AN ACT Relating to labor surplus areas; and amending RCW 43.31.085, 43.31.524, 43.31.526, 43.160.076, 43.163.080, 43.165.010, 43.165.020, 43.165.030, 43.165.040, 43.165.050, 43.165.060, 43.165.080, 43.165.090, 43.165.100, 43.168.010, 43.168.020, 43.168.030, 43.168.050, 43.168.120, 43.220.220, 50.65.138, 67.28.210, and 82.60.010.

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

Sec. 1. Section 11, chapter 466, Laws of 1985 as last amended by section 2, chapter 430, Laws of 1989 and RCW 43.31.085 are each amended to read as follows:

The business assistance center shall:

(1) Serve as the state's lead agency and advocate for the development and conservation of businesses.

(2) Coordinate the delivery of state programs to assist businesses.

(3) Provide comprehensive referral services to businesses requiring government assistance.

(4) Serve as the business ombudsman within state government and advise the governor and the legislature of the need for new legislation to improve the effectiveness of state programs to assist businesses.

(5) Aggressively promote business awareness of the state's business programs and distribute information on the services available to businesses.

(6) Develop, in concert with local economic development and business assistance organizations, coordinated processes that complement both state and local activities and services.

(7) The business assistance center shall work with other federal, state, and local agencies and organizations to ensure that business assistance services including small business, trade services, and ((~~distressed~~)) labor surplus area programs are provided in a coordinated and cost-effective manner.

(8) In collaboration with the child care coordinating committee in the department of social and health services, prepare and disseminate information on child care options for employers and the existence of the program. As much as possible, and through interagency agreements where necessary, such information should be included in the routine communications to employers from (a) the department of revenue, (b) the department of labor and industries, (c) the department of community development, (d) the employment security department, (e) the department of trade and economic development, (f) the small business development center, and (g) the department of social and health services.

(9) In collaboration with the child care coordinating committee in the department of social and health services, compile information on and facilitate employer access to individuals, firms, organizations, and agencies that provide technical assistance to employers to enable them to develop and support child care services or facilities.

(10) Actively seek public and private money to support the child care facility fund described in RCW 43.31.502, staff and assist the child care facility fund committee as described in RCW 43.31.504, and work to promote applications to the committee for loan guarantees, loans, and grants.

Sec. 2. Section 3, chapter 417, Laws of 1989 and RCW 43.31.524 are each amended to read as follows:

There is established a Washington marketplace program within the business assistance center established under RCW 43.31.083. The program shall assist Washington businesses to competitively meet their needs for goods and services within Washington by providing information relating to the replacement of imports or the fulfillment of new requirements with in-state products. The program shall place special emphasis on strengthening rural economies in economically ((~~distressed~~)) labor surplus areas of the state as defined in RCW 82.60.020(3). The Washington marketplace program shall consult with the community revitalization team established pursuant to chapter 43.165 RCW.

Sec. 3. Section 4, chapter 417, Laws of 1989 and RCW 43.31.526 are each amended to read as follows:

(1) The department shall contract with local nonprofit organizations in at least four ((~~economically distressed~~)) labor surplus areas of the state, as defined in RCW 82.60.020(3), to implement the Washington marketplace program in these areas. The department, in order to foster cooperation and linkages between ((~~distressed~~)) labor surplus and nondistressed areas and urban and rural areas, may enter into joint contracts with multiple nonprofit organizations. Each joint contract must include at least one nonprofit organization that is located in a ((~~distressed~~)) labor surplus area. No joint contract may include more than one nonprofit organization located in an urban location. In contracting with local nonprofit organizations, the department shall:

(a) Award contracts based on a competitive bidding process, pursuant to chapter 43.19 RCW;

(b) Give preference to nonprofit organizations representing a broad spectrum of community support; and

(c) Ensure that each location contain sufficient business activity to permit effective program operation and contribute at least twenty percent local funding.

