AN ACT Relating to business and job retention; amending RCW 43.63A.230; adding a new chapter to Title 43 RCW; adding a new section to chapter 42.17 RCW; and adding a new section to chapter 50.13 RCW.

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

NEW SECTION. Sec. 1. The legislature finds that the Washington state economy has suffered because of plant closures, mass layoffs, and business failures. As a result, there have been substantial increases in state expenditures for unemployment compensation and public assistance, significant decreases in the state taxes paid by workers and businesses, and increases in the costs of a wide range of social and health programs associated with increased economic dislocation and unemployment.

The legislature further finds that the state has a substantial and continuing interest in assisting firms in the state to adjust to changing economic conditions and that many plant closures, mass layoffs, and business closures are avoidable if early assistance is available to firms at risk of closure. The legislature further finds that the state has a substantial and continuing interest in assisting firms to diversify their markets so as to respond to changes in federal priorities. The provision of assistance requires early identification of firms at risk of closure, consistent with the need for confidentiality and development of capacity by local communities to identify firms at risk and to provide initial assistance. The involvement of local communities, with the participation of local government, business, labor, education, and other groups, is the most effective guarantee that assistance will be locally accountable and sensitive to the different needs of the diverse communities in the state. In cases of unavoidable plant closures, mass layoffs, and business failures, timely assistance to dislocated workers and communities can reduce the human and economic costs of economic change.

It is the purpose of this chapter to establish a state-wide program of business and job retention. The program shall include the capacity to identify firms at risk of closure, mass layoff, or business failure and to provide assistance to such firms in a timely manner; the provision of assistance, training and funding to locally based business and job retention efforts to assist businesses which are likely to close, fail, or experience a permanent mass layoff; enhanced capacity to respond rapidly in cases of unavoidable plant closure or business failure; the development of better relationships and closer cooperation between management and labor in the state; and the development of a greater understanding of the economic problems of industries and regions which contribute to business failures.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter:

(1) "Department" means the department of trade and economic development.

(2) "Director" means the director of trade and economic development.

NEW SECTION. Sec. 3. The business and job retention advisory committee is established within the department. The governor shall appoint eight people to an advisory committee within thirty days of the effective date of this act. The governor shall designate which member shall serve as the chair of the advisory committee. The committee shall include four representatives from business and four representatives from labor. At least one representative from business and at least one representative from labor shall reside from east of the Cascade mountains. No more than two representatives from business and no more than two representatives from labor may work for an employer with more than five hundred employees. The directors, or their designees, of the departments of trade and economic development, community development, revenue, financial management, and employment security shall serve as ex officio members. The president of the senate shall appoint a senator from each of the major caucuses to serve as ex officio members of the advisory committee. The speaker of the house of representatives shall appoint a representative from each of the major caucuses to serve as ex officio members of the advisory committee. The ex officio members of the advisory committee shall serve as nonvoting members. Staff assistance shall be provided to the committee by the department. Advisory committee members shall be reimbursed for travel expenses in accordance with RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 4. (1) There is established within the department a business and job retention program. The program shall be a combined effort of the department, the employment security department, the department of community development, the department of revenue, and the office of financial management. Each agency shall provide staff to the program as expertise is needed.

(2) The program shall be responsible for the development and management of activities for the following purposes:

(a) Identification of firms at risk of closure, mass layoff, or business failure and assistance to those firms in a timely manner;

(b) Assistance, training, and funding to locally based business and job retention efforts to assist businesses which are likely to close, fail, or experience a permanent mass layoff;

(d) Development of better relationships and closer cooperation between management and labor in the state; and

(e) Development of a greater understanding of the economic problems of industries and regions which contribute to business failures.

(3) The department shall establish a retention services program within the business and job retention program. The program shall provide technical assistance to firms and workforces in which there is a risk of plant closure, mass layoff, or business failure. This technical assistance shall include turn-around assistance to firms at risk of closure to identify management activities and other actions, including diversification, which would permit continued operation. It shall be the departmental policy in providing assistance to increase the cooperation of management and labor to increase the viability of firms at risk of closure. The department may contract for specialized services to provide turn-around assistance to firms at risk of closure.

