Bill Analysis — HB 1912, Requiring State Agencies to Share Information to Encourage Economic Development
Summary
Washington State House of Representatives Office of Program Research bill analysis for the Innovation, Community & Economic Development, & Veterans Committee on HB 1912, requiring state agencies to share information to encourage economic development, with a hearing date of 1/16/24 and staff member Martha Wehling. The brief summary states that the bill requires the Department of Commerce to collect information about individual business's revenue, employees, occupations, payroll, and NAICS codes, and to provide the business data to associate development organizations after meeting data security standards and completing training. It also requires the Department of Labor and Industries to publish apprentice data by county quarterly.
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“Bill Analysis — HB 1912, Requiring State Agencies to Share Information to Encourage Economic Development.”
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Washington State BILL
House of Representatives
Office of Program Research ANALYSIS
Innovation, Community & Economic
Development, & Veterans Committee
HB 1912
Brief Description: Requiring state agencies to share information to encourage economic
development.
Sponsors: Representatives Chapman, Waters, Schmidt, Barnard, Rule, Kloba, Sandlin, Wylie,
Reeves and Tharinger.
Brief Summary of Bill
• Requires the Department of Commerce (Commerce) to collect
information from four state agencies about individual business's revenue,
employees, occupations, payroll, and North American Industry
Classification System (NAICS) codes.
• Requires Commerce to provide the business data to associate
development organizations after meeting data security standards and
completing training.
• Requires the Department of Labor and Industries to identify the number
and occupation of apprentices by county and publish the information on
its website quarterly.
Hearing Date: 1/16/24
Staff: Martha Wehling (786-7067).
Background:
Business Licensing, Regulation, and Reporting.
This analysis was prepared by non-partisan legislative staff for the use of legislative
members in their deliberations. This analysis is not part of the legislation nor does it
constitute a statement of legislative intent.
House Bill Analysis -1- HB 1912
Businesses are regulated and licensed by multiple state agencies including the Department of
Revenue, the Department of Labor and Industries, the Employment Security Department, and the
Department of Licensing. Each agency has statutory duties related to Washington businesses:
• The Department of Revenue is Washington's primary tax agency and is responsible for
assessing, collecting, and reporting on taxes, such as the sales tax, business and occupation
tax, and the capital gains tax.
• The Department of Labor and Industries' duties include workers' compensation, workplace
safety, trade licensing, contractor registration, and regulation and enforcement of labor
standards.
• The Employment Security Department manages the unemployment system, including
unemployment benefits, job placement services, and collecting employment related data.
• The Department of Licensing regulates businesses and professions by issuing licenses and
ensuring compliance with professional standards and laws.
Businesses and agencies have statutory reporting obligations. For example, certain executive
branch agencies, including the Departments of Labor and Industries, Licensing, and Revenue, are
required to inventory and update all business permits identified in a performance audit. At least
25 other agencies, including the Employment Security Department and the Departments of
Revenue, Labor and Industries, and Licensing, are required to provide the Department of
Revenue with information about each business license issued by the agency.
North American Industry Classification System Code.
The North American Industry Classification System (NAICS) was developed as the standard for
use by federal statistical agencies in classifying business establishments for collection, analysis,
and publication of statistical data related to the business economy of the United States. NAICS
was developed by the federal Office of Management and Budget and adopted in 1997. The
NAICS hierarchy begins with broader two-digit sectors, and becomes increasingly narrow with
additional digits, including 96 three-digit subsectors, and 308 four-digit industry groups. There
are 689 five-digit NAICS codes, which is the level that provides industry detail.
The Department of Commerce's Trade and Business Responsibilities.
The Department of Commerce's (Commerce) statutory obligations related to trade and business
include:
• Assist in expanding Washington's role as an international center of trade, culture, and
finance; promote and market Washington's products nationally and internationally; work
closely with other private and public international trade efforts; function as a centralized
location for the assimilation and distribution of trade information; and establish and
operate foreign offices promoting overseas trade and commerce.
