ENGROSSED SUBSTITUTE HOUSE BILL NO. 2706


                                                           AS AMENDED BY THE SENATE


                                                                          C 278 L 90 PV



State of Washington                               51st Legislature                              1990 Regular Session


By House 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)



Read first time 2/2/90 and referred to Committee on Appropriations.



AN ACT Relating to promoting economic diversification for defense-dependent industries and communities; adding new sections to chapter 43.63A RCW; adding new sections to chapter 43.131 RCW; and creating new sections.




          NEW SECTION.  Sec. 1.     The legislature finds that the industrial and manufacturing base of the Washington economy has undergone tremendous change during the past two decades.  The challenge facing Washington firms is to become as productive and efficient as possible to survive in an increasingly competitive world market.  Many of the state's communities are dependent on one or two industries.  Many firms are heavily reliant on the defense expenditures of the federal government.  It is the intent of the legislature to assist communities in planning for economic change, developing a broader economic base, and preparing for any shift in federal priorities that could cause a reduction in federal expenditures, and assist firms by providing information and technical assistance necessary for them to introduce new products or production processes.


          NEW SECTION.  Sec. 2.     The community diversification program is created in the department of community development.  The program shall include:

          (1) The monitoring and forecasting of shifts in the economic prospects of major defense employers in the state.  This shall include but not be limited to the monitoring of defense contract expenditures, other federal contracts, defense employment shifts, the aircraft and aerospace industry, computer products, and electronics;

          (2) The identification of cities, counties, or regions within the state that are primarily dependent on defense or other federal contracting and the identification of firms dependent on federal defense contracts;

          (3) Assistance to communities in broadening the local economic base through the provision of management assistance, assistance in financing, entrepreneurial training, and assistance to businesses in using off-the-shelf technology to start new production processes or introduce new products;

          (4) Formulating 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.  The plan shall use the information made available through carrying out subsections (1) and (2) of this section; and

          (5) The identification of diversification efforts conducted by other states, the federal government, and other nations, and the provision of information on these efforts, as well as information gained through carrying out subsections (1) and (2) of this section, to firms, communities, and workforces that are defense dependent.

          The department shall, beginning January 1, 1992, report annually to the governor and the legislature on the activities of the community diversification program.


          NEW SECTION.  Sec. 3.     The advisory council on economic diversification is created to provide advice to the department of community development in carrying out its community diversification program.  The governor shall appoint two members from the business community, one of whom shall be a representative of a defense dependent firm; two employee representatives of defense dependent firms, one of whom shall be from a labor union; two members from community organizations active in economic diversification efforts; two members from local governments, from communities dependent on defense expenditures; one member with expertise in economic diversification; one member representing the financial institutions of the state; and one member representing military leadership in the state.  Four members of the advisory council shall be from the legislature, one from each political caucus of the senate to be appointed by the president of the senate, and one from each political caucus of the house of representatives to be appointed by the speaker of the house of representatives.  The director of the department of community development or the director's designee shall serve as the nonvoting chairperson of the advisory council.

          Members of the council other than the chair shall serve for two-year terms.  Vacancies shall be filled in the same manner as the original appointments.  Members of the council shall receive no compensation but shall be reimbursed for travel expenses under RCW 43.03.050 and RCW 43.03.060.  The department of community development shall assign staff to the council as necessary to carry out the purposes of this chapter.


          NEW SECTION.  Sec. 4.     If specific funding for the purposes of this act, referencing this act by bill number, is not provided by June 30, 1990, in the supplemental omnibus appropriations act, this act shall be null and void.


          NEW SECTION.  Sec. 5.     Sections 2 and 3 of this act are each added to chapter 43.63A RCW.


          NEW SECTION.  Sec. 6.     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.


          NEW SECTION.  Sec. 7.  A new section is added to chapter 43.131 RCW to read as follows:

          The community diversification program and the advisory council on economic diversification shall be terminated on June 30, 1996, as provided in section 8 of this act.


          NEW SECTION.  Sec. 8.  A new section is added to chapter 43.131 RCW to read as follows:

          The following acts, or parts of acts, as now existing or as hereafter amended, are each repealed, effective June 30, 1997:

          (1) Section 2, chapter __, Laws of 1990 and RCW 43.63A.___ (section 2 of this act); and

          (2) Section 3, chapter __, Laws of 1990 and RCW 43.63A.___ (section 3 of this act).

                                                                                                                           Passed the House March 3, 1990.


                                                                                                                                         Speaker of the House.


                                                                                                                           Passed the Senate March 1, 1990.


                                                                                                                                       President of the Senate.