5329 AMH KILM TAYL 086

SB 5329 - H AMD 1046

By Representative Kilmer

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature finds that the use of industrial clusters as a descriptive tool can provide a clear understanding of the relationships between firms that drive the local economy. An industry cluster is a group of complementary, competing, and interdependent firms that represent the entire value chain of a broadly defined industry from suppliers to end products, including supporting services and specialized infrastructure. The legislature further finds that (1) cluster-based economic analysis is a tool for understanding industry dynamics; (2) the purpose of cluster analysis is to identify those areas of the economy in which a region has or might develop a comparative advantage and to develop short and long-term strategies for growing the regional economy; and (3) using cluster analysis in the development of economic development strategies highlights opportunities for coordination and improvement in areas of mutual concern to firms without threatening or distorting competition. It is the intent of the legislature that the department of community, trade, and economic development use a cluster-based economic analysis in the development and delivery of economic development services in the state.

Sec. 2. RCW 43.330.090 and 2005 c 136 s 14 are each amended to read as follows:

(1) The department shall work with private sector organizations, industry and cluster associations, federal agencies, state agencies, local governments, local associate development organizations, and higher education and training institutions ((to assist)) in the development of industry cluster-based strategies to diversify the economy, facilitate technology transfer and diffusion, and increase value-added production ((by focusing on targeted sectors)). The initial industry clusters targeted ((sectors)) by the department may include, but are not limited to, software, forest products, biotechnology, environmental ((industries)) technology, recycling markets and waste reduction, aerospace, photonics, food processing, tourism, film and video, microelectronics, new materials, robotics, and machine tools. The department shall, on a continuing basis, evaluate the potential return to the state from devoting additional resources to ((a targeted sector's)) an industry cluster-based approach to economic development and ((including)) identifying and assisting additional ((sectors in its efforts)) clusters. The department shall use information gathered in each service delivery region in formulating its ((sectoral)) industry cluster-based strategies ((and in designating new targeted sectors)).

(2) The department shall pursue a coordinated program to expand the tourism industry throughout the state in cooperation with the public and private tourism development organizations. The department, in operating its tourism program, shall:

(a) Promote Washington as a tourism destination to national and international markets to include nature-based and wildlife viewing tourism;

(b) Provide information to businesses and local communities on tourism opportunities that could expand local revenues;

(c) Assist local communities to strengthen their tourism partnerships, including their relationships with state and local agencies;

(d) Provide leadership training and assistance to local communities to facilitate the development and implementation of local tourism plans;

(e) Coordinate the development of a statewide tourism and marketing plan. The department's tourism planning efforts shall be carried out in conjunction with public and private tourism development organizations including the department of fish and wildlife and other appropriate agencies. The plan shall specifically address mechanisms for: (i) Funding national and international marketing and nature-based tourism efforts; (ii) interagency cooperation; and (iii) integrating the state plan with local tourism plans.

(3) The department may, in carrying out its efforts to expand the tourism industry in the state:

(a) Solicit and receive gifts, grants, funds, fees, and endowments, in trust or otherwise, from tribal, local or other governmental entities, as well as private sources, and may expend the same or any income therefrom for tourism purposes. All revenue received for tourism purposes shall be deposited into the tourism development and promotion account created in RCW 43.330.094;

(b) Host conferences and strategic planning workshops relating to the promotion of nature-based and wildlife viewing tourism;

(d) Contract with individuals, businesses, or public entities to carry out its tourism-related activities under this section;

(e) Provide tourism-related organizations with marketing and other technical assistance;

(f) Evaluate and make recommendations on proposed tourism-related policies.

(4)(a) The department shall promote, market, and encourage growth in the production of films and videos, as well as television commercials within the state; to this end the department is directed to assist in the location of a film and video production studio within the state.

(b) The department may, in carrying out its efforts to encourage film and video production in the state, solicit and receive gifts, grants, funds, fees, and endowments, in trust or otherwise, from tribal, local, or other governmental entities, as well as private sources, and may expend the same or any income therefrom for the encouragement of film and video production. All revenue received for such purposes shall be deposited into the film and video promotion account created in RCW 43.330.092.

(5) In assisting in the development of ((a targeted sector)) its industry cluster-based strategies, the department's activities may include, but are not limited to:

(a) Conducting focus group discussions, facilitating meetings, and conducting studies to identify ((members of the sector)) industry clusters, appraise the current ((state of the sector)) information linkages within a cluster, and identify issues of common concern within ((the sector)) a cluster;

(b) Supporting the formation of industry and cluster associations, publications of association directories, and related efforts to create or expand the activities ((or)) of industry and cluster associations;

(c) ((Assisting in the formation of flexible networks by providing (i) agency employees or private sector consultants trained to act as flexible network brokers and (ii) funding for potential flexible network participants for the purpose of organizing or implementing a flexible network;

(d))) Helping establish research consortia;

(((e))) (d) Facilitating joint training and education programs;

(((f))) (e) Promoting cooperative market development activities;

(((g))) (f) Analyzing the need, feasibility, and cost of establishing product certification and testing facilities and services; and

(((h))) (g) Providing for methods of electronic communication and information dissemination among firms and groups of firms to facilitate ((network)) industry cluster activity.

NEW SECTION. Sec. 3. A new section is added to chapter 43.330 RCW to read as follows:

(1) A competitive grant program, administered by the department, is created to assist communities to develop, in partnerships, regional economic development and industry cluster strategies and conduct related cluster market strategies.

(a) Applicants must include organizations from at least two counties. Eligible organizations include, but are not limited to, local governments, economic development councils, chambers of commerce, federally recognized Indian tribes, work force development councils, and educational institutions. Applicants should also include participants from the local business community.

(b) There must be financial participation of the partner organizations in order to be eligible for the grant program.

(c) Grant money may be used to fund organizational activities necessary to develop the partnership's regional economic development and industry cluster strategies, and related marketing strategies.

(d) The maximum amount of a grant is one hundred thousand dollars.

(e) A maximum of one hundred thousand dollars total may be awarded to King, Pierce, Kitsap, and Snohomish counties combined.

(f) The competitive grant program expires June 30, 2007.

(2) As used in this section, "industry cluster" means a geographic concentration of interdependent competitive firms that do business with each other. "Industry cluster" also includes firms that sell inside and outside of the geographic region as well as support firms that supply raw materials, components, and business services.

NEW SECTION. Sec. 4. The department of community, trade, and economic development shall report to the governor and the fiscal and economic development committees of the house and senate no later than January 1, 2008, on the results of the activities undertaken under this section. The report shall include, but not be limited to:

(1) The industry clusters identified under section 2 of this act, the number of firms, employment and wage levels in each cluster identified, and an assessment of the competitiveness of each cluster;

(2) The number and description of new firms entered into each cluster as a result of the department's activities under section 2 of this act;

(3) A summary of the issues of common concern identified in the focus group discussions conducted under section 2 of this act;

(4) A list containing information on applicants and grant awards under section 3 of this act, a description of the process used for solicitation of grant applications, and the criteria used in the selection of grantees."

Correct the title.

EFFECT: Makes a technical correction to update the amended statute to reflect changes made during the 2005 session. Authorizes a competitive grant program to assist communities to develop, in partnerships, regional economic development and industry cluster strategies and conduct related cluster market strategies. Requires the Department of Community, Trade, and Economic Development to report to the fiscal and economic development committees of the Legislature by January 1, 2008, on the industry cluster strategies and outcomes developed as a result of the grant program.