BILL REQ. #:  H-0712.7 

Read first time 01/19/2007.   Referred to Committee on Community & Economic Development & Trade.

     AN ACT Relating to the creation of the joint legislative community development fund committee; amending RCW 44.04.260; adding a new chapter to Title 44 RCW; creating new sections; making appropriations; and declaring an emergency.

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

NEW SECTION.  Sec. 1   INTENT. (1) The legislature recognizes that although many regions of the state are thriving, there are still distressed communities throughout rural and urban Washington where investments in economic development and social services initiatives could create vibrant local business districts and prosperous neighborhoods. Communities, whether they are formed by cultural identity, geography, or other characteristics, can grow strong with a long-term vision and the synergy of crucial investments. Providing these investments is critical for the economic health of local communities, helps build strong relationships with the state, and expands life opportunities for underserved populations.
     (2) The legislature further recognizes that private nonprofit corporations fill an important public purpose in providing health, safety, and welfare services to our state's residents. Acting through partnerships with governmental entities, these private sector providers are able to increase the amount and quality of services available to state residents, conferring a valuable benefit on the public.
     (3) The legislature therefore finds that existing programs by governmental entities and private nonprofit organizations to help distressed communities and underserved populations could be enhanced by creating the community development fund.

NEW SECTION.  Sec. 2   DEFINITIONS. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Access to human services" means resources to help people in the communities access services including, but not limited to, health care, state programs, education, and workforce development and placement programs.
     (2) "Capacity building" means supporting the development and stability of community organizations and programs including building cooperative relationships between communities with established nonprofit organizations.
     (3) "Committee" means the joint legislative community development fund committee.
     (4) "Department" means the department of community, trade, and economic development.
     (5) "Director" means the executive officer of the joint legislative community development fund committee.
     (6) "Nonprofit organization" means an organization that is tax exempt, or not required to apply for an exemption, under section 501(c)(3) or 501(c)(6) of the federal internal revenue code of 1986, as amended.
     (7) "Technical assistance" means providing professional services under contract to emerging or expanding nonprofit organizations that will enable them to initiate or improve service to their customers.

NEW SECTION.  Sec. 3   FUND CREATION AND PURPOSE. The community development fund is created in the state treasury. Moneys in the fund may be spent only after appropriation. The fund shall be used for capacity-building, technical assistance, and capital project grants through a competitive process to qualifying governmental entities and nonprofit organizations to:
     (1) Support local economic development initiatives, particularly those that encourage small business start-up and sustainability;
     (2) Offer access to human services that help local communities care for those in need;
     (3) Provide education and recreational opportunities separate from the public education system;
     (4) Strengthen local capacity to establish goals, carry out initiatives, and build cooperative relationships within their communities; and
     (5) Support capital projects that further community objectives.

NEW SECTION.  Sec. 4   GOVERNANCE. (1)(a) The joint legislative community development fund committee is created, which shall consist of three members of the senate and three members of the house of representatives.
     (i) The president of the senate shall appoint three members to the committee, two members from the majority caucus of the senate and one member from the minority caucus of the senate.
     (ii) The speaker of the house of representatives shall appoint three members to the committee, two members from the majority caucus of the house of representatives and one member from the minority caucus of the house of representatives.
     (b) The committee must include legislators from rural and urban communities who have expertise in local economic development, social and human services, education, and local infrastructure development.
     (c) Members shall be appointed to two-year terms.
     (d) Vacancies on the committee shall be filled by the appointing official as designated in (a)(i) and (ii) of this subsection. All vacancies shall be filled from the same political party and from the same house of the legislature as the member whose seat was vacated.
     (2) The members of the committee shall serve without additional compensation, but shall be reimbursed for their travel expenses in accordance with RCW 44.04.120 for attending meetings of the committee or a subcommittee of the committee, or while engaged in other business authorized by the committee.
     (3) The administration of the committee is subject to RCW 44.04.260.

NEW SECTION.  Sec. 5   COMMITTEE POWERS AND DUTIES. Subject to RCW 44.04.260, the committee has the power and duty to:
     (1) Establish and conduct a competitive process to solicit, evaluate, and prioritize project proposals to invest the community development fund in economic development and social services initiatives in distressed rural and urban areas;
     (2) Hire and fix the salary of a director. Employee salaries, other than the director's salary, shall be set by the director with the approval of the committee;
     (3) Appoint its own cochairs, one from the senate and one from the house of representatives, and adopt rules and procedures for its orderly operation. The committee may create subcommittees to perform duties under this chapter; and
     (4) Cooperate, act, and function with the Washington state legislature including but not limited to: (a) Submitting a prioritized list of projects for funding each biennium through the community development fund; and (b) recommending statutory or budgetary changes to enhance the effectiveness of, or the resources available in, the community development fund.

