1565-S2

AN ACT Relating to private business entities receiving public assistance; adding a new section to chapter 82.62 RCW; adding a new section to chapter 82.60 RCW; adding a new section to chapter 82.61 RCW; adding a new chapter to Title 19 RCW; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that when public funds are used to support private enterprise, the public may gain through the creation of new jobs, the diversification of the economy, or higher quality jobs for existing workers. The legislature further finds that such returns on public investments are not automatic and that tax-based incentives, in particular, may result in a greater tax burden on businesses and individuals that are not eligible for the public support. The legislature therefore declares its intent to ensure that the state may recover funds or foregone state revenue used by private enterprises if the enterprises do not meet minimal standards or commitments made at the time the enterprises receive such benefits from the state.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Business" means a person, firm, partnership, corporation, trust, association, or other form of private business organization which employs one or more employees at a facility within this state.

(2) "Certified date of reduction in operations" means the actual or anticipated date of any reduction in operations at a business facility as determined by the director.

(3) "Director" means the director of community, trade, and economic development.

(4) "Department" means the department of community, trade, and economic development.

(5) "Reduction in operations" means the total closure of a business facility, any partial closure of a business facility, or any other reduction in operations or relocation of a business facility that results in the layoff of at least twenty-five employees at the facility within a six-month period prior to the certified date of reduction in operations. "Reduction in operations" does not include reductions:

(a) Resulting solely from labor disputes as defined in RCW 49.32.110(3);

(b) Occurring at construction sites;

(c) Resulting from seasonal factors, that are customary in the industry of which the business is a part, as determined by the director;

(d) Resulting from the lack of availability of natural resources required for production at the business facility, as determined by the director; or

(e) Resulting from fire, flood, war, or other acts of God.

(6) "High-performance work organization" means a business that meets five or more of the following criteria, as determined by the director, in accordance with section 5 of this act:

(a) Demonstrates a commitment to continuous improvement of products and services and cost reductions for the products and services;

(b) Encourages decentralized decision making, worker participation at all levels, and greater reliance on front line workers;

(d) Has adopted an organizational structure that includes flexible, cross-functional teams responsible for training, customer service, operational problem solving, and product design and development;

(e) Has cultivated an environment that permits a manager to assume motivational and leadership functions, including, but not limited to, long-range planning, coaching, and facilitation, rather than limiting the role of the manager to that of an enforcer;

(f) Demonstrates a commitment to ongoing training of all workers, including front-line staff;

(g) Has implemented a flexible benefits program and innovative compensation schemes, including, but not limited to, profit sharing, gain sharing, skill-based pay, and pay-for-performance systems;

(h) Demonstrates a commitment to a safe and healthful workplace;

(i) Solicits suggestions from customers and suppliers for designing and developing products and services; and

(j) Demonstrates a commitment to delivering a greater variety of high-quality products at lower cost through manufacturing innovations such as concurrent engineering, flexible manufacturing, and just-in-time production.

NEW SECTION. Sec. 3. Before receiving the benefit of: A loan of one hundred thousand dollars or more from the development loan fund; fifty thousand dollars or more in tax credits under chapter 82.62 RCW, or subsequently enacted tax credits under Title 82 RCW; or a deferral of one hundred thousand dollars or more in taxes under chapter 82.60 or 82.61 RCW, or subsequently enacted tax deferrals under Title 82 RCW, a business shall enter into a contract with the department that must specify particular requirements of the business receiving benefits. The contract must specify that upon receipt of the benefit or by a specific date:

(1) A business reducing operations at a facility or relocating a facility shall comply with the requirements of all federal and state plant closure laws, regardless of whether the business is included within the coverage of the plant closure law.

(2) A business purchasing or relocating a facility within the state shall continue to recognize any employee organization, whether international or local, that is a signatory to a collective bargaining agreement in effect at the predecessor facility or at the relocating facility at the time of relocation.

(3) A business selling or otherwise transferring a business shall include in the contract of sale or similar instrument of conveyance a statement that the successor business is bound by any collective bargaining agreement to which the predecessor business is a signatory at the time of transferring the business, until the expiration of the agreement.

(4) The permanent replacement of employees who legally exercise the right to strike shall be prohibited.

(5) The business shall maintain a neutral position with respect to their employees' determination of collective bargaining representation.

(6) The business shall comply with all federal and state requirements for affirmative action in hiring and promotion of its employees, regardless of whether the business is included within the coverage of the federal or state affirmative action requirement.

(7) A business totally closing or relocating a facility shall first make good faith offers of sale at fair market values for the plant, equipment, and inventory to the agents who represent a majority of the employees of the employer, who are seeking to form an employee-owned or, in combination with others, a jointly owned business at the facility being closed.

