BILL REQ. #:  H-4764.1 

Read first time 01/24/08.   Referred to Committee on Capital Budget.

     AN ACT Relating to efficiency of state investments; amending RCW 43.88.030, 43.82.035, 43.160.060, 43.160.230, 39.102.040, 47.26.282, 43.63A.135, 43.63A.125, 43.63A.750, and 27.34.330; reenacting and amending RCW 43.155.070; creating a new section; and providing expiration dates.

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

NEW SECTION.  Sec. 1   The legislature finds that the state capital budget provides billions of dollars for projects in communities across the state of Washington. These state dollars and policies shape the map of urban, suburban, and rural communities in every region of the state. This state investment sometimes leads to the unintended consequences of failed small businesses, the increased costs of services, displaced jobs from one community to another with no net gain in the number of jobs created, additional requests for state funding to adjust for the unintended consequences, and developed infrastructure on the margins of a community instead of addressing the infrastructure needs in a community's core where higher density is encouraged. Without careful analysis, state funded capital projects may lead to sprawl and inefficiencies in access to goods, services, and transportation.
     The legislature also finds that the 2007 study committee on public infrastructure programs and funding structures recommended that state infrastructure assistance to local governments should support projects that are consistent with state policy goals, including the growth management act, energy policy, transportation policy, sustainable communities, workforce development goals, and economic development goals.
     Therefore, it is the intent of the legislature to ensure that state funded capital projects create a net gain in economic activity, limit land use patterns that contribute to the production of greenhouse gases, and result in the following benefits to communities and the business environment:
     (1) Creation of additional family wage jobs, rather than shifting jobs from one location to another;
     (2) Promotion of the development and sustainability of small businesses;
     (3) A reduction of the overall cost for public infrastructure;
     (4) Efficiencies in the delivery of goods and services, public transit, and transportation;
     (5) The avoidance of additional costs to state and local governments that adversely impact local residents and small businesses; and
     (6) The promotion of compliance with the growth management act and smart growth while not fostering sprawl.

