Washington 2025-2026 Regular Session Status: Enacted 11 D cosponsors

HB 1974 — Establishing land banking authorities.

Last action — Effective date 6/11/2026.

  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed House
  4. ✓
    Passed Senate
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced February 14, 2025. Enacted.

Signed by Governor Bob Ferguson (Democratic) on March 27, 2026.

Odds of enactment

High chance

Based on the sponsor, cosponsors, and committee posture, this bill has a high chance of becoming law.

Upgrade to see the exact probability and what's driving it.

A statistical estimate from our own model of past outcomes — an insight, not a guarantee. Policymaking is volatile.

Prognosis

Likely to advance 82% · moderate confidence

  • Enacted

    Current position in the legislative process.

  • 11 sponsors

    1 primary, 10 co-sponsors signed on.

  • Single-party support

    Sponsorship is currently within one party (11 D).

  • Cleared a recorded vote

    Passed 3 recorded votes so far.

Based on stage, sponsorship breadth, committee status, recorded votes, and cross-state momentum — a description of the observable signals, not a prediction.

Bill Text

What changed in the latest version

454 added · 908 removed

Plain-language change summary

The revised version of House Bill 1974 removes an emphasis on the broader social and economic issues related to housing disparities and instead highlights the importance of land banks in addressing the housing crisis. It stresses the need for a multi-faceted approach to increase affordable housing supply, particularly by facilitating developers' access to land. This shift matters because it focuses the legislation more narrowly on land development mechanisms, potentially streamlining efforts to increase housing while still acknowledging the community benefits of land banks.

