2699-S

AN ACT Relating to community empowerment; amending RCW 43.63A.700, 43.63A.710, 82.60.020, 82.62.010, 43.270.010, 43.270.020, 43.270.030, 43.270.040, 43.270.050, 43.270.060, and 43.270.070; reenacting and amending RCW 43.185.070; adding a new section to chapter 50.67 RCW; adding a new section to chapter 82.04 RCW; adding a new section to chapter 43.330 RCW; adding a new section to chapter 43.310 RCW; adding a new section to chapter 43.185A RCW; adding new chapters to Title 43 RCW; adding a new chapter to Title 50 RCW; adding new chapters to Title 82 RCW; creating new sections; recodifying RCW 43.63A.700 and 43.63A.710; making appropriations; providing an effective date; and declaring an emergency.

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

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

(a) Neighborhoods are a powerful indicator of the diversity and health of the state;

(b) There are geographic areas within communities that are characterized by a lack of employment opportunities and high unemployment, by an average income that is below the median income level for the surrounding community, by a high rate of crime, by a lack of affordable housing, by deteriorating infrastructure, and by a lack of facilities for community services, job training, and education;

(c) Strategies to revitalize these neighborhoods and empower residents involve a variety of activities that increase economic and social diversity, make physical improvements, and improve economic opportunities for neighborhood residents;

(d) Revitalization strategies cannot be accomplished with governmental resources only and requires a comprehensive approach that depends on a local government's ability to coordinate public resources in a long-term strategy designed to leverage private and community investment in the neighborhood;

(e) Local governments, in cooperation with neighborhood residents, can provide leadership as well as planning and coordination of resources and necessary services to address revitalization of the neighborhood; and

(f) It is in the public interest to adopt a targeted approach to community empowerment and enlist the resources of the public and private sectors and neighborhood groups to revitalize neighborhoods.

(2) The legislature declares that the purposes of the community empowerment act are to:

(a) Encourage community empowerment through strong partnerships and cooperation between all levels of government, community-based organizations and groups, neighborhood residents, and the private sector;

(b) Involve and educate the private sector and stimulate private reinvestment through the judicious use of public resources;

(d) Include neighborhood individuals and organizations in the policy-making process; and

(e) Enable economically disadvantaged young adults to obtain the education and employment skills necessary to achieve economic self-sufficiency.

PART I. WASHINGTON YOUTHBUILD PROGRAM

NEW SECTION. Sec. 101. (1) The legislature finds that there is a need to:

(a) Expand the supply of permanent affordable housing for homeless individuals, low and very low-income persons, and special need populations by utilizing the energies and talents of economically disadvantaged youth;

(b) Provide economically disadvantaged youth with opportunities for meaningful work and service to their communities in helping to meet the housing needs of homeless individuals, low and very low-income persons, and special need populations;

(c) Enable economically disadvantaged youth to obtain the education and employment skills necessary to achieve economic self-sufficiency; and

(d) Foster the development of leadership skills and commitment to community development among youth in designated community empowerment zones.

(2) The legislature declares that the purpose of the Washington youthbuild program is to:

(a) Help disadvantaged youth who have dropped out of school to obtain the education and employment skills necessary to achieve economic self-sufficiency and develop leadership skills and a commitment to community development in designated community empowerment zones; and

(b) Provide funding assistance to entities implementing programs that provide comprehensive education and skills training programs designed to lead to self-sufficiency for economically disadvantaged youth.

NEW SECTION. Sec. 102. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Applicant" means a public or private nonprofit organization agency eligible to provide education and employment training under federal or state employment training programs.

(2) "Commissioner" means the commissioner of employment security.

(3) "Department" means the employment security department.

(4) "Low income" has the same meaning as in RCW 43.185A.010.

(5) "Participant" means an individual that:

(a) Is sixteen to twenty-four years of age, inclusive;

(b) Is or is a member of a very low-income household; and

(c) Is neither attending any school nor subject to a compulsory attendance law and who has not received a secondary school diploma or a certificate of equivalency for such diploma.

(6) "Very low income" means a person or household whose income is at or below fifty percent of the median family income, adjusted for household size, for the county where the household is located.

