HB 2448 — Increasing the availability of housing for developmentally disabled persons.

H-4063.1SUBSTITUTEH-3378.6HOUSE HOUSE BILL 2448State of Washington65th Legislature2018 Regular SessionBy House Finance (originally sponsored by Representatives Senn, Tharinger, Chapman, Kilduff, Macri, Robinson, Appleton, Kloba, Pollet, Santos, and Tarleton)READTarletonRead FIRSTfirst TIMEtime 01/24/18.AN01/09/18. ACT Relating to increasing the availability of housing for developmentally disabled persons;

Referred to Committee on Finance.AN ACT Relating to increasing the availability of housing for developmentally disabled persons;

and creating a new sections.BEsection.BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:NEW SECTION.  Sec. 1.  TheSECTION.  Sec. 1.  (1) legislatureThis findssection that there is needthe totax expandpreference housingperformance opportunitiesstatement for personsthe withtax developmentalpreference disabilities.contained in section 2, chapter .

The., legislatureLaws findsof it2018 is(section often2 preferableof forthis personsact). with developmental disabilities to remain residing in their home, when it is safe and appropriate, to foster ongoing stability.

The legislature recognizes that securing a child's future housing and services provides the parents of persons with developmental disabilities peace of mind.

The legislature further finds that providing a new mechanism for the transfer of residential property into housing for persons with developmental disabilities expands the state's housing capacity and helps meet demand.

The legislature further finds that utilizing existing residential property will reduce the demands on the housing trust fund.

The legislature finds that there is an opportunity and need, for advocates and the supporters of the developmental disabilities community to work together, to develop model transfer agreements that will provide peace of mind and assist parents of children with developmental disabilities more readily access this program.NEW SECTION.  Sec. 2.  (1) This section is the tax preference performance statement for the tax preference contained in section 3, chapter .

., Laws of 2018 (section 3 of this act).

It is not intended to create a private right of action by any party or to be used to determine eligibility for preferential tax treatment.(2) The legislature categorizes this tax preference as one intended to induce certain designated behavior by taxpayers, as indicated in RCW 82.32.808(2)(a).(3) It is the legislature's specific public policy objective to reduce the tax burden on individuals and businesses imposed by the existing real estate excise tax rates.(4) If a review finds that there is an increase of residential property transfers by parents of a person with developmental disabilities to a qualifiednonprofit entityor foundation that provides supported living to persons with developmental disabilities as a result of the relief from this tax preference, then the legislature intends to extend the expiration date of this tax preference.(5) In order to obtain the data necessary to perform the review in subsection (4) of this section, the joint legislative audit and review committee may refer to any data collected by the state.Sec. 3.  RCWstate.Sec. 2.  RCW 82.45.010 and 2014 c 58 s 24 are each amended to read as follows:(1) As used in this chapter, the term "sale" has its ordinary meaning and includes any conveyance, grant, assignment, quitclaim, or transfer of the ownership of or title to real property, including standing timber, or any estate or interest therein for a valuable consideration, and any contract for such conveyance, grant, assignment, quitclaim, or transfer, and any lease with an option to purchase real property, including standing timber, or any estate or interest therein or other contract under which possession of the property is given to the purchaser, or any other person at the purchaser's direction, and title to the property is retained by the vendor as security for the payment of the purchase price.

The real estate excise tax under this subsection (3)(q)(ii) is imposed upon the person or persons who previously held a controlling interest in the entity.(r) A qualified sale of a manufactured/mobile home community, as defined in RCW 59.20.030, that takes place on or after June 12, 2008, but before December 31, 2018.(s)(i) A qualified transfer of residential property by a legal representative of a person with developmental disabilities to a qualifiednonprofit entityorganization subjectunder toTitle the26 followingU.S.C. conditions:(A) The adult child with developmental disabilities of the transferor of the residential property retains a life estate in the property and must be allowed to reside in the residence or successor property so long as the placement is safe and appropriate as determined by the department of social and health services;(B) The title to the residential property is conveyed without the receipt of consideration by the legal representative of a person with developmental disabilities to a qualified entity;(C) The residential property must have no more than four living units located on it;

and(D) The residential property transferred must remain in continued use for fifty years by the qualified entity as supported living for persons with developmental disabilities by the qualified entity or successor entity.

If the qualified entity sells or otherwise conveys ownership of the residential property the proceeds of the sale or conveyance must be used to acquire similar residential property and such similar residential property must be considered the successor for continued use.

The property will not be considered in continued use if the department of social and health services finds that the property has failed, after a reasonable time to remedy, to meet any health and safety statutory or regulatory requirements.