• Identify and work with businesses that can use assistance to increase domestic and foreign
exports of goods and services.
• Work with small businesses and other employers on workforce training and infrastructure
needs, identify and locate suitable business sites, and resolve licensing and regulatory
House Bill Analysis -2- HB 1912
requirements.
• Increase the availability of capital to small businesses by developing new and flexible
investment tools, assisting in targeting and improving the efficiency of existing investment
mechanisms, and assisting in the procurement of managerial and technical assistance to
attract potential investors.
• Assist women and minority-owned businesses in overcoming barriers to entrepreneurial
success by conducting training courses in financing, marketing, managing, accounting, and
recordkeeping.
• Prepare a specific, actionable plan to increase access to capital and technical assistance to
small businesses and entrepreneurs. The plan must identify existing sources of capital and
technical assistance, critical gaps and barriers, workable solutions, and the changes
necessary to implement the plan.
Commerce has additional responsibilities that affect businesses, including community and
economic development, recruitment and retention of businesses, business services training,
operation of the small business retirement marketplace, and contracts with associate development
organizations. Services provided by Commerce to meet these responsibilities include technical
assistance on accessing capital, networking opportunities, mentorship programs, and education
and training.
Associate Development Organizations.
Associate development organizations (ADOs) are local organizations designated by each county
to serve as Commerce's primary partner in local economic development activities in their county.
Commerce contracts with the ADOs to increase the support for and coordination of community
and economic development services in communities or regional areas. The scope of services
delivered under the contracts must include direct assistance, including business planning, to
companies throughout the county who need support to stay in business, expand, or relocate to
Washington. Services must also include support for regional economic research and regional
planning efforts to implement target industry sector strategies and other economic development
strategies. Both ADOs and Commerce have reporting requirements. The ADOs must submit
annual performance reports to Commerce, and Commerce must submit a report to the Legislature
by the end of each even-numbered year on the performance results of the contracts with the
ADOs.
Public Records Act.
The Public Records Act requires all state and local governmental entities to make all public
records available to the public upon request unless a specific exemption applies or disclosure is
prohibited. Public records are records prepared or retained by a governmental entity that relate to
the conduct of government or the performance of governmental or proprietary functions. There
are statutory exemptions for records or information contained in records that allows the
governmental entity to withhold the record or redact the information. The exemptions are
narrowly construed and are permissive, meaning that the governmental entity has the discretion
House Bill Analysis -3- HB 1912
to produce an exempt record unless a court enjoins production.
Summary of Bill:
Business Information Collected by the Department of Commerce.
The Department of Commerce (Commerce) is required to collect the following information from
four state agencies about each business in Washington:
• the business's annual revenue;
• the business's number of employees and occupations;
• the business's aggregated payroll; and
• the business's North American Industry Classification System (NAICS) code.
Commerce must collect the information from the Department of Revenue, the Department of
Labor and Industries, the Employment Security Department, and the Department of Licensing.
The business information is exempt from disclosure by Commerce under the Public Records
Act. The exemption does not affect other agencies' obligations under the Public Records Act.
Business Information Provided to Associate Development Organizations.
Commerce is required to provide associate development organizations (ADOs) with access to the
information collected about individual businesses. Prior to receiving data, the ADOs must meet
data security standards and complete training regarding the access, use, and confidentiality of the
data. After receiving the data, the ADOs must keep the data confidential, except when the data is
provided to organizations applying for grant funding. In that situation, the ADO may provide the
requesting organization with aggregate data.
Apprentice Information Compiled and Published by the Department of Labor and Industries.
Beginning on January 1, 2025, the Department of Labor and Industries is required to compile
aggregate data on the number of apprentices living in each county and categorize the apprentices
by occupation. The Department of Labor and Industries must publish the aggregate data on its
website and update the website data each quarter.
Appropriation: None.
Fiscal Note: Requested on January 8, 2024.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is
passed.
House Bill Analysis -4- HB 1912
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