(2) The contracts with local nonprofit organizations shall be for the performance of the following services for the Washington marketplace program:

(a) Contacting Washington businesses to identify goods and services they are currently buying or are planning in the future to buy out-of-state and determine which of these goods and services could be purchased on competitive terms within the state;

(b) Identifying locally sold goods and services which are currently provided by out-of-state businesses;

(c) Determining, in consultation with local business, goods and services for which the business is willing to make contract agreements;

(d) Advertising market opportunities described in (c) of this subsection; and

(e) Receiving bid responses from potential suppliers and sending them to that business for final selection.

(3) Contracts may include provisions for charging service fees of businesses that profit as a result of participation in the program.

(4) The center shall also perform the following activities in order to promote the goals of the program:

(a) Prepare promotional materials or conduct seminars to inform communities and organizations about the Washington marketplace program;

(b) Provide technical assistance to communities and organizations interested in developing an import replacement program;

(d) Provide continuing management and technical assistance to local contractors; and

(e) Report by December 31 of each year to the senate economic development and labor committee and to the house of representatives trade and economic development committee describing the activities of the Washington marketplace program.

Sec. 4. Section 6, chapter 446, Laws of 1985 and RCW 43.160.076 are each amended 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~~)) labor surplus counties. For purposes of this section, the term "((~~distressed~~)) labor surplus 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~~)) labor surplus 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~~)) labor surplus counties.

Sec. 5. Section 9, chapter 279, Laws of 1989 and RCW 43.163.080 are each amended to read as follows:

(1) The authority is authorized to provide assistance and advice to persons forming corporations under chapter 31.24 RCW.

(2) The authority may contract with corporations organized under this chapter. Each contract shall specify that the money received under the contract shall be used to provide management assistance, which may include management and technical advice and services and other technical support, to businesses receiving financing from the contracting corporation. No more than five corporations may contract with the authority under this section at any time. No corporation may receive more than a total of two hundred fifty thousand dollars under this section.

(3) To qualify for a contract under this section, a corporation shall agree that at least one-half of the corporation's loans and investments will be to businesses operating in ((~~distressed~~)) labor surplus areas as defined in RCW 43.165.010(3)(a) and that the corporation's loans and investments will be to businesses that have agreed to enter first-source hiring agreements with the employment security department, local private industry councils, local labor unions, or other employment or placement agencies. These agreements shall require the businesses to interview prospective employees from a list of the unemployed supplied by the employment or placement agencies and hire any qualified candidates on the list before hiring any candidates not on the list. The first-source hiring agreements shall require the business to:

(a) Provide a job description for each position;

(b) Provide a description of the skills each position requires; and

The first-source hiring agreements shall require the employment or placement agency to provide a list of candidates who have expressed interest in each available position and who meet the skill requirements of each position. No fees may be charged of the unemployed candidates on the list supplied by the employment or placement agency.

(4) The authority shall adopt rules to carry out this section.

(5) The authority shall adopt general operating procedures for the authority. The authority shall also adopt operating procedures for individual programs as they are developed for obtaining funds and for providing funds to borrowers. These operating procedures shall be adopted by resolution prior to the authority operating the applicable programs.

(6) The operating procedures shall include, but are not limited to: (a) Appropriate minimum reserve requirements to secure the authority's bonds and other obligations; (b) appropriate standards for securing loans and other financing the authority provides to borrowers, such as guarantees or collateral; and (c) appropriate standards for providing financing to borrowers, such as (i) the borrower is a responsible party with a high probability of being able to repay the financing provided by the authority, (ii) the financing is reasonably expected to provide economic growth or stability in the state by enabling a borrower to increase or maintain jobs or capital in the state, (iii) the borrowers with the greatest needs or that provide the most public benefit are given higher priority by the authority, and (iv) the financing is consistent with any plan adopted by the authority under RCW 43.163.090.

