The proposed bill establishes a sales and use tax remittance program in Washington State to promote the development of affordable housing. It defines key terms such as "affordable housing," "eligible organization," and "qualifying project," which requires that at least 50% of residential units be dedicated to low-income households for a minimum of 40 years. The bill outlines the process for local governing authorities to create the remittance program, including public hearings and application criteria. Eligible organizations must apply for remittance before construction begins, and the bill mandates that 50% of remitted taxes go to the organization while the other half is allocated to the city or county that authorized the program. The remittance funds must be used specifically for affordable housing initiatives and the program is set to expire on December 31, 2035.

Additionally, the bill facilitates collaboration between cities and counties through interlocal agreements to combine funds from remittance programs. Eligible organizations are required to submit annual reports on the status of affordable housing units for 40 years after receiving a certificate of occupancy, while cities and counties must report annually to the department starting in 2026. The bill also outlines conditions for revoking tax exemptions, such as non-compliance or changes in project use, but allows ownership transfers of qualifying projects to maintain tax exemptions if the new owner meets eligibility requirements. A performance statement is included to assess the effectiveness of the tax preferences in increasing affordable housing units, with a review scheduled for December 31, 2033. The act is set to take effect on January 1, 2026.