Sec. 2   RCW 43.88.030 and 2006 c 334 s 43 are each amended to read as follows:
     (1) The director of financial management shall provide all agencies with a complete set of instructions for submitting biennial budget requests to the director at least three months before agency budget documents are due into the office of financial management. The budget document or documents shall consist of the governor's budget message which shall be explanatory of the budget and shall contain an outline of the proposed financial policies of the state for the ensuing fiscal period, as well as an outline of the proposed six-year financial policies where applicable, and shall describe in connection therewith the important features of the budget. The biennial budget document or documents shall also describe performance indicators that demonstrate measurable progress towards priority results. The message shall set forth the reasons for salient changes from the previous fiscal period in expenditure and revenue items and shall explain any major changes in financial policy. Attached to the budget message shall be such supporting schedules, exhibits and other explanatory material in respect to both current operations and capital improvements as the governor shall deem to be useful to the legislature. The budget document or documents shall set forth a proposal for expenditures in the ensuing fiscal period, or six-year period where applicable, based upon the estimated revenues and caseloads as approved by the economic and revenue forecast council and caseload forecast council or upon the estimated revenues and caseloads of the office of financial management for those funds, accounts, sources, and programs for which the forecast councils do not prepare an official forecast. Revenues shall be estimated for such fiscal period from the source and at the rates existing by law at the time of submission of the budget document, including the supplemental budgets submitted in the even-numbered years of a biennium. However, the estimated revenues and caseloads for use in the governor's budget document may be adjusted to reflect budgetary revenue transfers and revenue and caseload estimates dependent upon budgetary assumptions of enrollments, workloads, and caseloads. All adjustments to the approved estimated revenues and caseloads must be set forth in the budget document. The governor may additionally submit, as an appendix to each supplemental, biennial, or six-year agency budget or to the budget document or documents, a proposal for expenditures in the ensuing fiscal period from revenue sources derived from proposed changes in existing statutes.
     The budget document or documents shall also contain:
     (a) Revenues classified by fund and source for the immediately past fiscal period, those received or anticipated for the current fiscal period, and those anticipated for the ensuing biennium;
     (b) The undesignated fund balance or deficit, by fund;
     (c) Such additional information dealing with expenditures, revenues, workload, performance, and personnel as the legislature may direct by law or concurrent resolution;
     (d) Such additional information dealing with revenues and expenditures as the governor shall deem pertinent and useful to the legislature;
     (e) Tabulations showing expenditures classified by fund, function, and agency;
     (f) The expenditures that include nonbudgeted, nonappropriated accounts outside the state treasury;
     (g) Identification of all proposed direct expenditures to implement the Puget Sound water quality plan under chapter 90.71 RCW, shown by agency and in total; and
     (h) Tabulations showing each postretirement adjustment by retirement system established after fiscal year 1991, to include, but not be limited to, estimated total payments made to the end of the previous biennial period, estimated payments for the present biennium, and estimated payments for the ensuing biennium.
     (2) The budget document or documents shall include detailed estimates of all anticipated revenues applicable to proposed operating or capital expenditures and shall also include all proposed operating or capital expenditures. The total of beginning undesignated fund balance and estimated revenues less working capital and other reserves shall equal or exceed the total of proposed applicable expenditures. The budget document or documents shall further include:
     (a) Interest, amortization and redemption charges on the state debt;
     (b) Payments of all reliefs, judgments, and claims;
     (c) Other statutory expenditures;
     (d) Expenditures incident to the operation for each agency;
     (e) Revenues derived from agency operations;
     (f) Expenditures and revenues shall be given in comparative form showing those incurred or received for the immediately past fiscal period and those anticipated for the current biennium and next ensuing biennium;
     (g) A showing and explanation of amounts of general fund and other funds obligations for debt service and any transfers of moneys that otherwise would have been available for appropriation;
     (h) Common school expenditures on a fiscal-year basis;
     (i) A showing, by agency, of the value and purpose of financing contracts for the lease/purchase or acquisition of personal or real property for the current and ensuing fiscal periods; and
     (j) A showing and explanation of anticipated amounts of general fund and other funds required to amortize the unfunded actuarial accrued liability of the retirement system specified under chapter 41.45 RCW, and the contributions to meet such amortization, stated in total dollars and as a level percentage of total compensation.
     (3) The governor's operating budget document or documents shall reflect the statewide priorities as required by RCW 43.88.090.
     (4) The governor's operating budget document or documents shall identify activities that are not addressing the statewide priorities.
     (5) A separate capital budget document or schedule shall be submitted that will contain the following:
     (a) A statement setting forth a long-range facilities plan for the state that identifies and includes the highest priority needs within affordable spending levels;
     (b) A capital program consisting of proposed capital projects for the next biennium and the two biennia succeeding the next biennium consistent with the long-range facilities plan. Insomuch as is practical, and recognizing emergent needs, the capital program shall reflect the priorities, projects, and spending levels proposed in previously submitted capital budget documents in order to provide a reliable long-range planning tool for the legislature and state agencies;
     (c) A capital plan consisting of proposed capital spending for at least four biennia succeeding the next biennium;
     (d) A strategic plan for reducing backlogs of maintenance and repair projects. The plan shall include a prioritized list of specific facility deficiencies and capital projects to address the deficiencies for each agency, cost estimates for each project, a schedule for completing projects over a reasonable period of time, and identification of normal maintenance activities to reduce future backlogs;
     (e) A statement of the reason or purpose for a project;
     (f) Verification that a project is consistent with the provisions set forth in chapter 36.70A RCW;
     (g) A statement about the proposed site, size, and estimated life of the project, if applicable;
     (h) Estimated total project cost;
     (i) For major projects valued over five million dollars, estimated costs for the following project components: Acquisition, consultant services, construction, equipment, project management, and other costs included as part of the project. Project component costs shall be displayed in a standard format defined by the office of financial management to allow comparisons between projects;
     (j) Estimated total project cost for each phase of the project as defined by the office of financial management;
     (k) Estimated ensuing biennium costs;
     (l) Estimated costs beyond the ensuing biennium;
     (m) Estimated construction start and completion dates;
     (n) Source and type of funds proposed;
     (o) Estimated ongoing operating budget costs or savings resulting from the project, including staffing and maintenance costs;
     (p) For any capital appropriation requested for a state agency for the acquisition of land or the capital improvement of land in which the primary purpose of the acquisition or improvement is recreation or wildlife habitat conservation, the capital budget document, or an omnibus list of recreation and habitat acquisitions provided with the governor's budget document, shall identify the projected costs of operation and maintenance for at least the two biennia succeeding the next biennium. Omnibus lists of habitat and recreation land acquisitions shall include individual project cost estimates for operation and maintenance as well as a total for all state projects included in the list. The document shall identify the source of funds from which the operation and maintenance costs are proposed to be funded;
     (q) Such other information bearing upon capital projects as the governor deems to be useful;
     (r) Standard terms, including a standard and uniform definition of normal maintenance, for all capital projects;
     (s) Such other information as the legislature may direct by law or concurrent resolution.
     For purposes of this subsection (5), the term "capital project" shall be defined subsequent to the analysis, findings, and recommendations of a joint committee comprised of representatives from the house capital appropriations committee, senate ways and means committee, legislative evaluation and accountability program committee, and office of financial management.
     (6) The capital budget instructions shall require the public works board criteria in RCW 43.155.070; the community economic revitalization board criteria in RCW 43.160.060; the job development fund criteria in RCW 43.160.230; the local infrastructure financing tool criteria in RCW 39.102.040; the transportation improvement board criteria in RCW 47.26.282; the nonprofit youth organization criteria in RCW 43.63A.135; the nonprofit nonresidential social services criteria in RCW 43.63A.125; the nonprofit performing arts, art museums, and cultural facilities criteria in RCW 43.63A.750; and the Washington state historical society criteria in RCW 27.34.330 to include a review of applicant answers to the questions in (a) through (bb) of this subsection. Before making funding decisions, these boards and departments must consider the answers to the questions and the growth-related impacts of a project. The purpose of the questions is to identify the impacts from the proposal and to assist the boards or departments to determine whether the proposed project is consistent with state policy goals. Capital budget instructions must include the following questions:
     (a) How many family wage jobs will be created by the project?
     (b) Will the project result in development or expansion that may displace existing jobs in any other community or state?
     (c) Is the project located in a distressed area or will the jobs benefit socially disadvantaged groups?
     (d) Are resources available to train local residents who are unemployed or underemployed?
     (e) Describe the impact on area small businesses: Will this development displace existing businesses in the region, adversely impact existing small businesses, and/or increase small business opportunities?
     (f) Will the project impact the local jurisdiction's central business district?
     (g) Will the jobs created assist the state in meeting clean energy targets?
     (h) Will the project contribute to state greenhouse gas reduction goals?
     (i) Will the project promote infill and redevelopment or greenfield or brownfield development?
     (j) Will the project convert either working farms or forests, or both to residential or commercial development?
     (k) Has the project applicant pursued working with other entities to improve the sustainability of the local area; i.e., consolidate the footprint of the project or reduce energy and transportation costs?
     (l) Do plans exist for future additions, expansions, or other activity related to the proposal?
     (m) Does the project fix infrastructure or is it developing new infrastructure?
     (n) Does the project require the expansion of the urban growth boundary or will it cause the community to consider expanding the urban growth boundary in the next five years?
     (o) Describe how the local comprehensive plan is furthered by this project: Will the project encourage development in areas designated as natural resource lands or rural areas? Will this project encourage development in areas where development is preferred by the comprehensive plan?
     (p) Is the project consistent with the comprehensive plans of adjacent jurisdictions?
     (q) Is the project included in the local capital facility plan?
     (r) Are other capital projects planned for the area?
     (s) Will the project address existing safety hazards?
     (t) Will investments be made to mitigate the impact that this project will have on the increased number of school children, traffic congestion, run off, and other services provided by area governments?
     (u) Will this project lead to the need for additional local, state, or federal funds to serve this project or the commuter trips or development induced by this investment? If so, are the funds available?
     (v) Will the applicant report on the results that the project intends to accomplish and on the unintended consequences that might arise?
     (w) Will the project move more people and freight per dollar than the other projects?
     (x) Is the project consistent with plans adopted by regional transportation planning organizations?
     (y) Will the development associated with this project be connected with local transit options?
     (z) Will the project result in longer commutes to work or to access goods and services?
     (aa) Will the project require additional transportation infrastructure to service the project?
     (bb) Will the project contribute to or reduce transportation congestion; i.e., colocated facility, closer location to clients, and nearby public transportation?
     (7) No change affecting the comparability of agency or program information relating to expenditures, revenues, workload, performance and personnel shall be made in the format of any budget document or report presented to the legislature under this section or RCW 43.88.160(1) relative to the format of the budget document or report which was presented to the previous regular session of the legislature during an odd-numbered year without prior legislative concurrence. Prior legislative concurrence shall consist of (a) a favorable majority vote on the proposal by the standing committees on ways and means of both houses if the legislature is in session or (b) a favorable majority vote on the proposal by members of the legislative evaluation and accountability program committee if the legislature is not in session.

