BILL REQ. #:  S-4337.2 

READ FIRST TIME 02/03/10.   

     AN ACT Relating to the creation of entities to address the long-range impact of opportunities and changes in the aerospace industry; amending RCW 43.79A.040; adding a new section to chapter 43.42 RCW; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; adding a new chapter to Title 43 RCW; adding a new chapter to Title 28B RCW; and making an appropriation.

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

NEW SECTION.  Sec. 101   The aerospace industry is critically important to the economic vitality of Washington. The aerospace industry accounts for over thirty-six billion dollars in economic value to Washington. A highly skilled and educated workforce is a key ingredient to the continued vitality and growth of the technology-driven aerospace industry throughout the state.

NEW SECTION.  Sec. 102   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Aerospace company" means an entity that is primarily engaged in the research, design, manufacture, assembly, or sale of completed products for use in commercial or governmental aviation and avionics.
     (2) "Board" means the board of advisors of the Washington aerospace training and research coordination institute.
     (3) "Executive director" means the executive director of the institute.
     (4) "Institute" means the Washington state aerospace training and coordination institute.
     (5) "Skill centers" has the same meaning as provided in RCW 28A.245.010.

NEW SECTION.  Sec. 103   (1) The Washington state aerospace training and coordination institute is created. The goal and purpose of the institute is to enhance the vitality of the aerospace industry through improving the state's aerospace training, education, research, and development programs by coordinating, providing, and developing curricula for a statewide consortium of schools and programs that provide aerospace workforce education and training.
     (2) The institute must concentrate its efforts on providing the highest quality training and education programs, fostering the creation and retention of family wage jobs, integrating cutting edge research and development into the training and education of a skilled workforce, and facilitating growth and innovation in the aerospace industry.
     (3) The institute must emphasize public-private partnership and provide a forum for effective interaction, collaboration, and partnerships between and among the state's aerospace industry, labor, institutions of higher education, workforce training and education coordinating board, innovation partnership zones, and other relevant and appropriate public and private entities.

NEW SECTION.  Sec. 104   (1) The institute must be headquartered in Snohomish county and overseen by a board of advisors.
     (2) The board must consist of the following members:
     (a) One representative from the machinist trade;
     (b) One representative from professional aerospace engineering associations;
     (c) One representative from an aerospace company with sixty thousand employees or more;
     (d) Two representatives from an aerospace company with less than sixty thousand but more than two hundred employees;
     (e) Two representatives from an aerospace company with less than two hundred employees;
     (f) One representative from a four-year state public higher education institution located in a county with a population of one million or more residents;
     (g) One representative from a four-year state public higher education institution located east of the crest of the Cascade mountains with student enrollment of seventeen thousand or more;
     (h) One representative from the higher education coordinating board;
     (i) One representative from the state board for community and technical colleges;
     (j) One representative from the workforce training and education coordinating board; and
     (k) One representative from the office of the superintendent of public instruction.
     (3) The term of office for each board member, excluding the representatives from the higher education coordinating board, state board for community and technical colleges, workforce training and education coordinating board, office of the superintendent of public instruction, and institutions of higher education, is three years. The executive director of the institute must be an ex officio, nonvoting member of the board. Except for the representative from the office of the superintendent of public instruction, board members must be appointed by the governor. The governor must stagger the terms of the first group of appointees to ensure the long-term continuity of the board. The board must meet at least quarterly.
     (4) The duties of the board include:
     (a) Developing the general operating policies for the institute;
     (b) Appointing the executive director of the institute;
     (c) Adopting the biennial operating budget of the institute;
     (d) Developing and maintaining on a biennial basis a state comprehensive plan on aerospace training and education programs;
     (e) Developing a program in partnership with the office of the superintendent of public instruction and the skill centers that will generate interest and prepare students for postsecondary education, careers, employment, and apprenticeships in the aerospace industry;
     (f) Establishing and maintaining an inventory of aerospace training programs and research and development discoveries at the two and four-year colleges and universities and assess the extent to which the programs represent a consistent, coordinated, efficient, and integrated approach to meet the training needs of the aerospace industry;
     (g) Evaluating how research and development discoveries from institutions of higher education must be incorporated into aerospace training programs;
     (h) Coordinating a yearly forum in partnership with the center for aerospace technology innovation to promote research and development discoveries;
     (i) Producing a biennial report to the governor, legislature, and the entities represented on the board on progress by the institute in evaluating the state's aerospace training programs and meeting the other obligations of this chapter, as well as including recommendations for any statutory changes necessary to enhance operational efficiencies or improve coordination.
     (j) The board may enter into contracts to fulfill its responsibilities and purposes under this chapter.

