HomeMy WebLinkAboutOrdinances - 2020-05 - Authorizing of Substitute House Bill 1406, Affordable Housing Sales and Use Tax funds, adding Chapter 4.50 of the EWMC to authorize collection of the maximum capacity of the tax - 5/5/2020City of East Wenatchee Ordinance 2020-05 Page 1 of 5
City of East Wenatchee, Washington
Ordinance No. 2020-05
An Ordinance of the City of East Wenatchee relating to local sales and use taxes; authorizing the maximum capacity of the tax authorized under the provisions of Substitute House Bill 1406 for affordable and supportive housing and rental assistance by adding a new section 4.20.120 of the East Wenatchee Municipal Code to create an Affordable Housing Sales and Use Tax Fund and by adding a new chapter 4.50 of the East Wenatchee Municipal Code to authorize the collection of the maximum capacity of the tax.
Una ordenanza de la ciudad de East Wenatchee en relación con los impuestos locales sobre las ventas y el uso; autorizando la capacidad máxima del impuesto autorizado según las disposiciones del Proyecto de Ley 1406 de la Casa Sustituta para viviendas asequibles y de apoyo y asistencia para el alquiler mediante la adición de una nueva sección 4.20.120 del Código Municipal de East Wenatchee para crear un Fondo de Impuestos de Ventas y Uso de Viviendas Asequibles y por Agregar un nuevo capítulo 4.50 del Código Municipal de East Wenatchee para autorizar la recaudación de la capacidad máxima del impuesto.
1. Alternate format.
1.1. Para leer este documento en otro formato (español, Braille, leer en voz alta, etc.), póngase en contacto con el vendedor de la ciudad al alternatformat@east-wenatchee.com, al (509) 884-9515 o al 711 (TTY).
1.2. To read this document in an alternate format (Spanish, Braille, read aloud, etc.), please contact the City Clerk at alternateformat@east-wenatchee.com, at (509) 884-9515, or at 711 (TTY).
2. Recitals.
2.1. The City of East Wenatchee (“City”) is a non-charter code City duly incorporated and operating under the laws of the State of Washington; and
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2.2. The City Council of East Wenatchee (“City Council”) finds that it is in the best interests of the City and its citizens to establish this fund and accept the taxes.
2.3. In 2019, the Washington State Legislature enacted Substitute House Bill 1406 (chapter 338, Laws of 2019) (“SHB 1406”), a revenue sharing program with local governments for affordable housing which is intended to encourage investments in affordable and/or supportive housing.
2.4. SHB 1406 authorizes the governing body of cities and counties to collect 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, and if eligible, for providing rental assistance to tenants, with no increase in sales or use tax for the consumer.
2.5. The tax will be credited against sales and use taxes collected within the City by the State of Washington (the “State”) and, therefore, will not result in higher sales and use taxes within the City.
2.6. The credit against State retail sales or use taxes can be in place for a maximum of 20 years and will represent an additional source of funding to address housing needs in the City.
2.7. Revenues received from the sales and use tax must be used on projects that serve persons whose income is at or below 60% of the median household income within the Wenatchee standard metropolitan statistical area.
2.8. The revenues may be used to finance grants or loans to nonprofit organizations or public housing authorities to carry out these provisions, and the City may execute interlocal agreements with one or more cities, counties or public housing authorities in accordance with chapter 39.34 RCW.
2.9. On August 20, 2019, the City Council adopted Resolution No. 2019-18, declaring its intent to adopt an ordinance authorizing acceptance of the sales and use tax allowed by SHB 1406.
2.10. The sales and use tax collected under the provisions of SHB 1406 are considered to be restricted revenue subject to reporting requirements and audit review for compliance.
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2.11. SHB 1406 requires the City to adopt an ordinance authorizing the sales and use tax to be collected within 12 months of the effective date of SHB 1406, or by July 28, 2020.
3. Authority. RCW 35A.11.020 and RCW 35A.12.190 authorize the City Council to adopt ordinances of all kinds to regulate its municipal affairs and appropriate to the good government of the City.
THE CITY COUNCIL OF THE CITY OF EAST WENATCHEE DO ORDAIN AS FOLLOWS:
4. Purpose. The purpose of this ordinance is to authorize the collection of a portion of the state sales and use tax in accordance with the provisions of SHB 1406 to create an affordable housing fund as a source of revenue for local affordable housing projects and programs specifically addressed in the legislation.
5. Amendment 1. The City Council adds a new Section 4.20.120 Affordable Housing Sales Tax Fund to the East Wenatchee Municipal Code to read as follows:
4.20.120 Affordable Housing Sales and Use Tax Fund A. There is created a special revenue fund for the city of East Wenatchee, to be known as the “Affordable Housing Sales and Use Tax Fund,” into which shall be deposited all monies received from a portion of sales and use taxes otherwise required to be collected and paid to the department of revenue pursuant to legislation enacted by the 2019 Washington State Legislature and imposed under EWMC 4.50.010.