Sec. 3   RCW 43.82.035 and 2007 c 506 s 4 are each amended to read as follows:
     (1) The office of financial management shall design and implement a modified predesign process for any space request to lease, purchase, or build facilities that involve (a) the housing of new state programs, (b) a major expansion of existing state programs, or (c) the relocation of state agency programs. This includes the consolidation of multiple state agency tenants into one facility. The office of financial management shall define facilities that meet the criteria described in (a) and (b) of this subsection.
     (2) State agencies shall submit modified predesigns to the office of financial management and the legislature. Modified predesigns must include a problem statement, an analysis of alternatives to address programmatic and space requirements, proposed locations, and a financial assessment. For proposed projects of twenty thousand gross square feet or less, the agency may provide a cost-benefit analysis, rather than a life-cycle cost analysis, as determined by the office of financial management.
     (3) Projects that meet the capital requirements for predesign on major facility projects with an estimated project cost of five million dollars or more pursuant to chapter 43.88 RCW shall not be required to prepare a modified predesign.
     (4) The office of financial management shall require state agencies to identify plans for major leased facilities as part of the ten-year capital budget plan. State agencies shall not enter into new or renewed leases of more than one million dollars per year unless such leases have been approved by the office of financial management except when the need for the lease is due to an unanticipated emergency. The regular termination date on an existing lease does not constitute an emergency. The department of general administration shall notify the office of financial management and the appropriate legislative fiscal committees if an emergency situation arises.
     (5) For project proposals in which there are estimates of operational savings, the office of financial management shall require the agency or agencies involved to provide details including but not limited to fund sources and timelines.
     (6) The office of financial management shall require state agencies to answer the questions in (a) through (x) of this subsection. The office of financial management's state agency facility oversight review must consider the growth-related impacts of a project before project approval. The purpose of the questions is to identify the growth-related impacts of the proposed project and to assist the office of financial management in determining whether the project is consistent with state policy goals.
     (a) Do plans exist for future additions, expansions, or other activities related to the proposed project?
     (b) Will existing jobs be shifted from one location to another by the project?
     (c) Will the project impact a local jurisdiction's central business district?
     (d) Is the project located in a distressed area or will the jobs benefit socially disadvantaged groups?
     (e) Are resources available to train local residents who are unemployed or underemployed?
     (f) Will the development associated with this project be connected with local transit options?
     (g) Will the project result in longer commutes to work or to access goods and services?
     (h) Will the project require additional transportation infrastructure to service the project?
     (i) Will the project contribute to or reduce transportation congestion; i.e., colocated facility, closer location to clients, and nearby public transportation?
     (j) Will the project promote infill and redevelopment or greenfield or brownfield development?
     (k) Will the project contribute to state greenhouse gas reduction goals?
     (l) Does the proposed project fix infrastructure or develop new infrastructure?
     (m) Will the project address existing safety hazards?
     (n) Does the project require the expansion of the urban growth boundary or will it cause the community to consider expanding the urban growth boundary in the next five years?
     (o) How is the local comprehensive plan furthered by this project?
     (p) Will the project encourage development in areas designated as natural resource lands or rural areas?
     (q) Will this project encourage development in areas where development is preferred by the comprehensive plan?
     (r) Is the project consistent with the comprehensive plans of adjacent jurisdictions?
     (s) Is the project consistent with the plan adopted by regional transportation planning organizations?
     (t) Are other capital projects planned for the area?
     (u) Has the project applicant pursued working with other entities to improve the sustainability of the local area; i.e., consolidate the footprint of the project or reduce energy and transportation costs?
     (v) Will investments be made to mitigate the impact that this project will have on the increased number of school children, traffic congestion, run off, and other services provided by area governments?
     (w) Will this project lead to more local, state, or federal funds to serve this project or the commuter trips or development induced by this investment? If so, are the funds available?
     (x) Will the applicant report on the results that the project intends to accomplish and on the unintended consequences that might arise?

