The 2025 session of the Washington State Legislature gavels in at noon on Monday, January 13^th, and runs for 105 days until April 27^th. This promises to be a historic session, with major new state executives being sworn in for the first time in over a decade, and with nearly three dozen legislators either new to Olympia or in new seats. Major issues the Legislature will debate include multi-billion dollar budget shortfalls in the state’s operating and transportation budgets, new or increased taxes, big-ticket labor and employment issues, artificial intelligence regulation, and various new regulations on business and commerce.

Key Session Dates

• January 13 - First day of the 2025 session
• February 21 - Policy Committee Cutoff for House of Origin
• February 28 - Fiscal Committee Cutoff for House of Origin
• March 12 - House of Origin Cutoff
• April 2 - Policy Committee Cutoff for Opposite House
• April 8 - Fiscal Committee Cutoff for Opposite House
• April 16 - Opposite House Cutoff
• April 27 - Scheduled last day of the 2025 session (Sine Die)

Political Composition & New Faces in the Legislature

Following success in last November’s elections, Democrats in both chambers extended their majorities by one seat to 59-39 in the House and 30-19 in the Senate, bestowing a 60 percent supermajority in both bodies. Important changes in legislative leadership include the election of Sen. Jaime Pedersen (D-Seattle) as Senate Majority Leader, and the appointment of Sen. Rebecca Saldana (D-Seattle) as chair of the Senate Labor & Commerce Committee, and Sen. Claudia Kauffman (D-Kent) as chair of the Business, Financial Services & Trade Committee. In total, there will be 25 new legislators in the 2025 session, as well as eight current representatives who were elected or appointed to serve in the Senate. Senator Deb Krishadasan (D-Gig Harbor) was appointed to fill the vacancy caused by Emily Randall’s election to Congress, while Rep. Tina Orwall moves from the House to Senate to fill the vacancy caused by Karen Keiser’s retirement. Patty Kuderer’s election as Insurance Commissioner opened a vacancy that has now been filled by representative Vandana Slatter (D-Bellevue). Governor-elect Ferguson has appointed Rep. Tana Senn to lead the Department of Children, Youth & Families, and Sen. Joe Nguyen as Director of the Department of Commerce, creating further vacancies that will need to be filled by local appointment.

Governor-elect Ferguson continues to round out cabinet appointments

Of interest to the business community, Governor-elect Ferguson has completed appointments or re-appointments of agency directors in several key state agencies. Joel Sacks will continue to lead the Department of Labor & Industries, Cami Feek will continue to lead the Employment Security Department, and Charlie Clark will continue to lead the Department of Financial Institutions in the new administration. Julie Meredith has been newly appointed as the Secretary of Transportation, and Sen. Joe Nguyen, as noted above, has been tapped to head the Department of Commerce. 

Incoming Governor announces budget framework and priorities – tax policy yet to come

The biggest dynamic facing legislators is an operating budget shortfall over the next two biennia that is estimated to be at least $10 to $12 billion, and possibly more. In his lame duck budget proposal last month, outgoing Governor Inslee proposed to raise taxes by $12.9 billion over the next four years, relying principally on a “wealth tax” of one percent on the worldwide wealth of Washington residents exceeding $100 million and surcharges to the Business & Occupation Tax rates first of professional service companies and secondly all business taxpayers. For his part, yesterday, incoming Governor Ferguson announced his budget priorities that include deep skepticism of the wealth tax proposal, and a desire to cut $4.4 billion from projected spending levels through a variety of agency spending reductions. At the same time, Ferguson has indicated he will propose to spend about $1.2 billion in new funds for hiring and training law enforcement officers, affordable housing construction, modernizing the state’s ferry fleet, providing universal free school lunches to public K-12 students, and expanding childcare benefits for employees at small businesses. Ferguson has not yet announced what mix of new or expanded revenue sources he would support to backfill the remainder of the shortfall after his proposed cuts.  

