ENGROSSED SUBSTITUTE HOUSE BILL NO. 2137


                                            AS AMENDED BY FREE CONFERENCE COMMITTEE.


                                                                          C 423 L 89 PV



State of Washington                               51st Legislature                              1989 Regular Session


By House Committee on Trade & Economic Development (originally sponsored by Representatives Cantwell, Moyer, Rasmussen and Walk)



Read first time 3/1/89 and referred to Committee on Appropriations.



AN ACT Relating to targeted sectors for economic development; and adding new sections to chapter 43.31 RCW.




          NEW SECTION.  Sec. 1.     (1) The legislature finds that the future health of certain sectors of Washington state's economy is at risk in the face of increasing global competition.  The service and aerospace industries have responded well to this increasing global competition.  However, certain traditional industries, such as forest products and agriculture, have experienced some decline. Significant public and private resources are being directed toward restoring the vitality of these industries.

          (2) The legislature finds that, in addition to these industries, there are a number of emerging sectors in the state economy which offer real promise.  These include biotechnology and food processing.  In the next decade, these emerging sectors can be among the state's strongest, most stable sectors able to successfully compete in the global market.  It is the purpose of sections 1 through 6 of this act to help these emerging sectors by encouraging a broader base and support for their development.  It is also the purpose of this act to ensure that more specific direction is given to the department in developing its programs and that the impact of resources the department directs toward targeted sectors is better measured.

          (3) The legislature also finds that the state must work in partnership with the private sector to enhance economic development, whether restoring the vitality of declining industries or developing new industries with good economic potential.  In order for the public and private efforts to be most successful, the state, particularly the department, must clearly articulate:  (a) Its goals and objectives; (b) its appraisal of the sector that led to the goals and objectives; (c) its choice of strategy for achieving the goals and objectives; (d) its implementation plans and timetables; and (e) its evaluation criteria and process.  The department must work with the private sector and the legislature in the analysis, the setting of goals, the choice of strategy, and the evaluation process so that all parties have input into and understand how the problem is being defined and how the problem is being solved.


          NEW SECTION.  Sec. 2.     (1) The department shall establish targeted sector programs in the areas of biotechnology and food processing.  The purpose of these programs shall be to analyze the current state of the targeted sector and develop an action plan and program for each targeted sector to increase the sales of products from these sectors nationally and internationally.  The department shall also develop an evaluation process to measure the effectiveness of the targeted sector programs.  The targeted sector programs are intended to significantly increase the jobs and capital investment in these sectors through a well-conceived and implemented marketing plan.

          (2) A targeted sector program within the department shall:

          (a) Administer the targeted sector programs established in subsection (1) of this section;

          (b) Work with the advisory committee and subcommittees created in section 4 of this act to appraise each targeted sector, develop alternatives to assist in the development of the sector, choose a strategy for assisting the targeted sector, and evaluate the strategy and its implementation for effectiveness; and

          (c) Work with other state agencies, local governments, and the private sector.


          NEW SECTION.  Sec. 3.     (1) The department may contract with public or private organizations, such as the international marketing program for agricultural products and trade or the northwest policy center, to appraise the targeted sector to determine the current state of the sector prior to the department undertaking program development or marketing under section 2 of this act.  In making this appraisal, the department shall consider, but shall not be limited to, the following:  (a) The strengths and weaknesses of the sector; (b) the opportunities and risks in the sector; (c) any emerging products, processes, and market niches in the sector; (d) the commercialization of technology related to the sector; (e) the availability of capital in the sector; (f) the education and training needs in the sector; (g) the infrastructure development in the sector; (h) the number of employees and businesses in the sector; and (i) the role the state should play in the long-term development of the sector.

          (2) The department shall base its marketing strategy and action plan for each targeted sector on the appraisal of the sector under subsection (1) of this section.  Where needs are identified in the appraisal of the sector but are beyond the scope of the department's program or ability to accomplish without additional resources, the department shall provide clear recommendations to the legislature regarding an action plan the state should implement to address these identified needs.


          NEW SECTION.  Sec. 4.     (1) The department shall establish an advisory committee for its targeted sector program.  The advisory committee shall provide policy direction regarding:

          (a) The appraisal process;

          (b) Program development;

          (c) Program implementation; and

          (d) The evaluation criteria and process for the target sector programs.