NEW SECTION.  Sec. 105   (1) The board must employ an executive director and may delegate management to the director. The director must:
     (a) Serve at the pleasure of the board;
     (b) Be the executive officer of the board; and
     (c) Administer the provisions of this chapter under the board's supervision.
     (2) The executive director must, with the approval of the board: (a) Employ necessary deputy exempt staff under chapter 41.06 RCW who serve at his or her pleasure on such terms and conditions as he or she determines and (b) subject to the provisions of chapter 41.06 RCW, appoint and employ such other employees as may be required for the proper discharge of the functions of the institute.
     (3) The executive director must exercise such additional powers, other than rule making, as may be delegated by the board by resolution.
     (4) In fulfilling the duties under this chapter, the board must make extensive use of those state agencies with responsibility for implementing and supporting the plans of the aerospace training and research coordination institute.

NEW SECTION.  Sec. 106   (1) The institute may receive gifts, grants, or endowments from public or private sources that are made from time to time, in trust or otherwise, for the use and benefit of the purposes of the institute and spend gifts, grants, or endowments or income from the public or private sources according to their terms, unless the receipt of the gifts, grants, or endowments violates RCW 42.17.710.
     (2) The institute may accept appropriate financial support levels by private business, community groups, foundations, and individuals.

NEW SECTION.  Sec. 107   A new section is added to chapter 43.42 RCW to read as follows:
     The Washington aerospace futures account is created in the custody of the state treasurer. The governor may authorize expenditures from the account. Expenditures from the account may be made only for the purpose of statewide aerospace workforce and industry development, including programs and activities related to workforce training and education, research and development, and aerospace industry retention and expansion. Administrative expenses, including staff support, may be paid from the account. Revenues to the account consist of moneys received from grants and donations, funds administered under the governor's discretion that are deposited into the account, and moneys received pursuant to legislative appropriations.

NEW SECTION.  Sec. 201   (1) The legislature finds that Washington's aerospace industry is important to the economic vitality of the state and provides opportunities for the citizens of the state. The legislature finds that there is a need for coordination among the training and education programs referred to in sections 101 through 107 of this act and research and development of new aerospace technologies under this center as well as existing private and public universities.
     (2) The legislature also finds that it is in the interests of the state of Washington to provide a mechanism to transfer and apply research and technology developed at the institutions of higher education to the private sector in order to create new products and technologies which provide job opportunities in the aerospace industry.
     (3) It is the intent of the legislature that the University of Washington, Washington State University, and the department of commerce must work cooperatively with the private sector in the development and implementation of research and new technology.

NEW SECTION.  Sec. 202   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Aerospace company" means an entity that is primarily engaged in the research, design, manufacture, assembly, or sale of completed products for use in commercial or governmental aviation and avionics.
     (2) "Board" means the board of directors of the center for aerospace technology innovation.
     (3) "Center" means the center for aerospace technology innovation, including the affiliated staff, faculty, facilities, and research centers operated by the center.
     (4) "Executive director" means the executive director of the center.

