This bill introduces a new section to chapter 82.29A RCW, exempting leasehold interests in public lands from the leasehold excise tax when used for affordable housing. The exemption is contingent upon the lessee's commitment to either rent or sell a specified percentage of housing units as affordable housing for low-income and moderate-income households. Specifically, the exemption lasts for 12 years if at least 20% of the units are designated as affordable, or for 20 years if at least 25% are designated. The Department of Natural Resources is authorized to adopt necessary rules for the administration of this section.

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 a framework for evaluating the effectiveness of the tax preference, indicating that if an increase in affordable housing units is observed, the legislature may consider extending the tax preference's expiration date. The bill also clarifies that RCW 82.32.805 does not apply to this act, ensuring that the new provisions are distinct from existing tax regulations.