tight timelines
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under strict timelines These actions, if adopted by April 1, 2021 are
not subject to legal appeal under the State Environmental Policy Act
(SEPA) or the Growth Management Act (GMA) Cities will still need to
go through existing review processes and timelines, including
securing and considering public input. But once a city balances those
considerations and formally decides on a course of action, it would be
final and not subject to legal appeal under SEPA or GMA
The following specific actions qualify under this bill (note that these
are summaries and there are important nuances to qualifying
ordinances under these topics)
• Authorize development capacity of at least fifty units per acre
near commuter or light rail stations
• Authorize development capacity of at least twenty-five units per
acre near high frequency bus stops
• Authorize a duplex, triplex or courtyard apartment on all
parcels in a zoning district that allows single family homes
• Authorize cluster zoning or lot size averaging in all zoning
districts that allow single family homes
• Authorize accessory dwelling units (ADUs) with specific policy
provisions
• Adopt a SEPA subarea plan that leverages transit infrastructure
or regional centers
• Adopt a SEPA planned action that includes residential or
mixed-use development
• Utilize the SEPA infill authority to increase categorical
exemption thresholds for residential or mixed-use development
in areas not meeting planned density
• Adopt form-based codes.
• Authorize a duplex on all corner lots in single-family zones
• Adopt optional maximum thresholds under the short
subdivision process
• Authorize a minimum net density of six dwelling units per acre
https://wacities.orgl advocacy/News/advocacy-news/2019/06/14/newly-passed-affordable-housi ng-bi lls-req uire-city-action-on-tight-timelines?tbclid=lwA. 3/4
,7/7/2019 Newly passed affordable housing bills require city action on tight timelines
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$100,000—with an opportunity to apply for more than that amount if
they can demonstrate extraordinary potential to increase housing
supply or regulatory streamlining
Cities that want to develop their own approaches to address housing
challenges or supplement the actions listed above are also eligible to
receive funding of $100,000 for a local housing action plan That
housing action plan must
• Quantify existing projected housing needs for all income levels,
with documentation
• Develop strategies to increase the supply of housing needed
by those income levels.
• Analyze population and employment trends
• Consider strategies to minimize displacement of low-income
residents resulting from redevelopment
• Review and evaluate the current GMA housing element
• Provide for participation and input from a variety of
stakeholders
• Include a schedule of programs and actions for implementation
of the action plan
Again, to qualify for these incentives, cities need to act by April 1,
2021 We encourage you to take advantage of this opportunity and
will be providing more educational materials throughout the year to
support your efforts
Advocacy Land use & planning Affordable housing
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From Jim Cooper
Sent: Monday,July 1, 2019 8.34 AM
To Lisa Striedinger
Subject: United Ways of Washington Summer 2019 Legislative Update
United
Way � is:„ .
United Ways of the
Pacific Northwest
Lisa --
Happy July Today, we take notice of some of the effects of recent legislation
and a HUD rulemaking You can read up on the key achievements of the
session here Feel free to forward Information on subscribing is below
Local Government Action Needed to Receive Revenue for Affordable
Housing
One of the more important affordable housing achievements of the 2019
Legislative Session will only matter if your local government takes action within
the next 12 months r-IB 1406 provides a sales tax revenue sharing option for
local governments for buying, fixing up and building affordable housing as well
as for operations and maintenance of new affordable or supportive housing
facilities Cities can also issue bonds to finance the authorized projects
However, according to a recent article by the Association of Washington Cities,
there are tight timelines that must be met to access this funding source —the
first is January 31, 2020 to pass a resolution of intent The article provides a
sample resolution This is the time to engage your partners and local
government in determining whether to take advantage of this opportunity
Child Care Subsidy Program Shifts to Department of Children, Youth and
Families
As a result of legislation from the 2018 session, the Child Care Subsidy Program
will transition from the Department of Social and Health Services effective today,
July 1, to the Department of Children, Youth, and Families (DCYF), creating the
DCYF Child Care Subsidy Contact Center The goal of was to
consolidate all of the Working Connections Child Care program within one
department
United Way Program Helps Reduce Evictions - Legislation Provides More
Time
In an article by Crosscut, you can read how legislation this year is working with a
new United Way program in Seattle to prevent evictions The United VVay of
King County Home Base program provides one-time emergency funds to pay
rent while SB 5600 increases eviction notice from 3 days to 14 days The bill
becomes effective on July 28 but the Home Base program is already making a
difference in people's lives
Public Comment Deadline for HUD "Mixed-Status" Rulemaking is July 9
The U S Department of Housing and Urban Development (HUD) has published
a proposed rule that would prohibit "mixed-status" families from living in public
housing and Section 8 programs Mixed-status families are households that
include both members who are eligible and ineligible for housing assistance
based on their immigration status HUD's analysis of this proposed
indicates that over 25,000 families of mixed immigration status would be
affected Comments are due by July 9, 2019 Here's an online comment form
suggested by the Washington Low-Income Alliance
You can subscribe to receive our updates by email (more frequent during
legislative session)
Jim Cooper
http.//www uwpnw org/
United Ways of the Pacific Northwest United States
This email was sent to striedingeriisa(eDgmail.com To stop receiving emails, click here
You can also keep up with Jim Cooper on Twitter or Facebook
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