"NEW SECTION.  Sec. 1   A new section is added to chapter 50.20 RCW to read as follows:
     (1) The legislature finds that the establishment of a self-employment assistance program would assist unemployed individuals and create new businesses and job opportunities in Washington state. The department shall inform individuals identified as likely to exhaust regular unemployment benefits of the opportunity to enroll in commissioner-approved self-employment assistance programs.
     (2) An unemployed individual is eligible to participate in a self-employment assistance program if it has been determined that he or she:
     (a) Is otherwise eligible for regular benefits as defined in RCW 50.22.010;
     (b) Has been identified as likely to exhaust regular unemployment benefits under a profiling system established by the commissioner as defined in P.L. 103-152; and
     (c) Is enrolled in a self-employment assistance program that is approved by the commissioner, and includes entrepreneurial training, business counseling, technical assistance, and requirements to engage in activities relating to the establishment of a business and becoming self-employed.
     (3) Individuals participating in a self-employment assistance program approved by the commissioner are eligible to receive their regular unemployment benefits.
     (a) The requirements of RCW 50.20.010 and 50.20.080 relating to availability for work, active search for work, and refusal to accept suitable work are not applicable to an individual in the self-employment assistance program for the first fifty-two weeks of the individual's participation in the program. However, enrollment in a self-employment assistance program does not entitle the enrollee to any benefit payments he or she would not be entitled to had he or she not enrolled in the program.
     (b) An individual who meets the requirements of this section is considered to be "unemployed" under RCW 50.04.310 and 50.20.010.
     (4) An individual who fails to participate in his or her approved self-employment assistance program as prescribed by the commissioner is disqualified from continuation in the program.
     (5) An individual completing the program may not directly compete with his or her separating employer for a specific time period and in a specific geographic area. The time period may not, in any case, exceed one year. Both the time period and the geographic area must be reasonable, considering the following factors:
     (a) Whether restraining the individual from performing services is necessary for the protection of the employer or the employer's goodwill;
     (b) Whether the agreement harms the individual more than is reasonably necessary to secure the employer's business or goodwill; and
     (c) Whether the loss of the employee's services and skills injures the public to a degree warranting nonenforcement of the agreement.
     (6) The commissioner shall take all steps necessary in carrying out this section to assure collaborative involvement of interested parties in program development, and to ensure that the self-employment assistance programs meet all federal criteria for withdrawal from the unemployment fund. The commissioner may approve, as self-employment assistance programs, existing self-employment training programs available through community colleges, work force investment boards, or other organizations and is not obligated by this section to expend any departmental funds for the operation of self-employment assistance programs, unless specific funding is provided to the department for that purpose through federal or state appropriations.
     (7) The commissioner may adopt rules as necessary to implement this section.

Sec. 2   RCW 50.20.095 and 1980 c 74 s 4 are each amended to read as follows:
     Any individual registered at an established school in a course of study providing scholastic instruction of twelve or more hours per week, or the equivalent thereof, shall be disqualified from receiving benefits or waiting period credit for any week during the school term commencing with the first week of such scholastic instruction or the week of leaving employment to return to school, whichever is the earlier, and ending with the week immediately before the first full week in which the individual is no longer registered for twelve or more hours of scholastic instruction per week: PROVIDED, That registration for less than twelve hours will be for a period of sixty days or longer. The term "school" includes primary schools, secondary schools, and "institutions of higher education" as that phrase is defined in RCW 50.44.037.
     This disqualification shall not apply to any individual who:
     (1) Is in approved training within the meaning of RCW 50.20.043; ((or))
     (2) Is in an approved self-employment assistance program under section 1 of this act; or
     (3) Demonstrates to the commissioner by a preponderance of the evidence his or her actual availability for work, and in arriving at this determination the commissioner shall consider the following factors:
     (a) Prior work history;
     (b) Scholastic history;
     (c) Past and current labor market attachment; and
     (d) Past and present efforts to seek work.

NEW SECTION.  Sec. 3   By December 1, 2011, the employment security department shall report to the house of representatives commerce and labor committee and the senate labor, commerce, research and development committee on the performance of the self-employment assistance program. The report shall include an analysis of the following:
     (1) Self-employment impacts;
     (2) Wage and salary outcomes;
     (3) Benefit payment outcomes; and
     (4) A cost-benefit analysis.

NEW SECTION.  Sec. 4   This act takes effect January 1, 2008.

NEW SECTION.  Sec. 5   The commissioner of employment security may take the necessary steps to ensure that this act is implemented on its effective date.

NEW SECTION.  Sec. 6   This act expires July 1, 2012."