The bill seeks to enhance the financial capabilities of local governments in Washington by amending various sections of the Revised Code of Washington (RCW). It introduces new provisions allowing counties and cities to impose an additional real estate excise tax of up to 0.25% on property sales, with revenues earmarked for capital projects related to homelessness and affordable housing. The definition of "capital projects" is expanded to include facilities for individuals experiencing homelessness and the abatement of nuisance properties. Additionally, a new local sales and use tax capped at 0.01% is established to fund services for children and families, specifically for child care and mental health support. The bill also modifies existing local sales and use tax provisions, allowing counties to impose a tax of up to 0.1% for housing-related services, with a requirement that at least 60% of the funds be allocated for affordable housing and behavioral health facilities.

Moreover, the legislation introduces a new tax structure for cities and counties, permitting a tax rate of 0.0073% or 0.0146% based on the presence of qualifying local taxes, with strict guidelines on the use of collected funds for affordable housing initiatives. It outlines maximum tax distributions based on taxable retail sales and includes provisions for interlocal agreements to pool tax receipts. The bill also addresses property tax levy limitations, requiring reductions if the combined rate exceeds one percent of property value, and expands the authority for counties to impose sales and use taxes on retail car rentals. Additionally, it establishes a new property tax levy for county public health clinics and outlines procedures for forming fire protection districts, including voter approval and transparency requirements. Key sections of the bill will take effect on January 1, 2027, while others will be effective from July 1, 2026.

Statutes affected:
Original bill: 82.46.075, 82.14.530, 71.20.110, 84.52.043, 36.62.090, 84.52.010, 84.55.005, 84.55.050, 82.14.049
Substitute bill: 82.46.075, 82.14.530, 71.20.110, 73.08.080, 84.52.043, 36.62.090, 84.52.010, 84.55.005, 84.55.050, 82.14.049, 86.15.080
Engrossed substitute: 82.14.530, 82.14.540, 84.52.043, 36.62.090, 84.52.010, 84.55.050, 82.14.049, 86.15.080
Bill as passed Legislature: 82.14.530, 82.14.540, 84.52.043, 36.62.090, 84.52.010, 84.55.050, 82.14.049, 86.15.080, 71.20.110, 73.08.080, 84.55.005, 52.02.160, 52.02.180, 84.55.092, 84.52.125, 52.14.140
Session law: 82.14.530, 82.14.540, 84.52.043, 36.62.090, 84.52.010, 84.55.050, 82.14.049, 86.15.080, 71.20.110, 73.08.080, 84.55.005, 52.02.160, 52.02.180, 84.55.092, 84.52.125, 52.14.140