HomeMy WebLinkAbout121619_ra02JEFFERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
AGENDA REQUEST
TO: Board of Commissioners
FROM: Philip Morley, County Administra
DATE: December 16, 2019
RE: Public Hearing On A Proposed Ordinance Imposing A Sales And Use Tax For Affordable
And Supportive Housing In Accordance With Substitute House Bill 1406 (RCW 82.14.540)
STATEMENT OF ISSUE: The Board of County Commissioners (BoCC) will hold a Public
Hearing on Monday, December 16, 2019 at 10:20 a.m. in the Commissioners' Chambers,
Jefferson County Courthouse, 1820 Jefferson Street, Port Townsend, Washington for the purpose
of taking written and oral testimony regarding an Ordinance Imposing A Sales And Use Tax For
Affordable And Supportive Housing In Accordance With Substitute House Bill 1406 (Chapter 338,
Laws Of 2019) To Be Credited Against The State Sales And Use Tax.
The proposed sales and use tax would be deducted from the existing state sales tax, so there
would be no change to the consumer. Revenues may only be used to support affordable housing
and supportive housing serving low income people at or below 60% of Area Median Income. This
new revenue stream for affordable housing was authorized this year with the enactment of
Substitute House Bill 1406 (SHB 1406).
To impose the sales and use tax deducted from the state's sales and use tax, and receive this
revenue locally, SHB 1406 requires a two-step process: a Resolution of intent, followed by an
Ordinance. On October 14, 2019, the County Commissioners adopted a resolution of intent,
Resolution No. 52-19. The proposed Ordinance is the second step. SHB 1406 requires that the
Ordinance be adopted within one year of July 28, 2019.
ANALYSIS: A pervasive lack of affordable housing is a pressing challenge throughout Jefferson
County, especially for people with lower incomes. In 2017, the Jefferson County Board of
Commissioners adopted Resolution No. 35-17, finding "that an emergency exists with respect to
the availability of housing that is affordable to low-income households and with respect to the
availability of housing that is affordable to very low-income households in Jefferson County."
In 2019, the Washington State Legislature approved SHB 1406 authorizing a city or county to
impose a local sales and use tax for the acquisition, construction or rehabilitation of affordable
housing or facilities providing supportive housing, and for the operations and maintenance costs
of affordable or supportive housing, or, for providing rental assistance to tenants to assist
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persons whose income is at or below sixty percent of the County median income. SHB 1406 has
been codified as RCW 82.14.540.
The tax is credited against state sales taxes collected within the County and, therefore, will not
result in higher taxes.
Imposing the SHB 1406 sales and use tax in Jefferson County and using the revenue for affordable
housing will help address this need, and benefit citizens.
Jefferson County intends to use these tax monies in collaboration with the City of Port Townsend
as a means to fully leverage the resources under SHB 1406. SHB 1406 authorizes the County to
enter into an interlocal agreement for purposes of pooling the tax monies received, and
allocating the proceeds. County and City staff are preparing language to fold SHB 1406 revenues
into an existing interlocal through which the County and City already cooperate on using
recording fee revenues for homeless housing and affordable housing.
A Hearing Notice was published in The Leader on November 4 and November 11, 2019, and also
posted on the County's web page, inviting the public to review the proposed ordinance and to
submit written or oral testimony. The original ordinance that is the subject of this Hearing is
attached to this Agenda Request as Attachment 1.
Based in part on written public testimony received leading up to the December 16, 2019 Public
Hearing, staff is proposing clarifying amendments to the ordinance, to highlight in code and in
the ordinance's preamble, that the sales and use tax would not increase the cost to the consumer,
but would instead be credited to the County as a deduction from the state's share of the sales
and use tax. The edits mirror the structure of another local sales and use tax credited against the
state's portion, Chapter 3.28 JCC, and includes additional language from state statute. Staffs
recommended edited ordinance is attached to this Agenda Request showing tracked changes as
Attachment 2.
