BP BHEAD INT S

AN ACT Relating to community economic development; adding new sections to chapter 43.63A RCW; and repealing RCW 43.165.020, 43.165.030, 43.165.040, 43.165.050, 43.165.060, 43.165.070, 43.165.080, 43.165.090, 43.165.100, 43.165.900, 43.165.901, 43.31.097, 43.63A.075, 43.63A.078, 43.63A.230, 43.63A.440, 43.63A.450, and 43.63A.560.

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

NEW SECTION. Sec. 1. (1) The legislature finds that the ability of local communities to play an active and effective role in shaping their economic futures is important to the long-term prosperity of the state economy. The legislature further finds that the state's economy is changing rapidly as a result of international competition, resource shortages, actions of the federal government, and the impacts of economic cycles. These changes in the economy have produced regions, communities, and local areas which have been left behind in recent waves of economic growth. Without assistance from the rest of the state, these communities will face economic decline, will remain in poverty, or will be unable to develop new sources of employment and economic vitality.

(2) The legislature further finds that while existing economic development programs encourage local initiative and address local community needs, the existing state program structure is unable to help communities solve their major local economic problems. State activities are narrowly drawn and extremely complex and are neither of sufficient scope nor scale to effectively address local problems in those areas with the greatest needs. While the state provides considerable technical assistance to local areas, many local communities do not possess adequate skills to address their own economic problems.

(3) The legislature further finds that an effective response to community problems requires consolidation and reorganization of existing economic development programs. These programs should be organized to make it easier for communities to access state programs, with a single entry point for diverse services. Programs should be simplified so that they are more understandable for local communities and should reduce administrative duplication and overhead costs. Programs should provide technical expertise to local communities to implement locally determined priorities and should increase the skills available in local communities to respond to their own problems. State programs should also encourage and promote development capacity at the local and regional level whenever feasible. The goal of state efforts should be to assist local communities to respond to economic transitions.

(4) The legislature further finds that state efforts should be concentrated in those local communities with the greatest relative need and the fewest resources. Facing difficult budget constraints, the state should work to focus its limited resources in sufficient scale to assist those communities facing economic transitions such as timber-dependent communities and urban and rural areas affected by poverty.

(5) It is the intent of the legislature that existing economic development programs in the department of community development be consolidated. The consolidated programs should be: More accessible and understandable for local communities; targeted to help rural and urban communities with the greatest needs respond to economic change; flexible enough to allow the department to respond to new economic problems as they arise and to encourage local experimentation; and build the skills and capacity of local communities to address their own economic problems.

NEW SECTION. Sec. 2. (1) "Impact areas" means: (a) Distressed counties as defined in RCW 43.165.010(3)(a); (b) subcounty areas in those counties which are not covered under (a) of this subsection which are timber impact areas as defined in RCW 43.31.601; (c) urban subcounty areas as defined in RCW 43.165.010(3)(c); and (d) areas not currently experiencing economic distress which the department anticipates as likely to experience distress in the near future, such as areas experiencing defense budget reductions or suffering dislocations from natural resource issues such as salmon recovery.

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

NEW SECTION. Sec. 3. The department shall carry out its economic development responsibilities consistent with the following basic objectives: Focusing department economic efforts on those local communities facing severe economic changes and building the skills and capacities of communities to respond to economic change. In carrying out its economic development responsibilities the department shall:

(1) Focus significant resources on impact areas;

(2) Work to increase the financial resources and technical skills available to local communities in order to empower communities to address local economic problems;

(3) Build partnerships for economic development between the state, local governments, business, associate development organizations, nonprofit organizations, and foundations with the goal of building sustainable local economies and increasing local capacity to address local economic concerns;

(4) Leverage financial and technical support for local communities from public and private sources;

(5) Make state program resources easier to understand and use and increase state flexibility to deal with economic problems as they develop;

(6) Assist the governor in coordinating local economic development policies and programs; and

(7) Advise the legislature and the governor on local economic development policy.

NEW SECTION. Sec. 4. In carrying out the objectives established in section 3 of this act, the department's responsibilities shall include, but not be limited to the following:

(1) Developing state policies and coordinating state programs for the economic health of local communities. This shall include prioritizing services to impact areas on the basis of need and coordinating delivery of services to impact areas;

(2) Building local capacity for economic recovery, growth, and diversification. This shall include supporting local organizational and leadership development, assisting communities to develop local economic development strategies, undertaking or commissioning necessary technical analyses, and supporting project planning, feasibility studies, and implementation;

(3) Assisting communities to broaden and diversify their small business base. This shall include securing and leveraging public and private investment in small businesses, providing management and market assistance to existing and new small businesses, lending or granting federal funds to leverage small business investment, and enabling local communities to undertake technical analyses and implement business development and retention activities; and

(4) Assisting communities to maintain and expand the physical infrastructure necessary to support economic growth. This shall include making investments in planning and implementing infrastructure development and rehabilitation.

