H-2298

AN ACT Relating to economic development; amending RCW 43.160.010, 43.160.020, 43.160.076, 43.160.080, and 43.17.065; adding new sections to chapter 43.160 RCW; adding new sections to chapter 43.31 RCW; adding a new section to chapter 43.06 RCW; creating new sections; making appropriations; and declaring an emergency.

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

NEW SECTION. Sec. 1. FINDINGS AND INTENT. The legislature finds that:

(1) The economic health and well‑being of timber-dependent communities is of substantial public concern. The significant reduction in annual timber harvest levels likely will result in reduced economic activity and persistent unemployment and underemployment over time, which would be a serious threat to the safety, health, and welfare of residents of the timber-dependent communities, decreasing the value of private investments and jeopardizing the sources of public revenue.

(2) The state is experiencing a dual economy, where growth is occurring rapidly in some areas and is occurring slowly or not at all in other areas. This uneven growth rate across the state is causing some areas to suffer negative impacts from too much growth while other areas experience difficulty in creating adequate economic development. Inadequate economic development is a serious threat to the public safety, health, and welfare of a community. The state has an interest in encouraging growth state-wide, which reduces the negative impacts of growth in rapidly growing areas and assists areas of the state in need of economic development.

(3) Timber-dependent communities are most often located in areas that are experiencing little or no economic growth, creating an even greater risk to the health, safety, and welfare of these communities. The ability to remedy problems caused by the substantial reduction in harvest activity 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 resulting problems of poverty and unemployment.

(4) The revitalization and diversification of the economies of timber-dependent communities require 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 distressed areas in general and timber-dependent communities in particular. To accomplish this purpose, it is the intent of the legislature to:

(a) Increase the public financing of infrastructure necessary for economic development and make such financing more flexible;

(b) Increase and target the amount of public financing available to businesses to better create or preserve jobs through formation or expansion of viable enterprises;

(c) Provide tax incentives to encourage businesses to relocate to or expand in distressed or timber-dependent communities;

(d) Provide technical and financial assistance to businesses to increase the export of products from timber-dependent communities;

(e) Increase the resources available to associated development organizations to provide economic and community development services in timber-dependent communities and to provide resource and referral services to the community regarding state and local economic and community development services;

(f) Increase training and retraining services accessible to timber-dependent communities; and

(g) Provide for coordination of noneconomic development services in timber-dependent communities as economic development efforts will not succeed unless social, housing, health, and other needs are addressed.

Sec. 2. RCW 43.160.010 and 1989 c 431 s 61 are each amended to read as follows:

INFRASTRUCTURE FINANCING--CERB--INTENT. (1) The legislature finds that it is the public policy of the state of Washington to direct financial resources toward the fostering of economic development through the stimulation of investment and job opportunities and the retention of sustainable existing employment for the general welfare of the inhabitants of the state. Reducing unemployment and reducing the time citizens remain jobless is important for the economic welfare of the state. A valuable means of fostering economic development is the construction of public facilities which contribute to the stability and growth of the state's economic base. Strengthening the economic base through issuance of industrial development bonds, whether single or umbrella, further serves to reduce unemployment. Consolidating issues of industrial development bonds when feasible to reduce costs additionally advances the state's purpose to improve economic vitality. Expenditures made for these purposes as authorized in this chapter are declared to be in the public interest, and constitute a proper use of public funds. A community economic revitalization board is needed which shall aid the development of economic opportunities. The general objectives of the board should include:

(a) Strengthening the economies of areas of the state which have experienced or are expected to experience chronically high unemployment rates or below average growth in their economies;

(b) Encouraging the diversification of the economies of the state and regions within the state in order to provide greater seasonal and cyclical stability of income and employment;

(d) Encouraging new economic development or expansions to maximize employment;

(e) Encouraging the retention of viable existing firms and employment; and

(f) Providing incentives for expansion of employment opportunities for groups of state residents that have been less successful relative to other groups in efforts to gain permanent employment.

(2) The legislature also finds that the state's economic development efforts can be enhanced by, in certain instances, providing funds to improve state highways in the vicinity of new industries considering locating in this state or existing industries that are considering significant expansion.

(a) The legislature finds it desirable to provide a process whereby the need for diverse public works improvements necessitated by planned economic development can be addressed in a timely fashion and with coordination among all responsible governmental entities.

