BILL REQ. #:  S-4028.1 

Read first time 01/20/10.   Referred to Committee on Economic Development, Trade & Innovation.

     AN ACT Relating to business assistance programs; amending RCW 28B.30.530, 28B.20.297, 43.06.335, 43.338.020, 43.131.409, and 43.131.410; reenacting and amending RCW 43.84.092; adding a new section to chapter 43.330 RCW; adding a new section to chapter 28B.20 RCW; creating a new section; and making appropriations.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 43.330 RCW to read as follows:
     (1) The Washington entrepreneurial development and small business reference service is created in the department of commerce.
     (2) The department must:
     (a) In conjunction with and drawing on information compiled by the work force training and education coordinating board and the Washington economic development commission:
     (i) Establish and maintain an inventory of the public and private entrepreneurial training and technical assistance services, programs, and resources available in the state;
     (ii) Disseminate information about available entrepreneurial development and small business assistance services, programs, and resources via in-person presentations and electronic and printed materials and undertake other activities to raise awareness of entrepreneurial training and small business assistance offerings; and
     (iii) Evaluate the extent to which existing entrepreneurial training and technical assistance programs in the state are effective and represent a consistent, integrated approach to meeting the needs of start-up and existing entrepreneurs;
     (b) Assist providers of entrepreneurial development and small business assistance services in applying for federal and private funding to support the entrepreneurial development and small business assistance activities in the state;
     (c) Distribute awards for excellence in entrepreneurial training and small business assistance; and
     (d) Report to the governor, the economic development commission, the work force training and education coordinating board, and the appropriate legislative committees its recommendations for statutory changes necessary to enhance operational efficiencies or enhance coordination related to entrepreneurial development and small business assistance.
     (3) In carrying out the duties under this section, the department must seek the advice of small business owners and advocates, the Washington economic development commission, the work force training and education coordinating board, the state board for community and technical colleges, the employment security department, associate development organizations, impact Washington, the Washington quality award council, the Washington technology center, the small business export finance assistance center, the Spokane intercollegiate research and technology institute, representatives of the University of Washington business school and the Washington State University college of business and economics, the office of minority and women's business enterprises, the Washington economic development finance authority, and staff from small business development centers.
     (4) The director may appoint an advisory board or convene such other individuals or groups as he or she deems appropriate to assist in carrying out the department's duties under this section.

Sec. 2   RCW 28B.30.530 and 2009 c 486 s 1 are each amended to read as follows:
     (1) The board of regents of Washington State University ((shall)) must establish the Washington State University small business development center.
     (2) The center ((shall)) must provide management and technical assistance including but not limited to training, counseling, and research services to small businesses throughout the state. The center shall work with the department of ((community, trade, and economic development)) commerce, the state board for community and technical colleges, the higher education coordinating board, the workforce training and education coordinating board, the employment security department, the Washington state economic development commission, associate development organizations, and workforce development councils to:
     (a) Integrate small business development centers with other state and local economic development and workforce development programs;
     (b) Target the centers' services to small businesses;
     (c) Tailor outreach and services at each center to the needs and demographics of entrepreneurs and small businesses located within the service area;
     (d) Establish and expand small business development center satellite offices when financially feasible; and
     (e) Coordinate delivery of services to avoid duplication. In carrying out the duty under this subsection, the center must:
     (i) Develop and maintain a state comprehensive plan for the coordination and integration of small business and entrepreneurial development programs and the operations of a statewide small business and entrepreneurial development system. The plan must include but not be limited to setting measurable goals, objectives, and priorities;
     (ii) Advocate for the state's small business and entrepreneurial development system and for meeting the needs of small start-ups and existing entrepreneurs;
     (iii) Work with private and public entrepreneurial development and small business assistance providers to develop entrepreneurial training and small business assistance instructional materials and curricula that meet the particular entrepreneurial development and small business assistance needs of rural and low-income communities and small manufacturers interested in exporting; and
     (iv) Identify policies to reduce administrative and other barriers to efficient delivery and coordination of small business and entrepreneurial assistance.
     (3) The administrator of the center may contract with other public or private entities for the provision of specialized services.
     (4) The small business development center may accept and disburse federal grants or federal matching funds or other funds or donations from any source when made, granted, or donated to carry out the center's purposes. When drawing on funds from the business assistance account created in RCW ((30.60.010)) 28B.30.531, the center must first use the funds to make increased management and technical assistance available to small and start-up businesses at satellite offices. The funds may also be used to develop and expand assistance programs such as small business planning workshops and small business counseling.
     (5) The legislature directs the small business development center to request United States small business administration approval of a special emphasis initiative, as permitted under 13 C.F.R. 130.340(c) as of April 1, 2009, to target assistance to Washington state's smaller businesses. This initiative would be negotiated and included in the first cooperative agreement application process that occurs after July 26, 2009.
     (6) By December 1, 2009, and December 1, 2010, respectively, the center shall provide a written progress report and a final report to the appropriate committees of the legislature with respect to the requirements in subsections (2) and (5) of this section and the amount and use of funding received through the business assistance account. The reports must also include data on the number, location, staffing, and budget levels of satellite offices; affiliations with community colleges, associate development organizations or other local organizations; the number, size, and type of small businesses assisted; and the types of services provided. The reports must also include information on the outcomes achieved, such as jobs created or retained, private capital invested, and return on the investment of state and federal dollars.