NEW SECTION. Sec. 5. (1) The department shall administer a local development grant program. The department shall administer this program in conjunction with other state and federal grant programs to assist local community economic development. The program shall be a flexible funding source for local economic development projects. Projects eligible for funding through this program include innovative strategies for local development, capital projects, strategy development, and the purchase of needed development services. The program shall work to coordinate funding for eligible projects with other state, local, private, and nonprofit funding sources. To be eligible to receive funds under this program, an organization must be a local government, nonprofit local development entity, port district, or Indian tribe. Any local government or nonprofit entity requesting funds must demonstrate the participation of a cross-section of the local community in the project, including business, labor, religious institutions, associate development organizations, education and training, nonprofit development organizations, ethnic minorities, and local government. In awarding grants under this program, preference shall be given to efforts which have the prospect of resulting in ongoing family-wage employment, to development that is environmentally sustainable, and to projects that are developed and funded jointly with nonstate partners, such as businesses, foundations, and nonprofit organizations. Funds cannot be used for entertainment or hosting. Funds granted for economic development projects require a contribution of local funds to the project.

(2) The department shall administer a grant program for the provision of economic development services on a regional basis. The program shall fund the establishment of regional development consortia. Eligibility for grants is limited to consortia that include but are not limited to the following: Local governments, associate development organizations, other nonprofit organizations, educational institutions, and other local interests in the proposed region. The geographic scope of regions to be served is to be determined by applicants. Program eligibility is limited to impact communities. Applicants should propose to deliver services which meet the development needs of the region they propose to serve. Services should replace some of the services currently provided directly by state government. If grants are not provided under this provision before September 1, 1994, funds allocated for this purpose may be utilized to make other grants to communities, consistent with the provisions of subsection (1) of this section.

NEW SECTION. Sec. 6. (1) The local economic development service program is established in the department. This program shall coordinate the delivery of economic development services to local communities or regional areas. It shall encourage a partnership between the public and private sectors and between state and local officials to encourage appropriate economic growth in communities throughout the state.

(2) The department's local economic development service program shall promote local economic development by assisting businesses to start up, maintain, or expand their operations, by encouraging public infrastructure investment and private capital investment in local communities, and by expanding employment opportunities.

(3) The department's local economic development service program shall, among other things, (a) contract with local economic development nonprofit corporations, called "associate development organizations," for the delivery of economic development services to local communities or regional areas; (b) enter into interagency agreements with appropriate state agencies, such as the department of trade and economic development, the department of agriculture, and the employment security department, to coordinate the delivery of economic development services to local communities or regional areas; (c) enter into agreements with other public organizations or institutions that provide economic development services, such as the small business development center, the Washington technology center, community colleges, vocational-technical institutes, the University of Washington, Washington State University, four-year colleges and universities, the federal small business administration, ports, and others, to coordinate the delivery of economic development services to local communities and regional areas; and (d) provide training, through contracts with public or private organizations, and other assistance to associate development organizations to the extent resources allow.

(4) It is the intent of the legislature that the associate development organizations shall promote and coordinate, through local service agreements or other methods, the delivery of economic development services in their areas that are provided by public and private organizations, including state agencies.

(5) The legislature encourages local associate development organizations to form partnerships with other associate development organizations in their region to combine resources for better access to available services, to encourage regional delivery of state services, and to more effectively build the local capacity of communities in the region.

NEW SECTION. Sec. 7. (1) The department shall establish a technical assistance and training program. The program shall be designed to build the capacity of local communities, including rural towns and regions and urban neighborhoods experiencing economic transitions or affected by high rates of poverty, to build their local economies and to be effective in responding to economic change. The program shall be designed to increase the economic development skills available in local communities by providing training and funding for training for local citizens. Services shall be provided in impact areas.

(2) The department shall provide direct technical assistance to local communities to assist them to have a stronger role in building their local economies. This assistance shall include, but not be limited to:

(a) Identifying emerging problems in impact areas for businesses, workers, and communities and provide timely assistance;

(b) Evaluating the economic health of a community including its economic base and its strengths, weaknesses, and opportunities;

(c) Assisting communities and nonprofit development entities in developing local economic development strategies, including the technical analysis necessary to carry out the strategies;

(d) Providing assistance to communities in broadening their local economic base, including the provision of management and financial assistance, entrepreneurial training, and assistance to firms in identifying new markets and introducing new processes;

(e) Assisting communities in responding to economic change, including supporting organizational and leadership development;

(f) Providing technical and managerial assistance to small businesses;

(g) Assisting communities and small businesses to secure available financing;

(h) Providing technical assistance to cooperatives authorized under chapter 23.78 RCW and conducting educational programs on employee ownership and self-management, using firms and individuals with expertise in the field of employee ownership as appropriate in delivering and coordinating the delivery of technical, managerial, and educational services;

(i) Providing assistance to communities adversely impacted by reductions in timber harvested from federal lands, including assistance in the formation and implementation of community economic development plans, including the formation of community economic development plans;

(j) Monitoring and forecasting shifts in the economic prospects of major defense employers in the state and identification of firms and communities economically dependent on federal defense contract expenditures; and

(k) Assisting communities to develop links between the state's urban and rural areas to increase economic growth in areas outside the Puget Sound region.

