Legislative Session Update: Week 8 (March 2-6, 2026)

By Jim Hedrick, GSI WA State Lobbyist and Spokane Regional Advocate

As the 2026 legislative session races toward its March 12 adjournment deadline, lawmakers in Olympia tackled major housing, privacy, tax, budget, and policy battles this week. With Friday night marking the opposite-house floor cutoff, several high-profile proposals moved forward while others quietly faded as time ran out.

Governor Bob Ferguson also stepped off the sidelines this week and inserted himself into the debate over the proposed Millionaires Tax. Whether the proposal ultimately passes or fails, progressive tax reform has clearly emerged as the defining issue of the 2026 legislative session; and one Democratic leaders appear poised to make a central theme of the 2026 election cycle.

Million Dollar Drama

The proposed Millionaires Tax, which currently awaits a vote on the House floor next week, had appeared doubtful earlier in the week. In an email to supporters, Governor Ferguson acknowledged the proposal faced uncertain prospects and lacked clear support in the Legislature.

By Thursday night, however, the political landscape had shifted. Negotiations intensified and momentum began building behind a revised version of the measure. On Friday, Ferguson announced he would sign the latest version of the proposal if it reaches his desk, signaling that a compromise may finally be within reach and that the long-debated tax could be nearing the finish line.

For review, the millionaires tax imposes a 9.9% state income tax on earnings above $1 million, affecting roughly 30,000 Washington taxpayers and generating an estimated $4 billion annually once it takes effect in 2028. The newest version of the bill reflects several changes made during negotiations with the governor. Most notably, it directs a significant portion of the new revenue toward universal school meals for K-12 students, while dedicating five percent of the proceeds to child care and early learning programs. Lawmakers also expanded targeted tax relief aimed at offsetting costs for some families and businesses, a change that helped bring the governor on board.

Notably absent from the revised proposal is funding previously set aside to help cities and counties manage rising public defense costs, a removal that has drawn concern from local governments already grappling with increasing legal obligations. 

While the governor’s endorsement removes one major obstacle, the bill still faces procedural and political hurdles. The Senate has already approved its version, but the House must now pass the revised measure before the Legislature adjourns next week. Republican lawmakers are expected to challenge the proposal on the floor and may attempt to slow the process through amendments and procedural tactics. Even within the Democratic caucus, there remains some caution about establishing what many view as the state’s first true income tax.

If the bill ultimately passes and is signed into law, the political fight will likely shift quickly from the Legislature to the courts and the ballot box. Washington’s longstanding constitutional interpretation treats income as property, raising questions about whether a graduated income tax can withstand legal scrutiny. As a result, the debate over the measure may be far from over even after the legislature adjourns.

The Ground Floor

Governor Ferguson’s signature affordable housing bill, SB 6026 (Alvarado, D-Seattle), passed another major hurdle this week. The bill, aimed at expanding residential development in areas traditionally reserved for commercial or mixed-use purposes, passed the House on a 69-27 vote after the Senate had approved its version earlier (36-12). The Senate is expected to vote to concur with the House amendments next week, sending the legislation to the Governor for signature.

The legislation reflects the state’s ongoing housing shortage and focuses on encouraging development in areas already served by infrastructure, employment centers, and services. Cities with populations of 30,000 or more, along with non-rural counties under the Growth Management Act, will be required to allow residential uses in commercial or mixed-use zones—with certain exceptions such as industrial areas, sensitive shorelines, historic districts, and lands outside urban growth areas.

The bill also eases regulatory barriers that have slowed housing development. For example, it limits local requirements to include ground-floor commercial space to no more than 40% of commercial zoning, while publicly subsidized affordable housing is fully exempt. Developers can request waivers or reductions, and local governments must consider whether doing so would help create more housing. Local ordinances will need to be updated within 18 months, or the state rules will take effect automatically. 

Law Enforcement Technology and Privacy Protections

Privacy advocates and law enforcement alike saw progress this week on SB 6002 (Trudeau, D-Tacoma), a bill that regulates the use of automated license plate readers (ALPRs). The Senate passed the bill 40-9, and the House approved its version 84-10. With broad agreement between lawmakers, local governments, the ACLU, and law enforcement agencies, the Senate is expected to concur with the House version next week.