Pre-filed bills, anticipated issues, and upcoming hearings of interest to business & industry

On the eve of session, nearly 500 bills have been pre-filed between the House and Senate for introduction on Monday. Additionally, a number of issues are under discussion that are likely to be introduced as bills in the coming days. Policy committees will be holding a number of introductory work sessions, but a handful of pre-filed bills have been scheduled for public hearing next week.

Budget & Taxes

The Houe and Senate fiscal committees will be holding early hearings on the outgoing Governor’s operating, capital, and transportation budget proposals next week. These are largely pro forma hearings, as the ultimate budget negotiations on all three will occur much later in session. Budgets, and bills necessary to implement budgets, including tax bills, are exempt from the legislative cutoff deadlines described above, and typically come into play much later in the legislative session.

Consumer & Business Regulation

HB 1217 (Alvarado, D-West Seattle) and SB 5222 (Trudeau, D-Tacoma) revive last session’s controversy over capping residential rent increases. In the technology space, HB 1168 (Shavers, D-Friday Harbor) requires a comprehensive list of data that must be disclosed to the public by developers or artificial intelligence platforms, while HB 1170, also by Rep. Shavers, requires AI system creators to provide end users with an AI detection tool, and disclose in certain images, video, and audio whether it is AI-generated. HB 1103, again by Rep. Shavers, strengthens prohibitions on unwanted commercial calls and text messages.   

Labor & Employment

As in recent sessions, labor and employment promises to be an active and controversial issue area. The most prominent pre-filed bill is HB 1181 (Berry, D-Seattle), which would increase the statewide minimum rate on an annual schedule culminating in $25 per hour beginning in 2031. It would also require minimum accrual of paid vacation time for all employees, and a minimum of five days of paid bereavement leave. The bills’ provisions are also made applicable to Transportation Network Company (TNC) drivers. HB 1155, also by Rep. Berry, would bar all non-competition agreements and narrow the use of non-solicitation agreements with employees. HB 1184 (Schmidt, R-Spokane Valley) would provide exemption from the state’s minimum wages for overtime exemptions for certain small businesses and non-profits. While not yet filed, we also expect to see a return of the trial bar’s priority to require employee access to personnel records, backed by a new private right of action for enforcement.    

Social Insurance/Payroll Tax Programs

The state’s large, payroll-tax supported social insurance programs have already been the subject of numerous pre-filed bills. In workers’ compensation, HB 1059 (Alvarado, D-West Seattle) would extend the “duty of good faith and fair dealing” in self-insured employers’ claims handling, and attendant penalties for violations, to all private sector employers and administrators. In unemployment insurance, SB 5041 (Riccelli, D-Spokane) brings back last session’s hotly contested proposal to provide UI benefits to workers who go on strike. In paid family and medical leave insurance, HB 1213 (Berry, D-Seattle) expands employee access to job-protection during a period of family or medical leave, requires more explicit communication to workers of their rights, and directs the Employment Security Department to conduct periodic compliance audits of employers. Finally, in long term care insurance, HB 1025 and 1026, both by Rep. Abbarno, would re-open the period for workers to opt out of the program and would allow sharing of the program’s benefits among spouses.    

Design & Build Professions

Early bills implicating the interests of design and build professionals include HB 1104 (Waters, R-Stevenson) and its companion, SB 5090 (Liias, D-Mukilteo), a request of the Board of Registration for Professional Engineers and Land Surveyors to update language and make primarily housekeeping changes to the composition of the Board. HB 1242 (Jacobsen, R-Puyallup) would require annual study by the Department of Licensing of ten percent of the professional licenses it oversees, with a report back to the Legislature including expanded information required of the boards and commissions that oversee the licenses. Finally, SB SB 5176 (Valdez, D-Seattle) brings forward recommendations of the Capital Projects Advisory Review Board relating to requiring the prompt pay of amounts due to contractors and subcontractors on public works projects. It is up for public hearing Friday in the Senate State Government Committee.

