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HomeMy WebLinkAbout4495 Ordinance - Enacting PMC Chapter 3.26 Sales & Use Tax for Affordable_Supportive HousingORDINANCE NO. 4495 AN ORDINANCE OF THE CITY OF PASCO, WASHINGTON, ENACTING CHAPTER 3.26 "SALES AND USE TAX FOR AFFORDABLE AND SUPPORTIVE HOUSING" ADOPTING LEGISLATION TO AUTHORIZE THE MAXIMUM CAPACITY OF A SALES AND USE TAX FOR AFFORDABLE AND SUPPORTIVE HOUSING IN ACCORDANCE WITH SUBSTITUTE HOUSE BILL 1406 (CHAPTER 338, LAWS OF 2019), AND OTHER MATTERS RELATED THERETO WHEREAS, the Pasco City Council adopted Resolution No. 3937 on January 21, 2020, declaring the intent to adopt legislation to authorize the use of a portion of the sales and use tax for affordable and supportive housing in accordance with Substitute House Bill 1406 ("SHB - 1406"); and WHEREAS, in 2019, the Washington State Legislature enacted SHB -1406 a revenue sharing program for local governments providing a local sales and use tax credited against the state sales tax for housing investments; and WHEREAS, this is not a new tax, rather the tax will be credited against the state sales taxes and therefore, will not result in any new or higher sales and use taxes for consumers, and will represent an additional source of funding to address housing needs in Pasco; and WHEREAS, eligible uses of SHB -1406 include the acquisition, rehabilitation and/or construction of affordable housing units; the operation and maintenance costs of existing or new units, rental assistance to tenants at or below 60% of Pasco's median income and financing and/or grants to nonprofit organizations or housing authorities carrying out the purposes of SHB -1406; and WHEREAS, the City of Pasco aims to provide housing for all of its residents and with 27% of all Pasco households identifies as cost -burdened in 2018, has determined that the authorization of SHB -1406 will benefit its residents; and WHEREAS, the credit against the state retails sales or use tax can be in place for a maximum of twenty (20) years and will represent an additional source of funding to address needs in Pasco; and WHEREAS, the tax is considered to be restricted revenue subject to the reporting requirements and audit review for compliance; and WHEREAS, the City has consulted with local housing and service agencies about the intent to authorize legislation for SHB -1406 to maximize benefit; and WHEREAS, the state legislation requires the City adopt an ordinance authoring the tax within twelve (12) months of the effective date of SHB -1406, or by July 28, 2020. Ordinance — Enacting PMC 3.26 - 1 NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. A new Chapter 3.26 entitled "Sales and Use Tax for Affordable and Supportive Housing" of the Pasco Municipal Code shall be and hereby is enacted and shall read as follow: Chapter 3.26 SALES AND USE TAX FOR AFFORDABLE AND SUPPORTIVE HOUSING Sections: 3.26.010 Imposition of sales and use tax for affordable and supportive housing. 3.26.020 Purpose of tax. 3.26.030 Administration and collection — Statutory compliance. 3.26.040 Imposition of sales and use tax for affordable and supportive housing 3.26.010 Imposition of sales and use tax for affordable and supportive housing. (1) There is imposed a sales and use tax as authorized by RCW 82.14.540, upon every taxable event as defined in RCW 82.14, occurring within the City of Pasco. 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. (2) The rate of the tax imposed by this chapter shall be 0.0073 percent of the selling price or value of the article used. (3) The tax imposed under this chapter shall be deducted from the amount of tax otherwise required to be collected or paid to the Department of Revenue under RCW 82.08 or 82.12. The Department of Revenue will perform the collection of such taxes on behalf of the City of Pasco at no cost to the City. (4) The Department of Revenue will calculate the maximum amount of tax distributions for the City of Pasco based on the taxable retail sales in the City beginning in fiscal year 2019. The tax imposed under this chapter will cease to be distributed to the City of Pasco for the remainder of any 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 that have ceased during a fiscal year shall resume at the beginning of the next fiscal year and in any event shall continue for each successive year as provided by RCW 82.14.540 as it exists or as it may be amended in the future. 3.26.020 Purpose of tax. (1) The City may use the moneys collected by the tax imposed under this chapter only for the following j2Moses: Ordinance — Enacting PMC 3.26 - 2 (a) 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 71.24.386; and (b) Providing the operations and maintenance costs of new units of affordable or supportive housing; and (c) Providing; rental assistance to tenants. (2) The housing and services provided under this chapter may only be provided to persons whose income is at or below 60 percent (60%) of the median income of the City. (3) In determining the use of funds under this chapter, the City must consider the income of the individuals and families to be served, leveraging of all the resources made available, and the housing: needs within the City. (4) The City must report annually to the Washington State Department of Commerce, in accordance with the Departments' rules, on the collection and use of the revenue from the tax imposed under this chapter. (5) The tax imposed by the City under this chapter will expire 20 years after the date on which the tax is first imposed unless extended by state law. 3.26.030 Statutory compliance. The administration and collection of the tax imposed by this chapter shall be in accordance with the provisions of RCW 82.14.540. Section 2. The Finance Director is authorized to provide any necessary notice to the Department of Revenue to effectuate the tax enacted by this ordinance and to execute, for and on behalf of the City of Pasco, any necessary agreement with the Department of Revenue for the collection and administration of the tax enacted by this ordinance. Section 3. SEVERABILITY. If any section, sentence, clause, or phrase of this ordinance should be held to be invalid by a court of competent jurisdictions, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause or phrase of this ordinance. Section 4. EFFECTIVE DATE. This ordinance, being an exercise of a power specifically delegated to the City legislative body, is not subject to referendum, and shall take effect five (5) days after passage and publication of an approved summary thereof consisting of the title. Section 5. CORRECTIONS. The City Clerk and the codifiers of this ordinance are authorized to make necessary corrections to this ordinance including, but not limited to, the correction of scrivener's/clerical errors, references, ordinance numbering, section/subsection numbers and any references thereto. Ordinance — Enacting PMC 3.26 - 3 PASSED by the City Council of the City of Pasco, Washington, this 201h day of July, 2020. Saul Martinez Mayor ATTEST: G - Debra 9arham, CMC City Clerk Published: �� G Ordinance — Enacting PMC 3.26 - 4