HOUSE BILL REPORT

2SSB 5872

BYSenate Committee on Economic Development & Labor (originally sponsored by Senators Anderson, Smitherman, Lee, Murray, West, McMullen, Benitz, Saling, Barr and Patterson)

Establishing a rural affairs revitalization committee and undertaking rural development projects.

House Committe on Trade & Economic Development

Majority Report:  Do pass as amended.  (13)

      Signed by Representatives Cantwell, Chair; Wineberry, Vice Chair; Doty, Ranking Republican Member; G. Fisher, Kirby, Kremen, Moyer, Raiter, Rasmussen, Rector, Schoon, Tate and Youngsman.

House Staff:Charlie Gavigan (786-7340)

AS REPORTED BY COMMITTEE ON TRADE & ECONOMIC DEVELOPMENT

FEBRUARY 23, 1990

BACKGROUND:

The Puget Sound region faces problems associated with rapid growth, while much of the rest of the state faces the problems associated with slow growth. In comparison to the central Puget Sound region, many rural areas have higher unemployment, lower per capita income, and reduced governmental services because of declining public revenues.

Current state (and federal) economic development programs focus on improving economic development in general or focus on improving specific areas of economic development, such as rural revitalization.  Many of the programs that are not directly related to rural revitalization assist rural communities indirectly.  State economic development efforts can be categorized as follows: (1) international and domestic trade promotion; (2) business development, assistance, and investment; (3) tourism promotion; (4) financing programs; (5) tax incentives; (6) local economic assistance programs; and (7) training and education programs.

The primary state agencies responsible for economic development are the Department of Trade and Economic Development (DTED), the Department of Community Development (DCD), the Employment Security Department (ESD), and the Department of Agriculture.  The Associate Development Organization network is a statewide program that is managed by DTED and is comprised of local economic development officials.

Generally, the state economic development programs targeted to rural communities can be summarized as follows: (1) Financing. Many of the state financing programs are targeted to distressed or rural areas.  The major financing programs targeted to rural or distressed areas include the Community Economic Revitalization Board (CERB) in DTED, and the Development Loan Fund and the Coastal Revolving Loan Fund in DCD; (2) Tax incentives.  Business and Occupation Tax credits and Sales Tax deferrals for locating/expanding a business in distressed communities are used to attract businesses to these areas; and (3) Local Economic Assistance.  Programs in this category focus on helping local governments and organizations develop economic growth, and are either tied to specific areas, specific industries, or apply to all local areas.  The Community Revitalization Team (CRT), the Community Development Finance Team, and the Mainstreet program, all in DCD, provide technical assistance to local governments on financing or on revitalizing their local economy.

The state also provides funding for programs that local communities can utilize for economic development efforts.  Team Washington, Tri-cities Diversification, and the 1989 Timber Package and the Rural Economic Development Pilot Program (in DCD)  are examples of state spending to directly help local area economic development efforts.

SUMMARY:

BILL AS AMENDED:  The Rural Revitalization Program is established within the Department of Community Development to provide policy direction and promote coordination of the state's rural development programs.  The department may appoint an advisory committee for this program.

The Department of Community Development is directed to develop a rural development plan and establish revitalization projects.  The goals of the projects are:  (1) to encourage the formation of new businesses and industries in rural areas; (2) to retain existing businesses; (3) to maintain and develop infrastructure conducive to revitalization; and (4) to build local development capacity with an emphasis on local decision making.

The department is authorized to develop an application and evaluation process for the projects.  The department, in choosing project sites, is to consider the degree of economic distress in an area and the feasibility of significantly impacting the community's economy.

The Department of Community Development is to work with other state agencies regarding the Rural Revitalization Program.

AMENDED BILL COMPARED TO SECOND SUBSTITUTE:  The amendment eliminates the Rural Revitalization Council and requires the Department of Community Development to administer the program instead.

Fiscal Note:      Available.

Effective Date:The bill contains an emergency clause and takes effect immediately.

House Committee ‑ Testified For:    Senator Eleanor Lee, sponsor of original bill.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    The state can help rural revitalization by coordinating state efforts in this area, and by making grants available for projects developed by rural communities to help them build local capacity for economic growth.

House Committee - Testimony Against:      None.