This bill amends multiple sections of chapter 82.59 RCW to authorize and structure a city-level sales and use tax deferral program aimed at redeveloping underutilized commercial property and stimulating new multifamily affordable housing. It modifies existing law to allow a city legislative authority to approve a conditional sales and use tax deferral for qualifying investment projects, and adds requirements for creating the program (a resolution of intention, a public hearing with notice, and specified resolution content). The bill creates procedural requirements and substantive conditions for applicants and cities: owners must file detailed applications (project description, site plan, expected affordable units, verification under oath, and an application fee), complete projects within three years (cities may extend completion up to 24 consecutive months), and file post-occupancy statements within 30 days of a certificate of occupancy. A governing authority may grant a conditional certificate if findings are met, including a commitment that at least 10% of units will be affordable to low-income households; mixed-use projects are limited to commercial uses on the ground floor only; conversions must be of underutilized commercial property and new multifamily construction applicants must accept specified multiple-unit housing property tax exemptions under chapter 84.14 RCW. The department (not specifically identified in the text) certifies projects and determines qualifying deferred taxes; nonqualifying purchases are subject to interest but not penalties, deferred taxes become immediately due if a city denies a deferral and notifies the department (with interest retroactive to the deferral date), and maintaining qualifying use for at least ten years relieves the conditional recipient from repaying deferred sales and use taxes. Appeal routes include any city ordinance process and, if applicable, superior court review under RCW 34.05.510–.598. The bill also directs the Joint Legislative Audit and Review Committee to review outcomes and requires a report to the legislature’s fiscal committees by December 31, 2032; the legislature states intent to repeal the tax preference if JLARC finds affordable housing units have not increased, and JLARC may use department data under RCW 82.59.080. Owners seeking the deferral must also apply for the chapter 84.14 multiple-unit housing property tax exemption when required; the bill requires any affordable-unit commitments under this chapter to be additional to chapter 84.14’s conditions. Important details are unclear or missing in the provided text: the specific department named to certify projects is not identified, formal definitions for key terms (for example, underutilized commercial property and low-income households) are not included, the JLARC evaluation language is incomplete, the chapter citation for the 2025 act is left as a placeholder, and the precise additional affordable-unit requirement beyond the stated 10% commitment for applicants receiving chapter 84.14 exemptions is not specified.

If enacted, cities could offer owners a delayed payment of sales and use taxes to encourage turning underused commercial sites into new multifamily housing with at least 10% of units set as affordable for low-income households, and mixed-use projects would be limited to ground-floor commercial. Developers get cash-flow relief during construction and can avoid repaying deferred taxes if they keep the property in qualifying use for at least 10 years, but they must meet detailed application and timing rules (finish within three years unless the city grants up to a 24‑month extension), apply for the state multiple-unit housing property tax exemption for new construction, and face immediate repayment with retroactive interest (no penalties) and no discharge by insolvency if the city denies the deferral or the department finds purchases nonqualifying. The most affected parties are city governments (who must adopt resolutions, hold hearings, review applications, make findings, notify the state, and handle appeals), property owners/developers (who gain a tax deferral option but take on compliance, additional affordability requirements beyond the 84.14 program, and repayment risk), and the unspecified state department that will certify projects and calculate deferred tax amounts; the joint legislative audit and review committee must evaluate program outcomes and report to fiscal committees by December 31, 2032, and the legislature may repeal the preference if it does not increase affordable units. Key details are missing or unclear in the text provided—such as the identity of the department responsible, formal definitions of key terms, and the JLARC evaluation metrics—so some implementation steps and exact eligibility thresholds remain uncertain.