"Sec. 1   RCW 43.162.010 and 2007 c 232 s 2 are each amended to read as follows:
     (1) The Washington state economic development commission is established ((to oversee the economic development strategies and policies of the department of community, trade, and economic development)) as an independent agency of the state to provide the governor and legislature with policy analysis, strategic planning, program evaluation, and monitoring of the state's economic development system.
     (2)(a) The Washington state economic development commission shall consist of eleven voting members appointed by the governor as follows: Six representatives of the private sector, one representative of labor, one representative of port districts, one representative of four-year state public higher education, one representative for state community or technical colleges, and one representative of associate development organizations. The director of the department of community, trade, and economic development, the director of the workforce training and education coordinating board, the commissioner of the employment security department, and the chairs and ranking minority members of the standing committees of the house of representatives and the senate overseeing economic development policies shall serve as nonvoting ex officio members.
     The chair of the commission shall be a voting member selected by the governor with the consent of the senate, and shall serve at the pleasure of the governor. In selecting the chair, the governor shall seek a person who understands the future economic needs of the state and nation and the role the state's economic development system has in meeting those needs.
     (b) In making the appointments, the governor shall consult with organizations that have an interest in economic development, including, but not limited to, industry associations, labor organizations, minority business associations, economic development councils, chambers of commerce, port associations, tribes, and the chairs of the legislative committees with jurisdiction over economic development.
     (c) The members shall be representative of the geographic regions of the state, including eastern and central Washington, as well as represent the ethnic diversity of the state. Private sector members shall represent existing and emerging industries, small businesses, women-owned businesses, and minority-owned businesses. Members of the commission shall serve statewide interests while preserving their diverse perspectives, and shall be recognized leaders in their fields with demonstrated experience in economic development or disciplines related to economic development.
     (3) Members appointed by the governor shall serve at the pleasure of the governor for not more than two consecutive three-year terms, except that, as determined by the governor, the terms of four of the appointees on the commission on the effective date of this section will expire in 2010, the terms of four of the appointees on the commission on the effective date of this section will expire in 2011, and the terms of three of the appointees on the commission on the effective date of this section will expire in 2012. Thereafter all terms shall be for three years. Vacancies shall be filled in the same manner as the original appointments.
     (4) The commission may establish committees as it desires, and may invite nonmembers of the commission to serve as committee members.
     (5) The executive director of the commission shall be appointed by the governor with the consent of the voting members of the commission. The salary of the executive director shall be set by the governor with the consent of the commission. The governor may dismiss the executive director only with the approval of a majority vote of the commission. The commission, by a majority vote, may dismiss the executive director with the approval of the governor.
     (6) The commission may adopt rules for its own governance.
     (7) Members are eligible to receive reimbursement for travel expenses incurred in the performance of their duties in accordance with RCW 43.03.050 and 43.03.060.
     (8) A majority of members currently appointed constitutes a quorum for the purpose of conducting business.

Sec. 2   RCW 43.162.020 and 2007 c 232 s 4 are each amended to read as follows:
     (1) The Washington state economic development commission shall:
     (((1))) (a) Concentrate its major efforts on planning, coordination, evaluation, policy analysis, and recommending improvements to the state's economic development system using, but not limited to, the "Next Washington" plan and the global competitiveness council recommendations;
     (((2))) (b) Develop and maintain on a biennial basis a state comprehensive plan for economic development, including but not limited to goals, objectives, and priorities for the state economic development system; identify the elements local associate development organizations must include in their countywide economic development plans; and review the state system for consistency with the state comprehensive plan. In developing the state comprehensive plan for economic development, the commission shall use, but may not be limited to: Economic, labor market, and populations trend reports in office of financial management forecasts; the annual state economic climate report prepared by the economic climate council; joint office of financial management and employment security department labor force, industry employment, and occupational forecasts; the results of scientifically based outcome evaluations; the needs of industry associations, industry clusters, businesses, and employees as evidenced in formal surveys and other input;
     (((3))) (c) Establish and maintain an inventory of the programs of the state economic development system and related state programs; perform a biennial assessment of the ongoing and strategic economic development needs of the state; and assess the extent to which the economic development system and related programs represent a consistent, coordinated, efficient, and integrated approach to meet such needs; ((and
     (4))) (d) Produce a biennial report to the governor and the legislature on progress by the commission in coordinating the state's economic development system and meeting the other obligations of this chapter, as well as include recommendations for any statutory changes necessary to enhance operational efficiencies or improve coordination;
     (e) Consult, collaborate, and coordinate with other state agencies and local organizations when developing plans, inventories, and assessments so as to avoid duplication of effort; and
     (f) Have the authority to accept gifts, grants, donations, sponsorships, or contributions from any federal, state, or local governmental agency or program or any private source and expend the same for any purpose consistent with the provisions of this chapter.