(b) It is the intent of the legislature to create an economic development account within the motor vehicle fund from which expenditures can be made by the department of transportation for state highway improvements necessitated by planned economic development. All such improvements must first be approved by the state transportation commission and the community economic revitalization board in accordance with the procedures established by RCW 43.160.074 and 47.01.280. It is further the intent of the legislature that such improvements not jeopardize any other planned highway construction projects. The improvements are intended to be of limited size and cost, and to include such items as additional turn lanes, signalization, illumination, and safety improvements.

(3) The legislature also finds that the state's economic development efforts can be enhanced by providing funds to improve markets for those recyclable materials representing a large fraction of the waste stream. The legislature finds that public facilities which result in private construction of processing or remanufacturing facilities for recyclable materials are eligible for consideration from the board.

(4) The legislature finds that sharing economic growth state-wide is important to the welfare of the state. Distressed areas and timber-dependent communities do not share in the economic vitality of the Puget Sound region. Infrastructure is one of several ingredients that are critical for economic development. Distressed areas and timber-dependent communities generally lack the infrastructure necessary to diversify and revitalize their economies. It is, therefore, the intent of the legislature to increase the availability of funds to help provide infrastructure to distressed areas and timber-dependent communities.

Sec. 3. RCW 43.160.020 and 1985 c 466 s 58 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 trade and economic development or its successor with respect to the powers granted by this chapter.

(4) "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) "Industrial development facilities" means "industrial development facilities" as defined in RCW 39.84.020.

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

(7) "Local government" means any port district, county, city, or town.

(8) "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) "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) "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) "Timber-dependent community" means a county, city, or town located in a county meeting two of the following three criteria for the most recent year such data is available: (a) A lumber and wood products employment location quotient at or above the state average, (b) a direct lumber and wood products job loss of one hundred or more, or (c) an annual unemployment rate twenty percent above the state average.

(12) "Small scale tourism project" means a project that where added to the current facilities in the area attracts additional visitors for overnight stays and will be used primarily by nonresidents of the immediate area. A small scale tourism project may be a new project or an expansion or refurbishment of an existing facility.

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

(1) The economic development account is created within the public facilities construction loan revolving fund under RCW 43.160.080. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for the purposes of RCW 43.160.010(4) and this section. The account is subject to allotment procedures under chapter 43.88 RCW.

(2) Applications under this section for assistance from the economic development account are subject to all of the applicable criteria set forth under this chapter, as well as procedures and criteria established by the board, except as otherwise provided.

(3) Eligible applicants under this section are limited to political subdivisions of the state in timber-dependent communities that demonstrate, to the satisfaction of the board, the local economy's dependence on the forest products industry.

(4) Applicants must demonstrate that their request is part of an economic development plan consistent with applicable state planning requirements. Industrial projects must be approved by the local government and the associate development organization. Applicants must demonstrate that small scale tourism projects have been approved by the local government and are part of a regional tourism plan approved by the local and regional tourism organizations.

(5) Publicly owned projects may be financed under this section upon proof by the applicant that the public project is a necessary component of, or constitutes in whole, a small scale tourism project.

(6) Applications must demonstrate local match and participation. Such match may include: Land donation, other public or private funds or both, or other means of local commitment to the project.

(7) Board financing for feasibility studies shall not exceed twenty-five thousand dollars per study. Board funds for feasibility studies may be provided as a grant and require a dollar for dollar match with up to one-half in-kind match allowed.

(8) Board financing for small scale tourism projects shall not exceed two hundred fifty thousand dollars. Other public facility projects under this section shall not exceed five hundred thousand dollars. Loans with flexible terms and conditions to meet the needs of the applicants shall be provided. Grants may also be authorized, but only when, and to the extent that, a loan is not reasonably possible, given the limited resources of the political subdivision.

(9) The board shall develop guidelines for allowable local match and feasibility studies.

(10) Applications under this section need not demonstrate evidence that specific private development or expansion is ready to occur or will occur if funds are provided.

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

The board shall establish guidelines for making grants and loans to ensure that the requirements of this chapter are complied with. The guidelines shall include:

(1) A process to equitably compare and evaluate applications from competing communities.

(2) Criteria to ensure that approved projects will have a high probability of success and are likely to provide long-term economic benefits to the community. The criteria shall include: (a) A minimum amount of local participation, determined by the board per application, to verify community support for the project; (b) an analysis that establishes the project is feasible using standard economic principles; and (c) an explanation from the applicant regarding how the project is consistent with the communities' economic strategy and goals.

(3) A method of evaluating the impact of the loans or grants on the economy of the community and whether the loans or grants achieved their purpose.