NEW SECTION.  Sec. 203   The center for aerospace technology innovation is created. The center is to lead a collaborative effort between the state's universities, private industry, and government for the aerospace industry. The center must be headquartered at the University of Washington. The mission of the center is to advance the research and development of new aerospace technologies on a statewide basis that benefits the intermediate and long-term economic vitality of the state through increasing the competitive capacity of the state and the aerospace industry, and to develop and strengthen university-industry relationships through the conduct of research that relates to the interest of the state and the aerospace industry. The center must:
     (1) Perform and/or facilitate research supportive of state science and technology objectives, particularly as they relate to aerospace;
     (2) Provide leading edge collaborative research in the aerospace field;
     (3) Emphasize and develop nonstate support of the center's research activities; and
     (4) Provide a venue for effective interaction between the state's academic research institutions and the aerospace industry through the promotion of faculty collaboration with industry, particularly within the state.

NEW SECTION.  Sec. 204   (1) The center must be overseen by the board of directors of the center.
     (2) The board must consist of the following members:
     (a) The provost of the University of Washington or his or her designated representative;
     (b) The provost of the Washington State University or his or her designated representative;
     (c) The director of the department of commerce or his or her designated representative;
     (d) One representative from an aerospace company with sixty thousand employees or more; and
     (e) One representative from an aerospace company with less than sixty thousand employees.
     (3) The term of office for each board member, excluding the provost of the University of Washington, the provost of Washington State University, and the department of commerce, is three years. The executive director of the center must be an ex officio, nonvoting member of the board. Board members from the aerospace companies must be appointed by the governor. The governor must stagger the terms of the two aerospace representatives to ensure the long-term continuity of the board. The board must meet at least quarterly.
     (4) The board must contract with the University of Washington to provide such services as necessary for the operation of the center and implementation of the duties of the center.
     (5) The duties of the board include:
     (a) Developing the general operating policies for the center;
     (b) Appointing the executive director of the center;
     (c) Adopting the biennial operating budget of the center;
     (d) Establishing eligibility criteria for the selection and funding of research projects that guarantee the greatest potential return on the state's investment;
     (e) Approving and allocating funding for research projects conducted by the center, based on the recommendations from faculty and aerospace companies;
     (f) Coordinating a yearly forum in partnership with the Washington state aerospace training and coordination institute to promote research and development discoveries;
     (g) Developing a biennial work plan and five-year strategic plan for the center;
     (h) Coordinating with the University of Washington and Washington State University in the development of research and development programs to be conducted at the center to enhance the vitality of the state and the aerospace industry;
     (i) Reviewing annual progress reports on funded research projects; and
     (j) Providing a biennial report to the governor, the legislature, and the universities detailing the activities, performance, roles, and contractual obligations of the center.

NEW SECTION.  Sec. 205   The center may receive gifts, grants, or endowments from public or private sources that are made from time to time, in trust or otherwise, for the use and benefit of the purpose of the center and spend gifts, grants, or endowments or income from the public or private sources according to their terms, unless the receipt of the gifts, grants, or endowments violates RCW 42.17.710.

NEW SECTION.  Sec. 206   The sum of three million dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2010, from the general fund to the University of Washington for the purposes of this act.

NEW SECTION.  Sec. 301   A new section is added to chapter 82.08 RCW to read as follows:
     (1) Four-year institutions are eligible for an exemption in the form of a remittance for tax paid under RCW 82.08.020 on:
     (a) Labor and services rendered in respect to installing, repairing, cleaning, altering, or improving equipment used directly in aerospace product development; and
     (b) Tangible personal property that is consumed in the development of an aerospace product.
     (2) For purposes of this section:
     (a) "Four-year institutions" has the same meaning as provided in RCW 28B.76.020;
     (b) "Aerospace product" has the same meaning as provided in RCW 82.08.975; and
     (c) "Aerospace product development" has the same meaning as provided in RCW 82.04.4461.
     (3)(a) The amount of the remittance under this section is based on the state share of sales tax.
     (b) A person claiming an exemption from state tax in the form of a remittance under this section must pay the tax imposed by RCW 82.08.020. The buyer may then apply to the department for remittance of all or part of the tax paid under RCW 82.08.020.
     (c) The department must determine eligibility under this section based on information provided by the buyer and through audit and other administrative records. On a quarterly basis the buyer must submit an information sheet, in a form and manner as required by the department specifying the amount of exempted tax claimed and the qualifying purchases or acquisitions for which the exemption is claimed. The buyer must retain, in adequate detail to enable the department to determine whether the labor, services, or tangible personal property meets the criteria under this section: Invoices; proof of tax paid; and documents describing the labor, services, or tangible personal property.
     (d) On a quarterly basis the department must remit exempted amounts to qualifying public educational or research institutions that submitted applications during the previous quarter.

