Washington Legislative Week in Review

The 2012 Washington State legislative session is now two-thirds complete, as Tuesday, Feb. 14, marked what is known as the “House of Origin Cutoff.” All bills that are not budget related needed to have passed from the House to the Senate or from the Senate to the House or they are now considered dead.

The Washington State Revenue Forecast Council released its revenue forecast on Thursday, Feb. 16, showing projected revenue for the 2011–13 biennium up by $96 million. Combined with cuts and adjustments made since the December special session, the current projected budget shortfall is $855 million (down from $1.4 billion).

Many lawmakers from both parties agree that there are some “tax incentives” that need to be eliminated. One of those is the B&O tax exemption banks have on income earned from first mortgages. The House Republicans released their budget on Friday, and it includes elimination of the first mortgage interest exemption for “large banks.”

It is expected that House Democrats will announce their budget early this week, and the Senate budget should be announced next week.

Public Funds

Senate Bill 5913 received a do-pass recommendation from the House Business & Financial Services Committee on Thursday, Feb. 17, by a vote of 10-2 with one excused. The bill was then referred to the House Rules Committee. The bill will allow federal credit unions to become public depositaries and raise the amount that public entities could deposit at a credit union to the maximum level of federal insurance. Current law allows state-chartered credit unions to be depositaries up to a maximum of $100,000.

House Bill 1327 has been scheduled for a hearing before the Senate Financial Institutions, Housing & Insurance Committee on Wednesday, Feb. 22. House Bill 1327 does not include some technical correction language added by the Treasurer’s Office, currently in Senate Bill 5913.


Substitute House Bill 1552 has been referred to the Senate Judiciary Committee, where it is scheduled for a hearing today. The bill modifies the forms used in garnishment proceedings, increases the exemption for wages from 30 times the federal minimum hourly wage to 35 times the federal minimum hourly wage and increases the minimum and maximum amounts that may be collected for the garnishment attorney fee.

Document Recording Fees

House Bill 2048 has been referred to the Senate Financial Institutions, Housing & Insurance Committee where it is scheduled for a hearing today. The bill increases county recording fees to $40 from the current $30 surcharge for local homeless housing and assistance.


Substitute House Bill 2421 has been referred to the Senate Financial Institutions, Housing & Insurance Committee, where it is scheduled for a hearing today. The bill amends the Foreclosure Fairness Act to, among other things: (1) change when a borrower may be referred to mediation; (2) change the time period between the trustee sale and the recording of the notice of sale for owner occupied residential real property; (3) allow the mediator discretion to cancel a mediation session and continue a session; (4) provide immunity for all foreclosure mediators; (5) clarify what information a beneficiary and borrower must provide each other before mediation; (6) change the allocation of funds remitted by beneficiaries; and (7) make other procedural changes to the mediation process.

Short Sales

Substitute House Bill 2614 has been referred to the Senate Financial Institutions, Housing & Insurance Committee, where it is scheduled for a hearing tomorrow. The original bill prohibited the beneficiary on a deed of trust from obtaining a judgment on a deficiency balance in conjunction with a short sale of owner-occupied residential real property, if the beneficiary had filed an IRS forgiveness of debt (1099-C) OR the beneficiary consented to the sale of the property in writing. The substitute bill: (1) removes the provision prohibiting a beneficiary from obtaining a deficiency judgment when the beneficiary consented to the short sale; and (2) specifies that the bill only applies when the property that was sold was occupied by the borrower as the borrower’s principal residence at the time of the sale.

Deed of Trust Recording

Substitute Senate Bill 6070 passed the Senate on Tuesday, Feb. 14, by a vote of 48-0 with one excused. The bill establishes a stakeholder group made up of homeowner advocates, lenders and their servicers, representatives of county governments, and representatives of electronic registry systems to convene and discuss the issue of recording deeds of trust of residential property, including assignments and transfers, among other issues. The stakeholder group is to provide at least one specific legislative proposal to the legislature by Dec. 1, 2012.

Tax Preferences

Substitute Senate Bill 6088 has been referred to the House Ways & Means Committee, where it is scheduled for a hearing this week. The bill requires any bill introduced that would adopt a new tax preference or expand or extend an existing tax preference to include legislative intent provisions that might provide context and/or data for purposes of reviewing the preference under the Joint Legislative Audit and Review Commission (JLARC) review. Tax preferences must also include a specific expiration date. Tax preferences without a specified date expire five years after taking effect.

Drivers’ Licenses

Substitute Senate Bill 6150 has been referred to the House Transportation Committee, where it is scheduled for a hearing this week. The bill authorizes the Department of Licensing (DOL) to implement a facial recognition matching system for all driver’s licenses, permits and identicards. Any facial recognition matching system selected by DOL must be used only to verify the identity of an applicant for, or holder of, a driver’s license, permit or identicard. The bill also allows the DOL to issue a driver license or identicard for a period of other than six years in order to evenly distribute the yearly renewal rate.


Senate Bill 6465 has been referred to the House State Government & Tribal Affairs Committee where it is scheduled for a hearing this week. The bill authorizes bona fide charitable or nonprofit organizations to conduct raffles that exceed $5,000 if the organization obtains a license from the gambling commission. Credit unions are authorized to conduct raffles under current law.

House of Origin Cutoff Casualties

The following bills are among those that died with the House of Origin cutoff:

HB 2157 – Increasing tax revenue
HB 2268 – Establishing financial literacy as a high school graduation requirement
HB 2276 – Regarding administrative procedures that promote accountability, transparency, and economic relief
HB 2434 – Creating the Washington investment trust
HB 2486 / SB 6550 – Concerning tax reform
HB 2718 / SB 6337 – Protecting short sale sellers from payment of forgiven home loan debt if such debt forgiveness is reported to the internal revenue service (Note: HB 2614 relating to this same issue is still alive.)
SB 5810 – Concerning residential mortgage loan servicers
SB 6464 – Requiring the governor to sign certain significant legislative rules
HB 2777 / SB 6199 – Modifying the penalty for false swearing by a beneficiary


Questions? Contact a member of the Association’s Legislative Advocacy team:
Mark Minickiello, Vice President, Legislative Affairs
Stacy Augustine, Senior Vice President & General Counsel

Posted in Advocacy News, NWCUA.