Sec. 3   RCW 28B.20.297 and 2005 c 357 s 1 are each amended to read as follows:
     (1) The legislature finds that small technology-based firms are the source of approximately one-half of the economy's major innovations. The legislature further finds that economic development in the state is increasingly driven by innovative firms and that it is in the interest of the state to:
     (a) Increase participation by Washington state small businesses in the federal small business innovation research program by assisting them in becoming small business innovation research program grant recipients((.
     The legislature further finds that many small business innovators lack the grant-writing skills necessary to prepare a successful small business innovation research program proposal, and the federal program that funded grant-writing assistance has stopped operations. Nearly fifty percent of small businesses trained under the federal program won grants compared to less than ten percent of those that did not receive training)); and
     (b) Increase the number of innovative firms that understand and engage in the technology commercialization process by providing information resources and technical assistance in accessing new technologies.
     (2) As used in this section:
     (a) "Small business innovation research program" means the program, enacted pursuant to the small business innovation development act of 1982, P.L. 97-219, that provided funds to small businesses to conduct innovative research having commercial application.
     (b) "Small business" means a corporation, partnership, sole proprietorship, or individual, operating a business for profit, with two hundred fifty employees or fewer, including employees employed in a subsidiary or affiliated corporation, that otherwise meets the requirements of the federal small business innovation research program.
     (3) To the extent funds are appropriated for these purposes, the Washington technology center ((shall)) must establish a small business innovation research and assistance program, including a proposal review process, to train and assist Washington small businesses to win phase I federal small business innovation research program awards((.
     (a))) and federal technology innovation program awards. In operating the program, the Washington technology center ((shall)) must give priority to first-time small business innovation research program applicants, new businesses, and firms with fewer than ten employees.
     (((b))) (4) The Washington technology center may charge a fee for ((this)) its services.
     (5) The sum of one hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2011, from the state general fund for the operation of the assistance program specified in subsection (3) of this section.

NEW SECTION.  Sec. 4   A new section is added to chapter 28B.20 RCW to read as follows:
     The investing in innovation account is created in the custody of the state treasurer. Funds may be directed to the account from federal, state, and private sources. Expenditures from the account may be used only to carry out the investing in innovation grants program established under RCW 70.210.030, and other innovation and commercialization purposes consistent with the federal, state, or private and other funding guidelines that apply to the funds deposited in the account. Only the executive director of the Washington technology center or the executive director's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

