With lawmakers in the third week of their 2024 legislative session, they are busy in committees, hearing a slice of the nearly 3,000 bills introduced. The first cutoff, the deadline for bills to pass out of policy committees in their house of origin, will be next week on January 31. Following that, future cutoff dates will come rapidly in the short, 60-day session, narrowing the range of bills significantly. For now, though, here is some legislation WBA and the United Financial Lobby are watching. 

Taxes: Several tax proposals have been introduced. These include: 

• SB 5493 is this year's proposal to eliminate the B&O tax exemption for interest income on first mortgage loans. So far, it hasn't gotten any action, but we will watch closely so there are no surprises.
• HB 2276, which would increase the real estate excise tax on transactions over $3 million, is being pitched as a "mansion tax," but it would actually have a greater impact on an already struggling commercial real estate sector. We will closely monitor the business community's response to this proposal and engage if appropriate. 
• SB 5770 would allow local governments to triple the growth rate in their property tax collections from 1% to 3%. This could impact many customers, and we will watch it closely.
• HB 2308 would allow local governments to offer tax incentives for converting excess commercial property into housing or converting multifamily housing to affordable housing. 
• HB 2322 creates a new tax preference for childcare but also requires businesses receiving tax preferences to offer childcare. Businesses with a tax preference created, expanded, or extended on or after January 1, 2025, must provide childcare for employees' children. If the taxpayer has an employee making more than $250,000 or more annually, they will need to make a payment to the fair start for kid's account. If a business fails to submit proof of providing these services, there will be a penalty of 35% of the tax preference amount.

Artificial Intelligence: Lawmakers feel the need to do something to show that they are keeping up with rapid advances in artificial intelligence technology. The most prominent proposals are: 

• SB 5838 would establish an AI task force, but the exact composition continues to evolve. The latest version would have nine members, all of whom are elected officials, supported by a series of subcommittees, presumably including some tech industry experts. However, this bill has become moot as the rumor is that we will see an Executive Order from Gov. Inslee on the subject before it passes. 
• HB 1951 would impose additional requirements on any entity that uses algorithms in "consequential decisions." Our concern is that some analytic tools banks use could fall under an overly broad definition of artificial intelligence, even though we have been assured that this is not the intent of the bill sponsor. Additionally, we will be pointing out that most, if not all, of the requirements the bill would impose are already addressed by our compliance with various federal regulations, making an exemption like the one we have obtained in multiple data privacy bills appropriate. 

Other Issues: As always, the range of issues on our radar is wide: 

• HB 2094, HB 2095, and SB 5988 bills deal with the administration and regulation of consumer gift cards and loyalty programs and set out conditions under which the state could claim outstanding balances as unclaimed property. The public hearing on this issue pointed out several problems with the bill, and the feeling in Olympia is that they don't have the votes to move forward. We will be watching them just in case, however. 
• HB 2081/SB 5968 concerns home equity sharing agreements. Many of these programs are criticized as anti-consumer and predatory lending schemes. We will monitor the legislative response to ensure it does not disrupt the mainstream lending market.
• SB 5855 proposes requiring "plain language" user agreements, and SB 6081 is an even more restrictive bill covering contract language. We understand that any version of these bills will exempt financial institutions in recognition of our federal regulatory requirements.
• SB 5509 would create a statewide infrastructure bank. This doesn't have any momentum this session, are we are simply monitoring to ensure that it doesn't gain any.
• HB 1915/SB 5819, which would expand state financial literacy programs and requirements for high school graduation, is legislation we support.
• HB 1885 would prohibit "foreign-influenced" corporations from making political contributions in the state. The bill's definition of "foreign influence" is so restrictive that it would effectively ban any publicly traded corporation from engaging in the electoral process in Washington. Fortunately, it doesn't appear that this bill will move ahead. 
• HB 2149 would prohibit sharing or selling consumer data gathered at "the point of sale" unless expressly authorized by the customer. The sponsor has indicated several problems with the bill and intends to work on the issue in the interim. We will continue to share input to ensure it will not impose an additional compliance burden on banks.
• HB 2072, is AG request legislation that would substantially increase penalties imposed on organizations that violated anti-trust laws. While the proposal would not expand the definition of anti-trust behavior, just the penalties imposed, this is usually a federal issue, so we will be working to understand the practical implications of the legislation.
• SB 5801 regulates special deposits. We are comfortable with the bill's clarifications, and it has moved to the second reading calendar, which is a step before the bill moves to the floor.

As the session progresses, we will continue providing you with weekly updates on these and other bills. As always, if you have any questions or your bank is concerned about an issue that isn't mentioned here, please get in touch with me. Thanks for all you do to support WBA.