Washington Legislative Update: Credit Union Bills Awaiting House Vote

With just three weeks left in the 2015 regular legislative session, scheduled to adjourn on April 26, the focus has been on passing bills out of the transportation and fiscal committees and preparing for a lot of floor action as the legislature works to pass bills on to the Governor and to negotiate a budget.

Association supported legislation updating the Washington Credit Union Act, SB 5757 and SB 5300, are both in the House Rules Committee waiting to be pulled to the House floor for a final vote before being delivered to the Governor.  Association staff expects that to occur later this week, once the House Rules Committee begins meeting again and pulling bills to the floor for a vote.

As expected, the Republican controlled Senate released their budget last week.  Unlike the Democratically controlled House, the Senate proposal would not raise taxes to fulfill the McCleary education funding obligation.

While both the Governor and the House Democrats’ proposals have included a capital gains tax on investment revenue, the Senate has opposed that and any other new taxes.

The Senate budget would spend $38 billion over the next two years starting July 1 while the House budget is $38.8 billion. The current two-year budget is $33.6 billion.

Both proposals preserve the state chartered credit union B&O tax exemption.

Differences Between the Proposals

The Senate budget gives $1.3 billion extra to meet the state Supreme Court’s order to boost schools funding compared to $1.4 billion in the House Democrats’ proposal.

Both proposals would suspend part of Initiative 1351, which voters passed last year to reduce class sizes.

The biggest difference between the Senate and House budget proposals is the gap between how to compensate teachers and state government employees.  The Senate budget would give teachers and other school employees a cost-of-living increase, but state employees would get a $1,000 raise in mid-2015, and another $1,000 in mid-2016 instead of the increases negotiated between their unions and the governor’s office.  The difference in the proposals is over $430 million.

The Senate budget would also transfer most of the tax revenue from marijuana into the general fund rather than how it was allocated under I-502 for prevention, intervention and health programs. 

Both the House and Senate expect to vote in their budget proposals this week.

If both proposals pass out of their chamber this week as expected, the remainder of the regular session would focused on negotiations between the two in an effort to reach a plan that both chambers can send to the Governor.

Association Concerns with Budget Proposals

The Association has concerns with the House budget removing the Real Estate Excise Tax (REET) exemption on foreclosure sales.  As written, the bill would require REET to be paid twice; once at the foreclosure sale and then again upon resale of the property.  Association staff is working with Rep. Brendan Vick (R-Vancouver) on an amendment to the House budget removing the language.

The Association also has concerns with the Senate budget which includes language allowing the legislature to transfer the ‘excess fund balance’ from the Financial Services Regulation Fund to the general fund.  The Association opposes sweeps from DFI reserves as they could adversely affect the operations of the Agency or result in fee increases for credit unions.

Other Bills We Are Tracking

Data Breach

Substitute House Bill 1078 is AG request legislation modifying notice requirements in cases of a data breach.  The bill received a do-pass recommendation from the Senate Law & Justice Committee on March 31 and was referred to the Senate Ways & Means Committee.

Financial Fraud

House Bill 1090 reauthorizes and expands the Financial Fraud and Identity Theft Crimes Investigation and Prosecution Program.  The bill received a do-pass recommendation from the Senate Law & Justice Committee on March 31 and was referred to the Senate Ways & Means Committee.

Payday Lending

Engrossed Substitute Senate Bill 5899 replaces the current payday lending laws with a new small consumer installment loan regulated by DFI.  After receiving a do pass recommendation from the House Business & Financial Services Committee, the bill was referred to the House General Government & Information Technology Committee on March 31 where it is scheduled for a hearing on April 6.

Uber/Lyft

Engross Substitute Senate Bill 5550 addresses regulating insurance for providers of commercial transportation services (like Uber or Lyft).  The bill received a do-pass recommendation from the House Business & Financial Services Committee on March 31 and was referred to the House Rules Committee.

Electronic Signatures

Engrossed Substitute Senate Bill 5810 promotes the use, acceptance, and removal of barriers to the use and acceptance of electronic signatures by state agencies.  The bill received a do-pass recommendation from the House State Government Committee on April 1 and was referred to the House Rules Committee.

Look for the Washington Legislative Week in Review each week in Anthem during legislative session which runs January 12 – April 26, 2015. If you have questions or comments, please contact Mark Minickiello, mminickiello@nwcua.org, 206.340.4812.

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