This bill amends RCW 43.21C.229 to allow cities and counties that plan under RCW 36.70A.040 to adopt local categorical exemptions from the State Environmental Policy Act (SEPA) for certain development in designated urban growth areas, subject to specified criteria. It is a procedural change to environmental review law: local governments may adopt exemptions for residential, mixed-use, or commercial development (commercial capped at 65,000 square feet, excluding retail) and for “middle housing,” provided the development is consistent with the comprehensive plan, does not clearly exceed plan density or intensity, and probable adverse environmental impacts are shown to be adequately addressed by existing development regulations, comprehensive plan elements, planned action ordinances, or other applicable rules. The amendment requires that the comprehensive plan area have been analyzed in an EIS, that environmental analysis consider multimodal transportation impacts (including impacts to neighboring jurisdictions, transit, and the state transportation system), and that cities/counties consult and document consultation with the Department of Transportation about impacts to state-owned facilities. The amendment adds a new categorical exemption in subsection (3) making projects proposing one or more residential units within incorporated urban growth areas, or middle housing in unincorporated urban growth areas, eligible for a local SEPA categorical exemption if they meet the subsection’s criteria and procedural requirements. It also creates temporary, broader exemptions in subsection (4): until September 30, 2028, projects proposing two or more residential or middle housing units in a city west of the Cascades with a population of 700,000 or more are exempt; and until September 30, 2027, projects proposing four or more attached residential or middle housing units within incorporated urban growth areas are exempt. These temporary exemptions do not waive other state or local development regulations (for example, zoning, critical areas, shorelines, endangered species, trees, agricultural/industrial lands, utilities, or transportation access), and jurisdictions must notify any federally recognized tribe that may be affected. Procedural timing requirements are added: before finalizing the required environmental analysis under subsection (3) jurisdictions must provide at least 60 days’ notice to affected tribes, relevant state agencies, other impacted jurisdictions, and the public; the local categorical exemption becomes effective 30 days after the action required by that 60-day notice. The bill also states that locally adopted categorical exemptions apply even if they differ from categorical exemptions adopted by department rule under RCW 43.21C.110(1)(a), but remain subject to departmental rules that provide exceptions to categorical exemptions, and it does not invalidate planned action exemptions under RCW 43.21C.440. The text references statutory terms and an agency ("the department") by RCW citations but does not define them in the provided material. The precise statutory definitions of “middle housing,” “urban growth area,” and the identity of the referenced city meeting the population and geographic description are not included in the extracted facts and would require consulting the cited statutes for full meaning.

If enacted, cities and counties that plan under the state growth management law could adopt local rules that let many new housing, mixed-use, and modest commercial projects in designated urban growth areas skip full SEPA environmental review, provided the local plan already had an environmental impact statement and the projects meet set size, density, and consistency checks. For developers this likely means faster and cheaper permitting for qualifying projects (including certain middle housing and, temporarily, larger multiunit projects in big western cities), but they would still need to meet zoning, critical areas, shoreline, endangered species, and other development rules and any mitigation the local government requires. Local governments will gain new authority but also new duties and potential costs: they must run expanded environmental analyses focused on transportation impacts, consult with the state Department of Transportation, give at least 60 days’ notice to tribes, state agencies, other jurisdictions and the public, document that mitigation is covered in local rules, and implement any required mitigation measures. The law leaves unclear which state department is meant by one reference and does not define terms like “middle housing” or name the large western city affected, so some implementation details and responsibilities could remain uncertain until those definitions or guidance are clarified.