Sec. 4   RCW 43.155.070 and 2007 c 341 s 24 and 2007 c 231 s 2 are each reenacted and amended to read as follows:
     (1) To qualify for loans or pledges under this chapter the board must determine that a local government meets all of the following conditions:
     (a) The city or county must be imposing a tax under chapter 82.46 RCW at a rate of at least one-quarter of one percent;
     (b) The local government must have developed a capital facility plan; and
     (c) The local government must be using all local revenue sources which are reasonably available for funding public works, taking into consideration local employment and economic factors.
     (2) Except where necessary to address a public health need or substantial environmental degradation, a county, city, or town planning under RCW 36.70A.040 must have adopted a comprehensive plan, including a capital facilities plan element, and development regulations as required by RCW 36.70A.040. This subsection does not require any county, city, or town planning under RCW 36.70A.040 to adopt a comprehensive plan or development regulations before requesting or receiving a loan or loan guarantee under this chapter if such request is made before the expiration of the time periods specified in RCW 36.70A.040. A county, city, or town planning under RCW 36.70A.040 which has not adopted a comprehensive plan and development regulations within the time periods specified in RCW 36.70A.040 is not prohibited from receiving a loan or loan guarantee under this chapter if the comprehensive plan and development regulations are adopted as required by RCW 36.70A.040 before submitting a request for a loan or loan guarantee.
     (3) In considering awarding loans for public facilities to special districts requesting funding for a proposed facility located in a county, city, or town planning under RCW 36.70A.040, the board shall consider whether the county, city, or town planning under RCW 36.70A.040 in whose planning jurisdiction the proposed facility is located has adopted a comprehensive plan and development regulations as required by RCW 36.70A.040.
     (4) The board shall develop a priority process for public works projects as provided in this section. The intent of the priority process is to maximize the value of public works projects accomplished with assistance under this chapter. The board shall attempt to assure a geographical balance in assigning priorities to projects. The board shall consider at least the following factors in assigning a priority to a project:
     (a) Whether the local government receiving assistance has experienced severe fiscal distress resulting from natural disaster or emergency public works needs;
     (b) Except as otherwise conditioned by RCW 43.155.110, whether the entity receiving assistance is a Puget Sound partner, as defined in RCW 90.71.010;
     (c) Whether the project is referenced in the action agenda developed by the Puget Sound partnership under RCW 90.71.310;
     (d) Whether the project is critical in nature and would affect the health and safety of a great number of citizens;
     (e) Whether the applicant has developed and adhered to guidelines regarding its permitting process for those applying for development permits consistent with section 1(2), chapter 231, Laws of 2007;
     (f) The cost of the project compared to the size of the local government and amount of loan money available;
     (g) The number of communities served by or funding the project;
     (h) Whether the project is located in an area of high unemployment, compared to the average state unemployment;
     (i) Whether the project is the acquisition, expansion, improvement, or renovation by a local government of a public water system that is in violation of health and safety standards, including the cost of extending existing service to such a system;
     (j) The relative benefit of the project to the community, considering the present level of economic activity in the community and the existing local capacity to increase local economic activity in communities that have low economic growth; and
     (k) Other criteria that the board considers advisable.
     (5) The board shall require applicants to answer the questions in RCW 43.88.030(6) (a) through (bb) and must review the responses to the questions and consider the growth-related impacts of a project before making funding decisions.
     (6) Existing debt or financial obligations of local governments shall not be refinanced under this chapter. Each local government applicant shall provide documentation of attempts to secure additional local or other sources of funding for each public works project for which financial assistance is sought under this chapter.
     (((6))) (7) Before November 1st of each year, the board shall develop and submit to the appropriate fiscal committees of the senate and house of representatives a description of the loans made under RCW 43.155.065, 43.155.068, and subsection (((9))) (10) of this section during the preceding fiscal year and a prioritized list of projects which are recommended for funding by the legislature, including one copy to the staff of each of the committees. The list shall include, but not be limited to, a description of each project and recommended financing, the terms and conditions of the loan or financial guarantee, the local government jurisdiction and unemployment rate, demonstration of the jurisdiction's critical need for the project and documentation of local funds being used to finance the public works project. The list shall also include measures of fiscal capacity for each jurisdiction recommended for financial assistance, compared to authorized limits and state averages, including local government sales taxes; real estate excise taxes; property taxes; and charges for or taxes on sewerage, water, garbage, and other utilities.
     (((7))) (8) The board shall not sign contracts or otherwise financially obligate funds from the public works assistance account before the legislature has appropriated funds for a specific list of public works projects. The legislature may remove projects from the list recommended by the board. The legislature shall not change the order of the priorities recommended for funding by the board.
     (((8))) (9) Subsection (((7))) (8) of this section does not apply to loans made under RCW 43.155.065, 43.155.068, and subsection (((9))) (10) of this section.
     (((9))) (10) Loans made for the purpose of capital facilities plans shall be exempted from subsection (((7))) (8) of this section.
     (((10))) (11) To qualify for loans or pledges for solid waste or recycling facilities under this chapter, a city or county must demonstrate that the solid waste or recycling facility is consistent with and necessary to implement the comprehensive solid waste management plan adopted by the city or county under chapter 70.95 RCW.
     (((11))) (12) After January 1, 2010, any project designed to address the effects of storm water or wastewater on Puget Sound may be funded under this section only if the project is not in conflict with the action agenda developed by the Puget Sound partnership under RCW 90.71.310.

