1063, Local Sales and Use Taxes CITY OF YELM
ORDINANCE NUMBER 1063
AN ORDINANCE OF THE CITY OF YELM RELATING TO LOCAL SALES AND USE TAXES; AUTHORIZING
THE MAXIMUM CAPACITY OF THE TAX AUTHORIZED UNDER THE PROVISIONS OF RCW 82.14.540
(SUBSTITUTE HOUSE BILL 1406) FOR AFFORDABLE AND SUPPORTIVE HOUSING AND RENTAL
ASSISTANCE FOR COLLECTION BEGINNING JANUARY 1, 2020;AMENDING TITLE 3 OF THE YELM
MUNICIPAL CODE TO CREATE A NEW FUND;AND AMENDING, DELETING,AND ADDING NEW
SECTIONS TO TITLE OF THE YELM MUNICIPAL CODE AS MORE PARTICULARLY DESCRIBED HEREIN
Whereas, in 2019 Washington State enacted Substitute House Bill 1406 ("SHB 1406"), a
revenue sharing program with local governments for affordable housing which is intended to
encourage investments In affordable and/or supportive housing, and which is codified at Section
82.14.540 RCW; and
Whereas, Section 82.14.540 RCW authorizes the governing body of a city or county
to impose a local sales and use tax for the acquisition, construction or rehabilitation of
affordable housing or facilities providing supportive housing, and for the operations and
maintenance costs of affordable or supportive housing; and
Whereas, the tax will be credited against state sales taxes collected within the City of
Yelm and, therefore, will not result in higher sales and use taxes within Yelm and will
represent an additional source of funding to address housing needs in Yelm; and
Whereas, the tax must be used to assist persons whose income is at or below sixty
percent of the median income in the City of Yelm; and
Whereas, the City has established a Homelessness Task Force which will be
providing a report to the City Council quantifying the scope of the homeless and houseless
issue in Yelm along with recommendations as to how the City may facilitate solutions;
Whereas, in 2019, the City Council of the City of Yelm adopted updates to the Unified
Development Code, Title 18 Yelm Municipal Code to reduce barriers to achieve affordable
housing; and
Whereas, the City Council of Yelm has determined that imposing the sales and use
tax to address this need will benefit its citizens;and
Whereas, the City on January 14, 2020 adopted Resolution No. 604, declaring its
intent to adopt an ordinance authorizing the tax allowed by RCW 82.14.540; and
Whereas, through a credit against state retail sales and use taxes, the program
allows the City to authorize and collect a local sales and use tax, estimated to be $15,000
annually,for the acquisition, construction or rehabilitation of affordable housing or facilities
providing supportive housing, and for the operations and maintenance costs of affordable or
supportive housing, and If eligible, for providing rental assistance to tenants, with no
increase In sales or use tax for the consumer; and
Whereas,the revenues may be used to finance grants or loans to non-profit
organizations or public housing authorities to carry out these provisions. The City may enter
into Interlocal agreements with other cities or municipal corporations in the execution of these
provisions; and
WHEREAS,thecreditagainststateretailsalesorusetaxescanben place for a maximum
of twenty (20)years and will represent an additional source of fundingtoaddresshousingneeds
IntheCity;and
WHEREAS, the state legislation requires the City adopt an ordinance authorizing the
tax within twelve(12)months of the effective date of RCW82.14.540,or byJuly 28,2020;and
WHEREAS, the tax is considered to be restricted revenue subject to reporting
requirements and audit review for compliance;
Now THEREFORE BE IT ORDAINED by the City Council of the City of Yelm, does ordain as follows:
Section 1. A new Section 3.34.025, Credit against state's share of tax - sales or use
tax for affordable housing- Imposition
3.34.025 Credit against state's share of tax - sales or use tax for affordable housing -
Imposition.