Sec. 6. Section 1, chapter 229, Laws of 1985 as amended by section 1, chapter 461, Laws of 1987 and RCW 43.165.010 are each amended to read as follows:

Unless the context clearly requires to the contrary, the definitions in this section apply throughout this chapter.

(1) "Department" means the department of community development.

(2) "Director" means the director of the department.

(3) "((~~Distressed~~)) Labor surplus area" means: (a) A county that has an unemployment rate that is twenty percent above the state-wide average for the previous three years; or (b) a community or area that has experienced sudden and severe or long-term and severe loss of employment, or erosion of its economic base due to decline of its dominant industries; or (c) an area within a county which area: (i) Is composed of contiguous census tracts; (ii) has a minimum population of five thousand persons; (iii) has at least seventy percent of its families and unrelated individuals with incomes below eighty percent of the county's median income for families and unrelated individuals; and (iv) has an unemployment rate which is at least forty percent higher than the county's unemployment rate. For purposes of this definition, "families and unrelated individuals" has the same meaning that is ascribed to that term by the federal department of housing and urban development in its regulations authorizing action grants for economic development and neighborhood revitalization projects.

(4) "Economic development revolving loan funds" means a local, not-for-profit or governmentally sponsored business loan program.

(5) "Team" means the community revitalization team.

(6) "Technical assistance" includes, but is not limited to, assistance with strategic planning, market research, business plan development review, organization and management development, accounting and legal services, grant and loan packaging, and other assistance which may be expected to contribute to the redevelopment and economic well-being of a ((~~distressed~~)) labor surplus area.

Sec. 7. Section 2, chapter 229, Laws of 1985 and RCW 43.165.020 are each amended to read as follows:

There is established within the department a community revitalization team. The team shall be responsible for providing comprehensive technical and business assistance to ((~~distressed~~)) labor surplus areas.

Sec. 8. Section 3, chapter 229, Laws of 1985 as amended by section 13, chapter 195, Laws of 1987 and RCW 43.165.030 are each amended to read as follows:

The team shall be a combined effort of the department, the employment security department, the commission for vocational education, and the department of trade and economic development or its successor agency. Each agency shall provide staff to the team as expertise is needed. The team shall have the ability to:

(1) Identify emerging problems for businesses, workers, and communities and provide for timely communication on available assistance by state and federal programs;

(2) Assist employers and workers faced with substantial business reductions by providing examples of responses to retain business production and diversification and promote retraining and reemployment of unemployed workers using links with local economic development efforts;

(3) Examine the economic health of a community, including the economic base and its strengths, weaknesses, and untapped opportunities;

(4) Assist to develop and coordinate industry services for tourist promotion and recruiting new firms to the area;

(5) Provide technical assistance as to the potential viability of a business retention effort;

(6) Convene meetings of local business, labor, and education leaders and public officials to determine immediate and long-range steps to revitalize the community;

(7) Conduct work shops in ((~~distressed~~)) labor surplus areas or state-wide conferences on problems in revitalizing stagnant communities, models for redevelopment and diversification, and means to bring additional resources to developing solutions; and

(8) Utilize funds to match local and private resources to assist in the analysis and implementation of business retention and expansion efforts.

Sec. 9. Section 4, chapter 229, Laws of 1985 and RCW 43.165.040 are each amended to read as follows:

The team's response shall be triggered by a request made by community leaders to the director. The director may direct the team to explore initial opportunities in ((~~an economically distressed~~)) a labor surplus area by convening meetings with local groups. A formal request shall be made that details the type of assistance needed, local resources available to help with the effort, and a description of the problems or opportunities where the team is needed. In making a decision on the extent to which the team is needed in a ((~~distressed~~)) labor surplus area, the director shall consider community initiative, degree of ((~~distress~~)) labor surplus, market conditions for business opportunities, resources available for the effort, and expected outcomes. The director shall respond to a formal request for services within seven days of receipt of the request.

