(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. The state intends to enable land banks to operate regionally and provide incentives that result in reduced costs to hold property. In turn, land banks can coordinate with developers throughout their region to build mixed-income developments and give more Washingtonians a place to call home.

(3) Therefore, the legislature intends to authorize land banking authorities to:

(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) State the public purpose of the land bank authority, including acquiring, holding, managing, and transferring property for affordable housing consistent with adopted local housing plans and chapter 36.70A RCW;

(b) Describe the governance or oversight structure applicable to the land bank authority; and

(c) Authorize the land bank authority to acquire, hold, lease, and transfer real property, including transfers at less than fair market value in exchange for affordability requirements authorized under this chapter.

(2) The legislative authorities of two or more contiguous counties may authorize the establishment of a land bank to be administered in accordance with an interlocal agreement.

(2) Land acquisitions and dispositions must:

(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; and

(b) Demonstrate alignment with adopted local housing targets under chapter 36.70A RCW.

(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. Such transfers are not required to be made to the highest bidder.

(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:

(a) Rental housing units must be affordable to households with an income at or below 80 percent of the area median income; and

(b) Owner-occupied housing units must be affordable to households with an income at or below 120 percent of the area median income.

(a) Real property parcels acquired, held, and transferred during the year;

(b) The manner of disposition and alignment with local housing and land use plans;

(c) How each action advanced a community benefit;

(d) The purchase price and assessed value of each parcel acquired;

(e) The sales price and assessed value of each parcel transferred;

(f) The number of housing units developed on each parcel transferred;

(g) The affordability covenants recorded for each parcel sold; and

(h) Progress toward advancing equity, preventing displacement, and meeting locally identified housing needs.

(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. 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.

(1) "Land bank" means the inventory of real property acquired, held, leased, or transferred by a land bank authority for purposes consistent with this chapter.

(2) "Land bank authority" means an entity authorized by ordinance or resolution of a city or county legislative authority to establish and operate a land bank under this chapter.

(1) The county legislative authority may dispose of tax foreclosed property by private negotiation, without a call for bids, for not less than the principal amount of the unpaid taxes in any of the following cases: (a) When the sale is to any governmental agency and for public purposes; (b) when the county legislative authority determines that it is not practical to build on the property due to the physical characteristics of the property or legal restrictions on construction activities on the property; (c) when the property has an assessed value of less than five hundred dollars $500 and the property is sold to an adjoining landowner; 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; or (e) when the sale is to an entity operating a land bank authority under section 2 of this act.

(2) A county legislative authority must prioritize the transfer of tax foreclosed property to an entity operating a land bank authority under section 2 of this act.

(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 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. The notice must offer the city the opportunity to purchase the property for the original minimum bid under RCW 84.64.080, together with any direct costs incurred by the county in the sale. If the city chooses to purchase the property, the following conditions apply:

(a) The city must accept the offer within thirty 30 days of receiving notice, unless the county agrees to extend the offer;

(b) The city must provide that the property is suitable and will be used for an affordable housing development as defined in RCW 36.130.010; 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 under chapter 43.185A RCW. 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.

(1) A public corporation, commission, or authority created pursuant to RCW 35.21.730, 35.21.660, or 81.112.320, or a land bank authority established under section 2 of this act that is operated by a public corporation, shall receive the same immunity or exemption from taxation as that of the city, town, or county creating the same: 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 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 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: AND PROVIDED FURTHER, That property within a special review district established by ordinance prior to January 1, 1976, or property which is listed on any federal or state register of historical sites and 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, 1976, shall receive the same immunity or exemption from taxation as if such property had been within a district listed on any such federal or state register of historical sites as of January 1, 1976, and 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, 1976.

(2) As used in this section:

(a) "Low-income" means a total annual income, adjusted for family size, not exceeding fifty 50 percent of the area median income.

(b) "Area median income" means:

(i) For an area within a standard metropolitan statistical area, the area median income reported by the United States department of housing and urban development for that standard metropolitan statistical area; or

(ii) For an area not within a standard metropolitan statistical area, the county median income reported by the department of commerce.

(c) "Blighted property" means property that is contaminated with hazardous substances as defined under RCW 70A.305.020.

(1) The property of an authority is declared to be public property used for essential public and governmental purposes and such property and an authority shall be exempt from all taxes and special assessments of the city, the county, the state or any political subdivision thereof: PROVIDED, HOWEVER, That, except for any property owned by a land bank authority operated by a housing authority under section 2 of this act, in lieu of such taxes an authority may agree to make payments to the city or the county or any such political subdivision for improvements, services and facilities furnished by such city, county or political subdivision for the benefit of a housing project, but in no event shall such payments exceed the amount last levied as the annual tax of such city, county or political subdivision upon the property included in said project prior to the time of its acquisition by the authority.

(2) For the sole purpose of the exemption from tax under this section:

(a) "Authority," in addition to the meaning in RCW 35.82.020, also means tribal housing authorities and, intertribal housing authorities., and a land bank authority owned, operated, or controlled by a housing authority under section 2 of this act.

(b) "Intertribal housing authority" means a housing authority created by a consortium of tribal governments to operate and administer housing programs for persons of low income or senior citizens for and on behalf of such tribes.

(c) "Tribal government" means the governing body of a federally recognized Indian tribe.

(d) "Tribal housing authority" means the tribal government or an agency or branch of the tribal government that operates and administers housing programs for persons of low income or senior citizens.

(2) To qualify for this exemption, the nonprofit entity must be exempt from taxation under 26 U.S.C. Sec. 501(c)(3) of the internal revenue code of 1986, as amended.

(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.

(4) If a review finds that the tax preferences in sections 7 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.