Background: The Washington Economic Development Commission (Commission). In 2002, Governor Locke created the Commission through executive order. The following year the Legislature established the Commission in statute with the stated intent to have it develop and update the state's economic development strategy and performance measures; and provide advice to and oversight of the Department of Community, Trade, and Economic Development, now the Department of Commerce (Department). In 2007, the Legislature revised the statutory structure, and expanded the policy role and responsibilities of the Commission. In 2011, the Legislature increased the membership in the Commission to 24, with 15 voting members from the private sector, and four legislators and five agency directors serving in a nonvoting ex-officio capacity.

The Commission must concentrate its major efforts on strategic planning, policy research and analysis, advocacy, evaluation, and promoting collaboration and coordination. The Commission may not take an administrative role in the delivery of services. The executive director must develop an annual budget and work plan. The Commission may accept and spend gifts, grants, and contributions from public or private sources.

The Commission's comprehensive statewide economic development strategy is due by October 1 of every even-numbered year. The Commission must consult with relevant state agencies, private sector businesses, nonprofit organizations involved in economic development, trade associations, and relevant local organizations when developing its strategy, plans, inventories, assessments, and policy research.

The Commission uses a research manager to carry out the Commission's data collection, database, and evaluation functions. The database must include participation rates, costs, program activities, and outcomes from publicly funded economic development programs in the state. State agencies must cooperate with the commission and provide information reasonably requested. The Commission must:

require a minimum of core data to be collected;
develop requirements for minimum core data in consultation with the Economic Climate Council, the Office of Financial Management, and economic development service providers;
establish minimum common standards and metrics for program evaluation and monitor such program evaluations;
administer scientifically-based outcome evaluations of the state's economic development system, using data from industry surveys and data from the Employment Security Department and the Department of Revenue; and
evaluate proposals for expenditure from the Economic Development Strategic Reserve Account and recommend expenditures from the account.

The Economic Development Strategic Reserve Account (account). On the advice of the Commission, the Legislature created the account in 2005. The account is funded with one-third of unclaimed prize money from the state lottery. A maximum of $15 million may be in the account at any time, with any excess being transferred to the Education Construction Account.

The Governor may authorize expenditures from the account with the recommendation of the Director of Commerce and the Commission. Funds must be used to support the Commission. Funds may also be used to attract businesses and prevent business closure or relocation. Authorized uses include funding workforce development, public infrastructure, and other assistance provided contractually with an assurance of job creation or retention.Funds may not be expended unless the timely procurement of funding from other state sources is not possible and funding is accompanied by, and will not supplant, private investment. Any businesses assisted must produce significant economic benefits, including jobs or higher income, and may not require a continuing state subsidy.

Summary of Bill: A minimum of $500,000 from the account must be extended annually to cover the operational costs of the Commission.

Contracts with private firms using funds received from the account must specify that the funds must be returned if the terms of the contract are not met.

Data collection plans must be developed by state agencies for programs they operate that are identified by the Commission as providing significant economic development services. The data collection plans must be submitted to the Commission for approval by September 1, 2013, and approved by the Commission by December 31, 2013. Agencies must begin collecting data with their approved plans by January 1, 2014, and must make the data available to the Commission by January 1 and July 1 of each year.