House Bill 1206 (prefiled 01/09/25, first read 01/13/25) amends existing law by changing RCW 84.14.010 and RCW 84.14.040 to expand eligibility for the multifamily tax exemption program to all counties that are required or choose to plan under RCW 36.70A.040. The bill revises definitions used in chapter 84.14 (including terms such as affordable housing, city, county, lowand moderate-income household, multiple-unit housing, residential targeted area, and others) and changes the criteria and procedures for designating a "residential targeted area," including required findings, published notice and hearing procedures, and the adoption of standards and guidelines after designation. The bill authorizes governing authorities to impose stricter income, rent, or sale-price limits than the statutory minimums for extended exemption periods and to require contractual prerequisites as conditions of exemptions, such as prevailing wage and payroll record requirements, apprenticeship utilization, and a contracting inclusion plan developed with consultation from the Office of Minority and Women's Business Enterprises. For multiunit housing in unincorporated county areas, a property owner seeking the tax incentives must commit to renting or selling at least 20 percent of the units as affordable to lowand moderate-income households; for owner-occupancy-only projects that 20 percent can be met solely with units affordable to moderate-income households. The bill also retains procedural details such as displacement-risk evaluations for some designations and specific public notice timing for hearings. Several portions of the implementing language are missing from the extracted text. The document ends mid-sentence in subsection (8) of RCW 84.14.040, and a fragment referencing the adoption or implementation of additional requirements for exemptions under RCW 84.14.020 is incomplete, so the full scope of any additional authority, limits, or related changes to other sections is unclear from the provided excerpts.

If enacted, the bill would let every county that is required or chooses to plan under the Growth Management Act use the state's multifamily tax exemption program, so more local governments could offer property tax breaks to encourage building or rehabilitating four-plus unit housing. Cities and counties would need to designate targeted residential areas and follow the notice, hearing, and displacement-evaluation steps described, and they could impose stricter affordability rules or labor and contracting conditions (like prevailing wage, apprenticeship use, payroll records, or contracting inclusion plans). For projects in unincorporated county areas, owners would generally have to commit at least 20% of units to be affordable to lowand moderate-income households (or meet that 20% with moderate-income units for owner-occupied projects). The groups most affected are local governments, property owners/developers, and lowand moderate-income households. Counties and cities will gain a new tool but also more responsibility to designate areas, hold hearings, and possibly adopt mitigation measures and stricter conditions; where exemptions are used, local property tax receipts could be lower. Developers and owners will have expanded access to tax incentives but also new potential conditions and costs to qualify (set-asides, labor and contracting requirements) that can change project economics. The bill text in the provided material cuts off mid-section and omits some implementing details and other amended subsections, so how broadly and exactly these changes would be applied and enforced is unclear from the extracted text.