S-1393

AN ACT Relating to enhancing economic vitality; amending RCW 43.160.010, 43.160.020, 43.160.060, 43.160.200, 43.180.160, 42.52.080, and 43.131.386; reenacting and amending RCW 43.160.076; adding a new section to chapter 43.63A RCW; adding new sections to chapter 43.31 RCW; adding a new section to chapter 82.04 RCW; adding a new section to chapter 84.36 RCW; adding a new section to chapter 82.14 RCW; adding a new section to chapter 28B.30 RCW; adding a new chapter to Title 43 RCW; creating new sections; repealing RCW 43.31.855 and 43.31.857; repealing 1997 c 377 s 3 (uncodified); repealing 1997 c 367 s 11, 1995 c 226 s 8, 1993 c 316 s 7, and 1991 c 314 s 33 (uncodified); making appropriations; providing effective dates; and declaring an emergency.

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

NEW SECTION. Sec. 1. The legislature finds that while Washington's economy is currently prospering, economic growth continues to be uneven, particularly as between metropolitan and rural areas. This has created in effect two Washingtons. One afflicted by inadequate infrastructure to support and attract investment, another suffering from congestion and soaring housing prices. In order to address these problems, the legislature intends to use resources strategically to build on our state's strengths while addressing threats to our prosperity.

PART I

RURAL ECONOMIC DEVELOPMENT

Enhanced Flexibility for Use of Community Economic

Revitalization Board Funds

Sec. 101. RCW 43.160.010 and 1996 c 51 s 1 are each amended to read as follows:

(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~~)), county roads, or city streets for industries considering locating or expanding 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~~)) transportation improvements on state highways 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, in certain instances, providing funds to assist development of telecommunications infrastructure that supports business development, retention, and expansion in rural natural resources impact areas and rural counties of the state.

(4) 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)~~)) (5) The legislature finds that sharing economic growth state-wide is important to the welfare of the state. Rural counties and rural natural resources impact areas do not share in the economic vitality of the Puget Sound region. The ability of these communities to pursue business and job retention, expansion, and development opportunities depends on their capacity to ready necessary economic development project plans, sites, permits, and infrastructure for private investments. Project-specific planning, predevelopment, and infrastructure ((~~is one of several~~)) are critical ingredients ((~~that are critical~~)) for economic development. Rural counties and rural natural resources impact areas generally lack ((~~the infrastructure~~)) these necessary tools and resources 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 rural natural resource impact areas~~)) amount of funding available through the community economic revitalization board for rural counties and rural natural resources impact areas, and to authorize flexibility for available resources in these areas to help fund planning, predevelopment, and construction costs of infrastructure and facilities and sites that foster economic vitality and diversification.

Sec. 102. 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) "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" 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) "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) "Public facilities" means bridges, roads, domestic and industrial water, sanitary sewer, storm sewer, railroad, electricity, telecommunications, natural gas, buildings or structures, and port facilities.

(12) "Rural county" means a county with a population density of less than one hundred persons per square mile.

(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. 103. 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, project-specific environmental, capital facilities, land use, permitting, feasibility and marketing studies and plans; project design, site planning, and analysis; project debt and revenue impact analysis; 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~~)) financial circumstances ((~~exist. The board shall not obligate more than twenty percent of its biennial appropriation as grants~~)) require grant assistance to enable the project to move forward.

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 result in a development or expansion that would displace existing jobs in any other community in the state, except a project that would relocate a business from a nondistressed urban area to a rural county or rural natural resources impact area.

(d) For a construction project to any local government applicant that is not, at the time of application for financial assistance, in compliance with the provisions of chapter 36.70A RCW.

(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, advanced technology, research and development, 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 counties or rural natural resources impact 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) 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.

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

(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. 104. RCW 43.160.076 and 1998 c 321 s 28 (Referendum Bill No. 49) and 1998 c 55 s 4 are each reenacted and amended to read as follows:

(1) Except as authorized to the contrary under subsection (2) of this section, from all funds available to the board for financial assistance in a biennium under this chapter without reference to financial assistance provided under RCW 43.160.220, the board shall spend at least seventy-five percent for financial assistance for projects in ((~~distressed~~)) rural counties or rural natural resources impact areas. For purposes of this section, the term "((~~distressed~~)) rural counties" includes 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.