SB 6002 establishes clear rules for when and how ALPR systems can be used, aiming to balance public safety with privacy rights under the U.S. and Washington Constitutions. ALPRs may be used to track stolen vehicles, missing persons, outstanding warrants, and serious criminal investigations, as well as limited traffic and parking enforcement. Most collected data must be deleted within 21 days, and sharing or selling data is strictly prohibited. The bill also protects sensitive locations including schools, places of worship, health care facilities, and food banks from ALPR monitoring. Agencies must register their systems, adopt usage policies, train staff, report annually, and conduct internal audits. Violations can carry criminal penalties, civil liability, and consumer protection enforcement. With an emergency clause, the bill takes effect immediately to safeguard privacy.

Housing

HB 2266 (Peterson, D-Edmonds) aims to expand housing options and address homelessness by changing how Washington cities and counties regulate supportive and emergency housing. The bill requires jurisdictions to allow transitional and permanent supportive housing anywhere residential units or hotels are permitted and indoor emergency shelters where hotels are allowed, removing local zoning barriers that have slowed development.

The bill limits local governments from imposing more restrictive development or operating standards than those applied to other residential or lodging uses, while allowing objective requirements like setbacks, stormwater, and building codes. Local authorities retain limited power to address health and safety, such as requiring shelter operators to notify neighbors, hold community meetings, designate emergency contacts, and adopt operational policies. In specific cases near schools or other shelters, cities may negotiate additional safety protocols. Jurisdictions cannot restrict shelters in ways that prevent meeting projected housing needs, but existing protections remain for critical areas, natural hazards, and agricultural, forest, or mineral lands. Cities and counties must update zoning and development rules within two years or by their next comprehensive plan update.

Supporters say the bill ensures consistent statewide rules to speed housing delivery for vulnerable populations, while critics warn it limits local land-use control. Overall, HB 2266 reflects the Legislature’s strategy to accelerate housing production and address homelessness through statewide zoning reforms.

Expanding Authority of the State Attorney General

This week the legislature considered SB 5925 (Hansen, D-Bremerton) that would expand the Attorney General’s authority to issue civil investigative demands (CIDs). The proposal gives the office the power to request documents, written responses, and oral testimony from individuals or entities when there is reason to believe state or federal laws have been violated.

The bill is designed to apply before any civil proceeding is initiated, allowing the Attorney General to gather information efficiently. It covers a wide range of potential violations, including constitutional rights, labor and employment laws, public health and safety statutes, and consumer protections. Notably, the authority does not extend to criminal investigations or federal agencies performing official duties.

Key safeguards include demands must be specific, relevant, and reasonable, and cannot require the disclosure of privileged information. Individuals and entities can petition the court to modify or quash a demand, and the court can impose sanctions consistent with civil discovery rules. The legislation also includes confidentiality provisions to protect sensitive materials and restrict disclosure. Copies of documents or testimony may only be shared under strict terms, primarily for enforcement purposes, and cannot be used in criminal prosecutions.

Finally, the bill requires the Attorney General to report to the Legislature within four years on the use of these investigative demands, including how many were issued, set aside by courts, resolved informally, or enforced through court action. In short, this bill aims to provide the Attorney General with modern tools for civil law enforcement, while maintaining checks, transparency, and protection of rights.

Data Center Oversight Fails

Not every bill survived the legislative gauntlet this week. HB 2515 (Doglio, D-Olympia), which would have required utilities and data center companies to protect ratepayers from rising costs and provide transparency on environmental impacts, failed after the Senate Committee on Ways & Means did not bring the bill to a committee vote.

The bill had strong support from environmental groups, Tribes, and ratepayer advocates, who warned that the rapid expansion of data centers could strain the grid, increase electricity costs, and impact water resources. However, major tech companies like Microsoft and Amazon lobbied heavily against it, with Microsoft publicly calling the bill “uniquely anti-competitive” just before the committee deadline. 

Proponents argued the legislation was a common-sense step to hold tech companies accountable for their climate commitments and protect communities, while opponents emphasized the economic and infrastructure benefits of the data center sector. Lawmakers like Rep. Beth Doglio (D-Olympia) vowed to continue pursuing solutions, emphasizing the ongoing impact on the grid, utility bills, and environmental sustainability.

What’s Next

The regular legislative session adjourns Thursday, March 12. Between then and now there will be an agreed to operating, transportation, and capital budgets released, revenue bills to create resources to support those budges, about 150 bills that need votes to have their differences reconciled between the House and Senate, and an historic vote on this final version of the millionaires tax. One more week.