Sec. 6. RCW 43.160.076 and 1985 c 446 s 6 are each amended to read as follows:

INFRASTRUCTURE FINANCING--CERB--PRIORITY TO TIMBER AND DISTRESSED COMMUNITIES. (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~~)) fifty percent for grants and loans for projects in distressed counties or timber-dependent communities. For purposes of this section, the term "distressed counties" includes timber-dependent communities or any county((,)) in which the average level of unemployment for the three years before the year in which an application for a loan or grant is filed((,)) exceeds the average state employment for those years by twenty percent.

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

Sec. 7. RCW 43.160.080 and 1987 c 422 s 6 are each amended to read as follows:

INFRASTRUCTURE--CERB--REVOLVING LOAN FUND REPAYMENTS. There shall be a fund known as the public facilities construction loan revolving fund, which shall consist of all moneys collected under this chapter, except moneys of the board collected in connection with the issuance of industrial development revenue bonds, 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 fund 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)). The state treasurer shall be custodian of the revolving fund. Disbursements from the revolving fund shall be on authorization of the board. In order to maintain an effective expenditure and revenue control, the public facilities construction loan revolving fund shall be subject in all respects to chapter 43.88 RCW, but no appropriation is required to permit expenditures and payment of obligations from the fund.

Moneys in this fund not needed to meet the current expenses and obligations of the board shall be invested in the manner authorized for moneys in revolving funds. Any interest earned shall be deposited in this fund and shall be used for the purposes specified in this chapter. The state treasurer shall render reports to the board advising of the status of any funds invested, the market value of the assets as of the date the statement is rendered, and the income received from the investments during the period covered by the report.

NEW SECTION. Sec. 8. A new section is added to chapter 43.31 RCW to read as follows:

INCREASING EXPORTS FROM TIMBER-DEPENDENT COMMUNITIES. (1) Marketing is a vital element in expanding the economies of timber-dependent communities. The export of products produced in timber-dependent areas contributes substantial economic benefits to these communities, including an increase in jobs and an increase in tax revenues to the state and local governments.

(2)(a) Subject to funding for this subsection, the department shall contract with the small business export finance assistance center, created in chapter 43.210 RCW, to assist businesses in timber-dependent communities obtain financing for the export of their products. The department shall assist the small business export finance assistance center to ensure the services available under this subsection are understood and accessible in timber-dependent communities.

(b) Subject to funding for the necessary reserve funds, the Washington economic development finance authority, created in chapter 43.163 RCW, shall provide financing for export transactions where the product being exported is produced in timber-dependent communities.

(3) The department may make rules that are necessary to carry out this section and to coordinate the services described in this section and to prioritize the services based on greatest negative impact from the harvest reductions.

(4) For purposes of this section, the definition of "timber-dependent community" is the same as RCW 43.160.020.

Sec. 9. RCW 43.17.065 and 1990 1st ex.s. c 17 s 77 are each amended to read as follows:

EXPEDITING PERMITS IN TIMBER-DEPENDENT COMMUNITIES. (1) Where power is vested in a department to issue permits, licenses, certifications, contracts, grants, or otherwise authorize action on the part of individuals, businesses, local governments, or public or private organizations, such power shall be exercised in an expeditious manner. All departments with such power shall cooperate with officials of the business assistance center of the department of trade and economic development, and any other state officials, when such officials request timely action on the part of the issuing department.

(2)(a) The legislature finds that timber-dependent communities and distressed counties, as defined in RCW 43.160.020, are located predominately in areas characterized by little or no growth. These areas impact the environment less than areas of high growth. These timber-dependent communities and distressed counties need sites for industrial and economic development with infrastructure in place as soon as possible to help revitalize their local economies.

(b) Any state agency in which subsection (1) of this section applies shall adopt, by August 1, 1991, an expedited process for the fast and efficient processing of any permits or other actions that are necessary for economic development in timber-dependent communities and distressed counties.

NEW SECTION. Sec. 10. A new section is added to chapter 43.31 RCW to read as follows:

(1) The Washington wood products competitiveness commission is created. The commission shall have nine members as follows:

(a) One representative each from the departments of trade and economic development, community development, natural resources, and the employment security department appointed by the directors or the commissioners of the respective departments;

(b) One representative of the office of financial management, who shall chair the commission, appointed by the governor;

(d) One member representing primary wood products manufacturers appointed by the director of the department; and

(e) Two members representing secondary wood products manufacturers appointed by the director of the department.

