Senate Bill Report — SB 5677

Summary

A Senate Bill Report on SB 5677, an act relating to associate development organizations, as of February 11, 2025, prepared for the Senate Committee on Business, Financial Services & Trade in Washington. The bill is sponsored by Senators Cortes, Frame, Riccelli and Schoesler, with committee activity listed for 2/13/25. The report's background explains that Commerce contracts with county-designated Associate Development Organizations and describes current per capita funding and reporting rules. Its summary of the bill states that urban county allocations would total no more than $500,000 per organization, rural allocations would be at least $85,000 and up $150,000, and the in-kind match would be limited to 25 percent. The report states that reporting requirements for ADOs in counties with a population greater than 1.5 million would be eliminated.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

                            SENATE BILL REPORT
                                  SB 5677

                                     As of February 11, 2025

Title: An act relating to associate development organizations.

Brief Description: Concerning associate development organizations.

Sponsors: Senators Cortes, Frame, Riccelli and Schoesler.

Brief History:
     Committee Activity: Business, Financial Services & Trade: 2/13/25.


                                     Brief Summary of Bill
           • Increases the amount of assistance that Associate Development
             Organizations can provide for direct assistance in urban and rural areas.
           • Eliminates certain reporting requirements for Associate Development
             Organizations in counties with more than $1.5 million.
           • Permits the matched portion of the allocation to be provided through
             cash, in-kind, or a combination.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE

     Staff: Clint McCarthy (786-7319)

     Background: Associate Development Organizations. Washington is composed of 39
     counties, each of which can designate an Associate Development Organization (ADO) that
     furthers the county's or region's economic development goals. The Department of
     Commerce (Commerce) contracts with the designated ADOs in order to coordinate and
     increase support for community and economic development services in communities or
     regional areas. Commerce's 2023 annual report identifies contracts with 35 ADOs.

     ADOs are under contract with the state to provide economic development services in the




     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-                                             SB 5677
     communities that they represent. As part of their contracts, ADOs are required to submit
     annual performance reports to 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.

     Contracts with Associate Development Organizations. Commerce must contract with
     county-designated ADOs to increase support and coordination of community and economic
     development in certain communities or areas. The scope of services must include direct
     assistance to companies throughout the area that need support to stay in business, expend, or
     relocate to Washington from out of state or other countries. Assistance must comply with
     business recruitment and retention protocols.

     Since 1997, ADO's have been directed to have contracts that require the delivery of direct
     assistance to companies needing support to survive, expand, or relocate. The contracts will
     also require support for regional economic research and regional planning efforts to
     implement economic development strategies.

     When appropriations are provided by the Legislature, contracts with ADO's shall be
     awarded based on the following annual schedule:
        • for ADO's in urban counties, a locally matched allocation of up to $0.90 per capita
          totaling no more than $300,000 per organization; and
        • for ADO's in rural counties, a per county base allocation of up to $40,000 and a
          locally matched allocation of up to $0.90 per capita.

     Contracting ADOs are required to provide Commerce with an annual report including
     measures of their performance and a summary of best practices shared and implemented.
     Counties with populations more than 1.5 million have additional reporting requirements
     related to small businesses. All ADO reports are required to include certain employment
     data and financial information. Commerce is required to submit a report to the Legislature
     in each even-numbered year on the performance results of the contracts with the ADOs.

     Summary of Bill: The purposes for which contracts can be awarded is narrowed to direct
     assistance, including business planning to companies who need to stay in business, expand,
     or relocate based on a schedule for awards. The schedule for awards is modified as follows:
         • for ADOs in urban counties, a per county allocation totaling no more than $500,000
            per organization and a matched allocation; and
         • for ADOs in rural counties, a per allocation of at least $85,000 and up $150,000.

     The matched allocation may be provided through cash, in-kind, or a combination, with the
     in-kind match limited to 25 percent.


Senate Bill Report                             -2-                                        SB 5677
     Reporting requirements for ADOs in counties with a population greater than 1.5 million are
     eliminated. These reporting requirements include:
         • the number of small businesses that receive expansion services and the outcomes
           achieved through delivering those services; and
         • the number of businesses outside of the largest city within the ADO's region that
           received recruitment, retention, and expansion services, and the outcomes associated
           with receiving these services.

     Appropriation: None.

     Fiscal Note: Requested on February 7, 2025.

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

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




Senate Bill Report                            -3-                                        SB 5677


File and source

File

2025-02-13_a32754_d279544_bill-report-5677-sba-bft-25.pdf

Size

9,243 bytes

SHA-256

2c8b7616960bcb0b368943c8a5336b83e5ab9cac6a3fed0ef7d5ebfef1eb5bd8

Our copy

2025-02-13_a32754_d279544_bill-report-5677-sba-bft-25.pdf

Original

app.leg.wa.gov