→
Previous
Latest
H-2757.2 SUBSTITUTE HOUSE BILL 1974 State of Washington 69th Legislature 2026 Regular Session By House Housing (originally sponsored by Representatives Hill, Peterson, Parshley, Scott, Thomas, Reed, Simmons, Street, Pollet, Macri, and Ormsby) READ FIRST TIME 01/27/26.
H-1364.1 HOUSE BILL 1974 State of Washington 69th Legislature 2025 Regular Session By Representatives Hill, Peterson, Parshley, Scott, Thomas, Reed, Simmons, Street, Pollet, Macri, and Ormsby Read first time 02/14/25.
Referred to Committee on Housing.
amending RCW 36.35.150, 35.21.755, 82.45.010, and 82.45.010;
amending RCW 39.33.015, 36.35.150, and 35.21.755;
adding a new chapter to Title 35 RCW;
adding a new section to chapter 84.36 RCW;
creating new sections;
and adding a new chapter to Title 36 RCW.
providing an effective date;
and providing an expiration date.
(1) The legislature finds that solving the state's housing crisis requires a multipronged approach.
(1) The legislature finds the following:
Finding, acquiring, and holding land in the predevelopment phase is a time- consuming opportunity cost for all developers and is particularly acute for developers of affordable housing.
(a) Providing local governments with more options to increase residential capacity, especially in urban areas, consistent with RCW 43.21C.420, is essential to building affordable housing;
The legislature also finds that the state needs more affordable housing, and land banks play a crucial role in the housing ecosystem by finding, acquiring, and holding land until a developer is ready to build on the parcel or parcels.
(b) A history of racial segregation and displacement has led to disparities in access to education, living wage employment, affordable housing, and transportation, particularly for black and indigenous communities.
(2) The legislature further finds that land banks provide a benefit to neighbors and the community by managing abandoned or underutilized properties, preventing blight and crime, and improving public health and safety.
This history has also allowed certain populations to obtain and build wealth and to access critical resources at the expense of others.
The state intends to enable land banks to operate regionally and provide incentives that result in reduced costs to hold property.
Over time these factors have put pressure on, marginalized, and displaced many from these same communities;
In turn, land banks can coordinate with p.
and (c) Housing can drive economic growth within neighborhoods if developed with a focus on services, jobs, public improvements, open spaces, equity, and other elements that make housing vital and economically additive to nearby residents and the region.
1 SHB 1974 developers throughout their region to build mixed-income developments and give more Washingtonians a place to call home.
p.
(3) Therefore, the legislature intends to authorize land banking authorities to:
1 HB 1974 (2) The legislature intends to establish a land bank grant program which, using a land acquisition and deployment strategy, would produce more affordable low-income and moderate-income housing, ensuring any loss of affordable housing in areas of public infrastructure investment is exceeded by new affordable units, to enable all members of the workforce to live in the community in which they serve, including members of racial and ethnic groups disproportionately experiencing adverse housing outcomes, to make sure that the public improvement and housing investments in our state help to foster racial equity and rectify discriminatory practices.
(a) Operate as public land banks that hold property, tax-exempt, while preparing it for affordable housing and public benefit uses included with or attached to affordable housing;
(b) Prioritize equity, displacement prevention, and use of land acquisition and disposition strategies to expand capacity and address historical racial segregation, redlining, steering, and land prospecting, that has led to disparities in access to education, living wage employment, affordable housing, and transportation, particularly for Black, indigenous, and other communities of color, to ensure that future development remedies rather than reinforces these patterns;
and (c) Provide for governance and decision making that is representative, transparent, and inclusive so that land banking activities reflect the affordable housing needs of the region and help meet locally identified housing and infrastructure benchmarks.
A public corporation established under RCW 35.21.730, a public housing authority established under chapter 35.82 RCW, or an entity exempt from taxation under 26 U.S.C.
(1) The legislative authority of a county may authorize an entity to serve as a land bank throughout the county.
(2) The entity authorized as a land bank must be a public corporation established under RCW 35.21.730, a public housing authority established under chapter 35.82 RCW, or an entity exempt from taxation under 26 U.S.C.
501(c)(3) of the internal revenue code of 1986, as amended, may operate as a land bank authority under this act.
501(c)(3) of the internal revenue code of 1986, as amended.
(3) The legislative authorities of two or more contiguous counties may authorize a regional land bank to be administered in accordance with an interlocal agreement.
(1) A land bank authority may acquire, hold, manage, improve, lease, transfer, or dispose of property to be used as affordable housing.
(1) A county authorizing a land bank must establish a land bank advisory board to provide oversight and technical assistance to the land bank.
A land bank authority may also enter into contracts necessary to prepare property for productive use, including clearing title, addressing outstanding liens or taxes, and undertaking predevelopment activities.
The county executive must appoint nine members to the land bank advisory board as follows:
However, an entity that is exempt from taxation under 26 U.S.C.
(a) One member with public or private real estate finance experience;
Sec.
(b) One member with affordable housing development experience;
501(c)(3) of the internal revenue code of 1986, as amended, and operating as a land bank authority may not build or construct housing.
(c) One member with market rate housing development experience;
(2) Land acquisitions and dispositions must:
(d) One member with experience in neighborhood and community planning;
(a) Be consistent with any existing local, regional, or state housing plans and chapter 43.185B RCW, including the antidisplacement policies in the comprehensive plans of the county or city where the land is located;
(e) One member with design and architecture experience;
and p.
(f) One member with economic development experience;
2 SHB 1974 (b) Demonstrate alignment with adopted local housing targets under chapter 36.70A RCW.
(g) One member representing advocates for affordable housing for marginalized communities;
(3) A land bank authority may lease or sell land to a housing developer at less than market rate in exchange for compliance with affordability requirements.
(h) One member representing nonprofit housing developers;
Such transfers are not required to be made to the highest bidder.
and (i) One member representing renters in the region that is currently a renter.
(4) At least 50 percent of the land or property leased or sold by a land bank authority must include a covenant or deed restriction that the housing units developed or operated must maintain affordability requirements for at least 30 years as follows:
p.
(a) Rental housing units must be affordable to households with an income at or below 80 percent of the area median income;
2 HB 1974 (2) The county executive must strive to make appointments that reflect the racial and ethnic makeup of the region the land banking authority will cover.
and (b) Owner-occupied housing units must be affordable to households with an income at or below 120 percent of the area median income.
(1) Each land bank authority must prepare an annual report.
(1) A land bank may acquire, hold, improve, fund, lease, sell, and engage in predevelopment contracting for land within the urban growth areas of the authorizing county.
The annual report must include:
(2) Land acquisitions and dispositions must be consistent with any existing local, regional, or state housing plans and chapter 43.185B RCW, including the antidisplacement policies in the comprehensive plans of the authorizing county and any cities or towns within that county.
(a) Parcels acquired, held, and transferred during the year;
(3) A land bank may work with other public entities, nonprofit developers, and private landowners to acquire, assemble, lease, or land bank parcels.
(b) The manner of disposition and alignment with local housing and land use plans;
(4) The authorizing county and any city or town within that county must give a land bank within its jurisdiction priority for acquiring any existing surplus land and any properties foreclosed due to nuisance or unpaid taxes.
Show all 410 changed rows (370 more)
Previous
Latest
(c) How each action advanced a community benefit;
Any property conveyed to a land bank must have a clear title and address payment or forgiveness of any back taxes.
(d) The purchase price and assessed value of each parcel acquired;
(5) A land bank may lease or sell land to a housing developer at less than market rate in exchange for compliance with affordability requirements.
(e) The sales price and assessed value of each parcel transferred;
(6) A land bank may negotiate sales with developers and is not required to sell or lease land to the highest bidder.
(f) The number of housing units developed on each parcel transferred;
A land bank may prioritize community needs, such as affordable housing, workforce housing, a grocery store, or expanded recreational space.
(g) The affordability covenants recorded for each parcel sold;
(7) A land bank may sell land to any entity for any purpose if it can clearly demonstrate that it is not financially feasible to lease the parcel, and the net proceeds are directed to subsidies for affordable housing and permanently affordable homeownership units or public improvement costs necessary for the development of affordable housing or permanently affordable homeownership.
(h) A current board roster;
(8) A land bank may lease properties for temporary uses, if more permanent options are not reasonably available.
and (i) Progress toward advancing equity, preventing displacement, and meeting locally identified housing needs.
(9) A land bank must plan for and facilitate the following mix of housing:
(2) A land bank authority must make annual reports publicly available and submit each report to any city or county in which it has acquired or transferred land or property in the last 12 months.
(a) At least 33 percent affordable to extremely low-income, very low-income, and low-income households;
Cities and counties receiving an annual report are encouraged to provide feedback on the land bank's activities and alignment with local housing and land use plans to help guide compliance with local and regional housing plans.
3 SHB 1974 Sec.
3 HB 1974 (b) No more than 33 percent at market rate;
and (c) Housing affordable to moderate-income households.
(10) Land or property leased or sold by a land bank must include a covenant or deed restriction that the housing units developed or operated must maintain any affordability requirements for at least 99 years.
NEW SECTION.
Sec.
Each land bank must develop a land bank planning strategy that includes:
(1) Land acquisition and disposition policies;
(2) An equitable framework and equity goals;
(3) Identification of a community vision that includes people who are most impacted by housing and transportation disparities;
(4) An assessment of the current regulatory environment and identification of possible barriers to affordable housing development;
(5) An assessment of displacement risk for current low-income residents and underrepresented racial and ethnic minorities;
(6) A displacement mitigation plan that aligns with the city or county's antidisplacement policies;
(7) Prioritization of homeownership opportunities for underrepresented racial and ethnic minorities, including first-time homeowners qualifying for the covenant homeownership program under chapter 43.181 RCW;
(8) An assessment of alternate pathways to homeownership, including permanently affordable homeownership, community land trusts, and limited or shared equity cooperatives;
(9) Consideration to the preservation of historical and cultural communities and investments in low-income, very low-income, extremely low-income, and moderate-income housing;
and (10) Consideration of land that may be used for affordable housing.
NEW SECTION.
Sec.
6.
(1) Subject to appropriation, the housing finance commission shall develop and administer a competitive grant program for land banks.
Grants may be used for:
(a) Land bank planning strategies;
(b) Public improvements;
and (c) Land acquisition.
p.
4 HB 1974 (2) Up to one percent of the grant funds may be used for the actual costs incurred by a land bank advisory board in the performance of its oversight and technical assistance duties.
(3) To be eligible for a grant under this section, each county creating the land bank must:
(a) Levy a local tax dedicated to the construction, acquisition, or rehabilitation of housing affordable to households at or below 80 percent of area median income;
(b) Have removed barriers to the siting of permanent supportive housing;
and (c) Have expedited permit issuance timelines for housing affordable to low-income, very low-income, and extremely low-income households.
NEW SECTION.
Sec.
7.
(1)(a) The land bank must perform an annual review of all undeveloped properties held or transferred to determine progress towards the mix of affordable housing required under section 4 of this act.
(b) The land bank must submit the results of its review to its land bank advisory board.
(2)(a) The county authorizing a land bank must conduct an audit of all housing developed on land sold or leased by the land bank to ensure affordability and other conditions continue to be met.
Audits must be performed on each property at least every three years.
