SENATE BILL REPORT

EHB 2850

BYRepresentatives Raiter, Doty, Cantwell, Rayburn and Wineberry

Revising provisions for the Washington economic development finance authority.

House Committe on Trade & Economic Development

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 22, 1990; February 23, 1990

Majority Report:  Do pass.

      Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McDonald, McMullen, Murray, Smitherman, Warnke, Williams.

Senate Staff:Jack Brummel (786-7428)

                  February 23, 1990

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, FEBRUARY 23, 1990

BACKGROUND:

The Washington Economic Development Finance Authority (WEDFA) was established in 1989 to help small and medium-sized businesses meet their capital needs.  WEDFA is authorized to issue nonrecourse bonds, which are not obligations of the state.  WEDFA is governed by a 15-member board.  The Department of Trade and Economic Development provides the Authority's staff.  The Authority reports annually to the Legislature.

SUMMARY:

Changes are made to the 1989 legislation that established the Washington Economic Development Finance Authority (WEDFA).  These changes are:

      1.The prohibition in the intent section of the enabling legislation against the finance authority using "public" funds is changed to "state" funds.

      2.The WEDFA board is expanded from 15 members to 18 members.  The director of the Department of Agriculture is added, as well as two members from the general public.  Minority-owned and women-owned businesses must be represented on the board.

      3.The requirement that the finance authority only be allowed to borrow money for board member expenses from the Department of Trade and Economic Development for the first year of its operation is removed.  Also, the provision limiting annual administrative expenses to 5 percent of funds received is removed.

      4.The provision allowing the finance authority to pool loans guaranteed by the federal Small Business Administration and the Farm Home Administration is expanded to allow pooling of any loans guaranteed by the federal government.

      5.The finance authority can help farm enterprises as well as businesses.

      6.The provisions dealing with industrial development corporations are removed.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: Terry Sapp, DTED (pro)