READ FIRST TIME 03/05/07.   

     AN ACT Relating to the economic development commission; amending RCW 43.162.005, 43.162.010, 43.162.020, 43.162.030, 82.33A.010, and 82.33A.020; adding a new section to chapter 43.162 RCW; and creating new sections.

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

Sec. 1   RCW 43.162.005 and 2003 c 235 s 1 are each amended to read as follows:
     The legislature finds that Washington's innovation and trade-driven economy has provided tremendous opportunities for citizens of the state, but that there is no guarantee that globally competitive firms will continue to grow and locate in the state. The current economic development system is fragmented among numerous programs, councils, centers, and organizations with inadequate overall coordination and insufficient guidance built into the system to ensure that the system is responsive to its customers. The current economic development system's data-gathering and evaluation methods are inconsistent and unable to provide adequate information for determining how well the system is performing on a regular basis so the system may be held accountable for its outcomes.
     The legislature also finds that developing ((an effective)) a comprehensive economic development ((strategy for the state and operating)) strategic plan to guide the operation of effective economic development programs, including workforce training, infrastructure development, small business assistance, technology transfer, and export assistance, ((are)) is vital to the state's efforts to increase the competitiveness of state businesses, encourage employment growth, increase state revenues, and generate economic well-being. ((In addition, the legislature finds that)) There is a need for responsive and consistent involvement of the private sector in the state's economic development efforts. The legislature finds that there is a need for the development of coordination criteria for business recruitment, expansion, and retention activities carried out by the state and local entities. It is the intent of the legislature to create an economic development commission that will ((develop and update the state's economic development strategy and performance measures and provide advice to and oversight of the department of community, trade, and economic development)) provide planning, coordination, evaluation, monitoring, and policy analysis and development for the state economic development system as a whole, and advice to the governor and legislature concerning the state economic development system.

Sec. 2   RCW 43.162.010 and 2003 c 235 s 2 are each amended to read as follows:
     (1) The Washington state economic development commission is established to oversee the economic development strategies and policies of the department of community, trade, and economic development.
     (2)(a) The Washington state economic development commission shall consist of ((at least seven and no more than nine)) eleven voting members appointed by the governor as follows: Six representatives of the private sector, one representative of labor, one representative of port districts, one representative of four-year state public higher education, one representative for state community or technical colleges, and one representative of associate development organizations. The director of the department of community, trade, and economic development, the director of the workforce training and education coordinating board, the commissioner of the employment security department, and the chairs and ranking minority members of the standing committees of the house of representatives and the senate overseeing economic development policies shall serve as nonvoting ex officio members.
     The chair of the commission shall be a voting member selected by the governor with the consent of the senate, and shall serve at the pleasure of the governor. In selecting the chair, the governor shall seek a person who understands the future economic needs of the state and nation and the role the state's economic development system has in meeting those needs.
     (b) In making the appointments, the governor shall consult with organizations that have an interest in economic development, including, but not limited to, industry associations, labor organizations, minority business associations, economic development councils, chambers of commerce, port associations, tribes, and the chairs of the legislative committees with jurisdiction over economic development.
     (c) The members shall be representative of the geographic regions of the state, including eastern and central Washington, as well as represent the ethnic diversity of the state. ((Representation shall derive primarily from the)) Private sector((, including, but not limited to,)) members shall represent existing and emerging industries, small businesses, women-owned businesses, and minority-owned businesses((, but other sectors of the economy that have experience in economic development, including labor organizations and nonprofit organizations, shall be represented as well. A minimum of seventy-five percent of the members shall represent the private sector)). Members of the commission shall serve statewide interests while preserving their diverse perspectives, and shall be recognized leaders in their fields with demonstrated experience in economic development or disciplines related to economic development.
     (3) Members appointed by the governor shall serve at the pleasure of the governor for three-year terms((, except that through June 30, 2004, members currently serving on the economic development commission created by executive order may continue to serve at the pleasure of the governor. Of the initial members appointed to serve after June 30, 2004, two members shall serve one-year terms, three members shall serve two-year terms, and the remainder of the commission members shall serve three-year terms)).
     (4) ((The commission chair shall be selected from among the appointed members by the majority vote of the members.
     (5))) The commission may establish committees as it desires, and may invite nonmembers of the commission to serve as committee members.
     (5) The executive director of the commission shall be appointed by the governor with the consent of the voting members of the commission. The governor may dismiss the director only with the approval of a majority vote of the commission. The commission, by a majority vote, may dismiss the executive director with the approval of the governor.
     (6) The commission may adopt rules for its own governance.