(b) If an audit finds that an owner or manager of housing units is not in compliance with a minor or inadvertent variation of the affordability requirements, the county must direct the land bank to establish a plan to bring the owner or manager into compliance.
(c) If an audit finds that an owner or manager of housing units is not in compliance with a significant variance or variances from the affordability or other requirements, the county must provide notification of the noncompliance to any local, state, or federal agency awarding funds for the housing development.
Sec.
8.
RCW 39.33.015 and 2023 c 301 s 1 are each amended to read as follows:
(1) Any state agency, municipality, or political subdivision, with authority to dispose of surplus public property, may transfer, lease, or otherwise dispose of such property for a public benefit purpose, consistent with and subject to this section.
Any such p.
5 HB 1974 transfer, lease, or other disposal may be made to a public, private, or nongovernmental body on any mutually agreeable terms and conditions, including a no cost transfer, subject to and consistent with this section.
Consideration must include appraisal costs, debt service, all closing costs, and any other liabilities to the agency, municipality, or political subdivision.
However, the property may not be so transferred, leased, or disposed of if such transfer, lease, or disposal would violate any bond covenant or encumber or impair any contract.
(2) A deed, lease, or other instrument transferring or conveying property pursuant to subsection (1) of this section must include:
(a) A covenant or other requirement that the property shall be used for the designated public benefit purpose;
and (b) Remedies that apply if the recipient of the property fails to use it for the designated public purpose or ceases to use it for such purpose.
(3) To implement the authority granted by this section, the governing body or legislative authority of a municipality or political subdivision must enact rules to regulate the disposition of property for public benefit purposes.
Any transfer, lease, or other disposition of property authorized under this section must be consistent with existing locally adopted comprehensive plans as described in RCW 36.70A.070.
The state, a municipality, or a political subdivision must prioritize the transfer of surplus land to any land bank authorized in the county in which the surplus land is located.
(4) This section is deemed to provide a discretionary alternative method for the doing of the things authorized herein, and shall not be construed as imposing any additional condition upon the exercise of any other powers vested in any state agency, municipality, or political subdivision.
(5) No transfer, lease, or other disposition of property for public benefit purposes made pursuant to any other provision of law prior to June 7, 2018, may be construed to be invalid solely because the parties thereto did not comply with the procedures of this section.
(6) The transfer at no cost, lease, or other disposal of surplus real property for public benefit purposes is deemed a lawful purpose of any state agency, municipality, or political subdivision, for p.
6 HB 1974 which accounts are kept on an enterprise fund or equivalent basis, regardless of the primary purpose or function of such agency.
(7) This section does not apply to the sale or transfer of any state forestlands, any state lands or property granted to the state by the federal government for the purposes of common schools or education, or subject to a legal restriction that would be violated by compliance with this section.
(8) For purposes of this section:
(a) "Affordable housing" means:
(i) For rental housing, 30 percent of the household's monthly income for rent and utilities, other than telephone;
or (ii) For permanently affordable homeownership, 38 percent of the household's monthly income for mortgage principal, interest, property taxes, homeowner's insurance, homeowner's association fees, and land lease fees, as applicable.
In addition, total household debt is no more than 45 percent of the monthly household income;
(b) "Public benefit" means affordable housing, which can be rental housing or permanently affordable homeownership for low-income and very low-income households as defined in RCW 43.63A.510, and related facilities that support the goals of affordable housing development in providing economic and social stability for low-income persons;
and (c) "Surplus public property" means excess real property that is not required for the needs of or the discharge of the responsibilities of the state agency, municipality, or political subdivision.
Sec.
9.
((or)) (d) when no acceptable bids were received at the attempted public auction of the property, if the sale is made within ((twelve)) 12 months from the date of the attempted public auction ;
(d) when the sale is to a land bank authorized under section 2 of this act;
or (e) when the sale is to an entity operating as a land bank authority under section 2 of this act.
or (((d))) (e) when p.
(2) A county legislative authority must prioritize the transfer of tax foreclosed property to an entity operating as a land bank authority under section 2 of this act.
7 HB 1974 no acceptable bids were received at the attempted public auction of the property, if the sale is made within ((twelve)) 12 months from the date of the attempted public auction.
(3) Except when a county legislative authority purchases the tax foreclosed property for public purposes or transfers the tax foreclosed property to an entity operating as a land bank authority under section 2 of this act, the county legislative authority must give notice to any city in which any tax foreclosed property is located within at least ((sixty)) 60 days of acquiring such property, and the county may not dispose of the property at public auction or by private negotiation before giving such notice.
(2) Except when a county legislative authority purchases the tax foreclosed property for public purposes, the county legislative authority must give notice to any city in which any tax foreclosed property is located within at least ((sixty)) 60 days of acquiring such property, and the county may not dispose of the property at public auction or by private negotiation before giving such notice.
and (c) The city must agree to transfer the property to a local housing authority, land bank authority, or ((other)) nonprofit entity eligible to receive assistance from the affordable housing program p.
and (c) The city must agree to transfer the property to a local housing authority, land bank, or ((other)) nonprofit entity eligible to receive assistance from the affordable housing program under chapter 43.185A RCW.
4 SHB 1974 under chapter 43.185A RCW.
The city must be reimbursed by the housing authority, land bank, or ((other)) nonprofit entity for the amount the city paid to purchase the property together with any direct costs incurred by the city in the transfer to the housing authority, land bank, or ((other)) nonprofit entity.
The city must be reimbursed by the housing authority, land bank authority, or ((other)) nonprofit entity for the amount the city paid to purchase the property together with any direct costs incurred by the city in the transfer to the housing authority, land bank authority, or ((other)) nonprofit entity.
6.
10.
PROVIDED, That, except for (a) any property within a special review district established by ordinance prior to January 1, 1976, or listed on or which is within a district listed on any federal or state register of historical sites , or (b) any property owned, operated, or controlled by a public corporation that is used primarily for low-income housing, or that is used as a convention center, performing arts center, public assembly hall, public meeting place, public esplanade, street, public way, public open space, park, public utility corridor, or view corridor for the general public, or (c) any blighted property owned, operated, or controlled by a public corporation that was acquired for the purpose of remediation and redevelopment of the property in accordance with an agreement or plan approved by the city, town, or county in which the property is located, or (d) any property owned, operated, or controlled by a public corporation created under RCW 81.112.320, or (e) any property owned, operated, or controlled by a public corporation operating as a land bank authority under section 2 of this act, any such public corporation, commission, or authority shall pay to the county treasurer an annual excise tax equal to the amounts which would be paid upon real property and personal property devoted to the purposes of such public corporation, commission, or authority were it in private ownership, and such real property and personal property is acquired and/or operated under RCW 35.21.730 through 35.21.755, and the proceeds of such excise tax shall be allocated by the county treasurer to the various taxing authorities in which such property is situated, in the same manner as though the property were in private ownership:
PROVIDED, That, except for (a) any property within a special review district established by ordinance prior to January 1, 1976, or listed on or which is within a district listed on any federal or state register of historical sites, or (b) any property owned, operated, or controlled by a public corporation that is used primarily for low-income housing, or that is used as a convention center, performing arts center, public assembly hall, public meeting place, public esplanade, street, public way, public p.
PROVIDED FURTHER, That the provisions of chapter 82.29A RCW shall not apply to property within a special review district established by ordinance prior to January 1, 1976, or p.
8 HB 1974 open space, park, public utility corridor, or view corridor for the general public, or (c) any blighted property owned, operated, or controlled by a public corporation that was acquired for the purpose of remediation and redevelopment of the property in accordance with an agreement or plan approved by the city, town, or county in which the property is located, or (d) any property owned, operated, or controlled by a public corporation created under RCW 81.112.320, or (e) any property owned, operated, or controlled by a public corporation authorized as a land bank by a county under section 2 of this act, any such public corporation, commission, or authority shall pay to the county treasurer an annual excise tax equal to the amounts which would be paid upon real property and personal property devoted to the purposes of such public corporation, commission, or authority were it in private ownership, and such real property and personal property is acquired and/or operated under RCW 35.21.730 through 35.21.755, and the proceeds of such excise tax shall be allocated by the county treasurer to the various taxing authorities in which such property is situated, in the same manner as though the property were in private ownership:
5 SHB 1974 listed on or which is within a district listed on any federal or state register of historical sites and which is controlled by a public corporation, commission, or authority created pursuant to RCW 35.21.730 or 35.21.660, which was in existence prior to January 1, 1987:
PROVIDED FURTHER, That the provisions of chapter 82.29A RCW shall not apply to property within a special review district established by ordinance prior to January 1, 1976, or listed on or which is within a district listed on any federal or state register of historical sites and which is controlled by a public corporation, commission, or authority created pursuant to RCW 35.21.730 or 35.21.660, which was in existence prior to January 1, 1987:
(b) "Area median income" means:
p.
9 HB 1974 (b) "Area median income" means:
7.
11.
(1) All real and personal property owned or leased by a nonprofit entity operating as a land bank authority under section 2 of this act is exempt from property taxation.
A new section is added to chapter 84.36 RCW to read as follows:
(1) All real and personal property owned or leased by a nonprofit land bank authorized by a county under section 2 of this act is exempt from property taxation.
p.
6 SHB 1974 Sec.
8.
RCW 82.45.010 and 2025 c 159 s 1 are each amended to read as follows:
(1) As used in this chapter, the term "sale" has its ordinary meaning and includes any conveyance, grant, assignment, quitclaim, or transfer of the ownership of or title to real property, including standing timber, or any estate or interest therein for a valuable consideration, and any contract for such conveyance, grant, assignment, quitclaim, or transfer, and any lease with an option to purchase real property, including standing timber, or any estate or interest therein or other contract under which possession of the property is given to the purchaser, or any other person at the purchaser's direction, and title to the property is retained by the vendor as security for the payment of the purchase price.
The term also includes the grant, assignment, quitclaim, sale, or transfer of improvements constructed upon leased land.
(2)(a) The term "sale" also includes the transfer or acquisition within any 36 month period of a controlling interest in any entity with an interest in real property located in this state for a valuable consideration.
(b) For the sole purpose of determining whether, pursuant to the exercise of an option, a controlling interest was transferred or acquired within a 36 month period, the date that the option agreement was executed is the date on which the transfer or acquisition of the controlling interest is deemed to occur.
For all other purposes under this chapter, the date upon which the option is exercised is the date of the transfer or acquisition of the controlling interest.
(c) For purposes of this subsection, all acquisitions of persons acting in concert must be aggregated for purposes of determining whether a transfer or acquisition of a controlling interest has taken place.
The department must adopt standards by rule to determine when persons are acting in concert.
In adopting a rule for this purpose, the department must consider the following:
