This bill creates a new local sales and use tax remittance program to support development of affordable housing by adding a new chapter to Title 82 RCW and new sections to chapters 82.08 and 82.12 RCW. It authorizes cities and counties (governing authorities) to adopt a remittance program after public notice and hearing, defines key terms (including affordable housing, eligible organizations, qualifying projects, rural counties, nonprofit developers, and other participants), and sets procedures for local conditional approval, department approval, and remittance claims. Eligible organizations must apply to the governing authority for a conditional certificate, apply to the state department before initiating construction and pay taxes up front, then apply for a remittance; the department and local administrative bodies must act on applications within 90 days unless an extension is notified. The tax change is a tax preference/remittance program: beginning January 1, 2026, 50% of state and local sales and use taxes paid on qualifying project construction are remitted to the eligible organization and 50% of state sales and use taxes are distributed to the authorizing city or county (local remittance is limited to taxes imposed by the authorizing jurisdiction). The exemption rules apply to projects receiving a certificate of completion on or before December 31, 2035, and program funds must be used by authorizing jurisdictions for acquiring, building, rehabilitating, operating, or supporting affordable and supportive housing or to reimburse local funds used for qualifying projects; some program provisions expire December 31, 2035. The bill requires long-term affordability commitments (at least 50% of units affordable to low-income households for at least 40 years), annual reporting by recipients for 40 years, and annual reporting by authorizing jurisdictions to the department. The bill creates several procedural and enforcement rules: governing authorities may deny or rescind remittances for failure to complete or to comply with the approved application, may extend completion deadlines up to 24 months in limited circumstances, must notify the department of denials, and applicants may appeal denials to superior court. Taxes that were remitted become immediately due if a recipient discontinues compliance or transfers ownership without required notices and certifications; the department may assess interest retroactive to the date of remittance (but not penalties), and remitted tax debts survive insolvency. The Joint Legislative Audit and Review Committee must evaluate program outcomes and report to the legislature by December 31, 2033, and the act takes effect January 1, 2026. Some relevant text is missing from the provided excerpts (including the department’s name, complete lists of denial reasons in Sec. 7(4)(a), full remittance mechanics and calculation details, and the complete new chapter citation), so those specifics are not available here.

If enacted, the bill lets cities and counties choose to run a program that returns half of the state and local sales and use taxes paid on construction of qualifying affordable housing back to the developer and directs the other half of the state taxes to the authorizing city or county. Developers, public housing authorities, and similar organizations can get large tax remittances but must win local conditional approval, apply to the state department before starting construction, finish each building within three years (with a possible 24-month extension for good cause), and meet long-term affordability and reporting rules — including annual reports for 40 years. Cities and counties gain a new revenue stream for acquiring, building, operating, or supporting affordable housing and can require an application fee to cover administration, but they must hold hearings, certify projects, report annually to the state, and can be asked to reimburse their own general funds if they front money for projects. Practical impacts and risks are straightforward: eligible developers may see lower net construction costs because up to 50% of sales and use taxes can be returned, but they face strict timing, documentation, and continuing compliance obligations and risk immediate repayment with interest (no penalty) if they stop complying or fail to notify on ownership transfers. Local governments take on administrative duties and oversight, and they receive dedicated funds but must use them for specified housing and behavioral health purposes and report on outcomes; JLARC will review the program’s effectiveness by late 2033 and the remittance provisions apply only to projects completed by December 31, 2035. The excerpt omits some key implementation details (the department’s identity, specific remittance mechanics, and several referenced sections), so some operational steps and exact tax calculations remain unclear.