Bill > HB2089

This bill, known as the wildfire alleviation support act, aims to restore funding to Washington state's wildfire response, forest restoration, and community resilience account by modifying how certain financial institutions are taxed on loan interest. Specifically, it changes the definition of a "community bank" that was previously eligible for a tax break on interest earned from loans, particularly those secured by residential properties. Previously, a "community bank" was defined as a person or affiliate operating in ten or fewer states, intended to encourage lending in the residential housing market. However, a review found that a significant portion of the tax benefit went to large, out-of-state financial institutions, not the intended local lenders, and that these institutions' operations, like data centers, can contribute to climate warming and thus increase wildfire risk. This bill redefines the eligible entities to include "high volume mortgage lenders," which are either specified financial institutions or those with at least $10 billion in annual closed mortgage origination volume. The revenue generated from taxing interest from these larger lenders will be transferred from the state's general fund to the wildfire response account, starting in November 2027, to help fund wildfire preparedness and mitigation efforts.