BILL REQ. #:  S-3867.1 

Read first time 01/19/12.   Referred to Committee on Economic Development, Trade & Innovation.

     AN ACT Relating to associate development organizations; and amending RCW 43.330.080, 43.330.082, and 43.162.020.

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

Sec. 1   RCW 43.330.080 and 2011 c 286 s 2 are each amended to read as follows:
     ((In carrying out its obligations under RCW 43.330.070,)) (1)(a) The department 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 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 must)) The contracting organizations in each community or regional area must:
     (i) Be broadly representative of community and economic interests;
     (ii) Be capable of identifying key economic and community development problems, developing appropriate solutions, and mobilizing broad support for recommended initiatives((. The contracting organization must));
     (iii) Work closely with the department to carry out state-identified economic development priorities;
     (iv) 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; and
     (v) Meet and share best practices with other associate development organizations at least two times each year.
     (b) The scope of services delivered under ((these)) the contracts required in (a) of this subsection must include two broad areas of work:
     (((1))) (i) 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 RCW 43.330.062, and includes:
     (((a))) (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, innovation partnership zones, and other federal, state, and local programs to facilitate the alignment of planning efforts and the seamless delivery of business support services within the entire county;
     (((b))) (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))) (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))) (D) Working with businesses on site location and selection assistance;
     (((e))) (E) Providing business retention and expansion services throughout the county((, including)). Such services must include, but are not limited to, business outreach and monitoring efforts to identify and address challenges and opportunities faced by businesses, assistance to trade impacted businesses in applying for grants from the federal trade adjustment assistance for firms program, and the provision of information to businesses on:
     (I) Resources available for microenterprise development;
     (II) Resources available on the revitalization of commercial districts; and
     (III) The opportunity to maintain jobs through shared work programs authorized under chapter 50.60 RCW;
     (((f))) (F) Participating in economic development system-wide discussions regarding gaps in business start-up assistance in Washington; ((and
     (g))) (G) Providing or facilitating the provision of export assistance through workshops or one-on-one assistance; and
     (H) Using a web-based information system to track data and coordinate work with other economic development partners on business recruitment, retention, expansion, and trade; and
     (((2))) (ii) 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)). Research and planning efforts should support increased living standards and increased foreign direct investment, and must be aligned with the statewide economic development strategy. Activities include:
     (((a) Participation)) (A) Participating in regional planning efforts with workforce development councils involving coordinated strategies around workforce development and economic development policies and programs. Coordinated planning efforts must include, but not be limited to, assistance to industry clusters in the region;
     (((b) Participation between the contracting organization and)) (B) Participating with 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))) (C) Collecting and reporting data as specified by the contract with the department for statewide systemic analysis. The department 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))) (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.
     (2) The department must provide business services training to the contracting organizations, including but not limited to:
     (a) Training in the fundamentals of export assistance and the services available from private and public export assistance providers in the state; and
     (b) Training in the provision of business retention and expansion services as required by subsection (1)(b)(i)(E) of this section.

Sec. 2   RCW 43.330.082 and 2011 c 286 s 3 are each amended to read as follows:
     (1)(a) Contracting associate development organizations must provide the department with measures of their performance and a summary of best practices shared and implemented by the contracting organizations. Annual reports must include information on ((the impact of the contracting organization on employment, wages, tax revenue, and capital investment. Specific measures must be developed in the contracting process between the department)) the community or regional area served by the contracting organization. Annual reports may include the impact of the contracting organization on employment, wages, exports, tax revenue, small business creation, foreign direct investment, business relocations, expansions, terminations, and capital investment. Data must be input into a common web-based business information system managed by the department. Specific measures, data standards, and data definitions must be developed in the contracting process between the department, the economic development commission, 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 associate development organizations must agree upon specific target levels for the performance measures in subsection (1) of this section. Comparison of agreed thresholds and actual performance must occur annually.
     (b) Contracting organizations that fail to achieve the agreed performance targets in more than one-half of the agreed measures must develop remediation plans to address performance gaps. The remediation plans must include revised performance thresholds specifically chosen to provide evidence of progress in making the identified service changes.
     (c) Contracts and state funding 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 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 must submit a preliminary report to the Washington economic development commission by September 1st of each even-numbered year, and a final 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.
     (4) Contracting associate development organizations must provide the Washington state economic development commission with information to be used in the comprehensive statewide economic development strategy and progress report due under RCW 43.162.020, by the date determined by the commission.

