BILL REQ. #:  H-3996.3 

Read first time 01/12/10.   Referred to Committee on Community & Economic Development & Trade.

     AN ACT Relating to the economic development commission; amending RCW 43.162.005, 43.162.010, 43.162.015, 43.162.020, 43.162.025, and 43.162.030; and adding a new section to chapter 43.162 RCW.

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

Sec. 1   RCW 43.162.005 and 2007 c 232 s 1 are each amended to read as follows:
     The legislature finds that ((Washington's innovation and trade-driven economy has provided tremendous opportunities for citizens of the state, but that there is no guarantee that globally competitive firms will continue to grow and locate in the state. The current economic development system is fragmented among numerous programs, councils, centers, and organizations with inadequate overall coordination and insufficient guidance built into the system to ensure that the system is responsive to its customers. The current economic development system's data-gathering and evaluation methods are inconsistent and unable to provide adequate information for determining how well the system is performing on a regular basis so the system may be held accountable for its outcomes.
     The legislature also finds that developing a comprehensive economic development strategic plan to guide the operation of effective economic development programs, including workforce training, infrastructure development, small business assistance, technology transfer, and export assistance, is vital to the state's efforts to increase the competitiveness of state businesses, encourage employment growth, increase state revenues, and generate economic well-being. There is a need for responsive and consistent involvement of the private sector in the state's economic development efforts. The legislature finds that there is a need for the development of coordination criteria for business recruitment, expansion, and retention activities carried out by the state and local entities. It is the intent of the legislature to create an economic development commission that will provide planning, coordination, evaluation, monitoring, and policy analysis and development for the state economic development system as a whole, and advice to the governor and legislature concerning the state economic development system)) in order to achieve long-term global competitiveness, prosperity, and economic opportunity for all the state's citizens, Washington state must become the most attractive, creative, and fertile investment environment for innovation in the world.
     The legislature finds that the state must take a strategic approach to fostering an innovation economy, and that success will be driven by public and private sector leaders who are committed to developing and advocating a shared vision and collaborating across organizational and geographic boundaries.
     The legislature intends therefore that (1) the Washington economic development commission be comprised of business, labor, academic, association, and government leaders, and (2) the commission's mission be to create and regularly update a comprehensive statewide economic development strategy to guide the state's investments in economic development activities including: Infrastructure, talent and workforce development, technology transfer, trade, access to capital, and entrepreneurship.

Sec. 2   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)) assist the governor and legislature by providing leadership, direction, and guidance on a long-term and systematic approach to economic development that will result in enduring global competitiveness, prosperity, and economic opportunity for all the state's citizens.
     (2)(a) The ((Washington state economic development)) commission shall consist of ((eleven)) twenty-one voting members. Fourteen of the members shall be appointed by the governor as follows: ((Six)) Eight 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)) of state community or technical colleges, one representative of nonprofit trade associations engaged in economic development, and one representative of associate development organizations. Other members include: The director of the department of ((community, trade, and economic development)) commerce, 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)).
     (b) Members may not designate alternates, substitutes, or surrogates. However, members may participate in a meeting by conference telephone or similar communications equipment so that all persons participating in the meeting can hear each other at the same time. Participation by that method constitutes presence in person at a meeting.
     (c) 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)) elected by members of the commission to a two-year term. The chair may be reelected to serve additional terms. The chair may not be the director of an executive branch agency or a member of the legislature. A vice-chair shall also be elected by members of the commission and shall exercise the duties of the commission chair in his or her absence.
     (((b))) (d) In making the appointments, the governor shall consult with the commission and 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))) (e) 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, innovation, 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 expire in 2011, the terms of four of the appointees on the commission on the effective date of this section expire in 2012, and the terms of three of the appointees on the commission on the effective date of this section expire in 2013. 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. The commission shall evaluate the performance of the executive director in a manner consistent with the process used by the governor to evaluate the performance of agency directors.
     (6) The commission may adopt ((rules)) policies and procedures for its own governance.
     (7) As used in this chapter, "commission" means the Washington state economic development commission unless the context clearly requires otherwise.

