BILL REQ. #:  S-3351.1 

Read first time 01/29/14.   Referred to Committee on Governmental Operations.

     AN ACT Relating to creating a state agency innovation and efficiency grant program; adding new sections to chapter 43.41 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 43.41 RCW to read as follows:
     (1) The state agency innovation and efficiency grant program is created. The purpose of the program is to allow state agencies to compete for funds to implement projects that redesign service delivery processes that result in improved service at reduced state cost.
     (2) For the purposes of this section, "state agency" means an office, department, board, commission, or other separate unit or division, however designated, of the state government including all offices of state government elected officials, but does not include institutions of higher education as defined by RCW 41.06.020(10) and agencies of the legislative and judicial branches.
     (3) The office must administer the program and establish an annual process to solicit applications from state agencies. The first solicitation for applications must occur by November 1, 2014.
     (4) The state agency innovation and efficiency council created in section 2 of this act must evaluate, rank, and make recommendations to the director for the award of grants for projects in accordance with a competitive process to be developed by the council. The council must establish its criteria and process for evaluating, ranking, and making recommendations by October 1, 2014.
     (5) In addition to any criteria developed by the council, the council must consider:
     (a) Will the project increase the range, efficiency, or quality of the services provided to citizens;
     (b) Is the project ready to proceed and will it make timely use of the funds;
     (c) The expected return on investment, based on the ratio of expected savings or cost avoidance;
     (d) The probability of the project's success;
     (e) The ability to replicate the project in other state agencies, institutions of higher education, and other political subdivisions;
     (f) If the project resulted from a quality management, accountability, and performance system such as LEAN, Six Sigma, or Washington state quality award self-assessments;
     (g) Whether the project is to implement a performance audit or other audit recommendations under RCW 43.09.470 or chapter 44.28 RCW;
     (h) Whether the applicant has successfully completed an innovation or efficiency project in the past; and
     (i) Whether funds from private or other nonstate resources have been committed to the project.
     (6) The evaluation and ranking process may also include an examination of existing financial resources that state agencies may apply to the project. Grants may not be used to supplant existing funds for foreseeable or budgeted activities.
     (7) The council must make its first set of recommendations to the director by March 1, 2015.
     (8) Grant agreements must specify deliverables to be provided by the state agency pursuant to the grant, including a completion date that must be no later than three years from the date of the agreement. Grant agreements must also require the state agency to submit progress reports every six months. A report is also required upon completion of the project, and for three years thereafter, that measures the improvements made to service delivery and state savings or cost avoidance from the project.
     (9) The office and the council may not limit the number of applications that may be submitted by a state agency. A state agency may receive grants for multiple projects. The council may establish a maximum amount of grants that may be awarded for each project, taking into consideration the amount of funds contained in the state agency innovation and efficiency grant program account.

NEW SECTION.  Sec. 2   A new section is added to chapter 43.41 RCW to read as follows:
     (1) The state agency innovation and efficiency council is created. The council must consist of the following members:
     (a) The director or the director's designee;
     (b) The state auditor or the auditor's designee;
     (c) The secretary of state or the secretary's designee;
     (d) One person with experience in leading initiatives related to innovation, efficiency, or continuous improvement processes in local government, and one person with experience in leading initiatives related to innovation, efficiency, or continuous improvement processes in the private sector, appointed by the director;
     (e) Two members of the senate, with the leaders of the two largest caucuses of the senate each appointing one member;
     (f) Two members of the house of representatives, with the leaders of the two largest caucuses of the house of representatives each appointing one member.     
     (2) Initial appointments to the council must be made not later than ninety days from the effective date of this section. Each member appointed by the director, the senate, and the house of representatives must serve a three-year term. Members may be reappointed to the council for one additional term. Vacancies on the council must be filled in the same manner as the original appointments. In the event the office, state auditor's office, or office of the secretary of state apply for the award of grant funding, the respective director, auditor, secretary, and their designees must be recused from the evaluation and ranking of their applications.
     (3) At its first meeting, the council must select a chair from among its members. After the first meeting, the council must meet at the call of the chair or upon the request of a majority of the council's members. A majority of the council constitutes a quorum.
     (4) The office must provide administrative support to the council.
     (5) Council members receive no compensation but may be reimbursed for actual and necessary expenses incurred under RCW 43.03.050 and 43.03.060 in the performance of council duties.

NEW SECTION.  Sec. 3   The state agency innovation and efficiency grant program account is created in the state treasury. The account must consist of legislative appropriations and gifts, grants, or endowments from other sources as permitted by law. Moneys in the account may be spent only after appropriation. Only the director of the office of financial management or the director's designee, with the recommendation of the state agency innovation and efficiency council, may authorize expenditures from the account. Expenditures from the account may be used only for grants as provided in section 2 of this act and for any state agency innovation and efficiency council expenses.