During the Public Hearing, individuals may testify on the original ordinance, the staff's
recommended edited ordinance, or both. After conducting the Public Hearing and deliberating
on the record, if the Commissioners adopt an ordinance, it would take effect immediately upon
adoption. Once approved, staff would send a copy to the State of Washington, and we would
also notify the City of Port Townsend, which is considering its own ordinance.
FISCAL IMPACT: Assuming the City of Port Townsend also levies the tax, and if the value of
sales and use in the future is the same as the most recent 12 -months of statistics (2nd Quarter
2018 through the end of 1St Quarter 2019) from the Washington Department of Revenue, the
sales tax would generate the following amounts for the County and City per year:
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:ounty Levy & Separate City Levy county % County $$ I city % I City $$ 1 Both $$
W/in City of Port Townsend 0.0073% $ 21,358 0.0073% $ 21,358
W/in Unincorporated County 0.0146% $ 40,066 o.o % $ -
Total $ 61,424 $ 21,358 $ 82,782
Retail Sales & Use: 2nd Qtr 2018- 1st Qtr 2019 County $274,424,133
City $292,573,455
TTL $ 566,997,588
Retail Data Source: Wa5hi ngton Department of Revenue Taxa ble Reta i I Sa! es
RECOMMENDATION: Conduct the Public Hearing, deliberate on the record, and adopt an
amended Ordinance as proposed by staff, with or without changes.
REVIEWED BY:
Philip Morley, C my Administrator
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Date
ATTACHMENT 1— ORIGINAL ORDINANCE
STATE OF WASHINGTON
County of Jefferson
AN ORDINANCE IMPOSING A SALES AND
USE TAX FOR AFFORDABLE AND
SUPPORTIVE HOUSING IN ACCORDANCE
WITH SUBSTITUTE HOUSE BILL 1406
(CHAPTER 338, LAWS OF 2019) TO BE
CREDITED AGAINST THE STATE SALES
AND USE TAX
ORDINANCE NO.
WHEREAS, in the 2019 Regular Session, the Washington State Legislature approved, and
the Governor signed, Substitute House Bill 1406 (Chapter 338, Laws of 2019), which was codified
as RCW 82.14.540; and
WHEREAS, RCW 82.14.540 authorizes the governing body of a city or county to impose
a local sales and use tax for the acquisition, construction or rehabilitation of affordable housing or
facilities providing supportive housing, and for the operations and maintenance costs of affordable
or supportive housing, or, for providing rental assistance to tenants; and
WHEREAS, the tax will be credited against state sales and use taxes collected within the
County and, therefore, will not result in higher sales and use taxes within the County and will
represent an additional source of funding to address housing needs in the County; and
WHEREAS, the tax must be used to assist persons whose income is at or below sixty
percent of the County median income; and
WHEREAS, on July 31, 2017, the Jefferson County Board of Commissioners adopted
Resolution No. 35-17, finding "that an emergency exists with respect to the availability of housing
that is affordable to low-income households and with respect to the availability of housing that is
affordable to very low-income households in Jefferson County," and has determined that imposing
the sales and use tax authorized by RCW 82.14.540 to help address this need will benefit its
citizens; and
WHEREAS, RCW 82.14.540 authorizes the County to enter into an interlocal agreement
with one or more counties, cities, or public housing authorities for purposes of pooling the tax
monies received, allocating the proceeds, or pledging these taxes to bonds issued by one or more
parties to the agreement, all in accordance with the interlocal agreement and RCW 82.14.540; and
WHEREAS, in order for a city or county to impose the tax, within six months of the
effective date of RCW 82.14.540, or January 28, 2020, the governing body must adopt a resolution
of intent to authorize the maximum capacity of the tax, and within twelve months of the effective
date of RCW 82.14.540, or July 28, 2020, must adopt legislation to authorize the maximum
capacity of the tax; and
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ATTACHMENT 1— ORIGINAL ORDINANCE
WHEREAS, the Jefferson County Board of Commissioners adopted Resolution No. 52-19
on October 14, 2019, declaring the County's intent to impose a local sales and use tax as authorized
by RCW 82.14.540; and
WHEREAS, the Port Townsend City Council adopted Resolution No. 19-087 on
November 12, 2019, declaring the City's intent to impose a local sales and use tax within the City
of Port Townsend as authorized by RCW 82.14.540; and
WHEREAS, Jefferson County may use these tax monies in collaboration with the City of
Port Townsend as a means to fully leverage the resources for affordable and supportive housing
or for providing rental assistance, as allowed by RCW 82.14.540;
NOW, THEREFORE, be it ordained by the Jefferson County Board of Commissioners
as follows:
Section 1. Tax Imposed
There is hereby imposed by this ordinance a sales and use tax at the maximum levy rate authorized
by RCW 82.14.540 for the County to levy in unincorporated Jefferson County, and a sales and use
tax at the maximum levy rate authorized by RCW 82.14.540 for the County to levy in the City of
Port Townsend.
