HomeMy WebLinkAbout081020_cabs02 JEFFERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
AGENDA REQUEST
TO: Board of County Commissioners
FROM: Philip Morley,Jefferson County Administrato 410
DATE: August 10, 2020
RE: Briefing on House Bill 1590—Local Sales and Use Tax for Affordable
Housing
STATEMENT OF ISSUE: Staff will brief the Board of County Commissioners on House Bill
1590, an act amending RCW 82.14.530 creating councilmanic authority for a 1/10th of 1 percent
local sales and use tax to construct, operate and maintain affordable housing for people at or
below sixty percent of the area median income and who fall into seven specific demographic
categories. Funding may also be used to construct mental and behavioral health-related
facilities. This is an informational briefing only. No action is anticipated.
ANALYSIS: In the 2020 Legislative Session, the House and Senate passed, and the Governor
signed into law House Bill 1590. HB 1590 amends existing RCW 82.14.530 to create
councilmanic authority for. The councilmanic authority is an alternative to placing a proposition
on a special or general election ballot for authorization by the voters, which is also authorized by
the statute.
EXPLANATION OF HB 1590: If a 1/10th of 1 percent local sales and use tax were authorized
countywide, it would raise approximately $600,000 per year.
Under HB 1590, at least 60% of the funds must be used for any of a number of purposes:
• To construct, operate and maintain affordable housing for people at or below sixty percent of
the area median income and who fall into seven specific demographic categories. The
affordable housing would available to most persons who meet the income test, but not all.
Rather, the housing funded with this sales tax may only serve:
1. Persons with behavioral health disabilities;
2. Veterans;
3. Senior citizens;
4. Families with children who are homeless, or at-risk of being homeless;
5. Unaccompanied homeless youth or young adults;
6. Persons with disabilities; or
7. Domestic violence survivors.
The funding may also be used to construct mental and behavioral health-related facilities
and/or to operate and maintain newly constructed evaluation and treatment centers.
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• Any remainder of the moneys collected (i.e. up to 40%) must be used for the operation,
delivery, or evaluation of mental and behavioral health treatment programs and services, or
housing-related services.
After September 30, 2020, if the County has not already adopted the sales and use tax county-
wide, a City legislative authority may either submit a voter proposition or councilmanically
adopt the sales and use tax within the city limits. If the County adopts the sales and use tax after
the City, it must provide a credit against its tax for the tax imposed by the City.
Up to 50% of the sales and use tax revenue may be used to issue general obligation or revenue
bonds for the construction of affordable housing, facilities where housing-related programs are
provided, or evaluation and treatment centers as described above.
STAFF THOUGHTS ON POSSIBLE NEXT STEPS: Discussion of HB 1590 comes during a
global pandemic that has created significant temporary economic disruption for people, including
unemployment, income reductions and disrupted business revenues in Jefferson County. While
the goal of affordable housing remains a top priority for our County, service providers,
developers and local government have not yet engaged in planning for how to effectively use
approximately the $600,000 per year the sales and use tax authorized by HB 1590 would
generate, to make a lasting and meaningful difference in addressing Jefferson County's
affordable housing crisis, or how to best leverage the behavioral health supports authorized by
the law to help break the cycle of poverty and homelessness. Without any plan to effectively use
the tax revenue, imposing a regressive sales tax that will hit the very people we are trying to
help, is problematic to say the least.
The County may wish to reach out to the City of Port Townsend and jointly engage local
affordable housing providers to develop a plan over the next 12 months. The plan would
prioritize what population(s) we most need to serve, and how best to serve them consistent with
RCW 82.14.530.
Once the providers develop a draft plan, they could present it to the Housing Task Force and
Joint Oversight Board for those bodies' input and possible improvements.
A year from now, we would hope that our local economy will be beginning to recover from the
impacts of the pandemic, and with a solid affordable housing plan for using the $600,000 per
year that demonstrates meaningful benefit, the County Commissioners and/or the City Council
can then consider whether it would be appropriate to adopt the 1/10th of 1% sales and use tax for
affordable housing at that time.
