Legislative Session Report

Friday, Feb. 21 was the first major bill cutoff of this legislative session, meaning that all bills needed to be voted out of their house of origin policy committee in order to stay alive. However, it is important to note that no issue is really “dead” until the end of the biennium as parts can be resurrected in various ways.

This year, members of the House have introduced 1,086 bills and members of the Senate have introduced 840. Bills that passed the policy committees and have a fiscal impact must pass out of their respective fiscal committees by Feb. 28 to stay alive. Bills that have passed out of the policy committee but have no or minimal fiscal impact will proceed from the policy committee directly to the Rules Committee where they remain until they are pulled to the floor calendar and become eligible for a vote.

Revenue Update

The Washington State Economic and Revenue Forecast Council released its February revenue update on Feb. 14. The update indicated slight growth with tax collections up by $60.5 million, or 2.6%, mostly reversing last month’s decrease. However, cumulatively tracked collections since the November 2024 forecast are $17.2 million, or 0.2%, lower than forecasted. The minimal growth this month was partly driven by an unexpected increase in sales tax, possibly due to advanced large purchases to avoid potential tariffs, and real estate taxes exceeding projections by $8 million. The next forecast, scheduled for Mar. 18, which budget writers will use to finalize budget proposals.

Please see below for key insights from week six:

Employment Law

Senate Bill 5539 and House Bill 1213 both focus on expanding worker protections and clarifying employer responsibilities under Washington’s Paid Family and Medical Leave program, with an effective date of Jan. 1, 2026. Senate Bill 5539 had a public hearing in the Senate Labor & Commerce Committee on Feb. 18. House Bill 1213 was heard in the House Appropriations Committee on Feb. 22, and the Chamber signed in opposed for the record.

Senate Bill 5041 seeks to extend unemployment benefits to workers involved in strikes and lockouts, remove certain disqualifications, and shift the financial responsibility for benefits to the employer involved in the labor dispute. It is scheduled for a hearing in the Senate Ways & Means Committee on Feb. 25.

Senate Bill 5437 proposes to prohibit noncompetition covenants statewide, ensuring they are void and unenforceable while clarifying the scope of nonsolicitation and confidentiality agreements. The bill was heard in the Senate Labor & Commerce Committee on Feb. 18. House Bill 1155 also  aims to promote workforce mobility and economic growth by banning noncompetition covenants and outlining employer obligations.

House Bill 1623 prohibits employers from deducting credit card processing fees from employee tips. The bill ensures that employees receive the full amount of tips or gratuities left by customers, regardless of the payment method used. It was heard in the House Appropriations Committee on Feb. 22.

Housing

Senate Bill 5222 seeks to cap annual rent and fee increases at 7%, enhance tenant protections, and establish new notice requirements for landlords under Washington’s landlord-tenant laws. Executive action was taken in the Senate Committee on Housing on Feb. 19, where the committee recommended a first substitute bill that passed with a majority vote. House Bill 1217also aims to address housing affordability and stability through rent stabilization measures.

Legislation broadening the authority of counties to impose a real estate excise tax for affordable housing (House Bill 1480) allows counties to implement a voter-approved REET of up to 0.5% to fund affordable housing initiatives. The bill eliminates previous restrictions tied to a 2003 deadline, expanding eligibility to all counties in Washington state.

House Bill 1491 mandates higher-density transit-oriented development near major transit stops, requiring cities to adopt regulations that facilitate multifamily housing and mixed-use projects in designated station areas. It is scheduled for a hearing in the House Capital Budget Committee on Feb. 25.

House Bill 1494 refines property tax exemption criteria for multi-unit housing to prioritize affordability and anti-displacement measures. The bill updates definitions, eligibility, and administrative processes, emphasizing affordability requirements, transit proximity, and compliance mechanisms for local governments and property owners. The bill was heard in the House Finance Committee on Feb. 20.

House Bill 1687 establishes a framework for creating and supporting social housing public development authorities in Washington state. The bill integrates the authorities into existing housing authority provisions, enabling them to access the same support and funding mechanisms, and introduces concepts like cross-subsidization to promote affordability across income levels. A public hearing was held in the House Capital Budget Committee on Feb. 20.

Senate Bill 5471 facilitates middle housing development in designated areas while aligning permitting and development standards with those for single-family residences. The bill also exempts related county actions from SEPA appeals and Growth Management Hearings Board review to streamline the regulatory process. Floor amendments were adopted, and the bill passed its third reading in the Senate with a vote of 48-0 (1 excused) on Feb. 19.

