San Juan County, WA Real Estate Excise Tax for Affordable Housing

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San Juan County, WA, US

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Type: Ordinance

Status: Disposition unclear

Source File: http://www.sanjuanco.com/council/docs/Ordinances/AffHousingREET(2-06).pdf

Text:

ORDINANCE 2-2006
AN ORDINANCE ADDING A NEW CHAPTER TO TITLE 3 OF THE COUNTY CODE ESTABLISHING THE COLLECTION AND DISBURSEMENT OF ONE-HALF OF ONE PERCENT REAL ESTATE EXCISE TAX FOR THE DEVELOPMENT OF AFFORDABLE HOUSING

WHEREAS, citizens in San Juan County are experiencing a severe problem of affordable housing; and

WHEREAS, the lack of affordable housing makes it difficult to diversify the County’s economic base and encourage a more balanced, year-round economy; and

WHEREAS, the lack of affordable housing makes it difficult for private entities, the County and other public agencies to provide services in education, public safety, public works and administration; and

WHEREAS, the lack of affordable housing makes it difficult for young people in the County to establish themselves and start families here; and

WHEREAS, in the County there exists a number of not-for-profit organizations dedicated to the provision of affordable housing. These organizations have a history of delivery of affordable housing units of outstanding quality which are well suited to the conditions and needs of San Juan County; and

WHEREAS, the not-for-profit organizations are not able to provide a sufficient supply of affordable housing units to meet the needs of very low, low and moderate income workers; and

WHEREAS, San Juan County established an Affordable Housing Fund and Commission through Ordinance 20-2002; and

WHEREAS, the legislature through the enactment of RCW 82.46.075 provided a mechanism whereby the legislative authority of San Juan County may impose an additional excise tax on the purchase and sale of real property in the County for the purpose of developing affordable housing for very low, low and moderate-income persons and those with special needs; and

WHEREAS, no tax may be imposed under this legislation unless the County has previously imposed a tax under RCW 82.46.070 and such tax was imposed by January 1, 2003; and

WHEREAS, the County imposed a tax under RCW 82.46.070 prior to January 1, 2003; and

WHEREAS, the imposition of a real estate excise tax pursuant to RCW 82.46.075 must be approved by a vote of the people at a general election after the filing of a petition proposing the action with the County auditor or by resolution of the County Council; and

WHEREAS, the former Board of County Commissioners adopted Resolution 111-2005 to submit the additional one-half of one percent excise tax to the voters of San Juan County for approval at a special election; and

WHEREAS, RCW 82.46.075(6) requires the current County Council to adopt a plan for the expenditure of the proceeds of the tax at least sixty days before the election is held and to consult with the Town of Friday Harbor and hold at least one public hearing before the adoption of an expenditure plan; and

WHEREAS, the County has consulted with the Mayor and Town Council of the Town of Friday Harbor as required by the state statute; and

WHEREAS, this ordinance includes a plan for expenditure of the real estate excise tax funds in accordance with state and federal law; and

WHEREAS, the County Council held a public hearing on February 14, 2006 to consider the adoption of this ordinance for the expenditure of the tax proceeds; and

WHEREAS, all tax funds raised pursuant to RCW 82.46.075 shall be spent in accordance with this ordinance and state and federal law.

NOW, THEREFORE, BE IT ORDAINED, as a new chapter in Title 3 of the San Juan County Code, the following:

NEW SECTION. Sec. 1. Purpose.
The purpose of the additional one-half of one percent real estate excise tax on the sale of real property, imposed pursuant to RCW 82.46.075, is to aide in the development of affordable housing in San Juan County. Development of affordable housing shall include acquisition, building, rehabilitation, and maintenance and operation of housing for very low, low and moderate income persons and those with special needs.

NEW SECTION. Sec. 2. Definitions.
These words when used in this chapter have the following definitions:

“Affordable housing” means that occupants are spending no more than 30% of their gross household income on housing costs. Housing costs for renters are considered to include rent and utilities, or, for owners, to include the principal and interest on the mortgage plus property taxes and insurance (PITA). Utility costs include water, sewage disposal, electricity and/or gas for lighting, heating and cooking.

“Affordable housing excise tax” means the tax that is authorized by the voters of San Juan County pursuant to the requirements of RCW 82.46, as now enacted, or subsequently amended, and which is:

A. Levied on each sale of real property in the County beginning 30 days after approval of the tax by the voters.
B. At a rate of one-half percent of one percent of the selling price to be paid ninety-nine percent by the buyer and one percent by the seller.
C. For a period of 10 years after the initiation of the tax as set out in this definition and expiring with transactions that occur after the expiration of the 10-year period.

