AN ACT Relating to economic diversification in the Tri-Cities region; creating new sections; making appropriations; providing an expiration date; and declaring an emergency.

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

NEW SECTION. Sec. 1. The legislature finds that:

(1) Cutbacks in federal funds and programs to the Tri-Cities pose a substantial threat to the region and the state with massive lay-offs, loss of personal income, and declines in state revenues;

(2) The Tri-Cities is of critical significance to the state because of its leading role in the nuclear industry and its concentration of excellent scientists and engineers. Because of the presence of this highly trained workforce, this region requires a special state effort to diversify the local economy;

(3) There are key opportunities to broaden the economic base in the Tri-Cities including agriculture, high-technology, tourism, and regional exports; and

(4) A coordinated state, local, and private sector effort offers the greatest potential to promote economic diversification and to provide support for new projects within the region.

NEW SECTION. Sec. 2. The department of trade and economic development shall begin implementation of the priority goals established by the Tri-Cities diversification study conducted under chapter 501, Laws of 1987, as follows:

(1) To retain and expand existing businesses and industries within the region;

(2) To attract businesses and industries to the region that will provide new jobs;

(3) To encourage the formation of new businesses and industries in the region; and

(4) To assist in the development of a regional infrastructure favorable to economic diversification.

In evaluating these goals, the department, in conjunction with a Tri-Cities advisory committee, shall determine which objectives of these priority goals are most likely to lead to economic diversification. Consideration shall be given to potential jobs and income benefits, generation of additional fiscal support, increased private sector participation, and market forces supporting the proposed objectives. The department shall consider such additional studies and governmental agencies which could support the priority goals determined under this section.

NEW SECTION. Sec. 3. The department of trade and economic development shall:

(1) Designate a project manager within the department to facilitate the department's activities within the Tri-Cities region. This position shall be located in the Tri-Cities region. The manager's responsibilities shall include but not be limited to:

(a) Seeking to increase the use of existing state economic development programs in the Tri-Cities region;

(b) Helping to locate additional funds to be used for diversification activities;

(d) Coordinating evaluation of state diversification in the region;

(e) Seeking to increase the effectiveness of existing efforts to incubate new enterprises in the Tri-Cities region and to increase the resources devoted to the incubation of new enterprises;

(f) Facilitating technology transfer from the research base in the region to local businesses, including efforts to increase: The availability and accessibility of venture capital in the Tri-Cities region, especially for the early stages of enterprise development and for the expansion of existing enterprises, the accessibility of legal expertise, especially in regard to licenses and patents, and the identification of and assistance to entrepreneurs with expertise in managing new product development; and

(g) Increasing the availability and coordination of resources devoted to the expansion, development, and modernization of enterprises in existing promising growth areas of the Tri-Cities regional economy such as the industrial applications of advanced technology and recreational development.

(2) Develop and administer a Tri-Cities economic diversification feasibility fund. Under this program, money shall be made available to study the feasibility of various options for diversification of the economy of the Tri-Cities region. Such money shall be made available as follows:

(a) Local governments or local nonprofit community organizations with an economic development focus shall be eligible for the money. Any local government or entity requesting money must demonstrate the participation for the purposes of the study of a cross-section of the affected local communities, including business, labor, education and training, and the public sector.

(b) A maximum of fifty thousand dollars shall be made available for each study.

(d) Priority in availability of money shall be given to:

(i) Projects which broaden the base of the economy of the Tri-Cities region;

(ii) Projects which are likely in the long-term to result in the creation of family-wage employment;

(iii) Projects which build on the existing strengths of the Tri-Cities regional economy in agriculture and agricultural services, industrial applications of advanced technology, recreational development; and

(iv) Projects which involve the commercialization of research conducted in the Tri-Cities region into saleable products and which strengthen the process of technology transfer.

(e) Each study shall include, but not be limited to:

(i) The costs and potential benefits of the economic diversification proposal;

(ii) The likelihood of success of the proposal;

(iii) The availability of additional financial support from the private sector, local government, or the federal government; and

(iv) Viable long-term private sector markets for the goods or services which are the subject of the study.

(3) Develop and administer a Tri-Cities economic diversification grant program. Under this program, money shall be made available as grants for economic development projects within the Tri-Cities region. Such money shall be made available as follows:

(a) Local governments or local associate development organizations shall be eligible for the money. Any local government or associate development organization requesting money must demonstrate the participation, for the purposes of the projects, of a cross- section of the affected local communities, including business, labor, education and training, and the public sector.

(b) Projects must contribute to the diversification of the economy of the Tri-Cities region or to relieving economic dislocation and distress in the Tri-Cities region resulting from the sudden and severe loss of local sources of employment.

