BILL REQ. #:  H-5082.1 

READ FIRST TIME 02/08/06.   

     AN ACT Relating to cluster-based economic development; adding a new section to chapter 43.330 RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that:
     (a) Washington's quality of life, standard of living, and social and economic opportunity all depend on the vitality of the state's economy;
     (b) Economic development tries to reinforce the natural way by which strong foundations in the areas of human resources, capital resources, technology, tax and regulatory, advanced physical infrastructure, information and communication infrastructure, and quality of life strengthen the economy;
     (c) The strength and vitality of the state's economy depends on the competitiveness of the state's industry clusters;
     (d) Industry clusters can become a powerful magnet for businesses to locate in an area and create a spawning ground for start-up companies;
     (e) Industry clusters create large, diverse pools of experienced workers, attract suppliers who tend to congregate in their vicinity for increased efficiency, and foster a competitive spirit that stimulates growth and innovative strategic alliances; and
     (f) The state must first identify and understand the industry clusters before strategies can be developed to enhance their competitive position in the world.
     (2) It is the intent of the legislature to establish an industry cluster-based approach to economic development as a component of a statewide strategy to address economic growth and quality of life issues.

NEW SECTION.  Sec. 2   A new section is added to chapter 43.330 RCW to read as follows:
     (1) The department of community, trade, and economic development, or its successor agency, shall work with industry associations and organizations to identify industry clusters on a regional and statewide basis. The industry clusters may include, but are not limited to, aerospace, agriculture, food processing, forest products, business services, financial services, health and biomedical, software, digital and interactive media, transportation and distribution, and microelectronics.
     (2) In the identification of industry clusters, the department's activities may include, but are not limited to:
     (a) Conducting focus group discussions, facilitating meetings, and conducting studies to identify industry clusters, members of an industry cluster, the current state of the industry cluster, and issues of common concern of the industry cluster;
     (b) Supporting industry cluster associations, publication of cluster association directories, and related efforts to encourage the entry of new firms into the industry cluster; and
     (c) Providing methods for electronic communication and information dissemination among firms within industry clusters.
     (3) 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. Administrative costs are limited to ten percent of any appropriation for the purposes of this act.
     (d) The maximum amount of a grant is one hundred thousand dollars.
     (e) A maximum of one hundred thousand dollars total can go to King, Pierce, Kitsap, and Snohomish counties combined.
     (f) The competitive grant program expires June 30, 2007.
     (4) 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. 3   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 section 2 of this act. 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(2) of this act;
     (4) A list containing information on applicants and grant awards under section 2(3) of this act, a description of the process used for solicitation of grant applications, and the criteria used in the selection of grantees.