HOUSE BILL REPORT

ESB 6272

BYSenators Anderson, Smitherman, Lee, Warnke, Cantu, Deccio, McMullen, Saling, Williams, Conner, West, Fleming and Smith

Establishing the Washington investment opportunities office.

House Committe on Trade & Economic Development

Majority Report:  Do pass.  (13)

      Signed by Representatives Vekich, Chair; Wineberry, Vice Chair; Amondson, Beck, Cantwell, Doty, Fox, Grant, Holm, McLean, Moyer, Rasmussen and Schoon.

House Staff:Stephen Hodes (786-7092)

AS REPORTED BY COMMITTEE ON TRADE & ECONOMIC DEVELOPMENT

FEBRUARY 24, 1988

BACKGROUND:

Businesses which are new, small, and growing have been identified as the most important generator of new jobs in the state and in the nation. Studies of job growth in the United States in the 1970's revealed that approximately half of new job creation in took place in small, new, growing firms.  A more recent study undertaken in local areas in the state suggests that an even higher proportion of local job creation takes place in small and growing firms.  The high rate of job creation by small business is paralleled by a high rate of business failure.  In 1984, the U.S. Small Business Administration estimated that up to eighty percent of all small businesses fail within the first five years of operation.  A major cause of small business failure is the limited availability of adequate and appropriate capital resources.

Information on the availability of a wide range of capital resources is often unavailable to small and growing firms.  Information on investment opportunities is often not widely available for new, small, and growing businesses, particularly in economically distressed areas and for industries not based on the application of advanced technologies. Several states have created information networks designed to make information on capital resources and investment opportunities more widely available.  Existing state programs include: Michigan's Office of New Enterprise Services, operated in the state department of commerce; Indiana's Seed Capital Network;  and New Hampshire's Venture Capital Network, operated by the University of New Hampshire.

SUMMARY:

The Washington Investment Opportunities Office is created in the Business Assistance Center of the Department of Trade and Economic Development. The office shall provide a clearinghouse for entrepreneurs seeking capital and for investors seeking investments.  The office shall also maintain a list of entrepreneurs in the state seeking capital resources and shall provide prospective investors with information about these entrepreneurs.  The office shall maintain current information on national trends and preferences in capital markets and shall provide timely information to both investors and entrepreneurs.  Annual reports to the specified legislative committees are required.  The director of the Business Assistance Center is directed to form an advisory panel for the Investment Opportunities Office.

Fiscal Note:      Requested February 16, 1988.

House Committee ‑ Testified For:    None Presented.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    None Presented.

House Committee - Testimony Against:      None Presented.