Sec. 10. Section 5, chapter 229, Laws of 1985 and RCW 43.165.050 are each amended to read as follows:

(1) The team shall assist in the preparation of an action plan together with community leaders as to the best strategies for facilitating revitalization efforts.

(2) The team shall prepare a problem statement which identifies the causes and reasons for ((~~distress~~)) labor surplus in the affected area.

(3) The team shall recommend to the director methods to use private, state, and federal resources and shall analyze their potential costs and benefits.

(4) The director shall work with the governor and other state and federal agencies to determine the availability of resources and appropriate courses of action.

(5) The director shall encourage the direct application of private resources in the analysis and development of solutions.

(6) The director shall assist in the dissemination of the action plan at a public meeting of interested groups in the ((~~distressed~~)) labor surplus area.

Sec. 11. Section 6, chapter 229, Laws of 1985 and RCW 43.165.060 are each amended to read as follows:

Appropriations to any agency for the purposes of this chapter shall be used in accordance with the following rules:

(1) The agency shall give preference to projects which have been developed by action of the team and are requested by the director.

(2) The agency shall attempt to ensure that funds available to its program for ((~~distressed~~)) labor surplus areas are reasonably available throughout the biennium.

(3) The agency may spend the funds available to it for activities in ((~~distressed~~)) labor surplus areas without the director's request.

(4) If funds to be spent in ((~~distressed~~)) labor surplus areas are not used by February 1 of the second year of the biennium or are not requested for use by the director, then these funds shall be released for use by the agency under the activities for which they were generally intended.

Sec. 12. Section 8, chapter 229, Laws of 1985 as amended by section 14, chapter 195, Laws of 1987 and RCW 43.165.080 are each amended to read as follows:

The department of trade and economic development shall provide the team and leaders in the ((~~distressed~~)) labor surplus area with assistance including but not limited to the following:

(1) Identifying sources of assistance to firms to diversify production or to reuse unused plant capacity;

(2) Identifying raw materials suppliers, subcontractors, and other product needs which can be used locally;

(3) Facilitating marketing of firms to locate in the area or the marketing of a firm scheduled for closure;

(4) Assisting with tourist promotion activities; and

(5) Assisting with site improvements.

Sec. 13. Section 9, chapter 229, Laws of 1985 and RCW 43.165.090 are each amended to read as follows:

The employment security department shall provide the team and leaders in the ((~~distressed~~)) labor surplus area with assistance including but not limited to the following:

(1) Establishing links between service delivery areas as created under the federal job training partnership act and businesses and persons needing training resources in ((~~distressed~~)) labor surplus areas;

(2) Providing labor market information and wage and benefit reports;

(3) Informing new and existing firms of retraining funding sources; and

(4) Locating suitable employees, including displaced workers, for new employment opportunities.

Sec. 14. Section 10, chapter 229, Laws of 1985 and RCW 43.165.100 are each amended to read as follows:

The commission for vocational education shall provide the community revitalization team and community leaders in the ((~~distressed~~)) labor surplus area with assistance, including but not limited to:

(1) Establish links between service delivery areas and training providers to provide services under the education coordination and grants program of the federal job training partnership act;

(2) Assist in the delivery of education and training services to ((~~distressed~~)) labor surplus areas;

(3) Address the needs of ((~~distressed~~)) labor surplus areas and the allocation of federal vocational education funds to those areas in the development of the state plan for vocational education; and

(4) Assist in the development of partnerships between educational institutions and businesses that can benefit from job skills program grants.

Sec. 15. Section 1, chapter 164, Laws of 1985 and RCW 43.168.010 are each amended to read as follows:

The legislature finds that:

(1) The economic health and well-being of the state, particularly in areas of high unemployment, economic stagnation, and poverty, is of substantial public concern.

(2) The consequences of minimal economic activity and persistent unemployment and underemployment are serious threats to the safety, health, and welfare of residents of these areas, decreasing the value of private investments and jeopardizing the sources of public revenue.

