H-2240

AN ACT Relating to enhancing economic vitality; amending RCW 43.180.160, 43.86A.030, 43.86A.050, 43.86A.060, 43.86A.070, 43.168.020, 82.62.010, and 82.60.047; adding a new section to chapter 43.63A RCW; adding a new section to chapter 47.60 RCW; creating a new section; repealing RCW 43.131.381 and 43.131.382; providing an effective date; and declaring an emergency.

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

Sec. 1. RCW 43.180.160 and 1996 c 310 s 2 are each amended to read as follows:

The total amount of outstanding indebtedness of the commission may not exceed ((~~two~~)) three billion dollars at any time. The calculation of outstanding indebtedness shall include the initial principal amount of an issue and shall not include interest that is either currently payable or that accrues as a part of the face amount of an issue payable at maturity or earlier redemption. Outstanding indebtedness shall not include notes or bonds as to which the obligation of the commission has been satisfied and discharged by refunding or for which payment has been provided by reserves or otherwise.

Sec. 2. RCW 43.86A.030 and 1993 c 512 s 33 are each amended to read as follows:

(1) ((Funds held in public depositaries not as demand deposits as provided in RCW 43.86A.020 and 43.86A.030, shall be available for a time certificate of deposit investment program according to the following formula: The state treasurer shall apportion to all participating depositaries an amount equal to five percent of the three year average mean of general state revenues as certified in accordance with Article VIII, section 1(b) of the state Constitution, or fifty percent of the total surplus treasury investment availability, whichever is less. Within thirty days after certification, those funds determined to be available according to this formula for the time certificate of deposit investment program shall be deposited in qualified public depositaries. These deposits shall be allocated among the participating depositaries on a basis to be determined by the state treasurer.

~~(2)~~)) The state treasurer may use up to ((~~fifty~~)) seventy-five million dollars per year of ((~~all~~)) funds ((~~available under this section~~)) for the purposes of RCW 43.86A.060. The amounts made available to these public depositaries shall be equal to the amounts of outstanding loans made under RCW 43.86A.060.

(((3) The formula so devised shall be a matter of public record giving consideration to, but not limited to deposits, assets, loans, capital structure, investments or some combination of these factors. However,)) (2) If in the judgment of the state treasurer the amount of allocation for certificates of deposit ((~~as determined by this section~~)) for the purposes of RCW 43.86A.060 will impair the cash flow needs of the state treasury, the state treasurer may adjust the amount of the allocation accordingly.

Sec. 3. RCW 43.86A.050 and 1973 c 123 s 5 are each amended to read as follows:

The state treasurer ((~~shall devise the necessary formulae and methodology~~)) may adopt rules to implement the provisions of this chapter. Periodically, ((~~but at least once every six months,~~)) the state treasurer shall review all rules and ((~~shall~~)) may adopt, amend or repeal them as may be necessary. ((~~These rules and a list of time certificate of deposit allocations shall be published in the treasurer's monthly financial report as required under the provisions of RCW 43.08.150.~~))

Sec. 4. RCW 43.86A.060 and 1993 c 512 s 30 are each amended to read as follows:

(1) The state treasurer shall establish a linked deposit program for investment of deposits in qualified public depositaries. As a condition of participating in the program, qualified public depositaries must make qualifying loans as provided in this section. The state treasurer may purchase a certificate of deposit that is equal to the amount of the qualifying loan made by the qualified public depositary or may purchase a certificate of deposit that is equal to the aggregate amount of two or more qualifying loans made by one or more qualified public depositaries.

(2) Qualifying loans made under this section are those that:

(a) Are loans that have terms that do not exceed ten years;

(b) Are made to a minority or women's business enterprise that has received state certification under chapter 39.19 RCW;

(c) Are made to minority or women's business enterprises that are considered a small business as defined in RCW ((~~43.31.025~~)) 19.85.020;

(d) Are made where the interest rate on the loan to the minority or women's business enterprise does not exceed an interest rate that is two hundred basis points below the interest rate the qualified public depositary would charge for a loan for a similar purpose and a similar term; and

(e) Are made where the points or fees charged at loan closing do not exceed one percent of the loan amount.

(3) In setting interest rates of time certificate of deposits, the state treasurer shall offer rates so that a two hundred basis point preference will be given to the qualified public depositary.

Sec. 5. RCW 43.86A.070 and 1993 c 512 s 34 are each amended to read as follows:

The state and ((~~those acting as~~)) its agents are not liable in any manner for payment of the principal or interest on qualifying loans made under RCW 43.86A.060. Any delay in payments or defaults on the part of the borrower does not in any manner affect the deposit agreement between the qualified public depositary and the state treasurer.

NEW SECTION. Sec. 6. The following acts or parts of acts are each repealed:

(1) RCW 43.131.381 (Linked deposit program--Termination) and 1994 c 126 s 2 & 1993 c 512 s 35; and

(2) RCW 43.131.382 (Linked deposit program--Repeal) and 1994 c 126 s 3 & 1993 c 512 s 36.

Sec. 7. RCW 43.168.020 and 1996 c 290 s 3 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, trade, and economic development.

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

(4) "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 by the governor as a distressed area or an eligible area under RCW 82.60.047; or (f) a county designated as a rural natural resources impact area under RCW 43.31.601 if an application is filed by July 1, 1997. 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. 8. RCW 82.62.010 and 1996 c 290 s 5 are each amended to read as follows:

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

(1) "Applicant" means a person applying for a tax credit under this chapter.