(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~~)) rural counties or rural natural resources impact areas are clearly insufficient to use up the seventy-five percent allocation under subsection (1) of this section, 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 financial assistance to projects not located in ((~~distressed~~)) rural counties or rural natural resources impact areas.

((~~(3) This section expires June 30, 2000.~~))

Sec. 105. RCW 43.160.200 and 1996 c 51 s 9 are each amended 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((~~(3)~~)) (5) 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 rural natural resources impact areas ((~~that demonstrate, to the satisfaction of the board, the local economy's dependence on the forest products and salmon fishing industries~~)) and rural counties.

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

(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 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 project-specific environmental, capital facilities, land use, permitting, feasibility and marketing studies and plans; project engineering, design, and site planning and analysis; and project debt and revenue impact analysis shall not exceed ((~~twenty-five~~)) fifty thousand dollars per study. Board funds for ((~~feasibility studies~~)) these purposes 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 tourism projects shall not exceed two hundred fifty thousand dollars. Other public facility construction projects under this section shall not exceed ((~~five hundred thousand~~)) one million 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~~)) planning and predevelopment activities.

(10) The board may allow de minimis general system improvements to be funded if they are critically linked to the viability of the economic development project assisted under this section.

(11) 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.

((~~(11)~~)) (12) The board shall establish guidelines for providing financial assistance under this section to ensure that the requirements of this chapter are complied with. The guidelines shall include:

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

(b) 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: (i) A minimum amount of local participation, determined by the board per application, to verify community support for the project; (ii) an analysis that establishes the project is feasible using standard economic principles; and (iii) an explanation from the applicant regarding how the project is consistent with the communities' economic strategy and goals.

(c) A method of evaluating the impact of the financial assistance on the economy of the community and whether the financial assistance achieved its purpose.

PART II

HOUSING

Increasing the Housing Finance Commission's Debt Limit

Sec. 201. 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.

NEW SECTION. Sec. 202. A new section is added to chapter 43.63A RCW to read as follows:

The department shall establish and administer a "one-stop clearinghouse" to coordinate state assistance for growers and nonprofit organizations in developing housing for agricultural employees. Growers, housing authorities, and nonprofit organizations shall have direct access to the one-stop clearinghouse. The department one-stop clearinghouse shall provide assistance on planning and design, building codes, temporary worker housing regulations, financing options, and management to growers and nonprofit organizations interested in farmworker construction. The department one-stop clearinghouse shall also provide educational materials and services to local government authorities on Washington state law concerning farmworker housing.

PART III

RURAL DEVELOPMENT COUNCIL

NEW SECTION. Sec. 301. A new section is added to chapter 43.31 RCW to read as follows:

(1) The rural development council executive committee and the department are authorized to establish a successor organization to the rural development council executive committee created under RCW 43.31.855. The purpose of the successor organization is, at least in part, to improve the delivery and accessibility of public and private resources for meeting the needs of rural communities in Washington.

(2) For purposes of this section, "successor organization" means a private nonprofit corporation created specifically to assume responsibility for administering funds provided by the federal government and other sources to carry out the purpose state in subsection (1) of this section. A successor organization must qualify as a tax-exempt nonprofit corporation under section 501(C) of the federal internal revenue code.

NEW SECTION. Sec. 302. A new section is added to chapter 43.31 RCW to read as follows:

The executive committee and the department are authorized to take all steps reasonably necessary and proper to effect the orderly transition of the rural development council executive committee to the successor organization. This authorization includes, but is not necessarily limited to, the authority to:

(1) Transfer any equipment, records, other assets, or contracts for services to the successor organization under appropriate terms and conditions, including reasonable compensation for assets acquired with state funds;

(2) Assist in the establishment of a successor organization, including entering into contracts preparatory to the establishment of the organization; and

(3) Unless otherwise provided by agreement, assign to the successor organization any membership agreements, contracts, license, and other duties and obligations related to the rural development council.

