HOUSE BILL REPORT

HB 1835

BYRepresentatives Grant, Hankins, Jesernig, Brooks, Meyers, Ballard, Hine, Rayburn, Sayan, Silver, Appelwick, Moyer, Ebersole, Nealey, Dellwo, Miller, Jacobsen, S. Wilson, Grimm, Chandler, Fuhrman, Schoon, B. Williams, Ferguson, Doty, Day, Basich, P. King, Anderson, Pruitt and Todd

Providing for economic diversification in the Tri-Cities.

House Committe on Trade & Economic Development

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (18)

      Signed by Representatives Vekich, Chair; Wineberry, Vice Chair; Amondson, Beck, Braddock, Cantwell, Doty, Fox, Grant, Hargrove, Heavey, Holm, McLean, Moyer, Rasmussen, Schoon, B. Williams and J. Williams.

House Staff:Stephen Hodes (786-7092)

Rereferred House Committee on Ways & Means

Majority Report:  The second substitute bill be substituted therefor and the second substitute bill do pass.  (21)

      Signed by Representatives Grimm, Chair; Bristow, Vice Chair; Basich, Braddock, Butterfield, Ebersole, Grant, Hine, Holland, Locke, McLean, Nealey, Rust, Schoon, Silver, H. Sommers, Spanel, Sprenkle, Valle, Wang and B. Williams.

Minority Report:  Do not pass.  (1)

      Signed by Representative Brekke.

House Staff:      Susan Kavanaugh (786-7145)

AS REPORTED BY COMMITTEE ON WAYS & MEANS

FEBRUARY 7, 1988

BACKGROUND:

The Hanford Nuclear Reactor was scheduled to cease plutonium production in the mid-1990s.  The reactor is currently shut down, and it is currently unclear whether it will remain in operation for long if it is restarted.  The United States Department of Energy issued a study that predicted that 8,000 jobs would be lost statewide by 1991 in the event of a shut down.  By 1996 the job loss would reach 13,800 (a preliminary study by the Department of Energy estimated the job loss would reach 19,780).  According to the study, Hanford jobs account for about 27 percent of all non-farm jobs in the Tri-Cities area, 45 percent of the non-farm payroll and 75 percent of the Tri-Cities' industry labor base.

The Legislature directed the Department of Trade and Economic Development to undertake a study of economic diversification options for the Tri-Cities in the 1987 session.  The study focused on:  higher education capabilities; methods of utilizing the Tri-Cities economic development assets to diversify the economy; methods of addressing the economic development liabilities of the area; potential markets for Tri-Cities services and products; the availability of potential funding sources; federally-developed technology transfer to the commercial arena; and the development of a diversification plan.  The final results of the study will be available in February of 1988.

SUMMARY:

SUBSTITUTE BILL:  The Department of Trade and Economic Development is directed to begin implementation of the following goals: retention and expansion of existing businesses and industries in the Tri-Cities region; attraction of businesses and industries to the region; encouraging the formation of new businesses and industries in the region; and assisting in the development of a regional infrastructure favorable to economic diversification.

The Department is directed to designate a Tri-Cities project manager.  The Department is directed to conduct or contract for feasibility studies.  Such studies should utilize funds from other sources to the maximum extent possible.  The Department shall provide matching grants to local governments in the Tri-Cities region for projects to promote the growth of recreational industries.  The Department is directed to conduct a study of the feasibility of using heat from existing nuclear facilities for commercial and industrial applications, in conjunction with the Tri-Cities University Center.  State funding shall be no more than one-third of the federal funds provided for the study and shall not exceed fifty thousand dollars.

The Department of Agriculture is directed to establish a Tri-Cities agribusiness development program in conjunction with Washington State University.  The Department is also directed to evaluate the means for increasing the value of the wine industry in the Tri-Cities.

The Department of Trade and Economic Development is directed to establish a Tri-Cities technology transfer program in conjunction with Washington State University and in consultation with other universities and private sector laboratories.  The Department shall develop methods to facilitate research and product development, market patents and licenses, increase the availability of seed capital, and build business and management skills to advance technology transfer in the Tri-Cities region.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The listing of specific feasibility studies to be funded by the Department of Trade and Economic Development in the original has been omitted in the substitute.  The regional technology transfer program to be established by the Department of Trade and Economic Development is to be established in conjunction with Washington State University in the substitute.  It was to be established in conjunction with the Washington Technology Center in the original.  The methodology the Department was to utilize in establishing the regional technology transfer program has been omitted in the substitute.  That was to have included the establishment of a technology transfer team and an initial assessment of the most promising research that could be transferred to commercial production. An emergency clause has been added.

CHANGES PROPOSED BY COMMITTEE ON WAYS & MEANS:  Requirements for grants for the feasibility studies and projects are expanded.  Washington State University faculty are added.  Contracts with the Small Business Development Center are added.  The duties of the Department of Trade and Economic Development and Department of Agriculture staff are clarified.  A job retraining and job search assistance program is added.  A statewide diversification study is added.  Appropriations totaling to $1,615,000 are added.

Fiscal Note:      Available.

House Committee ‑ Testified For:    (Trade & Economic Development)  John Anderson, Department of Trade and Economic Development; Dennis Matson, Department of Trade and Economic Development; Ernie Boston, Tri-Cities Advisory Committee; Mike Schwenk, Tri-Cities Industrial Development Council; Jim Beard, Greenpeace; Lisa Johnson, Washington Physicians for Social Responsibility; Sarah McCoy, SANE.

(Ways & Means)  Representative Shirley Hankins; John Anderson, Department of Trade and Economic Development; Mike Schwenk, TRIDEC; Jim Worthington, Southwest Washington Building Trades.

House Committee - Testified Against:      (Trade & Economic Development)  None Presented.

(Ways & Means)  None Presented.

House Committee - Testimony For:    (Trade & Economic Development)  The shutdown of the N-Reactor is comparable in the Tri- Cities region to the closure of Boeing in King County.  Major impacts on the state are expected.  Best course for the state is economic diversification. Results of the recent study is a course we should follow.  Focus is on the major strengths of the Tri-Cities region in agriculture and the transfer of new technology into commercial applications. State should focus on diversification away from nuclear technologies and into new fields to strengthen local economy in the Tri-Cities in the long-run.

(Ways & Means)  The permanent shutdown of the N Reactor will be a tremendous economic loss to the Tri-Cities area.  The area has a valuable resource in its highly trained workforce, but assistance will be needed to deal with the dislocation and distress caused by job losses and to help new business to start up, grow and relocate in the area.

House Committee - Testimony Against:      (Trade & Economic Development)  None Presented.

(Ways & Means)  None Presented.