          (2) The advisory committee shall include:

          (a) At the discretion of the house of representatives and the senate, four legislators, one from each caucus in the house of representatives appointed by the speaker of the house, and one from each caucus in the senate appointed by the president of the senate;

          (b) Three members of the department of agriculture food products processing advisory committee appointed by the chairperson of this advisory committee;

          (c) Three members of the Washington state biotechnology association appointed by the chairperson of this association; and

          (d) Other members appointed by the director, such as industry experts, financing experts, venture capitalists, patent attorneys, and marketing experts, representing a variety of interests and geographic areas.

          The chairperson of the advisory committee shall be appointed by the director and shall serve as chairperson at the discretion of the director.

          (3) The advisory committee shall create a subcommittee for each targeted sector.  The members of each subcommittee, except as provided otherwise in this subsection, shall be appointed by the chairperson of the advisory committee in consultation with the advisory committee; the subcommittees may include persons who are not members of the advisory committee.  The subcommittee for each targeted sector shall include persons with expertise in that sector.  Each of the members appointed to the advisory committee under subsection (2)(b) of this section shall also serve on the subcommittee for the food processing targeted sector; each of the members appointed to the advisory committee under subsection (2)(c) of this section shall also serve on the subcommittee for the biotechnology targeted sector.

          (4)  The advisory committee and subcommittees shall provide policy and program direction to the targeted sector program created under section 2(2) of this act, and shall consider the role of other state agencies and the private sector in advising the department.

          (5) The members of the advisory committee and the subcommittees shall serve two-year terms.  The legislative members may be reimbursed for travel expenses under RCW 44.04.120.  Other members may be reimbursed for their travel expenses under RCW 43.03.050 and 43.03.060.


          NEW SECTION.  Sec. 5.     The department shall also establish a targeted sector program in manufactured forest products.  This program shall be part of the targeted sector program established under section 2(2) of this act, and the department shall conduct an appraisal, as described in section 3 of this act, for the manufactured forest products targeted sector.  Three members of the evergreen partnership appointed by the director of the evergreen partnership shall be included in the advisory committee established under section 4 of this act, and these persons shall also be part of the subcommittee on the manufactured forest products targeted sector.  The department shall also report on the manufactured forest products targeted sector as part of its reporting duties under section 9 of this act.


          NEW SECTION.  Sec. 6.     The business assistance center of the department of trade and economic development, in consultation with the Washington state institute for public policy and the northwest policy center shall review the establishment of an industrial extension grant program in targeted sectors.  The department shall conduct this review to the extent existing resources permit.


          NEW SECTION.  Sec. 7.     The department, in reviewing the establishment of the industrial extension program, shall identify:

          (1) The manner in which the program should be structured and funded;

          (2) The scope of services that should be provided; and

          (3) The availability of possible grant recipients that could provide services under the program.


          NEW SECTION.  Sec. 8.     The business assistance center shall  examine mechanisms for the establishment of flexible manufacturing networks or consortia in targeted sectors through which small firms cooperatively access modernization, marketing, training and other services.  The department shall conduct this study to the extent existing resources permit.


          NEW SECTION.  Sec. 9.     By January 10th of each year the department shall report in writing on its targeted sector programs to the trade and economic development committee in the house of representatives and the economic development and labor committee in the senate.  The department shall report on each element of the targeted sector program, including:  (1) Appraisal of the sector; (2) alternatives for assisting in the growth and development of the sector; (3) the choice of the strategy and the rationale  behind that choice; (4) the implementation of the strategy; and (5) the evaluation of the targeted sector program.  The department shall also make current information available on a regular basis to the legislature and the private sector regarding its targeted sector programs.

          The business assistance center shall report by January 1, 1990, to the senate economic development and labor committee and house of representatives trade and economic development committee on its findings and recommendations on the establishment of an industrial extension program and flexible manufacturing networks or consortia program.


          NEW SECTION.  Sec. 10.    The department shall work with industry trade groups, local governments, and local economic development organizations in implementing the target sector programs.  The department shall seek and utilize nonstate funds to help carry out these programs.


          NEW SECTION.  Sec. 11.    Sections 1 through 10 of this act are each added to chapter 43.31 RCW.

                                                                                                                           Passed the House April 22, 1989.


                                                                                                                                         Speaker of the House.


                                                                                                                           Passed the Senate April 22, 1989.


                                                                                                                                       President of the Senate.