SENATE BILL REPORT

SB 6669

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.

As Reported by Senate Committee On:

Economic Development, Trade & Innovation, February 5, 2010

Ways & Means, February 9, 2010

Committee Activity: Economic Development, Trade & Innovation: 1/21/10, 2/01/10, 2/03/10, 2/04/10, 2/05/10 [DPS-WM, w/oRec].

Ways & Means: 2/09/10 [DP2S, w/oRec].

Majority Report: That Substitute Senate Bill No. 6669 be substituted therefor, and the substitute bill do pass and be referred to Committee on Ways & Means.

Signed by Senators Kastama, Chair; Shin, Vice Chair; Delvin and Eide.

Minority Report: That it be referred without recommendation.

Signed by Senators Zarelli, Ranking Minority Member; McCaslin.

Majority Report: That Second Substitute Senate Bill No. 6669 be substituted therefor, and the second substitute bill do pass.

Signed by Senators Prentice, Chair; Fraser, Vice Chair, Capital Budget Chair; Tom, Vice Chair, Operating Budget; Zarelli, Ranking Minority Member; Brandland, Carrell, Fairley, Hewitt, Hobbs, Keiser, Kline, Kohl-Welles, McDermott, Murray, Oemig, Parlette, Pridemore, Regala and Rockefeller.

Minority Report: That it be referred without recommendation.

Signed by Senators Honeyford, Pflug and Schoesler.

Background: The Washington Small Business Development Center (SBDC) provides assistance, training, and support services to small businesses and entrepreneurs. The SBDC currently operates with federal funds and some state funds. The SBDC charges a nominal fee for a few training services.

The Business Assistance Account was created in the state treasury to be used for the expansion of business assistance services delivered by the SBDC, but it was not funded.

Most businesses subject to state excise taxes must apply for and obtain a registration certificate. About 80,000 new businesses obtain a registration certificate each year.

Summary of Bill (Recommended Second Substitute): In using funds from the Business Assistance Account, SBDC must give priority to the expansion of its existing services to start-up businesses and may also use funds to develop and provide new training, planning, counseling, and technical assistance services.

Businesses applying for a registration certificate with the state may donate $5 to be deposited in the Business Assistance Account.

EFFECT OF CHANGES MADE BY WAYS & MEANS COMMITTEE (Recommended Second Substitute): Requires the Department of Licensing to allow initial and renewal business license applicants to donate $5 to support Small Business Development Centers to assist small businesses. Business license applicants may choose not to make the donation.

EFFECT OF CHANGES MADE BY ECONOMIC DEVELOPMENT, TRADE & INNOVATION COMMITTEE (Recommended First Substitute): Proper distribution of on-time business assistance fee is ensured.

Staff Summary of Public Testimony on Original Bill (Economic Development, Trade & Innovation): PRO: The SBDC helps hundreds of businesses survive and thrive. We need to keep the SBDC alive. Local businesses ask for more business assistance services. There is a large number of businesses for which the SBDC makes a big difference. The economic returns of supporting small businesses are high. This bill will allow the SBDC to leverage federal dollars.

OTHER: Small businesses are struggling. They account for about 45 percent of private sector jobs. Small businesses don't see the state as having anything to help them. The SBDC should do seminars with the Department of Labor and Industries on how to survive. We would like to see the SBDC do more with what they have.

Persons Testifying (Economic Development, Trade & Innovation): PRO: Greg Taylor, Renton City Council; Doug Levy, Federal Way, Renton, Kent; John Gardner, WSU.

OTHER: Gary Smith, Independent Business Association.

Staff Summary of Public Testimony on Recommended First Substitute (Ways & Means): PRO: City of Renton works cooperatively with Washington State University (WSU), the U.S. Small Business Administration and Renton Community College to support small businesses. Small businesses are the way out of this recession. We would support the opt-out provision that you may be considering. With the revenue from this fee, the state can obtain matching funds from the USSBA – perhaps $250,000 per year.