BILL REQ. #:  S-4168.1 

Read first time 01/27/10.   Referred to Committee on Economic Development, Trade & Innovation.

     AN ACT Relating to providing regional economic development services; amending RCW 43.330.070 and 43.330.090; repealing RCW 43.330.080, 43.330.082, 43.330.084, and 43.330.086; and making appropriations.

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

Sec. 1   RCW 43.330.070 and 1993 c 280 s 10 are each amended to read as follows:
     (1)(a) The department ((shall)) must work closely with local communities to increase their capacity to respond to economic, environmental, and social problems and challenges. The department ((shall)) must coordinate the delivery of development services and technical assistance to local communities or regional areas. It ((shall)) must promote partnerships between the public and private sectors and between state and local officials to encourage appropriate economic growth and opportunity in communities throughout the state. The department ((shall)) must promote appropriate local development by: Supporting the ability of communities to develop and implement strategic development plans; assisting businesses to start up, maintain, or expand their operations; encouraging public infrastructure investment and private and public capital investment in local communities; supporting efforts to manage growth and provide affordable housing and housing services; providing for the identification and preservation of the state's historical and cultural resources; and expanding employment opportunities.
     (b) In carrying out its responsibilities under this subsection (1), the department must provide grants for the delivery of economic development services on a regional basis. Regions must be composed of at least two counties except that counties with populations greater than four hundred fifty thousand people may constitute a single region. No region may have fewer than two hundred thousand people. Each region may have no more than one grant recipient pursuant to this subsection. No recipient may receive more than two hundred fifty thousand dollars and no recipient may receive less than one hundred fifty thousand dollars, subject to available funds.
     (c) The grant recipient may be a consortium of associate development organizations or other organizations and must be broadly representative of community and economic interests. The grant recipient must be capable of identifying key economic and community development problems, developing appropriate solutions, and mobilizing broad support for recommended initiatives. The grant recipient must provide a locally matched allocation of at least fifty percent of the grant amount.
     (d) The department must require the following from each grant recipient:
     (i) The development of a regional economic development plan consistent with the state comprehensive plan for economic development developed by the state economic development commission;
     (ii) An inventory of sites available for development;
     (iii) The provision of, either directly, through subgrantees, or through coordinating the work of others, permit and licensing assistance, assistance in site location and selection, and essential information on tax and other issues to businesses seeking to locate or expand in the region. The grantee is obligated to notify the department of any recruitment effort that involves potential employment of greater than twenty-five employees;
     (iv) Marketing the region and the state as an excellent location to expand or locate a business, in coordination with the department's marketing efforts;
     (v) Identifying gaps in the delivery of business start-up assistance at the regional level and coordinating efforts with local small business development centers and other assistance providers to fill the gaps;
     (vi) Providing business retention and expansion services, including business surveys and outreach efforts, early detection of potential relocations or layoffs, and identification of employers' needs. The grantee is obligated to notify the department of any potential relocation or layoff that involves the dislocation of greater than twenty-five employees;
     (vii) Partnering with local governments, workforce development councils, port districts, export assistance providers, local colleges and universities, the Washington state quality award council, impact Washington, small business development centers, industry cluster or industry sector associations, and other federal, state, and local programs to facilitate the alignment of planning efforts and the seamless delivery of business support services in the region;
     (viii) Collecting and maintaining data as specified by the state economic development commission for use in program and system evaluation;
     (ix) Participating in economic research to identify regional industry cluster or industry sector needs, gaps in services, and methods and organizations available to meet identified needs; and
     (x) Working with regional partners to identify opportunities for promoting increased competitiveness of firms within the region and to coordinate and align regional workforce development and economic development efforts.
     (e) The department must develop performance measures for regional grant recipients relating to the requirements in (d) of this subsection including, but not limited to: Private investment measures; business creation, attraction, expansion, and retention measures; job creation measures; and measures of innovation. The performance measures developed must be consistently applied across regions to allow for statewide measurement. Specific target levels for the performance measures must be developed for each region, and each grant recipient must submit an annual or more frequent report, as determined by the department. The department must conduct an annual performance review with the grant recipient in each region and if the department determines any region would benefit from having a different grant recipient after the termination of the grant period, the department may award a grant to a new grant recipient for the region.
     (2) The department ((shall)) must define a set of services including training and technical assistance that it will make available to local communities, community-based nonprofit organizations, regional areas, or businesses. The department ((shall)) must simplify access to these programs by providing more centralized and user-friendly information and referral. The department ((shall)) must coordinate community and economic development efforts to minimize program redundancy and maximize accessibility. The department ((shall)) must develop a set of criteria for targeting services to local communities.
     (3) The department ((shall)) must develop a coordinated and systematic approach to providing training to community-based nonprofit organizations, recipients of regional grants pursuant to subsection (1) of this section, small business development centers, industry sector and industry cluster associations, local communities, and businesses. The approach ((shall)) must be designed to increase the economic and community development skills available in local communities ((by providing training and funding for training for local citizens, nonprofit organizations, and businesses)) and must include training in the provision of export assistance skills. The department ((shall)) must emphasize providing training in those communities most in need of state assistance.

