This bill adds a new chapter to Title 19 RCW and creates a new state regulatory scheme for electronic payment transactions, effective July 1, 2026. It prohibits issuers, payment card networks, acquirer banks, processors, or other designated entities from receiving or charging interchange fees on the tax or gratuity portion of an electronic payment transaction when the merchant transmits that tax or gratuity amount as part of authorization or settlement. Merchants who did not transmit the tax or gratuity amount at the time of the transaction may submit tax documentation within 180 days; the issuer must credit the merchant the interchange fees charged on that tax or gratuity amount within 30 days after the merchant’s submission. Payment card networks must provide a mechanism for merchants to transmit tax or gratuity data within two years of the section’s effective date, and the bill forbids altering fee computations to circumvent these rules. The bill establishes a civil penalty of $1,000 per electronic payment transaction for covered entities that receive tax or gratuity data and violate the fee prohibition, and requires the issuer to refund the interchange fee calculated on the tax or gratuity amount. Civil penalties are to be paid to the director of the Department of Labor and Industries for deposit in the supplemental pension fund established in RCW 51.44.033. The bill also prohibits entities other than the merchant that facilitate or process electronic payments from distributing, exchanging, transferring, disseminating, or using the transaction data except to facilitate or process the transaction or as required by law; such misuse is treated as a violation of the Consumer Protection Act (chapter 19.86 RCW). The bill amends RCW 49.46.020 to prohibit employers from reducing an employee’s tips, gratuities, and service charges by the amount of any interchange fees defined in the bill, and requires the Department of Labor and Industries to calculate an adjusted minimum wage rate each September 30 by increasing the current year’s minimum wage by the rate of inflation using CPI-W for the prior 12 months, with the adjusted rate effective the following January 1. The text includes statutory definitions for terms such as acquirer bank, authorization, clearance, electronic payment transaction, gratuity, interchange fee, issuer, merchant, payment card network, processor, settlement, tax, and tax documentation, and references federal law 15 U.S.C. §1693l-1 for the definition of a general use prepaid card as of the act’s effective date. The provided document text is incomplete: it ends partway through a later section (Sec. 7) and does not show the new chapter number added to Title 19 RCW or any provisions that may follow Sec. 7. The fragment “d 6 of this act” is unclear in context. No additional provisions, exceptions, or transitional rules beyond the extracted facts are available in the provided text.

If enacted, merchants who send the tax or tip amount with a card sale will no longer have interchange fees charged on those amounts, and merchants who forgot to send that data can submit documentation within 180 days to get any such fees refunded within 30 days. Payment card networks and banks will have to build or adopt a way for merchants to transmit tax/gratuity data (networks must provide that mechanism within two years), and issuers, networks, acquirers, and processors face $1,000 per-transaction civil penalties plus mandatory refunds if they receive the data and still assess fees or misuse it; misuse of transaction data beyond processing is also treated as a consumer protection violation. As a result, card networks and banks will likely face new compliance and technology costs and increased legal and refund risk, merchants stand to keep more of taxes/tips and recover past overcharges if they follow the deadlines, and tipped employees are explicitly protected from employers reducing their tips to cover interchange fees. The Department of Labor and Industries must annually increase the state minimum wage by inflation (CPI-W) each September 30 with the new rate effective January 1, which will likely raise employer wage costs year to year in line with inflation, and penalties collected under the bill go to the department’s supplemental pension fund. The bill text provided ends mid-sentence and omits the full new chapter designation and any additional transitional details or exceptions, so some implementation specifics and possible limits are unclear.