     (2) The commission may delegate to the executive director any of the functions of this section.
     (3) The executive director must present a fiscal report to the commission quarterly for its review and approval.
     (4) To maintain its leadership and concentration on strategic planning, coordination, and assessment of the economic development system as a whole, the commission shall not take an administrative role in the delivery of services.

Sec. 3   2007 c 232 s 6 (uncodified) is amended to read as follows:
     (1) ((The commission must develop and update a state comprehensive plan for economic development and an initial inventory of economic development programs, as required under section 4 of this act, by June 30, 2008.
     (2))) Using the information from ((the)) its initial inventory of economic development programs, public input, and such other information as it deems appropriate, the commission shall, by ((September 1, 2008)) November 1, 2009, provide a report with findings, analysis, and recommendations to the governor and the legislature on the appropriate state role in economic development and the appropriate administrative and regional structures for the provision of economic development services. The report shall address how best to organize the state system to ensure that the state's economic development efforts:
     (a) Are organized around a clear central mission and aligned with the state's comprehensive plan for economic development;
     (b) Are capable of providing focused and flexible responses to changing economic conditions;
     (c) Generate greater local capacity to respond to local opportunities and needs;
     (d) Face no administrative barriers to efficiency and effectiveness;
     (e) Maximize results through partnerships and the use of intermediaries; and
     (f) Provide increased accountability to the public, the executive branch, and the legislature.
     (((3))) (2) The report should address the potential value of creating or consolidating specific programs if doing so would be consistent with an agency's core mission, and the potential value of removing specific programs from an agency if the programs are not central to the agency's core mission.

Sec. 4   RCW 43.330.280 and 2007 c 227 s 2 are each amended to read as follows:
     (1) The Washington state economic development commission shall, with the advice of an innovation partnership advisory group selected by the commission, have oversight responsibility for the implementation of the state's efforts to further innovation partnerships throughout the state. The commission shall:
     (a) Provide information and advice to the department of community, trade, and economic development to assist in the implementation of the innovation partnership zone program, including criteria to be used in the selection of grant applicants for funding;
     (b) Document clusters of companies throughout the state that have comparative competitive advantage or the potential for comparative competitive advantage, using the process and criteria for identifying strategic clusters developed by the working group specified in subsection (2) of this section;
     (c) Conduct an annual innovation opportunity analysis to identify (i) the strongest current intellectual assets and research teams in the state focused on emerging technologies and their commercialization, and (ii) faculty and researchers that could increase their focus on commercialization of technology if provided the appropriate technical assistance and resources;
     (d) Based on its findings and analysis, and in conjunction with the higher education coordinating board and research institutions:
     (i) Develop a plan to be updated annually to build on existing, and develop new, intellectual assets and innovation research teams in the state in research areas where there is a high potential to commercialize technologies. The commission shall present the plan to the governor and legislature by December ((31, 2007)) 31st of each year. The higher education coordinating board shall be responsible for implementing the plan in conjunction with the publicly funded research institutions in the state. The plan shall address the following elements and such other elements as the commission deems important:
     (A) Specific mechanisms to support, enhance, or develop innovation research teams and strengthen their research and commercialization capacity in areas identified as useful to strategic clusters and innovative firms in the state;
     (B) Identification of the funding necessary for laboratory infrastructure needed to house innovation research teams;
     (C) Specification of the most promising research areas meriting enhanced resources and recruitment of significant entrepreneurial researchers to join or lead innovation research teams;