(c) Projects should contribute to job creation in the Tri-Cities region, and may include, but not be limited to: Training or retraining services; programs to promote entrepreneurial development; the incubation of new businesses in the Tri-Cities region; short-term job creation; projects which build on the existing strengths of the Tri-Cities regional economy in agriculture and agricultural services, industrial applications of advanced technology, and recreational development.

(d) No project may receive more than one grant from the grant program under this subsection.

(e) The department of trade and economic development shall consult with the department of community development and with the Tri-Cities economic diversification study advisory committee in prioritizing and providing money under the grant program.

(4) Conduct 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 as appropriate, existing studies on district heating and on other warm water uses. Any state appropriation for this study is contingent upon and shall be no more than one-third of the federal funds provided for this study and shall not exceed fifty thousand dollars.

NEW SECTION. Sec. 4. (1) The sum of one hundred thousand dollars, or so much thereof as may be necessary, is appropriated from the general fund for the biennium ending June 30, 1989, to the department of trade and economic development for the purposes of section 3(2) of this act.

(2) The sum of four hundred thousand dollars, or so much thereof as may be necessary, is appropriated from the general fund for the biennium ending June 30, 1989, to the department of trade and economic development for the purposes of section 3(3) of this act.

(3) The sum of fifty thousand dollars, or so much thereof as may be necessary, is appropriated from the general fund for the biennium ending June 30, 1989, to the department of trade and economic development for the purposes of section 3(4) of this act.

(4) The sum of seventy-five thousand dollars, or so much thereof as may be necessary, is appropriated from the general fund for the biennium ending June 30, 1989, to the department of trade and economic development for the project manager under section 3(1) of this act.

NEW SECTION. Sec. 5. The sum of two hundred thousand dollars, or so much thereof as may be necessary, is appropriated from the general fund for the biennium ending June 30, 1989, to the department of trade and economic development to promote the economic development and industrial diversification of the Tri-Cities area. The department shall contract with the Tri-Cities industrial development corporation (TRIDEC) for this work. The contract may include, but is not limited to, provisions requiring TRIDEC to: (a) work to attract new businesses to the area, (b) work to promote the development of new businesses in the area, (c) survey area businesses to gather information about business needs and to identify firms at risk of mass layoffs, shut down, or relocation, (d) coordinate the provision of state, local and federal to firms at risk of mass layoff, shut down or relocation, (e) coordinate the provision of marketing assistance to area businesses, and (f) promote local purchase of goods and services now purchased outside the area.

NEW SECTION. Sec. 6. The department of agriculture in conjunction with Washington State University shall:

(1) Establish a Tri-Cities agribusiness development program in cooperation with the IMPACT program, the Tri-Cities industrial development council, and the agricultural extension program of Washington State University. In establishing this program, the department shall designate a program manager from within the department to facilitate the department's activities within the Tri-Cities region. This position shall be located in the Tri-Cities region. The manager's responsibilities shall include but not be limited to:

(a) Seeking to increase the utilization of existing federal, state, and local programs for agricultural development, diversification, marketing, and processing in the Tri-Cities region;

(b) Seeking to increase the coordination and effectiveness of existing federal, state, and local programs for agricultural development, diversification, marketing, and processing in the Tri-Cities region; and

(c) Undertaking efforts to promote and further the existing strengths of the Tri-Cities region in value-added agricultural processing, agricultural services, specialty agriculture, and agricultural diversification.

(2) Evaluate the means for increasing the value of the wine industry to the Tri-Cities and for the region to become a principal center for the wine industry.

NEW SECTION. Sec. 7. The sum of seventy-five thousand dollars, or so much thereof as may be necessary, is appropriated from the general fund for the biennium ending June 30, 1989, to the department of agriculture for the purposes of section 6 of this act.

NEW SECTION. Sec. 8. (1) The department of trade and economic development, in conjunction with Washington State University, and in consultation with other four-year institutions of higher education and private sector laboratories, shall establish a program to facilitate the transfer of technology from the substantial research base in the region to local businesses. In all efforts, the department shall seek to protect the rights and confidentiality of those involved in high-technology research.

(2) The department shall designate responsible parties and develop methods to establish a network for technology transfer in the Tri-Cities. Specific support programs shall be established to increase the availability of seed capital and build necessary business and management skills to advance technology transfer in the Tri-Cities region.

