Before the Senate takes up the 1 percent property tax cap members are debating a second bill that would create a property tax deferral program for mid-level income homeowners. The bill, SB 6178, comes at the request of Gov. Christine Gregoire and is sponsored by Sen. Claudia Kauffman, D-Kent.

Kauffman says the bill would help those who need it most who are in "real danger of losing their homes." The bill would allow people to defer property tax payments, but they'd have to pay back taxes, with interest, if the property is sold or the owner dies. The deferral would be available to households making up to $57,000-a-year and allow them to defer half their tax payments.

Sen. Joe Zarelli, R-Ridgefield, said the bill would push people further into debt because of interest charges that would accrue. Republicans have been describing the bill today as a form of predatory lending that would trap homeowners with large debt owed to the government.

"That's really what this is, payday lending by the state of Washington," Sen. Mark Schoesler, R-Ritzville, said.

The bill passed 27-21

All Republicans in the Senate voted no, as did four Democrats: Tim Sheldon, Brian Hatfield, Steve Hobbs and Jim Kastama.

The Senate is now, at 4:20 p.m., taking up the 1 percent cap bill.

Republican Don Benton also tried to amend the bill. He wanted to prohibit use of unused tax capacity that local taxing districts may have saved up.

"The underlying bill restores half the people's will," Benton said. "My amendment restores the other half."

Democrats challenged the amendment, just as happened in the House, saying that the amendment was outside the scope of the bill.

Lt. Gov. Brad Owen hasn't ruled yet. The Senate is standing at ease.

The Senate went back in about 5:30. Benton's amendment was ruled out of scope and tabled. Senators are now debating the bill and will vote soon.

Sen. Jeanne Kohl-Welles, D-Seattle, spoke against the bill and said Initiative 747 "should never have been passed by the voters in the first place." She said it has done more harm than good because local services have been starved of funding.

Republicans in the Senate are being more upbeat about the bill than most House Republicans were. Benton said the cap was a "step in the right direction and provides certainty" about increases in property tax rates. And he said how glad he was that the governor called the special session.

Sen. Mike Carrell, R-Lakewood, began his floor speech this way: "I am very happy tonight to be voting in favor of Initiative 747." He said it was a "great move" and that his constituents will be happy to have tax increases restricted even a little.

The bill passed 39-9. Voting no were Democrats Darlene Fairley, Ken Jacobsen, Adam Kline, Kohl-Welles, Joe McDermott, Ed Murray, Craig Pridemore, Harriet Spanel and Brian Weintstein.

Zarelli just told reporters he was happy with the Legislature's work today.

"The point is, where in history has a Legislature come into special session for the purpose of cutting taxes. Has that ever happened?"