The bill introduces a new section to chapter 82.29A RCW, exempting all leasehold interests in public lands from the leasehold excise tax for the duration of the lease, provided that the land is used for affordable housing. To qualify for this exemption, lessees must commit to renting or selling 100 percent of the units as permanently affordable for low-income and moderate-income households, and the lease must have a minimum term of 20 years. The Department of Natural Resources is authorized to adopt necessary rules for the administration of this section, and affordable housing for low-income households is prioritized in the exemption process.

Additionally, the bill includes a tax preference performance statement that outlines the legislature's intent to incentivize the placement of affordable housing on public lands. It establishes that if a review by the joint legislative audit and review committee finds an increase in affordable housing units on public lands following the enactment of this tax preference, the legislature intends to extend the expiration date of the tax preference. The bill also specifies that RCW 82.32.805 does not apply to this act, indicating a unique treatment for this tax exemption.