Sec. 5   RCW 43.06.335 and 2004 c 245 s 1 are each amended to read as follows:
     (1) The Washington quality award council ((shall)) must be organized as a private, nonprofit corporation, in accordance with chapter 24.03 RCW and this section.
     (2) The council ((shall)) must oversee the governor's Washington state quality award program. The purpose of the program is to improve the overall competitiveness of the state's economy by stimulating Washington state industries, business, and organizations to bring about measurable success through setting standards of organizational excellence, encouraging organizational self-assessment, identifying successful organizations as role models, and providing a valuable mechanism for promoting and strengthening a commitment to continuous quality improvement in all sectors of the state's economy. The governor ((shall)) must annually present the award to organizations that improve the quality of their products and services and are noteworthy examples of high-performing work organizations, as determined by the council in consultation with the governor or appointed representative.
     (3) The governor ((shall)) must appoint a representative to serve on the board of directors of the council.
     (4) The council ((shall)) must establish a board of examiners, a recognition committee, and such other committees or subgroups as it deems appropriate to carry out its responsibilities.
     (5) The council may conduct such public information, research, education, and assistance programs as it deems appropriate to further quality improvement in organizations operating in the state of Washington.
     (6) The council ((shall)) must:
     (a) Approve and announce award recipients;
     (b) Approve guidelines to examine applicant organizations;
     (c) Approve appointment of board of examiners; ((and))
     (d) Arrange appropriate annual awards and recognition for recipients;
     (e) Provide training to technical assistance providers from the department of commerce, impact Washington, small business development centers, associate development organizations, and other organizations in continuous quality improvement, performance measurement, strategic planning, and other approaches designed to reduce operating costs, improve effectiveness, and increase productivity in businesses receiving assistance; and
     (f) Offer the services of a public sector and a private sector manager to conduct conferences, perform outreach, provide training, and deliver technical assistance to organizations, agencies, and businesses to allow them to develop and implement quality management, accountability, and performance systems.
     (7) The sum of two hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2011, from the state general fund to the Washington quality award council for the operation of its quality award program and the purposes of this act.

Sec. 6   RCW 43.338.020 and 2008 c 315 s 3 are each amended to read as follows:
     (1) The Washington manufacturing innovation and modernization extension service program is created to provide assistance to small manufacturers located in the state of Washington. The program ((shall)) must be administered by the department.
     (2)(a) Application to receive assistance under this program must be made to the department in a form and manner specified by the department. Successful applicants will receive an innovation and modernization extension voucher from the department to cover the costs of extension services performed by a qualified manufacturing extension partnership affiliate. An applicant may not receive a voucher or vouchers of over two hundred thousand dollars per calendar year. The department shall only allocate up to sixty percent of available funding during the first year of a biennium.
     (b) Applicants must:
     (i) Have a valid agreement with a qualified manufacturing extension partnership affiliate to engage in innovation and modernization extension services;
     (ii) Agree to: (A) Make a contribution to the manufacturing innovation and modernization account created in RCW 43.338.030, in an amount equal to twenty-five percent of the amount of the innovation and modernization extension voucher, upon completion of the innovation and modernization extension service; and (B) make monthly or quarterly contributions over the subsequent eighteen months, as specified in their agreement with the affiliate, to the manufacturing innovation and modernization account created in RCW 43.338.030 in an amount equal to eighty percent of the amount of the innovation and modernization extension voucher;
     (iii) Be a small manufacturer or an industry association or cluster association at the time the applicant entered into an agreement with a qualified manufacturing extension partnership affiliate; and
     (iv) If a small manufacturer, ensure that the number of employees the applicant has in the state during the calendar year following the completion of the program will be equal to or greater than the number of employees the applicant had in the state in the calendar year preceding the start of the program.
     (3) The director may solicit and receive gifts, grants, funds, fees, and endowments, in trust or otherwise, from tribal, local, federal, or other governmental entities, as well as private sources, for the purpose of providing funding for the innovation and modernization extension services and outreach services specified in this chapter. All revenue solicited and received by the department pursuant to this subsection must be deposited into the manufacturing innovation and modernization account created in RCW 43.338.030.
     (4) The department may adopt rules to implement this section.
     (5) Any qualified manufacturing extension partnership affiliate receiving funding under this program is required to submit a copy of its annual independent federal audit to the department within three months of its issuance.
     (6) The sum of two hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2011, from the state general fund for the operation of the Washington manufacturing innovation and modernization extension service program and the purposes of this act.

