ORD NO. 2019-37 AUTHORIZING LOCAL SALES AND USE TAX TO FUND INVESTMENTS IN AFFORDABLE AND SUPPORTIVE HOUSINGORDINANCE NO. 2019-37
AN ORDINANCE of the City of Bainbridge Island, Washington,
authorizing the maximum capacity of a local sales and use tax to
fund investments in affordable housing in accordance with
Substitute House Bill 1406 (Chapter 338, Laws of 2019).
WHEREAS, the City's Comprehensive Plan contains a Housing Element that establishes
goals for encouraging the availability of affordable housing; and
WHEREAS, on October 22, 2019, the City Council adopted Resolution No. 2019=27,
declaring its intent to adopt legislation to authorize a sales and use tax for affordable housing in
accordance with Substitute House Bill 1406 (Chapter 338, Laws of 2019); and
WHEREAS, the City intends to impose the maximum local sales and use tax authorized
under Chapter 338, Laws of 2019 within one year of the date on which said law takes effect; and
WHEREAS, the Department of Revenue requires 30 days' notice of adoption of sales
tax credits and the credit will then take effect on the first day of the month following the 30 -day
period; and
WHEREAS, the local sales and use tax revenue will be credited against the state sales
and use tax so that the total amount paid by the consumer will not increase; and
WHEREAS, to collect the tax, a city must adopt an ordinance authorizing the tax within
one year of the effective date of Chapter 338, Laws of 2019, (i.e., July 28, 2020); and
WHEREAS, the City is prepared to develop a plan for the use of resources consistent
with Chapter 338, Laws of 2019.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF BAINBRIDGE ISLAND,
WASHINGTON, DOES ORDAIN, AS FOLLOWS:
Section 1. New Chapter of City Code. A new Chapter 3.61 of the Bainbridge Island
Municipal Code is hereby adopted to read as shown on Exhibit A, attached hereto and
incorporated herein by this reference.
Section 2. City Manager Authorized. The City Manager is hereby 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 Bainbridge Island any necessary
agreement with the Department of Revenue for the collection, administration, and disbursement
of revenue of the tax enacted by this ordinance.
Section 3. Effective Date. This ordinance shall take effect and be in force five (5) days
from its passage and publication as required by law.
Page 1 of 4
PASSED by the City Council this 26th day of November, 2019.
APPROVED by the Mayor this 26th day of November, 2019.
Kol Medina, Mayor
ATTEST/AUTHENTICATE:
ristine Brown, CMC, Jerk
FILED WITH THE CITY CLERK: November 8, 2019
PASSED BY THE CITY COUNCIL: November 26, 2019
PUBLISHED: November 29, 2019
EFFECTIVE DATE: December 4, 2019
ORDINANCE NUMBER: 2019-37
Exhibit A
Page 2 of 4
Exhibit A
Chapter 3.61
Affordable and Supportive Housing Sales and Use Tax Credit
Sections:
3.61.005
Purpose
3.61.010
Imposition of Tax.
3.61.020
Collection of Tax by Department of Revenue.
3.61.030
Use of Tax Revenues.
3.61.040
Bonds.
3.61.050
Interlocal Agreements.
3.61.060
Reporting.
3.61.070
Expiration of Tax.
3.61.005 Purpose.
In the 2019 legislative session, the Washington State Legislature adopted Chapter 338, Laws of
2019, codified as RCW 82.14.540, which created a local revenue sharing program for affordable
housing in the form of a tax credit against the state sales tax. The purpose of this chapter is to the
take advantage of this tax credit to provide revenue to support affordable and supportive housing
as allowed under RCW 82.14.540.
3.61.010 Imposition of Tax.
Pursuant to RCW 82.14.540, there is hereby imposed a sales and use tax on all taxable events, as
defined in RCW 82.14.020, occurring within the City for the purpose of providing for affordable
and supportive housing. The rate of the tax shall be 0.0073 percent.
3.61.020 Collection of Tax by Department of Revenue.
The Washington State Department of Revenue is authorized to collect such taxes on behalf of the
City at no cost to the City. The Washington State Department of Revenue shall deduct the
amount of the tax levied under this chapter from the amount of sales or use tax otherwise
required to be collected or paid to the Department of Revenue under Chapter 82.08 or 82.12
RCW. The Washington State Department of Revenue shall distribute the proceeds of the tax to
the City as provided in RCW 82.14.540, up to the maximum amount provided in such state law.
3.61.030 Use of Tax Revenues.
The City may use the revenue from the tax levied under this chapter for any purpose authorized
under RCW 82.14.540, as the same now exists or as hereafter amended or superseded.
3.61.040 Bonds.
RCW 82.14.540 authorizes the City to issue general obligation or revenue bonds to carry out the
purposes of such state law and to pledge the monies collected from the tax levied under this
chapter for repayment of such bonds. Such bonds, if any, shall be authorized by separate action
of the City Council.
Page 3 of 4
3.61.050 Interlocal Agreements.
RCW 82.14.540 authorizes the City to enter into interlocal agreements with one or more
counties, cities, or public housing authorities in accordance with Chapter 39.34 RCW. Such
interlocal agreements may include, but are not limited to, pooling the tax receipts, pledging those
taxes to bonds issued by one or more parties, and allocating the proceeds of the taxes levied or
bonds issued in accordance with such interlocal agreement. Such interlocal agreements, if any,
shall be authorized by separate action of the City Council.
3.61.060 Reporting.
The City shall report annually to the Washington State Department of Commerce on the
collection and use of the tax revenues. The report shall be in such form and contain such content
as the Department of Commerce shall prescribe by rule.
3.61.070 Expiration of Tax.
The tax imposed by this chapter shall expire as provided in RCW 82.14.540, as the same now
exists or as hereafter amended or superseded.
Page 4 of 4