NEW SECTION.  Sec. 6   GRANT-MAKING PROCESS AND CRITERIA. The committee shall establish and conduct a competitive process to solicit, evaluate, and prioritize projects that propose to invest in economic development and social services initiatives in distressed rural and urban areas, as follows:
     (1) The committee shall determine a process to notify qualifying governmental entities and nonprofit organizations of the availability of moneys through the community development fund.
     (2) The committee shall conduct an application, evaluation, and prioritization process according to the following criteria:
     (a) The applicant demonstrates a long-term vision for the development of the community, using the synergy of enhanced services, infrastructure, and community improvements;
     (b) The applicant demonstrates that the state's investment in the project is critical; and
     (c) The applicant demonstrates that the applicant has the ability to fulfill the terms of the grant agreement.
     (3) The committee may also consider the following criteria in its evaluation of proposals:
     (a) Severity of economic distress including poverty, unemployment, low-income residents, dependence upon public assistance, job loss, plant closures, outmigration, incidence of crime, abandoned housing stock, deteriorated infrastructure, and other measures of distress;
     (b) Evidence that there is an unmet need for human and social services, youth education, or workforce training;
     (c) Evidence that the project will achieve its stated goals including:
     (i) Creating new or retaining existing jobs;
     (ii) Increasing local economic development opportunities;
     (iii) Providing residents with needed human and social services; or
     (iv) Providing the workforce and youth with needed education and training opportunities;
     (d) Extent to which the grassroots community, local leaders, and partners are involved in developing and carrying out the project; and
     (e) Other relevant criteria as determined by the committee.
     (4) The committee must submit a prioritized list of recommended projects for full legislative consideration either as a bill or as a budget request. The list must include a description of each prioritized project and the amount of recommended funding. In addition to the prioritized list, an alternate list of prioritized grants may also be submitted. The legislature may remove projects from the list recommended by the committee; however, the legislature may not change the prioritization of the list. If a project is removed from the list, the legislature may add projects from the alternate list in order of priority.
     (5) 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 as the committee may request; and exercise due diligence and other contract management responsibilities as required. The department may not sign agreements or otherwise financially obligate funds under this section until the legislature has approved a specific list of projects in law.
     (6) In contracts for grants authorized under this section, the department shall include provisions which require that capital improvements must be held by the grantee for a specific period of time appropriate to the amount of the grant and that facilities must 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 community development 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.
     (7) The grant-making process and criteria described in this section shall be used by the committee for community development fund grants beginning with the 2009-2011 fiscal biennium, and each biennium thereafter.

NEW SECTION.  Sec. 7   PILOT PROJECTS. (1) Notwithstanding the competitive process contained in section 6 of this act, for the 2007-2009 biennium, the following pilot projects are authorized to determine the feasibility of the community development fund, subject to the following limitations:
     (a) The KNDA community center project award shall not exceed $500,000 from the state building construction account;
     (b) The Casa Latina project award shall not exceed $250,000 from the state building construction account;
     (c) The Sea Mar family housing community project award shall not exceed $1,500,000 from the state building construction account;
     (d) The El Centro de la Raza project award shall not exceed $821,000 from the state building construction account;
     (e) The refugee and immigrant community development project award shall not exceed $100,000 from the community development fund;
     (f) The Hill top renaissance community project award shall not exceed $7,000,000 from the state building construction account, including $5,000,000 for the Martin Luther King housing development authority and $2,000,000 for Centro Latino;
     (g) The Salishan project award shall not exceed $3,000,000 from the state building construction account;
     (h) The Ilwaco community building project award shall not exceed $2,800,000 from the state building construction account;
     (i) The Spokane community programs project award shall not exceed $1,000,000 from the state building construction account for the Spokane northeast community center, $470,000 from the state building construction account for the Spokane Emmanuel center, and $150,000 from the state building construction account for the Spokane east central community center;
     (j) The Homesight center project award shall not exceed $300,000 from the state building construction account;
     (k) The north helpline project award shall not exceed $350,000 from the state building construction account;
     (l) The Japanese cultural center of Washington project award shall not exceed $1,300,000 from the state building construction account; and
     (m) The divine alternatives for dads services (DADS) center project award shall not exceed $20,000 from the state building construction account.
     (2) After the legislature has approved a specific list of pilot projects in law, the department shall develop and manage appropriate contracts with the grantees; monitor project expenditures and grantee performance; report project and contract information as the committee may request; and exercise due diligence and other contract management responsibilities as required. The department may not sign agreements or otherwise financially obligate funds under this section until the legislature has approved a specific list of pilot projects in law.
     (3) In contracts for grants authorized under this section, the department shall include provisions which require that capital improvements must be held by the grantee for a specific period of time appropriate to the amount of the grant and that facilities must 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 community development 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.

