Substitute Senate Bill 6201 (S-4603.1), introduced in the 69th Legislature (read first time 02/04/26), amends state excise and property tax statutes to create new tax preferences and to clarify when real estate excise tax (REET) applies. The bill revises the statutory definition of "sale" in RCW 82.45.010 to explicitly include many forms of conveyance and to treat transfers or acquisitions of a controlling interest within any 36-month period as sales for REET purposes, while listing numerous specific exclusions and limiting rules. It also adds a new property tax exemption provision to chapter 84.36 RCW for rental housing owned or used by a "social housing agency" and makes related changes to RCW 84.36.815 governing exemption applications and renewals. The changes to RCW 82.45.010 are primarily definitional and procedural: they clarify that option agreements are, for the narrow purpose of the 36-month aggregation rule, deemed transferred on the option execution date; require aggregation of acquisitions by persons acting in concert with rulemaking authority delegated to the department; and enumerate many transfers that are not treated as taxable sales (for example gifts, inheritances, certain foreclosure-related transfers, transfers complying with preexisting leases, federal FHA/VA conveyances, certain nonrecognition transfers under specified Internal Revenue Code sections, qualified manufactured/mobile home community sales within certain dates, and transfers involving qualified low‑income housing developments with a four‑year recapture lookback and a sunset of the exclusion on July 1, 2035). The bill creates a narrowly defined exclusion for transfers by legal representatives of adults with developmental disabilities to specified qualified entities only if conditions are met (no consideration to the representative, property limits, a 50‑year required use as supported living, and DSHS oversight); if continued-use requirements fail, DSHS must notify the department and REET based on the original transfer value becomes immediately due and payable to the department, and that tax is not subject to penalties, fees, or interest under the title. The bill also governs transfers to qualifying grantees for low‑income housing by requiring recorded covenants, timelines to place property in qualifying use (operate within 1 year, substantially rehabilitate within 3 years, or develop within 5 years), affidavits, and liability for the tax that would have been due at transfer plus interest under RCW 82.32.050 if requirements are not met. The bill creates a new real and personal property tax exemption for social housing agencies in chapter 84.36 RCW, allowing full exemption when at least 50 percent of occupied units are leased to qualifying households (partial exemptions when fewer units qualify), sets rules for continuity if household incomes change, provides for exemption of unoccupied property under certain financing and conversion conditions, and allows social housing agencies to make payments in lieu of taxes up to the prior tax amount. It amends exemption application and renewal procedures in RCW 84.36.815 (Department of Revenue forms, deadlines, electronic filing, a 60‑day rule for newly acquired or converted property, late filing penalties, and sharing approved applications with JLARC), establishes timing for JLARC review and data collection by the Housing Finance Commission, and sets multiple effective and expiration dates for various sections (including applicability to taxes levied for collection in 2027 and specified section effective dates and expirations through 2033). Several provisions refer to "the department" without naming it in every place, and portions of the act and some subsection text are not present in the extracted material, so certain procedural or definitional details and the full text of related sections are uncertain from the provided excerpts.

If enacted, the bill would let social housing agencies and certain nonprofit or public housing grantees avoid property tax on rental housing when a specified share of units serve lowor moderate-income households, allow fractional exemptions when fewer than half the units qualify, and create clear deadlines and recorded-use covenants (operate within 1 year, rehab within 3 years, develop within 5 years) that grantees must meet or else pay the real estate excise or retroactive property taxes plus interest. Transfers of property into these programs are treated specially for real estate excise tax purposes (including aggregation of transfers over 36 months and specific nonrecognition exclusions), DSHS can trigger immediate tax collection if supportive housing for people with developmental disabilities no longer meets safety or continued-use standards, and the Department of Revenue will administer applications, renewals, and penalties with new filing deadlines and sharing of approvals with JLARC for later review. The groups most affected are social housing agencies, qualifying nonprofit grantees, housing authorities and public corporations (they could see lower ongoing property tax costs but must record covenants, meet timelines, and face financial risk if requirements lapse), the Department of Revenue (more application, renewal, and enforcement work), DSHS (new compliance and notification responsibilities), and local governments (potentially reduced property tax revenue, though payments in lieu up to prior tax levies are allowed). Some implementation details are unclear from the provided text—such as which state department is charged with certain rules in every instance and the full definitions and cross-references in other sections—so the exact scope of duties and timing for some provisions may change once the missing sections are seen.