This bill adds a new program and amends existing multifamily tax exemption and related statutes. It directs the department identified in chapter 43.330 RCW (named as the Department of Commerce in a later section) to solicit letters of interest from owners or developers of retail or commercial properties with substantial potential for redevelopment to residential or mixed‑use projects that include market‑rate and affordable housing. The department must screen, score, and prioritize proposals as high, medium, or low priority using specified public‑benefit criteria; high priority projects are eligible for technical assistance, expedited permit review timelines (notice of inconsistencies within 90 days and processing of local objective standards within 180 days, with certain deemed compliance consequences), priority for certain department funding programs, density bonuses and limited parking waivers, potential eligibility for a sales and use tax deferral program, and potential qualification for a new multifamily property tax exemption added to chapter 84.14 RCW. The solicitation and scoring process has specific deadlines (letters due by October 1, 2025; eligibility review by October 31, 2025; scoring by November 15, 2025) and the new chapter 43.330 RCW section expires June 30, 2027. The bill creates a new limited property tax exemption under chapter 84.14 RCW that provides a 20‑year ad valorem exemption for the value of qualifying new construction, conversion, or rehabilitation improvements, beginning January 1 after issuance of the exemption certificate, subject to conditions including approval as a high priority eligible project and affordability commitments (at least 20% of units affordable to households at or below 80% of area median income, with affordability covenants or deed restrictions recorded for at least 50 years). It amends definitions, application, approval, timing, and reporting rules for the exemption: applications must be approved or denied within 90 days, conditional certificates must be issued and copied to the county assessor within specified timelines, eligible construction/rehabilitation generally must be completed within three years (with local authority to extend up to 24 months and special extensions for certain earlier applications), and no new exemptions may be granted under the section starting June 30, 2027. At the end of an exemption period, the previously exempted improvement value is treated as new construction for chapters 84.55 and 36.21 RCW. A reasonable administration fee may be charged at each point of sale to cover oversight costs for permanently affordable units. The bill strengthens compliance, reporting, audit, and enforcement procedures. Owners must file annual reports; cities and counties must report annually to the Department of Commerce (reports and an audit/review program are required, with private owners audited at least once every five years and the Department authorized to charge audit costs). Noncompliance can trigger sliding scale penalties (up to the difference between compliant and actual rents), cancellation of the exemption, retroactive additional tax plus a 20 percent penalty and interest, and a lien on the property; cancellation and valuation decisions are subject to local appeal procedures and superior court review under administrative appeal statutes. The reporting and audit provisions expire January 1, 2058. Several provisions and details are not contained in the extracted facts: parts of Section 3 end mid‑sentence and several listed amendments to RCW 84.14.010, 84.14.030, 84.14.060, 84.14.070, 84.14.090, 84.14.100, 84.14.110, and 82.59.010 are referenced but their specific amended text is not included here, and some procedural or definitional language is incomplete in the provided excerpts.

If enacted, the bill creates a short-term state program to recruit owners and developers of underused retail or commercial sites to convert them to market-rate and affordable housing, with a deadline for letters of interest by October 1, 2025 and a mandatory prioritization and scoring process soon after. Developers whose projects are ranked high priority can get technical help, faster local permitting (90‑day notice of zoning issues and 180‑day review for objective standards), priority for certain Commerce funding programs, possible density bonuses and limited parking waivers, eligibility for a sales and use tax deferral, and a 20‑year property tax exemption on the value of new multifamily improvements if they commit to keeping at least 20 percent of units affordable to low‑income households for 50 years; local governments must adopt regulations and record long‑term covenants to secure affordability. The parties most affected are owners and developers (who gain financial and process incentives but must meet tight deadlines, complete work within three years or seek extensions, comply with long affordability covenants, file annual reports, and face audits, fees, and significant financial penalties—including retroactive taxes, a 20 percent penalty, interest, and liens—if they fail to comply), local governments and county assessors (who must adopt rules, record covenants, issue certificates, report annually to Commerce, and adjust assessment rolls if exemptions are canceled), and the Department of Commerce (which must run solicitation, scoring, technical assistance, audits, and reporting). Important implementation details are missing from the extracted text—for example, some connection between sections, how the administration fee is applied, and other amendments referenced—so the exact procedures, timing after June 30, 2027, and certain enforcement mechanics remain unclear.