(7) "Youthbuild" means any program that provides disadvantaged youth with opportunities for employment, education, leadership development, and training in the construction or rehabilitation of housing for special need populations, very low-income households, or low-income households.

NEW SECTION. Sec. 103. The Washington youthbuild program is established within the department. The commissioner, in cooperation and consultation with the director of the department of community, trade, and economic development, shall:

(1) Make grants, up to the lesser of three hundred thousand dollars or twenty-five percent of the total costs of the youthbuild activities, to applicants eligible to provide education and employment training under federal or state employment training programs, for the purpose of carrying out a wide range of multidisciplinary activities and services to assist economically disadvantaged youth under the federal opportunities for youth: Youthbuild program (106 Stat. 3723; 42 U.S.C. Sec. 8011), or locally developed youthbuild-type programs for economically disadvantaged youth; and

(2) Coordinate youth employment and training efforts under the department's jurisdiction and cooperate with other agencies and departments providing youth services to ensure that funds appropriated for the purposes of this chapter will be used to supplement funding from federal, state, local, or private sources.

NEW SECTION. Sec. 104. (1) Grants made under this chapter shall be used to fund an applicant's activities to implement a comprehensive education and employment skills training program.

(2) Activities eligible for assistance under this chapter include:

(a) Education and job skills training services and activities that include:

(i) Work experience and skills training, coordinated to the maximum extent feasible, with preapprenticeship and apprenticeship programs in construction and rehabilitation trades;

(ii) Services and activities designed to meet the educational needs of participants, including basic skills instruction and remedial education, bilingual education for participants with limited-English proficiency, secondary education services and activities designed to lead to the attainment of a high school diploma or its equivalent, and counseling and assistance in attaining postsecondary education and required financial aid;

(b) Counseling services and related activities;

(d) Support services and need-based stipends necessary to enable the participant to participate in the program and to assist participants through support services in retaining employment;

(e) Wage stipends and benefits provided to participants; and

(f) Administrative costs of the applicant, not to exceed five percent of the amount of assistance provided under this chapter.

NEW SECTION. Sec. 105. (1) An individual selected as a participant in the youthbuild program under this chapter may be offered full-time participation for a period of not less than six months and not more than twenty-four months.

(2) An applicant's program that is selected for funding under this chapter shall be structured so that fifty percent of the time spent by the participants in the youthbuild program is devoted to educational services and activities, such as those outlined in section 104 of this act.

NEW SECTION. Sec. 106. (1) An application for a grant under this chapter shall be submitted by the applicant in such form and in accordance with the requirements as determined by the commissioner.

(2) The application for a grant under this chapter shall contain at a minimum:

(a) The amount of the grant request and its proposed use;

(b) A description of the applicant and a statement of its qualifications, including a description of the applicant's past experience with housing rehabilitation or construction with youth and youth education and employment training programs, and its relationship with local unions and apprenticeship programs and other community groups;

(d) A description of the educational and job training activities, work opportunities, and other services that will be provided to participants;

(e) A description of the proposed construction or rehabilitation activities to be undertaken and the anticipated schedule for carrying out such activities;

(f) A description of the manner in which eligible participants will be recruited and selected, including a description of arrangements which will be made with federal or state agencies, community-based organizations, local school districts, the courts of jurisdiction for status and youth offenders, shelters for homeless individuals and other agencies that serve homeless youth, foster care agencies, and other appropriate public and private agencies;

(g) A description of the special outreach efforts that will be undertaken to recruit eligible young women, including young women with dependent children;

(h) A description of how the proposed program will be coordinated with other federal, state, local, and private resources and programs, including vocational, adult, and bilingual education programs, and job training programs;

(i) Assurances that there will be a sufficient number of adequately trained supervisory personnel in the program who have attained the level of journeyman or have served an apprenticeship through the Washington state apprenticeship training council;

(j) A description of the applicant's relationship with building contractor groups and trade unions regarding their involvement in training, and the relationship of the youthbuild program with established apprenticeship and training programs;

(k) A description of activities that will be undertaken to develop the leadership skills of the participants;

(l) A description of the commitments for any additional resources to be made available to the local program from the applicant, from recipients of other federal, state, local, or private sources; and

(m) Other factors the commissioner deems necessary.