Section 2. Applicability of Tax
The tax shall be imposed upon and collected from those persons from whom the state sales and
use tax is collected pursuant to Chapters 82.08 and 82.12 RCW. The rate of tax imposed by this
ordinance shall be applied to the selling price in the case of a sales tax or the value of the article
used in the case of a use tax.
Section 3. Administration and Collection
The tax imposed by this ordinance shall be administered and collected in accordance with Chapter
82.14.050RCW.
Section 4. Use of Funds.
Monies collected shall be used for allowable expenditures authorized by RCW 82.14.540.
Section 5. Administration of Fund.
The funds shall be collected in County Fund 148 Jefferson County Affordable Housing, and shall
be administered by the Board of County Commissioners.
Section 6. Expiration
The tax imposed under this Chapter expires 20 years after the date on which the tax is first imposed.
Section 7. Effective Date.
This ordinance is effective on the date of signing.
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ATTACHMENT 1— ORIGINAL ORDINANCE
Section 8. Severabili
If any provision of this ordinance or its application to any person or circumstance is held invalid,
the remainder of this ordinance or the application of the remaining provisions to a person or
circumstance shall not be affected.
Section 9. Code Reviser.
The Code Reviser shall codify this ordinance as a separate chapter in Title 3 Revenue And Finance
of the Jefferson County Code, possibly as Chapter 3.29.
ADOPTED this day of December 2019.
SEAL:
ATTEST:
Carolyn Gallaway,
Deputy Clerk of the Board
JEFFERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
Kate Dean, Chair
David Sullivan, Member
Greg Brotherton, Member
APPROVED AS TO FORM:
Philip C. Hunsucker, Date
Chief Civil Deputy Prosecuting Attorney
WON
ATTACHMENT 2 — STAFF'S RECOMMENDED EDITED ORDINANCE
STATE OF WASHINGTON
County of Jefferson
AN ORDINANCE IMPOSING A SALES AND
USE TAX FOR AFFORDABLE AND
SUPPORTIVE HOUSING IN ACCORDANCE
WITH SUBSTITUTE HOUSE BILL 1406
(CHAPTER 338, LAWS OF 2019) TO BE
CREDITED AGAINST THE STATE SALES
FAIN t1111AWO 1
ORDINANCE NO.
