Washington Legislative Update: Credit Union Bills Await Floor Vote
February 23, 2015
February 23, 2015
Credit union advocates covered the capitol grounds on Thursday for Credit Union Day at the Capitol. They visited all 156 legislative offices, sharing the credit union story and the recent economic impact report. It was the largest ever gathering of credit union advocates at the Washington state capitol.
During the same week, both House Bill 1871 and Senate Bill 5757 addressing credit unions’ corporate governance and investments were passed out of their respective policy committees and referred to Rules ahead of the February 20 cutoff. Association staff now turns its focus on getting the bills ‘pulled’ from their respective Rules committees and made eligible for floor votes. The bills have until March 11 to pass out of their house of origin.
The Senate released its transportation tax package last week, emphasizing it is a work in progress. The $15 billion transportation package includes an 11.7 cents-per-gallon gas tax increase and increases yearly car-tab fees. The proposal raises the gas tax by 5 cents in July 2015, 4.2 cents in July 2016 and 2.5 cents in July 2017. Yearly car-tab fees are raised by $15 and then an additional $8 in 2022. Aside from transportation projects, their plan includes reforms that address issues including sales tax, permitting, contracts, and project delivery.
House Bill 1239 and its companion measure Senate Bill 5492 relate to increasing tax exemption transparency and accountability. The bills would require the state operating budget to include a tax expenditure budget detailing all discretionary state tax expenditures with an estimate of state revenue impacts, and require the Governor’s budget to include a list of expiring tax expenditures and a recommendation to extend or allow the tax expenditure to expire. House Bill 1239 received a hearing before the House Finance Committee on February 20.
House Bill 2134 concerns the creation, extension, expansion, accountability, and transparency of state tax preferences. The bill addresses state tax preferences with regard to: (1) Improving tax preference data collection; (2) Incorporating Department of Revenue-led work group recommendations for improving department of revenue annual surveys and reports; (3) Authorizing public disclosure of firm-specific tax savings from business tax incentives; and (4) Updating and modernizing the department of revenue tax exemption report. The bill received a hearing before the House Finance Committee on February 20.
The state-chartered credit union B&O tax exemption would be included in this new process, which would bring attention to all tax exemptions.
House Bill 2150 which would reform the B&O tax to provide fairness and administrative simplicity, was introduced on February 19 and referred to the House Finance Committee. The bill replaces the dozens of current B&O tax classifications and numerous preferences with three new rates and every business being provided one of three standard deductions to choose from to determine their taxable margin. The new rates would be:
- Services: 3.75%
- Retail/Wholesale/manufacturing/banking: 1.60%
- Telecom: 1.20%
Every business would be allowed to deduct the first $500,000 from its gross receipts, in effect exempting nearly 286,000 small businesses from any B&O tax obligation. For businesses grossing more than $500,000, to determine the taxable margin a business would also be allowed to deduct either:
- Cost of goods sold;
- Total compensation (Up to $200k per employee); or
- 1/3 of revenue;
The bill maintains the state-chartered credit union B&O tax exemption.
House Bill 1923 relates to regulating income share agreements. The bill creates a regulatory structure for income share agreements, an alternative to student loans, through which individuals agree to pay a percentage of their future income in exchange for funds provided to pay for higher education. House Bill 1923 received a hearing before the House Business & Financial Services Committee on February 17 before receiving a do-pass recommendation from the committee on February 18 and being referred to the House Appropriations Committee.
Congress passed the Achieving a Better Life Experience (ABLE) Act in December, 2014, amending the IRS Code to exempt qualified ABLE savings programs established by states from taxation. House Bill 2063 and its companion measure Senate Bill 6043 create the Washington ABLE program within the Department of Commerce to allow for the creation of savings accounts for eligible individuals with disabilities. The bills also create the ABLE program account and authorize the State Investment Board to invest, reinvest, manage, contract, sell, or exchange investment money in the account. House Bill 2063 received a hearing before the House Early Learning & Human Services Committee on February 18 before receiving a do-pass recommendation from the committee on February 20 and being referred to the House Appropriations Committee.
Senate Bill 5968 would clarify that the owner or holder of a trust deed, or the owner or holder’s designee, may initiate foreclosure proceedings. A mortgage may be sold among different financial institutions and investors, sometimes over and over again. The financial institution that is the owner of the note may not have possession of the original note. The bill provides that in order to initiate foreclosure proceedings, the trustee must have proof that the beneficiary is the owner or holder of any promissory note or other obligation secured by the deed of trust, and that a declaration stating that the beneficiary is the owner or holder of the promissory note constitutes sufficient proof. The bill was introduced on February 13 and referred to the Senate Financial Institutions & Insurance Committee but did not receive a hearing before Friday’s cutoff.
Senate Bill 5971 would establish the Washington Publicly Owned Trust (WASHPOT) in order to create a financing infrastructure to implement Initiative 502 (recreational marijuana) that complies with the U.S. Attorney General’s guidance letter, thereby providing resources for public infrastructure and other public purposes. The bill was introduced on February 13 and referred to the Senate Financial Institutions & Insurance Committee but did not receive a hearing before Friday’s cutoff.
Glass Steagall Act
Senate Joint Memorial 8005 requests that Congress enact legislation that would reinstate the separation of commercial and investment banking functions that were in effect under the Glass-Steagall Act, prohibiting commercial banks and bank holding companies from investing in stocks, underwriting securities, or investing in or acting as guarantors to derivative transactions, in order to prevent American taxpayers from being called upon to fund hundreds of billions of dollars to bail out financial institutions. The memorial received a hearing before the Senate Financial Institutions & Insurance Committee on February 19.
Other bills we are tracking
Substitute House Bill 1078 modifies notice requirements in cases of a data breach. The bill requires disclosure of a security breach of personal information to be made no later than 45 days after the breach was disclosed and makes failure to notify affected consumers of a security breach a violation of the Consumer Protection Act. The substitute bill exempts notification for persons and businesses in compliance with the Gramm Leach Bliley Act, provided that they do report a data breach to the Office of the Attorney General when more than 500 Washington residents are affected by the breach. The bill received a do-pass recommendation from the House Technology & Economic Development Committee on February 17 and was referred to the House Rules Committee. While the Association remains in support of the bill, Association staff is working with the AG’s office to ensure the GLBA exemption includes credit unions.
House Bill 1304 allows banks that serve as public depositaries to arrange for reciprocal deposits of public funds and authorizes public funds to be deposited in institutions located outside of the state if certain conditions are met. The bill passed the House floor on February 19 by a vote of 97-0 with 1 excused and was referred to the Senate Financial Institutions & Insurance Committee on February 20.
Small Business Retirement Plan Marketplace
Senate Bill 5826 creates the Washington small business retirement Marketplace, requiring the Department of Commerce to contract with a private sector entity to establish a program that connects eligible employers with qualifying plans. The bill received a do-pass recommendation from the Senate Financial Institutions & Insurance Committee on February 18 and was referred to the Senate Ways & Means Committee.
Look for the Washington Legislative Week in Review each week in Anthem during legislative session which runs January 29 – April 26, 2015. If you have questions or comments, please contact Mark Minickiello, email@example.com, 206.340.4812.
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