NEW SECTION. Sec. 107. A new section is added to chapter 50.67 RCW to read as follows:

(1) In addition to its duties under this chapter, the Washington state job training coordinating council shall advise the employment security department and department of community, trade, and economic development on the development and implementation of the Washington youthbuild program created under sections 101 through 106 of this act.

(2) The Washington state job training coordinating council shall submit to the commissioner of the employment security department, the director of the department of community, trade, and economic development, and the legislature, by each December 1st, beginning December 1, 1994, a report detailing the progress, findings, and recommendations concerning the Washington youthbuild program created under sections 101 through 106 of this act.

Sec. 108. RCW 43.185.070 and 1991 c 356 s 5 and 1991 c 295 s 2 are each reenacted and amended to read as follows:

(1) During each calendar year in which funds from the housing trust fund or other legislative appropriations are available for use by the department for the housing assistance program, the department shall announce to all known interested parties, and through major media throughout the state, a grant and loan application period of at least ninety days' duration. This announcement shall be made as often as the director deems appropriate for proper utilization of resources. The department shall then promptly grant as many applications as will utilize available funds less appropriate administrative costs of the department. Administrative costs paid out of the housing trust fund may not exceed four percent of annual revenues available for distribution to housing trust fund projects. In awarding funds under this chapter, the department shall provide for a geographic distribution on a state-wide basis.

(2) The department shall give first priority to applications for projects and activities which utilize existing privately owned housing stock including privately owned housing stock purchased by nonprofit public development authorities and public housing authorities as created in chapter 35.82 RCW. As used in this subsection, privately owned housing stock includes housing that is acquired by a federal agency through a default on the mortgage by the private owner. Such projects and activities shall be evaluated under subsection (3) of this section. Second priority shall be given to activities and projects which utilize existing publicly owned housing stock. All projects and activities shall be evaluated by some or all of the criteria under subsection (3) of this section, and similar projects and activities shall be evaluated under the same criteria.

(3) The department shall give preference for applications based on some or all of the criteria under this subsection, and similar projects and activities shall be evaluated under the same criteria:

(a) The degree of leveraging of other funds that will occur;

(b) The degree of commitment from programs to provide necessary habilitation and support services for projects focusing on special needs populations;

(c) Recipient contributions to total project costs, including allied contributions from other sources such as professional, craft and trade services, and lender interest rate subsidies;

(d) Local government project contributions in the form of infrastructure improvements, and others;

(e) Projects that encourage ownership, management, and other project-related responsibility opportunities;

(f) Projects that demonstrate a strong probability of serving the original target group or income level for a period of at least twenty-five years;

(g) The applicant has the demonstrated ability, stability and resources to implement the project;

(h) Projects which demonstrate serving the greatest need;

(i) Projects that provide housing for persons and families with the lowest incomes;

(j) Projects serving special needs populations which are under statutory mandate to develop community housing;

(k) Project location and access to employment centers in the region or area; ((~~and~~))

(l) Projects that provide employment and training opportunities for disadvantaged youth under a youthbuild or youthbuild-type program as defined in section 102 of this act; and

(m) Project location and access to available public transportation services.

(4) The department shall only approve applications for projects for mentally ill persons that are consistent with a regional support network six-year capital and operating plan.

NEW SECTION. Sec. 109. The sum of five million dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1995, from the general fund to the employment security department for the purposes of sections 101 through 106 of this act.

PART II. COMMUNITY EMPOWERMENT ZONES

NEW SECTION. Sec. 201. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Affordable housing" has the same meaning as in RCW 43.185B.010.

(2) "Afterschool program" means a program of tutoring, recreation, mentoring, or cultural activities that are offered to K-12 students either before or after school hours and is approved by the local school district.

(3) "Community empowerment zone" means a geographic area within the boundaries of a local government that: (a) Meets the requirements of RCW 43.63A.710 (as recodified by this act) and is so designated by the director; or (b) is designated an empowerment zone or enterprise community under Title XIII, Chapter I of the Omnibus Reconciliation Act of 1993 (P.L. 103-66) and is designated by the director.

