SENATE BILL REPORT

SB 5776

BYSenators Warnke, Smitherman and Vognild

Revising community economic revitalization board statutes.

Senate Committee on Commerce & Labor

Senate Hearing Date(s):March 2, 1987; March 5, 1987

Majority Report:  That Substitute Senate Bill No. 5776 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Warnke, Chairman; Smitherman, Vice Chairman; Anderson, Cantu, Tanner, Vognild, West, Williams, Wojahn.

Senate Staff:Patrick Woods (786-7430)

                  March 5, 1987

AS REPORTED BY COMMITTEE ON COMMERCE & LABOR, MARCH 5, 1987

BACKGROUND:

The Community Economic Revitalization Board (CERB) was established in 1982 to promote economic development by creating jobs and capital investment in the state of Washington.  The Board is made up of 22 members appointed by the Governor and the Legislature.  Staff support is provided to the Board by the Department of Trade and Economic Development.  The Board is authorized to award loans and grants to political subdivisions to assist in financing construction of public facilities that will result in specific private sector investments and permanent job opportunities.  In 1984 the Board was authorized to act as a statewide issuing authority of umbrella revenue bonds.  In 1985 the Legislature designated funds from the Department of Transportation (DOT) motor vehicle fund to be used by CERB and DOT for improvements to state highways necessitated by planned economic development.

The Board was reviewed under the Sunset Act by the Legislative Budget Committee and OFM during 1986 and is scheduled to terminate on June 30, 1987.

SUMMARY:

The Community Economic Revitalization Board (CERB) is reauthorized with modifications and removed from the sunset schedule.

The membership of the Board is modified to remove legislative and executive branch members.  The Board's ability to issue grants to local municipalities is removed.

EFFECT OF PROPOSED SUBSTITUTE: 

Modifications to the Board's membership include:  the number of legislators on the Board is reduced from six to four; and the status of executive branch members is modified to that of nonvoting ex officio members. The total number of voting members on the Board is reduced from 22 to 15 members.

The Board is authorized to issue grants to local municipalities.  Additional modifications require the Board to adopt administrative rules which establish formal criteria for evaluating applications for grants or loans.  The evaluation factors include:  the number of jobs created or retained by a project; the existence of convincing evidence that specific private development will occur only through funding by the Board; the absence of no other timely source of funding available to the political subdivision at costs reasonably similar to the financing available from the Board; and evidence that the political subdivision has explored alternative funding sources.  The Board is directed to adopt policies for determining interest rates on loans; determine eligibility criteria for grant funding; and develop ongoing information on the actual number of jobs that are created or retained by approved projects.

Fiscal Note:      requested

Senate Committee - Testified: Jerry Ellis, Department of Trade and Economic Development