Sec. 5   RCW 43.160.060 and 2007 c 231 s 3 are each amended to read as follows:
     The board is authorized to make direct loans to political subdivisions of the state and to federally recognized Indian tribes for the purposes of assisting the political subdivisions and federally recognized Indian tribes 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 or the federally recognized Indian tribe and the finding by the board that financial circumstances require grant assistance to enable the project to move forward. However, at least ten percent of all financial assistance provided by the board in any biennium shall consist of grants to political subdivisions and federally recognized Indian tribes.
     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.
     (c) For the acquisition of real property, including buildings and other fixtures which are a part of real property.
     (d) For a project the primary purpose of which is to facilitate or promote gambling.
     (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 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:
     (a) 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;
     (b) The rate of return of the state's investment, that includes the expected increase in state and local tax revenues associated with the project; and
     (c) Whether the applicant has developed and adhered to guidelines regarding its permitting process for those applying for development permits consistent with section 1(2), chapter 231, Laws of 2007.
     (4) The board shall require applicants to answer the questions in RCW 43.88.030(6) (a) through (bb) and must review the responses to the questions and consider the growth-related impacts of a project before making funding decisions.
     (5) A responsible official of the political subdivision or the federally recognized Indian tribe shall be present during board deliberations and provide information that the board requests.
     Before any financial assistance application is approved, the political subdivision or the federally recognized Indian tribe 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. 6   RCW 43.160.230 and 2007 c 231 s 4 are each amended to read as follows:
     (1) The job development fund program is created to provide grants for public infrastructure projects that will stimulate job creation or assist in job retention. The program is to be administered by the board. The board shall establish a competitive process to request and prioritize proposals and make grant awards.
     (2) For the purposes of chapter 425, Laws of 2005, "public infrastructure projects" has the same meaning as "public facilities" as defined in RCW 43.160.020(11).
     (3) The board shall conduct a statewide request for project applications. The board shall apply the following criteria for evaluation and ranking of applications:
     (a) The relative benefits provided to the community by the jobs the project would create, including, but not limited to: (i) The total number of jobs; (ii) the total number of full-time, family wage jobs; (iii) the unemployment rate in the area; and (iv) the increase in employment in comparison to total community population;
     (b) The present level of economic activity in the community and the existing local financial capacity to increase economic activity in the community;
     (c) Whether the applicant has developed and adhered to guidelines regarding its permitting process for those applying for development permits consistent with section 1(2), chapter 231, Laws of 2007;
     (d) The rate of return of the state's investment, that includes the expected increase in state and local tax revenues associated with the project;
     (e) The lack of another timely source of funding available to finance the project which would likely prevent the proposed community or economic development, absent the financing available under chapter 425, Laws of 2005;
     (f) The ability of the project to improve the viability of existing business entities in the project area;
     (g) Whether or not the project is a partnership of multiple jurisdictions;
     (h) Demonstration that the requested assistance will directly stimulate community and economic development by facilitating the creation of new jobs or the retention of existing jobs; and
     (i) The availability of existing assets that applicants may apply to projects.
     (4) The board shall require applicants to answer the questions in RCW 43.88.030(6) (a) through (bb) and must review the responses to the questions and consider the growth-related impacts of a project before making funding decisions.
     (5) Job development fund program grants may only be awarded to those applicants that have entered into or expect to enter into a contract with a private developer relating to private investment that will result in the creation or retention of jobs upon completion of the project. Job development fund program grants shall not be provided for any project where:
     (a) The funds will not be used within the jurisdiction or jurisdictions of the applicants; or
     (b) Evidence exists that the project would result in a development or expansion that would displace existing jobs in any other community in the state.
     (((5))) (6) The board shall, with the joint legislative audit and review committee, develop performance criteria for each grant and evaluation criteria to be used to evaluate both how well successful applicants met the community and economic development objectives stated in their applications, and how well the job development fund program performed in creating and retaining jobs.