Sec. 303. RCW 42.52.080 and 1994 c 154 s 108 are each amended to read as follows:

(1) No former state officer or state employee may, within a period of one year from the date of termination of state employment, accept employment or receive compensation from an employer if:

(a) The officer or employee, during the two years immediately preceding termination of state employment, was engaged in the negotiation or administration on behalf of the state or agency of one or more contracts with that employer and was in a position to make discretionary decisions affecting the outcome of such negotiation or the nature of such administration;

(b) Such a contract or contracts have a total value of more than ten thousand dollars; and

(c) The duties of the employment with the employer or the activities for which the compensation would be received include fulfilling or implementing, in whole or in part, the provisions of such a contract or contracts or include the supervision or control of actions taken to fulfill or implement, in whole or in part, the provisions of such a contract or contracts. This subsection shall not be construed to prohibit a state officer or state employee from accepting employment with a state employee organization.

(2) No person who has served as a state officer or state employee may, within a period of two years following the termination of state employment, have a direct or indirect beneficial interest in a contract or grant that was expressly authorized or funded by specific legislative or executive action in which the former state officer or state employee participated.

(3) No former state officer or state employee may accept an offer of employment or receive compensation from an employer if the officer or employee knows or has reason to believe that the offer of employment or compensation was intended, in whole or in part, directly or indirectly, to influence the officer or employee or as compensation or reward for the performance or nonperformance of a duty by the officer or employee during the course of state employment.

(4) No former state officer or state employee may accept an offer of employment or receive compensation from an employer if the circumstances would lead a reasonable person to believe the offer has been made, or compensation given, for the purpose of influencing the performance or nonperformance of duties by the officer or employee during the course of state employment.

(5) No former state officer or state employee may at any time subsequent to his or her state employment assist another person, whether or not for compensation, in any transaction involving the state in which the former state officer or state employee at any time participated during state employment. This subsection shall not be construed to prohibit any employee or officer of a state employee organization from rendering assistance to state officers or state employees in the course of employee organization business.

(6) As used in this section, "employer" means a person as defined in RCW 42.52.010 or any other entity or business that the person owns or in which the person has a controlling interest. For purposes of subsection (1) of this section, the term "employer" does not include a successor organization to the rural development council under chapter 43.31 RCW.

NEW SECTION. Sec. 304. A new section is added to chapter 43.31 RCW to read as follows:

Notwithstanding anything to the contrary in chapter 41.06 RCW or any other provision of law, the department may contract to provide funding to a successor organization under section 301 of this act to carry out activities of the organization that are consistent with the department's powers and duties. All moneys for contracts entered into under this section are subject to appropriation.

NEW SECTION. Sec. 305. The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective June 30, 2000:

(1) RCW 43.31.855 (Rural development council) and 1997 c 377 s 1;

(2) RCW 43.31.857 (Rural development council‑-Financial contributions encouraged) and 1997 c 377 s 2; and

(3) 1997 c 377 s 3 (uncodified).

NEW SECTION. Sec. 306. The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective June 30, 2002:

(1) RCW 43.31.--- and 1998 c ... s 301 (section 301 of this act); and

(2) RCW 43.31.--- and 1998 c ... s 302 (section 302 of this act).

PART IV

COMMERCIAL DISTRICT REVITALIZATION

Legislative Intent

NEW SECTION. Sec. 401. (1) The legislature finds:

(a) The continued economic vitality of downtown and neighborhood commercial districts in our state's cities is essential to community preservation, social cohesion, and economic growth;

(b) In recent years there has been a deterioration of downtown and neighborhood commercial districts in rural and urban communities due to a shifting population base, changes in the marketplace, and greater competition from suburban shopping malls and discount centers;

(c) This decline has eroded the ability of businesses and property owners to renovate and enhance their commercial and residential properties; and

(d) Business owners in these districts need to maintain their local economies in order to provide goods and services to adjacent residents, to provide employment opportunities, and to avoid disinvestment and economic dislocations, and have developed downtown and neighborhood commercial district revitalization programs to address these problems.