Sec. 2   RCW 43.330.090 and 2009 c 151 s 1 are each amended to read as follows:
     (1) The department ((shall)) must work with private sector organizations, industry and sector associations, federal agencies, state agencies that use a sector-based approach to service delivery, local governments, local associate development organizations, and higher education and training institutions in the development of industry sector-based strategies to diversify the economy, facilitate technology transfer and diffusion, and increase value-added production. The industry sectors targeted by the department may include, but are not limited to, aerospace, agriculture, food processing, forest products, marine services, health and biomedical, software, digital and interactive media, transportation and distribution, and microelectronics. The department ((shall)) must, on a continuing basis, evaluate the potential return to the state from devoting additional resources to an industry sector-based approach to economic development and identifying and assisting additional sectors.
     (2) The department's sector-based strategies ((shall)) must include, but not be limited to, cluster-based strategies that focus on assisting regional industry sectors and related firms and institutions that meet the definition of an industry cluster in this section and based on criteria identified by the working group ((established in)) convened by the state economic development commission and the workforce training and education coordinating board under this chapter.
     (3)(((a) The department shall promote, market, and encourage growth in the production of films and videos, as well as television commercials within the state; to this end the department is directed to assist in the location of a film and video production studio within the state.
     (b) The department may, in carrying out its efforts to encourage film and video production in the state, solicit and receive gifts, grants, funds, fees, and endowments, in trust or otherwise, from tribal, local, or other governmental entities, as well as private sources, and may expend the same or any income therefrom for the encouragement of film and video production. All revenue received for such purposes shall be deposited into the film and video promotion account created in RCW 43.330.092.
     (4))) In assisting in the development of regional and statewide industry cluster-based strategies, the department's activities ((shall)) must include, but are not limited to:
     (a) Facilitating regional focus group discussions and conducting studies to identify industry clusters, appraise the current information linkages within a cluster, ((and)) identify issues of common concern within a cluster, and promote industry cluster involvement in the application process for designation of innovation partnership zones;
     (b) Supporting industry and cluster associations, publications of association and cluster directories, and related efforts to create or expand the activities of industry and cluster associations including their involvement with innovation partnership zones;
     (c) Administering a competitive grant program to fund economic development activities designed to further regional cluster growth and to integrate its sector-based and cluster-based strategies with its support for the development of innovation partnership zones. In administering the program, the department ((shall)) must work with ((an industry cluster advisory committee with equal representation from)) the economic development commission((,)) and the workforce training and education coordinating board((, the state board for community and technical colleges, the employment security department, business, and labor)) to develop criteria for rewarding grants.
     (i) ((The industry cluster advisory committee shall recommend criteria for evaluating applications for grant funds and recommend applicants for receipt of grant funds. Criteria shall include not duplicating)) Grant recipients must provide matching funds equal to the size of the grant.
     (ii) Grants may be awarded to support the formation of sector associations or cluster associations, the identification of the technology and commercialization needs of a sector or cluster, facilitating working relationships between a sector association or cluster association and an innovation partnership zone, expanding the operations of an innovation partnership zone, and developing and implementing plans to meet the technology development and commercialization needs of industry sectors, industry clusters, and innovation partnership zones. The projects receiving grants must not duplicate the purpose or efforts of industry skill panels but priority must be given to applicants that complement industry skill panels and will use the grant funds to build linkages and joint projects.
     (((ii) Applicants must include organizations from at least two counties and participants from the local business community. Eligible organizations include, but are not limited to, local governments, economic development councils, chambers of commerce, federally recognized Indian tribes, workforce development councils, and educational institutions.
     (iii) Applications must evidence financial participation of the partner organizations.
     (iv) Eligible activities include the formation of cluster economic development partnerships, research and analysis of economic development needs of the cluster, the development of a plan to meet the economic development needs of the cluster, and activities to implement the plan.
     (v) Priority shall be given to applicants that complement industry skill panels and will use the grant funds to build linkages and joint projects.
     (vi))) (iii) The maximum amount of a grant is ((one hundred)) seventy-five thousand dollars.
     (((vii) A maximum of one hundred thousand dollars total can go to King, Pierce, Kitsap, and Snohomish counties combined.
     (viii))) (iv) No more than ten percent of funds received for the grant program may be used by the department for administrative costs.
     (((5))) (4) As used in this chapter, "industry cluster" means a geographic concentration of interconnected companies in a single industry, related businesses in other industries, including suppliers and customers, and associated institutions, including government and education.

NEW SECTION.  Sec. 3   (1) The sum of two million two hundred thousand dollars, or as much thereof as may be necessary, is appropriated to the department of commerce for the fiscal year ending June 30, 2011, from the state general fund for the operation of the regional grant program required in section 1 of this act.
     (2) The sum of eight hundred thousand dollars, or as much thereof as may be necessary, is appropriated to the department of commerce for the fiscal year ending June 30, 2011, from the state general fund to meet the department's obligations under section 2 of this act. Of this amount, six hundred thousand dollars must be used for the grant program required under section 2(3)(c) of this act.

NEW SECTION.  Sec. 4   The following acts or parts of acts are each repealed:
     (1) RCW 43.330.080 (Coordination of community and economic development services -- Contracts with county-designated associate development organizations -- Scope of services) and 2009 c 151 s 10, 2007 c 249 s 2, 1997 c 60 s 1, & 1993 c 280 s 11;
     (2) RCW 43.330.082 (Contracting associate development organizations -- Performance measures -- Remediation plans -- Reports) and 2009 c 518 s 15 & 2007 c 249 s 3;
     (3) RCW 43.330.084 (Washington state quality award -- Reimbursement of application fee) and 2007 c 249 s 4; and
     (4) RCW 43.330.086 (Contracts with associate development organizations -- Schedule of awards) and 2008 c 131 s 3 & 2007 c 249 s 5.