NEW SECTION.  Sec. 302   A new section is added to chapter 82.12 RCW to read as follows:
     (1) Four-year institutions are eligible for an exemption in the form of a remittance for tax paid under RCW 82.12.020 on:
     (a) Labor and services rendered in respect to installing, repairing, cleaning, altering, or improving equipment used directly in aerospace product development; and
     (b) Tangible personal property that is consumed in the development of an aerospace product.
     (2)(a) The amount of the remittance under this section is based on the state share of sales tax.
     (b) A person claiming an exemption from state tax in the form of a remittance under this section must pay the tax imposed by RCW 82.12.020. The buyer may then apply to the department for remittance of all or part of the tax paid under RCW 82.12.020.
     (c) The department must determine eligibility under this section based on information provided by the buyer and through audit and other administrative records. On a quarterly basis the buyer must submit an information sheet, in a form and manner as required by the department specifying the amount of exempted tax claimed and the qualifying purchases or acquisitions for which the exemption is claimed. The buyer must retain, in adequate detail to enable the department to determine whether the labor, services, or tangible personal property meets the criteria under this section: Invoices; proof of tax paid; and documents describing the labor, services, or tangible personal property.
     (d) On a quarterly basis the department must remit exempted amounts to qualifying public educational or research institutions that submitted applications during the previous quarter.
     (3) The definitions in section 301 of this act apply to this section.

Sec. 401   RCW 43.79A.040 and 2009 c 87 s 4 are each amended to read as follows:
     (1) Money in the treasurer's trust fund may be deposited, invested, and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.
     (2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.
     (3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment 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)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.
     (b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The Washington aerospace futures account, the Washington promise scholarship account, the college savings program account, the Washington advanced college tuition payment program account, the agricultural local fund, the American Indian scholarship endowment fund, the foster care scholarship endowment fund, the foster care endowed scholarship trust fund, the students with dependents grant account, the basic health plan self-insurance reserve account, the contract harvesting revolving account, the Washington state combined fund drive account, the commemorative works account, the Washington international exchange scholarship endowment fund, the toll collection account, the developmental disabilities endowment trust fund, the energy account, the fair fund, the family leave insurance account, the food animal veterinarian conditional scholarship account, the fruit and vegetable inspection account, the future teachers conditional scholarship account, the game farm alternative account, the GET ready for math and science scholarship account, the grain inspection revolving fund, the juvenile accountability incentive account, the law enforcement officers' and firefighters' plan 2 expense fund, the local tourism promotion account, the pilotage account, the produce railcar pool account, the regional transportation investment district account, the rural rehabilitation account, the stadium and exhibition center account, the youth athletic facility account, the self-insurance revolving fund, the sulfur dioxide abatement account, the children's trust fund, the Washington horse racing commission Washington bred owners' bonus fund and breeder awards account, the Washington horse racing commission class C purse fund account, the individual development account program account, the Washington horse racing commission operating account (earnings from the Washington horse racing commission operating account must be credited to the Washington horse racing commission class C purse fund account), the life sciences discovery fund, the Washington state heritage center account, the reduced cigarette ignition propensity account, and the reading achievement account. However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (c) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advanced right-of-way revolving fund, the advanced environmental mitigation revolving account, the city and county advance right-of-way revolving fund, the federal narcotics asset forfeitures account, the high occupancy vehicle account, the local rail service assistance account, and the miscellaneous transportation programs account.
     (5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 402   Sections 101 through 106 of this act constitute a new chapter in Title 43 RCW.

NEW SECTION.  Sec. 403   Sections 201 through 205 of this act constitute a new chapter in Title 28B RCW.