(4) The department shall establish an early warning program within the business and job retention program. The program shall obtain information currently available within state agencies to identify firms and industrial facilities at risk of closure, consistent with the confidentiality requirements of chapter 50.13 RCW. The program shall work with business organizations, labor organizations, educational institutions, nonprofit organizations, and others to develop and implement means to identify firms at risk of closure on a state-wide basis, consistent with confidentiality requirements. The department shall establish a business and job retention labor liaison to identify firms at risk of closure, to provide labor with business and job retention services, to assist efforts in the formation and operation of employee-owned businesses, and to identify opportunities for increased labor-management cooperation. This responsibility is in addition to any activity undertaken by the employment security department. The department may contract to provide such services.

(5) The department shall develop model local business surveys and assist local business and job retention efforts in the use of the surveys. Surveys shall be designed to gather information from businesses, workforces, financial institutions, governmental agencies, community organizations, and other groups which would contribute to identifying firms at risk of closure and identifying the potential for long-term job retention and expansion. The surveys will gather information about business needs, expansion plans, relocation decisions, training needs, potential layoffs, financing needs, the availability of financing, and other appropriate information.

(6) The business and job retention program shall identify research activities that would enhance the capacity of the state to identify firms and industrial facilities at risk of closure and to provide assistance to permit continued operation. A report describing such activities shall be provided to the trade and economic development and appropriation committees of the house of representatives and the economic development and labor and ways and means committees of the senate by December 1, 1989.

NEW SECTION. Sec. 5. The department of trade and economic development, in consultation with the advisory committee established under section 3 of this act, shall provide funds to study the feasibility of various options for continuing or renewing the operation of industrial facilities which are threatened with closure or which have already closed. Funding shall be made available as follows:

(1) Local governments, ports, local associate development organizations, local labor organizations, or local nonprofit community organizations shall be eligible for funds.

(2) The department may require that money be matched at least dollar for dollar with nonstate money.

(3) No more than thirty-five thousand dollars of state money shall be made available for each study.

(4) Only one study may be funded for each industrial facility.

(5) Priority in availability of funds shall be given to:

(a) Closures, mass layoffs, or relocations out-of-state, affecting large numbers of employees;

(b) Employee buyouts; and

(6) In providing funding for studies, the department shall also consider:

(a) The severity of problems affecting the business or workforce; and

(b) The extent and severity of the social and economic costs of the closure, mass layoff, or relocation.

NEW SECTION. Sec. 6. (1) With the approval of the advisory committee created in section 3 of this act, the director shall select, in response to proposals, local development organizations to undertake local business and job retention activities. Such activities shall include:

(a) The identification of local firms at risk of closure, mass layoff, or relocation out-of-state through the administration of local business surveys and through other appropriate methods;

(b) Initial assessments of firms or workforces to determine their viability and identify problems, and initial assessments of workforces to determine skill levels; and

(c) The provision of appropriate marketing, technical, managerial, regulatory, and training assistance to client businesses, unions, and workforces. Such assistance may include training in labor-management cooperation.

(2) Organizations shall be selected to receive contracts according to the following criteria:

(a) The local ability to implement a system to identify and assist firms at risk of closure, mass layoff, and relocation out-of-state;

(b) The ability to build a partnership of labor and management;

(d) Geographic balance; and

(e) The ability to work effectively with local organizations and affected parties.

(3) Organizations eligible to undertake these activities include associate development organizations, local governments, port districts, local labor organizations, local educational institutions, community-based organizations, nonprofit organizations, and local private industry councils.

(4) The department shall be responsible for the development and implementation of training programs for local organizations that receive contracts under this section and for other community participants. The training programs shall be designed to assist local efforts to identify firms at risk of closure, mass layoff, or relocation out-of-state through the use of local business surveys and other appropriate methods, to perform initial assessments of firms to identify problems, and to assess the need for outside resources. The training programs may also include the identification of additional public and private resources needed to assist firms and workers, and the skills necessary to identify and provide appropriate technical assistance.

NEW SECTION. Sec. 7. The business and job retention advisory committee shall work jointly with any labor-management cooperation program which is established at the state or local level in order to achieve the intent of this act.

NEW SECTION. Sec. 8. (1) The department of community development shall use its existing programs, including the employee ownership program, the community revitalization team, the local development matching fund, the community development finance program and the development loan fund, for the business and job retention program.

(2) The department of revenue shall ensure that taxpayers eligible for assistance under the business and job retention program receive information concerning the availability of services under the program.