WHEREAS, in the 2019 Regular Session, the Washington State Legislature approved, and
the Governor signed, Substitute House Bill 1406 (Chapter 338, Laws of 2019), which was codified
as RCW 82.14.540; and
WHEREAS, RCW 82.14.540 authorizes the governing body of a city or county to impose
a local sales and use tax for the acquisition, construction or rehabilitation of affordable housing or
facilities providing supportive housing, and for the operations and maintenance costs of affordable
or supportive housing, or, for providing rental assistance to tenants; and
WHEREAS, the tax will not increase the total sales tax collected at time of sale, but will
be credited to the local government as a deduction against the state sales and use taxes otherwise
collected and retained by the statewithin r,,, my and, tl}ere€ re, will not festfit in highef Sales
and use taxes within the County-- and
WHEREAS, the tax credited to the local government will represent an additional source of
funding to address housing needs in the County; and
WHEREAS, the tax must be used to assist persons whose income is at or below sixty
percent of the County median income; and
WHEREAS, on July 31, 2017, the Jefferson County Board of Commissioners adopted
Resolution No. 35-17, finding "that an emergency exists with respect to the availability of housing
that is affordable to low-income households and with respect to the availability of housing that is
affordable to very low-income households in Jefferson County," and has determined that imposing
the sales and use tax authorized by RCW 82.14.540 to help address this need will benefit its
citizens; and
WHEREAS, RCW 82.14.540 authorizes the County to enter into an interlocal agreement
with one or more counties, cities, or public housing authorities for purposes of pooling the tax
monies received, allocating the proceeds, or pledging these taxes to bonds issued by one or more
parties to the agreement, all in accordance with the interlocal agreement and RCW 82.14.540; and
WHEREAS, in order for a city or county to impose the tax, within six months of the
effective date of RCW 82.14.540, or January 28, 2020, the governing body must adopt a resolution
of intent to authorize the maximum capacity of the tax, and within twelve months of the effective
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ATTACHMENT 2 — STAFF'S RECOMMENDED EDITED ORDINANCE
date of RCW 82.14.540, or July 28, 2020, must adopt legislation to authorize the maximum
capacity of the tax; and
WHEREAS, the Jefferson County Board of Commissioners adopted Resolution No. 52-19
on October 14, 2019, declaring the County's intent to impose a local sales and use tax as authorized
by RCW 82.14.540; and
WHEREAS, the Port Townsend City Council adopted Resolution No. 19-087 on
November 12, 2019, declaring the City's intent to impose a local sales and use tax within the City
of Port Townsend as authorized by RCW 82.14.540; and
WHEREAS, Jefferson County may use these tax monies in collaboration with the City of
Port Townsend as a means to fully leverage the resources for affordable and supportive housing
or for providing rental assistance, as allowed by RCW 82.14.540;
NOW, THEREFORE, be it ordained by the Jefferson County Board of Commissioners
as follows:
Section 1. Tax Imposed
LD_There is hereby imposed by this ordinance a sales and use tax at the maximum levy rate
authorized by RCW 82.14.540 for the County to levy in unincorporated Jefferson County, and a
sales and use tax at the maximum levy rate authorized by RCW 82.14.540 for the County to levy
in the City of Port Townsend.
Q_The tax shall be imposed upon and collected from those persons from whom the state sales
and use tax is collected pursuant to Chapters 82.08 and 82.12 RCW. The rate of tax imposed by
this ordinance shall be applied to the selling price in the case of a sales tax or the value of the
article used in the case of a use tax.
The tax imposed by this ordinance shall be administered and collected in accordance with
Ch RCW 82.14.050 and RCW 82.14.540(3), by which the tax imposed by this ordinance
shall be deducted from the amount of tax otherwise required to be collected or paid to the
Washington State Department of Revenue under chapter 82.08 and 82.12 RCW, and the
Washington State Department of Revenue will perform the collection of such taxes on behalf of
the county at no cost to the county.
Section 24. Use of Funds.
Monies collected shall be used for allowable expenditures authorized by RCW 82.14.540.
Section 35. Administration of Fund.
The funds shall be collected in County Fund 148 Jefferson County Affordable Housing, and shall
be administered by the Board of County Commissioners.
Section 46. Expiration
The tax imposed under this Chapter expires 20 years after the date on which the tax is first imposed.
ATTACHMENT 2 — STAFF'S RECOMMENDED EDITED ORDINANCE
Section 57. Effective Date.
This ordinance is effective on the date of signing.
Section 69. Severability.
If any provision of this ordinance or its application to any person or circumstance is held invalid,
the remainder of this ordinance or the application of the remaining provisions to a person or
circumstance shall not be affected.
Section 79. Code Reviser.
The Code Reviser shall codify this ordinance as a separate chapter in Title 3 Revenue And Finance
of the Jefferson County Code, possibly as Chapter 3.29.
ADOPTED this day of December 2019.
SEAL:
ATTEST:
Carolyn Gallaway,
Deputy Clerk of the Board
JEFFERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
Kate Dean, Chair
David Sullivan, Member
Greg Brotherton, Member
APPROVED AS TO FORM:
Philip C. Hunsucker, Date
Chief Civil Deputy Prosecuting Attorney