HOUSE BILL REPORT

                  HB 2906

             As Reported By House Committee On:

                Trade & Economic Development

Title:  An act relating to defining distressed area for purposes of economic assistance.

Brief Description:  Defining distressed area for purposes of economic assistance.

Sponsors:  Representatives Schoesler, Mastin, Grant, Sheahan and O'Brien.

Brief History:

  Committee Activity:

Trade & Economic Development:   2/5/98 [DP].

HOUSE COMMITTEE ON TRADE & ECONOMIC DEVELOPMENT

Majority Report:  Do pass.  Signed by 9 members:  Representatives Van Luven, Chairman; Dunn, Vice Chairman; Veloria, Ranking Minority Member; Eickmeyer, Assistant Ranking Minority Member; Alexander; Ballasiotes; Mason; McDonald and Morris.

Staff:  Kenny Pittman (786-7392).

Background:  The state of Washington has developed various incentives that are designed to assist in job creation or retention in economically distressed areas.  The incentives available to businesses located in a distressed area include a sales and use tax exemption on equipment purchases and building construction, a tax credit for employee training, and a tax credit for job creation.

A distressed area is classified as either: (a) a county with an unemployment rate that is 20 percent higher than the state unemployment rate for the previous three years; or (b) a county with a median income that is 75 percent of the state median income for the previous three years; or (c) a metropolitan statistical area (MSA) in which the average unemployment rate is 20 percent higher than the state unemployment rate for the previous year; or (d) a county designated as a rural natural resource impact area; or (e) a county designated by the Governor as an eligible area as a result of natural disaster, business closure, military base closure, or mass layoff.

Summary of Bill:  The definition of "distressed area" is modified to include a county that has a proportion of its population on medical assistance that is 40 percent or more above the state average for the previous three years.

Appropriation:  None.

Fiscal Note:  Not requested.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  This will add an additional criteria to determine economic distress in an area.  The designation as a distressed area will make available state incentives that can be used in our economic development efforts.

Testimony Against:  None.

Testified:  Representative Schoesler, prime sponsor (pro); and Scott Taylor, Washington Public Ports Association/Port of Clarkston (pro).