(2) It is the intent of the legislature to establish a program to:

(a) Work in partnership with these organizations;

(b) Provide technical assistance and training to local governments, business organizations, downtown and neighborhood commercial district organizations, and business and property owners to accomplish community and economic revitalization and development of business districts; and

Downtown and Neighborhood Commercial District

Revitalization Incentives

NEW SECTION. Sec. 402. A new section is added to chapter 82.04 RCW to read as follows:

(1) There may be credit against the tax imposed by this chapter, the value of private contributions that are designed to assist in the development and operation of a downtown and neighborhood commercial district revitalization program for any city with a population of less than twenty thousand or a city or town located within a rural county.

(2) The credit allowed under this section is limited to an amount equal to:

(a) Seventy-five percent of the value of the contribution that is made directly, by the business, to a downtown and neighborhood commercial district revitalization program; or

(b) Fifty percent of the value of the contribution that is made directly, by the business, to the department of community, trade, and economic development for distribution as financial or technical assistance under section 406 of this act. The total credits allowed under this section for an individual downtown and neighborhood commercial district cannot exceed one hundred thousand dollars in a calendar year. The total credits allowed under this section for a business cannot exceed two hundred fifty thousand dollars in a calendar year. The total credits allowed on a state-wide basis cannot exceed two million dollars in a calendar year.

(3) Prior to making the contribution under this section, the business must obtain approval from the department of community, trade, and economic development. The businesses' request for approval must include a description of the contribution and the value of the contribution.

(4) This section applies only to contributions for which an application is approved on or after the effective date of this section.

(5) As used in this section:

(a) "Contribution" means either cash or other in-kind contributions or both.

(b) "Downtown and neighborhood commercial district revitalization program" means a program designated by the department of community, trade, and economic development under sections 401 and 405 through 409 of this act.

NEW SECTION. Sec. 403. A new section is added to chapter 84.36 RCW to read as follows:

(1) A physical improvement to a commercial building upon real property, that is located within boundaries identified and approved by the department of community, trade, and economic development under section 407 of this act and that is located in a city with a population of less than twenty thousand or a rural county, is exempt from taxation for the ten assessment years subsequent to the completion of the improvement, if the improvement meets the guidelines established by the local downtown and neighborhood commercial district revitalization program. In addition, for buildings that meet the definition of historic property as defined in RCW 84.26.020, the improvements must be consistent with the definition of rehabilitation as defined in RCW 84.26.020, and adhere to the historic preservation process and guidelines adopted by the community. A taxpayer desiring to obtain the exemption granted by this section must file notice of their intent to construct the improvement prior to the improvement being made on forms prescribed by the department of revenue and furnished to the taxpayer by the county assessor. This exemption cannot be claimed more than once in a fifteen-year period. As used in this section, "downtown and neighborhood commercial district revitalization program" has the same meaning as in section 402 of this act.

(2) The department of revenue shall adopt those rules as are necessary to properly administer the provisions of this section.

(3) As used in this section, "rural county" means a county with a population density of less than one hundred persons per square mile.

NEW SECTION. Sec. 404. A new section is added to chapter 82.14 RCW to read as follows:

(1) The legislative authority of an eligible local government located in a city with a population of less than twenty thousand or a rural 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 boundaries of the local government. The rate of tax shall not exceed two-tenths of one 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 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 local government at no cost to the local government.

(3) Moneys collected under this section shall only be used for the purpose of paying the costs for a downtown and neighborhood commercial district revitalization project in an eligible area.

(4) No tax may be collected under this section before January 1, 2000.

(5) Moneys collected under this section must be matched with one dollar of local government or private funds for every two dollars of funds collected under this section.

(6) As used in this section:

(a) "Downtown and neighborhood commercial district revitalization project" means: Public infrastructure improvements, including street and utility improvements; professional management, planning, and promotion within the eligible area, including the management and promotion of retail trade activities in the eligible area; maintenance and security for common or public areas in the eligible area; and historic preservation activities authorized under RCW 35.21.395.