(4) "Community empowerment zone assistance" means furnishing financial assistance, labor, material, or technical assistance to aid in the provision of community services, crime prevention, education, job training, and housing assistance activities within a designated community empowerment zone.

(5) "Community service" means any type of counseling and advice, emergency assistance, or medical care furnished to individuals or groups within a designated community empowerment zone.

(6) "Crime prevention" means any activity that aids in the reduction or prevention of crime within a designated community empowerment zone.

(7) "Department" means the department of community, trade, and economic development.

(8) "Director" means the director of community, trade, and economic development.

(9) "Education" means any type of scholastic instruction or scholarship assistance, including an afterschool program, to any person who resides within a designated community empowerment zone that enables that person to prepare for better employment opportunities.

(10) "Housing assistance" means any activity that aids in the acquisition, preservation, rehabilitation, or construction of affordable housing within a designated community empowerment zone.

(11) "Job training" means any type of instruction to any person who resides within a designated community empowerment zone that enables that person to acquire vocational skills to become employable or seek a higher grade of employment.

(12) "Local government" means a city, town, or county. The term local government also includes federally recognized Indian reservations.

(13) "Nonprofit organization" means any public or private organization that: (a) Is organized under federal, state, or local laws; (b) has no part of its net earnings inuring to the benefit of any member, founder, contributor, or individual; and (c) has among its purposes significant activities related to community empowerment zone assistance activities within a designated community empowerment zone. The term also includes public housing authorities created under chapter 35.82 RCW and public corporations created under chapter 35.21 RCW that operate within a designated community empowerment zone.

Sec. 202. RCW 43.63A.700 and 1993 sp.s. c 25 s 401 are each amended to read as follows:

(1) The department, in cooperation with the department of revenue, the employment security department, and the office of financial management, shall approve applications submitted by local governments for designation as a ((~~neighborhood reinvestment area~~)) community empowerment zone under this section. The application shall be in the form and manner and contain such information as the department may prescribe, provided that the application for designation shall:

(a) Contain information sufficient for the director to determine if the criteria established in RCW 43.63A.710 (as recodified by this act) have been met.

(b) Be submitted on behalf of the local government by its chief elected official, or, if none, by the governing body of the local government.

(c) Contain a five-year ((~~neighborhood reinvestment~~)) community empowerment plan that describes the proposed designated ((~~neighborhood reinvestment area's~~)) community empowerment zone's community development needs and present a strategy for meeting those needs. The plan shall address the following categories: Housing needs; public infrastructure needs, such as transportation, water, sanitation, energy, and drainage/flood control; other public facilities needs, such as neighborhood facilities or facilities for provision of health, education, recreation, public safety, or other services; community economic development needs, such as commercial/industrial revitalization, job creation and retention considering the unemployment and underemployment of area residents, accessibility to financial resources by area residents and businesses, investment within the area, or other related components of community economic development; ((~~and~~)) social service needs; and public safety needs, such as gang and violence reduction or prevention, or community policing activities.

The local government is required to provide a description of its strategy for meeting the needs identified in this subsection (1)(c). As part of the strategy, the local government is required to identify the needs for which specific plans are currently in place and the source of funds expected to be used. For the balance of the area's needs, the local government must identify the source of funds expected to become available during the next two-year period and actions the local government will take to acquire those funds.

(d) Certify that neighborhood residents were given the opportunity to participate in the development of the five-year ((~~neighborhood reinvestment~~)) community empowerment strategy required under (c) of this subsection.

(2) No local government shall submit more than two neighborhoods to the department for possible designation as a designated ((~~neighborhood reinvestment area~~)) community empowerment zone under this section.

(3)(a) Within ninety days after January 1, 1994, the director may designate up to six designated ((~~neighborhood reinvestment areas~~)) community empowerment zones from among the applications eligible for designation as a designated ((~~neighborhood reinvestment area under this section~~)) community empowerment zone.

(b) Within ninety days after October 1, 1994, the director may designate additional designated community empowerment zones from among the applications eligible for designation as a designated community empowerment zone. The director may designate up to a total of ten designated community empowerment zones under this section.