Transportation

Senate Bill 5726 creates a mileage-based road usage charge (RUC) system to address declining fuel tax revenues and fund transportation projects. The bill phases in voluntary and mandatory RUC programs, includes privacy safeguards, and allocates revenues for highway and multimodal purposes. A public hearing was held in the Senate Transportation Committee on Feb. 18.

Economic Development

Senate Bill 5677 increases funding for associate development organizations (ADOs) and standardizes performance reporting requirements statewide. Executive action was taken in the Senate Committee on Business, Financial Services & Trade on Feb. 19, where a first substitute bill was adopted with a majority recommendation to pass. House Bill 1406, which mirrors Senate Bill 5677, was heard in the House Appropriations Committee on Feb. 22.

Energy

Senate Bill 5601 seeks to advance alternative jet fuel production through infrastructure grants, tax incentives, and environmental review processes. The bill also requires a biomethane availability report, establishes tax exemptions for facilities, and mandates a racial equity analysis as part of its performance review. It is scheduled for a hearing in the Senate Ways & Means Committee on Feb. 25.

Short-Term Rentals

House Bill 1882 proposes a temporary 2% tax on short-term lodging from Apr. 1 to Sep. 30, 2026. The revenue would be allocated to county governments, human trafficking victim assistance programs, and state tourism initiatives through an “enhanced tourism account,” which is set to expire on Jul. 1, 2027. The bill was heard in the House Finance Committee on Feb. 18.

Technology

House Bill 1168 mandates that developers of generative AI systems publicly disclose detailed information about the datasets used in training these systems. The bill is scheduled for a hearing in the House Appropriations Committee on Feb. 25 and executive session on Feb. 27.

House Bill 1671, sponsored by Representative Shelley Kloba, establishes a comprehensive framework for consumer data privacy in Washington State. The bill grants consumers rights over their personal data, imposes obligations on businesses, and provides enforcement mechanisms through the Attorney General under the Consumer Protection Act. The bill was passed by the House Committee on Technology, Economic Development, & Veterans on Feb. 14 and was referred to Rules on Feb. 18.

Dead Bills

Legislation to provide an overtime exemption for certain nonprofit and small business employees (House Bill 1184), sought to exempt employees of qualifying nonprofits and small businesses from overtime requirements if they meet specific salary and duties-related criteria. The bill failed to advance before the cutoff and is considered dead for this session.

House Bill 1181 sought to reform labor standards in Washington by increasing the minimum wage to $25 per hour by 2031 and expanding labor protections for employees and transportation network company (TNC) drivers. The bill included provisions for paid leave, enforcement measures, and specific regulations for TNCs, ensuring drivers receive fair compensation and benefits. The bill failed to advance before the cutoff and is considered dead for this session.

House Bill 1276 proposed sentencing enhancements for organized retail theft based on the value of stolen property. The bill introduced additional sentencing time of 12 months for thefts valued at $20,000 or more and 24 months for thefts valued at $50,000 or more, aiming to deter high-value organized retail theft through stricter penalties. The bill failed to advance before the cutoff and is considered dead for this session.

Senate Bill 5755 sought to incentivize the redevelopment of underutilized commercial properties into affordable residential and mixed-use housing. The bill introduced a 20-year property tax exemption, sales and use tax deferrals, and regulatory changes to encourage high-priority projects that provide public benefits such as affordability, energy efficiency, and access to transit. It was heard in the Senate Housing Committee on Feb. 21. The bill failed to advance before the cutoff and is considered dead for this session.

Legislation promoting the development and use of alternative jet fuels, House Bill 1844, establishes a grant program for infrastructure, provides tax incentives for facilities, and mandates environmental and economic reviews to support the alternative jet fuel industry. The bill includes provisions for a biomethane availability report, tax exemptions, and a racial equity analysis of air travel-related pollution. The bill failed to advance before the cutoff and is considered dead for this session.

House Bill 1840 authorizes and streamlines the development of middle housing in urban growth areas, limited areas of more intensive rural development, and fully contained communities. The bill also limits legal challenges by exempting related county actions from SEPA appeals and Growth Management Hearings Board review. Executive session was scheduled, but no action was taken in the House Committee on Housing on February 20. The bill failed to advance before the cutoff and is considered dead for this session.

Important Session Dates:

Feb. 28, 2025: House of Origin Fiscal Cutoff
March 12, 2025: House of Origin Floor Cutoff
March 24, 2025: Opposite House Policy Cutoff
March 31, 2025: Opposite House Fiscal Cutoff
April 9, 2025: Opposite House Floor Cutoff
April 27, 2025: Last Day of Session

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