Sec. 3   RCW 43.162.015 and 2007 c 232 s 3 are each amended to read as follows:
     (1) ((The commission shall employ an executive director.)) The executive director of the commission shall serve as its chief executive officer ((of the commission and)). Subject to available resources and in accordance with commission direction, the executive director shall:
     (a) Administer the provisions of this chapter((, employ such personnel as may be necessary to implement the purposes of this chapter, utilize staff of existing operating agencies to the fullest extent possible, and employ outside consulting and service agencies when appropriate)).
     (2) The executive director may not be the chair of the commission.
     (3) The executive director shall));
     (b) Appoint necessary staff who shall be exempt from the provisions of chapter 41.06 RCW. The executive director's appointees shall serve at the executive director's pleasure on such terms and conditions as the executive director determines but subject to chapter 42.52 RCW((.
     (4) The executive director shall));
     (c) Appoint ((and employ such other)) employees ((as may be required for the proper discharge of the functions of the commission)) who shall be subject to the provisions of chapter 41.06 RCW; and
     (d) Contract with additional persons who have specific technical expertise if needed to carry out a specific, time-limited project.
     (((5))) (2) The executive director shall exercise ((such)) additional ((powers)) authority, other than rule making, as may be delegated by the commission.
     (3) The executive director must develop for commission review and approval an annual commission budget and work plan in accordance with the omnibus appropriations bill approved by the legislature, and must present a fiscal report to the commission quarterly for its review and comment.
     (4) The executive director of the commission shall report solely to the governor and the commissioners on matters pertaining to commission operations.

Sec. 4   RCW 43.162.020 and 2009 c 151 s 9 are each amended to read as follows:
     ((The Washington state economic development commission shall:
     (1) 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) 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. The plan shall include the industry clusters in the state and the strategic clusters targeted by the commission for economic development efforts. The commission shall consult with the workforce training and education coordinating board and include labor market and economic information by the employment security department in developing the list of clusters and strategic clusters that meet the criteria identified by the working group convened by the economic development commission and the workforce training and education coordinating board under chapter 43.330 RCW. 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) 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) 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.
     The commission may delegate to the executive director any of the functions of this section.)) (1) The commission shall concentrate its major efforts on strategic planning, policy research and analysis, advocacy, and evaluation.
     (2)(a) During each regular legislative session, the commission shall consult with appropriate legislative committees about the state's economic development needs and opportunities.
     (b) By June 15th of each even-numbered year, the commission shall submit to the governor and legislature a biennial comprehensive statewide economic development strategy. The strategy may include:
     (i) An assessment of the state's economic vitality;
     (ii) Recommended goals, objectives, and priorities for the next biennium, and the future;
     (iii) A common set of outcomes and benchmarks for the economic development system as a whole;
     (iv) Recommendations for removing barriers and promoting collaboration among participants in the innovation ecosystem;
     (v) An inventory of existing relevant programs compiled by the commission from materials submitted by agencies;
     (vi) Recommendations for expanding, discontinuing, or redirecting existing programs, or adding new programs; and
     (vii) Recommendations of best practices and public and private sector roles in implementing the strategy.
     (3) By June 15th of every odd-numbered year, the commission shall develop and submit to the governor and legislature a written update to the biennial strategic plan.
     (4) In developing the biennial strategic plan for economic development and the annual update, the commission shall consult, collaborate, and coordinate with relevant state agencies, private sector business, nonprofit organizations involved in economic development, trade associations, and relevant local organizations in order to avoid duplication of effort.
     (5) State agencies shall cooperate with the commission and provide information as the commission may reasonably request.
     (6) The commission must develop a biennial budget request for approval by the office of financial management. The department of commerce must forward the commission's budget request to the office of financial management with the department's budget package. The commission must adopt an annual budget and work plan in accordance with the omnibus appropriations bill approved by the legislature.
     (7)(a) The commission and the department of commerce shall jointly develop and adopt a memorandum of understanding to outline and establish clear lines of authority and responsibility between them related to budget and administrative services.
     (b) The memorandum of understanding shall not provide any additional grant of authorities to the commission or the department that is not already provided for by statute, nor diminish any authorities or powers granted to either party by statute.
     (c) Periodically, but not less often than biannually, the commission and department of commerce shall review the memorandum of understanding and, if necessary, recommend changes to the other party.
     (d) As provided generally under RCW 43.162.015, the executive director of the commission shall report solely to the governor and the commissioners on matters pertaining to commission operations.
     (8) To maintain its objectivity and concentration on strategic planning, policy research and analysis, and evaluation, the commission shall not take an administrative role in the delivery of services. However, subject to available resources and consistent with its work plan, the commission or the executive director may conduct outreach activities such as regional forums and best practices seminars.
     (9) The commission must evaluate its own performance on a regular basis.
     (10) The commission may 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 this chapter.

