BILL REQ. #:  S-2193.1 

READ FIRST TIME 03/02/05.   

     AN ACT Relating to small business incubator program grants; and amending RCW 43.176.010, 43.176.020, 43.176.030, 43.176.040, and 43.176.901.

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

Sec. 1   RCW 43.176.010 and 2004 c 237 s 1 are each amended to read as follows:
     It is hereby declared to be the policy of the state of Washington to assist in the creation and expansion of innovative small commercial enterprises that produce marketable goods and services through the employment of Washington residents, the use of technology, and the application of best management practices. This policy is to be implemented through the ((use)) support of qualified small business incubator((s)) programs.

Sec. 2   RCW 43.176.020 and 2004 c 237 s 2 are each amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Business incubator" means a facility that offers:
     (a) Space for start-up and expanding firms;
     (b) The shared use of equipment and work areas;
     (c) Daily management support services essential to high-quality commercial operations; and
     (d) Technical assistance.
     (2) "Qualified small business incubator program" means ((an incubator)) a program that ((is)):
     (a) Provides advice and assistance to start-up firms to help them establish and accelerate their growth and success;
     (b)(i) Is designated as a nonprofit organization under section 501(c)(3) or 501(c)(6) of the internal revenue code, or (ii) consists of a partnership between a designated nonprofit organization under section 501(c)(3) or 501(c)(6) of the internal revenue code and a government or quasi-government agency;
     (((b))) (c) Is focused on developing small businesses in an economically distressed or disadvantaged area; and
     (((c))) (d) Is structured around a sound business plan which includes the following criteria:
     (A) Affordability. The incubator program can be supported through available funding sources and is affordable for the businesses proposed to be served;
     (B) Quality. The incubator program provides support services and facilities at a high level of quality that reflects well on the community as a whole;
     (C) Sustainability. The incubator program generates a continuing stream of incubator clients that graduate from the incubator program as successful businesses and permanently locate within the region; and
     (D) Efficiency. The incubator program provides facilities and programs that are efficient and cost-effective and that continue to operate within the financial resources available.

Sec. 3   RCW 43.176.030 and 2004 c 237 s 3 are each amended to read as follows:
     (1) The ((small business incubator program is created in the)) department of community, trade, and economic development is to distribute grants to provide start-up and operating assistance to qualified small business ((incubators)) incubator programs.
     (2) The department shall award grants to qualified small business incubator ((organizations)) programs for:
     (a) Construction and equipment costs, up to a maximum of three million dollars per recipient; and
     (b) Provision of technical assistance to small businesses, up to a maximum of one hundred twenty-five thousand dollars per year per recipient.
     (3) The department shall:
     (a) Require a grant recipient to show that it has the resources to complete the project in a timely manner and the state grant is not the sole source of funds;
     (b) Develop, in conjunction with the Washington association of small business incubators, criteria for receipt of grant funds, including criteria related to organizational capacity, community need, and the availability of other economic development resources;
     (c) Accept and receive grants, gifts, and pledges of funds for the support of the qualified small business incubator program, which shall be deposited in the small business incubator account established in RCW 43.176.040; ((and))
     (d) Integrate the promotion of small business incubators as economic development tools in its strategic plan; and
     (e) Require a grant recipient receiving funds for construction costs to have a feasibility study performed by a qualified vendor.

Sec. 4   RCW 43.176.040 and 2004 c 237 s 4 are each amended to read as follows:
     The small business incubator account is created in the custody of the state treasurer. All money received for ((the)) qualified small business incubator programs under RCW 43.176.030 must be deposited in the account. Expenditures from the account may be used only for ((the)) qualified small business incubator programs and related administrative expenses. Only the director of the department of community, trade, and economic development or the director's designee may authorize expenditures from the account. The account is subject to the allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

Sec. 5   RCW 43.176.901 and 2004 c 237 s 6 are each amended to read as follows:
     The department of community, trade, and economic development shall have no duty to provide services related to the small business incubator and entrepreneurship assistance act of 2004 unless and until the qualified small business incubator program grants and related administrative expenses are funded by the legislature.