(b) "Eligible local government" means a local government that is implementing a program designated by the department of community, trade, and economic development at the partner-level or associate-level under section 407 of this act.

(d) "Rural county" means a county with a population density of less than one hundred persons per square mile.

Downtown and Neighborhood Commercial District

Revitalization Program

NEW SECTION. Sec. 405. The definitions in this section apply throughout this section and sections 401 and 406 through 409 of this act unless the context clearly requires otherwise.

(1) "Area" means a geographic area within a local government that is described by a closed perimeter boundary.

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

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

(4) "Local government" means a city, code city, or town.

(5) "Qualified levels of participation" means a local downtown and neighborhood commercial district revitalization effort that has been certified by the department, as being at the participant-level, associate-level, or partner-level.

NEW SECTION. Sec. 406. The Washington main street program is created within the department. In order to implement the Washington main street program, the department shall:

(1) Provide technical assistance to businesses, property owners, organizations, and local governments undertaking a comprehensive downtown and neighborhood commercial district revitalization and management strategy within a specified area. Technical assistance includes, but is not limited to: Initial site evaluations and assessments; training for local programs; training for local program staff; site visits and assessments by technical specialists; local program design assistance and evaluation; and continued local program on-site assistance;

(2) To the extent funds are made available, provide financial assistance to local governments or local organizations to assist in initial program start-up costs, specific project feasibility studies, market studies, and design assistance;

(3) Develop objective criteria for selecting recipients of financial assistance under subsection (1) of this section and providing designation of a local program under section 407 of this act;

(4) Operate the Washington main street program in accordance with the plan described in section 408(2) of this act; and

(5) Consider other factors the department deems necessary for the implementation of this chapter.

NEW SECTION. Sec. 407. (1) The department shall, by rule, adopt criteria for the designation of the local downtown and neighborhood commercial district revitalization programs and official local main street programs. In establishing the criteria, the department shall consider:

(a) The degree of interest and commitment to downtown and neighborhood commercial district revitalization and, where applicable, historic preservation by both the public and private sectors;

(b) The evidence of potential private sector investment in the downtown and neighborhood commercial district;

(c) Where applicable, a downtown and neighborhood commercial district with sufficient historic fabric to become a foundation for an enhanced community image;

(d) The capacity of the organization to undertake a comprehensive program and the financial commitment to implement a long-term downtown and neighborhood commercial district revitalization program that includes a commitment to employ a professional program manager with a sufficient operating budget;

(e) The department's existing downtown revitalization services tier system;

(f) The national main street center's criteria for designating official main street cities; and

(g) Other factors the department deems necessary for the designation of a local program.

(2) The department shall designate local downtown and neighborhood commercial district revitalization programs and official local main street programs. The programs shall be limited to the following three categories: Partner-level, associate-level, and participant-level.

(3) Sections 402, 403, and 404 of this act do not apply to any local downtown and neighborhood commercial district revitalization program unless the boundaries of the program have been identified and approved by the department. The boundaries of a local downtown and neighborhood commercial district revitalization program are typically limited to the pedestrian core area or the central commercial district.

NEW SECTION. Sec. 408. (1) The Washington main street advisory committee is created within the department. The members of the advisory committee are appointed by the director and consist of:

(a) The director, or the director's designee, who shall serve as chair;

(b) One representative of private industry councils;

(d) The chair of the governor's small business improvement council;

(e) Five representatives from existing main street programs or downtown and neighborhood commercial district programs; and

(f) One representative of the Washington state office of archaeology and historic preservation.

(2) The department shall develop a plan for the Washington main street program, in consultation with the Washington main street advisory committee. The plan must describe:

(a) The objectives and strategies of the Washington main street program;

(b) How the Washington main street program will be coordinated with existing federal, state, local, and private sector business development and historic preservation efforts;

(d) The methods of selecting and providing assistance to participating local programs; and

(e) A means to solicit private contributions for state and local operations of the Washington main street program.

NEW SECTION. Sec. 409. The Washington main street trust fund account is created in the state treasury. All receipts from private contributions, federal funds, legislative appropriations, and fees for services, if levied, must be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for the operation of the Washington main street program.