(i) Persons must be treated as acting in concert when they have a relationship with each other such that one person influences or controls the actions of another through common ownership;
and (ii) When persons are not commonly owned or controlled, they must be treated as acting in concert only when the unity with which the purchasers have negotiated and will consummate the transfer of ownership interests supports a finding that they are acting as a single entity.
If the acquisitions are completely independent, with p.
7 SHB 1974 each purchaser buying without regard to the identity of the other purchasers, then the acquisitions are considered separate acquisitions.
(3) The term "sale" does not include:
(a) A transfer by gift, devise, or inheritance.
(b) A transfer by transfer on death deed, to the extent that it is not in satisfaction of a contractual obligation of the decedent owed to the recipient of the property.
(c) A transfer of any leasehold interest other than of the type mentioned above.
(d) A cancellation or forfeiture of a vendee's interest in a contract for the sale of real property, whether or not such contract contains a forfeiture clause, or deed in lieu of foreclosure of a mortgage.
(e) The partition of property by tenants in common by agreement or as the result of a court decree.
(f) The assignment of property or interest in property from one spouse or one domestic partner to the other spouse or other domestic partner in accordance with the terms of a decree of dissolution of marriage or state registered domestic partnership or in fulfillment of a property settlement agreement.
(g) The assignment or other transfer of a vendor's interest in a contract for the sale of real property, even though accompanied by a conveyance of the vendor's interest in the real property involved.
(h) Transfers by appropriation or decree in condemnation proceedings brought by the United States, the state or any political subdivision thereof, or a municipal corporation.
(i) A mortgage or other transfer of an interest in real property merely to secure a debt, or the assignment thereof.
(j) Any transfer or conveyance made pursuant to a deed of trust or an order of sale by the court in any mortgage, deed of trust, or lien foreclosure proceeding or upon execution of a judgment, or deed in lieu of foreclosure to satisfy a mortgage or deed of trust.
(k) A conveyance to the federal housing administration or veterans administration by an authorized mortgagee made pursuant to a contract of insurance or guaranty with the federal housing administration or veterans administration.
(l) A transfer in compliance with the terms of any lease or contract upon which the tax as imposed by this chapter has been paid p.
8 SHB 1974 or where the lease or contract was entered into prior to the date this tax was first imposed.
(m) The sale of any grave or lot in an established cemetery.
(n) A sale by the United States, this state or any political subdivision thereof, or a municipal corporation of this state.
(o) A sale to a regional transit authority or public corporation under RCW 81.112.320 under a sale/leaseback agreement under RCW 81.112.300.
(p) A transfer of real property, however effected, if it consists of a mere change in identity or form of ownership of an entity where there is no change in the beneficial ownership.
These include transfers to a corporation or partnership which is wholly owned by the transferor and/or the transferor's spouse or domestic partner or children of the transferor or the transferor's spouse or domestic partner.
However, if thereafter such transferee corporation or partnership voluntarily transfers such real property, or such transferor, spouse or domestic partner, or children of the transferor or the transferor's spouse or domestic partner voluntarily transfer stock in the transferee corporation or interest in the transferee partnership capital, as the case may be, to other than (i) the transferor and/or the transferor's spouse or domestic partner or children of the transferor or the transferor's spouse or domestic partner, (ii) a trust having the transferor and/or the transferor's spouse or domestic partner or children of the transferor or the transferor's spouse or domestic partner as the only beneficiaries at the time of the transfer to the trust, or (iii) a corporation or partnership wholly owned by the original transferor and/or the transferor's spouse or domestic partner or children of the transferor or the transferor's spouse or domestic partner, within three years of the original transfer to which this exemption applies, and the tax on the subsequent transfer has not been paid within 60 days of becoming due, excise taxes become due and payable on the original transfer as otherwise provided by law.
(q)(i) A transfer that for federal income tax purposes does not involve the recognition of gain or loss for entity formation, liquidation or dissolution, and reorganization, including but not limited to nonrecognition of gain or loss because of application of 26 U.S.C.
Sec.
332, 337, 351, 368(a)(1), 721, or 731 of the internal revenue code of 1986, as amended.
p.
9 SHB 1974 (ii) However, the transfer described in (q)(i) of this subsection cannot be preceded or followed within a 36 month period by another transfer or series of transfers, that, when combined with the otherwise exempt transfer or transfers described in (q)(i) of this subsection, results in the transfer of a controlling interest in the entity for valuable consideration, and in which one or more persons previously holding a controlling interest in the entity receive cash or property in exchange for any interest the person or persons acting in concert hold in the entity.
This subsection (3)(q)(ii) does not apply to that part of the transfer involving property received that is the real property interest that the person or persons originally contributed to the entity or when one or more persons who did not contribute real property or belong to the entity at a time when real property was purchased receive cash or personal property in exchange for that person or persons' interest in the entity.
The real estate excise tax under this subsection (3)(q)(ii) is imposed upon the person or persons who previously held a controlling interest in the entity.
(r) A qualified sale of a manufactured/mobile home community, as defined in RCW 59.20.030.
(s)(i) A transfer of a qualified low-income housing development or controlling interest in a qualified low-income housing development, unless, due to noncompliance with federal statutory requirements, the seller is subject to recapture, in whole or in part, of its allocated federal low-income housing tax credits within the four years prior to the date of transfer.
(ii) For purposes of this subsection (3)(s), "qualified low- income housing development" means real property and improvements in respect to which the seller or, in the case of a transfer of a controlling interest, the owner or beneficial owner, was allocated federal low-income housing tax credits authorized under 26 U.S.C.
Sec.
42 or successor statute, by the Washington state housing finance commission or successor state-authorized tax credit allocating agency.
(iii) This subsection (3)(s) does not apply to transfers of a qualified low-income housing development or controlling interest in a qualified low-income housing development occurring on or after July 1, 2035.
(iv) The Washington state housing finance commission, in consultation with the department, must gather data on:
(A) The fiscal p.
10 SHB 1974 savings, if any, accruing to transferees as a result of the exemption provided in this subsection (3)(s);
(B) the extent to which transferors of qualified low-income housing developments receive consideration, including any assumption of debt, as part of a transfer subject to the exemption provided in this subsection (3)(s);
and (C) the continued use of the property for low-income housing.
The Washington state housing finance commission must provide this information to the joint legislative audit and review committee.
The committee must conduct a review of the tax preference created under this subsection (3)(s) in calendar year 2033, as required under chapter 43.136 RCW.
(t)(i) A qualified transfer of residential property by a legal representative of a person with developmental disabilities to a qualified entity subject to the following conditions:
(A) The adult child with developmental disabilities of the transferor of the residential property must be allowed to reside in the residence or successor property so long as the placement is safe and appropriate as determined by the department of social and health services;
(B) The title to the residential property is conveyed without the receipt of consideration by the legal representative of a person with developmental disabilities to a qualified entity;
(C) The residential property must have no more than four living units located on it;
and (D) The residential property transferred must remain in continued use for 50 years by the qualified entity as supported living for persons with developmental disabilities by the qualified entity or successor entity.
If the qualified entity sells or otherwise conveys ownership of the residential property the proceeds of the sale or conveyance must be used to acquire similar residential property and such similar residential property must be considered the successor for continued use.
The property will not be considered in continued use if the department of social and health services finds that the property has failed, after a reasonable time to remedy, to meet any health and safety statutory or regulatory requirements.
If the department of social and health services determines that the property fails to meet the requirements for continued use, the department of social and health services must notify the department and the real estate excise tax based on the value of the property at the time of the transfer into use as residential property for persons with p.
11 SHB 1974 developmental disabilities becomes immediately due and payable by the qualified entity.
The tax due is not subject to penalties, fees, or interest under this title.
(ii) For the purposes of this subsection (3)(t) the definitions in RCW 71A.10.020 apply.
(iii) A "qualified entity" is:
(A) A nonprofit organization under Title 26 U.S.C.
Sec.
501(c)(3) of the federal internal revenue code of 1986, as amended, as of June 7, 2018, or a subsidiary under the same taxpayer identification number that provides residential supported living for persons with developmental disabilities;
or (B) A nonprofit adult family home, as defined in RCW 70.128.010, that exclusively serves persons with developmental disabilities.
(iv) In order to receive an exemption under this subsection (3)(t) an affidavit must be submitted by the transferor of the residential property and must include a copy of the transfer agreement and any other documentation as required by the department.
(u)(i) The sale by an affordable homeownership facilitator of self-help housing to a low-income household.
(ii) The definitions in this subsection (3)(u) apply to this subsection (3)(u) unless the context clearly requires otherwise.
(A) "Affordable homeownership facilitator" means a nonprofit community or neighborhood-based organization that is exempt from income tax under Title 26 U.S.C.
Sec.
501(c) of the internal revenue code of 1986, as amended, as of October 1, 2019, and that is the developer of self-help housing.
(B) "Low-income" means household income as defined by the department, provided that the definition may not exceed 80 percent of median household income, adjusted for household size, for the county in which the dwelling is located.
(C) "Self-help housing" means dwelling residences provided for ownership by low-income individuals and families whose ownership requirement includes labor participation.
"Self-help housing" does not include residential rental housing provided on a commercial basis to the general public.
(v)(i) A sale or transfer of real property to a qualifying grantee that uses the property for housing for low-income persons and receives or otherwise qualifies the property for an exemption from real and personal property taxes under RCW 84.36.560, 84.36.049, 35.82.210, 35.21.755, or 84.36.010.
For purposes of this subsection p.
12 SHB 1974 (3)(v), "qualifying grantee" means a nonprofit entity as defined in RCW 84.36.560, a nonprofit entity or qualified cooperative association as defined in RCW 84.36.049, a housing authority created under RCW 35.82.030 or 35.82.300, a public corporation established under RCW 35.21.660 or 35.21.730, or a county or municipal corporation.
A qualifying grantee that is a county or municipal corporation must record a covenant at the time of transfer that prohibits using the property for any purpose other than for low- income housing for a period of at least 10 years.
At a minimum, the covenant must address price restrictions and household income limits for the low-income housing.
A qualifying grantee must comply with the requirements described in (v)(i)(A), (B), or (C) of this subsection and must also certify, by affidavit at the time of sale or transfer, that it intends to comply with those requirements.
(A) If the qualifying grantee intends to operate existing housing on the property, within one year of the sale or transfer:
(I) The qualifying grantee must receive or qualify the property for a tax exemption under RCW 84.36.560, 84.36.049, 35.82.210, 35.21.755, or 84.36.010;
and (II) The property must be used as housing for low-income persons.
(B) If the qualifying grantee intends to develop new housing on the site, within five years of the sale or transfer:
(I) The qualifying grantee must receive or qualify the property for a tax exemption under RCW 84.36.560, 84.36.049, 35.82.210, 35.21.755, or 84.36.010;
and (II) The property must be used as housing for low-income persons.
(C) If the qualifying grantee intends to substantially rehabilitate the premises as defined in RCW 59.18.200, within three years:
(I) The qualifying grantee must receive or qualify the property for a tax exemption under RCW 84.36.560, 84.36.049, 35.82.210, 35.21.755, or 84.36.010;
