Committees Accelerate as Cutoffs Approach and Fiscal Proposals Multiply

Published February 2, 2026 at 9:06 AM · Legislative Advocacy - Washington

With the first major policy cutoff looming on Wednesday, February 4^th, legislative activity intensified over the past week as committees shifted from public hearings to executive sessions to debate and move bills. Several higher-profile proposals advanced out of policy committees, while fiscal committees continued to add new items to already crowded agendas in advance of the fiscal cutoff next Monday, February 9^th.

Below are selected highlights from the past week, along with a look ahead to notable committee action scheduled in the coming days. Additional bills under tracking, including those with upcoming committee action, are detailed in the attached bill report.

Taxes

With all eyes trained on an anticipated income tax proposal, supported by Governor Ferguson and Senate and House majority leaders, other high-profile tax measures came to light or received a public hearing.

Income Tax: Originally expected to be introduced Friday, word is that a new income tax bill will be released Monday evening (preliminary draft here). Based on the draft, starting in 2029, the proposal would collect a 9.9 percent tax on Washington adjusted gross income above $1 million, with various credits and adjustments available. This would include business owners’ income from pass-through entities like LLCs and S-Corps, and would hit highly compensated individuals who are out of state, such as professional athletes, for their time worked in Washington. Given that Washington has not had an income tax (debates over characterization of the Capital Gains Tax notwithstanding), once introduced, this will become the central topic of the session. As noted, the Governor and Democratic leaders have said passage of this bill is a top priority.
Payroll Tax: HB 2100, imposes an excise tax on the portion of a Washington employer’s payroll encompassing employees earning $125,000 or more annually. Under a planned amendment, it now applies to employers of 250 or more (as opposed to 20 or more), with gross annual volume of $5 million or more, and a total payroll of $7 million or more. It contains a deduction for Seattle companies subject to the city’s similar JumpStart tax.
New Local Public Utility Tax & Sales Tax: HB 2442 and SB 6294 represent a far-reaching local tax measure that expands the use of local property tax revenues, authorizes a new county-imposed public utility tax, authorizes a new 0.01 percent sales tax increase to fund child and family services, and expands the authorized use of sales tax revenue by counties and cities to include various social services. The House version was voted out of the Finance Committee on Thursday, while the Senate companion has a Ways & Means Committee hearing set for Thursday.
Sales Tax on Services Follow Up: HB 2257 and SB 6113 is a Department of Revenue-requested “technical fix” bill following last year’s SB 5814 sales tax on services measure. While normally an uncontroversial affair, this bill has gained attention for a provision stating that if any part of the law’s provision excluding various activities from the sales tax on advertising services is declared invalid, then the entire list of exclusions would be invalidated. There is pending litigation challenging a portion of that section, which if successful, could invalidate all of the exclusions under this bill – including the negotiated carve-out for billboard advertising, signage at live events, naming rights, fixed in-venue signage – for example, at professional sports venues. The House bill was heard Wednesday in the Finance Committee.
Governor Request B&O Tax Exemption Removal: HB 2487, the House companion to SB 5949, had a public hearing Friday in House Finance. The bill narrows the statutory definition of “insurance business” for purposes of the insurance premium tax, with the effect of expanding the application of the B&O tax to insurance-affiliated activities historically treated as covered by the premium tax.
Employer Assessment/Tax for Employee use of the State Medicaid Program: SB 6173 would assess private employers of more than 100 employees for the full cost of their employees who utilize state Medicaid for health insurance. Committee staff project the measure could yield as much as $700 million annually in revenue. A similar bill in the House, HB 2300, has not been scheduled for hearing. Both proposals are based on the Health Care Authority report that can be found here.

Technology, AI, and Consumer Regulation

Artificial intelligence and digital regulation continued to command significant legislative attention, with several bills advancing toward committee votes. Two highlights:

HB 2481, prohibiting surveillance-based or algorithmic pricing practices and imposing a moratorium on electronic shelf labels in grocery and retail establishments, was voted out of the House Technology, Economic Development & Veterans Committee on Wednesday and was referred to the Appropriations Committee for additional consideration. The Senate version, SB 6312, was heard Wednesday in the Senate Business, Economic Development & Trade Committee, and is scheduled for a vote on that side this coming Wednesday. Industry is actively seeking amendments that would clarify definitional items and remove the moratorium on e-shelf labels.
SB 6284, establishing consumer protections for “high risk” AI systems, was heard Tuesday in the Senate Environment, Energy & Technology Committee and is set for a committee vote this Tuesday. This appears to be the leading contender among several AI-regulation bills this session to make it across the line. It requires risk management planning and various disclosures by deployers of AI systems that impact “consequential decisions” in employment and consumer affairs and prohibits algorithmic discrimination for attributes protected by the Washington Law Against Discrimination.