(2) Since the best hope for quickly replacing some of the jobs being lost in primary manufacturing may be in value-added and secondary manufacturing, the legislature intends that the commission design a set of programs to stimulate the growth of value-added and secondary wood products manufacturing in Washington and increase the involvement of the wood products industry in value-added products and business networks.

(3) The legislature also intends that after two years, the commission become industry supported and industry operated.

(4) Members not representing state government shall serve a term of three years, with the initial members serving staggered terms of one year, two years, and three years as determined by the director of the department.

(5) Travel expenses may be reimbursed under RCW 43.03.050 and 43.03.060.

(6) Staff support for the commission shall be provided by the department.

NEW SECTION. Sec. 11. A new section is added to chapter 43.31 RCW to read as follows:

The Washington wood products competitiveness commission shall:

(1) Gather, analyze, and disseminate information about the competitiveness of the wood products industry in this state and make that information available to the wood products industry, state government, and the general public.

(2) Encourage cooperation among wood products firms through the formation of business networks to develop solutions to technology and product development problems, acquire and disseminate marketing information, promote and market wood products of this state, and address other common industry problems. In carrying out activities to encourage cooperation among firms to promote further utilization of wood resources of this state and to increase the value added to wood products by firms in this state, the commission shall provide network cooperation grants in amounts not to exceed fifteen thousand dollars per grant and to not fewer than three firms per grant, and operate a network broker training program, consisting of classroom instruction, practical application of concepts of flexible manufacturing networks, wood technology, wood products, and such other information as the commission considers appropriate.

(3) Assist the department in the department's efforts to increase the competitiveness of the industry and increase the production of value-added products by providing grants for feasibility studies and product research and development. The grants under this subsection shall:

(a) Be of general benefit to the industry rather than intended to benefit a specific firm;

(b) Be for such activities as identifying options, assessing markets, evaluating business and financial risks, addressing production issues, and assessing new technologies; and

(c) Be less than thirty five thousand dollars unless seventy-five percent of the commission authorizes up to fifty thousand dollars.

(4) Work with state agencies, wood products firms, wood products industry associations, and institutions of higher education in this state to assure close coordination of all efforts to improve the competitiveness of the wood products industry in this state.

(5) Report periodically to the governor, the legislature, the wood products industry, and the general public on the competitive position of the wood products industry in this state, and make such recommendations as the commission determines appropriate for public or private actions needed to improve the competitiveness of the wood products industry in this state. The commission shall recommend, by January 1, 1992, how to change this public commission into a commodity-style industry commission, and recommend a fair method of assessment for the industry to fund the commission.

NEW SECTION. Sec. 12. A new section is added to chapter 43.31 RCW to read as follows:

The Washington wood products competitiveness commission may:

(1) Engage, with private sector funds only, in informational and promotional activities to increase the awareness and recognition of the value of wood products in this state and of the contribution of wood products to the economy of this state.

(2) Contract for research activities to develop and apply new technologies for wood products manufacture related to the commission's and the department's efforts to make value-added wood products industries more competitive. Any public funds used for this subsection shall be matched at least dollar for dollar by private funds. In carrying out research for development and application of new manufacture technologies, the commission may promote activities including, but not limited to:

(a) Improved utilization of wood wastes;

(b) Improved utilization of lower grade and underutilized lumber;

(d) New and improved utilization of select and clear grade lumber to produce high quality and high value-added wood products in Washington;

(e) Identifying unique properties and characteristics of wood species of this state and determining products particularly suited to those properties and characteristics; or

(f) Providing access to testing facilities and services for wood products firms in this state.

NEW SECTION. Sec. 13. The Washington wood products competitiveness commission account is created in the custody of the state treasurer. All receipts of the Washington wood products competitiveness commission shall be deposited into the account. Expenditures from the account may be used only for the purposes under sections 10 through 12 of this act. Only the chair of the commission or the chair's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but no appropriation is required for expenditures.

NEW SECTION. Sec. 14. A new section is added to chapter 43.06 RCW to read as follows:

COORDINATION OF STATE AND LOCAL SERVICES. (1) The governor, or the governor's designee, shall coordinate state noneconomic development related assistance provided to timber-dependent communities to ensure state services are delivered effectively and efficiently and coordinated locally with minimal duplication and maximum local access. (2) Associate development organizations located in timber-dependent communities shall assist the governor in coordinating the delivery of state economic development related services locally. The associate development organization, as the primary local coordinating organization for state and local economic development services, shall provide resource and referral services to ensure state and local economic development services are delivered effectively and efficiently with minimal duplication and maximum local access.

