WA HB2451

Amends Washington's local tax increment financing law (RCW 39.114) to add new definitions, strengthen requirements for designating increment areas, and expand protections for impacted taxing districts

Changes the $200,000,000 assessed valuation cap for increment areas to be adjusted annually by consumer price index, with a special exception allowing cities with population 150,000-170,000 in counties over 1.5 million to create increment areas up to $500,000,000 during fiscal year 2026

Requires mandatory negotiations, mediation, and binding arbitration with impacted taxing districts when increment areas will increase residential development by 50+ units, impact 10%+ of assessed value, or cause forecasted property tax revenue losses

Strengthens public notice requirements from 90 to 180 days before project analysis submission, requires two public hearings instead of briefings, and mandates annual reporting on increment area status including impacts to taxing districts

Changes sunset date from permissive 25 years to mandatory earlier of 25 years or when tax allocation revenues equal maximum public improvement obligations; requires construction to begin within 5 years (changed from "at least" to "no more than"); effective date June 2, 2026