(c) The director shall make determinations of designated ((~~neighborhood reinvestment areas~~)) community empowerment zones on the basis of the following factors:

(i) The strength and quality of the local government commitments to meet the needs identified in the five-year ((~~neighborhood reinvestment~~)) community empowerment plan required under this section.

(ii) The level of private commitments by private entities of additional resources and contribution to the designated ((~~neighborhood reinvestment area~~)) community empowerment zone.

(iii) The potential for ((~~reinvestment in~~)) revitalization of the area as a result of designation as a designated ((~~neighborhood reinvestment area~~)) community empowerment zone.

(iv) Other factors the director ((~~of the department of community development~~)) deems necessary.

((~~(b)~~)) (d) The determination of the director as to the areas designated as ((~~neighborhood reinvestment areas~~)) community empowerment zones shall be final.

Sec. 203. RCW 43.63A.710 and 1993 sp.s. c 25 s 402 are each amended to read as follows:

(1) The director may not designate an area as a designated ((~~neighborhood reinvestment area~~)) community empowerment zone unless that area meets the following requirements:

(a) The area must be designated by the legislative authority of the local government as an area to receive federal, state, and local assistance designed to increase economic, physical, or social activity in the area;

(b) The area must have at least fifty-one percent of the households in the area with incomes at or below eighty percent of the county's median income, adjusted for household size;

(c)(i) The average unemployment rate for the area, for the most recent twelve-month period for which data is available must be at least one hundred twenty percent of the average unemployment rate of the county; or (ii) the percentage rate of households, for the area, that receives public assistance under Title 74 RCW must be at least one hundred twenty percent of the percentage rate of households that receive public assistance for the county; and

(d) A five-year ((~~neighborhood reinvestment~~)) community empowerment plan for the area that meets the requirements of RCW 43.63A.700(1)(c) (as recodified by this act) and as further defined by the director must be adopted.

(2) The director may establish, by rule, such other requirements as the director may reasonably determine necessary and appropriate to assure that the purposes of this section are satisfied.

(3) In determining if an area meets the requirements of this section, the director may consider data provided by the United States bureau of the census from the most recent census or any other reliable data that the director determines to be acceptable for the purposes for which the data is used.

PART III. COMMUNITY EMPOWERMENT ZONE INCENTIVES

A. Community and Business Partnership Tax Credits

NEW SECTION. Sec. 301. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Affordable housing" has the same meaning as in RCW 43.185B.010.

(2) "Community empowerment zone" has the same meaning as in section 201 of this act.

(3) "Community empowerment zone assistance" has the same meaning as in section 201 of this act.

(4) "Community service" has the same meaning as in section 201 of this act.

(5) "Crime prevention" has the same meaning as in section 201 of this act.

(6) "Department" means the department of revenue.

(7) "Director" means the director of the department of revenue.

(8) "Education" has the same meaning as in section 201 of this act.

(9) "Housing assistance" has the same meaning as in section 201 of this act.

(10) "Job training" has the same meaning as in section 201 of this act.

(11) "Nonprofit organization" has the same meaning as in section 201 of this act.

(12) "Person" has the meaning given in RCW 82.04.030.

(13) "Recipient" means a person receiving tax credits under this chapter.

NEW SECTION. Sec. 302. The department shall establish a program to provide tax credits to a person making contributions to nonprofit organizations that are undertaking community empowerment zone assistance activities in a designated community empowerment zone. The tax credit may be used as a credit against any of the taxes imposed on the person under chapter 82.04 RCW.

NEW SECTION. Sec. 303. (1) Application for tax credit under this chapter must be made before the actual contribution to the community empowerment zone assistance activity is made. The application shall be made to the department of community development through June 30, 1994, and on and after July 1, 1994, to the department of community, trade, and economic development in a form and manner prescribed by the department of revenue and the department of community development through June 30, 1994, and on and after July 1, 1994, the department of community, trade, and economic development.