(3) The economic and social interdependence of communities and the vitality of industrial and economic activity necessitates, and is in part dependent on preventing substantial dislocation of residents and rebuilding the diversification of the areas' economy.

(4) The ability to remedy problems in stagnant areas of the state is beyond the power and control of the regulatory process and influence of the state, and the ordinary operations of private enterprise without additional governmental assistance are insufficient to adequately remedy the problems of poverty and unemployment.

(5) The revitalization of depressed communities requires the stimulation of private investment, the development of new business ventures, the provision of capital to ventures sponsored by local organizations and capable of growth in the business markets, and assistance to viable, but under-financed, small businesses in order to create and preserve jobs that are sustainable in the local economy.

Therefore, the legislature declares there to be a substantial public purpose in providing capital to promote economic development and job creation in areas of economic stagnation, unemployment, and poverty. To accomplish this purpose, the legislature hereby creates the Washington state development loan fund committee and vests in the committee the authority to spend federal funds to stimulate the economy of ((~~distressed~~)) labor surplus areas.

Sec. 16. Section 2, chapter 164, Laws of 1985 as last amended by section 18, chapter 42, Laws of 1988 and RCW 43.168.020 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Committee" means the Washington state development loan fund committee.

(2) "Department" means the department of community development.

(3) "Director" means the director of the department of community development.

(4) "((~~Distressed~~)) Labor surplus area" means: (a) A county which has an unemployment rate which is twenty percent above the state average for the immediately previous three years; (b) a metropolitan statistical area, as defined by the office of federal statistical policy and standards, United States department of commerce, in which the average level of unemployment for the calendar year immediately preceding the year in which an application is filed under this chapter exceeds the average state unemployment for such calendar year by twenty percent. Applications under this subsection (4)(b) shall be filed by April 30, 1989; or (c) an area within a county, which area: (i) Is composed of contiguous census tracts; (ii) has a minimum population of five thousand persons; (iii) has at least seventy percent of its families and unrelated individuals with incomes below eighty percent of the county's median income for families and unrelated individuals; and (iv) has an unemployment rate which is at least forty percent higher than the county's unemployment rate. For purposes of this definition, "families and unrelated individuals" has the same meaning that is ascribed to that term by the federal department of housing and urban development in its regulations authorizing action grants for economic development and neighborhood revitalization projects.

(5) "Fund" means the Washington state development loan fund.

(6) "Local development organization" means a nonprofit organization which is organized to operate within an area, demonstrates a commitment to a long-standing effort for an economic development program, and makes a demonstrable effort to assist in the employment of unemployed or underemployed residents in an area.

(7) "Project" means the establishment of a new or expanded business in an area which when completed will provide employment opportunities. "Project" also means the retention of an existing business in an area which when completed will provide employment opportunities.

Sec. 17. Section 3, chapter 164, Laws of 1985 and RCW 43.168.030 are each amended to read as follows:

(1) The Washington state development loan fund committee is established as an entity within the department of community development. The committee shall have seven members. The director shall appoint the members, subject to the following requirements: (a) Three members shall be experienced in investment finance and have skills in providing capital to new and innovative businesses, in starting and operating businesses and providing professional services to small or expanding businesses; (b) two members shall be residents of ((~~distressed~~)) labor surplus areas; (c) one member shall represent organized labor; and (d) one member shall represent a minority business. Careful consideration in making these appointments shall be taken to ensure that the various geographic regions of the state are represented, that members will be available for meetings on a regular basis, and will have a commitment to working with local governments and local development organizations.

(2) Each member appointed by the director shall serve a term of three years, except that of the members first appointed, two shall serve two-year terms and two shall serve one-year terms. A person appointed to fill a vacancy of a member shall be appointed in a like manner and shall serve for only the unexpired term. A member is eligible for reappointment. A member may be removed by the director only for cause.

(3) The director shall designate a member of the board as its chairperson. The committee may elect such other officers as it deems appropriate. Four members of the committee constitute a quorum and four affirmative votes are necessary for the transaction of business or the exercise of any power or function of the committee.