Sec. 7   RCW 39.102.040 and 2007 c 229 s 2 are each amended to read as follows:
     (1) Prior to applying to the board to use local infrastructure financing, a sponsoring local government shall:
     (a) Designate a revenue development area within the limitations in RCW 39.102.060;
     (b) Certify that the conditions in RCW 39.102.070 are met;
     (c) Complete the process in RCW 39.102.080;
     (d) Provide public notice as required in RCW 39.102.100; and
     (e) Pass an ordinance adopting the revenue development area as required in RCW 39.102.090.
     (2) Any local government that has created an increment area under chapter 39.89 RCW and has not issued bonds to finance any public improvement may apply to the board and have its increment area considered for approval as a revenue development area under this chapter without adopting a new revenue development area under RCW 39.102.090 and 39.102.100 if it amends its ordinance to comply with RCW 39.102.090(1) and otherwise meets the conditions and limitations under this chapter.
     (3) As a condition to imposing a sales and use tax under RCW 82.14.475, a sponsoring local government, including any cosponsoring local government seeking authority to impose a sales and use tax under RCW 82.14.475, must apply to the board and be approved for a project award amount. The application shall be in a form and manner prescribed by the board and include but not be limited to information establishing that the applicant is an eligible candidate to impose the local sales and use tax under RCW 82.14.475, the anticipated effective date for imposing the tax, the estimated number of years that the tax will be imposed, and the estimated amount of tax revenue to be received in each fiscal year that the tax will be imposed. The board shall make available forms to be used for this purpose. As part of the application, each applicant must provide to the board a copy of the ordinance or ordinances creating the revenue development area as required in RCW 39.102.090. A notice of approval to use local infrastructure financing shall contain a project award that represents the maximum amount of state contribution that the applicant, including any cosponsoring local governments, can earn each year that local infrastructure financing is used. The total of all project awards shall not exceed the annual state contribution limit. The determination of a project award shall be made based on information contained in the application and the remaining amount of annual state contribution limit to be awarded. Determination of a project award by the board is final.
     (4) The board shall require applicants to answer the questions in RCW 43.88.030(6) (a) through (bb) and must review the responses to the questions and consider the growth-related impacts of a project before making funding decisions.
     (5)(a) Sponsoring local governments, and any cosponsoring local governments, applying in calendar year 2007 for a competitive project award, must submit completed applications to the board no later than July 1, 2007. By September 15, 2007, in consultation with the department of revenue and the department of community, trade, and economic development, the board shall approve competitive project awards from competitive applications submitted by the 2007 deadline. No more than two million five hundred thousand dollars in competitive project awards shall be approved in 2007. For projects not approved by the board in 2007, sponsoring and cosponsoring local governments may apply again to the board in 2008 for approval of a project.
     (b) Sponsoring local governments, and any cosponsoring local governments, applying in calendar year 2008 for a competitive project award, must submit completed applications to the board no later than July 1, 2008. By September 18, 2008, in consultation with the department of revenue and the department of community, trade, and economic development, the board shall approve competitive project awards from competitive applications submitted by the 2008 deadline.
     (c) Except as provided in RCW 39.102.050(2), a total of no more than five million dollars in competitive project awards shall be approved for local infrastructure financing.
     (d) The project selection criteria and weighting developed prior to July 22, 2007, for the application evaluation and approval process shall apply to applications received prior to November 1, 2007. In evaluating applications for a competitive project award after November 1, 2007, the board shall, in consultation with the Washington state economic development commission, develop the relative weight to be assigned to the following criteria:
     (i) The project's potential to enhance the sponsoring local government's regional and/or international competitiveness;
     (ii) The project's ability to encourage mixed use and transit-oriented development and the redevelopment of a geographic area;
     (iii) Achieving an overall distribution of projects statewide that reflect geographic diversity;
     (iv) The estimated wages and benefits for the project is greater than the average labor market area;
     (v) The estimated state and local net employment change over the life of the project;
     (vi) The current economic health and vitality of the proposed revenue development area and the contiguous community and the estimated impact of the proposed project on the proposed revenue development area and contiguous community;
     (vii) The estimated state and local net property tax change over the life of the project;
     (viii) The estimated state and local sales and use tax increase over the life of the project;
     (ix) An analysis that shows that, over the life of the project, neither the local excise tax allocation revenues nor the local property tax allocation revenues will constitute more than eighty percent of the total local funds as described in RCW 39.102.020(29)(c); and
     (x) If a project is located within an urban growth area, evidence that the project utilizes existing urban infrastructure and that the transportation needs of the project will be adequately met through the use of local infrastructure financing or other sources.
     (e)(i) Except as provided in this subsection (((4))) (5)(e), the board may not approve the use of local infrastructure financing within more than one revenue development area per county.
     (ii) In a county in which the board has approved the use of local infrastructure financing, the use of such financing in additional revenue development areas may be approved, subject to the following conditions:
     (A) The sponsoring local government is located in more than one county; and
     (B) The sponsoring local government designates a revenue development area that comprises portions of a county within which the use of local infrastructure financing has not yet been approved.
     (iii) In a county where the local infrastructure financing tool is authorized under RCW 39.102.050, the board may approve additional use of the local infrastructure financing tool.
     (((5))) (6) Once the board has approved the sponsoring local government, and any cosponsoring local governments, to use local infrastructure financing, notification must be sent by the board to the sponsoring local government, and any cosponsoring local governments, authorizing the sponsoring local government, and any cosponsoring local governments, to impose the local sales and use tax authorized under RCW 82.14.475, subject to the conditions in RCW 82.14.475.

