First week of session ushers in furious pace of bill introductions, hearings, and sprint to the first cutoff deadline.

By the end of the first week of the legislative session, over 900 new bills, including December’s pre-files, were introduced and committee hearings and executive sessions began in earnest. Lawmakers have until February 4^th to hear and move bills in the policy committees. 

The week began with the usual formalities, with swearing in the members elected last November and the Governor’s State of the State address and statements by caucus leaders on their priorities for session. These centered heavily around bridging the state’s latest budget gap.  When hearings resume on Monday, tax policy will be front and center.

Here are highlights from week 1, with a look ahead to week 2. Additional bills under tracking are linked, and upcoming hearings noted, in the attached bill report.

Taxes
The House and Senate fiscal committees were mostly concerned with hearing the Governor’s supplemental budget proposals in week one. Next week, consideration of several new tax proposals begins with a slate of public hearings.

Two important pieces to note, we expect to see this week the Governor’s income tax proposal which, as described, would impose a 9.9 percent tax on annual adjusted gross income above $1 million.

Also prominent in the rumor mill is House Finance Committee Chair April Berg’s interest in re-introducing a Texas-style margins tax proposal as a replacement for the B&O tax. This was a recommendation of the then-active Tax Structure Workgroup, and was briefly considered in the 2023 session. You can see the Workgroup’s final report here.  

• HB 2100, Rep. Shaun Scott’s proposal to impose a statewide payroll excise tax. The bill would impose a tax on employers of more than 20 employees and more than $5 million in gross annual receipts on that portion of its payroll above $7 million attributable to employees earning $125,000 per year or more.
• SB 5949 would retroactively overturn the recent Washington Supreme Court Envolve decision by applying the B&O tax to certain inter-company services within the insurance industry, despite insurers already being subject to the state’s premium tax.
• SB 6159 would impose a “covered lives” assessment on insurers paying for health care services in order to increase funding for public hospitals.
• SB 6129, expands the state’s various taxes on tobacco products to include all nicotine-containing products.
• HB 2097, which would authorize counties to establish their own local B&O taxes. This bill has not yet been set for hearing.
• HB 2098, increases funding for higher education by removing the $75 million cap established last year on the B&O tax surcharge for Advanced Computing Services.

Liability Reform
The legal committees of the Legislature have before them proposals that would both improve the state’s tort liability climate, as well as significantly expand it in certain areas.

• HB 2255 would require disclosure to courts and lawsuit parties of any third-party financing of litigation, along with a series of regulations on outside funders.
• HB 2095, creating a presumption of negligence on the part of motorists involved in collisions with “vulnerable roadway users” (pedestrians, cyclists, and the like), layered on top of statutory penalties, punitive damages, and one-sided attorney fee shifting.

Consumer & Business Regs
Business and consumer protection regulation proposals are ramping up in various areas of commerce, with a continued heavy focus on technology and artificial intelligence.

• HB 1170, a holdover from last session, would require notification to online users when content is developed or modified by artificial intelligence.
• HB 2157 regulates the development, deployment, and use of “high risk” AI systems (involving decision-making regarding consumers, employees, etc.)
• HB 2225 is a Governor request bill that regulates AI companion chatbots, with an eye toward protecting individuals, particularly minors, from self-harm.
• HB 2481 prohibits surveillance or algorithmic pricing in grocery and retail sales, and imposes a four-year moratorium on the use of electronic shelf label systems on retailers.
• A new effort at regulating the sales of tickets for entertainment events has been introduced, SB 6175, with exclusions that made earlier efforts problematic, including professional and college sports, smaller arts non-profits, and movie theaters, among others.

Labor & Employment
Labor & employment regulation is always highly active and this week.

• HB 2471, and its Senate companion SB 6117, is the NLRA bill proposing to place private-sector collective bargaining rights and labor relations regulation for individuals not covered by federal law. The bill would further be triggered by any change in NLRA pre-emption of state private sector labor relations, or any change in jurisdiction of the National Labor Relations Board over state-level employers and employees. Bills with similar components in other states have generally been enjoined on the grounds of federal pre-emption.
• SB 5437, a holdover from last session barring non-compete agreements in Washington.
• HB 2144 would require employers provide notice to employees if they use electronic means to monitor employees for performance evaluation purposes. It contains both a heavy administrative enforcement system under the Department of Labor & Industries as well as a broad private right of action against employers.
• The Attorney General’s Office has requested HB 2105 and SB 5852, the Immigrant Rights Act, requiring jobsite notices of immigrant rights and protections and 72 hours’ notice to employees of any federal I-9 audit. The requirements are backed by steep penalties for violations.

Payroll Tax Programs
Among the state’s large, payroll-tax funded social insurance benefit programs, much of the action this session has focused on Labor & Industries and workers’ compensation.

• HB 2218/SB 5847,  is a union and claimants’ bar-backed bill that would significantly weaken Labor & Industries’ medical provider network standards, and impose steep penalties on employers for steering employees’ medical care.
• HB 2372/SB 6067, would expand worker disability benefits by including 100 percent of the value of employer-provided health insurance in the event an employer does not continue coverage during a workers’ period of disability.
• In Paid Family & Medical Leave Insurance, SB 5292 a holdover from last session, would switch the program’s premium rate-setting system from statute to calculations made by the state’s Office of Actuarial Services.

Insurance
In addition to the tax bills noted above, several big-ticket proposals continue to percolate impacting insurers.

• SB 5331, Commissioner Patty Kuderer’s request bill from last session establishing a power to make restitution orders and to impose uncapped per-violation penalties on property & casualty insurers, was pulled from the Senate Rules Committee on Tuesday and is eligible for a floor vote in upcoming action.
• HB 2428, requiring certain disclosures and proof of delivery of life insurance lapse notices.
• HB 2275, establishing a wildfire prevention council and recovery fund for victims of wildfire-related losses
• SB 5928, an OIC request bill requiring wildfire risk score disclosure.

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