     (D) The most productive approaches to take in the recruitment, in the identified promising research areas, of a minimum of ((ten)) one significant entrepreneurial researcher((s over the next ten years)) per year to join or lead innovation research teams;
     (E) Steps to take in solicitation of private sector support for the recruitment of entrepreneurial researchers and the commercialization activity of innovation research teams; and
     (F) Mechanisms for ensuring the location of innovation research teams in innovation partnership zones;
     (ii) Provide direction for the development of comprehensive entrepreneurial assistance programs at research institutions. The programs may involve multidisciplinary students, faculty, entrepreneurial researchers, entrepreneurs, and investors in building business models and evolving business plans around innovative ideas. The programs may provide technical assistance and the support of an entrepreneur-in-residence to innovation research teams and offer entrepreneurial training to faculty, researchers, undergraduates, and graduate students. Curriculum leading to a certificate in entrepreneurship may also be offered;
     (e) Develop performance measures to be used in evaluating the performance of innovation research teams, the implementation of the plan and programs under (d)(i) and (ii) of this subsection, and the performance of innovation partnership zone grant recipients, including but not limited to private investment measures, business initiation measures, job creation measures, and measures of innovation such as licensing of ideas in research institutions, patents, or other recognized measures of innovation. The performance measures developed shall be consistent with the economic development commission's comprehensive plan for economic development and its standards and metrics for program evaluation. The commission shall report to the legislature and the governor by ((December 31, 2008)) September 30, 2009, on the measures developed; and
     (f) Using the performance measures developed, perform a biennial assessment and report, the first of which shall be due December 31, 2012, on:
     (i) Commercialization of technologies developed at state universities, found at other research institutions in the state, and facilitated with public assistance at existing companies;
     (ii) Outcomes of the funding of innovation research teams and recruitment of significant entrepreneurial researchers;
     (iii) Comparison with other states of Washington's outcomes from the innovation research teams and efforts to recruit significant entrepreneurial researchers; and
     (iv) Outcomes of the grants for innovation partnership zones.
The report shall include recommendations for modifications of chapter 227, Laws of 2007 and of state commercialization efforts that would enhance the state's economic competitiveness.
     (2) The economic development commission and the workforce training and education coordinating board shall jointly convene a working group to:
     (a) Specify the process and criteria for identification of substate geographic concentrations of firms or employment in an industry and the industry's customers, suppliers, supporting businesses, and institutions, which process will include the use of labor market information from the employment security department and local labor markets; and
     (b) Establish criteria for identifying strategic clusters which are important to economic prosperity in the state, considering cluster size, growth rate, and wage levels among other factors.

NEW SECTION.  Sec. 5   A new section is added to chapter 43.162 RCW to read as follows:
     (1) The Washington state economic development commission fund is created in the state treasury. All receipts from gifts, grants, donations, sponsorships, or contributions under RCW 43.162.020 must be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used by the Washington state economic development commission only for purposes related to carrying out the mission, roles, and responsibilities of the commission.
     (2) Whenever any money, from the federal government or from other sources, that was not anticipated in the budget approved by the legislature, has actually been received and is designated to be spent for a specific purpose, the executive director shall use the unanticipated receipts process as provided in RCW 43.79.270 to request authority to spend the money.
     (3) The commission shall use the small agency client services within the office of financial management for accounting, budgeting, and payroll services.
     (4) The commission is subject to audits by the state auditor as provided under chapter 43.09 RCW."