Reminder: HB 1406 deadline at the end of the month

July 28 marks an important deadline for cities implementing the Encouraging Investments in Affordable and Supportive Housing Act (HB 1406). The bill passed in the 2019 legislative session.

For cities that have already met the January deadline to adopt a resolution of intent to impose the new tax (credit), a city must adopt an ordinance to authorize the new tax by July 28, 2020. If a city does not adopt an ordinance by this deadline, it cannot participate in the program – and will miss out on 20 years of shared revenue for affordable housing. Once the ordinance is passed and the Department of Revenue (DOR) is notified, DOR requires 30-days' notice before the tax credit will take effect. The credit will take effect on the first day of the month following the 30-day period.

If a city does not adopt an ordinance by this deadline, it cannot participate in the program.

July 28 is also the deadline to adopt an additional, optional “qualifying local tax” and notify DOR. The types of eligible or “qualifying” local taxes are specified in statute. However, each of the qualifying local taxes requires a ballot measure. If your jurisdiction did not pass a ballot measure adopting a qualifying local tax in the last year, this option is not available. A qualifying local tax is not required to participate in the program, but it gives the city access to double the tax credit regardless of whether the county chooses to participate in the program.

For more information and FAQs on implementing HB 1406, please see AWC’s fact sheet.