Bill Summary – FastDemocracy

S-0163.2
                                 SENATE BILL 5027
     State of Washington         68th Legislature         2023 Regular Session
     By Senators Fortunato,     Padden,   Holy,   J.   Wilson,   Braun,   Short,
     Warnick, and Gildon
     Prefiled 12/06/22.    Read first time 01/09/23.    Referred to Committee
     on Housing.
     AN   ACT   Relating   to  promoting   housing   affordability by
 incentivizing the construction of American dream homes; adding a new
 section to chapter 36.70A RCW; adding a new section to chapter 82.08
 RCW; adding a new section to chapter 82.12 RCW; adding a new section
 to chapter 82.04 RCW; creating new sections; providing an effective
 date; providing expiration dates; and declaring an emergency.
 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
     NEW SECTION. Sec. 1. A new section is added to chapter 36.70A
 RCW to read as follows:
     (1) Until December 31, 2033, a person may request a permit for an
 American dream home in order to encourage the development of
 residential housing for low-income households.
     (2) A permit for a new American dream home must be approved in a
 city or county if the following criteria are met:
     (a) Each American dream home is exempt from impact fees under RCW
 82.02.050;
     (b) The city or county does not charge cumulative permitting fees
 for each American dream home that equal more than $1,250;
     (c) Provisions, such as covenants or other restrictions, are
 included to ensure that each American dream home remains reserved for
 low-income households. The covenant or restriction must provide that
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 the American dream home is occupied by the owner that is qualified
 under this section. If an American dream home is resold any time
 before December 31, 2033, the price must be affordable for low-income
 households;
     (d) An American dream home must conform to the residential
 building code in effect in the jurisdiction where the home is built.
     (3)(a) This chapter does not prohibit a county planning under RCW
 36.70A.040 from authorizing the extension of public facilities and
 utilities to serve residential building sites for an American dream
 home.
     (b) A city or county may authorize the siting of an American
 dream home outside of the urban growth area, even where otherwise
 prohibited by a multicounty planning policy.
     (4) For the purposes of this section:
     (a) "Affordable" means residential housing which, as long as the
 same is occupied by low-income households, requires payment of
 monthly housing costs, including utilities other than telephone, of
 no more than 30 percent of the family's income, for a family earning
 80 percent of the area median income.
     (b) "American dream home" means an owner-occupied single-family
 residential detached dwelling of 1,700 square feet or less serving
 low-income households.
     (c) "Low-income household" means a single person, family, or
 unrelated persons living together whose adjusted income is less than
 80 percent of the median family income adjusted for household size,
 for the city or county where the project is located.
     (5) A city or county must report to the department by March 1,
 2033, regarding the number of American dream home permits issued in
 its jurisdiction. The department must compile the data and report to
 the   appropriate  committees   of  the   legislature regarding  the
 participation by jurisdiction of the program.
     NEW SECTION.   Sec. 2.   A new section is added to chapter 82.08
 RCW to read as follows:
     (1) A city or county may receive a distribution equal to the
 state portion of the tax levied by RCW 82.08.020 in respect to:
     (a) Charges for labor and services rendered in respect to the
 constructing of dwellings designated American dream homes, as
 provided in section 1 of this act;
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     (b) Sales of tangible personal property that will be incorporated
 as an ingredient or component of such dwellings during the course of
 the constructing; or
     (c) Charges made for labor and services rendered in respect to
 installing, during the course of constructing such dwellings,
 fixtures not otherwise eligible for the exemption under RCW
 82.08.02565.
     (2) The exemption under this section applies only to American
 dream homes meeting the requirements and conditions described in
 section 1 of this act.
     (3)(a) The department must at least once annually remit to the
 city or county an estimated amount, as determined by the department,
 of state taxes collected during the prior calendar year with respect
 to section 1 of this act.
     (b) The department must determine eligibility under this section
 based on information provided by the city or county and through audit
 and other administrative records.
     (c) The city or county must, on an annual basis, submit an
 application, in a form and manner as required by the department by
 rule, containing any information the department deems necessary in
 determining remittance amounts under this section.
     (4) This section expires July 1, 2034.
     NEW SECTION.   Sec. 3.   A new section is added to chapter 82.12
 RCW to read as follows:
     (1) The provisions of this chapter do not apply with respect to
 the use of:
     (a) Tangible personal property that will be incorporated as an
 ingredient or component in constructing of dwellings designated as
 American dream homes, as provided in section 1 of this act; or
     (b) Labor and services rendered in respect to installing, during
 the course of constructing such dwellings, fixtures not otherwise
 eligible for the exemption under RCW 82.08.02565.
     (2) The eligibility requirements and conditions in section 2 of
 this act apply to this section.
     (3) This section expires July 1, 2034.
     NEW SECTION.   Sec. 4.   A new section is added to chapter 82.04
 RCW to read as follows:
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     (1)(a) The builder of an American dream home is allowed an annual
 credit against the tax due under this chapter as provided in this
 section. The credit equals four percent of the gross selling price of
 the American dream home.
     (b) Credits under this section may only be earned on the sale of
 American dream homes meeting the requirements and conditions
 described in section 1 of this act.
     (2) The credit may be used against any tax due under this
 chapter, and may be carried over until used, except as provided in
 subsection (4) of this section. No refund may be granted for credits
 under this section.
     (3) Credits earned under this section may be claimed only on
 returns   filed  electronically   with  the   department  using   the
 department's online tax filing service or other method of electronic
 reporting as the department may authorize. The taxpayer must keep
 records necessary for the department to determine eligibility under
 this section including records establishing the sale of an American
 dream home.
     (4) Credits allowed under this section can be earned for tax
 reporting periods through June 30, 2033. No credits can be claimed
 after June 30, 2034.
     (5) For the purposes of this section, "American dream home" has
 the same meaning as in section 1 of this act.
     (6) This section expires July 1, 2034.
     NEW SECTION. Sec. 5. (1)(a) The value of an American dream home
 is exempt from property taxation for a period of 12 years beginning
 January 1st of the year immediately following the calendar year in
 which construction of the American dream home is completed.
     (b) The exemption under this section applies only to American
 dream homes meeting the requirements and conditions described in
 section 1 of this act.
     (c) An American dream home receiving an exemption under this
 section is immediately subject to property taxation if at any point
 during the exemption period the home no longer meets the requirements
 and conditions in section 1 of this act.
     (2) Claims for an exemption under this section must be filed with
 the county assessor on forms provided by the department and furnished
 by the county assessor.
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     (3) The department may promulgate such rules, pursuant to chapter
 34.05 RCW, as necessary to properly administer this section.
     (4) The exemption under this section applies to both the value of
 new construction and the underlying land.
     (5) At the conclusion of the exemption period, the value of the
 new housing must be considered as new construction for the purposes
 of chapters 84.55 and 36.21 RCW as though the property was not exempt
 under this section.
     (6) For the purposes of this section, "American dream home" has
 the same meaning as in section 1 of this act.
     NEW SECTION.    Sec. 6.    The provisions   of   RCW   82.32.805   and
 82.32.808 do not apply to this act.
     NEW SECTION.   Sec. 7.    This act applies for taxes levied for
 collection in 2024 and thereafter.
     NEW SECTION.   Sec. 8.  This act is necessary for the immediate
 preservation of the public peace, health, or safety, or support of
 the state government and its existing public institutions, and takes
 effect July 1, 2023.
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