If the department of social and health services determines that the property fails to meet the requirements for continued use, the department of social and health services must notify the department and the real estate excise tax based on the value of the property at the time of the transfer into use as residential property for persons with developmental disabilities becomes immediately due and payable by the qualified entity.

The tax due is not subject to penalties, fees, or interest under this title.(ii) For the purposes of this subsection (3)(s) the definitions in RCW 71A.10.020 apply.(iii) A "qualified entity" is:(A) A nonprofit organization under Title 26 U.S.C.

501(c)(3) of the federal internal revenue code of 1986, as amended, as of the effective date of this section, that provides residential supported living for persons with developmental disabilities subject to the following conditions:(A) The adult child with developmental disabilities of the transferor of the residential property retains a life estate in the property and must be allowed to reside in the residence or successor property so long as the placement is safe and appropriate as determined by the department of social and health services;(B) The title to the residential property is conveyed without the receipt of consideration by the legal guardian of a subsidiaryperson with developmental disabilities to a nonprofit organization under theinternal samerevenue taxpayercode identificationsection number501(c)(3) thatwith providesthe purpose of providing residential supported living forservices to persons with developmental disabilities;disabilities;(C) The residential property must have no more than four living units located on it;

or(B)and(D) AThe nonprofitresidential adultproperty familytransferred home,must asremain defined in RCWcontinued 70.128.010,use thatfor exclusivelyfifty servesyears persons with developmental disabilities.(iv) In order to receive an exemption under this subsection (3)(s) an affidavit must be submitted by the transferornonprofit oforganization theunder residentialinternal propertyrevenue andcode mustsection include501(c)(3) aas copysupported ofliving thefor transferpersons agreementwith anddevelopmental anydisabilities other documentation as required by the department.Sec. 4.  RCWnonprofit 43.185.050organization andor 2017successor 3rdnonprofit sp.s.organization.

If the nonprofit organization sells or otherwise conveys ownership of the residential property the proceeds of the sale or conveyance must be used to acquire similar residential property and such similar residential property must be considered the successor for continued use.

The property will not be considered in continued use if the department of social and health services finds that the property has failed, after a reasonable time to remedy, to meet any health and safety statutory or regulatory requirements.

If the department of social and health services determines that the property fails to meet the requirements for continued use, the department of social and health services must notify the department and the real estate excise tax based on the value of the property at the time of the transfer into use as residential property for persons with developmental disabilities becomes immediately due and payable by the nonprofit organization.(ii) For the purposes of this subsection (3)(s) the definitions in RCW 71A.10.020 apply.(iii) The Washington state developmental disabilities council must develop and make available model transfer agreements that legally transfer a residential property from a parent or guardian of a developmentally disabled person to a nonprofit or foundation that provides residential supported living services to persons with developmental disabilities.

The model transfer agreement must meet the requirements in this subsection (3)(s).(iv) In order to receive an exemption under this subsection (3)(s) an affidavit must be submitted by the transferor of the residential property and must include a copy of the transfer agreement and any other documentation as required by the department.Sec. 3.  RCW 43.185.050 and 2017 3rd sp.s.

At least thirty percent of these moneys used in any given funding cycle ((shall))shall must be for the benefit of projects located in rural areas of the state as defined by the department.

and(l) Remodeling and improvements as required to meet building code, licensing requirements, or legalfunctionality operations to residential properties owned and operated by ana entitynonprofit eligibleor underfoundation RCWthat 43.185A.040,was which were transferred as described in RCW 82.45.010(3)(s) by the parent of a child with developmental disabilities.(3)disabilities. Preference ((shall)) must be given for projects that include an early learning facility.(4) Legislative appropriations from capital bond proceeds may be used only for the costs of projects authorized under subsection (2)(a), (i), and (j) of this section, and not for the administrative costs of the department.(5) Moneys from repayment of loans from appropriations from capital bond proceeds may be used for all activities necessary for the proper functioning of the housing assistance program except for activities authorized under subsection (2)(b) and (c) of this section.(6) Administrative costs associated with application, distribution, and project development activities of the department may not exceed three percent of the annual funds available for the housing assistance program.

Priority must be given to those properties requiring the improvements in order to legally operate.(3) Preference shall be given for projects that include an early learning facility.(4) Legislative appropriations from capital bond proceeds may be used only for the costs of projects authorized under subsection (2)(a), (i), and (j) of this section, and not for the administrative costs of the department.(5) Moneys from repayment of loans from appropriations from capital bond proceeds may be used for all activities necessary for the proper functioning of the housing assistance program except for activities authorized under subsection (2)(b) and (c) of this section.(6) Administrative costs associated with application, distribution, and project development activities of the department may not exceed three percent of the annual funds available for the housing assistance program.