NEW SECTION. Sec. 9. The employment security department shall provide enhanced retraining and job search assistance in the Tri-Cities region to dislocated workers as defined in RCW 50.04.075. Training and retraining assistance shall be designed to contribute to the diversification of the economy of the Tri-Cities region or to relieving economic dislocation and distress in the Tri-Cities region resulting from the sudden and severe loss of local sources of employment. The department shall work in conjunction with the Tri-Cities university center, local community colleges, local vocational-technical institutes, and other local educational institutions in designing and providing such services. The department shall consult and work in conjunction with local businesses, local labor organizations, local associate development organizations, local private industry councils and local government to determine the demand for labor and to identify the employment skills required for employment in the private and public sectors in the Tri-Cities region. In establishing training and retraining programs under this act, and in planning regarding areas of skills training, the department shall also consult and work in conjunction with those groups involved in efforts to attract new business ventures to the Tri-Cities region and in efforts to assist in the formation of new enterprises in the Tri-Cities region, including the Tri-Cities economic diversification study advisory committee. The department shall coordinate the training and retraining assistance efforts in the Tri-Cities region with all appropriate existing programs within the department, with special emphasis on the active use of data and analytical services available in the department regarding labor markets in the state. The employment security department shall also coordinate its training and retraining activities in the Tri-Cities region with the department of trade and economic development, the department of community development, the state economic development board, and the board for vocational education, and with other state departments and programs as appropriate. Training and retraining assistance provided by the employment security department under this act shall be focused in the following areas:

(1) Entrepreneurial development and training;

(2) Short-term job creation;

(3) The incubation of new business enterprises;

(4) Agriculture, agricultural processing, and agricultural services;

(5) The industrial applications of advanced technology;

(6) Recreational and tourism development; and

(7) Hazardous materials clean-up.

NEW SECTION. Sec. 10. The sum of five hundred thousand dollars, or so much thereof as may be necessary, is appropriated from the general fund for the biennium ending June 30, 1989, to the employment security department for the purposes of section 9 of this act.

NEW SECTION. Sec. 11. The sum of two hundred fifty thousand dollars, or so much thereof as may be necessary, is appropriated from the general fund for the biennium ending June 30, 1989, to Washington State University for the following purposes:

(1) Seventy-five thousand dollars shall be used for one faculty member to research and teach at the Tri-Cities university center in the field of business development, new enterprise development, and the transfer of new technologies to commercial applications.

(2) Seventy-five thousand dollars shall be used for one faculty member to research and teach at the Tri-Cities university center in the field of agribusiness and agricultural services development.

(3) One hundred thousand dollars shall be used for faculty and equipment for wine industry research at the Tri-Cities university center.

NEW SECTION. Sec. 12. The sum of one hundred twenty-five thousand dollars, or so much thereof as may be necessary, is appropriated from the general fund for the biennium ending June 30, 1989, to the department of trade and economic development for the following purposes:

(1) Seventy-five thousand dollars shall be used for staff for the small business development center serving the Tri-Cities region to provide assistance to small businesses and persons considering forming small businesses.

(2) Fifty thousand dollars shall be used by the small business development center serving the Tri-Cities region for contracts for the provision of specialized technical and managerial assistance in fields that promote the existing strengths of the region in such areas as agricultural services and processing, the industrial applications of advanced technology, and recreation and tourism.

NEW SECTION. Sec. 13. The department shall report back to the legislature by December 31, 1988, on the success of activities under sections 1 through 12 of this act.

NEW SECTION. Sec. 14. (1) The Washington institute for public policy shall initiate a study to investigate the impact of the state's dependence on the military economy and to investigate the state's role in the diversification of the state's economy.

(2) The study shall focus on:

(a) Methods of utilizing the assets of military-dependent companies and their workforce to diversify such companies. The study shall examine alternative production technologies and occupations which could easily be converted from military use such as light rail mass transit, alternative energy, low-cost housing, and new product development.

(b) Potential markets for new nonmilitary technologies and products.

(c) Retraining and reemployment opportunities for the highly skilled work force now engaged in military production throughout the state.

(d) The development of a plan to diversify the industrial base of the state's economy.

(3) The following shall provide whatever assistance is needed in the completion of the study: The department of employment security, the department of trade and economic development, and the state economic development board.

(4) The institute shall submit a final report to the legislature no later than January 1, 1989.

(5) The institute may solicit from public or private sources any funds needed, in addition to appropriated funds, to complete the study.

NEW SECTION. Sec. 15. The sum of forty thousand dollars, or so much thereof as may be necessary, is appropriated for the biennium ending June 30, 1989, from the general fund to the Washington institute for public policy for the purposes of section 14 of this act. The institute shall contract with Washington State University for the study.

NEW SECTION. Sec. 16. This act shall expire June 30, 1989.

NEW SECTION. Sec. 17. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 18. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect immediately.