Report - 2024 01 30 A31844 D267444 Bill Report 1717 S Sbr Bfgt Ta 24

Summary

A Washington Senate Bill Report on SHB 1717, supporting innovation at associate development organizations, as of January 23, 2024. It records that the bill passed the House on 1/11/24 by 93-4 and that the Senate Committee on Business, Financial Services, Gaming & Trade issued a majority report of do pass as amended with referral to Ways & Means. The report explains that associate development organizations (ADOs) contract with the state for economic development services and receive per capita base funding. The bill requires the Department of Commerce to establish an annual competitive grant program for ADO initiatives, to report on grant use beginning with its December 31, 2026 report, and creates a dedicated grant account in the custody of the state treasurer. The report also summarizes supportive public testimony from 2023 and 2024.

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                            SENATE BILL REPORT
                                 SHB 1717

                                      As of January 23, 2024

Title: An act relating to supporting innovation at associate development organizations.

Brief Description: Supporting innovation at associate development organizations.

Sponsors: House Committee on Appropriations (originally sponsored by Representatives Rule,
    Corry, Paul, Stonier, Chapman, Duerr and Timmons).

Brief History: Passed House: 1/11/24, 93-4.
     Committee Activity: Business, Financial Services, Gaming & Trade: 3/14/23, 3/21/23
         [DPA-WM]; 1/23/24.


                                     Brief Summary of Bill
           • Requires the Department of Commerce to establish an annual
             competitive grant program to support and catalyze initiatives to foster
             innovation, sustainability, partnerships, and equity at associate
             development organizations.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES, GAMING & TRADE

     Majority Report: Do pass as amended and be referred to Committee on Ways & Means.
         Signed by Senators Stanford, Chair; Frame, Vice Chair; Dozier, Ranking Member;
     Boehnke, Gildon, Lovick, MacEwen and Mullet.

     Staff: Kellee Gunn (786-7429)

SENATE COMMITTEE ON WAYS & MEANS

     Staff: Trevor Press (786-7446)




     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.

Senate Bill Report                              -1-                                        SHB 1717
     Background:      Associate Development Organizations.          Associate Development
     Organizations (ADOs) are under contract with the state to provide economic development
     services in the communities that they represent. As part of their contracts, ADOs are
     required to submit annual performance reports to the Department of Commerce
     (Commerce), which Commerce compiles as a report and submits to the Legislature
     biennially.

     The annual base funding an ADO receives from the state is dependent on local matching
     funds as well as whether the county served is a rural county. Funding is provided on a per
     capita basis. Commerce may consider an ADO's total resources when making contracting
     and fund allocation decisions.

     Summary of Bill: Commerce must establish an annual competitive grant program to
     support and catalyze initiatives to foster innovation, sustainability, partnerships, and equity
     at ADOs. Commerce shall develop grant criteria with relevant stakeholders and award
     funding based on initiatives aligned with its work and priorities. Awards must be given
     equitably across the state. Grant recipients must provide information on the use of their
     award funding to Commerce, and Commerce must provide that information in its report to
     the Legislature beginning with its December 31, 2026, report. The Associate Development
     Organization Innovation, Sustainability, Partnerships, and Equity Grant Account is created
     in the custody of the state treasurer. Moneys in the account may be spent only after an
     appropriation. The account may consist of state appropriations, private contributions, and
     other sources, to fund the grant program. Expenditures may only be used for the grant
     program.

     Appropriation: None.

     Fiscal Note: Available.

     Creates Committee/Commission/Task Force that includes Legislative members: No.

     Effective Date: Ninety days after adjournment of session in which bill is passed.

     Staff Summary of Public Testimony on Substitute House Bill (Business, Financial
     Services, Gaming & Trade) (Regular Session 2023): The committee recommended a
     different version of the bill than what was heard. PRO: I've been in my role at Thurston
     County's ADO since 2004. The 34 ADOs have worked together, in coordination, to recover
     and reengage the economy. This bill is about growing the number of jobs, reinvesting
     money to bring in more revenue, and increasing economic activity. ADOs have a strong
     ROI for the communities they serve. For every dollar that goes into our ADO, we bring
     back $16 to the local community. Our ADO serves just under 10,000 businesses and we
     would use this as a tool to launch new businesses and entrepreneurs. Our center for business
     innovation, and our women's business center could serve more people as a result of this
     legislation. The last few years have not been easy for economic development. ADO funding


Senate Bill Report                              -2-                                       SHB 1717
     models have remained stagnant. ADOs do not receive COLAs, or other adjustments.

     As Washington's only trade organization focused on economic development, we think this
     is just the right investment to support economic development and foster innovation. Passage
     of this bill is a critical step to support an intergovernmental network that will be a resource
     to catalyze innovative initiatives. This will build facilities and create and retain jobs. Please
     consider making the strong ADO partnership with the state even more impactful.

     Persons Testifying (Business, Financial Services, Gaming & Trade): PRO: Suzanne
     Dale Estey, Washington Economic Development Association; Michael Cade, Thurston
     Economic Development Council.

     Persons Signed In To Testify But Not Testifying (Business, Financial Services,
     Gaming & Trade): No one.

     Staff Summary of Public Testimony on Bill as Amended by Business, Financial
     Services, Gaming & Trade (Ways & Means) (Regular Session 2023): PRO: This bill
     would scale state ADO partnerships and we would like a $10 million funding level. The
     network has created many jobs and generated a lot of revenue over the last few years.
     Impoverished communities do not have funds or expertise to bring in federal grants. These
     funds would help level the playing field. Funding for ADOs has remained stagnant. Now is
     the time to add additional funding.

     Persons Testifying (Ways & Means): PRO: Suzanne Dale Estey, Washington Economic
     Development Association; Colleen McAleer, Clallam Economic Development Council;
     Garry Clark, Economic Alliance Snohomish County.

     Persons Signed In To Testify But Not Testifying (Ways & Means): No one.

     Staff Summary of Public Testimony (Business, Financial Services, Gaming & Trade)
     (Regular Session 2024): PRO: Our neighbors and friends are struggling to make ends
     meet. There are things we can and should do to expand opportunities for jobs. ADOs are a
     key tool in this process. During COVID, ADOs are the ones that worked hand in hand to
     make sure money was delivered appropriately. This bill helps address funding shortfalls.
     The committee passed this bill last year. This bill is bipartisan. This would increase funding
     for regional capacity, through a $5 million fund that would go out as grants.

     ADOs have not seen an increase in funding on over 15 years. No inflation or COLA. These
     organizations deliver and the collective results of ADOs have helped businesses expand and
     start up throughout the state. This investment will strengthen and grow the work of the
     ADOs. Commerce has recently deployed new metric data reporting, including OMWBE
     information. With these increased expectations, ADOs funding has not increased. Our ADO
     recently received one-time funding to do work with OMWBE businesses, and entities - with
     the funding in this bill, this work could continue. We can help provide additional services


Senate Bill Report                              -3-                                         SHB 1717
     that our community needs.

     Persons Testifying (Business, Financial Services, Gaming & Trade): PRO:
     Representative Alicia Rule, Prime Sponsor; Suzanne Dale Estey, Washington Economic
     Development Association; Vaughn Taylor, Seattle Metropolitan Chamber of Commerce
     (ADO for King County); Roni Holder-Diefenbach, Economic Alliance (ADO for Okanogan
     County).

     Persons Signed In To Testify But Not Testifying (Business, Financial Services,
     Gaming & Trade): No one.




Senate Bill Report                        -4-                                 SHB 1717


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