HB 1406, and its companion SB 5646, would create a revenue sharing partnership between the state and cities and counties for affordable housing construction. In addition, for cities under 100,000 in population, this bill allows the monies to provide for rental assistance. HB 1406 is one of AWC’s priority housing bills. We were very supportive of the predecessor bill, HB 2437 last session, and it has only gotten better for cities this year.

HB 1406 would allow a total sales tax share between the state and local governments equivalent to a total of two one-hundredths of a percent – a total of $31 million per year if every jurisdiction took advantage. The commitment is for 20 years, so these funds can be bonded. The mechanism is a credit against the state sales tax, so there is no effective increase on the consumer. And unlike last year’s version, there is no match requirement.

The substitute version of HB 1406 makes technical corrections to clarify that the bill applies only to the new local sales and use tax authorized. The substitute also specifies that to enact the maximum 0.02 percent rate, a city must levy a qualifying local tax no later than 12 months after the effective date of the bill, rather than within 12 months of the effective date. The substitute bill requires the median income calculation for cities imposing the tax to be based on the city's median income, not the county's, unless the United States Census Bureau does not calculate median income for the city. The substitute bill also clarifies that a county or city may begin levying the tax on the effective date of the bill.

Check out this chart to see the projected share per county. We are working to provide a clear illustration of what that would mean per city and will share that when it is available.

Dates to remember

HB 1406 is scheduled for a hearing in the House Finance Committee on Thursday, February 21 at 1:30 pm. It must get voted out of this committee no later than March 1st to stay alive this session.

SB 5646 is scheduled for a hearing in the Senate Ways & Means Committee at 3:30 pm on Thursday, February 21. Because SB 5646 already passed out of its policy committee, it has until March 1 to pass out of Ways & Means.