5468-S2.E

AN ACT Relating to private business entities receiving public assistance; adding a new chapter to Title 43 RCW; providing an effective date; and declaring an emergency.

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. It is the purpose of this chapter to collect information sufficient to allow the legislature and the executive branch to make informed decisions about the merits of existing tax-based incentives and loan programs intended to encourage economic development in the state.

NEW SECTION. Sec. 2. (1) The department of revenue and the department of community, trade, and economic development shall gather such base-line data as is necessary to measure the effect on businesses other than businesses certified as minority or women-owned and controlled businesses pursuant to chapter 39.19 RCW of any of the following benefits: (a) A loan of one hundred thousand dollars or more from the development loan fund; (b) fifty thousand dollars or more in tax credits under chapter 82.62 RCW; or (c) a deferral of one hundred thousand dollars or more in taxes under chapter 82.60 or 82.61 RCW. The departments shall measure the effect of the programs on job creation, company growth, the introduction of new products, the diversification of the state's economy, growth in investments, the movement of firms or the consolidation of firms' operation into the state, and such other factors as the departments select.

(2) The departments shall also measure whether the businesses receiving the benefits: (a) Have complied with federal and state requirements for affirmative action in hiring and promotion of its employees; (b) have provided 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; (c) have provided basic health coverage at a level at least equivalent to basic health coverage under chapter 70.47 RCW; (d) have complied with all applicable federal and state environmental laws and regulations; (e) have complied with the requirements of all federal and state plant closure laws if reducing operations at a facility or relocating a facility; (f) have continued to recognize, if purchasing or relocating a facility within the state, any employee organization, whether international or local, that is a signatory to a collective bargaining agreement; (g) have, if totally closing or relocating a facility, made 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 or relocated; and (h) meet any five of the following criteria for being a higher performing work organization:

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

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

(iii) Has developed a worker-management relationship based on consideration of mutual interest and concerns;

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

(v) Has cultivated an environment which 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;

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

(vii) 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;

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

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

(x) 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.

(3) Businesses other than businesses certified or eligible to be certified as minority or women-owned and controlled businesses pursuant to chapter 39.19 RCW applying for one of the benefits specified in subsection (1) of this section shall submit employment impact estimates to the departments 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 departments shall make the employment impact estimates available for review and comment by employees who may 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.

(4) The departments shall specify that upon a certain date or dates, the businesses, not including businesses certified or eligible to be certified as minority or women-owned and controlled businesses pursuant to chapter 39.19 RCW, which receive one of the benefits specified in subsection (1) of this section 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.

(5) The departments shall report their findings to the executive-legislative committee on economic development policy by September 1, 1995.

(6) The executive-legislative committee on economic development policy shall evaluate the departments' report and make recommendations to the governor and the legislature on the continuation of the benefit programs and any conditions under which they should operate if they are to continue.

(7) This section does not apply to any business certified or eligible to be certified as a minority or women-owned and controlled business pursuant to chapter 39.19 RCW.

NEW SECTION. Sec. 3. Sections 1 and 2 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 4. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect March 1, 1994.