Shown verbatim: the complete text as captured from the official page posted by the Washington Legislature, fetched 2026-08-29. This is the chaptered version. The official bill page.
CERTIFICATION OF ENROLLMENT SECOND SUBSTITUTE HOUSE BILL 1516 Chapter 202, Laws of 2025 69TH LEGISLATURE 2025 REGULAR SESSION PERMANENTLY AFFORDABLE HOMEOWNERSHIP UNITS—CONSTRUCTION DEFECT LIABILITY—INSURANCE COVERAGE STUDY EFFECTIVE DATE: July 27, 2025 Passed by the House March 11, 2025 Yeas 58 Nays 38 LAURIE JINKINS Speaker of the House of Representatives Passed by the Senate April 16, 2025 Yeas 41 Nays 8 JOHN LOVICK President of the Senate CERTIFICATE I, Bernard Dean, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is SECOND SUBSTITUTE HOUSE BILL 1516 as passed by the House of Representatives and the Senate on the dates hereon set forth. BERNARD DEAN Chief Clerk Chief Clerk Approved May 7, 2025 1:19 PM FILED May 12, 2025 BOB FERGUSON Governor of the State of Washington Secretary of State State of Washington SECOND SUBSTITUTE HOUSE BILL 1516 Passed Legislature - 2025 Regular Session State of Washington 69th Legislature 2025 Regular Session By House Appropriations (originally sponsored by Representatives Hill, Taylor, Reed, Simmons, Morgan, Ormsby, Farivar, Parshley, Gregerson, Macri, Ramel, Pollet, and Salahuddin) READ FIRST TIME 02/28/25. AN ACT Relating to conducting a study of insurance coverage options for permanently affordable homeownership units; creating new sections; and providing an expiration date. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON: NEW SECTION. Sec. 1. (1) The office of the insurance commissioner shall conduct a study regarding how projects that develop new permanently affordable homeownership units may utilize different insurance coverage options and approaches to reduce costs related to condominium construction defect liability while maintaining commensurate access to insurance coverage. (2) The study must be conducted in consultation with: Identified nonprofit organizations and government entities that sponsor permanently affordable homeownership units; authorized insurers of permanently affordable homeownership projects; unauthorized insurers of permanently affordable homeownership projects; representatives of the residential building construction industry; and relevant state associations. (3) In conducting the study, the insurance commissioner shall: (a) Collect and use relevant findings from past insurance market studies conducted by the office of the insurance commissioner on or after December 31, 2017, or other relevant information released on or after December 31, 2017, that may assist the insurance commissioner in conducting the analysis or making recommendations; and (b) Collect information and data from entities transacting insurance in the state. Any identified authorized insurers, unauthorized insurers, and risk retention groups are required to provide the requested information and data to the insurance commissioner for purposes of this subsection. (4) The insurance commissioner may contract with actuarial or other consultants to facilitate the study. (5) Consistent with RCW 43.01.036, the insurance commissioner shall submit a report on its findings to the appropriate committees of the legislature by December 31, 2026. The report must include: (a) An actuarial analysis of how the condominium construction defect liability risk pools for nonprofit organizations and government entities that sponsor permanently affordable homeownership units may differ from for-profit models of condominium production, sale, and ownership; (b) An analysis of the role that the commissioner and insurers can play to lower condominium construction defect liability insurance costs for nonprofit organizations and government entities that sponsor permanently affordable homeownership units; and (c) Recommendations for how current or new insurance mechanisms may be used to reduce insurance costs for nonprofit organizations and government entities that sponsor permanently affordable homeownership units. (6) Funding for the study shall be provided from the insurance commissioner's regulatory account established under RCW 48.02.190. (7) For the purposes of this section, "permanently affordable homeownership" means a unit that, in addition to meeting the definition of "affordable housing" in RCW 43.185A.010, is: (a) Sponsored by a nonprofit organization or governmental entity; (b) Subject to a ground lease or deed restriction, the forms of which may include a ground lease, deed restriction, community land trust lease, or affordability covenant that includes: (i) A resale restriction designed to provide affordability for future low and moderate-income homebuyers; (ii) A right of first refusal for the sponsoring organization to purchase the home at resale, except in cases where the sponsor organization is a limited equity cooperative, defined as "cooperative" in RCW 64.90.010, and the sponsor organization is not partnered with a community land trust; and (iii) A requirement that the sponsor must approve any refinancing secured by the home, including home equity lines of credit, except where the sponsor organization is a limited equity cooperative, defined as "cooperative" in RCW 64.90.010, and the sponsor organization is not partnered with a community land trust; and (c) Sponsored by a nonprofit organization or governmental entity and the sponsor: (i) At the initial sale and at each successive sale of the unit, executes a new ground lease or deed restriction, the forms of which may include a ground lease, deed restriction, community land trust lease, or affordability covenant with a duration of at least 99 years; and (ii) Supports the unit's homeowner and enforces the ground lease or deed restriction. (8) This section expires December 31, 2027. NEW SECTION. Sec. 2. If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2025, in the omnibus appropriations act, this act is null and void. Passed by the House March 11, 2025. Passed by the Senate April 16, 2025. Approved by the Governor May 7, 2025. Filed in Office of Secretary of State May 12, 2025.
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