SENATE BILL REPORT

SB 6717

BYSenator Lee

Revising provisions on the housing trust fund.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 4, 1988

Majority Report:     Do pass.

     Signed by Senators Lee, Chairman; Anderson, Vice Chairman; Cantu, Conner, McMullen, Saling, Smitherman, Warnke, West.

Senate Staff:Charles A. Woods (786-7911)

                February 16, 1988

AS PASSED SENATE, FEBRUARY 16, 1988

BACKGROUND:

The housing trust fund is funded by interest from real estate broker's deposits of nominal or short term client funds into pooled interest-bearing escrow accounts.  A nominal or short term deposit is defined as a deposit which would not produce positive net income if placed into a separate account.  This can be difficult to discern due to uncertainty of factors such as length of deposit while awaiting closing, interest rates available, bank processing and start-up fees.

SUMMARY:

The definition of nominal deposits would be changed to be any deposit of not more than $5,000.  The words "short term" would be removed from the sections.  "Bank processing fees and other administrative costs" are included in subsection (5) as specific examples of reasonable transaction costs.  Subsection (6) would be modified to allow funds not required to be deposited into a subsection (5) pooled escrow account to be placed there if the parties to the transaction agree.

Appropriation:  none

Revenue:   none

Fiscal Note:    none requested

Senate Committee - Testified:   Ed Murphy, WAR (for); Bob Mitchell, DOL, Real Estate Prog. Mgmt. (for); Randy Scott, City of Seattle (against)