READ FIRST TIME 02/12/08.   

     AN ACT Relating to creating the building communities fund program; amending RCW 43.63A.125; adding new sections to chapter 43.63A RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   FINDINGS AND 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 capital investments in community services initiatives could create vibrant local business districts and prosperous neighborhoods.
     (2) The legislature also recognizes that nonprofit organizations provide a variety of community services that serve the needs of the citizens of Washington, including many services implemented under contract with state agencies. The legislature also finds that the efficiency and quality of these services may be enhanced by the provision of safe, reliable, and sound facilities, and that, in certain cases, it may be appropriate for the state to assist in the development of these facilities.
     (3) The legislature finds that providing these capital investments is critical for the economic health of local distressed communities, helps build strong relationships with the state, and expands life opportunities for underserved, low-income populations.

NEW SECTION.  Sec. 2   DEFINITIONS. The definitions in this section apply throughout RCW 43.63A.125, this section, and sections 3 and 5 of this act unless the context clearly requires otherwise.
     (1) "Department" means the department of community, trade, and economic development.
     (2) "Distressed community" means: (a) A county that has an unemployment rate that is twenty percent above the state average for the immediately previous three years; (b) an area within a county that the department determines to be a low-income community, using as guidance the low-income community designations under the community development financial institutions fund's new markets tax credit program of the United States department of the treasury; or (c) a school district in which at least fifty percent of local elementary students receive free and reduced-price meals.
     (3) "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.
     (4) "Technical assistance" means professional services provided under contract to nonprofit organizations for feasibility studies, planning, and project management related to acquiring, constructing, or rehabilitating nonresidential community services facilities.

NEW SECTION.  Sec. 3   BUILDING COMMUNITIES FUND ACCOUNT CREATED. The building communities fund account is created in the state treasury. The account shall consist of legislative appropriations and gifts, grants, or endowments from other sources as permitted by law. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for capital and technical assistance grants as provided in RCW 43.63A.125.

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 nonresidential ((social)) community services, including social service centers and multipurpose community centers, including those serving a distinct or ethnic population. Such 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)) ranked list 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.)) The list shall include a description of each project, its total cost, the amount of requested state funding, and the amount of recommended state funding((, and documentation of nonstate funds to be used for the project)).
     (b) The total amount of recommended state capital funding for projects on ((a biennial)) the annual ranked project list shall be determined by the capital budget beginning with the 2009-2011 biennium and thereafter, and shall not exceed ((ten million dollars)) forty percent of the total amount appropriated for the building communities fund program. 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,)) 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 an unranked list of the remaining eligible projects 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. The total amount of state capital funding available for all projects on the annual unranked list shall be determined by the capital budget beginning with the 2009-2011 biennium and thereafter, and shall not exceed sixty percent of the total amount appropriated for the building communities fund program.
     (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.

NEW SECTION.  Sec. 5   ACCOUNTABILITY. (1) The department shall develop accountability and reporting standards for grant recipients. At a minimum, the department shall use the criteria listed in RCW 43.63A.125(2)(b) to evaluate the progress of each grant recipient.
     (2) Beginning January 1, 2011, the department shall submit an annual report to the appropriate committees of the legislature, including:
     (a) A list of projects currently under contract with the department under the building communities fund program; a description of each project, its total cost, the amount of state funding awarded and expended to date, the project status, the number of low-income people served, and the extent to which the project has met the criteria in RCW 43.63A.125(2)(b); and
     (b) Recommendations, if any, for policy and programmatic changes to the building communities fund program to better achieve program objectives.

NEW SECTION.  Sec. 6   CAPTIONS NOT LAW. Captions used in this act are not any part of the law.

NEW SECTION.  Sec. 7   Sections 2, 3, and 5 of this act are each added to chapter 43.63A RCW.