(4) The members of the committee shall serve without compensation, but are entitled to reimbursement for actual and necessary expenses incurred in the performance of official duties in accordance with RCW 43.03.050 and 43.03.060.

(5) Members shall not be liable to the state, to the fund, or to any other person as a result of their activities, whether ministerial or discretionary, as members except for willful dishonesty or intentional violations of law. The department may purchase liability insurance for members and may indemnify these persons against the claims of others.

Sec. 18. Section 5, chapter 164, Laws of 1985 as last amended by section 9, chapter 430, Laws of 1989 and RCW 43.168.050 are 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) Will result in the creation of employment opportunities or the maintenance of 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 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 shall, subject to federal block grant criteria, give higher priority to economic development projects that contain provisions for child care.

(3) 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.

(4) 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.

(5) (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.

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

(7) 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.

(8) 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.

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

(10) The committee shall make at least eighty percent of the appropriated funds available to projects located in ((~~distressed~~)) labor surplus areas, and may make up to twenty percent available to projects located in areas not designated as ((~~distressed~~)) having a labor surplus. The committee shall not make funds available to projects located in areas not designated as ((~~distressed~~)) having a labor surplus if the fund's net worth is less than seven million one hundred thousand dollars.

(11) If an objection is raised to a project on the basis of unfair business competition, the committee shall evaluate the potential impact of a project on similar businesses located in the local market area. A grant may be denied by the committee if a project is not likely to result in a net increase in employment within a local market area.

Sec. 19. Section 6, chapter 461, Laws of 1987 and RCW 43.168.120 are each amended to read as follows:

(1) The committee shall develop guidelines for development loan funds to be used to fund existing economic development revolving loan funds. Consideration shall be given to the selection process for grantees, loan quality criteria, legal and regulatory issues, and ways to minimize duplication between development loan funds and local economic development revolving loan funds.

(2) If it appears that all of the funds appropriated to the development loan fund for a biennium will not be fully granted to local governments within that biennium, the committee may make available up to twenty percent of the eighty percent of the funds available to projects in ((~~distressed~~)) labor surplus areas under RCW 43.168.050(9) for grants to local governments to assist existing economic development revolving loan funds in ((~~distressed~~)) labor surplus areas. The grants to local governments shall be utilized to make loans to businesses that meet the specifications for loans under this chapter. The local governments shall, to the extent permitted under federal law, agree to convey to the development loan fund the principal and interest payments from existing loans that the local governments have made through their revolving loan funds. 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.

Sec. 20. Section 2, chapter 230, Laws of 1985 and RCW 43.220.220 are each amended to read as follows:

Sixty percent of the general funds available to the youth employment exchange as prescribed in chapter 50.65 RCW, and the Washington conservation corps shall be for enrollees and members from ((~~distressed~~)) labor surplus areas and for projects in ((~~distressed~~)) labor surplus areas. A ((~~distressed~~)) labor surplus area shall mean: (1) A county which has an unemployment rate which is twenty percent above the state average for the immediately previous three years; (2) a community which has experienced sudden and severe loss of employment; or (3) an area within a county which area: (a) Is composed of contiguous census tracts; (b) has a minimum population of five thousand persons; (c) the median household income is at least thirty-five percent below the county's median household income, as determined from data collected for the previous United States ten-year census; and (d) has an unemployment rate which is at least forty percent higher than the county's unemployment rate. For purposes of this definition, "families and unrelated individuals" has the same meaning that is ascribed to that term by the federal department of housing and urban development in its regulations authorizing action grants for economic development and neighborhood revitalization projects.

The department of employment security shall evaluate projects on the basis of average cost per enrollee, public benefit of the proposed project, opportunity for placement of enrollees and corps members, degree of public and private support, and coordination of projects with other agencies. A training plan shall be developed for each corps member and enrollee. Preference shall be given to persons not less than eighteen years of age, and not older than twenty-three years of age. The department of employment security shall ensure the availability of corps members to respond to emergency projects and needs as they arise.

