The 66th State legislature passed Substitute House Bill 1406 on April 28, 2019.  The Governor signed the Bill on May 9, 2019 and the Bill will be effective on July 28, 2019.  The Bill provides an opportunity for participating cities and counties to retain up to a maximum amount of 0.0146% of the retail sales and use tax otherwise collected by and paid to the State to be used for purposes supporting the provision of affordable housing in the participating jurisdiction.  The actual amount that is permitted to be imposed by each jurisdiction is determined by the application of several factors established by the terms set forth in the Bill.

In order for the City of Yakima to be eligible to authorize, fix and impose this tax for the benefit of the City’s affordable housing efforts the City Council must 1) pass a resolution within six months of the effective date of the legislation indicating its intent to impose the maximum capacity of the tax and 2) must pass legislation actually imposing the maximum capacity of the tax within one year of the effective date of the legislation.  The amount of the sales and use tax retained by the City in accordance with SHB 1406 may be used by the City for acquiring, rehabilitating or constructing affordable housing, including new units of affordable housing within existing structures or facilities providing supportive housing services, or for providing rental assistance to tenants.  The affordable housing assistance is available to persons whose income is at or below sixty percent of the City’s median income level.