Sec. 8   RCW 47.26.282 and 2002 c 189 s 5 are each amended to read as follows:
     In any project funded by the transportation improvement board, except for projects in cities having a population of less than five thousand persons, and in addition to any other items required to be considered by statute, the board also shall consider the land use implications of the project, such as whether the programs and projects:
     (1) Support development in and revitalization of existing downtowns;
     (2) Implement local comprehensive plans for rural and urban residential and nonresidential densities;
     (3) Have land use planning and regulations encouraging compact development for rural and urban residential and nonresidential densities; ((and))
     (4) Promote the use of multimodal transportation; and
     (5) Are consistent with state policy goals and have growth-related impacts identified in responses to the questions in RCW 43.88.030(6) (a) through (bb). The board must review the responses to the questions and consider the growth-related impacts of a project before making funding decisions.

Sec. 9   RCW 43.63A.135 and 2006 c 371 s 234 are each amended to read as follows:
     (1) The department of community, trade, and economic development must establish a competitive process to solicit proposals for and prioritize projects whose primary objective is to assist nonprofit youth organizations in acquiring, constructing, or rehabilitating facilities used for the delivery of nonresidential services, excluding outdoor athletic fields.
     (2) The department of community, trade, and economic development must establish a competitive process to prioritize applications for the assistance as follows:
     (a) The department of community, trade, and economic development must conduct a statewide solicitation of project applications from local governments, nonprofit organizations, and other entities, as determined by the department of community, trade, and economic development. The department of community, trade, and economic development must evaluate and rank applications in consultation with a citizen advisory committee using objective criteria. Projects must have a major recreational component, and must have either an educational or social service component. At a minimum, applicants must demonstrate that the requested assistance will increase the efficiency or quality of the services it provides to youth. The evaluation and ranking process must also include an examination of existing assets that applicants may apply to projects. Grant assistance under this section may not exceed twenty-five percent of the total cost of the project. 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.
     (b) The department of community, trade, and economic development must submit a prioritized list of recommended projects to the governor and the legislature in the department of community, trade, and economic development's biennial capital budget request beginning with the 2005-2007 biennium and thereafter. The list must include a description of each project, 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 projects on a biennial project list must not exceed eight million dollars. The department of community, trade, and economic development may not sign contracts or otherwise financially obligate funds under this section until the legislature has approved a specific list of projects.
     (c) In contracts for grants authorized under this section the department of community, trade, and economic development must include provisions that require that capital improvements be held by the grantee for a specified period of time appropriate to the amount of the grant and that facilities 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 must 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.
     (3) The department of community, trade, and economic development shall require applicants to answer the questions in RCW 43.88.030(6) (a) through (bb) and must review the responses to the questions and consider the growth-related impacts of a project before making funding decisions.

