[atlas:bill]

AN ACT Relating to rural economic development; amending RCW 43.160.020, 43.160.060, 43.160.070, 43.160.080, 43.160.900, and 82.14.370; adding a new section to chapter 44.28 RCW; adding a new chapter to Title 43 RCW; creating new sections; repealing RCW 43.168.010, 43.168.020, 43.168.031, 43.168.040, 43.168.050, 43.168.060, 43.168.070, 43.168.090, 43.168.100, 43.168.110, 43.168.120, 43.168.130, 43.168.140, 43.168.150, and 43.168.900; and providing an expiration date.

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

PART I

INFRASTRUCTURE FINANCING

Sec. 1. RCW 43.160.020 and 1997 c 367 s 8 are each amended to read as follows:

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

(1) "Board" means the community economic revitalization board.

(2) "Bond" means any bond, note, debenture, interim certificate, or other evidence of financial indebtedness issued by the board pursuant to this chapter.

(3) "Department" means the department of community, trade, and economic development.

(4) "Distressed county" means any county in which the average level of unemployment, for the three years before the year in which an application for financial assistance is filed, exceeds the average state unemployment for those years by twenty percent.

(5) "Financial institution" means any bank, savings and loan association, credit union, development credit corporation, insurance company, investment company, trust company, savings institution, or other financial institution approved by the board and maintaining an office in the state.

((~~(5)~~)) (6) "Industrial development facilities" means "industrial development facilities" as defined in RCW 39.84.020.

((~~(6)~~)) (7) "Industrial development revenue bonds" means tax-exempt revenue bonds used to fund industrial development facilities.

((~~(7)~~)) (8) "Local government" or "political subdivision" means any port district, county, city, town, special purpose district, and any other municipal corporations or quasi-municipal corporations in the state providing for public facilities under this chapter.

((~~(8)~~)) (9) "Sponsor" means any of the following entities which customarily provide service or otherwise aid in industrial or other financing and are approved as a sponsor by the board: A bank, trust company, savings bank, investment bank, national banking association, savings and loan association, building and loan association, credit union, insurance company, or any other financial institution, governmental agency, or holding company of any entity specified in this subsection.

((~~(9)~~)) (10) "Umbrella bonds" means industrial development revenue bonds from which the proceeds are loaned, transferred, or otherwise made available to two or more users under this chapter.

((~~(10)~~)) (11) "User" means one or more persons acting as lessee, purchaser, mortgagor, or borrower under a financing document and receiving or applying to receive revenues from bonds issued under this chapter.

((~~(11)~~)) (12) "Public facilities" means bridges, roads, domestic and industrial water, sanitary sewer, storm sewer, railroad, electricity, natural gas, buildings or structures, and port facilities.

((~~(12)~~)) (13) "Rural natural resources impact area" means:

(a) A nonmetropolitan county, as defined by the 1990 decennial census, that meets three of the five criteria set forth in subsection ((~~(13)~~)) (14) of this section;

(b) A nonmetropolitan county with a population of less than forty thousand in the 1990 decennial census, that meets two of the five criteria as set forth in subsection ((~~(13)~~)) (14) of this section; or

(c) A nonurbanized area, as defined by the 1990 decennial census, that is located in a metropolitan county that meets three of the five criteria set forth in subsection ((~~(13)~~)) (14) of this section.

((~~(13)~~)) (14) For the purposes of designating rural natural resources impact areas, the following criteria shall be considered:

(a) A lumber and wood products employment location quotient at or above the state average;

(b) A commercial salmon fishing employment location quotient at or above the state average;

(d) Projected or actual direct commercial salmon fishing job losses of one hundred positions or more; and

(e) An unemployment rate twenty percent or more above the state average. The counties that meet these criteria shall be determined by the employment security department for the most recent year for which data is available. For the purposes of administration of programs under this chapter, the United States post office five-digit zip code delivery areas will be used to determine residence status for eligibility purposes. For the purpose of this definition, a zip code delivery area of which any part is ten miles or more from an urbanized area is considered nonurbanized. A zip code totally surrounded by zip codes qualifying as nonurbanized under this definition is also considered nonurbanized. The office of financial management shall make available a zip code listing of the areas to all agencies and organizations providing services under this chapter.