There is imposed an additional sales or use tax, as the case may be, separate and apart
from the tax referred to in YMC 3.32.010, 3.32.020, 3.34.010, and 3.34.020, as authorized
by RCW 82.14.540, upon every taxable event, as defined in RCW 82.14.020, occurring in
the city. The tax shall be imposed upon and collected from those persons from whom the
state sales tax or use tax is collected pursuant to Chapters 18.08 and 82.12 RCW but will be
credited against the state's share of the tax. Moneys collected under this section must be
used solely, as required by RCW 82.14.540 and as hereinafter amended, for the purpose of
acquiring, rehabilitating, or construction affordable housing, which may include new units of
affordable housing within an existing structure or facilities providing supportive housing
services under RCW 71.24.385, or funding the operation and maintenance of new units of
affordable housing or supportive housing for providing rental assistance to tenants.
Section 2. A new section 3.34.026 Credit against state's share of tax - Sales or use
tax for affordable housing - Rate.
3.34.026 Credit against state's share of tax - Sales or use tax for affordable housing -
Rate.
The rate of the tax imposed by YMC 3.34.025 shall be .0073 percent of the selling price or
value of the article used, as the case may be.
Section 3. Section 3.34.030 of the Yelm Municipal Code is hereby amended to read
as follows:
3.34.030 Administration and collection.
The administration and collection of the tax imposed by YMC 3.34.010 this chapter shall be
in accordance with the provisions of RCW 82.14.050. and the administration and collection
of the sales or use tax imposed by YMC 3.34.025 shall be in accordance with the provisions
of RCW 82.14.540.
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Section 4. A new section 3.34.035 Distribution
3.34.035 Distribution
City Council shall, after review and recommendation from the Finance Committee, disburse
funds to support affordable housing projects. The Finance Committee shall review requests
for funding for projects that:
a) Are used for(i) 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 .24.385; (ii)funding the
operations and maintenance costs of new units of affordable or supportive housing;
or(iii) for providing rental assistance to tenants.
b) The housing and services provided under YMC Section 3.34.025 may only be
provided to persons whose income is at or below 60 percent of the median
income of the County.
c) In determining the use of funds under TMC Section 3.14.020,the City must consider
the income of the individuals and families to be served,the leveraging of the
resources made available under YMC Section 3.34.025, and the housing needs
within the City.
Section 4. Section 3.24.050 of the Yelm Municipal Code is hereby deleted in its
entirety.
3.34.050 Contract with state.
The mayor and clerk/trcccurcr of the city arc authorized to enter into a contract with
tax. (Ord. 281 § 5, 1983).
Section 5. A new Chapter 3.90 Affordable Housing Sales Tax Fund is hereby added to
the Yelm Municipal Code to read as follows:
Chapter 3.90 Affordable Housing Sales Tax Fund.
Sections:
3.90.010 Fund created.
3.90.010 Affordable Housing Sales Tax Fund.
A. There is hereby established a special revenue fund for the city of Yelm,tobeknown as
the"Affordable HousingSalesTax Fund,"into which shall be deposited all monies received
from a portion of sales and usetaxes otherwise required tobecollected and paid tothe
departmentof revenue pursuant to legislation enacted bythe2019Washington State
Legislature.
B. This fund has been established to receivethat portion of sales and use tax credited back
to the city for use the acquisition, construction or rehabilitation of affordable
housing orfacilities providing supportive housing,and for the operations and
maintenance costs of new units of affordable or supportive housing, and If eligible,for
providing rental assistance to tenants.
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C. Anyunexpendedfundsremaininglntheaffordablehousingsalestaxfund at the end of a
budget period shall not be transferred to the general fund or otherwise lapse,butfunds
shallbecarriedforwardfromyeartoyear until expended fora purposesetforth h subsection B of
thissection.
Section 6. If any provision of this Ordinance or its application to any person or
circumstance is held invalid, the remainder of the Ordinance or the application to other
persons or circumstances is not affected.
Section 8. This Ordinance shall be in full force and effect after its passage, approval, and
publication as provided by law.
Passed by the City Council of Yelm this 28th day of July, 2020.
JW Foster, Mayor
Authenticated:
AtAteAg
Lori Lucas, City Clerk
PUBLISHED: August 6, 2020
Effective Date: August 11, 2020
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