(2) The department of community development through June 30, 1994, and on and after July 1, 1994, the department of community, trade, and economic development shall transmit a copy of the completed application for tax credits to the department of revenue, with its recommendations, within ten working days after receipt thereof. Within thirty days after receipt of the completed application from the department of community development or the department of community, trade, and economic development, the department of revenue shall determine the amount of tax credits to be allocated to the business firm. The department of revenue shall notify the department of community development through June 30, 1994, and on and after July 1, 1994, the department of community, trade, and economic development of its decision within ten working days.

(3) The department of revenue, in consultation with the department of community development through June 30, 1994, and on and after July 1, 1994, the department of community, trade, and economic development, shall adopt rules specifying the administrative procedures applicable to applicants for tax credits, the form and manner in which the applications shall be filed, and the information to be contained therein. The rules shall apply to administrative procedure before the department of revenue and the department of community development or the department of community, trade, and economic development.

NEW SECTION. Sec. 304. In order to qualify for the tax credits in section 302 of this act, the community empowerment zone assistance activity must meet the following requirements:

(1) The activity must be located in a designated community empowerment zone;

(2) The contribution must be made to a nonprofit organization that is undertaking activities that are consistent with the area's five-year community empowerment zone strategy approved under RCW 43.63A.700 (as recodified by this act).

NEW SECTION. Sec. 305. (1) No tax credit under this chapter for community empowerment zone assistance activities may be issued after December 31, 1999.

(2) The department shall grant a credit against the tax due under this chapter of an amount equal to thirty percent of the approved amount contributed by the person for eligible community empowerment zone assistance activities in designated community empowerment zones during the taxable year.

(3) Any tax credit not used during the taxable year in which the contribution was made may be carried forward for the five immediately succeeding taxable years until the full credit has been used.

(4) The department shall keep a running total of all tax credits granted under this chapter during each fiscal biennium. The department shall not allow any credits that would cause the total tabulation for a biennium to exceed two million dollars. If all or part of an application for credit is disallowed under this subsection, the disallowed portion shall be carried over for approval the next biennium.

(5) No tax credit shall be granted to any bank, bank and trust company, trust company, national bank, savings bank, savings association, or savings and loan association for activities that are a part of its normal course of business.

(6) No recipient is eligible for tax credits in excess of two hundred thousand dollars during the taxable year and no tax credit shall be granted to any person for any amount contributed of less than two hundred fifty dollars.

NEW SECTION. Sec. 306. Applications and any other information received by the department under sections 301 through 305 of this act shall not be confidential and shall be subject to disclosure.

B. Tax Deferrals for Investment Projects in Distressed Areas

Sec. 307. RCW 82.60.020 and 1993 sp.s. c 25 s 403 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Applicant" means a person applying for a tax deferral under this chapter.

(2) "Department" means the department of revenue.

(3) "Eligible area" means: (a) A county in which the average level of unemployment for the three years before the year in which an application is filed under this chapter exceeds the average state unemployment for those years by twenty percent; (b) a metropolitan statistical area, as defined by the office of federal statistical policy and standards, United States department of commerce, in which the average level of unemployment for the calendar year immediately preceding the year in which an application is filed under this chapter exceeds the average state unemployment for such calendar year by twenty percent; or (c) a designated ((~~neighborhood reinvestment area~~)) community empowerment zone approved under RCW 43.63A.700 (as recodified by this act).

(4)(a) "Eligible investment project" means that portion of an investment project which:

(i) Is directly utilized to create at least one new full-time qualified employment position for each three hundred thousand dollars of investment on which a deferral is requested; and

(ii) Either initiates a new operation, or expands or diversifies a current operation by expanding or renovating an existing building with costs in excess of twenty-five percent of the true and fair value of the plant complex prior to improvement; or

(iii) Acquires machinery and equipment to be used for either manufacturing or research and development if the machinery and equipment is housed in a new leased structure. The lessor/owner of the structure is not eligible for a deferral unless the underlying ownership of the buildings, machinery, and equipment vests exclusively in the same person.

(b) "Eligible investment project" does not include any portion of an investment project undertaken by a light and power business as defined in RCW 82.16.010(5), with the exception of buildings used for offices of the light and power business, or investment projects which have already received deferrals under this chapter.

(5) "Investment project" means an investment in qualified buildings and qualified machinery and equipment, including labor and services rendered in the planning, installation, and construction of the project.