PART V

AGRICULTURAL RESEARCH

NEW SECTION. Sec. 501. A new section is added to chapter 28B.30 RCW to read as follows:

(1) The legislature finds that the health of the rural economy in many areas in the state depends heavily on a productive and economically healthy agricultural industry. The legislature finds that a viable agricultural industry is dependent on the continual improvement in technology to allow the state's agricultural industry to keep pace in a changing society and competitive global economy.

Washington State University has played a pivotal role in agricultural research and the improvement in agricultural technology. The legislature recognizes the timeliness and importance of the indepth review of priority needs in agricultural research and improvement in technology as presented in the safe food initiative developed by Washington State University in collaboration with representatives of the state's agricultural industry.

(2) The objectives of the safe food initiative are to:

(a) Ensure food products for domestic and global markets by elimination of risks from food-borne pathogens;

(b) Protect food crops from devastating pests through new crop protection techniques and materials; and

(3) Washington State University is authorized to implement the safe food initiative subject to the availability of funding.

PART VI

LONG-TERM DEVELOPMENT EFFORTS

NEW SECTION. Sec. 601. A new section is added to chapter 43.31 RCW to read as follows:

It is the legislature's intent to ensure that Washington is positioned for long-term economic vitality. To achieve this objective, economic development efforts should be aimed at: (1) Keeping our growing companies in the state; (2) helping troubled companies stay competitive; (3) marketing Washington state as a viable business location; and (4) finding a strategy that meets two key legislative goals - rural economic development and growth management.

To implement these goals, the legislature finds it necessary to provide funds for a state-wide business retention and expansion partnership and for state-wide marketing and recruiting activities. Furthermore, an advisory board has been created to ensure that funds are leveraged and targeted appropriately.

NEW SECTION. Sec. 602. A new section is added to chapter 43.31 RCW to read as follows:

(1) The department, working with local communities, shall:

(a) Determine industries that best fit in Washington's rural communities in order to enable the department to allocate incentive funding to encourage these industries to operate within Washington;

(b) Determine changes that would improve Washington state's overall business climate and would provide the best return on the state's investment; and

(c) Commence advertising and publicity efforts, organize tours for site location consultants, print or publish collateral materials and fulfillment pieces, and conduct telemarketing to support advertising and trade missions to promote economic growth in Washington.

(2) An advisory group shall be created to ensure that the funds appropriated for this section are leveraged and targeted appropriately. The advisory group shall consist of at least five economic development professionals and shall represent the rural and nonrural areas of eastern and western Washington.

NEW SECTION. Sec. 603. (1) The sum of one hundred fifty thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2000, from the general fund to the department of community, trade, and economic development for the purposes of section 602 of this act.

(2) The sum of one hundred fifty thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2001, from the general fund to the department of community, trade, and economic development for the purposes of section 602 of this act.

NEW SECTION. Sec. 604. (1) The sum of four hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2000, from the general fund to the department of community, trade, and economic development to be used for state-wide marketing and recruiting activities described in section 602 of this act.

(2) The sum of four hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2001, from the general fund to the department of community, trade, and economic development to be used for state-wide marketing and recruiting activities described in section 602 of this act.

PART VII

ECONOMIC VITALITY COMMITTEE

NEW SECTION. Sec. 701. (1) The legislature shall establish an ad hoc economic development group to analyze potential economic development projects of state-wide significance and recommend appropriate administrative or legislative actions.

(2) The group shall include one representative each from the department of community, trade, and economic development, the department of agriculture, and the department of revenue as well as two representatives from rural economic development councils appointed by the legislature.

(3) The group shall promote economic development and business diversification throughout the state with special attention given to the economic difficulties of rural counties.

(4) In order to expedite coordinated responses, the governor may direct the group to meet on an emergency basis when projects of state-wide significance arise.

(5) The department of community, trade, and economic development shall establish criteria to determine whether a project meets the standards of a "project of state-wide significance." These criteria may include such economic indicators as local unemployment and personal income levels and project scope indicators such as the assessed value of the project in relation to the assessed value of the county.

