BILL REQ. #:  S-2048.1 

READ FIRST TIME 02/25/05.   

     AN ACT Relating to downtown and neighborhood commercial district revitalization; adding a new chapter to Title 82 RCW; adding a new chapter to Title 43 RCW; and creating new sections.

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

NEW SECTION.  Sec. 101   (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 both rural and urban communities due to a shifting population base, changes in the marketplace, and greater competition from suburban shopping malls, discount centers, and business transacted through the internet;
     (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, to avoid disinvestment and economic dislocations, and to develop and sustain 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
     (c) Certify a downtown or neighborhood commercial district organization's use of available tax incentives.

NEW SECTION.  Sec. 201   Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Applicant" means a person applying for a tax credit under this chapter.
     (2) "Contribution" means cash contributions.
     (3) "Department" means the department of revenue.
     (4) "Person" has the meaning given in RCW 82.04.030.
     (5) "Program" means a downtown or neighborhood commercial district revitalization program. For the purposes of this section, "downtown or neighborhood commercial district revitalization program" means a nonprofit organization under internal revenue code sections 501(c)(3) or 501(c)(6), with the sole mission of revitalizing a downtown or neighborhood commercial district area, that is designated by the department of community, trade, and economic development as described in sections 301 through 305 of this act.
     (6) "Main street trust fund" means the department of community, trade, and economic development's main street trust fund account under section 305 of this act.

NEW SECTION.  Sec. 202   (1) Application for tax credits under this chapter must be made to the department before making a contribution to a program or the main street trust fund. The application shall be made to the department in a form and manner prescribed by the department. The application shall contain information regarding the proposed amount of contribution to a program or the main street trust fund, and other information required by the department to determine eligibility under this act. The department shall rule on the application within forty-five days. Applications shall be approved on a first-come basis.
     (2) The person must make the contribution described in the approved application by the end of the calendar year in which the application is approved to claim a credit allowed under section 203 of this act.
     (3) The department shall not accept any applications before September 1, 2005.

NEW SECTION.  Sec. 203   (1) Subject to the limitations in this chapter, a credit is allowed against the tax imposed by chapters 82.04 and 82.16 RCW for approved contributions that are made by a person to a program or the main street trust fund.
     (2) The credit allowed under this section is equal to:
     (a) Seventy-five percent of the approved contribution made by a person to a program; and
     (b) Fifty percent of the approved contribution made by a person to the main street trust fund.
     (3) The department shall keep a running total of all credits approved under this chapter for each calendar year. The department shall not approve any credits under this section that would cause the total amount of approved credits statewide to exceed two million dollars in any calendar year.
     (4) The total credits allowed under this chapter for contributions made to each program cannot exceed one hundred thousand dollars in a calendar year. The total credits allowed under this chapter for a person cannot exceed two hundred fifty thousand dollars in a calendar year.
     (5) The credit may be claimed against any tax due under chapters 82.04 and 82.16 RCW in the calendar year following the calendar year in which the credit was approved by the department and the contribution was made to the program or the main street trust fund. Credits cannot be carried over to subsequent years. No refunds may be granted for credits under this chapter.
     (6) A person may claim all or part of its approved credit against taxes due under chapters 82.04 and 82.16 RCW, except that a person cannot claim the same credit against taxes due under chapters 82.04 and 82.16 RCW. For purposes of this subsection, "same credit" means credit for the same contribution.
     (7) The total amount of credit claimed in any calendar year by a person cannot exceed the lesser of the amount of the approved credit, or seventy-five percent of the amount of the contribution that is made by the person to a program and fifty percent of the amount of the contribution that is made by the person to the main street trust fund, in the prior calendar year.

NEW SECTION.  Sec. 204   To claim credit under this chapter, a person must electronically file with the department all returns, forms, and other information the department requires in an electronic format as provided or approved by the department. Any return, form, or information required to be filed in an electronic format under this section is not filed until received by the department in an electronic format. As used in this subsection, "returns" has the same meaning as "return" in RCW 82.32.050.

NEW SECTION.  Sec. 205   The department of community, trade, and economic development shall provide information to the department to administer this chapter, including a list of designated programs that shall be updated as necessary.

NEW SECTION.  Sec. 206   Chapter 82.32 RCW applies to the administration of this chapter.

NEW SECTION.  Sec. 301   The definitions in this section apply throughout this chapter 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 the department 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 or neighborhood commercial district revitalization program that has been designated by the department.

NEW SECTION.  Sec. 302   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 or neighborhood commercial district revitalization initiative and management strategy. Technical assistance may include, 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 downtown or neighborhood commercial district revitalization program start-up costs, specialized training, specific project feasibility studies, market studies, and design assistance;
     (3) Develop objective criteria for selecting recipients of assistance under subsections (1) and (2) of this section and provide for designation of local programs under section 303 of this act;
     (4) Operate the Washington main street program in accordance with the plan developed by the department, in consultation with the Washington main street advisory committee created under section 304 of this act; and
     (5) Consider other factors the department deems necessary for the implementation of this chapter.

NEW SECTION.  Sec. 303   (1) The department shall adopt criteria for the designation of local downtown or 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 comprehensive downtown or 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 or neighborhood commercial district;
     (c) Where applicable, a downtown or 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 or neighborhood commercial district revitalization program that includes a commitment to employ a professional program manager and maintain a sufficient operating budget;
     (e) The department's existing downtown revitalization program's 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 or neighborhood commercial district revitalization programs and official local main street programs. The programs shall be limited to three categories of designation, one of which shall be the main street level.
     (3) Sections 201 through 206 of this act do not apply to any local downtown or 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 or neighborhood commercial district revitalization program are typically defined using the pedestrian core of a traditional commercial district.

NEW SECTION.  Sec. 304   (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) Two representatives from local governments;
     (c) Five representatives from existing local main street programs or downtown and neighborhood commercial district programs including a combination of staff, property owners, and business owners; and
     (d) One representative from the Washington trust for 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;
     (c) The means by which private investment will be solicited and employed;
     (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. 305   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. Expenditures from the account may be used only for the operation of the Washington main street program.

NEW SECTION.  Sec. 401   Sections 101 and 301 through 305 of this act constitute a new chapter in Title 43 RCW.

NEW SECTION.  Sec. 402   Sections 201 through 206 of this act constitute a new chapter in Title 82 RCW.

NEW SECTION.  Sec. 403   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. 404   Part headings used in this act are not part of the law.

NEW SECTION.  Sec. 405   This act may be known and cited as the Washington main street act.