10-06-2020 HB 1590House Bill 1590
Federal Way City Council
October 6, 2020
1
2
What is House Bill 1590?
Passed in 2020, HB 1590 provides that King
County may impose a sales tax of up to one‐tenth
of one percent countywide to fund affordable
housing and other special needs projects.
The authority to implement the tax is extended to
cities if cities implement the tax before King
County. At one-tenth of one percent, tax revenue
in Federal Way would be about $160,000 annually.
3
What can be funded by
House Bill 1590?
•A minimum of 60% of the money collected from the tax must be used for:
o Construction of affordable housing
o Construction of mental and behavioral health facilities
o Funding the operations and maintenance costs of new affordable
housing and facilities where housing‐related programs are provided
o Newly constructed evaluation and treatment centers
•The remainder of the funds collected, up to 40%, may be used for the
operation, delivery, or evaluation of mental and behavioral health
treatment programs and services or housing-related services.
4
Who is served by
House Bill 1590?
Facilities and programs funded through the levy must serve
individuals whose income is below 60% area median income
(AMI). The funds will target specific populations including
people with disabilities, domestic violence survivors, homeless
individuals or families, or unaccompanied homeless youth or
young adults.
5
Next steps for implementing
House Bill 1590 locally
To impose the tax, counties or cities may:
•Submit an authorizing proposition to city voters at a special
or general election. If the proposition is approved by the
majority of voters, the City may impose the whole or
remainder of the sales and use tax rate.
•Impose by councilmanic action, without a proposition
approved by a majority of voters, the whole or remainder of
the sales and use tax rate.
6
Next steps for implementing
House Bill 1590 locally
The King County Council is considering the tax on the October
6 Committee of the Whole agenda. If it moves out of
committee, King County Council could take action as early as
October 13 for a countywide tax.
7
Next steps for implementing
House Bill 1590 locally
If King County does impose the full tax rate, but does so after a
city has imposed the tax, then the county must provide a credit
against its tax for the full amount of tax imposed by a city. Any
city that enacts the tax would then have control over the tax
revenue and its use within the city. However, King County could
still fund projects sited within such cities.
8
Next steps for implementing
House Bill 1590 locally
The cities of Covington, Kent, Renton, and Issaquah are
considering a city enacted tax, preempting King County from
receiving the tax revenue generated in those cities with the
cities retaining control of the funds.
9
Options
•Direct Staff to schedule a Special Meeting of Council to
present an ordinance implementing the local sales tax before
October 13, 2020
•Take no action
Mayor’s Recommendation
•Take no action
10
Q&A