PART VIII

REPEALED SECTIONS

Sec. 801. RCW 43.131.386 and 1997 c 367 s 19 are each amended to read as follows:

The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective June 30, 2001:

(1) RCW 43.31.601 and 1997 c 367 s 1, 1995 c 226 s 1, 1992 c 21 s 2, & 1991 c 314 s 2;

(2) RCW 43.31.641 and 1997 c 367 s 6, 1995 c 226 s 4, 1993 c 280 s 50, & 1991 c 314 s 7;

(3) RCW 50.22.090 and ((~~1995 c 226 s 5, 1993 c 316 s 10, 1992 c 47 s 2, & 1991 c 315 s 4~~)) 1997 c 367 s 4;

(4) RCW 43.160.212 and 1996 c 168 s 4, 1995 c 226 s 6, ((&)) 1993 c 316 s 5, 1992 c 21 s 8, & 1991 c 314 s 26;

(5) RCW 43.63A.021 and 1997 c 367 s 5 & 1995 c 226 s 11;

(6) RCW 43.63A.600 and 1995 c 226 s 12, 1994 c 114 s 1, 1993 c 280 s 77, & 1991 c 315 s 23;

(7) RCW 43.63A.440 and 1997 c 367 s 7, 1995 c 226 s 13, 1993 c 280 s 74, & 1989 c 424 s 7;

(8) ((~~RCW 43.160.200 and 1995 c 226 s 16, 1993 c 320 s 7, 1993 c 316 s 4, & 1991 c 314 s 23;~~

~~(9)~~)) RCW 28B.50.258 and 1995 c 226 s 18 & 1991 c 315 s 16;

((~~(10)~~)) (9) RCW 28B.50.262 and 1995 c 226 s 19 & 1994 c 282 s 3;

((~~(11)~~)) (10) RCW 28B.80.570 and 1997 c 367 s 14, 1995 c 226 s 20, 1992 c 21 s 6, & 1991 c 315 s 18;

((~~(12)~~)) (11) RCW 28B.80.575 and 1995 c 269 s 1001, 1995 c 226 s 21, & 1991 c 315 s 19;

((~~(13)~~)) (12) RCW 28B.80.580 and 1997 c 367 s 15, 1995 c 226 s 22, 1993 sp.s. c 18 s 34, 1992 c 231 s 31, & 1991 c 315 s 20;

((~~(14)~~)) (13) RCW 28B.80.585 and 1995 c 226 s 23 & 1991 c 315 s 21;

((~~(15)~~)) (14) RCW 43.17.065 and 1995 c 226 s 24, 1993 c 280 s 37, 1991 c 314 s 28, & 1990 1st ex.s. c 17 s 77;

((~~(16)~~)) (15) RCW 43.20A.750 and ((~~1995 c 226 s 25, 1993 c 280 s 38, 1992 c 21 s 4, & 1991 c 153 s 28~~)) 1997 c 367 s 16;

((~~(17)~~)) (16) RCW 43.168.140 and 1995 c 226 s 28 & 1991 c 314 s 20;

((~~(18)~~)) (17) RCW 50.12.270 and 1997 c 367 s 17, 1995 c 226 s 30, & 1991 c 315 s 3;

((~~(19)~~)) (18) RCW 50.70.010 and 1995 c 226 s 31, 1992 c 21 s 1, & 1991 c 315 s 5; and

((~~(20)~~)) (19) RCW 50.70.020 and 1995 c 226 s 32 & 1991 c 315 s 6.

NEW SECTION. Sec. 802. 1997 c 367 s 11, 1995 c 226 s 8, 1993 c 316 s 7, & 1991 c 314 s 33 (uncodified) are each repealed.

PART IX

MISCELLANEOUS

NEW SECTION. Sec. 901. Part headings and subheadings used in this act are not any part of the law.

NEW SECTION. Sec. 902. Section 101 of this act takes effect January 1, 2001.

NEW SECTION. Sec. 903. Sections 401 and 405 through 409 of this act constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 904. Sections 402 through 404 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect July 1, 1999.

NEW SECTION. Sec. 905. 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.