HOUSE BILL REPORT

E2SSB 6015

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Summary of Engrossed Second Substitute Bill

(As Amended by House)

Requires the Department of Community, Trade and Economic Development (DCTED), in consultation with industry trade associations, to examine how the state can encourage and support the growth of innovation in the development and commercialization of life sciences and information technology.
Requires the relevant industries to provide 50 percent of the resources needed to accomplish the tasks and report; absent such commitment by August 1, 2009, the requirements are null and void.
Requires the DCTED to report findings and recommendations to the Governor and the Legislature by December 1, 2009.
Provides an expiration date of December 31, 2009.

Background:

The Department of Community, Trade and Economic Development (DCTED) is an executive branch agency created in 1994 through the consolidation of the Department of Community Development and the Department of Trade and Economic Development. The DCTED is responsible for promoting community and economic development statewide by assisting communities to increase their economic vitality and the quality of their citizen's lives, and assisting the state's businesses to maintain and increase their economic competitiveness while maintaining a healthy environment.

The Washington State Economic Development Commission (Commission) is an 11-member body required to concentrate on planning, coordination, evaluation, policy analysis, and recommending improvements to the state's economic development system. Among its primary responsibilities, the Commission must develop and maintain on a biennial basis a state comprehensive plan for economic development, establish and maintain an inventory of programs, and report to the Legislature and the Governor on the appropriate state role in economic development.

Washington has a number of public and private sector organizations and initiatives directed at the creation of new technologies and encouragement of commercialization. Examples include the Life Sciences Discovery Fund, the Washington Technology Center, and the University of Washington TechTransfer Office.

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Summary of Amended Bill:

In consultation with specified industry trade associations, the DCTED must review how the state can encourage and support the growth of innovation in the development and commercialization of life sciences and information technology. The DCTED and the associations must: investigate and recommend strategies to increase the amount of local or regional capital targeted to pre-seed, seed, and other early stage investments in life sciences and information technology companies; examine state laws, rules, appropriations, and taxes, identify barriers and recommend alternatives that will support growth of these industries; evaluate the state's technology-based economic development efforts and recommend any additional infrastructure needed to assist companies at each stage of the business life cycle; and review the status of technology transfer and commercialization efforts by the state's public research universities.

The life sciences and information technology industries must provide 50 percent of the resources needed for the tasks and report. Without their commitment of resources by August 1, 2009, the tasks and report requirements will be null and void.

The DCTED must provide a draft report of its findings and recommendations to the Commission, which will compare the recommendations in the draft report to the relevant strategies adopted in the state's comprehensive economic development plan. The Commission will provide written observations to the DCTED on areas of alignment or non-alignment between the report and the plan. The DCTED will include the Commission's observations and any changes in response to its observations, in its final report to the Governor and the Legislature by December 1, 2009.

An expiration date of December 31, 2009 is provided.

Amended Bill Compared to Original Bill:

Responsibilities and areas of examination for the December 1, 2009 report to the Governor and the Legislature are clarified. The relevant industries are required to provide 50 percent of the total resources required; lack of such a commitment by August 1, 2009, will result in nullification of the required tasks and the report. The role of the Commission in comparing the DCTED's draft recommendations to the state's comprehensive economic development plan is clarified. An expiration date is added.

Staff Summary of Public Testimony:

(In support) There are great opportunities and also significant challenges confronting the rapidly emerging life sciences and information technology industries. This bill is a result of industry input, which has called out a number of challenges, among them: local fire and building codes and other regulations; competitive disadvantages with states and countries that give land and buildings to companies; and the costs of labor in manufacturing. The original version of the bill focused on creating a Governor's office director of innovation and commercialization. The current bill directs the DCTED, as it becomes the Department of Commerce, to consult with industry trade associations to review in a comprehensive way how the state can advance these industries and maintain a competitive edge. In some ways, the bill memorializes and continues the close work the industry is already doing with the DCTED.

(Opposed) None.