Sec. 2. RCW 43.160.060 and 1996 c 51 s 5 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 development of land and improvements for public facilities, as well as the construction, rehabilitation, alteration, expansion, or improvement of the facilities. A grant may also be authorized for purposes designated in this chapter, but only when, and to the extent that, a loan is not reasonably possible, given the limited resources of the political subdivision and the finding by the board that unique circumstances exist. The board shall not obligate more than twenty percent of its biennial appropriation as grants.

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 provide financial assistance:

(a) For a project the primary purpose of which is to facilitate or promote a retail shopping development or expansion.

(b) For any project that evidence exists would directly result in a development or expansion that would displace existing jobs in any other community in the state.

(2) The board shall only provide financial assistance:

(a) For those projects which would result in specific private developments or expansions (i) in manufacturing, production, food processing, assembly, warehousing, and industrial distribution; (ii) for processing recyclable materials or for facilities that support recycling, including processes not currently provided in the state, including but not limited to, de-inking facilities, mixed waste paper, plastics, yard waste, and problem-waste processing; (iii) for manufacturing facilities that rely significantly on recyclable materials, including but not limited to waste tires and mixed waste paper; (iv) which support the relocation of businesses from nondistressed urban areas to distressed rural areas; or (v) which substantially support the trading of goods or services outside of the state's borders.

(b) 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.

(c)(i) Except as provided in (c)(ii) of this subsection, when the application includes convincing evidence that a specific private development or expansion is ready to occur and will occur only if the public facility improvement is made.

(ii) Applications for projects located in distressed counties or rural natural resources impact areas need not demonstrate evidence that specific private development or expansion is ready to occur if funds are provided.

(3) The board shall prioritize each proposed project according to:

(a) The relative benefits provided to the community by the jobs the project would create, not just the total 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 financial assistance than there are funds available, the board is instructed to fund projects in order of their priority~~)); and

(b) The rate of return on the state's investment, that includes the expected increase in state and local tax revenues associated with the project.

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

Before any financial assistance application is approved, the political subdivision seeking the assistance must demonstrate to the community economic revitalization board that no other timely source of funding is available to it at costs reasonably similar to financing available from the community economic revitalization board.

Sec. 3. RCW 43.160.070 and 1998 c 321 s 27 (Referendum Bill No. 49) are each amended to read as follows:

Public facilities financial assistance, when authorized by the board, is subject to the following conditions:

(1) The moneys in the public facilities construction loan revolving account and the distressed county public facilities construction loan account shall be used solely to fulfill commitments arising from financial assistance authorized in this chapter or, during the 1989-91 fiscal biennium, for economic development purposes as appropriated by the legislature. The total outstanding amount which the board shall dispense at any time pursuant to this section shall not exceed the moneys available from the accounts. The total amount of outstanding financial assistance in Pierce, King, and Snohomish counties shall never exceed sixty percent of the total amount of outstanding financial assistance disbursed by the board under this chapter without reference to financial assistance provided under RCW 43.160.220.

(2) On contracts made for public facilities loans the board shall determine the interest rate which loans shall bear. The interest rate shall not exceed ten percent per annum. The board may provide reasonable terms and conditions for repayment for loans, including partial forgiveness of loan principal and interest payments on projects located in distressed counties or rural natural resources impact areas, as the board determines. The loans shall not exceed twenty years in duration.

(3) Repayments of loans made from the public facilities construction loan revolving account under the contracts for public facilities construction loans shall be paid into the public facilities construction loan revolving account. Repayments of loans made from the distressed county public facilities construction loan account under the contracts for public facilities construction loans shall be paid into the distressed county public facilities construction loan account. Repayments of loans from moneys from the new appropriation from the public works assistance account for the fiscal biennium ending June 30, 1999, shall be paid into the public works assistance account.

(4) When every feasible effort has been made to provide loans and if loans are not possible, the board may provide grants upon finding that unique circumstances exist.

Sec. 4. RCW 43.160.080 and 1998 c 321 s 30 (Referendum Bill No. 49) are each amended to read as follows:

There shall be a fund in the state treasury known as the public facilities construction loan revolving account, which shall consist of all moneys collected under this chapter or deposited by the state treasurer pursuant to any other legislative act, except moneys of the board collected in connection with the issuance of industrial development revenue bonds and moneys deposited in the distressed county public facilities construction loan account under RCW 43.160.220, and any moneys appropriated to it by law((: PROVIDED, That seventy-five percent of all principal and interest payments on loans made with the proceeds deposited in the account under section 901, chapter 57, Laws of 1983 1st ex. sess. shall be deposited in the general fund as reimbursement for debt service payments on the bonds authorized in RCW 43.83.184)). Disbursements from the revolving account shall be on authorization of the board. In order to maintain an effective expenditure and revenue control, the public facilities construction loan revolving account shall be subject in all respects to chapter 43.88 RCW.