NEW SECTION.  Sec. 3   A new section is added to chapter 43.162 RCW to read as follows:
     (1) The commission shall employ an executive director. The executive director shall serve as chief executive officer of the commission and shall administer the provisions of this chapter, employ such personnel as may be necessary to implement the purposes of this chapter, utilize staff of existing operating agencies to the fullest extent possible, and employ outside consulting and service agencies when appropriate.
     (2) The executive director may not be the chair of the commission.
     (3) The executive director shall appoint necessary staff who shall be exempt from the provisions of chapter 41.06 RCW. The executive director's appointees shall serve at the executive director's pleasure on such terms and conditions as the executive director determines but subject to chapter 42.52 RCW.
     (4) The executive director shall appoint and employ such other employees as may be required for the proper discharge of the functions of the commission.
     (5) The executive director shall exercise such additional powers, other than rule making, as may be delegated by the commission.

Sec. 4   RCW 43.162.020 and 2003 c 235 s 3 are each amended to read as follows:
     The Washington state economic development commission shall ((perform the following duties:
     (1) Review and periodically update the state's economic development strategy, including implementation steps, and performance measures, and perform an annual evaluation of the strategy and the effectiveness of the state's laws, policies, and programs which target economic development;
     (2) Provide policy, strategic, and programmatic direction to the department of community, trade, and economic development regarding strategies to:
     (a) Promote business retention, expansion, and creation within the state;
     (b) Promote the business climate of the state and stimulate increased national and international investment in the state;
     (c) Promote products and services of the state;
     (d) Enhance relationships and cooperation between local governments, economic development councils, federal agencies, state agencies, and the legislature;
     (e) Integrate economic development programs, including work force training, technology transfer, and export assistance; and
     (f) Make the funds available for economic development purposes more flexible to meet emergent needs and maximize opportunities;
     (3) Identify policies and programs to assist Washington's small businesses;
     (4) Assist the department of community, trade, and economic development with procurement and deployment of private funds for business development, retention, expansion, and recruitment as well as other economic development efforts;
     (5) Meet with the chairs and ranking minority members of the legislative committees from both the house of representatives and the senate overseeing economic development policies; and
     (6) Make a biennial report to the appropriate committees of the legislature regarding the commission's review of the state's economic development policy, the commission's recommendations, and steps taken by the department of community, trade, and economic development to implement the recommendations. The first report is due by December 31, 2004)):
     (1) Concentrate its major efforts on planning, coordination, evaluation, policy analysis, and recommending improvements to the state's economic development system using, but not limited to, the "Next Washington" plan and the global competitiveness council recommendations;
     (2) Develop and maintain on a biennial basis a state comprehensive plan for economic development, including but not limited to goals, objectives, and priorities for the state economic development system; identify the elements local associate development organizations must include in their countywide economic development plans; and review the state system for consistency with the state comprehensive plan. In developing the state comprehensive plan for economic development, the commission shall use, but may not be limited to: Economic, labor market, and populations trend reports in office of financial management forecasts; the annual state economic climate report prepared by the economic climate council; joint office of financial management and employment security department labor force, industry employment, and occupational forecasts; the results of scientifically based outcome evaluations; the needs of industry associations, industry clusters, businesses, and employees as evidenced in formal surveys and other input;
     (3) Establish and maintain an inventory of the programs of the state economic development system and related state programs; perform a biennial assessment of the ongoing and strategic economic development needs of the state; and assess the extent to which the economic development system and related programs represent a consistent, coordinated, efficient, and integrated approach to meet such needs; and
     (4) Produce a biennial report to the governor and the legislature on progress by the commission in coordinating the state's economic development system and meeting the other obligations of this chapter, as well as include recommendations for any statutory changes necessary to enhance operational efficiencies or improve coordination.
     The commission may delegate to the director any of the functions of this section.

NEW SECTION.  Sec. 5   A new section is added to chapter 43.162 RCW to read as follows:
     Subject to available funds, the Washington state economic development commission may:
     (1) Periodically review for consistency with the state comprehensive plan for economic development the policies and plans established for:
     (a) Business and technical assistance by the small business development center, the Washington manufacturing service, the Washington technology center, associate development organizations, the department of community, trade, and economic development, and the office of minority and women-owned business enterprises;
     (b) Export assistance by the small business export finance assistance center, the international marketing program for agricultural commodities and trade, the department of agriculture, the center for international trade in forest products, associate development organizations, and the department of community, trade, and economic development; and
     (c) Infrastructure development by the department of community, trade, and economic development and the department of transportation;
     (2) Review and make recommendations to the office of financial management and the legislature on budget requests and legislative proposals relating to the state economic development system for purposes of consistency with the state comprehensive plan for economic development;
     (3) Provide for coordination among the different agencies, organizations, and components of the state economic development system at the state level and at the regional level;
     (4) Advocate for the state economic development system and for meeting the needs of industry associations, industry clusters, businesses, and employees;
     (5) Identify partners and develop a plan to develop a consistent and reliable database on participation rates, costs, program activities, and outcomes from publicly funded economic development programs in this state by January 1, 2011.
     (a) In coordination with the development of the database, the commission shall establish standards for data collection and maintenance for providers in the economic development system in a format that is accessible to use by the commission. The commission shall require a minimum of common core data to be collected by each entity providing economic development services with public funds and shall develop requirements for minimum common core data in consultation with the economic climate council, the office of financial management, and the providers of economic development services;
     (b) The commission shall establish minimum common standards and metrics for program evaluation of economic development programs, and monitor such program evaluations; and
     (c) The commission shall, beginning no later than January 1, 2012, periodically administer, based on a schedule established by the commission, scientifically based outcome evaluations of the state economic development system including, but not limited to, surveys of industry associations, industry cluster associations, and businesses served by publicly funded economic development programs; matches with employment security department payroll and wage files; and matches with department of revenue tax files; and
     (6) Evaluate proposals for expenditure from the economic development strategic reserve account and recommend expenditures from the account.
     The commission may delegate to the director any of the functions of this section.

