AN ACT Relating to local development; amending RCW 43.63A.078; and creating a new section.

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

NEW SECTION. Sec. 1. The legislature finds that the high levels of poverty and unemployment in distressed areas of the state decrease the value of private investments and threaten sources of public revenue. The development or redevelopment of such areas can be substantially enhanced by the self-help projects of community-based organizations. The legislature further finds that increasing the number of such local development projects requires increasing the availability of technical assistance in project design and implementation.

Sec. 2. Section 7, chapter 125, Laws of 1984 as amended by section 33, chapter 505, Laws of 1987 and RCW 43.63A.078 are each amended to read as follows:

(1) The department shall develop and administer a local development matching fund program. To be eligible to receive funds under this program, an organization must be a local government or a nonprofit local development entity. Any local government or entity requesting funds must demonstrate the participation of a cross-section of the local community in the economic development project, including business, labor, education and training, and the public sector. Under this program, the department shall provide matching funds which shall be used for the formulation of local economic development strategies, including the technical analysis necessary to designate and carry out the strategies. A technical analysis can include, but is not limited to, the development and dissemination of data on local markets, demographics, comparative business costs, site availability, labor force characteristics, and local incentives. Funds are to be used primarily to foster new developments and expansions which result in the trading of goods and services outside of the state's borders. Funds may be made available for assisting local businesses in utilizing state and federal programs in exporting, training, and financing. Funds may also be used to provide technical assistance to businesses in the areas of land use, transportation, site location, and manpower training. Matching funds cannot be used for entertainment, capital expenses, hosting, or marketing. Funds granted for economic development projects must be matched by local resources on a dollar-for-dollar basis. Not more than fifty thousand dollars of state matching funds as provided by this section may be used for any one project.

(2) The department shall set aside, within its general fund appropriation, a sum of two hundred thousand dollars per biennium for technical assistance grants to assist community-based organizations in their efforts contributing to the redevelopment and economic well-being of distressed areas as defined in RCW 43.165.010.

A maximum of forty percent of the funds set aside for technical assistance purposes provided in this subsection may be made available for technical assistance in organizational and board development. A minimum of sixty percent of the funds set aside for technical assistance purposes shall be used for projects which meet the following standards:

(a) Community-based organizations have or will have a minimum ten percent ownership of the development project;

(b) The project is within a distressed area as defined in RCW 43.165.010 and may reasonably be expected to contribute to the redevelopment and economic well-being of the distressed area within which it is located and to increase or maintain capital and employment which pays at least one and one-half times the minimum wage as defined in chapter 49.46 RCW;

(c) The project has provided reasonable assurance that it will conform to all applicable environmental, zoning, and building laws;

(d) The benefits of the project, including the addition or retention of employment and of capital in the distressed area, shall primarily accrue to the residents of the area;

(e) There is a reasonable expectation that the project will be successful, and that the eligible organization and project participants are responsible parties;

(f) Alternative sources, including other agencies or institutions of the state or federal government, have been sought and are either insufficient or unavailable to meet the needs of the project;

(g) The technical assistance to be provided is essential to the success of the project;

(h) Provision has been made for the active participation in the project of residents of the distressed area; and

(i) Provisions have been made for reporting by the eligible organization concerning the manner in which the technical assistance is used on the project and the extent to which it achieves its intended results.

The amount required to be set aside under this section for the biennium ending June 30, 1991, shall be reduced or eliminated if a specific appropriation for the full amount required under this subsection is not made to the department by June 30, 1989.

Grant recipients under this subsection may be community-based organizations or state-wide organizations which provide technical assistance to community-based organizations.

(3) For purposes of subsection (2) of this section, "community-based organization" means:

(a) A nonprofit corporation organized under state law that:

(i) Is organized to operate within a specific distressed area;

(ii) Permits all residents eighteen years of age or older within the area of operation to become members of the organization and limits voting membership of persons not residing in the area to not more than ten percent of the total membership;

(iii) Has a board of directors, a majority of whom reside in the distressed area;

(iv) Holds elections each year for at least one-third of the members of the board of directors with the elected members serving staggered terms of not less than three years;

(v) Hires low-income, underemployed, or unemployed residents of the operating area as a majority of its staff.

(b) A state-supported community action agency that certifies by a vote of its board that it will meet the conditions specified in (a) of this subsection within one year and petitions the department for certification as a community-based organization.