Sec. 5. RCW 43.160.900 and 1993 c 320 s 8 are each amended to read as follows:

(1) The community economic revitalization board shall report to the appropriate standing committees of the legislature biennially on the implementation of this chapter. The report shall include information on the number of applications for community economic revitalization board assistance, the number and types of projects approved, the grant or loan amount awarded each project, the projected number of jobs created or retained by each project, the actual number of jobs created or retained by each project, the amount of state and local tax revenue generated by projects funded under this chapter, the number of delinquent loans, and the number of project terminations. The report may also include additional performance measures and recommendations for programmatic changes. The first report shall be submitted by December 1, 1994.

(2) The joint legislative audit and review committee shall contract for services to conduct a performance review on the effectiveness of the program administered by the board under this chapter. The costs for the performance reviews shall be paid from repayments of principal and interest on loans made under this chapter. The performance reviews shall be submitted to the appropriate committees of the legislature by December 1, 2000, December 1, 2004, and December 1, 2008.

Sec. 6. RCW 82.14.370 and 1998 c 55 s 6 are each amended to read as follows:

(1)(a) The legislative authority of a distressed county may impose a sales and use tax in accordance with the terms of this chapter. The tax is in addition to other taxes authorized by law and shall be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the county. The rate of tax shall not exceed 0.04 percent of the selling price in the case of a sales tax or value of the article used in the case of a use tax.

(b) The legislative authority of a distressed county may impose an additional sales and use tax in accordance with the terms of this chapter. The tax is in addition to other taxes authorized by law and may be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the county. The rate of tax may not exceed 0.04 percent of the selling price in the case of a sales tax or value of the article used in the case of a use tax.

(2) The tax imposed under subsection (1) of this section shall be deducted from the amount of tax otherwise required to be collected or paid over to the department of revenue under chapter 82.08 or 82.12 RCW. The department of revenue shall perform the collection of such taxes on behalf of the county at no cost to the county.

(3)(a) Moneys collected under this section shall only be used for the purpose of financing qualifying public facilities all for the purpose of job creation, job retention, or job expansion in ((~~rural~~)) distressed counties. The public facility must be listed as an item in the officially adopted county overall economic development plan or the economic development section of the county's comprehensive plan or the comprehensive plan of a city located within the county for those counties planning under RCW 36.70A.040, or, for those counties who do not plan under the growth management act and do not have an adopted overall economic development plan, the public facility must be listed in the county's capital facilities plan or the capital facilities plan of a city located within the county.

(b) The county must set aside an appropriate amount of money collected under subsection (1)(b) of this section to be used for the purpose of financing qualifying public facilities in cities and towns, located within the county, that qualify for municipal sales and use tax equalization under RCW 82.14.210(3).

(4) No tax may be collected under subsection (1)(b) of this section before ((~~July 1, 1998~~)) October 1, 1999. No tax may be collected under this section by a county more than twenty-five years after the date that a tax is first imposed under this section.

(5)(a) The joint legislative audit and review committee shall develop performance standards for judging the effectiveness of the use of the sales and use tax for public facilities in distressed counties. Those standards must include, to the extent possible, an examination of the effectiveness of the money to: (i) Create new job opportunities for area residents; (ii) retain existing employment opportunities; (iii) diversify the economic base of the county; and (iv) determine the return on the investment in the form of either increased or retained tax revenues at the local government.

(b) By February 1, 2000, and every February 1st thereafter, all distressed counties that impose the tax authorized under this section shall report to the joint legislative audit and review committee on the use and effectiveness of the sales and use tax money to meet the objectives of (a) of this subsection. The joint legislative audit and review committee shall report the results to the appropriate legislative committees by March 1, 2000, and every March 1st thereafter.

(6) For purposes of this section((,)):

(a) "Distressed county" means a county in which the average level of unemployment for the three years before the year in which a tax is first imposed under this section exceeds the average state unemployment for those years by twenty percent.

(b) "Public facility" means a bridge, road, domestic and industrial water, sanitary sewer, storm sewer, railroad, electricity, natural gas, building or structure, flood control facility, earth stabilization facility, and port facility in the state of Washington.

