We are approaching the midpoint of the 105-day 2025 legislative session. Feb. 28 was the last day to move bills out of fiscal committees in their house of origin.

This week, legislators will spend most of their time on the floor debating and passing bills out of their respective chambers until the Mar. 12 house of origin cutoff. All bills must be voted out of their house of origin to stay alive this session.

Revenue Update

On Feb. 27, Gov. Bob Ferguson released his plan to save $4 billion to address the budget shortfall. His plan creates government efficiencies and pauses new spending. While the Governor’s plan is part of the conversation, the state legislature will write the 2025-27 budget.

Last week the House Democrats released a new webpage highlighting what they believe a “no new revenue” budget would look like. The webpage is intended to demonstrate the largest of the possible cuts and provides a perspective on what these cuts would mean to communities across the state in advance of the upcoming budget/revenue conversations.

As we get further into session, the realities of the budget shortfall are setting in. In addition to potential cuts, budget writers have indicated that they will not be able to fund new programs that require ongoing funding.

Please see below for key insights from week seven:

Employment Law

Senate Bill 5041 seeks to extend unemployment benefits to employees involved in strikes and lockouts, remove certain disqualifications, and shift the financial responsibility for benefits to the employer involved in the labor dispute. The bill was heard in the Senate Ways & Means Committee on Feb. 25, and executive action was taken in the same committee on Feb. 28, where the majority recommended a “do pass” on the first substitute bill proposed by Labor & Commerce. The bill now moves to the Senate Rules Committee.

Senate Bill 5539 and House Bill 1213 both focus on expanding employee protections and clarifying employer responsibilities under Washington’s Paid Family and Medical Leave program, with an effective date of Jan. 1, 2026. The House version had executive action taken in the House Committee on Appropriations on Feb. 27, where the majority recommended a 2nd substitute bill do pass, and it currently sits in House Rules.

Senate Bill 5437 proposes to prohibit noncompetition covenants statewide, ensuring they are void and unenforceable while clarifying the scope of nonsolicitation and confidentiality agreements. House Bill 1155 aligns with similar goals to promote workforce mobility and economic growth by banning noncompetition covenants and outlining employer obligations. The Senate bill never moved beyond its initial hearing, but the House version currently sits in the Rules Committee.

House Bill 1623 prohibits employers from deducting credit card processing fees from employee tips. Executive action was taken in the House Committee on Appropriations on Feb. 27, with a do pass recommendation given.

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. The bill failed to advance before the cutoff and is considered dead for this session. House Bill 1217, which mirrors these objectives, sits in Rules after passing out of Appropriations, and appears to be the primary vehicle for this legislation.

House Bill 1491 mandates higher-density transit-oriented development, requiring cities to adopt regulations that facilitate multifamily housing and mixed-use projects in designated station areas. The bill had a public hearing in the House Committee on Capital Budget on Feb. 25, and executive action was taken in the same committee on Feb. 26, where a second substitute bill was adopted with a majority recommendation to pass. It then had a public hearing in the House Appropriations Committee on Feb. 27, followed by executive action in the same committee on Feb. 28, where a third substitute bill was adopted with a majority recommendation to pass. The bill will now likely move to the House Rules Committee.

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. Executive action was taken in the House Finance Committee on Feb. 26, where the majority recommended a “do pass.” It has now been referred to the House Rules Committee.

House Bill 1687 establishes a framework for creating and supporting social housing public development authorities. Executive action was taken in the House Committee on Capital Budget on Feb. 26, where the majority recommended “do pass” and referred the bill to the House Rules Committee.

Economic Development

House Bill 1515 seeks to expand alcohol service options in public spaces and civic campuses, including shared outdoor and indoor service areas and a new license for nonprofit organizations to serve alcohol at community events. A public hearing was held in the House Appropriations Committee on Feb. 25, and executive action was taken in the same committee on Feb. 27, resulting in a second substitute bill being passed with a majority recommendation. The bill now awaits a floor vote in the House Rules Committee.

Senate Bill 5492 creates an advisory group to evaluate a sustainable tourism funding mechanism. A first substitute bill was adopted in the Senate Business, Financial Services, Gaming & Trade Committee on Feb. 28, and the bill passed the Senate on the same day with 48 yeas, 0 nays, and 1 excused.

Senate Bill 5677 and House Bill 1406 increase funding for associate development organizations and standardizes performance reporting requirements statewide. The Senate bill currently sits in the Senate Rules Committee, and the House bill had executive action taken in the House Appropriations Committee on Feb. 25, where a first substitute bill was adopted with a majority recommendation to pass. On Feb. 28, the Rules Committee was relieved of further consideration. Placed on second reading.

Technology

House Bill 1170 requires large AI providers to implement tools for identifying AI-generated content and mandates clear disclosures to inform users. The bill remains in the House Rules Committee.

Dead Bills

House Bill 1671 sought to establish a comprehensive framework for consumer data privacy. It failed to advance before the cutoff and is considered dead for this session.

Senate Bill 5601 promoted the production and use of alternative jet fuels through grants, tax incentives, and environmental review processes. The Senate bill failed to advance before the cutoff and is considered dead for this session.

Senate Bill 5726 sought to create a mileage-based road usage charge (RUC) system to address declining fuel tax revenues and fund transportation projects. It failed to advance before the cutoff and is considered dead for this session.

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 failed to advance before the cutoff and is considered dead for this session.

Important Session Dates

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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