(3) The department shall administer a local technical assistance funding pool. The pool is to be utilized by the technical assistance staff identified in subsection (2) of this section. The pool is to be used to enable local communities and nonprofit development entities and small firms within impact areas access necessary technical assistance services. The department shall develop a list of individuals and firms qualified to meet specialized community or business development needs. When communities, development entities or firms, and technical assistance staff identified in subsection (2) of this section identify such needs, the department shall contract to provide such services or shall grant funds to purchase them.

(4) The department shall establish a community development training institute to provide intensive economic and community development skills training to local communities. The institute shall be established under contract with a nonprofit development organization, and shall include provision for classroom training, workshops, and seminars. The institute shall be funded and operated in cooperation with local governments, foundations, and nonprofit entities. Training should include but not be limited to small business finance, low-income housing finance, local leadership training, and community diversification.

NEW SECTION. Sec. 8. (1) The governor shall appoint a timber and impact area recovery coordinator in the department of community development. The coordinator shall coordinate the state and federal economic and social programs targeted to impact areas.

(2) The coordinator's responsibilities shall include but not be limited to:

(a) Serving as executive secretary of the economic recovery board and directing staff associated with the board;

(b) Chairing and staffing a cabinet-level task force delegated the responsibility of coordinating services to impact areas;

(d) Coordinating and expediting programs to assist impact areas;

(e) Prioritizing impact areas on the basis of need; and

(f) Providing the legislature with a status and impact report on the recovery program in January 1994.

(3) This section shall expire June 30, 1995.

NEW SECTION. Sec. 9. (1) The economic recovery board is established consisting of thirty representatives, appointed by the governor, from impact areas. The recovery coordinator shall also be a member of the board. Members shall include one representative from each of the twenty timber impact areas as defined in RCW 43.31.601, four representatives of other rural impact counties, and five representatives of urban neighborhoods with high rates of poverty.

(2) The board shall:

(a) Advise the timber and targeted area recovery coordinator and the agency cabinet-level task force on issues relating to impact area economic and social development, and review and provide recommendations on proposals for the diversification of the impact areas presented to it by the recovery coordinator;

(b) Respond to the needs and concerns of citizens at the local level;

(d) Provide recommendations to the governor, the legislature, and congress on land management and economic and regulatory policies that affect impact areas; and

(e) Recommend to the legislature any changes or improvements in existing programs designed to benefit impact areas.

(3) Members of the board and committees shall receive no compensation but shall be reimbursed for travel expenses under RCW 43.03.050 and 43.03.060.

(4) This section shall expire June 30, 1995.

NEW SECTION. Sec. 10. The following acts or parts of acts are each repealed:

(1) RCW 43.165.020 and 1985 c 229 s 2;

(2) RCW 43.165.030 and 1987 c 195 s 13 & 1985 c 229 s 3;

(3) RCW 43.165.040 and 1985 c 229 s 4;

(4) RCW 43.165.050 and 1985 c 229 s 5;

(5) RCW 43.165.060 and 1985 c 229 s 6;

(6) RCW 43.165.070 and 1985 c 229 s 7;

(7) RCW 43.165.080 and 1987 c 195 s 14 & 1985 c 229 s 8;

(8) RCW 43.165.090 and 1985 c 229 s 9;

(9) RCW 43.165.100 and 1985 c 229 s 10;

(10) RCW 43.165.900 and 1985 c 229 s 14;

(11) RCW 43.165.901 and 1985 c 229 s 15;

(12) RCW 43.31.097 and 1990 1st ex.s. c 17 s 71;

(13) RCW 43.63A.075 and 1985 c 466 s 53 & 1984 c 125 s 6;

(14) RCW 43.63A.078 and 1987 c 505 s 33 & 1984 c 125 s 7;

(15) RCW 43.63A.230 and 1987 c 457 s 15;

(16) RCW 43.63A.440 and 1989 c 424 s 7;

(17) RCW 43.63A.450 and 1990 c 278 s 2; and

(18) RCW 43.63A.560 and 1990 1st ex.s. c 17 s 67.

NEW SECTION. Sec. 11. Sections 1 through 9 of this act are each added to chapter 43.63A RCW.

NEW SECTION. Sec. 12. 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.