(2) "Department" means the department of revenue.

(3) "Eligible area" means: (a) A county in which the average level of unemployment for the three years before the year in which an application is filed under this chapter exceeds the average state unemployment for those years by twenty percent; (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) a designated community empowerment zone approved under RCW 43.63A.700; ((or)) (e) a county designated by the governor as a distressed area or an eligible area under RCW 82.60.047; or (f) subcounty areas in those counties that are not covered under (a) of this subsection that are timber impact areas as defined in RCW 43.31.601.

(4)(a) "Eligible business project" means manufacturing or research and development activities which are conducted by an applicant in an eligible area at a specific facility, provided the applicant's average full-time qualified employment positions at the specific facility will be at least fifteen percent greater in the year for which the credit is being sought than the applicant's average full-time qualified employment positions at the same facility in the immediately preceding year.

(b) "Eligible business project" does not include any portion of a business project undertaken by a light and power business as defined in RCW 82.16.010(5) or that portion of a business project creating qualified full-time employment positions outside an eligible area or those recipients of a sales tax deferral under chapter 82.61 RCW.

(5) "Manufacturing" means all activities of a commercial or industrial nature wherein labor or skill is applied, by hand or machinery, to materials so that as a result thereof a new, different, or useful substance or article of tangible personal property is produced for sale or commercial or industrial use and shall include the production or fabrication of specially made or custom made articles. "Manufacturing" also includes computer programming, the production of computer software, and other computer-related services, and the activities performed by research and development laboratories and commercial testing laboratories.

(6) "Person" has the meaning given in RCW 82.04.030.

(7) "Qualified employment position" means a permanent full-time employee employed in the eligible business project during the entire tax year.

(8) "Tax year" means the calendar year in which taxes are due.

(9) "Recipient" means a person receiving tax credits under this chapter.

(10) "Research and development" means the development, refinement, testing, marketing, and commercialization of a product, service, or process before commercial sales have begun. As used in this subsection, "commercial sales" excludes sales of prototypes or sales for market testing if the total gross receipts from such sales of the product, service, or process do not exceed one million dollars.

Sec. 9. RCW 82.60.047 and 1994 sp.s. c 1 s 9 are each amended to read as follows:

The governor is authorized to designate a county as an eligible area for purposes of chapter 43.168 RCW, chapter 82.62 RCW, and this chapter if, as a result of: (1) A natural disaster or business or military base closure or mass layoff, the twelve-month average unemployment rate using the projected level of new unemployment in the county over the ensuing twelve months added to the base unemployment level in the county for the preceding twelve months will exceed the previous twelve-month average state unemployment rate by forty percent, or (2) a military base restructuring, the county has a loss of more than five thousand jobs over the previous seven-year period. The designation shall be effective for a period of ((~~twelve~~)) twenty-four months.

NEW SECTION. Sec. 10. A new section is added to chapter 43.63A RCW to read as follows:

(1) The department shall establish the Washington jobs initiative program. The department shall provide grants to local governments for the purpose of creating local programs designed to achieve livable wage jobs and promote retention and upward mobility for low-income job seekers by supplying regional employers with qualified workers and by working on job and job-related system improvements.

(2) Grants awarded under this section shall be used to develop strategies that:

(a) Assist unemployed and underemployed residents to obtain livable wage jobs in targeted sectors in the regional economy;

(b) Help low-income residents access job opportunities with businesses that benefit local government-led economic development efforts by establishing first-source and voluntary hiring agreements with those businesses;

(c) Create pathways to employment that are longer term and more intensive for residents that are harder to serve due to chronic unemployment or lack of work experience; and

(d) Coordinate services of the public and private sector and community organizations to provide outreach, recruitment, and job readiness services to low-income job seekers.

(3) The department shall develop, by rule, guidelines regarding the amount of funds awarded to local governments, performance evaluation standards, and other guidelines the department deems necessary for the administration of this section.

NEW SECTION. Sec. 11. (1) The legislature finds that:

(a) Tourism is an important component of the state's economy and spending by out-of-state visitors and Washington residents traveling within the state totaled over seven and one-half billion dollars in 1994;

(b) In 1994, spending by travelers provided employment for over ninety-six thousand people and that travel-generated payroll was one billion fifty-one million dollars;

(c) In 1994, state tax revenue generated by travel spending totaled four hundred eleven million dollars and local governments collected one hundred four million nine hundred thousand dollars in travel-generated taxes;

(d) In 1994, approximately twelve and one-half million international travelers visited Washington state and Canadian visitors accounted for approximately twelve million of the total visitors to Washington state;

(e) In 1995, approximately twenty-two and nine-tenths percent of all Canadian visitors, both overnight and same day, to the United States came to Washington state; and

(f) In 1994, spending by Canadian visitors added four hundred four million eight hundred thousand dollars to the Washington state economy.

(2) The legislature declares that tourism is a vital component of the state's economy and that the Puget Sound ferry system is vital to the state's tourism efforts.

NEW SECTION. Sec. 12. A new section is added to chapter 47.60 RCW to read as follows:

In addition to the requirements of RCW 47.60.330(1), before a substantial curtailment in the level of service provided to ferry users between the state and British Columbia, Canada, the department of transportation shall consider the impact of the loss of tourism on the state and the local community.

NEW SECTION. Sec. 13. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 1999.