NEW SECTION.  Sec. 6   (1) The commission must develop and update a state comprehensive plan for economic development and an initial inventory of economic development programs, as required under section 4 of this act, by June 30, 2008.
     (2) Using the information from the inventory, public input, and such other information as it deems appropriate, the commission shall, by September 1, 2008, provide a report with findings, analysis, and recommendations to the governor and the legislature on the appropriate state role in economic development and the appropriate administrative and regional structures for the provision of economic development services. The report shall address how best to organize the state system to ensure that the state's economic development efforts:
     (a) Are organized around a clear central mission and aligned with the state's comprehensive plan for economic development;
     (b) Are capable of providing focused and flexible responses to changing economic conditions;
     (c) Generate greater local capacity to respond to local opportunities and needs;
     (d) Face no administrative barriers to efficiency and effectiveness;
     (e) Maximize results through partnerships and the use of intermediaries; and
     (f) Provide increased accountability to the public, the executive branch, and the legislature.
     (3) The report should address the potential value of creating or consolidating specific programs if doing so would be consistent with an agency's core mission, and the potential value of removing specific programs from an agency if the programs are not central to the agency's core mission.

Sec. 7   RCW 43.162.030 and 2003 c 235 s 4 are each amended to read as follows:
     (((1) The Washington state economic development commission shall receive the necessary staff support from the staff resources of the governor, the department of community, trade, and economic development, and other state agencies as appropriate, and within existing resources and operations.
     (2))) Creation of the Washington state economic development commission shall not be construed to modify any authority or budgetary responsibility of the governor or the department of community, trade, and economic development.

Sec. 8   RCW 82.33A.010 and 1998 c 245 s 168 are each amended to read as follows:
     (1) The economic climate council is hereby created.
     (2) The council shall, in consultation with the Washington economic development commission, select a series of ((no more than ten)) benchmarks that characterize the competitive environment of the state. The benchmarks should be indicators of the cost of doing business; the education and skills of the work force; a sound infrastructure; and the quality of life. In selecting the appropriate benchmarks, the council shall use the following criteria:
     (a) The availability of comparative information for other states and countries;
     (b) The timeliness with which benchmark information can be obtained; and
     (c) The accuracy and validity of the benchmarks in measuring the economic climate indicators named in this section.
     (3) Each year the council shall prepare an official state economic climate report on the present status of benchmarks, changes in the benchmarks since the previous report, and the reasons for the changes. The reports shall include current benchmark comparisons with other states and countries, and an analysis of factors related to the benchmarks that may affect the ability of the state to compete economically at the national and international level.
     (4) All agencies of state government shall provide to the council immediate access to all information relating to economic climate reports.

Sec. 9   RCW 82.33A.020 and 1996 c 152 s 4 are each amended to read as follows:
     (((1))) The economic climate council shall ((create an advisory committee to assist the council)) consult with the Washington economic development commission in selecting benchmarks and developing economic climate reports and benchmarks. The ((advisory committee)) commission shall provide for a process to ensure public participation in the selection of the benchmarks. ((The advisory committee shall consist of no more than seven members. At least two of the members of the advisory committee shall have experience in and represent business, and at least two of the members shall have experience in and represent labor. All of the members of the advisory committee shall have special expertise and interest in the state's economic climate and competitive strategies. Appointments to the advisory committee shall be recommended by the chair of the council and approved by a two-thirds vote of the council. The chair of the advisory committee shall be selected by the members of the committee.
     (2) The advisory committee shall meet as determined by the chair of the committee until September 30, 1996, and shall meet at least twice per year thereafter in advance of the economic climate reports due on March 31st and September 30th of each year.
     (3) Members of the advisory council shall serve without compensation but shall be reimbursed for travel expenses in accordance with RCW 43.03.050 and 43.03.060 while attending meetings of the advisory committee, sessions of the economic climate council, or on official business authorized by the council.))

NEW SECTION.  Sec. 10   If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2007, in the omnibus appropriations act, this act is null and void.