BILL REQ. #:  S-3919.2 

Read first time 01/21/10.   Referred to Committee on Economic Development, Trade & Innovation.

     AN ACT Relating to the creation of entities to address the long-range impact of opportunities and changes in the aerospace industry; reenacting and amending RCW 43.84.092; adding a new section to chapter 43.42 RCW; adding a new section to chapter 82.08 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) Services rendered in respect to installing, repairing, cleaning, altering, or improving equipment directly incurred may be used in aerospace product development; or
     (b) Tangible personal property that is consumed or becomes a component of aerospace product development.
     (2) For purposes of this section:
     (a) "Four-year institutions" has the same meaning as provided in RCW 28B.76.020; and
     (b) "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 services or tangible personal property meets the criteria under this section: Invoices; proof of tax paid; and documents describing the services or tangible personal property.
     (d) On a quarterly basis the department must remit exempted amounts to qualifying public educational or research institutions who submitted applications during the previous quarter.

Sec. 401   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 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 aerospace futures account, 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. 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.