(8) The business must provide an average wage that is above the average wage paid by firms located in the same county that share the same two-digit standard industrial code.

(9) The business shall provide basic health coverage at a level at least equivalent to basic health coverage under chapter 70.47 RCW.

(10) The business shall comply with all applicable federal and state environmental laws and regulations.

(11) The business, when in violation of contract provisions agreed to between the department and the business, is subject to one or more of the following consequences as determined by the director based upon rules adopted under chapter 34.05 RCW:

(a) The amount received in loans, tax deferrals, or tax credits must be immediately returned to the state;

(b) Some portion of the amount received in loans, tax deferrals, or tax credits must be immediately returned to the state;

(d) The business is ineligible for some or all of the business assistance programs offered by the state for a period of up to ten years following the date of violation as determined by the director. The director shall determine the length of ineligibility, and the nature of the business assistance programs for which the business is ineligible, based upon rules adopted to implement this chapter.

NEW SECTION. Sec. 4. (1) Businesses applying for one of the benefits specified in section 3 of this act shall submit employment impact estimates to the department specifying the number and types of jobs, with wage rates and benefits for those jobs, that the business submitting the application expects to be eliminated, created, or retained on the project site and on other employment sites of the business in Washington as a result of the project that is the subject of the application. The department shall make the employment impact estimates available for review and comment by employees who might be displaced, employee organizations or state-wide organizations representing employees, the local economic development council or associate development organization, and other affected or interested community organizations or associations.

(2) The contract entered into between the department and a business that is eligible to receive one of the benefits specified in section 3 of this act must specify that upon a certain date or dates, the business shall submit to the department an employment impact statement stating the net number and types of jobs eliminated, created, or retained, with the wage rates and benefits for those jobs, by the business in Washington as a result of the benefit received. The contract must also provide the terms under which the business shall return a portion or all of the benefit received if the projections contained in the employment impact estimates are not met.

NEW SECTION. Sec. 5. (1) The director shall designate a business facility as a high-performance work organization if both management and employees at the facility certify, in writing, that the business facility qualifies as a high-performance work organization under the definition in section 2 of this act. If the employees of a business facility have a collective bargaining representative, the director may not designate the facility as a high-performance work organization unless both management and the collective bargaining representative certify, in writing, that the business facility qualifies as a high-performance work organization under the definition in section 2 of this act. The director shall attempt to verify the claims made in the certification. The business seeking designation as a high-performance work organization shall facilitate access to such records, worksites, employees, or customers as the director or the director's representative deems necessary to verify the claims made in the certification. If the director is unable to verify the claims made in the certification, the director shall not designate the business facility as a high-performance work organization unless the business facility complies with the conditions of subsection (2) of this section. The director shall adopt rules under chapter 34.05 RCW prescribing the form, content, and filing requirements of the written certification required by this subsection.

(2) A business facility that does not qualify as a high-performance work organization under the definition in section 2 of this act may be designated a high-performance work organization by executing a contract with the department obligating it to become a high-performance work organization. The contract must require the business to submit such information as the director determines, including, but not limited to: (a) A plan outlining the specific high-performance work organization criteria the business facility will meet; and (b) a timetable for meeting the criteria. Failure to meet the terms of the contract subjects the business to section 3(11) of this act.

NEW SECTION. Sec. 6. A new section is added to chapter 82.62 RCW to read as follows:

A business that received a tax credit under this chapter based on its increased employment for one year is not eligible for further tax credits under this chapter or any tax credit under this title effective after the effective date of this act unless the director of the department of community, trade, and economic development has designated the business facility as a high-performance work organization.

NEW SECTION. Sec. 7. A new section is added to chapter 82.60 RCW to read as follows:

A business that received a tax deferral under this chapter for a period of one year is not eligible for tax deferrals under this chapter or chapter 82.61 RCW or under any tax deferral statute under this title effective after the effective date of this act unless the director of the department of community, trade, and economic development has designated the business facility as a high-performance work organization.

NEW SECTION. Sec. 8. A new section is added to chapter 82.61 RCW to read as follows:

A business that received a tax deferral under this chapter for a period of one year is not eligible for tax deferrals under this chapter, chapter 82.60 RCW, or under any tax deferral statute under this title effective after the effective date of this act unless the director of the department of community, trade, and economic development has designated the business facility as a high-performance work organization.

NEW SECTION. Sec. 9. (1) The department shall report annually to the governor and the appropriate legislative committees on the activities under this chapter.

(2) The director shall adopt rules under chapter 34.05 RCW to carry out the purposes of this chapter.

NEW SECTION. Sec. 10. Sections 1 through 5 and 9 of this act shall constitute a new chapter in Title 19 RCW.

NEW SECTION. Sec. 11. This act shall take effect July 1, 1994.