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                                                   HOUSE BILL NO. 1337

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State of Washington                              49th Legislature                              1986 Regular Session

By Representatives Sommers, Niemi, B. Williams, Braddock and P.  King

Prefiled with Chief Clerk 12/18/85.  Read first time 1/13/86 and referred to Committee on Constitution, Elections & Ethics.

AN ACT Relating to the Washington state development loan fund committee; amending RCW 43.168.100 and 43.168.050; and repealing RCW 42.18.350.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 10, chapter 164, Laws of 1985 and RCW 43.168.100 are each amended to read as follows:

          The committee may make grants of state funds to local governments which qualify as "entitlement communities" under the federal law authorizing community development block grants.  These grants may only be made on the condition that the entitlement community provide the committee with assurances that it will:  (1) Spend the grant moneys for purposes and in a manner which satisfies state constitutional requirements; (2) spend the grant moneys for purposes and in a manner which would satisfy federal requirements ((dealing with the entitlement community's spending of federal community development block grant funds, assuming the grant moneys were block grant funds received from the federal government)); and (3) spend double the amount of the grant for loans to businesses from the federal funds received by the entitlement community ((as community development block grant funds)).

        Sec. 2.  Section 5, chapter 164, Laws of 1985 and RCW 43.168.050are each amended to read as follows:

          (1) The committee may only approve an application providing a loan for a project which the committee finds:

          (a) Is located within a distressed area and may reasonably be expected to increase employment or maintain threatened employment;

          (b) Has been approved by the director as conforming to federal rules and regulations governing the spending of federal community development block grant funds;

          (c) Will be of public benefit and for a public purpose, and that the benefits, including increased or maintained employment, improved standard of living, and the employment of disadvantaged workers, will primarily accrue to residents of the distressed area;

          (d) Will probably be successful;

          (e) Would probably not be completed without the loan because other capital or financing at feasible terms is unavailable or the return on investment is inadequate.

          (2) The committee may not approve an application if it fails to provide for adequate reporting or disclosure of financial data to the committee.  The committee may require an annual or other periodic audit of the project books.

          (3) The committee may require that the project be managed in whole or in part by a local development organization and may prescribe a management fee to be paid to such organization by the recipient of the loan or grant.

          (4) (a) Except as provided in (b) of this subsection, the committee shall not approve any application which would result in a loan or grant in excess of three hundred fifty thousand dollars.

(b) The committee may approve an application which results in a loan or grant of up to seven hundred thousand dollars if the application has been approved by the director.

          (5) The committee shall fix the terms and rates pertaining to its loans.

          (6) Should there be more demand for loans than funds available for lending, the committee shall provide loans for those projects which will lead to the greatest amount of employment or benefit to a community.  In determining the "greatest amount of employment or benefit" the committee shall also consider the employment which would be saved by its loan.

          (7) To the extent permitted under federal law the committee shall require applicants to provide for the transfer of all payments of principal and interest on loans to the Washington state development loan fund created under this chapter.  Under circumstances where the federal law does not permit the committee to require such transfer, the committee shall give priority to applications where the applicants on their own volition make commitments to provide for the transfer.

          (8) The committee shall not approve any application to finance or help finance a shopping mall.

NEW SECTION. Sec. 3.  Section 12, chapter 164, Laws of 1985 and RCW 42.18.350 are each repealed.

                                                                                                                          Passed the House March 12, 1986.

                                                                                                                                         Speaker of the House.

                                                                                                                          Passed the Senate March 12, 1986.

                                                                                                                                       President of the Senate.