(3) The employment security department shall analyze trends in the state's industries and workforces for the business and job retention program. The department shall draw upon its existing resources and work with the department of trade and economic development, the office of financial management and other relevant state agencies in performing these tasks. The department may contract for activities contributing to complete these tasks. The department shall make the analyses available to relevant businesses, labor organizations or workforces, local governments, and economic development organizations. The employment security department shall also work with the department of social and health services to track dislocated workers who exhaust their unemployment compensation benefits and begin collecting public assistance.

(4) The state board for community college education and the superintendent of public instruction shall provide coordination between the business and job retention program and the educational institutions providing the necessary academic, occupational and basic skills programs that are designed to train, upgrade, and retrain employees. These two state agencies will assist the business and job retention program in expanding partnerships between local educational institutions and the businesses and other employer groups who can benefit from the instructional programs and activities.

NEW SECTION. Sec. 9. The director shall publish an annual report which shall be made available to the house appropriations, trade and economic development, and commerce and labor committees, and the senate ways and means and economic development and labor committees. The report shall be issued in conjunction with the annual state economic report prepared by the department of employment security. The report shall include a description of the progress of the program and the following:

(1) The number of businesses, labor unions, employee groups, local governments, and port districts assisted under this chapter;

(2) The types of assistance provided; and

(3) The number of businesses and jobs retained through assistance rendered under this chapter.

The information shall be reported by county, standard industrial classification, and size of firm.

NEW SECTION. Sec. 10. The department of trade and economic development shall incorporate provisions to ensure that confidentiality will be maintained over any financial or proprietary information into each contract entered into pursuant to this act.

Sec. 11. Section 15, chapter 457, Laws of 1987 and RCW 43.63A.230 are each amended to read as follows:

(1) The department of community development shall integrate an employee ownership program within its existing technical assistance programs. The employee ownership program shall provide technical assistance to cooperatives authorized under chapter 23.78 RCW and conduct educational programs on employee ownership and self-management. The department shall include information on the option of employee ownership wherever appropriate in its various programs.

(2) The director of the department shall form an employee ownership advisory panel to assist in the development of the employee ownership program. The panel shall consist of representatives of educational institutions; local, regional, and national cooperative and employee-ownership organizations; employee-owned cooperatives; firms with employee stock ownership plans; and associate development organizations.

(3) The department shall maintain a list of firms and individuals with expertise in the field of employee ownership and utilize such firms and individuals, as appropriate, in delivering and coordinating the delivery of technical, managerial, and educational services. In addition, the department shall work with and rely on the services of the department of trade and economic development, the employment security department, and state institutions of higher education to promote employee ownership.

(4) The department shall report to the governor, the trade and economic development committee of the house of representatives, the commerce and labor committee of the senate, and the ways and means committees of each house by December 1 of 1988, and each year thereafter, on the accomplishments of the employee-ownership program. Such reports shall include the number and types of firms assisted, the number of jobs created by such firms, the types of services, the number of workshops presented, the number of employees trained, and the results of client satisfaction surveys distributed to those using the services of the program.

(5) For purposes of this section, an employee stock ownership plan qualifies as a cooperative if at least fifty percent, plus one share, of its voting shares of stock are voted on a one-person-one-vote basis.

(6) The department, in consultation with the employee ownership advisory panel, shall fund training for labor and management in cases of employee ownership buyouts to retain employment in the state. The department may require that money be matched at least dollar-for-dollar with nonstate money. No more than ten thousand dollars of state money shall be made available to any one employee-owned firm. Priority in availability of funds shall be given to:

(a) Employee-owned firms with large numbers of employees;

(b) Employee-owned firms which play a major role in the economy of communities located in distressed areas as defined in RCW 43.165.010.

NEW SECTION. Sec. 12. A new section is added to chapter 42.17 RCW to read as follows:

Notwithstanding the provisions of RCW 42.17.260 through 42.17.340, no financial or proprietary information supplied by businesses to the department of trade and economic development may be made available to the public.

NEW SECTION. Sec. 13. A new section is added to chapter 50.13 RCW to read as follows:

(1) If information provided to the department by another governmental agency is confidential by state or federal law, the department shall enter into an agreement with the other agency that provides that the department will keep the information confidential.

(2) The department may hold private or confidential information obtained for statistical analysis, research, or study purposes if the information was supplied voluntarily, conditioned upon maintaining confidentiality of the information.

(3) Persons requesting disclosure of information held by the department under subsection (1) of this section shall request such disclosure from the providing agency rather than from the department.

NEW SECTION. Sec. 14. Sections 1 through 10 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 15. 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.