Policy Blog – February 23, 2026 – Legislative Session Check-in: Where Things Stand with Three Weeks To Go

Join us for a virtual briefing on Thursday, February 26, 2026 at 1:00 PM PST for an update on this year’s state legislative session. LSW President & CEO Marc Cummings will also share insights from his recent meetings in Washington, DC, where he met with our Congressional delegation to discuss key federal issues. Contact Curtis Knapp, LSW’s Public Affairs Manager to RSVP for the call.

The legislative session is more than halfway through, with final adjournment expected on March 12. Below is an update on legislation we have been tracking this year.

We are still sifting through legislative budget proposals that were released Sunday afternoon, but two LSW priorities were included in the Senate budget proposal.

We secured $250,000 to support the Center for Biotechnology Innovation and Training at the University of Washington Bothell. This funding is exactly the type of high demand degree support the Workforce Education Investment Act (WEIA) was intended to fund.

Additionally, language we sought was included that directs the WEIA Oversight Board to work with high-tech trade associations to develop recommendations for expanding industry-aligned, high-demand degree programs.

We will continue working with lawmakers to ensure the final budget includes these important provisions.

Since our last update a week ago, LSW has testified for a fifth time opposing legislation that would prohibit restrictions on contract pharmacy arrangements by hospitals and other clinics for prescribing medications under the 340B program. We continue to urge legislators to first pass a standalone transparency bill to get a full picture of the loss of state Medicaid rebates and determine whether patients are seeing the benefits originally intended by the program, or simply hospital drug price markups. After passing the Senate, SB 5981 is now scheduled for a vote in the House Health Care & Wellness Committee on February 25.

Following a record-breaking public hearing with nearly 81,000 individuals signing in (including Life Science Washington) and more than 200 people providing testimony, the Senate Ways & Means Committee advanced the Millionaire’s Tax, SB 6346 (Pedersen, D-43). The committee adopted Senator Pedersen’s substitute bill and the full Senate passed the bill on February 16. As it passed the Senate, the bill:

• Imposes a 9.90 percent tax on individuals’ income exceeding $1M beginning in calendar year 2028.
• Increases the distribution amount for public defense services from 5% to 7%;
• Allocates 10% of the revenues for public defense services to cities and provides an alternate distribution mechanism for counties;
• Increases the charitable deduction from $50,000 to $100,000;
• Specifies that income excluded from federal AGI, including tribal treaty income, is also exempt from the state tax calculation unless a specific provision in state law requires otherwise;
• Authorizes a deduction for contributions to a capital construction fund by commercial fisherman and vessel operators where the amounts reduced federal taxable income;
• Increases the small business B&O tax credit to exempt approximately the first $300,000 of business income with a complete phaseout at $600,000;
• Specifies that DOR will continue with implementation efforts regardless of litigation;

The bill is now in the House where it is scheduled for a vote in the Finance Committee on February 27.

Late last week, a second proposal establishing an income tax on millionaires was introduced by Rep. Amy Walen (D-Kirkland). This bill is intended to address some concerns raised by the business community, including the marriage penalty. With the majority’s preferred bill moving forward swiftly, it is unclear whether this bill will receive consideration or if provisions from it may be added to Sen. Pedersen’s bill during it’s consideration in the House. Read more about the new bill here.

As we wrote earlier in the legislative session, legislation was introduced this year that would enact a new capital gains tax on the sale of small business stock. The outpouring of opposition from the state’s startup community helped pursued lawmakers from advancing the bill for several weeks, but the bill appeared on a vote list in the Senate Ways & Means Committee last week, though no action was taken. We will continue monitoring the bill.

Two bills remain under consideration that would make changes to tax changes enacted in 2025. SB 6347 would revert the estate tax back to the rates as they stood in 2025, though Washington’s estate tax would continue to be one of the highest in the country. Additionally, SB 6113, would amend certain sales tax changes made last year, though it currently would not exempt nonprofits from the sales tax on live presentations. A similar House bill no longer under consideration would have included such an exemption, and it is not too late for SB 6113 to be amended to exempt nonprofits from the sales tax on live presentations.

Since we wrote last week, one of the three nicotine tax bills that would fix the funding formula for the Andy Hill Cancer Research Endowment (CARE Fund) (SB 6129), has been scheduled for a committee vote this week on February 24.

AI bills continue to be a topic of conversation, but most bills have stalled for the year. HB 1170 requires providers of certain generative AI systems to make a provenance system available to users. The bill passed the House 56-37, along party lines. The bill is now in the Senate where it is scheduled for a vote on February 24 in the Environment, Energy and Technology Committee. In coordination with AdvaMed and BIO, we determined amendments were not necessary to protect research or medical devices.

Neither HB 2157 nor SB 6284 passed either chamber before the required deadline, and are likely dead for this year. These bills would have regulated the deployment and use of “high risk” AI systems.

HB 1155 passed the House by a vote of 65-29; 10 Republicans joined the Democrats in supporting the bill. It has been referred to Senate Labor and Commerce where there may be an effort to exempt senior executives from the legislation.

SB 5915, a priority bill for rare disease patients, would make it easier for treatments to receive state purchased health program coverage. The bill provides flexibility for the Health Technology Clinical Committee to consider all valid clinical trials and scientific data when evaluating technologies and making assessments, rather than only randomized and controlled trials. The bill is schooled for a House committee vote on February 24.

• Postconsumer plastic content of recycled containers
• Prohibiting phthalates in medical equipment used for intravenous purposes
• Biosimilar medicine prescribing practices
• Animal testing ban