B. This fund has been created to receive that portion of sales and use tax credited back to the city for the purpose of acquiring, constructing or rehabilitating affordable housing or facilities providing supportive housing, paying for the operation and maintenance costs of new units of affordable or supportive housing, and providing rental assistance to tenants whose income is at or below 60% of the median household income within the Wenatchee standard metropolitan statistical area.
C. Any unexpended funds remaining in the Affordable Housing Sales and Use Tax Fund at the end of a budget period shall not be transferred to the general fund or otherwise lapse. The funds shall be carried forward from year to year until expended for a purpose set forth in EWMC 4.20.120(B).
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6. Amendment 2. The City Council adds a new chapter 4.50 Sales and Use Tax for Affordable Housing to the East Wenatchee Municipal Code to read as follows:
Chapter 4.50 Sales and Use Tax for Affordable Housing
Sections: 4.50.010 Credit against state’s share of tax sales or use tax for affordable housing - Imposition. 4.50.020 Rate. 4.50.030 Administration and collection. 4.50.040 Use of funds 4.50.050 Annual Reports. 4.50.060 Expiration.
4.50.010 Credit against state’s share of tax-sales or use tax for affordable housing - Imposition. There is a sales and use tax as authorized by Washington State Legislature Laws of 2019 ch. 338§1, which shall be codified in Chapter 82.14 RCW (RCW 82.14.540), upon every taxable event, as defined in Chapter 82.14 RCW, occurring within the city of East Wenatchee.This tax is separate and apart from the tax referred to in East Wenatchee Municipal Code Chapters 4.04 and 4.08. The tax shall be imposed upon and collected from those persons from whom the state sales tax or use tax is collected pursuant to RCW 82.08 and 82.12.
4.50.020 Rate. A. The rate of the tax imposed by EWMC 4.50.010 shall be .0073 percent of the selling price, in the case of a sales tax, or value of the article used, in the case of a use tax, as the case may be upon every taxable event that occurs within the city.
B. The tax imposed under this section shall be deducted from the amount of tax otherwise required to be collected or paid to the Department of Revenue under Chapter 82.08 or 82.12 RCW.
C. The Department of Revenue will calculate the maximum amount of tax distributions for the city of East Wenatchee based on the taxable retail sales in the city in state fiscal year 2019, and the tax imposed under this section will cease to be
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distributed to the city of East Wenatchee for the remainder of any state fiscal year in which the amount of tax exceeds the maximum amount of tax distributions for the city as properly calculated by the Department of Revenue. Distributions to the city of East Wenatchee that have ceased during a state fiscal year shall resume at the beginning of the next state fiscal year.
4.50.030 Administration and collection. A. The state department of revenue shall collect and administer the tax on behalf of city at no cost to the city. The administration and collection of the sales and use tax imposed by EWMC 4.50.010 shall be in accordance with the provisions of the Laws of 2019, ch 338 § 1 which will be codified in Chapter 82.14 RCW (RCW 82.14.540).
B. The mayor and city treasurer are authorized to enter into any agreements or contracts with the state department of revenue for the administration and collection of the tax imposed by this ordinance.
4.50.040 Use of funds A. The city may use the moneys collected by the tax imposed under EWMC 4.50.010 or bonds issued only for the following purposes:
1. Acquiring, rehabilitating, or constructing affordable housing, which may include new units of affordable housing within an existing structure or facilities providing supportive housing services under RCW 71.24.385; or
2. Providing the operations and maintenance costs of new units of affordable or supportive housing; or
3. Providing rental assistance to tenants.
B. The housing and services provided under this section may only be provided to persons whose income is at or below 60 percent of the median income of the Wenatchee standard metropolitan statistical area.
C. Any unexpected funds remaining in the affordable housing sales tax fund, established as EWMC 4.20.120, at the end of a budget period shall not be transferred to the general fund or otherwise lapse, but funds shall be carried forward from year to year until expended for a purpose set forth in subsection A of this section.
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4.50.050 Annual Reports. The City shall report annually to the state department of commerce on the collection and use of the revenue as prescribed in rules adopted by such department. If the amount of revenue from the sales or use tax imposed by section 4.50.010 exceeds the maximum amount allowed to the City under the Laws of 2019, ch 338 § 1, any excess shall be remitted to the State Treasurer in accordance with the Laws of 2019, ch 338 § 1.
4.50.060 Expiration The sales and use tax for affordable housing set forth in EWMC 4.50.010 shall expire 20 years after the date on which the tax is first imposed.
7. Severability. The provisions of this ordinance are declared separate and severable. If a court of competent jurisdiction declares any provision in this Ordinance to be contrary to law, such declaration shall not affect the validity of the other provisions of this Ordinance.
8. Publication. The City Council directs the City Clerk to publish a summary of this Ordinance. The summary shall consist of the title of this Ordinance. The City Council directs the City Clerk to publish a copy of this Ordinance on the City’s website.
9. Notice to Department of Revenue. The City Clerk is directed to send a certified copy of this ordinance to the State of Washington Department of Revenue and other public officers or agencies required by law.
10. Effective Date. This Ordinance becomes effective five days after the date its summary is published.