and (II) The property must be used as housing for low-income persons.
(ii) If the qualifying grantee fails to satisfy the requirements described in (v)(i)(A), (B), or (C) of this subsection, within the timelines described in (v)(i)(A), (B), or (C) of this subsection, the qualifying grantee must pay the tax that would have otherwise been due at the time of initial transfer, plus interest calculated from the date of initial transfer pursuant to RCW 82.32.050.
p.
13 SHB 1974 (iii) If a qualifying grantee transfers the property to a different qualifying grantee within the original timelines described in (v)(i)(A), (B), or (C) of this subsection, neither the original qualifying grantee nor the new qualifying grantee is required to pay the tax, so long as the new qualifying grantee satisfies the requirements as described in (v)(i)(A), (B), or (C) of this subsection within the exemption period of the initial transfer.
If the new qualifying grantee fails to satisfy the requirements described in (v)(i)(A), (B), or (C) of this subsection, only the new qualifying grantee is liable for the payment of taxes required by (v)(ii) of this subsection.
There is no limit on the number of transfers between qualifying grantees within the original timelines.
(iv) Each affidavit must be filed with the department upon completion of the sale or transfer of property, including transfers from a qualifying grantee to a different qualifying grantee.
The qualifying grantee must provide proof to the department as required by the department once the requirements as described in (v)(i)(A), (B), or (C) of this subsection have been satisfied.
(v) For the purposes of this subsection (3)(v), "low-income" has the same meaning as in (u) of this subsection.
(w)(i) Beginning January 1, 2026, the sale of qualified space in a development that qualifies for a property tax exemption under RCW 84.36.560, 84.36.049, 35.82.210, 35.21.755, or 84.36.010 to a nonprofit organization, a housing authority, or public corporation for use for an exempt community purpose.
(ii) For the purposes of this subsection (3)(w), the following definitions apply:
(A) "Affordable housing development" means a development with housing provided to households with a household income that does not exceed 80 percent of median household income at initial occupancy, adjusted for household size, for the county in which the dwelling is located.
(B) "Exempt community purpose" means any use to provide a service that benefits affordable housing development tenants or the public including, but not limited to, health clinics, senior day care, food banks, community centers, and early learning facilities.
(C) "Nonprofit organization" means an organization exempt from taxation under section 501(c)(3) of the internal revenue code of 1986 (26 U.S.C.
Sec.
501(c)(3)), as amended.
p.
14 SHB 1974 (D) "Qualified space" means any portion of an affordable housing development that is accessible to tenants or the public that constitutes a separate legal parcel of property under chapter 64.32, 64.34, or 64.90 RCW.
(x) A sale or transfer of real property to an entity operating as a land bank authority under section 2 of this act.
(y) A sale or transfer of real property by an entity operating as a land bank authority under section 2 of this act.
Sec.
9.
RCW 82.45.010 and 2025 c 159 s 2 are each amended to read as follows:
(1) As used in this chapter, the term "sale" has its ordinary meaning and includes any conveyance, grant, assignment, quitclaim, or transfer of the ownership of or title to real property, including standing timber, or any estate or interest therein for a valuable consideration, and any contract for such conveyance, grant, assignment, quitclaim, or transfer, and any lease with an option to purchase real property, including standing timber, or any estate or interest therein or other contract under which possession of the property is given to the purchaser, or any other person at the purchaser's direction, and title to the property is retained by the vendor as security for the payment of the purchase price.
The term also includes the grant, assignment, quitclaim, sale, or transfer of improvements constructed upon leased land.
(2)(a) The term "sale" also includes the transfer or acquisition within any 36 month period of a controlling interest in any entity with an interest in real property located in this state for a valuable consideration.
(b) For the sole purpose of determining whether, pursuant to the exercise of an option, a controlling interest was transferred or acquired within a 36 month period, the date that the option agreement was executed is the date on which the transfer or acquisition of the controlling interest is deemed to occur.
For all other purposes under this chapter, the date upon which the option is exercised is the date of the transfer or acquisition of the controlling interest.
(c) For purposes of this subsection, all acquisitions of persons acting in concert must be aggregated for purposes of determining whether a transfer or acquisition of a controlling interest has taken place.
The department must adopt standards by rule to determine when p.
15 SHB 1974 persons are acting in concert.
In adopting a rule for this purpose, the department must consider the following:
(i) Persons must be treated as acting in concert when they have a relationship with each other such that one person influences or controls the actions of another through common ownership;
and (ii) When persons are not commonly owned or controlled, they must be treated as acting in concert only when the unity with which the purchasers have negotiated and will consummate the transfer of ownership interests supports a finding that they are acting as a single entity.
If the acquisitions are completely independent, with each purchaser buying without regard to the identity of the other purchasers, then the acquisitions are considered separate acquisitions.
(3) The term "sale" does not include:
(a) A transfer by gift, devise, or inheritance.
(b) A transfer by transfer on death deed, to the extent that it is not in satisfaction of a contractual obligation of the decedent owed to the recipient of the property.
(c) A transfer of any leasehold interest other than of the type mentioned above.
(d) A cancellation or forfeiture of a vendee's interest in a contract for the sale of real property, whether or not such contract contains a forfeiture clause, or deed in lieu of foreclosure of a mortgage.
(e) The partition of property by tenants in common by agreement or as the result of a court decree.
(f) The assignment of property or interest in property from one spouse or one domestic partner to the other spouse or other domestic partner in accordance with the terms of a decree of dissolution of marriage or state registered domestic partnership or in fulfillment of a property settlement agreement.
(g) The assignment or other transfer of a vendor's interest in a contract for the sale of real property, even though accompanied by a conveyance of the vendor's interest in the real property involved.
(h) Transfers by appropriation or decree in condemnation proceedings brought by the United States, the state or any political subdivision thereof, or a municipal corporation.
(i) A mortgage or other transfer of an interest in real property merely to secure a debt, or the assignment thereof.
p.
16 SHB 1974 (j) Any transfer or conveyance made pursuant to a deed of trust or an order of sale by the court in any mortgage, deed of trust, or lien foreclosure proceeding or upon execution of a judgment, or deed in lieu of foreclosure to satisfy a mortgage or deed of trust.
(k) A conveyance to the federal housing administration or veterans administration by an authorized mortgagee made pursuant to a contract of insurance or guaranty with the federal housing administration or veterans administration.
(l) A transfer in compliance with the terms of any lease or contract upon which the tax as imposed by this chapter has been paid or where the lease or contract was entered into prior to the date this tax was first imposed.
(m) The sale of any grave or lot in an established cemetery.
(n) A sale by the United States, this state or any political subdivision thereof, or a municipal corporation of this state.
(o) A sale to a regional transit authority or public corporation under RCW 81.112.320 under a sale/leaseback agreement under RCW 81.112.300.
(p) A transfer of real property, however effected, if it consists of a mere change in identity or form of ownership of an entity where there is no change in the beneficial ownership.
These include transfers to a corporation or partnership which is wholly owned by the transferor and/or the transferor's spouse or domestic partner or children of the transferor or the transferor's spouse or domestic partner.
However, if thereafter such transferee corporation or partnership voluntarily transfers such real property, or such transferor, spouse or domestic partner, or children of the transferor or the transferor's spouse or domestic partner voluntarily transfer stock in the transferee corporation or interest in the transferee partnership capital, as the case may be, to other than (i) the transferor and/or the transferor's spouse or domestic partner or children of the transferor or the transferor's spouse or domestic partner, (ii) a trust having the transferor and/or the transferor's spouse or domestic partner or children of the transferor or the transferor's spouse or domestic partner as the only beneficiaries at the time of the transfer to the trust, or (iii) a corporation or partnership wholly owned by the original transferor and/or the transferor's spouse or domestic partner or children of the transferor or the transferor's spouse or domestic partner, within three years of the original transfer to which this exemption applies, and the tax on p.
17 SHB 1974 the subsequent transfer has not been paid within sixty days of becoming due, excise taxes become due and payable on the original transfer as otherwise provided by law.
(q)(i) A transfer that for federal income tax purposes does not involve the recognition of gain or loss for entity formation, liquidation or dissolution, and reorganization, including but not limited to nonrecognition of gain or loss because of application of 26 U.S.C.
Sec.
332, 337, 351, 368 (a)(1), 721, or 731 of the internal revenue code of 1986, as amended.
(ii) However, the transfer described in (q)(i) of this subsection cannot be preceded or followed within a 36 month period by another transfer or series of transfers, that, when combined with the otherwise exempt transfer or transfers described in (q)(i) of this subsection, results in the transfer of a controlling interest in the entity for valuable consideration, and in which one or more persons previously holding a controlling interest in the entity receive cash or property in exchange for any interest the person or persons acting in concert hold in the entity.
This subsection (3)(q)(ii) does not apply to that part of the transfer involving property received that is the real property interest that the person or persons originally contributed to the entity or when one or more persons who did not contribute real property or belong to the entity at a time when real property was purchased receive cash or personal property in exchange for that person or persons' interest in the entity.
The real estate excise tax under this subsection (3)(q)(ii) is imposed upon the person or persons who previously held a controlling interest in the entity.
(r) A qualified sale of a manufactured/mobile home community, as defined in RCW 59.20.030, that takes place on or after June 12, 2008, but before December 31, 2018.
(s)(i) A transfer of a qualified low-income housing development or controlling interest in a qualified low-income housing development, unless, due to noncompliance with federal statutory requirements, the seller is subject to recapture, in whole or in part, of its allocated federal low-income housing tax credits within the four years prior to the date of transfer.
(ii) For purposes of this subsection (3)(s), "qualified low- income housing development" means real property and improvements in respect to which the seller or, in the case of a transfer of a controlling interest, the owner or beneficial owner, was allocated p.
18 SHB 1974 federal low-income housing tax credits authorized under 26 U.S.C.
Sec.
42 or successor statute, by the Washington state housing finance commission or successor state-authorized tax credit allocating agency.
(iii) This subsection (3)(s) does not apply to transfers of a qualified low-income housing development or controlling interest in a qualified low-income housing development occurring on or after July 1, 2035.
(iv) The Washington state housing finance commission, in consultation with the department, must gather data on:
(A) The fiscal savings, if any, accruing to transferees as a result of the exemption provided in this subsection (3)(s);
(B) the extent to which transferors of qualified low-income housing developments receive consideration, including any assumption of debt, as part of a transfer subject to the exemption provided in this subsection (3)(s);
and (C) the continued use of the property for low-income housing.
The Washington state housing finance commission must provide this information to the joint legislative audit and review committee.
The committee must conduct a review of the tax preference created under this subsection (3)(s) in calendar year 2033, as required under chapter 43.136 RCW.
(t)(i) A qualified transfer of residential property by a legal representative of a person with developmental disabilities to a qualified entity subject to the following conditions:
(A) The adult child with developmental disabilities of the transferor of the residential property must be allowed to reside in the residence or successor property so long as the placement is safe and appropriate as determined by the department of social and health services;
(B) The title to the residential property is conveyed without the receipt of consideration by the legal representative of a person with developmental disabilities to a qualified entity;