(6) "Manufacturing" means all activities of a commercial or industrial nature wherein labor or skill is applied, by hand or machinery, to materials so that as a result thereof a new, different, or useful substance or article of tangible personal property is produced for sale or commercial or industrial use and shall include the production or fabrication of specially made or custom made articles. "Manufacturing" also includes computer programming, the production of computer software, and other computer-related services, and the activities performed by research and development laboratories and commercial testing laboratories.

(7) "Person" has the meaning given in RCW 82.04.030.

(8) "Qualified buildings" means new structures used for manufacturing and research and development activities, including plant offices and warehouses or other facilities for the storage of raw material or finished goods if such facilities are an essential or an integral part of a factory, mill, plant, or laboratory used for manufacturing or research and development. If a building is used partly for manufacturing or research and development and partly for other purposes, the applicable tax deferral shall be determined by apportionment of the costs of construction under rules adopted by the department.

(9) "Qualified employment position" means a permanent full-time employee employed in the eligible investment project during the entire tax year. In addition to the requirements of this subsection, for projects located in community empowerment zones, the employee must initially reside in the community empowerment zone.

(10) "Qualified machinery and equipment" means all new industrial and research fixtures, equipment, and support facilities that are an integral and necessary part of a manufacturing or research and development operation. "Qualified machinery and equipment" includes: Computers; software; data processing equipment; laboratory equipment; manufacturing components such as belts, pulleys, shafts, and moving parts; molds, tools, and dies; operating structures; and all equipment used to control or operate the machinery.

(11) "Recipient" means a person receiving a tax deferral under this chapter.

(12) "Research and development" means the development, refinement, testing, marketing, and commercialization of a product, service, or process before commercial sales have begun. As used in this subsection, "commercial sales" excludes sales of prototypes or sales for market testing if the total gross receipts from such sales of the product, service, or process do not exceed one million dollars.

C. Tax Credits for Eligible Business Projects

Sec. 308. RCW 82.62.010 and 1993 sp.s. c 25 s 410 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Applicant" means a person applying for a tax credit under this chapter.

(2) "Department" means the department of revenue.

(3) "Eligible area" means: (a) A county in which the average level of unemployment for the three years before the year in which an application is filed under this chapter exceeds the average state unemployment for those years by twenty percent; (b) a metropolitan statistical area, as defined by the office of federal statistical policy and standards, United States department of commerce, in which the average level of unemployment for the calendar year immediately preceding the year in which an application is filed under this chapter exceeds the average state unemployment for such calendar year by twenty percent; (c) a designated ((~~neighborhood reinvestment area~~)) community empowerment zone approved under RCW 43.63A.700 (as recodified by this act); or (d) subcounty areas in those counties that are not covered under (a) of this subsection that are timber impact areas as defined in RCW 43.31.601.

(4)(a) "Eligible business project" means manufacturing or research and development activities which are conducted by an applicant in an eligible area at a specific facility, provided the applicant's average full-time qualified employment positions at the specific facility will be at least fifteen percent greater in the year for which the credit is being sought than the applicant's average full-time qualified employment positions at the same facility in the immediately preceding year.

(b) "Eligible business project" does not include any portion of a business project undertaken by a light and power business as defined in RCW 82.16.010(5) or that portion of a business project creating qualified full-time employment positions outside an eligible area or those recipients of a sales tax deferral under chapter 82.61 RCW.

(5) "Manufacturing" means all activities of a commercial or industrial nature wherein labor or skill is applied, by hand or machinery, to materials so that as a result thereof a new, different, or useful substance or article of tangible personal property is produced for sale or commercial or industrial use and shall include the production or fabrication of specially made or custom made articles. "Manufacturing" also includes computer programming, the production of computer software, and other computer-related services, and the activities performed by research and development laboratories and commercial testing laboratories.

(6) "Person" has the meaning given in RCW 82.04.030.

(7) "Qualified employment position" means a permanent full-time employee employed in the eligible business project during the entire tax year. In addition to the requirements of this subsection, for projects located in community empowerment zones, the employee must initially reside in the community empowerment zone.

(8) "Tax year" means the calendar year in which taxes are due.

