Committee Hears Support for Raising Deed Recording Surcharge to Fund Mortgage-Fraud Prosecutions
February 18, 2026 | Legislative Sessions, Washington
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The Appropriations Committee heard public testimony Tuesday on Senate Bill 5,109, which would increase the surcharge collected when a deed of trust is recorded from $1 to $5 and remove the existing sunset on that surcharge and the associated mortgage-lending fraud prosecution account.
Jessica Van Horn, staff to the committee, told members the change would allow county auditors to retain up to 5% for administrative costs and that the fiscal note anticipates $1.1 million in new revenue in fiscal year 2027 and about $2.6 million per biennium thereafter, with roughly $1.0 million deposited into the prosecution account in FY2027 and $2.5 million per biennium thereafter.
Patrick Hynes, Chief Deputy of the Economic Crimes and Wage Theft Division at the King County Prosecutor’s Office, testified in support, saying the surcharge has not been adjusted since the fund’s creation in 2003 and that funding erosion has reduced local capacity: “5109 will address this by finally adjusting the surcharge to $5.” Hynes said the higher surcharge is typically tied to high-dollar real-estate transactions and is small on an individual basis but meaningful in the aggregate for prosecutorial resources.
Russell Brown, Executive Director of the Washington Association of Prosecuting Attorneys, also urged passage, saying local prosecutors are underfunded and that increased funds in King County have statewide spillover benefits. “We would encourage you to move and pass this bill,” Brown said.
Representative Penner asked whether a $2.5 million mitigation allocation in the governor’s budget for related fraud mitigation under Commerce could substitute for the surcharge increase; witnesses replied the surcharge’s direct linkage to recorded deeds and the statute-limited use of the fund make the special account the preferred mechanism for sustained prosecution funding.
No vote was taken; the committee closed the public hearing and moved on to other items on the agenda.
Jessica Van Horn, staff to the committee, told members the change would allow county auditors to retain up to 5% for administrative costs and that the fiscal note anticipates $1.1 million in new revenue in fiscal year 2027 and about $2.6 million per biennium thereafter, with roughly $1.0 million deposited into the prosecution account in FY2027 and $2.5 million per biennium thereafter.
Patrick Hynes, Chief Deputy of the Economic Crimes and Wage Theft Division at the King County Prosecutor’s Office, testified in support, saying the surcharge has not been adjusted since the fund’s creation in 2003 and that funding erosion has reduced local capacity: “5109 will address this by finally adjusting the surcharge to $5.” Hynes said the higher surcharge is typically tied to high-dollar real-estate transactions and is small on an individual basis but meaningful in the aggregate for prosecutorial resources.
Russell Brown, Executive Director of the Washington Association of Prosecuting Attorneys, also urged passage, saying local prosecutors are underfunded and that increased funds in King County have statewide spillover benefits. “We would encourage you to move and pass this bill,” Brown said.
Representative Penner asked whether a $2.5 million mitigation allocation in the governor’s budget for related fraud mitigation under Commerce could substitute for the surcharge increase; witnesses replied the surcharge’s direct linkage to recorded deeds and the statute-limited use of the fund make the special account the preferred mechanism for sustained prosecution funding.
No vote was taken; the committee closed the public hearing and moved on to other items on the agenda.
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