On July 28, 2019, Substitute House Bill 1406 went into effect. The Bill provides an opportunity for participating cites 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 of supporting the provision of affordable housing within the participating city or county. The actual tax rate permitted to be imposed by each jurisdiction is dependent on several factors specified in HB 1406. As a credit against the sales and use tax collected by the State, the total tax paid by the consumer will not increase.

On August 5, 2019, the Yakima City Council passed Resolution R-2019-076 expressing the Council’s intent to adopt legislation authorizing the imposition of the sales and use tax pursuant to HB 1406, which this ordinance would so impose. The passage of this ordinance would comply with the requirement of HB 1406 that legislation authorizing the sales and use tax be passed no later than July 27, 2020. Additionally, the sooner that this ordinance goes into effect, the sooner the City can access the funds available under HB 1406.  Such funds may be used by the City for acquiring, rehabilitating or constructing affordable housing, including new units of affordable housing within exiting 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.