Labor and Employment

Labor and employment regulation is perennially active. Highlights:

HB 2611, a newly introduced proposal redefining the standard workweek from 40 hours to 32 hours, was heard in the House Labor & Workplace Standards Committee on Tuesday. It is not scheduled for further action this session.
HB 2471 and SB 6117, originally proposing to extend collective bargaining rights to workers not covered by the National Labor Relations Act, was voted out of both House and Senate Labor Committees on Friday. It was amended in both committees to remove the collective bargaining rights and instead provides state-level labor relations regulation for workers already covered by federal law, but only in the event federal law no longer pre-empts state law or the National Labor Relations Board declines or loses jurisdiction over labor disputes under the NLRA.
HB 1155, last session’s ban on non-compete agreements and limitation on non-solicitation agreements, was pulled from the House Rules Committee and is eligible for a floor vote. Its companion, SB 5437, was voted out of the Senate Labor Committee Friday after picking up an amendment allowing its private right of action to operate on alleged violations before the effectiveness date of the law.
HB 2144, requiring notice to employees regarding electronic monitoring used for performance evaluation, was voted out of the House Labor Committee on Wednesday, and was referred to the Appropriations Committee. Efforts remain underway to strip the private right of action enforcement provision.
SB 5852, the Attorney General’s Immigrant Rights Act, was voted out of the Senate Labor Committee on Friday. Its House companion, HB 2105, is moving and is before the Appropriations Committee. The bill requires 72-hours’ notice to current and former employees of a federal I-9 work eligibility audit, backed by stiff penalties for failure to provide the notice.

Payroll-Tax-Funded Programs and Workers’ Compensation

With long-term care insurance dormant and unemployment insurance non-controversial this session, big-ticket bills in workers’ compensation and a tweak to rate-setting for the paid family & medical leave insurance program are moving.

HB 2218 and SB 5847, narrowing the Labor & Industries medical provider network and imposing penalties for employers found to have directed medical care, saw additional committee action. The Senate version was voted out of Senate Labor on Friday, while the House version is scheduled for a vote on Tuesday. Employers continue to seek amendments clarifying the prohibition and penalty around directed medical care.
HB 2243 and SB 6152, expanding the definition of attending provider to include physical and occupational therapists, moved on the Senate side, advancing with a committee vote on Friday.
HB 2372 and SB 6067, a highly expensive bill to include the value of employer-provided health insurance in an injured worker’s time loss or pension benefits when an employer does not continue to provide coverage, moved forward in both chambers. The House bill was voted out of committee on Wednesday and is before the Appropriations Committee, while the Senate version was voted out of committee on Friday.
HB 2188, requiring additional transparency in industrial insurance rate-setting, was heard Wednesday in House Labor, and is set for a committee vote on Tuesday. Its Senate companion, SB 6136, was voted out of committee on Friday.
SB 5292, modifying the statutory basis for setting Paid Family & Medical Leave premium rates in favor of actuarial determination, is up for a public hearing in the Senate Ways & Means Committee on Monday.

Liability Reform and Litigation

Several measures affecting tort liability and enforcement authority moved during the week, with additional action scheduled.

HB 2255, regulating third-party litigation funding and requiring disclosure of funding arrangements, is now scheduled for executive session on Wednesday in the House Civil Rights & Judiciary Committee.
HB 2095, creating a presumption of negligence for motorists involved in collisions with “vulnerable roadway users,” was scheduled for and pulled from executive session twice since its public hearing, while opposition has built and amendments have been considered. It is now scheduled for a vote in Civil Rights & Judiciary on Tuesday.
SB 6239, requiring non-binding arbitration for tort claims against the state and its political subdivisions, was heard in the Senate Law & Justice Committee on Tuesday and subsequently voted out of committee on Thursday. After provoking opposition from the plaintiffs’ bar, it was amended to narrow the arbitration requirement to a smaller subset of claims against the state. It is now in the Ways & Means Committee.
HB 2706, a slightly different approach to dealing with the state’s tort liability difficulties, was introduced Thursday. It would declare sovereign immunity for the state for claims against the state’s Division of Children, Youth & Families and would require tort claims against the division be subject to an administrative adjudication commission within the Administrative Office of Hearings. It is before the Civil Rights & Judiciary Committee, likely considered a bill “necessary to implement the budget,” and thus exempt from cutoffs.
HB 2585, establishing a state false claims act with a qui tam private right of action, received a public hearing in Civil Rights & Judiciary on Wednesday, but is not scheduled to move before cutoff.

Insurance

Insurance-related legislation continued to move, with several Commissioner-requested bills advancing and additional regulatory proposals scheduled for action.

SB 5928, having previously cleared the Senate Business, Trade & Economic Development Committee, was pulled from the Rules Committee on Wednesday and is moving toward a floor vote. Both the Commissioner and industry have proposed amendments, which are under discussion with sponsors.
SB 6079, establishing a wildfire mitigation grant program while restricting underwriting based on IBHS designations, is scheduled for a committee vote on Wednesday. Industry is working to place an amendment to eliminate the bill’s underwriting restrictions and sunset its use of the Commissioner’s regulatory account surplus for initial funding of the grant program.
SB 6031 and HB 2394, strengthening OIC’s fraud prevention tools, continues to move with the Senate version in the Rules Committee and House version set for a committee vote on Tuesday.
SB 6178 and HB 2399, the Commissioner’s request to ban post-loss assignments of benefits, are also moving, with the Senate version pulled from the Rules Committee to the floor on Wednesday and the House version set for a committee vote this coming Wednesday.
HB 2087, adopting NAIC model travel insurance regulation, is scheduled for executive session on Wednesday. It does not appear the Senate version will move.
SB 5871, regulating motor vehicle glass repair claims, has been pulled from the executive session schedule and isn’t moving further this session.
HB 2428, requiring proof of delivery for life insurance lapse notices and notice of reinstatement rights, is set for a committee vote on Wednesday, with a clarifying amendment worked out between the bill’s sponsor and industry.

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