NEW SECTION. Sec. 15. APPROPRIATION--INFRASTRUCTURE. (1) There is hereby appropriated for the biennium ending June 30, 1993, eight million dollars to the public facilities construction loan revolving account from the general fund for the purposes of this act.

(2) There is hereby appropriated for the biennium ending June 30, 1993, eight million dollars to the economic development account created in section 4 of this act from the state building construction account for the purposes of section 4 of this act.

(3) There is hereby appropriated for the biennium ending June 30, 1993, three million dollars to the department of community development from the general fund to switch with federal community development block grant funds. The department of community development shall deposit the federal funds in the development loan fund for timber-dependent communities.

NEW SECTION. Sec. 16. APPROPRIATION--PROGRAM ENHANCEMENTS. (1) There is hereby appropriated for the biennium ending June 30, 1993, an additional one hundred fifty thousand dollars from the general fund to the department of trade and economic development for the marketplace program to assist the export of products from timber-dependent communities to urban areas through import substitution and rural-urban links.

(2) There is hereby appropriated for the biennium ending June 30, 1993, an additional two hundred thousand dollars from the general fund to the department of trade and economic development to contract with the small business export finance assistance center to provide export financing assistance to businesses in timber-dependent communities under section 8(2)(a) of this act.

(3) There is hereby appropriated for the biennium ending June 30, 1993, two hundred fifty thousand dollars from the general fund--federal to the Washington economic development finance authority for a reserve fund to provide financing for the export of products from timber-dependent communities under section 8(2)(b) of this act.

(4) There is hereby appropriated for the biennium ending June 30, 1993, one million five hundred thousand dollars from the general fund to the department of social and health services, in consultation with the office of financial management, to provide social, housing, health, and other support assistance when necessary to allow individuals engaged in education, training, and employment programs to continue their programs, and to provide grants for the coordination of health, social, and welfare services in timber-dependent communities through community councils, family support centers, reemployment centers, or other local agencies.

(5) There is hereby appropriated for the biennium ending June 30, 1993, an additional three hundred seventy-five thousand dollars from the general fund to the department of trade and economic development to contract with associate development organizations in timber-dependent communities to provide additional coordination and resources under section 14(2) of this act. For purposes of this subsection, "timber-dependent community" means a distressed county, as defined in RCW 43.160.020, that meets at least one of the following two criteria for the most recent year such data is available: (a) A lumber and wood products employment location quotient at or above the state average or (b) a direct lumber and wood products job loss of one hundred or more. Associate development organizations shall provide representation on their board of directors of cities, counties, businesses, and community-based public service organizations.

(6) There is appropriated for the biennium ending June 30, 1993, two million five hundred thousand dollars from the general fund to the state board for community college education for the purposes of training and retraining in timber-dependent communities as follows:

(a) Two million dollars for disbursement to individual community colleges for supplemental slots in cases where enrollment demand exceeds allocation; and

(b) Five hundred thousand dollars for two pilot projects on innovative approaches to literacy and employment training.

(7) There is hereby appropriated for the biennium ending June 30, 1993, three hundred fifty thousand dollars from the general fund to the department of trade and economic development to contract with the small business development center to provide services through the Grays Harbor Community College and Peninsula Community College.

(8) One million five hundred thousand dollars to the department of trade and economic development for the forest product division's value-added programs;

(9) Five hundred thousand dollars is appropriated to the Washington wood products competitiveness commission account, under section 13 of this act, for the purposes of sections 10 through 12 of this act;

(10) Nine hundred seventy thousand dollars to the department of community development for its timber assistance program, grants to timber-dependent communities, and community development finance technical assistance;

(11) Seventy thousand dollars to the department of community development for enhancements to reemployment centers in timber-dependent communities; and

(12) Five hundred thousand dollars to the employment security department for a self-employment and enterprise development (SEED) program in timber-dependent communities.

(13) For purposes of this section, "timber-dependent community" means a county, city or town located in a county that meets two of the following three criteria for the most recent year such data is available: (a) A lumber and wood products employment location quotient at or above the state average, (b) a direct lumber and wood products job loss of one hundred or more, or (c) an annual unemployment rate twenty percent above the state average.

NEW SECTION. Sec. 17. TITLE. This act may be referred to as "the omnibus timber community assistance act."

NEW SECTION. Sec. 18. SECTION HEADINGS ARE NOT LAW. Section headings as used in this act do not constitute any part of the law.

NEW SECTION. Sec. 19. 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.

NEW SECTION. Sec. 20. 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 shall take effect immediately.