Agencies which do not develop projects which meet the department's requirements in the biennium, and result in unexpended funds, shall have those unexpended funds go to other ((~~distressed~~)) labor surplus areas to encourage the recruitment of disadvantaged unemployed youth.

Sec. 21. Section 10, chapter 167, Laws of 1987 and RCW 50.65.138 are each amended to read as follows:

Sixty percent of the general funds available to the service corps program shall be for enrollees from ((~~distressed~~)) labor surplus areas and for projects in ((~~distressed~~)) labor surplus areas. A ((~~distressed~~)) labor surplus area shall mean:

(1) A county which has an unemployment rate which is twenty percent above the state average for the immediately preceding three years;

(2) A community which has experienced sudden and severe loss of employment; or

(3) An area within a county which area:

(a) Is composed of contiguous census tracts;

(b) Has a minimum population of five thousand persons;

(c) The median household income is at least thirty-five percent below the county's median household income, as determined from data collected for the preceding United States ten-year census; and

(d) Has an unemployment rate which is at least forty percent higher than the county's unemployment rate. For purposes of this definition, "families and unrelated individuals" has the same meaning that is ascribed to that term by the federal department of housing and urban development in its regulations authorizing action grants for economic development and neighborhood revitalization projects.

Sec. 22. Section 14, chapter 236, Laws of 1967 as last amended by section 24, chapter 1, Laws of 1988 ex. sess. and RCW 67.28.210 are each amended to read as follows:

All taxes levied and collected under RCW 67.28.180, 67.28.230, and 67.28.240 shall be credited to a special fund in the treasury of the county or city imposing such tax. Such taxes shall be levied only for the purpose of paying all or any part of the cost of acquisition, construction, or operating of stadium facilities, convention center facilities, performing arts center facilities, and/or visual arts center facilities or to pay or secure the payment of all or any portion of general obligation bonds or revenue bonds issued for such purpose or purposes under this chapter, or to pay for advertising, publicizing, or otherwise distributing information for the purpose of attracting visitors and encouraging tourist expansion when a county or city has imposed such tax for such purpose, or as one of the purposes hereunder, and until withdrawn for use, the moneys accumulated in such fund or funds may be invested in interest bearing securities by the county or city treasurer in any manner authorized by law. In addition such taxes may be used to develop strategies to expand tourism in ((~~distressed~~)) labor surplus areas, as defined in RCW 43.165.010: PROVIDED, That any county, and any city within a county, bordering upon Grays Harbor may use the proceeds of such taxes for construction and maintenance of a movable tall ships tourist attraction in cooperation with a tall ships restoration society, except to the extent that such proceeds are used for payment of principal and interest on debt incurred prior to June 11, 1986: PROVIDED FURTHER, That any city or county may use the proceeds of such taxes for the refurbishing and operation of a steam railway for tourism promotion purposes.

Sec. 23. Section 1, chapter 232, Laws of 1985 and RCW 82.60.010 are each amended to read as follows:

The legislature finds that there are several areas in the state that are characterized by very high levels of unemployment and poverty. The ((~~legislative [legislature]~~)) legislature further finds that economic stagnation is the primary cause of this high unemployment rate and poverty; that new state policies are necessary in order to promote economic stimulation and new employment opportunities in these ((~~distressed~~)) labor surplus areas; and that policies providing incentives for economic growth in these ((~~distressed~~)) labor surplus areas are essential. For these reasons, the legislature hereby establishes a tax deferral program to be effective solely in ((~~distressed~~)) labor surplus areas and under circumstances where the deferred tax payments are for investments or costs that result in the creation of a specified number of jobs. The legislature declares that this limited program serves the vital public purpose of creating employment opportunities and reducing poverty in the ((~~distressed~~)) labor surplus areas of the state.