"Sec. 4   RCW 43.63A.125 and 2006 c 371 s 233 are each amended to read as follows:
     (1) The department shall establish ((a competitive process to solicit proposals for and prioritize projects that assist nonprofit organizations in)) the building communities fund program. Under the program, capital and technical assistance grants may be made to nonprofit organizations for acquiring, constructing, or rehabilitating facilities used for the delivery of: (a) Nonresidential social services, including social service centers, or (b) nonresidential community services, including multipurpose community centers, which may include those serving a distinct or ethnic population. In the case of either (a) or (b) of this subsection, the proposed facilities must be located in a distressed community or serve a substantial number of low-income or disadvantaged persons.
     (2) The department shall establish a competitive process to solicit, evaluate, and prioritize applications for the ((assistance)) building communities fund program as follows:
     (a) The department shall conduct a statewide solicitation of project applications from ((local governments,)) nonprofit organizations((, and other entities, as determined by the department)).
     (b) The department shall evaluate and rank applications in consultation with a citizen advisory committee using objective criteria. ((At a minimum,)) Applicants must demonstrate that the ((requested assistance)) proposed project:
     (i) Will increase the range, efficiency, or quality of the ((social)) services ((it provides)) provided to citizens;
     (ii) Will be located in a distressed community or will serve a substantial number of low-income or disadvantaged persons;
     (iii) Meets at least one of the following objectives:
     (A) To provide social services;
     (B) To encourage small business startups or sustainability, expand employment opportunities for community residents, or increase the employability of community residents; or
     (C) To offer educational and recreational opportunities separate from the public education system;
     (iv) Reflects a long-term vision for the development of the community, shared by residents, businesses, leaders, and partners;
     (v) Requires state funding to accomplish a discrete, usable phase of the project;
     (vi) Is ready to proceed and will make timely use of the funds;
     (vii) Is sponsored by one or more entities that have the organizational and financial capacity to fulfill the terms of the grant agreement and to maintain the project into the future;
     (viii) Fills an unmet need for community services;
     (ix) Will achieve its stated objectives; and
     (x) Is a community priority as shown through tangible commitments of existing or future assets made to the project by community residents, leaders, businesses, and government partners.
     (c) The evaluation and ranking process shall also include an examination of existing assets that applicants may apply to projects. ((Grant assistance under this section shall not exceed twenty-five percent of the total cost of the project.)) The department shall require a nonstate match for grant assistance under this section. The nonstate portion of the total project cost may include cash, the value of real property when acquired solely for the purpose of the project, and in-kind contributions. The required match shall not exceed twenty-five percent of the total cost of the project, and the exact percentage shall be determined by the department based upon its review of both the project and the applicant's relevant assets.
     (((b))) (d) The department may not:
     (i) Set a monetary limit to funding requests; or
     (ii) Require that state funds be the last to be spent on a project.
     (3)(a) The department shall submit ((a prioritized)) two separately ranked lists of recommended projects annually to the governor and the legislature in the department's ((biennial)) capital budget requests beginning with the ((2001-2003)) 2009-2011 biennium and thereafter. ((For the 1999-2001 biennium, the department shall conduct a solicitation and ranking process, as described in (a) of this subsection, for projects to be funded by appropriations provided for this program in the 1999-2001 capital budget.))
     (i) The first annually ranked list shall include recommended nonresidential social services projects, including social service centers, as provided in subsection (1)(a) of this section. The list shall include a description of each project, its total cost, the amount of requested state funding, the amount of recommended state funding, and documentation of nonstate funds to be used for the project. The total amount of recommended state funding for nonresidential social services projects ((on a biennial project list)) shall not exceed ten million dollars per biennium.
     (ii) The second annually ranked list shall include recommended nonresidential community services projects, including multipurpose community centers, as provided in subsection (1)(b) of this section. The list shall include a description of each project, its total cost, the amount of requested state funding, the amount of recommended state funding, and documentation of nonstate funds to be used for the project. The total amount of recommended state capital funding for projects on this project list shall be determined by the capital budget beginning with the 2009-2011 biennium and thereafter. In addition, if cash funds have been appropriated, up to three million dollars may be used for technical assistance grants. ((Except for the 1999-2001 biennium,))
     (b) The department shall not sign contracts or otherwise financially obligate funds under this section until the legislature has approved a specific list of projects.
     (((c))) (4) The department shall also submit to the legislature annually two separate unranked lists of the remaining eligible social services and community services projects, as provided under subsection (1)(a) and (b) of this section, for which applications were received. The list must include a description of each project, its total cost, and the amount of state funding requested. The appropriate fiscal committees of the legislature shall use this list to determine, in the legislature's sole discretion, any additional building communities fund projects that may receive funding in the capital budget.
     (5) In addition to the ranked and the unranked lists, the department shall submit to the appropriate fiscal committees of the legislature all application materials it received and all working papers it developed during its evaluation process.
     (6) After the legislature has approved a specific list of projects in law, the department shall develop and manage appropriate contracts with the selected applicants; monitor project expenditures and grantee performance; report project and contract information; and exercise due diligence and other contract management responsibilities as required.
     (7) In contracts for grants authorized under this section the department shall include provisions which require that capital improvements shall be held by the grantee for a specified period of time appropriate to the amount of the grant and that facilities shall be used for the express purpose of the grant. If the grantee is found to be out of compliance with provisions of the contract, the grantee shall repay to the state general fund the principal amount of the grant plus interest calculated at the rate of interest on state of Washington general obligation bonds issued most closely to the date of authorization of the grant."