SENATE BILL REPORT

SB 6766

BYSenator Lee

Creating the Washington state economic diversification council.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 1, 1990

Senate Staff:Patrick Woods (786-7430)

AS OF JANUARY 30, 1990

BACKGROUND:

During the last decade some of the state's rural counties experienced economic decline that was disproportionately severe compared to conditions in the urban counties of the central Puget Sound region.  Twenty-two of the state's 39 counties, all of which are rural, are "distressed" as defined under several state programs.  In contrast, the Puget Sound and Vancouver regions have experienced dramatic growth resulting in traffic congestion, urban sprawl, housing shortages and other adverse impacts on the quality of life.  It is estimated that nonfarm employment in the Puget Sound and Vancouver areas has increased during the 1980-88 period by 26 percent as opposed to a 6.6 percent growth in the rest of the state.

The reasons for the economic disparity within the state are complex and varied.  However, the dependence of rural regions on agriculture, timber, fishing and other resource based industries, along with the cyclical markets of the majority of these products during the 1980's is considered to be a major factor driving this phenomenon.  In contrast, a boom in the aerospace, high technology and service industries in the Puget Sound region has fueled the consistent upsurge in the economy.

Some urban communities have developed partnerships with rural areas to transfer out business growth in order to insure consistent quality of life.

SUMMARY:

The Washington State Economic Diversification Council is established to promote the dispersal and diversification of economic activity throughout the state.

Council members are appointed by the Governor.  They include:  the Directors of the Department of Trade and Economic Development, the Department of Community Development, the Department of Ecology and the Department of Natural Resources, the Commissioner of Employment Security, the Secretary of the Department of Transportation, three members from growing urban communities, three members from distressed communities, and one public member.

The council will be staffed by the Department of Community Development and is to develop policies to promote economic diversity and dispersal of economic growth between the state's growing urban communities and its distressed areas, and assist the Department of Community Development in implementing the Washington State Economic Diversification Project.

The Washington State Economic Diversification Project is established within the Department of Community Development to support the development and implementation of local economic diversification strategies.  These strategies may include plans to address growth problems and opportunities, and to encourage partnerships and the distribution of economic opportunities between high growth areas and distressed communities.

Communities apply to the department for participation in the project.  Joint applications from several communities are encouraged.  Applications must include generally a description of the applicant communities, including their need for and capacity to participate in the project, and a description of their project and their anticipated role in it.

In deciding which applications to accept, the department will consider the degree of growth and distress in the applicant communities, community initiative, the degree to which state assistance is required and the potential impact of the project in the applicant communities.  The department will oversee and assist the selected communities, and evaluate the results.

Appropriation:  $400,000

Revenue:   none

Fiscal Note:    requested