PART II

TASK FORCE ON DISTRESSED AREA ECONOMIC DEVELOPMENT

NEW SECTION. Sec. 7. (1) There is created the task force on distressed area economic development incentives to consist of seventeen members. The task force consists of the following members:

(a) The director of the department of community, trade, and economic development or the director's designee, who shall serve as chair;

(b) Two members of the house of representatives, one each from two of the largest caucuses, appointed by the speaker of the house;

(d) The director of the department of revenue or the director's designee;

(e) The director of the office of financial management or the director's designee;

(f) Four representatives of the business community appointed by the director of community, trade, and economic development, those four representatives consisting of one representative from a business with less than fifty employees that is located in a distressed area, one representative from a business with more than fifty employees that is located in a distressed area, one representative from a business with less than fifty employees that is located outside a distressed area, and one representative from a business with more than fifty employees that is located outside a distressed area;

(g) Two representatives of state-wide labor organizations, appointed by the director of community, trade, and economic development;

(h) Two representatives of local economic development organizations, appointed by the director of community, trade, and economic development; and

(i) Two representatives at large, appointed by the director of community, trade, and economic development.

(2) The vice-chair of the task force is selected by majority vote of the task force members. The members of the task force serve without compensation, but shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.

(3) The department of community, trade, and economic development and the department of revenue shall provide administrative and clerical assistance to the task force.

(4) As used in this section and section 8 of this act, "distressed area" means a rural natural resources impact area as defined in RCW 43.31.601 and an eligible area as defined in RCW 82.60.020.

NEW SECTION. Sec. 8. The task force on distressed area economic development incentives shall:

(1) Review existing federal and state programs and incentives designed to assist economic development efforts in distressed areas;

(2) Review programs, incentives, and techniques designed to assist economic development efforts in rural and distressed areas in other states;

(3) Make recommendations regarding a common definition of distress and options to consolidate, streamline, or strengthen existing programs or incentives designed to assist economic development efforts in distressed areas;

(4) Make recommendations regarding the establishment of performance measures and standards, and program evaluation standards for the various state incentive programs designed to encourage economic development;

(5) By November 30, 1999, prepare and submit to the governor and legislature, a report detailing its findings and recommendations regarding economic development efforts in distressed areas.

NEW SECTION. Sec. 9. Sections 7 and 8 of this act expire February 1, 2000.

PART III

RURAL WASHINGTON LOAN FUND

NEW SECTION. Sec. 10. The legislature finds that:

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

(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 geographic 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 partially depends upon 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) Revitalization of depressed communities requires stimulation of private investment, development of new business ventures, provision of capital to ventures sponsored by local organizations and capable of growth in the business markets, and assistance to viable, but underfinanced, 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 rural Washington loan fund and vests in the department of community, trade, and economic development the authority to spend federal funds to stimulate the economy of distressed areas.

NEW SECTION. Sec. 11. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Department" means the department of community, trade, and economic development.

(2) "Director" means the director of community, trade, and economic development.

(3) "Distressed 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 county that has a median household income that is less than seventy-five percent of the state median household income for the previous three years; (c) 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; (d) 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; or (e) a county designated as a rural natural resources impact area under RCW 43.31.601. For purposes of this subsection, "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) "Fund" means the rural Washington loan fund.

(5) "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.

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

NEW SECTION. Sec. 12. Subject to the restrictions contained in this chapter, the department is authorized to approve applications of local governments for federal community development block grant funds or other federal funds which the local governments would use to make loans to finance business projects within their jurisdictions. Applications approved by the department under this chapter must conform to applicable federal requirements.

NEW SECTION. Sec. 13. (1) The department may approve an application providing a loan for a project only if the department finds that the project:

(a) Will result in creation of employment opportunities, maintenance of threatened employment, or development or expansion of business ownership by minorities and women;

(b) Has been approved by the director as conforming to federal rules and regulations governing the spending of federal community development block grant funds or other applicable federal 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, employment of disadvantaged workers, and development or expansion of business ownership by minorities and women, 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 because the return on investment is inadequate.

(2)(a) The department shall, subject to applicable federal funding criteria, give priority to applications that capitalize or recapitalize an existing or new local revolving loan fund.

(b) The department shall, subject to applicable federal funding criteria, give higher priority to economic development projects that contain provisions for child care.

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

(4) The department 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 that organization by the recipient of the loan or grant.

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

(6) If there is more demand for loans than funds available for lending, the department 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 department shall also consider the employment which would be saved by its loan and the benefit relative to the community, not just the total number of new jobs or jobs saved.

