AN ACT Relating to economic development; amending RCW 43.160.060 and 43.160.030; and adding new sections to chapter 43.160 RCW.

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

Sec. 1. Section 6, chapter 40, Laws of 1982 1st ex. sess. as amended by section 3, chapter 60, Laws of 1983 1st ex. sess. and RCW 43.160.060 are each amended to read as follows:

The board is authorized to make direct loans to political subdivisions of the state for the purposes of assisting the political subdivisions in financing the cost of public facilities, including the cost of acquisition and development of land and improvements for public facilities, as well as the acquisition, construction, rehabilitation, alteration, expansion, or improvement of the facilities. ((~~Grants~~)) A grant may also be authorized for purposes designated in this chapter, but only when ((~~grants are uniquely required~~)), and to the extent that, a loan is not reasonably possible, given the limited resources of the political subdivision.

Application for funds shall be made in the form and manner as the board may prescribe. In making grants or loans the board shall conform to the following requirements:

(1) The board shall not make a grant or loan unless the application includes convincing evidence that a specific private development or expansion is ready to occur and will only occur if the grant or loan is made.

(2) The board shall only make grants or loans for those projects which would result in specific private developments or expansions (a) in manufacturing, production, food processing, assembly, warehousing, and industrial distribution, or (b) which substantially support the trading of goods or services outside of the state's borders. In no instance may the board make a grant or loan for a project where the primary purpose is to facilitate or promote a retail shopping development or expansion.

(3) The board shall prioritize each proposed project according to the number of jobs it would create after the project is completed and according to the unemployment rate in the area in which the jobs would be located. As long as there is more demand for loans or grants than there are funds available for loans or grants, the board is instructed to fund ((~~those~~)) projects ((~~which will lead to the greatest employment once the initial project is completed~~)) in order of their priority.

(4) The board may not make a grant or loan for any project that probably would result in a development or expansion that would displace existing jobs in any other community in the state.

(5) The board may not make any grant or loan for the acquisition of real property, including buildings and other fixtures which are a part of real property.

(6) A responsible official of the political subdivision shall be present during board deliberations and provide information that the board requests.

((~~Public facilities funds shall be used for projects to~~)) (7) The board shall only make loans or grants for projects which it finds will improve the opportunities for the successful maintenance, establishment, or expansion of industrial or commercial plants or will otherwise assist in the creation or retention of long-term economic opportunities. ((~~The board shall determine whether or not the projects will assist in alleviating unemployment.~~))

(8) Before any loan or grant application is approved, the political ((~~subdivisions of the state~~)) subdivision seeking the loan or grant must demonstrate to the community economic revitalization board that no other timely source of funding is available to ((~~them~~)) it at costs reasonably similar to financing available from the community economic revitalization board.

Sec. 2. Section 3, chapter 40, Laws of 1982 1st ex. sess. as last amended by section 89, chapter 287, Laws of 1984 and RCW 43.160.030 are each amended to read as follows:

(1) The community economic revitalization board is hereby created to exercise the powers granted under this chapter.

(2) The board shall consist of ((~~nine~~)) eleven persons appointed by the governor ((~~and~~)), the director of commerce and economic development, the director of ((~~planning and community affairs~~)) community development, the director of revenue, the commissioner of employment security, and ((~~the chairmen~~)) a majority member and a minority member of the committee on ((~~commerce~~)) trade and economic development of the house of representatives; and a majority member and a minority member of the committee on commerce and labor of the senate, or the equivalent standing committees, for a total of ((~~seventeen~~)) nineteen members. Legislative members shall be chosen by the leader of their respective caucuses. The appointive members shall be as follows: A recognized private or public sector economist selected from the governor's council of economic advisors; one port district official; one county official; one city official; one representative of the public; one representative of small businesses each from: (a) The area west of Puget Sound, (b) the area east of Puget Sound and west of the Cascade range, (c) the area east of the Cascade range and west of the Columbia river, and (d) the area east of the Columbia river; one executive from large businesses each from the area west of the Cascades and the area east of the Cascades. The appointive members shall initially be appointed to terms as follows: Three members for one-year terms, three members for two-year terms, and three members for three-year terms which shall include the chairman. Thereafter each succeeding term shall be for three years. The representative from the governor's council of economic advisors shall serve as chairman of the board. The director of the department of commerce and economic development shall serve as vice chairman.

(3) Staff support shall be provided by the department of commerce and economic development.

(4) All appointive members of the board shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060 as now or hereafter amended.

(5) If a vacancy occurs by death, resignation, or otherwise of appointive members of the board, the governor shall fill the same for the unexpired term. Any members of the board, appointive or otherwise, may be removed for malfeasance or misfeasance in office, upon specific written charges by the governor, under chapter 34.04 RCW.

NEW SECTION. Sec. 3. A new section is added to chapter 43.160 RCW to read as follows:

Each agency head of an executive branch agency who is appointed to the community economic revitalization board under RCW 43.160.030 may designate an agency employee to take his or her place on the board for meetings in which the agency head will be absent. The designee shall have all powers to vote and participate in board deliberations as have the other board members.

NEW SECTION. Sec. 4. A new section is added to chapter 43.160 RCW to read as follows:

In order to enhance competition for grants and loans and the quality of projects for which loans and grants are sought, the board shall take such reasonable measures as are necessary to familiarize government officials and members of the public with the provisions of this chapter, particularly the board's authority to make grants and loans.

NEW SECTION. Sec. 5. A new section is added to chapter 43.160 RCW to read as follows:

(1) Except as authorized to the contrary under subsection (2) of this section, from all funds available to the board for loans and grants, the board shall spend at least twenty percent for grants and loans for projects in distressed counties. For purposes of this section, the term "distressed counties" includes any county, in which the average level of unemployment for the three years before the year in which an application for a loan or grant is filed, exceeds the average state employment for those years by twenty percent.

(2) If at any time during the last six months of a biennium the board finds that the actual and anticipated applications for qualified projects in distressed counties are clearly insufficient to use up the twenty percent allocation, then the board shall estimate the amount of the insufficiency and during the remainder of the biennium may use that amount of the allocation for loans and grants for projects not located in distressed counties.