NEW SECTION. Sec. 3. Imposition and Rate.

A. Thirty days after the approval by a majority of the voters of San Juan County of the affordable housing excise tax, there shall be levied and collected by the treasurer an excise tax on each sale of real property in San Juan County at the rate of one-half of one percent of the selling price. Taxes imposed under this chapter shall be imposed in the same manner and on the same occurrences and are subject to the same conditions, as the taxes imposed under RCW 82.45.

B. Taxes imposed under this chapter shall be paid ninety-nine percent by the buyer and one-percent by the seller of the property.

NEW SECTION. Sec. 4. Use of Proceeds.

A. The County treasurer shall place the proceeds of the affordable housing excise tax in the affordable housing trust fund. All tax revenues shall be administered by the County as part of the affordable housing trust fund and spent in accordance with RCW 82.46.075 and this ordinance.

B. Disbursements of the RCW 82.46.075 tax funds in the affordable housing fund shall be made following a competitive grant and loan process. The County Council shall determine by resolution a mechanism for receiving grant and loan applications, and the criteria by which the applications shall be approved and funded.

C. Eligible recipients shall be:

1. Private nonprofit affordable housing providers;
2. Housing authorities established under state law;
3. Other housing programs conducted or funded by a public agency or a public agency in partnership with a private nonprofit entity.

NEW SECTION. Sec. 5. Liens.
Any tax imposed under this chapter and any interest and penalties thereon is a specific lien upon each piece of real property sold from the time of the sale until the tax is paid, which lien may be enforced in the manner prescribed for the foreclosure of mortgages.

NEW SECTION. Sec. 6. Taxpayer’s Obligations.
The taxes levied in this chapter are an obligation on the buyer (ninety-nine percent) and the seller (one-percent). The tax obligations of the seller and buyer may be enforced through an action of debt against the seller or in the manner prescribed for the foreclosure of mortgages. Resort to one course of enforcement is not an election not to pursue the other.

NEW SECTION. Sec. 7. Expenditure Plan.
Grants and loans pursuant to RCW.82.46.075 shall comply with the following expenditure plan:

A. Competitive grants and loans disbursed from the proceeds of the affordable housing excise tax shall go only to eligible recipients as defined in RCW 82.46.075. All grants and loans funded from the affordable housing excise tax shall used to support the development of affordable housing for individuals with very low, low, and moderate income and those with special needs; provided that all funds shall be distributed in a manner that is consistent with state and federal law. Very low, low and moderate incomes shall be determined based on definitions established by the United States Department of Housing and Urban Development.
B. Eligible projects shall include both home ownership creation and rental property development with priority for projects that will provide perpetually affordable housing.
C. Funding shall be disbursed among the various islands in proportion to the need for affordable housing on that island.
D. Initial priority for funding shall be for acquisition by eligible recipients of real property suitable for affordable housing development, building of affordable housing, and rehabilitation of affordable housing.
E. All proposed projects shall be evaluated as to their overall cost-effectiveness and their focus on affordable housing that is durable, modest, and financially realistic for all participants.
F. In order to leverage the limited funding available from the REET to achieve the greatest possible overall impact in meeting the County’s affordable housing needs, funds awarded for any project shall generally constitute a minority share of proposed total project costs.
G. The Affordable Housing Bank Commission will prepare and regularly update an analysis of affordable housing needs, develop criteria for evaluating proposals to meet those needs, and solicit proposals from eligible organizations on meeting those needs.
H. The Affordable Housing Bank Commission will provide periodic opportunities for all interested parties to inform the commission, and share among all providers knowledge, of changing needs, opportunities, and relevant technology trends affecting affordable housing in the County.
I. The Affordable Housing Bank Commission shall put into place appropriate management and financial controls to assure that statutory limitation are met and that all supported projects reflect sound financial management.
J. The solicitation, management and disbursement shall be the responsibility of the San Juan County Affordable Housing Bank Commission. Final approval of the grants and loans shall be made by the County Council.
K. Not more than 10% of the funds available from the REET shall be used for administrative staff and expenses.

NEW SECTION. Sec. 8. Effective Date.
This ordinance shall not become effective until certification by the County Auditor that a majority of voters in San Juan County have voted in a special election to be held on May 16, 2006 to approve the imposition of the excise tax authorized in RCW 82.46.075 and in this ordinance.

NEW SECTION. Sec. 9. Severability
If any provision of this ordinance or application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions of application of the ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are declared to be severable.

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