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

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

(9) For loans not made to minority and women-owned businesses, the department shall make at least eighty percent of the appropriated funds available to projects located in distressed areas, and may make up to twenty percent available to projects located in areas not designated as distressed.

(10) If an objection is raised to a project on the basis of unfair business competition, the department shall evaluate the potential impact of a project on similar businesses located in the local market area. The department may deny a grant if the department determines the proposed project is not likely to result in a net increase in employment within a local market area.

(11) For loans to minority and women-owned businesses who do not meet the credit criteria, the department may consider nontraditional credit standards to offset past discrimination that has precluded full participation of minority or women-owned businesses in the economy. For applicants with high potential who do not meet the credit criteria, the department shall consider developing alternative borrowing methods. For applicants denied loans due to credit problems, the department shall provide financial counseling within available resources and provide referrals to credit rehabilitation services. In circumstances of competing applications, the department shall give priority to members of eligible groups which previously have been least served by this fund.

NEW SECTION. Sec. 14. The department is encouraged to work with local development organizations to promote applications for loans by the fund. The department shall also provide assistance to local development organizations and local governments to identify viable projects for consideration by the department. The department shall provide technical assistance to organizations that administer local revolving loan funds regarding practices to establish sustainable operations. The department shall adopt such rules and regulations as are appropriate to carry out its authority under this chapter.

NEW SECTION. Sec. 15. The department may receive and approve applications on a monthly basis but shall receive and approve applications on at least a quarterly basis for each fiscal year. The department shall make every effort to simplify the loan process for applicants. Department staff shall process and assist in the preparation of applications. Each application shall show in detail the nature of the project, the types and numbers of jobs to be created, wages to be paid to new employees, and methods of hiring unemployed persons from the local market area. Each application must contain a credit analysis of the business to receive the loan.

NEW SECTION. Sec. 16. The department shall make available an amount of federal community development block grant funds equal to the amount of state funds transferred or appropriated to the department for purposes of supplementing the department's block grant funds.

NEW SECTION. Sec. 17. The department may make grants of state funds to local governments that qualify as "entitlement communities" under the federal law authorizing community development block grants. These grants may be made only on condition that the entitlement community provide the department with assurances that the entitlement community will: (1) Spend the grant moneys for purposes and in a manner satisfying state constitutional requirements; (2) spend the grant moneys for purposes and in a manner satisfying federal requirements; and (3) spend at least the same amount of the grant for loans to businesses from the federal funds received by the entitlement community.

NEW SECTION. Sec. 18. There is established the rural Washington loan fund, which shall be an account in the state treasury. The rural Washington loan fund shall include revenue from the sources established by this chapter, appropriations by the legislature, federal funds, private contributions, all loan payments of principal and interest that are transferred under section 13 of this act, and all other sources. Moneys in the account may be spent only after legislative appropriation for loans or grants under this chapter. Any expenditures of federal moneys must conform to applicable federal law.

NEW SECTION. Sec. 19. (1) The department shall develop guidelines for rural Washington loan funds to be used to fund local economic development revolving loan funds. The department shall consider 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) The department may make loans or grants from the rural Washington loan fund to local governments to capitalize new, or to recapitalize existing, economic development revolving loan funds in distressed areas.

NEW SECTION. Sec. 20. The department shall develop performance standards for judging the effectiveness of the program including, to the extent possible, examining the effectiveness of loans or grants with regard to:

(1) Creation of jobs for individuals of low and moderate income;

(2) Retention of existing employment;

(3) Creation of new employment opportunities;

(4) Diversification of the economic base of local communities;

(5) Establishment of employee cooperatives;

(6) Providing assistance in cases of employee buyouts of firms to prevent the loss of existing employment;

(7) The degree of risk assumed by the rural Washington loan fund, with emphasis on loans which did not receive financing from commercial lenders, but which are considered financially sound.

NEW SECTION. Sec. 21. Any funds appropriated by the legislature to the rural Washington loan fund for purposes of the timber recovery act shall be used for development loans in rural natural resources impact areas as defined in RCW 43.31.601.

NEW SECTION. Sec. 22. Subject to the restrictions contained in this chapter, the department is authorized to approve applications of minority and women-owned businesses for loans or loan guarantees from the fund. Applications approved by the department under this chapter must conform to applicable federal requirements. The department shall prioritize available funds for loan guarantees rather than loans when possible. The department may enter into agreements with other public or private lending institutions to develop a joint loan guarantee program for minority and women-owned businesses. If such a program is developed, the department may provide funds, in conjunction with the other organizations, to operate the program. This section does not preclude the department from making individual loan guarantees.