Sec. 7   RCW 43.131.409 and 2008 c 315 s 7 are each amended to read as follows:
     The Washington manufacturing innovation and modernization extension service program under chapter 43.338 RCW ((shall be terminated)) terminates on June 30, ((2012)) 2017, as provided in RCW 43.131.410.

Sec. 8   RCW 43.131.410 and 2008 c 315 s 8 are each amended to read as follows:
     The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective June 30, ((2013)) 2018:
     (1) RCW 43.338.005 and 2008 c 315 § 1;
     (2) RCW 43.338.010 and 2008 c 315 § 2;
     (3) RCW 43.338.020 and 2008 c 315 § 3;
     (4) RCW 43.338.900 and 2008 c 315 § 4;
     (5) RCW 43.338.030 and 2008 c 315 § 5; and
     (6) RCW 43.338.040 and 2008 c 315 § 6.

Sec. 9   RCW 43.84.092 and 2009 c 479 s 31, 2009 c 472 s 5, and 2009 c 451 s 8 are each reenacted and amended to read as follows:
     (1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.
     (2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.
     (3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.
     (4) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:
     The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the budget stabilization account, the capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the cleanup settlement account, the Columbia river basin water supply development account, the common school construction fund, the county arterial preservation account, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of licensing services account, the department of retirement systems expense account, the developmental disabilities community trust account, the drinking water assistance account, the drinking water assistance administrative account, the drinking water assistance repayment account, the Eastern Washington University capital projects account, the education construction fund, the education legacy trust account, the election account, the energy freedom account, the energy recovery act account, the essential rail assistance account, The Evergreen State College capital projects account, the federal forest revolving account, the ferry bond retirement fund, the freight congestion relief account, the freight mobility investment account, the freight mobility multimodal account, the grade crossing protective fund, the public health services account, the health system capacity account, the personal health services account, the high capacity transportation account, the state higher education construction account, the higher education construction account, the highway bond retirement fund, the highway infrastructure account, the highway safety account, the high occupancy toll lanes operations account, the industrial insurance premium refund account, the investing in innovation account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the medical aid account, the mobile home park relocation fund, the motor vehicle fund, the motorcycle safety education account, the multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land account, the pension funding stabilization account, the perpetual surveillance and maintenance account, the public employees' retirement system plan 1 account, the public employees' retirement system combined plan 2 and plan 3 account, the public facilities construction loan revolving account beginning July 1, 2004, the public health supplemental account, the public transportation systems account, the public works assistance account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the Puyallup tribal settlement account, the real estate appraiser commission account, the recreational vehicle account, the regional mobility grant program account, the resource management cost account, the rural arterial trust account, the rural Washington loan fund, the site closure account, the small city pavement and sidewalk account, the special category C account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the state patrol highway account, the state route number 520 corridor account, the supplemental pension account, the Tacoma Narrows toll bridge account, the teachers' retirement system plan 1 account, the teachers' retirement system combined plan 2 and plan 3 account, the tobacco prevention and control account, the tobacco settlement account, the transportation 2003 account (nickel account), the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, the transportation infrastructure account, the transportation partnership account, the traumatic brain injury account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the urban arterial trust account, the volunteer firefighters' and reserve officers' relief and pension principal fund, the volunteer firefighters' and reserve officers' administrative fund, the Washington fruit express account, the Washington judicial retirement system account, the Washington law enforcement officers' and firefighters' system plan 1 retirement account, the Washington law enforcement officers' and firefighters' system plan 2 retirement account, the Washington public safety employees' plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state health insurance pool account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 10   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 11   If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state or the eligibility of employers in this state for federal unemployment tax credits, the conflicting part of this act is inoperative solely to the extent of the conflict, and the finding or determination does not affect the operation of the remainder of this act. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state or the granting of federal unemployment tax credits to employers in this state.