AN ACT Relating to associate development organizations;
SB 5677 revises Washington law governing associate development organizations (ADOs), which are local or regional organizations that contract with the state to provide business recruitment, retention, expansion, and related economic development services. The bill requires ADOs to report more detailed performance information to the Department of Commerce, including measures of job creation and retention, economic conditions in the region, funding received from the state and other sources, and the organization’s overall impact on employment. Reports may also include effects on wages, exports, tax revenue, and small business development.
The bill also changes how the state awards and oversees contracts with ADOs. It requires the department and each contracting organization to agree on specific performance targets, compare those targets with actual results annually, and develop remediation plans if performance falls short. If an organization fails to meet agreed-upon progress standards, state funding and the contract must be terminated for one year, with the organization expected to review alternative delivery strategies during that period. The department must then report contract performance results to the Legislature every two years.
SB 5677 amends RCW provisions governing associate development organizations and the state’s contracting process for economic development services. It adds new reporting duties, performance standards, remediation requirements, and a temporary contract/funding termination mechanism for nonperforming organizations. It also establishes different annual allocation structures for urban and rural ADOs, including per-capita and per-county limits and local match requirements, while preserving the use of non-state funds, cash, or in-kind contributions for matching purposes.
The bill appears to have broad overall support, passing the Senate and House with large margins, including unanimous or near-unanimous committee votes in the House. The final floor votes were also strongly favorable, though the Senate’s final passage as amended by the House drew more opposition than earlier stages, suggesting some concern with the amended version or with the bill’s accountability provisions. Overall, the legislative record indicates a generally positive reception to strengthening oversight of ADO performance.
The main point of contention is the bill’s stricter accountability framework for ADOs, especially the requirement to set performance targets, create remediation plans, and suspend contracts and state funding for a year if progress standards are not met. Those provisions likely raised concerns among some senators, reflected in the narrower Senate final vote after House amendments. Another possible area of debate is the allocation formula and reporting burden, particularly for organizations in larger urban counties versus rural counties, since the bill imposes different funding caps and more detailed statewide performance reporting.