Engrossed Substitute House Bill 2442 (passed House March 11, 2026 and Senate March 5, 2026) makes multiple changes to Washington tax and local government law. It reenacts and amends RCW 82.46.035 to continue and modify a local real estate excise tax option (allowing up to 0.25%) and to define “capital project” uses and documentation rules, including limits on housing uses and a temporary rescission mechanism tied to a governor’s notice of noncompliance. The bill also adds a new local sales and use tax authority (chapter 82.14) allowing a city or county to impose up to 0.01% to fund services that assist children and families, requires counties to credit overlapping city taxes so the combined rate does not exceed 0.01%, and amends RCW 82.14.530 to revise procedures, rate ceilings (including a 0.1% cap for certain housing-related taxes), required use proportions (including a 60% minimum for construction or acquisition of affordable housing in a truncated subsection), documentation, voter authorization options, and interlocal collaboration rules. The act creates and changes several property tax and levy rules. It amends levy priority and computation statutes (including RCW 84.52.010, 84.52.043, and 84.55.050) to prescribe a ranked order for reducing or eliminating levies when consolidated levy limits are exceeded, to add a new optional county regular levy of up to $0.05 per $1,000 AV for public health clinics, and to adjust levy definitions, limit factors, and inflation indexing for specific levies. It amends RCW 71.20.110 and RCW 73.08.080 to require county levies for developmental disabilities/mental health services and to set a minimum and range for veterans’ assistance levies, including annual computation and transfer rules. The bill also authorizes counties and cities imposing the housing-related sales taxes to enter into interlocal agreements, pledge up to 50% of collections to bonds, limit supplanting of local funds to 10%, require reporting to the Department of Commerce (first report due December 1, 2019 and annually thereafter), and sets that taxes imposed under the referenced housing section expire 20 years after first imposition. The bill changes procedures for creating fire protection districts from cities or towns under RCW 52.02.160. It allows a city or town legislative authority to establish a coterminous fire district subject to a specified financing plan, public hearing and notice, consultation requirements with labor and public hospital districts, and voter approval (simple majority or 60% if a benefit charge is initially imposed). On formation, powers, property, personnel, funds, contracts, and pending business transfer to the district; the bill prescribes transition and employment protections, options for governance (ex officio members, appointed or independently elected commissioners), staggered terms, and deadlines for holding elections for commissioners. The act specifies differing levy reduction rules depending on whether a district is formed before or after July 1, 2026, and contains multiple targeted effective and expiration dates (many provisions take effect July 1, 2026, while specified sections take effect or expire January 1, 2027). Parts of the bill text provided are truncated or not included here, so several detailed provisions are incomplete or unclear in the extracted material — for example, the full list of permitted uses under the 60% housing minimum, the complete amendments to numerous cited RCWs listed in the bill header, and the full text of some cross-referenced sections (including section 801 and several subsections) are not shown. The summary above reflects only the provisions explicitly present in the extracted facts.

If enacted, the bill gives counties and cities new, narrowly sized revenue tools and repurposes existing ones so local governments can raise money specifically for affordable housing, behavioral health facilities, and services for children and families. Cities and counties could add a tiny local sales tax (up to 0.01%) for child and family services and use expanded real estate excise and housing sales-tax authorities (including a county/city housing tax up to 0.1% and a real estate excise tax up to 0.25%) to buy, build, rehab, operate, and subsidize housing and related facilities; jurisdictions can pledge up to half of those receipts for bonds, must meet reporting and planning requirements, must direct large shares to housing construction or acquisition and limit supplanting of local funds to 10%, and collections above a calculated maximum are remitted to the state general fund. This mainly affects county and city legislative authorities (who gain revenue options but also new documentation, consultation, and reporting duties and potential administrative costs capped at 10%), housing and behavioral health providers (who are likeliest to receive funding), and local taxpayers (who face modest new sales taxes and shifting property tax levy capacity as levies are recalculated). The bill also creates or changes several property tax levies and local government structures that will affect county budgets and local services: counties must levy for developmental disabilities/mental health services and for veterans’ assistance at set minimums, a new county public health clinic levy up to $0.05 per $1,000 AV is authorized, and cities can form coterminous fire protection districts that transfer fire assets, staff, and budgeting to the district with new election, notice, and levy-adjustment rules. Many of the levy-reduction rules, timing, and some percentage or allocation details in the housing and levy sections are truncated or cross-referenced elsewhere in the bill, so exact formulae and effective dates for some financial shifts are unclear from the provided text.