State-federal payments

AN ACT Relating to directing the withholding of state payments to 1
the federal government if federal funding is withheld due to the 2
existence of a valid Washington state law; adding a new section to 3
chapter 43.08 RCW; adding a new section to chapter 82.01 RCW; adding 4
a new section to chapter 43.79 RCW; creating a new section; and 5
declaring an emergency. 6
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:7
NEW SECTION. Sec. 1. A new section is added to chapter 43.08 8
RCW to read as follows: 9
(1) Within 60 days of the effective date of this section, the 10
treasurer shall submit a report to the fiscal committees of the 11
legislature detailing: 12
(a) Any federal funds owed to the state that have not been paid 13
to the state by the federal government due to the existence of a 14
Washington state law, the exercise of which has not been invalidated 15
by a court of competent jurisdiction; 16
(b) Any federal funds owed to the state, where the federal 17
government's nonpayment of those funds is in contravention of a court 18
decision; and 19
(c) Any funds the treasurer projects will be due to be paid by 20
the state to the federal government during the succeeding 12 months 21
S-3996.1
SENATE BILL 6218
State of Washington 69th Legislature 2026 Regular Session
By Senators Dhingra, Frame, Alvarado, Bateman, Cortes, Liias, Nobles,
Stanford, Trudeau, Valdez, and Wellman
Read first time 01/19/26. Referred to Committee on Ways & Means.
p. 1 SB 6218
including, but not limited to, federal taxes owed by the state as an 1
employer, federal employment taxes withheld by the state on behalf of 2
the federal government, offsets for federal debts, backup withholding 3
of federal taxes, and federal grant repayments. 4
(2) The treasurer shall update this report monthly. Both the 5
initial report under subsection (1) of this section and monthly 6
updates shall be published on the treasurer's website.7
NEW SECTION. Sec. 2. A new section is added to chapter 82.01 8
RCW to read as follows: 9
(1) If any report required in section 1 of this act indicates 10
there are federal funds owed to the state including but not limited 11
to federal funds that have been withheld due to the existence of a 12
valid Washington state law, the exercise of which has not been 13
invalidated by a court of competent jurisdiction, or federal funds 14
that have been withheld in contravention of a court decision, the 15
director of the office of financial management shall, in consultation 16
with the state treasurer, direct affected agencies to withhold 17
payments to the federal government in the amount of federal funds 18
withheld from the state as described in the treasurer's report.19
(2) In directing the withholding of payments under this section, 20
the director of the office of financial management, in consultation 21
with the state treasurer, shall: 22
(a) First direct the agency or agencies from which federal 23
funding has been withheld due to federal government action to 24
withhold payments to the federal government to prioritize a direct 25
connection with state action. If payments from the agency or agencies 26
directly affected by federal government withholding are insufficient 27
to match the amount of federal funding withheld from the state, the 28
director shall direct other state agencies to withhold payments to 29
the federal government; 30
(b) Where applicable, direct the affected agency or agencies to 31
first withhold payments to the federal government attributable to 32
senior leadership or management staff before withholding payments to 33
the federal government attributable to other employees.34
(3)(a) The director of the office of financial management, in 35
consultation with the state treasurer, shall direct affected agencies 36
to place payments withheld from the federal government in the 37
RECOURSE act escrow account created in section 3 of this act where 38
federal funds have been withheld from the state by the federal 39
p. 2 SB 6218
government due to the existence of a Washington state law and either 1
the federal government or state have sought adjudication of the state 2
law's constitutionality, but a court of competent jurisdiction has 3
not issued a ruling on the state's ability to exercise the law.4
(b) Funds shall be expended from the RECOURSE act escrow account 5
pursuant to the procedures established in section 3 of this act.6
(4) Funds held pursuant to this section and not placed in the 7
RECOURSE act escrow account created in section 3 of this act shall be 8
made available for appropriation as state funds. However, such 9
appropriations shall not exceed the amount of federal funds withheld 10
from the state as described in the treasurer's report in section 1 of 11
this act. 12
NEW SECTION. Sec. 3. A new section is added to chapter 43.79 13
RCW to read as follows: 14
(1) The RECOURSE act escrow account is created in the custody of 15
the state treasurer. All payments to the federal government which are 16
withheld under section 2 (3) of this act must be deposited into the 17
account. Only the director of the office of financial management or 18
the director's designee may authorize expenditures from the account. 19
Expenditures from the account may be used only as follows:20
(a) If a court of competent jurisdiction issues a ruling, either 21
not subject to appeal or where the deadline for an appeal has lapsed, 22
that the state may, either in part or in full, exercise a law or laws 23
that served as the basis for the federal government to withhold 24
funding owed to the state, the amount of federal payments withheld 25
shall be transmitted to the federal government upon receipt of 26
federal funds previously withheld from the state. 27
(b) If a court of competent jurisdiction issues a ruling, either 28
not subject to appeal or where the deadline for an appeal has lapsed, 29
that the state may not exercise a law or laws that served as the 30
basis for the federal government to withhold funding owed to the 31
state, the amount of federal payments withheld shall be transmitted 32
to the federal government as soon as possible after either entry of 33
final judgment or lapsing of the appeal deadline. 34
(2) The account is not subject to allotment procedures under 35
chapter 43.88 RCW. 36
(3) An appropriation is not required for expenditures from the 37
account. 38
p. 3 SB 6218
NEW SECTION. Sec. 4. This act may be known and cited as the 1
reciprocal enforcement of claims on unpaid or reduced state 2
entitlements act or RECOURSE act.3
NEW SECTION. Sec. 5. This act is necessary for the immediate 4
preservation of the public peace, health, or safety, or support of 5
the state government and its existing public institutions, and takes 6
effect immediately.7
--- END ---
p. 4 SB 6218