FISCAL IMPACT: None from this briefing. Were a sales and use tax authorized under HB
1590 to be adopted county-wide, and based on recent retail volumes, it would raise
approximately $600,000 per year for the affordable housing purposes enumerated in the statute.
Reductions in retail activity would reduce revenue.
RECOMMENDATION: Staff recommends the Board of Commissioners listen to the briefing,
ask questions and offer suggestions.
10 1,,f BY• /
--Philip I— ey, ounty Administrator Date
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CERTIFICATION OF ENROLLMENT
HOUSE BILL 1590
Chapter 222, Laws of 2020
66th Legislature
2020 Regular Session
AFFORDABLE HOUSING SALES AND USE TAX--COUNCILMANIC AUTHORITY
EFFECTIVE DATE: June 11, 2020
Passed by the House March 9, 2020 CERTIFICATE
Yeas 52 Nays 44
I, Bernard Dean, Chief Clerk of the
House of Representatives of the
LAURIE JINKINS State of Washington, do hereby
Speaker of the House of certify that the attached is HOUSE
Representatives BILL 1590 as passed by the House of
Representatives and the Senate on
the dates hereon set forth.
Passed by the Senate March 6, 2020
Yeas 27 Nays 21 BERNARD DEAN
Chief Clerk
CYRUS HABIB
President of the Senate
Approved March 31, 2020 10:44 AM FILED
March 31, 2020
Secretary of State
JAY INSLEE State of Washington
Governor of the State of Washington
HOUSE BILL 1590
AS AMENDED BY THE SENATE
Passed Legislature - 2020 Regular Session
State of Washington 66th Legislature 2019 Regular Session
By Representatives Doglio, Dolan, Macri, Cody, Gregerson, Wylie,
Appleton, Robinson, Ormsby, Frame, and Davis
Read first time 01/24/19. Referred to Committee on Housing,
Community Development & Veterans .
1 AN ACT Relating to allowing the local sales and use tax for
2 affordable housing to be imposed by a councilmanic authority; and
3 amending RCW 82 . 14 . 530 .
4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
5 Sec. 1 . RCW 82 . 14 . 530 and 2015 3rd sp. s . c 24 s 701 are each
6 amended to read as follows :
7 (1) (a) (i) A county legislative authority may submit an
8 authorizing proposition to the county voters at a special or general
9 election and, if the proposition is approved by a majority of persons
10 voting, impose a sales and use tax in accordance with the terms of
11 this chapter. The title of each ballot measure must clearly state the
12 purposes for which the proposed sales and use tax will be used. The
13 rate of tax under this section may not exceed one-tenth of one
14 percent of the selling price in the case of a sales tax, or value of
15 the article used, in the case of a use tax.
16 (ii) As an alternative to the authority provided in (a) (i) of
17 this subsection, a county legislative authority may impose, without a
18 proposition approved by a majority of persons voting, a sales and use
19 tax in accordance with the terms of this chapter. The rate of tax
20 under this section may not exceed one-tenth of one percent of the
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•
1 selling price in the case of a sales tax, or value of the article
2 used, in the case of a use tax.
3 (b) (i) If a county ( (with a population of one million five
4 hundred thousand or less has not imposed) ) does not impose the full
5 tax rate authorized under (a) of this subsection ( (within two years
6 of October 9, 2015) ) by September 30, 2020, any city legislative
7 authority located in that county may ( (submit) )_
8 (A) Submit an , authorizing proposition to the city voters at a
9 special or general election and, if the proposition is approved by a
10 majority of persons voting, impose the whole or remainder of the
11 sales and use tax rate in accordance with the terms of this chapter.
12 The title of each ballot measure must clearly state the purposes for
13 which the proposed sales and use tax will be usedL
14 (B) Impose, without a proposition approved by a majority of
15 persons voting, the whole or remainder of the sales and use tax rate
16 in accordance with the terms of this chapter.
17 (ii) The rate of tax under this section may not exceed one-tenth
18 of one percent of the selling price in the case of a sales tax, or
19 value of the article used, in the case of a use tax.
