Legislators convened in January against the backdrop of the ongoing pandemic with COVID-19 response, economic recovery, equity issues, and climate at the top of the agenda. In the 105 days that followed, legislators’ sharp focus on this agenda resulted in what has been cast as a historic session that saw the passage of bills long on the progressive wish-list – including a cap-and-invest program, low-carbon fuel standard, and a capital gains tax. However, the virtual mode of the session constrained overall volume, with a four-decade low of only 335 bills passed.

For Washington’s tech sector, the policy results were mixed. There was significant investment in workforce development and equity programs, as well as important steps forward to close the digital divide. However, the passage of a capital gains tax will continue to raise questions about Washington’s competitiveness as a tech hub and the long-term vitality of the state’s startup sector. Throughout the session, WTIA advocated on several key policy priorities, with active engagement on more than 70 bills.  

Digital Divide Top of the Tech Agenda

The pandemic has shown a bright spotlight on the digital divide, for both K-12 students learning from home as well as for families working remotely. Washington policymakers put forward a wide range of legislative measures to address pervasive issues related to access and equity. To expand broadband internet access, legislators passed two bills aimed at providing coverage to rural and underserved areas throughout the state, alongside increased funding for the Washington Statewide Broadband Office. The WTIA also engaged on a range of workforce development priorities throughout the session, with a focus on increasing equity in computer science programs. 

Capital Gains Tax Passes

Widespread support for the capital gains tax in both houses catalyzed its passage this year. First introduced as a 9% tax on capital gains over $25,000 per year, early negotiations in the Senate saw the rate reduced to 7% and the exemption threshold increased to $250,000. End-game negotiations in the House added a back-door emergency clause to the bill, precluding a ballot referendum on the bill in November. Going forward, questions remain if the tax will survive a court challenge and an expected initiative in 2022. The WTIA led the tech and startup community in advocating against the tax, raising concerns related to the punitive impact of the tax on startups, and the adverse impact on the competitiveness of Washington vis-à-vis other tech hubs. 

Privacy Dies on Goal Line

The Washington Privacy Act was once again at the top of the tech agenda for the third year in a row – this year, with renewed interest in charting a new model for federal-level regulation. Introduced by Senator Reuven Carlyle in the Senate, the bill moved quickly in the first half of the session and passed out of the Senate with a strong 48 to 1 vote. However, the bill saw significant changes in the House Civil Rights and Judiciary Committee, including the addition of a private right of action limited to coverage of attorney’s fees and injunctive relief, as well as the sunset of the right to cure after one year. Though legislators worked in the final weeks to strike a compromise, the Democratic caucus was divided over enforcement, and it failed to garner enough support to move to the House floor. 

Throughout the session, WTIA also advocated for progress on important issues impacting our communities, including on criminal justice and police reform, as well as increased funding for priority transportation projects.

As we look ahead, WTIA will be working to advance core policy priorities related to workforce development and higher education, Washington’s startup ecosystem, blockchain applications, broadband, and many other issues through the interim period. 

If you would like to get involved or learn more about our policy work, please reach out to mjones@washingtontechnology.org.