Sec. 10   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 acquiring, constructing, or rehabilitating facilities used for the delivery of nonresidential social services.
     (2) The department shall establish a competitive process to prioritize applications for the assistance 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. 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 will increase the efficiency or quality of the social services it provides to citizens. 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 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.
     (b) The department shall submit a prioritized list of recommended projects to the governor and the legislature in the department's biennial capital budget request beginning with the 2001-2003 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, 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 projects on a biennial project list shall not exceed ten million dollars. 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) 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.
     (3) The department shall require applicants to answer the questions in RCW 43.88.030(6) (a) through (bb) and must review the responses to the questions and consider the growth-related impacts of a project before making funding decisions.

Sec. 11   RCW 43.63A.750 and 2006 c 371 s 235 are each amended to read as follows:
     (1) A competitive grant program to assist nonprofit organizations in acquiring, constructing, or rehabilitating performing arts, art museums, and cultural facilities is created.
     (2)(a) The department shall submit a list of recommended performing arts, art museum projects, and cultural organization projects eligible for funding to the governor and the legislature in the department's biennial capital budget request beginning with the 2001-2003 biennium and thereafter. The list, in priority order, shall include a description of each project, 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 projects on a biennial project list shall not exceed twelve million dollars.
     (b) The department shall establish a competitive process to prioritize applications for state assistance as follows:
     (i) The department shall conduct a statewide solicitation of project applications from nonprofit organizations, local governments, and other entities, as determined by the department. The department shall evaluate and rank applications in consultation with a citizen advisory committee, including a representative from the state arts commission, using objective criteria. The evaluation and ranking process shall also consider local community support for projects and an examination of existing assets that applicants may apply to projects.
     (ii) The department may establish the amount of state grant assistance for individual project applications but the amount shall not exceed twenty percent of the estimated total capital cost or actual cost of a project, whichever is less. The remaining portions of the project capital cost shall be a match from nonstate sources. The nonstate match may include cash, the value of real property when acquired solely for the purpose of the project, and in-kind contributions. The department is authorized to set matching requirements for individual projects. State assistance may be used to fund separate definable phases of a project if the project demonstrates adequate progress and has secured the necessary match funding.
     (iii) The department shall not sign contracts or otherwise financially obligate funds under this section until the legislature has approved a specific list of projects. In contracts for grants authorized under this section, the department shall include provisions requiring that capital improvements be held by the grantee for a specified period of time appropriate to the amount of the grant and that facilities 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.
     (3) The department shall require applicants to answer the questions in RCW 43.88.030(6) (a) through (bb) and must review the responses to the questions and consider the growth-related impacts of a project before making funding decisions.

Sec. 12   RCW 27.34.330 and 2006 c 371 s 232 are each amended to read as follows:
     (1) The Washington state historical society shall establish a competitive process to solicit proposals for and prioritize heritage capital projects for potential funding in the state capital budget. The society shall adopt rules governing project eligibility and evaluation criteria.
     (2) Application for funding of specific projects may be made to the society by local governments, public development authorities, nonprofit corporations, tribal governments, and other entities, as determined by the society.
     (3) The society, with the advice of leaders in the heritage field, including but not limited to representatives from the office of the secretary of state, the eastern Washington state historical society, and the department of archaeology and historic preservation, shall establish and submit a prioritized list of heritage capital projects to the governor and the legislature in the society's biennial capital budget request. The list shall include a description of each project, the amount of recommended state funding, and documentation of nonstate funds to be used for the project.
     (a) The total amount of recommended state funding for projects on a biennial project list shall not exceed ten million dollars.
     (b) The prioritized list shall be developed through open and public meetings and the amount of state funding shall not exceed thirty-three percent of the total cost of the project.
     (c) The Washington state historical society shall require applicants to answer the questions in RCW 43.88.030(6) (a) through (bb) and must review the responses to the questions and consider the growth-related impacts of a project before making funding decisions.
     (4) 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 department shall not sign contracts or otherwise financially obligate funds under this section until the legislature has approved a specific list of projects. In contracts for grants authorized under this section, the society shall include provisions requiring that capital improvements be held by the grantee for a specified period of time appropriate to the amount of the grant and that facilities 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. 13   Section 6 of this act expires June 30, 2011.

NEW SECTION.  Sec. 14   Section 7 of this act expires June 30, 2039.