HOUSE BILL REPORT

EHB 1423

BYRepresentatives Day, Cantwell, Wineberry, Schoon, Rasmussen, Doty, Kremen, McLean, Rayburn, Jesernig, Ferguson, Jacobsen, Rector and P. King 

House Committe on Trade & Economic Development

Majority Report:  Do pass as amended. (12)

      Signed by Representatives Cantwell, Chair; Wineberry, Vice Chair; Doty, Ranking Republican Member, Kirby, Kremen, Moyer, Raiter, Rasmussen, Rector, Schoon, Tate and Youngsman.

House Staff:Paul Leistner (786-7663)

AS REPORTED BY COMMITTEE ON TRADE & ECONOMIC DEVELOPMENT

FEBRUARY 2, 1990

BACKGROUND:

The availability of seed and start-up capital is critical for companies to commercialize new products and for the creation of new business enterprises by entrepreneurs.  Many financial institutions, however, are reluctant to provide start-up financing because the start-ups do not meet the financial institution's basic underwriting criteria.  Most business start-ups are undercapitalized, have an insufficient cash flow, and lack sufficient collateral. Although United States Small Business Administration loan guarantees are available for business start-ups, many entrepreneurs cannot meet the requirements associated with the federal loan programs.

It is suggested that the establishment of seed capital pools at the local level may enable new enterprises to be successfully created and help finance new product development.

BACKGROUND:

Port districts, by statute, may only expend funds for promotional hosting from gross operating revenues.  Funds spent on promotional hosting may not exceed the following percentages of gross operating revenues:  (1)  1.00 percent of the first $2,500,000; (2) 0.50 percent of the next $2,500,000; and (3) 0.25 percent of the funds over $5 million.

All ports are allowed to spend up to $2,500 for promotional hosting, even if their gross revenues are less than $250,000.

There are two port districts in Washington State that serve as associate development organizations (ADOs):  Walla Walla and Clarkston.

SUMMARY:

A port district that has been designated as an Associate Development Organization (ADO) by the state Department of Trade and Economic Development is allowed to spent up to $5,000 on promotional hosting from any funds available to the port, even if the port's gross revenues are less than $500,000.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Scott Taylor, Assistant Director, Washington Ports Association.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    The Port of Clarkston wants to be able to spend more than $2,500 on hosting.  The Port of Walla Walla, with the addition of the airport, may now have gross operating levels that exceed $250,000 freeing that port from the $2,500 limit on hosting expenditures.

House Committee - Testimony Against:      None.