NEW SECTION.  Sec. 8   ACCOUNTABILITY AND REPORTS. (1) The committee shall develop accountability and reporting standards for grant recipients.
     (2) The committee shall submit a report each biennium to the appropriate committees of the legislature, including at a minimum:
     (a) The results of projects funded during the current biennium;
     (b) Recommendations for policy and programmatic changes to the community development fund; and
     (c) A list of prioritized projects and amounts proposed for funding in the subsequent biennium.
     (3) The committee shall submit its initial report by January 1, 2009, when, in addition to providing the information required in subsection (2) of this section, the committee shall propose one or more sources of ongoing funding for the community development fund.

Sec. 9   RCW 44.04.260 and 2005 c 319 s 112 are each amended to read as follows:
     The joint legislative audit and review committee, the joint transportation committee, the select committee on pension policy, the legislative evaluation and accountability program committee, the joint legislative community development fund committee, and the joint legislative systems committee are subject to such operational policies, procedures, and oversight as are deemed necessary by the facilities and operations committee of the senate and the executive rules committee of the house of representatives to ensure operational adequacy of the agencies of the legislative branch. As used in this section, "operational policies, procedures, and oversight" includes the development process of biennial budgets, contracting procedures, personnel policies, and compensation plans, selection of a chief administrator, facilities, and expenditures. This section does not grant oversight authority to the facilities and operations committee of the senate over any standing committee of the house of representatives or oversight authority to the executive rules committee of the house of representatives over any standing committee of the senate.

NEW SECTION.  Sec. 10   STATE GENERAL FUND APPROPRIATION TO THE COMMUNITY DEVELOPMENT FUND. The sum of seven hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2007, from the state general fund to the community development fund for the purposes of this act.

NEW SECTION.  Sec. 11   COMMUNITY DEVELOPMENT FUND APPROPRIATION TO THE COMMITTEE. The sum of three hundred fifty thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 2009, from the community development fund to the joint legislative community development fund committee for the purposes of this act.

NEW SECTION.  Sec. 12   COMMUNITY DEVELOPMENT FUND APPROPRIATION FOR DEPARTMENT ADMINISTRATION. The sum of one hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 2009, from the community development fund to the department of community, trade, and economic development for administrative costs associated with implementing section 7 of this act.

NEW SECTION.  Sec. 13   COMMUNITY DEVELOPMENT FUND APPROPRIATION FOR TECHNICAL ASSISTANCE GRANTS. The sum of one hundred fifty thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 2009, from the community development fund to the department of community, trade, and economic development for technical assistance grants to support the development of the pilot projects authorized in section 7 of this act.

NEW SECTION.  Sec. 14   COMMUNITY DEVELOPMENT FUND APPROPRIATION TO THE DEPARTMENT FOR PILOT PROJECTS. The sum of one hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 2009, from the community development fund to the department of community, trade, and economic development for the purpose of implementing section 7 of this act.

NEW SECTION.  Sec. 15    STATE BUILDING CONSTRUCTION ACCOUNT APPROPRIATION TO THE DEPARTMENT. The sum of nineteen million four hundred sixty-one thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 2009, from the state building construction account to the department of community, trade, and economic development for the purpose of implementing section 7 of this act.

NEW SECTION.  Sec. 16   CAPTIONS. Captions used in this act are not any part of the law.

NEW SECTION.  Sec. 17   CODIFICATION. Sections 1 through 6 and 8 of this act constitute a new chapter in Title 44 RCW.

NEW SECTION.  Sec. 18   Section 10 of this act is necessary for the support of state government by providing funding for vital community projects and takes effect immediately.