This bill creates a new legal framework authorizing cities or counties to establish land bank authorities by ordinance or resolution, either as a public corporation under existing RCW provisions, as a public housing authority, or as a 26 U.S.C. §501(c)(3) nonprofit. It establishes a new chapter in Title 35 RCW (sections 2–5 and 9), requires authorizing ordinances to state a public purpose tied to affordable housing and relevant planning statutes, prescribe governance and oversight, and explicitly authorizes acquisition, holding, leasing, transferring, and disposal of real property for affordable housing. It requires that at least 50% of land or property leased or sold by a land bank carry affordability covenants of at least 30 years (rental units at or below 80% AMI; owner-occupied units at or below 120% AMI), bars a 501(c)(3) land bank operator from constructing housing, and requires annual public reporting by each land bank authority. The bill changes county procedures for tax-foreclosed property (amending RCW 36.35.150) by prioritizing transfers to land bank authorities, permitting private negotiation sales without a call for bids to a land bank for not less than the unpaid tax principal (within 12 months of an unsuccessful auction), and requiring counties to notify cities at least 60 days after acquiring tax-foreclosed property and offer the city the opportunity to purchase at the original minimum bid plus direct costs with a 30-day acceptance window; cities that purchase must ensure suitability and transferability for affordable housing and are to be reimbursed by the ultimate transferee for purchase costs. The bill also changes tax treatment and creates tax-related obligations and preferences. It amends RCW 35.82.210 to declare certain authority property public and generally exempt from property taxation while allowing (with specified exceptions) authorities to agree to payments in lieu of taxes not to exceed the last levied tax. It expands the definition of “authority” for that exemption to include tribal and intertribal housing authorities and land bank authorities owned or operated by housing authorities. It requires public corporations, commissions, or authorities operating a land bank under specified RCWs to pay an annual excise tax to the county treasurer equal to the amounts that would be paid if the property were privately owned, with receipts allocated to taxing jurisdictions as if the property were private. Separately, the bill creates a property tax exemption for nonprofit entities operating a land bank authority if they qualify as 501(c)(3) organizations, and it includes a statutory tax preference performance statement authorizing JLARC review of whether these preferences reduce land costs. The provided text is incomplete in places: the amendment to RCW 35.21.755 is only partially shown, the listed amendment to RCW 35.82.210 and other cross-references rely on sections not fully included here, and the full text of the new chapter and some numbered sections are not provided, so additional provisions or exceptions may exist outside the extracted facts.

If enacted, the bill gives cities and counties a new tool to create land banks that can take in and move tax-foreclosed and other property into long-term affordable housing uses, and it requires counties to prioritize and allow private negotiation sales of some tax-foreclosed property to those land banks. Practically, local governments will need to set up oversight rules, handle new notice and purchase timelines for tax-foreclosed property, and expect developers and housing authorities to gain access to below-market land in exchange for multi-decade affordability covenants (at least half of land leased or sold must remain affordable for 30 years, with rental and owner income thresholds tied to AMI), while nonprofits designated under 501(c)(3) may operate land banks but are barred from constructing housing themselves. The bill also shifts tax and revenue effects: public corporations running land banks must pay an annual excise tax to counties equal to what property taxes would have been, with proceeds allocated to local taxing districts, while a new exemption would make property owned by qualifying 501(c)(3) nonprofits exempt from property tax, and the statute clarifies tax-exempt status for certain housing authorities and tribal authorities with limited ability to agree to payments in lieu of taxes. These changes most directly affect counties (treasurers must collect and allocate excise taxes and follow new transfer priorities), cities (new authorization and potential purchase obligations), land bank operators (new powers, reporting duties, and differing tax treatments), local taxing districts (potentially lower property tax revenue where exemptions apply), and developers/housing authorities (more access to subsidized land but with long affordability rules). Some implementation details and certain statutory provisos are incomplete in the provided text, so exact tax exceptions and how PILOT agreements will apply remain unclear.