(C) The residential property must have no more than four living units located on it;
and (D) The residential property transferred must remain in continued use for 50 years by the qualified entity as supported living for persons with developmental disabilities by the qualified entity or successor entity.
If the qualified entity sells or otherwise conveys ownership of the residential property the proceeds of the sale or conveyance must be used to acquire similar residential property and p.
19 SHB 1974 such similar residential property must be considered the successor for continued use.
The property will not be considered in continued use if the department of social and health services finds that the property has failed, after a reasonable time to remedy, to meet any health and safety statutory or regulatory requirements.
If the department of social and health services determines that the property fails to meet the requirements for continued use, the department of social and health services must notify the department and the real estate excise tax based on the value of the property at the time of the transfer into use as residential property for persons with developmental disabilities becomes immediately due and payable by the qualified entity.
The tax due is not subject to penalties, fees, or interest under this title.
(ii) For the purposes of this subsection (3)(t) the definitions in RCW 71A.10.020 apply.
(iii) A "qualified entity" is:
(A) A nonprofit organization under Title 26 U.S.C.
Sec.
501(c)(3) of the federal internal revenue code of 1986, as amended, as of June 7, 2018, or a subsidiary under the same taxpayer identification number that provides residential supported living for persons with developmental disabilities;
or (B) A nonprofit adult family home, as defined in RCW 70.128.010, that exclusively serves persons with developmental disabilities.
(iv) In order to receive an exemption under this subsection (3)(t) an affidavit must be submitted by the transferor of the residential property and must include a copy of the transfer agreement and any other documentation as required by the department.
(u)(i) A sale or transfer of real property to a qualifying grantee that uses the property for housing for low-income persons and receives or otherwise qualifies the property for an exemption from real and personal property taxes under RCW 84.36.560, 84.36.049, 35.82.210, 35.21.755, or 84.36.010.
For purposes of this subsection (3)(u), "qualifying grantee" means a nonprofit entity as defined in RCW 84.36.560, a nonprofit entity or qualified cooperative association as defined in RCW 84.36.049, a housing authority created under RCW 35.82.030 or 35.82.300, a public corporation established under RCW 35.21.660 or 35.21.730, or a county or municipal corporation.
A qualifying grantee that is a county or municipal corporation must record a covenant at the time of transfer that prohibits using the property for any purpose other than for low- p.
20 SHB 1974 income housing for a period of at least 10 years.
At a minimum, the covenant must address price restrictions and household income limits for the low-income housing.
A qualifying grantee must comply with the requirements described in (u)(i)(A), (B), or (C) of this subsection and must also certify, by affidavit at the time of sale or transfer, that it intends to comply with those requirements.
(A) If the qualifying grantee intends to operate existing housing on the property, within one year of the sale or transfer:
(I) The qualifying grantee must receive or qualify the property for a tax exemption under RCW 84.36.560, 84.36.049, 35.82.210, 35.21.755, or 84.36.010;
and (II) The property must be used as housing for low-income persons.
(B) If the qualifying grantee intends to develop new housing on the site, within five years of the sale or transfer:
(I) The qualifying grantee must receive or qualify the property for a tax exemption under RCW 84.36.560, 84.36.049, 35.82.210, 35.21.755, or 84.36.010;
and (II) The property must be used as housing for low-income persons.
(C) If the qualifying grantee intends to substantially rehabilitate the premises as defined in RCW 59.18.200, within three years:
(I) The qualifying grantee must receive or qualify the property for a tax exemption under RCW 84.36.560, 84.36.049, 35.82.210, 35.21.755, or 84.36.010;
and (II) The property must be used as housing for low-income persons.
(ii) If the qualifying grantee fails to satisfy the requirements described in (u)(i)(A), (B), or (C) of this subsection, within the timelines described in (u)(i)(A), (B), or (C) of this subsection, the qualifying grantee must pay the tax that would have otherwise been due at the time of initial transfer, plus interest calculated from the date of initial transfer pursuant to RCW 82.32.050.
(iii) If a qualifying grantee transfers the property to a different qualifying grantee within the original timelines described in (u)(i)(A), (B), or (C) of this subsection, neither the original qualifying grantee nor the new qualifying grantee is required to pay the tax, so long as the new qualifying grantee satisfies the requirements as described in (u)(i)(A), (B), or (C) of this subsection within the exemption period of the initial transfer.
If the new qualifying grantee fails to satisfy the requirements described in (u)(i)(A), (B), or (C) of this subsection, only the new p.
21 SHB 1974 qualifying grantee is liable for the payment of taxes required by (u)(ii) of this subsection.
There is no limit on the number of transfers between qualifying grantees within the original timelines.
(iv) Each affidavit must be filed with the department upon completion of the sale or transfer of property, including transfers from a qualifying grantee to a different qualifying grantee.
The qualifying grantee must provide proof to the department as required by the department once the requirements as described in (u)(i)(A), (B), or (C) of this subsection have been satisfied.
(v) For the purposes of this subsection (3)(u), "low-income" means household income as defined by the department, provided that the definition may not exceed 80 percent of median household income, adjusted for household size, for the county in which the dwelling is located.
(v)(i) The sale of qualified space in a development that qualifies for a property tax exemption under RCW 84.36.560, 84.36.049, 35.82.210, 35.21.755, or 84.36.010 to a nonprofit organization, a housing authority, or public corporation for use for an exempt community purpose.
(ii) For the purposes of this subsection (3)(v), the following definitions apply:
(A) "Affordable housing development" means a development with housing provided to households with a household income that does not exceed 80 percent of median household income at initial occupancy, adjusted for household size, for the county in which the dwelling is located.
(B) "Exempt community purpose" means any use to provide a service that benefits affordable housing development tenants or the public including, but not limited to, health clinics, senior day care, food banks, community centers, and early learning facilities.
(C) "Nonprofit organization" means an organization exempt from taxation under section 501(c)(3) of the internal revenue code of 1986 (26 U.S.C.
Sec.
501(c)(3)), as amended.
(D) "Qualified space" means any portion of an affordable housing development that is accessible to tenants or the public that constitutes a separate legal parcel of property under chapter 64.32, 64.34, or 64.90 RCW.
(w) A sale or transfer of real property to an entity operating as a land bank authority under section 2 of this act.
p.
22 SHB 1974 (x) A sale or transfer of real property by an entity operating as a land bank authority under section 2 of this act.
10.
(1) This section is the tax preference performance statement for the tax preferences in sections 6 through 9 of this act.
This performance statement is only intended to be used for subsequent evaluation of the tax preferences.
It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
(2) The legislature categorizes this tax preference as one intended to induce certain designated behavior by taxpayers, as indicated in RCW 82.32.808(2)(a).
(3) It is the legislature's specific public policy objective to:
(a) Encourage sales or transfers of real property to land bank authorities that intend the property to be used for affordable housing;
and (b) Reduce the cost of land for housing development by allowing land bank authorities to own land or property without being subject to state or local property tax and to sell land or property without being subject to the real estate excise tax.
(4) If a review finds that the tax preferences in sections 6 through 9 of this act have not reduced the cost of land for housing development, then the legislature intends to consider repealing the tax preferences.
(5) In order to obtain the data necessary to perform the review in subsection (4) of this section, the joint legislative audit and review committee may refer to any available data source, including county records identifying the assessed value, sales value, and number of housing units developed for any property acquired or transferred by a land bank authority.
NEW SECTION.
Sec.
11.
The provisions of RCW 82.32.805 do not apply to sections 6 through 9 of this act.
NEW SECTION.
Sec.
Sections 2 through 4 and 7 of this act constitute a new chapter in Title 35 RCW.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Affordable housing" means residential housing that is rented by a person or household whose monthly housing costs, including utilities other than telephone, do not exceed 30 percent of the household's monthly income.
(2) "City" means a city or town as defined in Title 35 or 35A RCW.
(3) "Community land trust" means a community housing development organization:
(a) That is not sponsored by a for-profit organization;
(b) That is established to:
(i) Acquire parcels of land, held in perpetuity, primarily for conveyance under long-term ground leases;
(ii) Transfer ownership of any structural improvements located on such leased parcels to the lessee;
and p.
10 HB 1974 (iii) Retain a preemptive option to purchase any such structural improvement at a price determined by formula that is designed to ensure that the improvement remains affordable to low-income and moderate-income families in perpetuity;
(c) Whose corporate membership is open to any adult resident of a particular geographic area specified in the bylaws of the organization;
and (d) Whose board of directors:
(i) Includes a majority of members who are elected by the corporate membership;
and (ii) Is composed of equal numbers of:
(A) Lessees pursuant to (b) of this subsection;
(B) Corporate members who are not lessees;
and (C) Any other category of persons described in the bylaws of the organization.
(4) "County" means a county as defined in Title 36 RCW.
(5) "Extremely low-income household" means a single person, family, or unrelated persons living together whose income is at or below 30 percent of the median income, as determined by the United States department of housing and urban development, with adjustments for household size, for the county where the land bank is located.
(6) "Land bank" means a land bank authorized by a county to serve the urban growth areas of the county.
(7) "Low-income household" means a single person, family, or unrelated persons living together whose income is above 50 percent and at or below 80 percent of the median income, as determined by the United States department of housing and urban development, with adjustments for household size, for the county where the land bank is located.
(8) "Moderate-income household" means a single person, family, or unrelated persons living together whose income is above 80 percent and at or below 120 percent of the median income, as determined by the United States department of housing and urban development, with adjustments for household size, for the county where the land bank is located.
(9) "Permanently affordable homeownership" means units that, in addition to meeting the definition of "affordable housing" in RCW 43.185A.010, are:
(a) Sponsored by a nonprofit organization or governmental entity;
p.
11 HB 1974 (b) Subject to a ground lease or deed restriction, the forms of which may include a ground lease, deed restriction, community land trust lease, or affordability covenant that includes:
(i) A resale restriction designed to provide affordability for future low and/or moderate-income homebuyers;
(ii) A right of first refusal for the sponsor organization to purchase the home at resale, except in cases where the sponsoring organization is a limited equity cooperative as defined by RCW 64.90.010 and is not partnered with a community land trust;
and (iii) A requirement that the sponsor must approve any refinancing secured by the home, including home equity lines of credit, except in cases where the sponsoring organization is a limited equity cooperative as defined by RCW 64.90.010 and is not partnered with a community land trust;
and (c) Sponsored by a nonprofit organization or governmental entity and the sponsor organization:
(i) Executes a new ground lease or deed restriction, the forms of which may include a ground lease, deed restriction, community land trust lease, or affordability covenant with a duration of at least 99 years at the initial sale and at each successive sale of the home;
and (ii) Supports homeowners and enforces the ground lease or deed restriction.
(10) "Public improvements" has the same meaning as "public improvement costs" as defined in RCW 39.114.010.
(11) "Very low-income household" means a single person, family, or unrelated persons living together whose income is above 30 percent and at or below 50 percent of the median income, as determined by the United States department of housing and urban development, with adjustments for household size, for the county where the land bank is located.
Section 8 of this act expires January 1, 2030.
Sections 1 through 7 and 12 of this act constitute a new chapter in Title 36 RCW.
p.
23 SHB 1974 NEW SECTION.
Sec.
14.
Section 9 of this act takes effect January 1, 2030.
24 SHB 1974
12 HB 1974
⬇ Download PDF
View plain text versions (5)