20 ( ( (ii) If a) ) (iii) A county with a population of greater than
21 one million five hundred thousand ( (has not imposed the full) ) may
22 impose the tax authorized under (a) (ii) of this subsection ( (within
23 three years of October 9, 2015, any city legislative authority) ) only
24 if the county plans to spend at least thirty percent of the moneys
25 collected under this section that are attributable to taxable
26 activities or events within any city with a population greater than
27 sixty thousand located in that county ( (may submit an authorizing
28 proposition to the city voters at a special or general election and,
29 if the proposition is approved by a majority of persons voting,
30 impose the whole or remainder of the sales and use tax rate in
31 accordance with the terms of this chapter. The title of each ballot
32 measure must cl arly state the purposes for which the proposed sales
33 and use tax will be used. The rate of tax under this section may not
34 exceed one tenth of one percent of the selling price in the case of a
35 sales tax, or value of the article used, in the case of a use tax) )
36 within that city' s boundaries .
37 (c) If a county imposes a tax authorized under (a) of this
38 subsection after a city located in that county has imposed the tax
39 authorized under (b) of this subsection, the county must provide a
40 credit against its tax for the full amount of tax imposed by a city.
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1 (d) The taxes authorized in this subsection are in addition to
2 any other taxes authorized by law and must be collected from persons
3 who are taxable by the state under chapters 82 . 08 and 82 . 12 RCW upon
4 the occurrence of any taxable event within the county for a county' s
5 tax and within a city for a city' s tax.
6 (2) (a) Notwithstanding subsection (4) of this section, a minimum
7 of sixty percent of the moneys collected under this section must be
8 used for the following purposes :
9 (i) Constructing affordable housing, which may include new units
10 of affordable housing within an existing structure, and facilities
11 providing housing-related services; or
12 (ii) Constructing mental and behavioral health-related
13 facilities; or
14 (iii) Funding the operations and maintenance costs of new units
15 of affordable housing and facilities where housing-related programs
16 are provided, or newly constructed evaluation and treatment centers .
17 (b) The affordable housing and facilities providing housing-
18 related programs in (a) (i) of this subsection may only be provided to
19 persons within any of the following population groups whose income is
20 at or below sixty percent of the median income of the county imposing
21 the tax:
22 (i) Persons with ( (mental illnccc) ) behavioral health
23 disabilities;
24 (ii) Veterans;
25 (iii) Senior citizens;
26 (iv) Homeless, or at-risk of being homeless, families with
27 children;
28 (v) Unaccompanied homeless youth or young adults;
29 (vi) Persons with disabilities; or
30 (vii) Domestic violence survivors .
31 (c) The remainder of the moneys collected under this section must
32 be used for the operation, delivery, or evaluation of mental and
33 behavioral health treatment programs and services or housing-related
34 services .
35 (3) A county that imposes the tax under this section must consult
36 with a city before the county may construct any of the facilities
37 authorized under subsection (2) (a) of this section within the city
38 limits .
39 (4) A county that has not imposed the tax authorized under RCW
40 82 . 14 . 460 prior to October 9, 2015, but imposes the tax authorized
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1 under this section after a city in that county has imposed the tax
2 authorized under RCW 82 . 14 . 460 prior to October 9, 2015, must enter
3 into an interlocal agreement with that city to determine how the
4 services and provisions described in subsection (2) of this section
5 will be allocated and funded in the city.
6 (5) To carry out the purposes of subsection (2) (a) and (b) of
7 this section, the legislative authority of the county or city
8 imposing the tax has the authority to issue general obligation or
9 revenue bonds within the limitations now or hereafter prescribed by
10 the laws of this state, and may use, and is authorized to pledge, up
11 to fifty percent of the moneys collected under this section for
12 repayment of such bonds, in order to finance the provision or
13 construction of affordable housing, facilities where housing-related
14 programs are provided, or evaluation and treatment centers described
15 in subsection (2) (a) (iii) of this section.
16 (6) (a) Moneys collected under this section may be used to offset
17 reductions in state or federal funds for the purposes described in
18 subsection (2) of this section.
19 (b) No more than ten percent of the moneys collected under this
20 section may be used to supplant existing local funds .
Passed by the House March 9, 2020 .
Passed by the Senate March 6, 2020 .
Approved by the Governor March 31, 2020 .
Filed in Office of Secretary of State March 31, 2020 .
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