FINAL BILL REPORT

SHB 2706

PARTIAL VETO

                                  C 278 L 90

BYHouse Committee on Trade & Economic Development (originally sponsored by Representatives Locke, Cantwell, Prince, Spanel, Wineberry, Betrozoff, Cooper, Basich, Raiter, Miller, Rector, Rasmussen, Moyer, Youngsman, G. Fisher, Prentice, Kremen, Nelson, Anderson, Valle, P. King, R. King, Ferguson, O'Brien, Jacobsen, Phillips, Pruitt, Wang, Silver, Brekke, Belcher and Sprenkle)

Promoting economic diversification for defense-dependent industries and communities.

House Committe on Trade & Economic Development

Rereferred House Committee on Appropriations

Senate Committee on Economic Development & Labor

SYNOPSIS AS ENACTED

BACKGROUND:

Washington state's economy is impacted by a wide range of defense-related expenditures. These include Army, Navy, and Air Force facilities, nuclear weapons production, defense research and development, and production contracts.

In 1988, the Legislature required the Institute for Public Policy to study the impacts of military expenditures.  This study, released in 1989, found that in 1987, Washington State ranked 12th in the nation in per capita defense spending.  Expenditures on payrolls and procurement in Washington represented about 6 percent of the gross state product, or $5.8 billion in 1982 dollars. These expenditures generated an estimated 153,000 civilian jobs or 7.3 percent of the state's civilian labor force.

SUMMARY:

The Department of Community Development, with the advice of an advisory council on economic diversification, is required to assist defense-dependent firms and communities in planning responses to cuts in federal defense spending.

The Community Diversification Program is created in the Department of Community Development.  As part of the program, the department is required to fulfill the following duties:  monitor and forecast shifts in defense spending and the impacts of these shifts on major defense employers in the state; identify cities, counties and regions of the state and firms that are dependent on federal defense contracts; provide assistance to communities in broadening their economic base; formulate a state plan for diversification in defense dependent communities in collaboration with the Employment Security Department, the Department of Trade and Economic Development and the Office of Financial Management; and identify diversification efforts being conducted by other states, the federal government and other nations.

The department is required to make an annual report to the governor and the Legislature on the activities of the Community Diversification Program.

The Advisory Council on Economic Diversification is created.  The council consists of 15 voting members; 11 council members are appointed by the governor and the remaining four members are legislators.  The director of the Department of Community Development or the director's designee serves as the non-voting chair of the advisory council.

The Community Diversification Program and the Advisory Council on Economic Diversification are set to terminate under the Sunset Act in 1996.

VOTES ON FINAL PASSAGE:

      House 65  30

      Senate    41     0 (Senate amended)

      House 80  14 (House concurred)

EFFECTIVE:June 7, 1990

Partial Veto Summary:  The section is vetoed that establishes an advisory committee to assist the Department of Community Development in carrying out the charges of this act.  (See VETO MESSAGE)