"NEW SECTION.  Sec. 1   A new section is added to chapter 43.330 RCW to read as follows:
     In carrying out its responsibilities under RCW 43.330.060 and 43.330.080, the department must establish protocols to be followed by associate development organizations and department staff for the recruitment and retention of businesses. The protocols must specify the circumstances under which an associate development organization is required to notify the department of its business recruitment and retention efforts and when the department must notify the associate development organization of its business recruitment and retention efforts. The protocols established may not require the release of proprietary information or the disclosure of information that a client company has requested remain confidential. The department must require compliance with the protocols in its contracts with associate development organizations.

Sec. 2   RCW 43.330.080 and 2009 c 151 s 10 are each amended to read as follows:
     In carrying out its obligations under RCW 43.330.070, the department ((shall)) must provide business services training to and contract with county-designated associate development organizations to increase the support for and coordination of community and economic development services in communities or regional areas. The business services training provided to the organizations contracted with must include, but need not be limited to, training in the fundamentals of export assistance and the services available from private and public export assistance providers in the state. The organizations contracted within each community or regional area ((shall)) must work closely with the department to carry out state-identified economic development priorities and must be broadly representative of community and economic interests. The organization ((shall)) must be capable of identifying key economic and community development problems, developing appropriate solutions, and mobilizing broad support for recommended initiatives. The contracting organization ((shall)) must work with and include local governments, local chambers of commerce, workforce development councils, port districts, labor groups, institutions of higher education, community action programs, and other appropriate private, public, or nonprofit community and economic development groups. The scope of services delivered under these contracts ((shall)) must include two broad areas of work:
     (1) Direct assistance, including business planning, to companies throughout the county who need support to stay in business, expand, or relocate to Washington from out of state or other countries. Assistance must comply with business recruitment and retention protocols established in section 1 of this act, and includes:
     (a) Working with the appropriate partners throughout the county, including but not limited to, local governments, workforce development councils, port districts, community and technical colleges and higher education institutions, export assistance providers, the Washington manufacturing services, the Washington state quality award council, small business assistance programs, and other federal, state, and local programs to facilitate the alignment of planning efforts and the seamless delivery of business support services ((in the)) within the entire county;
     (b) Providing information on state and local permitting processes, tax issues, export assistance, and other essential information for operating, expanding, or locating a business in Washington;
     (c) Marketing Washington and local areas as excellent locations to expand or relocate a business and positioning Washington as a globally competitive place to grow business, which may include developing and executing regional plans to attract companies from out of state;
     (d) Working with businesses on site location and selection assistance;
     (e) Providing business retention and expansion services throughout the county, including business outreach and monitoring efforts to identify and address challenges and opportunities faced by businesses; ((and))
     (f) Participating in economic development system-wide discussions regarding gaps in business start-up assistance in Washington; and
     (g) Providing or facilitating the provision of export assistance through workshops or one-on-one assistance; and
     (2) Support for regional economic research and regional planning efforts to implement target industry sector strategies and other economic development strategies, including cluster-based strategies, that support increased living standards and increase foreign direct investment throughout Washington. Activities include:
     (a) Participation in regional planning efforts with workforce development councils involving coordinated strategies around workforce development and economic development policies and programs. Coordinated planning efforts ((shall)) must include, but not be limited to, assistance to industry clusters in the region;
     (b) Participation between the contracting organization and the state board for community and technical colleges as created in RCW 28B.50.050, and any community and technical colleges in providing for the coordination of the job skills training program and the customized training program within its region;
     (c) Collecting and reporting data as specified by the contract with the department for statewide systemic analysis. The department ((shall)) must consult with the Washington state economic development commission in the establishment of such uniform data as is needed to conduct a statewide systemic analysis of the state's economic development programs and expenditures. In cooperation with other local, regional, and state planning efforts, contracting organizations may provide insight into the needs of target industry clusters, business expansion plans, early detection of potential relocations or layoffs, training needs, and other appropriate economic information;
     (d) In conjunction with other governmental jurisdictions and institutions, participate in the development of a countywide economic development plan, consistent with the state comprehensive plan for economic development developed by the Washington state economic development commission.

Sec. 3   RCW 43.330.082 and 2009 c 518 s 15 are each amended to read as follows:
     (1)(a) Contracting associate development organizations ((shall)) must provide the department with measures of their performance. Annual reports ((shall)) must include information on the impact of the contracting organization on employment, wages, tax revenue, and capital investment. Specific measures ((shall)) must be developed in the contracting process between the department and the contracting organization every two years. Except as provided in (b) of this subsection, performance measures should be consistent across regions to allow for statewide evaluation.
     (b) In addition to the measures required in (a) of this subsection, contracting associate development organizations in counties with a population greater than one million five hundred thousand persons must include the following measures in reports to the department:
     (i) The number of small businesses that received retention and expansion services, and the outcome of those services.
     (ii) The number of businesses located outside of the boundaries of the largest city within the contracting associate development organization's region that received recruitment, retention, and expansion services, and the outcome of those services.
     (2)(a) The department and contracting organizations ((shall)) must agree upon specific target levels for the performance measures in subsection (1) of this section. Comparison of agreed thresholds and actual performance ((shall)) must occur annually.
     (b) Contracting organizations that fail to achieve the agreed performance targets in more than one-half of the agreed measures ((shall)) must develop remediation plans to address performance gaps. The remediation plans ((shall)) must include revised performance thresholds specifically chosen to provide evidence of progress in making the identified service changes.
     (c) Contracts and state funding ((shall)) must be terminated for one year for organizations that fail to achieve the agreed upon progress toward improved performance defined under (b) of this subsection. During the year in which termination for nonperformance is in effect, organizations ((shall)) must review alternative delivery strategies to include reorganization of the contracting organization, merging of previous efforts with existing regional partners, and other specific steps toward improved performance. At the end of the period of termination, the department may contract with the associate development organization or its successor as it deems appropriate.
     (3) The department ((shall)) must report to the legislature and the Washington economic development commission by December 31st of each even-numbered year on the performance results of the contracts with associate development organizations.

Sec. 4   RCW 43.330.010 and 2009 c 565 s 2 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Associate development organization" means a local economic development nonprofit corporation that is broadly representative of community interests.
     (2) "Department" means the department of commerce.
     (3) "Director" means the director of the department of commerce.
     (4) "Financial institution" means a bank, trust company, mutual savings bank, savings and loan association, or credit union authorized to do business in this state under state or federal law.
     (5) "Microenterprise development organization" means a community development corporation, a nonprofit development organization, a nonprofit social services organization or other locally operated nonprofit entity that provides services to low-income entrepreneurs.
     (6) "Small business" has the same meaning as provided in RCW 39.29.006.
     (7) "Statewide microenterprise association" means a nonprofit entity with microenterprise development organizations as members that serves as an intermediary between the department of commerce and local microenterprise development organizations."