Sec. 3   RCW 43.162.020 and 2011 c 311 s 5 are each amended to read as follows:
     (1) The commission must concentrate its major efforts on strategic planning, policy research and analysis, advocacy, evaluation, and promoting coordination and collaboration.
     (2) During each regular legislative session, the commission must consult with appropriate legislative committees about the state's economic development needs and opportunities.
     (3)(a) By October 1st of each even-numbered year, the commission must submit to the governor and legislature a biennial comprehensive statewide economic development strategy with a report on progress from the previous comprehensive strategy.
     (b) The comprehensive statewide economic development strategy must include the industry clusters in the state and the strategic clusters targeted by the commission for economic development efforts. The commission must consult with the workforce training and education coordinating board and include labor market and economic information by the employment security department in developing the list of clusters and strategic clusters that meet the criteria identified by the working group convened by the economic development commission and the workforce training and education coordinating board under chapter 43.330 RCW.
     (4)(a) In developing the comprehensive statewide economic development strategy, the commission must use, but may not be limited to: Economic, labor market, and populations trend reports in office of financial management forecasts; the annual state economic climate report prepared by the economic climate council; joint office of financial management and employment security department labor force, industry employment, and occupational forecasts; the results of scientifically based outcome evaluations; the needs of industry associations, industry clusters, businesses, and employees as evidenced in formal surveys and other input.
     (b) The comprehensive statewide economic development strategy may include:
     (i) An assessment of the state's economic vitality;
     (ii) Recommended goals, objectives, and priorities for the next biennium, and the future;
     (iii) A common set of outcomes and benchmarks for the economic development system as a whole;
     (iv) Recommendations for removing barriers and promoting collaboration among participants in the innovation ecosystem;
     (v) An inventory of existing relevant programs compiled by the commission from materials submitted by agencies;
     (vi) Recommendations for expanding, discontinuing, or redirecting existing programs, or adding new programs; and
     (vii) Recommendations of best practices and public and private sector roles in implementing the comprehensive statewide economic development strategy.
     (c) The report on progress from the previous comprehensive strategy must include information provided by associate development organizations as requested by the commission. The commission may include recommendations for associate development organizations in the report on progress or in the comprehensive statewide economic development strategy.
     (5) In developing the biennial statewide economic development strategy, plans, inventories, assessments, and policy research, the commission must consult, collaborate, and coordinate with relevant state agencies, private sector businesses, nonprofit organizations involved in economic development, trade associations, associate development organizations, and relevant local organizations in order to avoid duplication of effort.
     (6) State agencies and associate development organizations must cooperate with the commission and provide information as the commission may reasonably request.
     (7) The commission must develop a biennial budget request for approval by the office of financial management. The commission must adopt an annual budget and work plan in accordance with the omnibus appropriations bill approved by the legislature.
     (8)(a) The commission and its fiscal agent must jointly develop and adopt a memorandum of understanding to outline and establish clear lines of authority and responsibility between them related to budget and administrative services.
     (b) The memorandum of understanding may not provide any additional grant of authorities to the commission or the fiscal agent that is not already provided for by statute, nor diminish any authorities or powers granted to either party by statute.
     (c) Periodically, but not less often than biannually, the commission and fiscal agent must review the memorandum of understanding and, if necessary, recommend changes to the other party.
     (d) As provided generally under RCW 43.162.015, the executive director of the commission must report solely to the governor and the commissioners on matters pertaining to commission operations.
     (9) To maintain its objectivity and concentration on strategic planning, policy research and analysis, and evaluation, the commission may not take an administrative role in the delivery of services. However, subject to available resources and consistent with its work plan, the commission or the executive director may conduct outreach activities such as regional forums and best practices seminars.
     (10) The commission must evaluate its own performance on a regular basis.
     (11) The commission may accept gifts, grants, donations, sponsorships, or contributions from any federal, state, or local governmental agency or program, or any private source, and expend the same for any purpose consistent with this chapter.