To the maximum extent practicable, the department shall make available to minority and women-owned businesses, on an equal basis, funds available under this section. The department shall submit to the appropriate committees of the senate and house of representatives quarterly reports that detail the number of loans approved and the characteristics of the recipients by ethnic and gender groups.

NEW SECTION. Sec. 23. The department may receive gifts, grants, or endowments from public or private sources that are made from time to time, in trust or otherwise, for the use and benefit of the purposes of this chapter, and the department may spend gifts, grants, or endowments or income from the public or private sources according to their terms, unless the receipt of the gifts, grants, or endowments violates RCW 42.17.710.

NEW SECTION. Sec. 24. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

PART IV

PERFORMANCE REVIEW

NEW SECTION. Sec. 25. A new section is added to chapter 44.28 RCW to read as follows:

(1) The joint legislative audit and review committee shall work with the department of community, trade, and economic development and the department of revenue to establish performance-based measurements for programs and incentives designed specifically to assist in job creation and retention or job expansion.

(2) The joint legislative audit and review committee shall conduct performance evaluations on programs and incentives designed specifically to assist in job creation and retention or job expansion. The joint legislative audit and review committee may contract for services to conduct the performance evaluations. The following programs and incentives are subject to performance evaluations under this section:

(a) The community development finance program under RCW 43.63A.075;

(b) The public works trust fund - rural natural resources loan program under RCW 43.160.212;

(d) The Washington state rural development council under RCW 43.31.855;

(e) The community economic revitalization board program under chapter 43.160 RCW;

(f) The distressed area sales tax deferral/exemption program under chapter 82.60 RCW;

(g) The distressed area business and occupation tax credit for job creation program under chapter 82.62 RCW;

(h) The distressed area business and occupation tax credit for job training program under RCW 82.04.433;

(i) The distressed county sales tax credit program under RCW 82.14.370;

(j) The tax credit for international service jobs in community empowerment zones program in RCW 82.04.44525; and

(k) The tax remittance for warehouse and grain elevators program under RCW 82.08.820.

(3) The costs of the performance reviews shall be paid from funds appropriated by the legislature to the specific program or, if no funding is provided, by the administering agency's funds. The findings and recommendations shall be submitted to the appropriate committees of the legislature by December 1, 2000, December 1, 2004, and December 1, 2008.

PART V

TECHNICAL PROVISIONS

NEW SECTION. Sec. 26. Sections 10 through 24 of this act constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 27. The following acts or parts of acts are each repealed:

(1) RCW 43.168.010 and 1985 c 164 s 1;

(2) RCW 43.168.020 and 1996 c 290 s 3, 1995 c 226 s 27, 1993 c 280 s 56, 1991 c 314 s 19, 1988 c 42 s 18, 1987 c 461 s 2, & 1985 c 164 s 2;

(3) RCW 43.168.031 and 1995 c 399 s 92 & 1988 c 186 s 7;

(4) RCW 43.168.040 and 1987 c 461 s 3 & 1985 c 164 s 4;

(5) RCW 43.168.050 and 1993 c 512 s 12, 1990 1st ex.s. c 17 s 74, 1989 c 430 s 9, 1987 c 461 s 4, 1986 c 204 s 2, & 1985 c 164 s 5;

(6) RCW 43.168.060 and 1985 c 164 s 6;

(7) RCW 43.168.070 and 1993 c 512 s 14, 1987 c 461 s 5, & 1985 c 164 s 7;

(8) RCW 43.168.090 and 1985 c 164 s 9;

(9) RCW 43.168.100 and 1993 c 512 s 15, 1986 c 204 s 1, & 1985 c 164 s 10;

(10) RCW 43.168.110 and 1992 c 235 s 11 & 1985 c 164 s 11;

(11) RCW 43.168.120 and 1987 c 461 s 6;

(12) RCW 43.168.130 and 1998 c 245 s 52 & 1987 c 461 s 7;

(13) RCW 43.168.140 and 1995 c 226 s 28 & 1991 c 314 s 20;

(14) RCW 43.168.150 and 1993 c 512 s 13; and

(15) RCW 43.168.900 and 1985 c 164 s 15.

NEW SECTION. Sec. 28. Part headings used in this act are not any part of the law.