Requires the department of community, trade, and economic development to administer, with the advice of the Washington economic development council, an innovation partnership zone program consisting of the designation of innovation partnership zones, the awarding of innovation partnership grants, and the provision of technical and planning assistance.

Provides that, on October 1st of each year, the director shall designate innovation partnership zones. Applications for state designation of an area as an innovation partnership zone may be submitted by associate development organizations, port districts, workforce development councils, cities, or counties.

Requires the director to disburse innovation partnership zone grants. Innovation partnership zone grants must be used to improve the commercialization facilities within an area designated as an innovation partnership zone and be used to facilitate the collaboration between research teams, industry, and workforce training providers that will lead to the formation and financing of new innovative firms, the commercialization of research results, and the movement of firms and industry clusters into globally competitive niches. The grants will be awarded only to applicants operating within a designated innovation partnership zone consistent with the following criteria and such other criteria as the director develops in consultation with the Washington state economic development commission: (1) Each grant must be matched by a commitment of financial support from the private sector equal to or greater than fifty percent of the requested grant amount;

(2) Eligible grant applicants may include associate development organizations, port districts, workforce development councils, educational or research institutions, and local jurisdictions;

(3) During the biennium ending June 30, 2009, more than two partnership zone grants shall be awarded to recipients in the central Puget Sound region, a minimum of two such grants shall be awarded in eastern Washington and a minimum of one such grant shall be awarded in western Washington outside the central Puget Sound region;

(4) Applicants for innovation partnership zone grants must: (a) disclose the service delivery mechanisms to be used to allow industry associations, cluster associations, and businesses to access the technical assistance, advisory, research, and commercialization capabilities of research teams within the zone; (b) detail how training services will be coordinated and delivered to industry associations, cluster associations, and businesses within the zone; and (c) describe the methods by which the applicant will facilitate the competitiveness of firms, the commercialization of research, and the upgrading of worker skills within the zone.

Provides that the act shall be null and void if appropriations are not approved.