Sec. 5   RCW 43.162.025 and 2007 c 232 s 5 are each amended to read as follows:
     ((Subject to available funds, the Washington state economic development commission may:
     (1) Periodically review for consistency with the state comprehensive plan for economic development the policies and plans established for:
     (a) Business and technical assistance by the small business development center, the Washington manufacturing service, the Washington technology center, associate development organizations, the department of community, trade, and economic development, and the office of minority and women-owned business enterprises;
     (b) Export assistance by the small business export finance assistance center, the international marketing program for agricultural commodities and trade, the department of agriculture, the center for international trade in forest products, associate development organizations, and the department of community, trade, and economic development; and
     (c) Infrastructure development by the department of community, trade, and economic development and the department of transportation;
     (2) Review and make recommendations to the office of financial management and the legislature on budget requests and legislative proposals relating to the state economic development system for purposes of consistency with the state comprehensive plan for economic development;
     (3) Provide for coordination among the different agencies, organizations, and components of the state economic development system at the state level and at the regional level;
     (4) Advocate for the state economic development system and for meeting the needs of industry associations, industry clusters, businesses, and employees;
     (5) Identify partners and develop a plan to develop a consistent and reliable database on participation rates, costs, program activities, and outcomes from publicly funded economic development programs in this state by January 1, 2011.
     (a) In coordination with the development of the database, the commission shall establish standards for data collection and maintenance for providers in the economic development system in a format that is accessible to use by the commission. The commission shall require a minimum of common core data to be collected by each entity providing economic development services with public funds and shall develop requirements for minimum common core data in consultation with the economic climate council, the office of financial management, and the providers of economic development services;
     (b) The commission shall establish minimum common standards and metrics for program evaluation of economic development programs, and monitor such program evaluations; and
     (c) The commission shall, beginning no later than January 1, 2012, periodically administer, based on a schedule established by the commission, scientifically based outcome evaluations of the state economic development system including, but not limited to, surveys of industry associations, industry cluster associations, and businesses served by publicly funded economic development programs; matches with employment security department payroll and wage files; and matches with department of revenue tax files; and
     (6) Evaluate proposals for expenditure from the economic development strategic reserve account and recommend expenditures from the account.
     The commission may delegate to the director any of the functions of this section.)) Subject to available resources, the governor or legislature may direct the commission, from time to time, to undertake additional research and policy analysis, assessments, or other special projects related to its mission.

Sec. 6   RCW 43.162.030 and 2007 c 232 s 7 are each amended to read as follows:
     Creation of the ((Washington state economic development)) commission shall not be construed to modify any authority or budgetary responsibility of the governor or the department of ((community, trade, and economic development)) commerce.

NEW SECTION.  Sec. 7   A new section is added to chapter 43.162 RCW to read as follows:
     The Washington state economic development commission account 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.