[WSBARP] SB 5408 - 39 homestead exemption amounts - and they float- passed the Senate, now in the House

[Rod Harmon]

The Senate passed a bill yesterday that is a major amendment to the homestead exemption.   The homestead exemption would become the greater of $125,000 or the county median price home value as determined by an academic department at the UW.  So, we would have 39 different homestead exemption amounts.  And they would float.  This bill started out as a clarification to resolve a dispute among bankruptcy judges about how Washington homestead exemption law fit into the Bankruptcy Code. Then someone decided to make a Washington version of what just went into effect in California Jan 1, 2021:


Section 704.730 of California's Civil Code:

(a) The amount of the homestead exemption is the greater of the following:

(1) The countywide median sale price for a single-family home in the calendar year prior to the calendar year in which the judgment debtor claims the exemption, not to exceed six hundred thousand dollars ($600,000).

(2) Three hundred thousand dollars ($300,000).

(b) The amounts specified in this section shall adjust annually for inflation, beginning on January 1, 2022, based on the change in the annual California Consumer Price Index for All Urban Consumers for the prior fiscal year, published by the Department of Industrial Relations.

Here are the details:
SB 5408 - 2021-22.  Concerning the homestead exemption.
Bill Information:  Washington State Legislature<https://app.leg.wa.gov/billsummary?BillNumber=5408&year=2021>
Passed Senate 46-2


RCW 6.13.030 is amended as:

(1) The homestead exemption amount is the greater of:

(a) $125,000;  [or]

(b) The county median sale price of a single-family home in the preceding calendar year; ...

(2) In determining the county median sale price of a single-family home in the preceding year, a court shall use data from the Runstad department of real estate at the University of Washington or, if the Runstad department no longer provides the data, a successor entity designated by the office of financial management.



RCW 6.13.010 is amended as:

(1) The homestead consists of real or personal property that the owner or a dependent of the owner uses as a residence.

(2) (d) "Dependent" has the meaning given in Title 11 U.S.C. Sec. 522(a)(1).





The bill report refers to these two bankruptcy cases:
In re Good, 588 B.R. 573 (Bankr. W.D. Wash. 2018) (Bankruptcy sale of debtors' homestead property by Chapter 7 trustee was in nature of "forced sale," that did not trigger obligation on part of debtors to timely reinvest exempt sales proceeds in order to maintain their exempt character for more than one year following sale). Wilson v. Rigby, 909 F.3d 306 (9th Cir. 2018) (While each state is entitled to set the parameters of the homestead exemption that debtor may claim, in all cases, debtor is limited to the value that may lawfully be claimed under state law on petition date).

The engrossed bill report is telling: "Staff Summary of Public Testimony on Original Bill: The committee recommended a different version of the bill than what was heard."

Rod Harmon

RODNEY T. HARMON
       Attorney at Law
         P.O. Box 1066
      Bothell, WA   98041
     Tel:   (425) 402-7800
     Fax:  (425) 458-9096
    www.rodharmon.com<http://www.rodharmon.com>
   rodharmon at msn.com<mailto:rodharmon at msn.com>




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