Action History

  1. Effective date 6/11/2026.

  2. Chapter 233, 2026 Laws.

  3. Governor signed.

  4. Delivered to Governor.

  5. President signed.

  6. Speaker signed.

  7. Passed final passage; yeas, 59; nays, 37; absent, 0; excused, 2.

  8. House concurred in Senate amendments.

  9. Third reading, passed; yeas, 30; nays, 19; absent, 0; excused, 0.

  10. Rules suspended. Placed on Third Reading.

  11. Committee amendment(s) adopted with no other amendments.

  12. Placed on second reading by Rules Committee.

  13. Passed to Rules Committee for second reading.

  14. Minority; without recommendation.

  15. Minority; do not pass.

  16. WM - Majority; do pass with amendment(s).

  17. Executive action taken in the Senate Committee on Ways & Means at 10:30 AM.

  18. Public hearing in the Senate Committee on Ways & Means at 1:30 PM.

  19. Referred to Ways & Means.

  20. Minority; without recommendation.

  21. And refer to Ways & Means.

  22. HSG - Majority; do pass.

  23. Executive action taken in the Senate Committee on Housing at 10:30 AM.

  24. First reading, referred to Housing.

  25. Third reading, passed; yeas, 59; nays, 37; absent, 0; excused, 2.

  26. Rules suspended. Placed on Third Reading.

  27. Floor amendment(s) adopted.

  28. 2nd substitute bill substituted (FIN 26).

  29. Rules Committee relieved of further consideration. Placed on second reading.

  30. Referred to Rules 2 Review.

  31. Minority; without recommendation.

  32. FIN - Majority; 2nd substitute bill be substituted, do pass.

  33. Executive action taken in the House Committee on Finance at 8:00 AM.

  34. Public hearing in the House Committee on Finance at 8:00 AM.

  35. Referred to Finance.

  36. Minority; without recommendation.

  37. HOUS - Majority; 1st substitute bill be substituted, do pass.

  38. Executive action taken in the House Committee on Housing at 8:30 AM.

  39. Public hearing in the House Committee on Housing at 1:30 PM.

  40. By resolution, reintroduced and retained in present status.

  41. Public hearing in the House Committee on Housing at 4:00 PM.

  42. First reading, referred to Housing.

Sponsors

Sponsorship breakdown

Export CSV (upgrade) →

1 sponsors · 10 co-sponsors · 140 not signed on · 57 voted No

Sponsors (1)

Co-sponsors (10)

Not signed on (140)

140 members have not signed on to this bill.

Show all 140 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

Final Passage as Amended by the Senate (#19)

Passed 59 Yea · 37 Nay · 2 Other
Party YeaNayPresentNot Voting
Republican 13601
Democrat 58101
Total 593702
% of votes cast 60%38%0%2%
How each member voted (98)
Member Party Vote
Adam Bernbaum Democrat Yea
Adison Richards Democrat Yea
Adrian Cortes Democrat Yea
Alex Ramel Democrat Yea
Alicia Rule Democrat Yea
Amy Walen Democrat Yea
April Berg Democrat Yea
Beth Doglio Democrat Yea
Brandy Donaghy Democrat Yea
Brianna Thomas Democrat Yea
Chipalo Street Democrat Yea
Chris Stearns Democrat Yea
Cindy Ryu Democrat Yea
Clyde Shavers Democrat Yea
Dan Bronoske Democrat Yea
Darya Farivar Democrat Yea
Dave Paul Democrat Yea
David Hackney Democrat Yea
Davina Duerr Democrat Yea
Debra Entenman Democrat Yea
Debra Lekanoff Democrat Yea
Edwin Obras Democrat Yea
Gerry Pollet Democrat Yea
Greg Nance Democrat Yea
Jake Fey Democrat Yea
Jamila Taylor Democrat Yea
Janice Zahn Democrat Yea
Javier Valdez Democrat Nay
Joe Fitzgibbon Democrat Yea
Joe Timmons Democrat Yea
Julia Reed Democrat Yea
Kristine Reeves Democrat Yea
Larry Springer Democrat Yea
Lauren Davis Democrat Yea
Laurie Jinkins Democrat Yea
Lillian Ortiz-Self Democrat Yea
Lisa Callan Democrat Yea
Lisa Parshley Democrat Yea
Liz Berry Democrat Yea
Mari Leavitt Democrat Yea
Mary Fosse Democrat Yea
Melanie Morgan Democrat Yea
Mia Gregerson Democrat Yea
Monica Jurado Stonier Democrat Yea
My-Linh Thai Democrat Yea
Natasha Hill Democrat Yea
Nicole Macri Democrat Yea
Osman Salahuddin Democrat Yea
Roger Goodman Democrat Yea
Sharlett Mena Democrat Yea
Sharon Tomiko Santos Democrat Yea
Sharon Wylie Democrat Yea
Shaun Scott Democrat Yea
Shelley Kloba Democrat Yea
Steve Bergquist Democrat Yea
Steve Tharinger Democrat Not Voting
Strom Peterson Democrat Yea
Tarra Simmons Democrat Yea
Timm Ormsby Democrat Yea
Zach Hall Democrat Yea
Alex Ybarra Republican Nay
Andrew Barkis Republican Nay
Andrew Engell Republican Nay
April Connors Republican Nay
Brian Burnett Republican Nay
Carolyn Eslick Republican Nay
Chris Corry Republican Nay
Cyndy Jacobsen Republican Nay
Dan Griffey Republican Nay
David Stuebe Republican Nay
Deb Manjarrez Republican Nay
Drew Stokesbary Republican Nay
Ed Orcutt Republican Nay
Gloria Mendoza Republican Nay
Hunter Abell Republican Nay
Jenny Graham Republican Nay
Jeremie Dufault Republican Nay
Jim Walsh Republican Nay
Joe Schmick Republican Nay
Joel McEntire Republican Not Voting
John Ley Republican Nay
Joshua Penner Republican Nay
Kevin Waters Republican Nay
Mark Klicker Republican Nay
Mary Dye Republican Nay
Matt Marshall Republican Nay
Michael Keaton Republican Nay
Mike Steele Republican Nay
Mike Volz Republican Nay
Peter Abbarno Republican Nay
Rob Chase Republican Nay
Sam Low Republican Nay
Skyler Rude Republican Nay
Stephanie Barnard Republican Nay
Stephanie McClintock Republican Nay
Suzanne Schmidt Republican Yea
Tom Dent Republican Nay
Travis Couture Republican Nay

