AN ACT Relating to employment zones; adding a new chapter to Title 43 RCW; and creating a new section.

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

NEW SECTION. Sec. 1. (1) The legislature finds:

(a) That the health, safety, morals, and welfare of the people of this state are dependent upon the continued encouragement, development, and expansion of opportunities for employment in the private sector in this state.

(b) That there are both rural and urban areas within the state that require new employment opportunities to overcome conditions of unemployment, underemployment, chronic economic distress, deterioration of main street business districts, or sudden and severe economic dislocations, and that such conditions may well exist from time to time in other areas of the state.

(2) In order to provide incentives for private enterprise to expand, for new businesses to locate in economically depressed areas, to provide more job opportunities for residents, and to enhance the tax base of the areas, it is declared to be the policy of this state to establish a pilot program for tax incentives and other assistance for businesses in designated areas to be known as employment zones.

(3) The legislature intends that state agencies, including but not limited to the department of community development, the department of labor and industries, and the department of revenue place special emphasis on providing assistance to designated employment zones. The legislature also intends that areas so designated also be eligible to apply for designation under federal employment zone legislation if enacted.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "New business enterprise" means a person or company as defined by RCW 82.04.030 that is newly established and hires new employees.

(2) "Target group" means residents of the employment zone who have been domiciled within the zone for not less than six months before employment by the new business enterprise.

(3) "Department" means the department of community development unless otherwise indicated.

(4) "Director" means the executive director of the department of community development.

NEW SECTION. Sec. 3. (1) A municipality, county, or group of contiguous municipalities or counties may propose an area described by a closed perimeter of the municipality, county, or group of municipalities or counties to be designated as an employment zone if the area has a population of no more than fifty thousand persons and meets at least two of the following additional criteria:

(a) An unemployment rate above the state average for the most recent period of twelve consecutive months for which data is available from the employment security department;

(b) A crime rate of at least fifty percent above the state average for the most recent period of twelve months for which official data is available;

(c) A per capita income less than seventy-five percent of the state average for the most recent period for which data is available from the United States census bureau or the office of financial management;

(d) Unemployment in the area fluctuates considerably due to the mix of seasonal industries in the area;

(e) The percentage of the population receiving aid to families with dependent children in the area exceeds the state-wide average; or

(f) The percentage of workers who exhaust their unemployment benefits following a permanent mass layoff or plant closing in the area exceeds the state-wide average.

(2) The director shall determine whether an area meets the criteria specified in subsection (1) of this section, based on the most recent statistics available.

(3) In proposing an area for designation as an employment zone, the local government shall submit a development plan to the director no later than February 28, 1990. This plan shall include information describing the following items:

(a) The boundaries of the proposed zone;

(b) The proposed zone's potential for business development and job creation;

(c) How the proposed zone will support and be consistent with maintenance of an economically viable central business district;

(d) Measures which will be undertaken by local government and the private sector to support the business development and job creation objectives of the zone;

(e) Any other pertinent information the director may require.

(4) The director, after consultation with the directors of the department of labor and industries and the department of revenue, shall approve the designation of not more than eight areas as employment zones by May 31, 1990.

(5) The director shall require the local governments that submitted development plans pertaining to areas selected as employment zones to continue to submit annual documentation of efforts to improve conditions in those areas and the results of those efforts. The documentation shall include at least the number of jobs created in the area, the number of jobs retained in the area, and an analysis of capital investment in the area.

NEW SECTION. Sec. 4. (1) Any new business enterprise as defined in section 2(1) of this act, which is located in an employment zone for at least one year and employs not less than four employees from the target group, shall have reduced by fifty percent the amount of contributions otherwise required by chapters 50.24 and 51.16 RCW for the first five years while located in the employment zone.

(2) Any new business enterprise as defined in section 2(1) of this act, which is located in an employment zone for at least one year, shall qualify as an eligible business project under RCW 82.62.010 and shall be entitled to apply for tax credits as provided by chapter 82.62 RCW.

NEW SECTION. Sec. 5. Sections 2 through 4 of this act shall constitute a new chapter in Title 43 RCW.