SENATE BILL REPORT
E2SHB 1835
BYHouse Committee on Ways & Means (originally sponsored by Representatives 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
Rereferred House Committee on Ways & Means
Senate Committee on Economic Development & Labor
Senate Hearing Date(s):February 24, 1988; February 25, 1988
Majority Report: Do pass as amended.
Signed by Senators Lee, Chairman; Anderson, Vice Chairman; Cantu, Conner, Deccio, McMullen, Smitherman, Warnke, West.
Senate Staff:Jack Brummel (786-7428)
February 25, 1988
AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, FEBRUARY 25, 1988
BACKGROUND:
The Hanford Nuclear Reactor was scheduled to cease plutonium production in the mid-1990s. The reactor is shut down, and it is 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.
In the 1987 session, the Legislature directed the Department of Trade and Economic Development to undertake a study of economic diversification options for the Tri-Cities. 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:
The Department of Trade and Economic Development is directed to undertake a program to promote economic diversification activities in the Tri-Cities area. It is to designate a project manager to coordinate this effort. The manager shall work with affected local groups, state agencies, and educational institutions to assist in the effort. $75,000 is appropriated to the department for the project manager.
The Department of Trade and Economic Development is directed to develop and administer a Tri-Cities economic diversification feasibility fund to provide grants for studies of the feasibility of options for diversification of the Tri-Cities region. $100,000 is appropriated for this purpose.
The department is directed to develop and administer a Tri-Cities economic diversification grant program for economic development projects in the Tri-Cities region. The program shall provide monies for projects including training or retraining services, entrepreneurial development, the incubation of new firms, and agricultural, advanced technology applications, and recreational development. $400,000 is appropriated for this purpose.
The department is directed to undertake a study through the Tri- Cities University Center on the feasibility of using heat generated by existing nuclear facilities for commercial industrial applications, taking into consideration and drawing from existing studies on district heating. $50,000, which must be matched on a two-to-one basis by federal funding, is appropriated for this purpose.
The department is directed to contract with the Tri-Cities Industrial Development Corporation to promote the economic development and industrial diversification of the Tri-Cities area. The contract may include provisions requiring activities such as work to attract new firms, promote the development of new enterprises, or to identify firms at risk of closure or relocation. $200,000 is provided for this purpose.
The Department of Agriculture is directed to establish an agribusiness development program in the Tri-Cities area. The department is directed to designate a program manager to coordinate this effort. $75,000 is provided to the Department of Agriculture for this purpose.
The Department of Trade and Economic Development is directed to establish a technology transfer program in the Tri-Cities in conjunction with Washington State University and in consultation with other universities and private sector laboratories.
The Employment Security Department is directed to provide enhanced retraining and job search assistance to dislocated workers in the Tri-Cities area. The department is directed to: work with all affected local groups and educational institutions; to coordinate with job training and job search assistance already provided in the area; to work with groups seeking to attract new businesses to the area; and to use all available information regarding labor markets in the state. $500,000 is provided to the Employment Security Department for this purpose.
The following amounts are appropriated to Washington State University: $75,000 for a faculty member to research and teach in the field of business development, new enterprise development, and technology transfer; $75,000 for a faculty member to research and teach in the field of agribusiness development. $100,000 for a faculty member and equipment for wine industry research at the Tri-Cities University Center.
The sum of $125,000 is appropriated to the Department of Trade and Economic Development for grants to the Small Business Development Center serving the Tri-Cities area. $75,000 of this amount is for a staff person to provided assistance to small businesses and persons considering forming small businesses. $50,000 is for contracts for specialized technical and managerial assistance to small businesses in fields such as agricultural services and processing, advanced technology applications, and recreation and tourism.
The Washington Institute for Public Policy is directed to contract with Washington State University for a study of the impact of the state's dependence on the military economy and to investigate the state's role in the diversification of the state economy. $40,000 is provided for this study.
SUMMARY OF PROPOSED SENATE AMENDMENT:
The committee amendment is a striking amendment. $1.8 million is appropriated to the Department of Trade and Economic Development for purposes of diversifying the Tri-Cities economy and mitigating the effects of the loss of jobs in the region.
$75,000 is allocated for a project manager to begin implementing the priority goals of the Tri-Cities diversification study. $90,000 is for administrative costs, impact assessment, coordination of multi-agency efforts, and acting as liaison to address financing needs. The department is directed to develop a technology transfer program. A report to the Legislature on progress under the act is due December 31, 1988.
$810,000 is to subcontracted out to local organizations, institutions, or agencies to: (a) conduct an import substitution program; (b) operate a business and job retention program; (c) implement a marketing training program; (d) facilitate the development and operation of small business incubators; (e) operate an investment opportunities office; and (f) provide business assistance.
$205,000 is to be used to establish a Tri-Cities agribusiness development program and evaluate the potential of the local wine industry. These funds may be used for a faculty member to teach, conduct research in agribusiness, and provide technical assistance to local growers and processors.
$50,000 is for a study on the feasibility of using heat generated by existing nuclear facilities for commercial applications.
$370,000 is to provide training, retraining, and a variety of services to the unemployed. To the extent these funds are not needed by the Employment Security Department to match federal training moneys, they shall be made available to local organizations, governments, businesses or institutions to further training and retraining services and provide unemployment support services.
$200,000 is to be distributed through the local development matching fund in the Department of Community Development. These funds are for local projects or studies directed toward the diversification of the Tri-Cities economy.
There is an expiration date of July 1, 1990. An emergency clause is added.
Appropriation:
Revenue:
Fiscal Note: available
Senate Committee - Testified: Representative Jesernig, sponsor; Dennis Matson, DTED; Chuck Clark, DCD