Official roll call →

3rd Reading & Final Passage as Amended by the Senate (#34)

Passed 30 Yea · 19 Nay
Party YeaNayPresentNot Voting
Democrat 30000
Republican 01900
Total 301900
% of votes cast 61%39%0%0%
How each member voted (49)
Member Party Vote
Adrian Cortes Democrat Yea
Annette Cleveland Democrat Yea
Bob Hasegawa Democrat Yea
Claire Wilson Democrat Yea
Claudia Kauffman Democrat Yea
Deborah Krishnadasan Democrat Yea
Derek Stanford Democrat Yea
Drew Hansen Democrat Yea
Emily Alvarado Democrat Yea
Jamie Pedersen Democrat Yea
Javier Valdez Democrat Yea
Jesse Salomon Democrat Yea
Jessica Bateman Democrat Yea
John Lovick Democrat Yea
June Robinson Democrat Yea
Lisa Wellman Democrat Yea
Liz Lovelett Democrat Yea
Manka Dhingra Democrat Yea
Marcus Riccelli Democrat Yea
Marko Liias Democrat Yea
Mike Chapman Democrat Yea
Noel Frame Democrat Yea
Rebecca Saldaña Democrat Yea
Sharon Shewmake Democrat Yea
Steve Conway Democrat Yea
T'wina Nobles Democrat Yea
Tina Orwall Democrat Yea
Vandana Slatter Democrat Yea
Victoria Hunt Democrat Yea
Yasmin Trudeau Democrat Yea
Chris Gildon Republican Nay
Curtis King Republican Nay
Drew MacEwen Republican Nay
Jeff Holy Republican Nay
Jeff Wilson Republican Nay
Jim McCune Republican Nay
John Braun Republican Nay
Judy Warnick Republican Nay
Keith Goehner Republican Nay
Keith Wagoner Republican Nay
Leonard Christian Republican Nay
Mark Schoesler Republican Nay
Matt Boehnke Republican Nay
Nikki Torres Republican Nay
Paul Harris Republican Nay
Perry Dozier Republican Nay
Phil Fortunato Republican Nay
Ron Muzzall Republican Nay
Shelly Short Republican Nay

Official roll call →

3rd Reading & Final Passage (#20)

Passed 59 Yea · 37 Nay · 2 Other
Party YeaNayPresentNot Voting
Republican 13601
Democrat 58101
Total 593702
% of votes cast 60%38%0%2%
How each member voted (98)
Member Party Vote
Adam Bernbaum Democrat Yea
Adison Richards Democrat Yea
Adrian Cortes Democrat Yea
Alex Ramel Democrat Yea
Alicia Rule Democrat Yea
Amy Walen Democrat Yea
April Berg Democrat Yea
Beth Doglio Democrat Yea
Brandy Donaghy Democrat Yea
Brianna Thomas Democrat Yea
Chipalo Street Democrat Yea
Chris Stearns Democrat Yea
Cindy Ryu Democrat Yea
Clyde Shavers Democrat Yea
Dan Bronoske Democrat Yea
Darya Farivar Democrat Yea
Dave Paul Democrat Yea
David Hackney Democrat Yea
Davina Duerr Democrat Yea
Debra Entenman Democrat Yea
Debra Lekanoff Democrat Yea
Edwin Obras Democrat Yea
Gerry Pollet Democrat Yea
Greg Nance Democrat Yea
Jake Fey Democrat Yea
Jamila Taylor Democrat Yea
Janice Zahn Democrat Yea
Javier Valdez Democrat Nay
Joe Fitzgibbon Democrat Yea
Joe Timmons Democrat Yea
Julia Reed Democrat Yea
Kristine Reeves Democrat Yea
Larry Springer Democrat Yea
Lauren Davis Democrat Yea
Laurie Jinkins Democrat Yea
Lillian Ortiz-Self Democrat Yea
Lisa Callan Democrat Yea
Lisa Parshley Democrat Yea
Liz Berry Democrat Yea
Mari Leavitt Democrat Yea
Mary Fosse Democrat Yea
Melanie Morgan Democrat Yea
Mia Gregerson Democrat Yea
Monica Jurado Stonier Democrat Yea
My-Linh Thai Democrat Yea
Natasha Hill Democrat Yea
Nicole Macri Democrat Yea
Osman Salahuddin Democrat Yea
Roger Goodman Democrat Yea
Sharlett Mena Democrat Yea
Sharon Tomiko Santos Democrat Yea
Sharon Wylie Democrat Yea
Shaun Scott Democrat Yea
Shelley Kloba Democrat Yea
Steve Bergquist Democrat Yea
Steve Tharinger Democrat Not Voting
Strom Peterson Democrat Yea
Tarra Simmons Democrat Yea
Timm Ormsby Democrat Yea
Zach Hall Democrat Yea
Alex Ybarra Republican Nay
Andrew Barkis Republican Nay
Andrew Engell Republican Nay
April Connors Republican Nay
Brian Burnett Republican Nay
Carolyn Eslick Republican Nay
Chris Corry Republican Nay
Cyndy Jacobsen Republican Nay
Dan Griffey Republican Nay
David Stuebe Republican Nay
Deb Manjarrez Republican Nay
Drew Stokesbary Republican Nay
Ed Orcutt Republican Nay
Gloria Mendoza Republican Nay
Hunter Abell Republican Nay
Jenny Graham Republican Nay
Jeremie Dufault Republican Nay
Jim Walsh Republican Nay
Joe Schmick Republican Nay
Joel McEntire Republican Nay
John Ley Republican Nay
Joshua Penner Republican Nay
Kevin Waters Republican Nay
Mark Klicker Republican Nay
Mary Dye Republican Nay
Matt Marshall Republican Nay
Michael Keaton Republican Nay
Mike Steele Republican Nay
Mike Volz Republican Nay
Peter Abbarno Republican Nay
Rob Chase Republican Nay
Sam Low Republican Nay
Skyler Rude Republican Nay
Stephanie Barnard Republican Nay
Stephanie McClintock Republican Nay
Suzanne Schmidt Republican Yea
Tom Dent Republican Not Voting
Travis Couture Republican Nay

Official roll call →

Subjects

public-safety housing
Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

Frequently asked questions

Who sponsors HB 1974?
HB 1974 is sponsored by Timm Ormsby (Democrat), Nicole Macri (Democrat), Gerry Pollet (Democrat), Chipalo Street (Democrat), Tarra Simmons (Democrat), Julia Reed (Democrat), Brianna Thomas (Democrat), Shaun Scott (Democrat), Lisa Parshley (Democrat), Strom Peterson (Democrat), and Natasha Hill (Democrat).
What is the current status of HB 1974?
This bill has been enacted into law. Introduced February 14, 2025. Enacted.
Where can I track HB 1974?
Track HB 1974 free on One Click Politics — get push/email alerts when it moves.

Make your voice heard on HB 1974

Find the representatives who decide this bill and tell them where you stand — for yourself, or mobilize your whole list in one click with One Click Politics advocacy software.

Find my representatives → Run a campaign

Stay ahead of HB 1974

Last checked for changes 3 months ago · updated continuously

One Click Politics tracks every bill in Congress and all 50 states.

Track this bill →