Insurance

Several bills impacting insurance have been filed, with several more anticipated on the way. Incoming Insurance Commissioner Patty Kuderer has requested HB 1199 (Taylor, D-Federal Way), which would create an explicit power of OIC to seek restitution of any moneys owed to persons under the Insurance Code, as well as extend the $10,000 cap on penalty assessments to a per violation cap. HB 1078 (Walen, D-Bellevue) regulates pet insurance policies by prohibiting consideration of pre-existing conditions. Companions HB 1230 (Hackney, D-Tukwila) and SB 5141 (Cortes, D-Battle Ground) remove the requirement for single case filings in experience-rated group disability income insurance policies. HB 1006 (Ryu, D-Shoreline) and SB 5108 (Kauffman, D-Kent) streamline the regulation of service contracts and protection product guarantees by allowing multiple financial backing options for the contracts. HB 1194 (Goodman, D-Kirkland) and SB 5127 (Lovick, D-Mill Creek) require owners of collector cars to possess liability insurance, at the request of the Department of Licensing. While not filed yet, we anticipate seeing bills addressing wildfire mitigation and underwriting, firearm owner liability, and possibly auto repair and appraisal, among other issues.   

Civil Justice/Liability

So far, HB 1046 (Leavitt, D-Lakewood) has been pre-filed. It would provide immunity from civil liability for individuals who damage a motor vehicle in the course of rescuing a vulnerable person or animal locked in the vehicle. It’s anticipated that a proposal to improve the investigation and evaluation of medical malpractice claims by promoting mediation and settlement will be introduced soon. We will be monitoring for defensive issues, such as prejudgment interest, which has been a top trial bar priority in recent sessions.

Upcoming Events

Appropriations (House) - HHR A and Virtual JLOB - 1/13 @ 4:00pm

• HB 1198 - Public Hearing - Making 2025-2027 fiscal biennium operating appropriations. (Remote Testimony Available). (If measure is referred to committee.)

• HB 1197 - Public Hearing - Making 2023-2025 fiscal biennium second supplemental operating appropriations. (Remote Testimony Available). (If measure is referred to committee.)

Law & Justice (Senate) - SHR 4 and Virtual JACB - 1/14 @ 8:00am

• SB 5067 - Public Hearing - Concerning impaired driving. (Remote Testimony Available). (If measure is referred to committee.)

Consumer Protection & Business (House) - HHR B and Virtual JLOB - 1/14 @ 1:30pm

• HB 1006 - Public Hearing - Regulating service contracts and protection product guarantees. (Remote Testimony Available). (If measure is referred to committee.)

Ways & Means (Senate) - SHR 4 and Virtual JACB - 1/14 @ 4:00pm

• SB 5166 - Public Hearing - Making 2023-2025 fiscal biennium second supplemental operating appropriations. (If measure is referred to committee.)

• SB 5167 - Public Hearing - Making 2025-2027 fiscal biennium operating appropriations. (If measure is referred to committee.)

Business, Financial Services, Gaming & Trade (Senate) - SHR 2 and Virtual J.A. Cherberg - 1/16 @ 8:00am

• SB 5108 - Public Hearing - Regulating service contracts and protection product guarantees. (Remote Testimony Available). (If measure is referred to committee.)

Law & Justice (Senate) - SHR 4 and Virtual JACB - 1/16 @ 10:30am

• SB 5067 - Exec Session - Concerning impaired driving. (If measure is referred to committee.)

Consumer Protection & Business (House) - HHR B and Virtual JLOB - 1/17 @ 8:00am

• HB 1078 - Public Hearing - Concerning pet insurance. (Remote Testimony Available). (If measure is referred to committee.)

Technology, Economic Development, & Veterans (House) - HHR C and Virtual JLOB - 1/17 @ 10:30am

• HB 1168 - Public Hearing - Increasing transparency in artificial intelligence. (Remote Testimony Available). (If measure is referred to committee.)

• HB 1170 - Public Hearing - Informing users when content is developed or modified by artificial intelligence. (Remote Testimony Available). (If measure is referred to committee.)

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