2026 Legislative Update: Week 4

The Washington State Legislature has now passed the first major cutoff of the session, the deadline by which bills must be voted out of their respective policy committees in their house of origin. Legislation that failed to advance by this point is generally considered stalled, while bills that cleared the cutoff remain alive and eligible to continue moving through the legislative process. Those measures will next be considered by fiscal committees if they carry a budget impact or advance directly to the floor for further debate and votes. In short session years, the timeline is especially compressed. Bills with fiscal implications face a particularly tight turnaround, as they must be voted out of fiscal committees by February 9^th to remain viable. The exception to these deadlines applies to bills deemed by majority leadership to be “necessary to implement the budget” (NTIB). NTIB bills are granted additional flexibility and may continue to advance even after standard cutoff dates have passed because final budget negotiations occur at the end of the legislative session.

The highlight of the week for those both for and against it was the long-awaited formal introduction of SB 6346 (Pedersen, D-43) / HB 2724 (Fitzgibbon, D-34), the “Millionaire’s Income Tax.” As currently drafted, the bill would impose a 9.9 % state income tax on household income above $1 million a year. Lawmakers estimate it would impact about 20,000 households and raise roughly $3.7 billion annually. 80% of the revenue would go to the general fund, and 20% would fund tax relief for small businesses and repeal some sales taxes. The tax would not take effect until 2028 and will undoubtedly face legal challenges. The bill has strong Democratic support in the Legislature, but after the release, Gov. Bob Ferguson (D) announced he will not support this version of the bill, saying it does not do enough to return money to taxpayers to make life in Washington more affordable.

Over the last two weeks, majority Democrats have made a coordinated effort to extend labor protections to workers excluded from full coverage under state and federal labor law. SB 6045 (Saldaña, D-37) grants agricultural workers formal collective bargaining rights under state law, creating a PERC-administered framework for organizing, representation, and dispute resolution in a sector excluded from the federal NLRA.  This comes after the policy committee passage last week of HB 2355 (Thomas, D-34) which focuses on domestic workers, establishes baseline employment standards such as minimum wage, overtime, written agreements, anti-retaliation protections, and enforceable remedies while addressing the unique vulnerabilities of work performed in private homes.

This week majority Democrats also took aim at addressing health care market oversight, financial accountability of nonprofit insurers, and funding mechanisms to support health care programs through three bills. HB 2548 (Taylor, D-30) was voted out of the House Committee on Civil Rights & Judiciary. The bill requires that significant transactions such as mergers, acquisitions, affiliations, or major asset transfers be reported to the Attorney General, who is authorized to collaborate with other state agencies on data collection and enforcement. HB 2073 (Parshley, D-22) received a hearing in Appropriations this week as well. This targets nonprofit health insurance carriers, requiring insurers to annually report their surplus to the state insurance commissioner, beginning July 1, 2026. If a carrier’s surplus exceeds 600% of its risk-based capital requirements, the commissioner can deem it “excessive,” triggering a payment of 3% of the excess to the state health care affordability account, which funds premium assistance programs. Carriers retain the right to request hearings to reduce the payment if it would jeopardize financial stability. Also heard this week was HB 2626 (Parshley, D-22), which increases the insurance premium tax from 2% to 3% for health maintenance organizations, health care service contractors, and certain self-funded plans, starting with taxes due March 1, 2027. The bill directs most of the revenue to the general fund, with a portion allocated to the health benefit exchange account, funding state-administered health programs. These bills could be considered “necessary to implement the budget,” thus extending their timeline in the process.

Important Dates:

• February 9 – Fiscal Committee Cutoff (House of Origin)
• February 17 – Floor Cutoff
• February 25 – Policy Committee Cutoff (Opposite House)
• March 2 – Fiscal Committee Cutoff (Opposite House)
• March 6 – Floor Cutoff
• March 12 – Sine Die

Bill Status Report: