This bill creates a new limited property tax program and makes multiple changes to related tax, fee, and administrative rules. It adds a new 20-year ad valorem property tax exemption for the value of qualifying new multiple-unit housing construction, conversion, or rehabilitation improvements located in designated "station areas," beginning the January 1 after the certificate is issued. The exemption excludes nonhousing improvements, can include a share of land value proportional to affordable housing square footage, and requires owners to commit to long-term affordability (options include at least 20 percent of units affordable to low‑income households for at least 50 years, or at least 20 percent affordable to low‑ or moderate‑income households for at least 50 years if at least 10 percent of units are family‑sized). The provision defines or amends multiple terms in RCW 84.14.010, sets income thresholds tied to HUD median family income, requires local governing authorities to designate station areas and adopt application standards, and prohibits granting new exemptions under this section on or after January 1, 2032. The bill also changes procedures and enforcement for existing tax preference programs and related programs. It amends application, approval, reporting, and appeal procedures for certificates of limited tax exemption (including timelines for approvals/denials, required filings after occupancy, and annual owner and jurisdiction reporting). The Department of Commerce must implement an audit program (private owners audited at least once every five years), may charge audit fees up to audit cost, and must notify local jurisdictions of noncompliance; local jurisdictions must impose sliding‑scale penalties for rent shortfalls and continued substantial noncompliance can trigger cancellation of the exemption. When an exemption is canceled, owners must notify the assessor within 60 days; the law treats nonqualifying improvements as newly taxable, imposes an additional real property tax on the value of nonqualifying improvements plus a 20 percent penalty and interest at delinquent property tax rates, makes that liability a lien subject to foreclosure, and limits omitted assessment recovery to no more than three calendar years preceding discovery. Appeals procedures to local authorities and superior court are preserved under cited statutes. The bill further amends local impact fee rules and a sales and use tax deferral program. Local governments may fully or partially waive impact fees for low‑income housing and early learning facilities (partial exemptions up to 80 percent and full waivers for early learning where covenants require at least 25 percent subsidized children), with covenants recorded and repayment or liens required if conditions are not met; jurisdictions must not recoup lost revenue by raising unrelated impact fees, must provide credits for developer‑provided system improvements, and must adopt required ordinance changes timed to the next periodic comprehensive plan update. It revises real estate excise tax and related thresholds, and modifies a sales and use tax deferral program for redevelopment of underutilized commercial property to encourage multifamily housing (approval conditions include that projects be primarily multifamily and commit at least 10 percent of units as affordable, completion within three years, possible 24‑month extensions, department certification of deferred tax amounts and interest on nonqualifying purchases, and a JLARC review due December 31, 2032 with a legislative repeal intention if affordable unit goals are not met). Sections 1–9 apply to property taxes levied for collection in 2026 and sections 12–20 take effect October 1, 2025. Several important texts are missing from the extracted material: the complete statutory definition of "station area" is cut off, the bill text amends many RCWs but those full amended provisions are not included here, the identity of "the department" responsible for some duties is not specified in the provided excerpts, and the bill preamble's effective date language (if any beyond the cited section dates) is not present. These gaps prevent a full understanding of some operational details and cross‑references.

If enacted, the bill creates a strong financial incentive for developers to build, convert, or rehabilitate multiunit housing near transit by exempting qualifying new housing value from property tax for 20 years, provided projects meet locally adopted affordability rules (generally at least 20% affordable units with 50‑year covenants) and are in designated station or residential targeted areas. Developers who meet the rules will likely see lower ongoing property tax costs for two decades, while cities and counties will need to adopt standards, review applications quickly, record and enforce long‑term affordability covenants, handle annual reporting, and can collect reasonable administration fees; failure to maintain commitments triggers audits, repayment of taxes plus a 20% penalty and interest, lien placement, and possible cancellation of the exemption. The Department of Commerce is given audit and program oversight responsibilities (private owners audited at least once every five years and biennial reviews starting in 2027), local impact fee rules change to allow up to 80% exemptions or waivers for low‑income housing and early learning facilities (with recorded covenants and school district approval for school fee exemptions), and owners may also apply for sales and use tax deferrals under revised conditions tied to completing projects within three years and maintaining affordable units. Key implementation details are missing from the extracted text, so some effects are uncertain: the full statutory definition of “station area,” the precise maximum household income allowed under the new program, and the identity of certain referenced state departments are not included here, which leaves open how strictly local jurisdictions must set income limits, how small or large station areas may be, and which state office handles certain certification and audit duties. Sections affecting property taxes are timed to apply to taxes levied for collection in 2026 and later, parts of the act take effect October 1, 2025, and a JLARC review of whether the tax preferences increased affordable housing is due to the legislature by December 31, 2032.