6479-S

AN ACT Relating to private business entities receiving public assistance; amending 1994 c 302 s 1 (uncodified); and adding a new chapter to Title 43 RCW.

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

Sec. 1. 1994 c 302 s 1 (uncodified) is amended to read as follows:

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 ensure that public investment creates a net increase in jobs in the state and 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 and job creation in the state.

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

(1) "Assistance" means a grant, loan, bond, tax deferral, or tax abatement program administered by the state or local government in which the business receives assistance of more than twenty-five thousand dollars.

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

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

NEW SECTION. Sec. 3. (1) A private business that receives state or local government assistance for economic development or job growth purposes must create a net increase in jobs in this state within two years of receiving the assistance unless the advisory committee established in section 4(3) of this act finds that this requirement is inconsistent with other economic development goals established for the program providing the assistance. The government agency providing the assistance shall establish goals for wage and benefit levels and job creation or retention that are to be met by the business receiving the assistance. The department shall provide advice and consultation for establishing these goals, with the assistance of the committee created in section 4(3) of this act.

(2) A business that fails to meet the goals established pursuant to subsection (1) of this section must repay the assistance to the government agency.

(3) Each government agency providing assistance to a private business shall report the goals for wage and benefit levels and job creation or retention and the results for each project in achieving those goals to the department. The department shall compile and publish the results of the reports for the previous calendar year by July 1st each year. The reports of the agencies to the department and the compilation report of the department must be made available to the appropriate committees of the legislature and the public.

NEW SECTION. Sec. 4. (1) Beginning with the 1997-1999 biennium and each biennium thereafter, the director shall analyze the effect of all state and local government assistance to private business on the aggregate number of jobs created or retained and wages and benefits paid in those new jobs. Following consultation with the business assistance advisory committee, the director shall report the results of the analysis to the appropriate committees of the legislature.

(2) After the enactment of business-related tax expenditure legislation, the department must establish measurable goals for wage and benefit levels and job creation or retention. The director shall biennially review the merits of continuing the new legislation based on the meeting of the goals set. Following consultation with the business assistance advisory committee, the director shall report the results of the review to the appropriate committees of the legislature.

(3)(a) The business assistance advisory committee is established in the department. Its members shall be appointed by September 1, 1996. The role of the committee shall be to advise the department in establishing goals for wage and benefit levels and job creation or retention, to analyze the effect of state and local government assistance to private business on the established goals, to monitor state economic policy impacts on the economy, and to review drafts of the reports required under this section.

(b) The committee shall consist of eleven members appointed by the governor. Three members of the committee must represent labor, three members must represent business, and five members must represent agencies with one member from each of the following: The department of community, trade, and economic development; the department of revenue; the work force training and education coordinating board; the office of financial management; and the labor market and economic analysis section of the employment security department. The members representing labor must be appointed from a list of names submitted to the governor by an organization, state-wide in scope, that through its affiliates embraces a cross section and a majority of the organized labor of the state. The members representing business must be appointed from a list of names submitted to the governor by a recognized state-wide organization of employers representing a majority of employers. The labor and business members of the committee shall serve for terms of four years, except that for initial appointments, one labor representative and one business representative must be appointed to a two-year term and one labor representative and one business representative appointed to a three-year term.

NEW SECTION. Sec. 5. The director shall adopt rules necessary to implement this chapter. The rules shall include a definition of "receipt of assistance" which begins the time frame for the two-year requirement of section 3 of this act after all necessary permits have been obtained.

NEW SECTION. Sec. 6. Sections 2 through 5 of this act shall constitute a new chapter in Title 43 RCW.