(9) "Recipient" means a person receiving tax credits under this chapter.

(10) "Research and development" means the development, refinement, testing, marketing, and commercialization of a product, service, or process before commercial sales have begun. As used in this subsection, "commercial sales" excludes sales of prototypes or sales for market testing if the total gross receipts from such sales of the product, service, or process do not exceed one million dollars.

D. Deductions for Business Loans in Community Empowerment Zones

NEW SECTION. Sec. 309. A new section is added to chapter 82.04 RCW to read as follows:

In computing tax there may be deducted from the measure of tax by those engaged in banking, loan, security, or other financial business, amounts derived from interest received on loans to bona fide businesses located in a designated community empowerment zone approved under RCW 43.63A.700 (as recodified by this act).

E. Commercial District Revitalization Technical Assistance

NEW SECTION. Sec. 310. A new section is added to chapter 43.330 RCW to read as follows:

The department shall provide technical assistance to support implementation of community empowerment zone plans. Such assistance may include, but is not limited to, commercial district revitalization techniques using the state's main street program approach, technical and leadership skills training for community-based development organizations, small business and entrepreneurial development, and real estate development and financing.

NEW SECTION. Sec. 311. The sum of one hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1995, from the general fund to the department of community, trade, and economic development for the purposes of section 310 of this act.

F. At-Risk Youth Employment Tax Credits

NEW SECTION. Sec. 312. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "At-risk youth" means a person who is under the age of eighteen, who risks the significant loss of social or economic opportunities, including those who are victims of violence, abuse, and neglect, and who resides within a designated community empowerment zone as defined in section 201 of this act.

(2) "Department" means the department of revenue.

(3) "Person" has the meaning given in RCW 82.04.030.

(4) "Tax year" means the calendar year in which taxes are due.

(5) "Recipient" means a person receiving tax credits.

NEW SECTION. Sec. 313. (1) A person shall be allowed a credit against the tax due under chapter 82.04 RCW of an amount equal to five hundred dollars for each one thousand hours of employment, or a credit that is prorated by the number of hours of employment, by at-risk youth.

(2) No recipient is eligible for tax credits in excess of ten thousand dollars in a tax year.

(3) No recipient may use tax credits to decertify a union or displace existing jobs in any community in the state.

(4) No recipient may receive a tax credit on taxes which have not been paid during the taxable year.

NEW SECTION. Sec. 314. (1) Each recipient shall submit a report to the department on December 31st of each year on the number of at-risk youth employed over the previous twelve months as a result of the tax credits authorized by this chapter.

(2) The department shall report to the appropriate committee of the house of representatives and senate on the accomplishments of the tax credit authorized by this chapter.

NEW SECTION. Sec. 315. Chapter 82.32 RCW applies to the administration of this chapter.

PART IV. CRIME PREVENTION AND REDUCTION

NEW SECTION. Sec. 401. The legislature finds that crime is one of the most compelling, symbolic, and practical issues that reinforce the image of decline in a neighborhood. Pervasive and violent crime, drug trafficking, and gang activities make these neighborhoods difficult places in which to live and dangerous and expensive places in which to do business. The legislature further finds that the perception that an area is unsafe discourages business involvement or reinvestment by individuals or financial institutions. The legislature declares that all citizens of the state of Washington will benefit from a comprehensive strategy to provide local communities the tools to develop community-based responses to crime prevention.

A. Youth Gangs

NEW SECTION. Sec. 402. A new section is added to chapter 43.310 RCW to read as follows:

(1) For the period beginning July 1, 1994, through June 30, 1995, the department of community, trade, and economic development shall award grants to either school districts or community organizations for the development, administration, and implementation of community-based gang risk prevention and intervention pilot programs in designated community empowerment zones.

(2) The provisions of this chapter shall apply to grants awarded under this section.

(3) For the purpose of this section, "community empowerment zone" has the same meaning as in section 201 of this act.

(4) This section shall expire June 30, 1995.

NEW SECTION. Sec. 403. The sum of two hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1995, from the general fund to the department of community, trade, and economic development for the purposes of section 402 of this act.

NEW SECTION. Sec. 404. The sum of fifty thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1995, from the public safety and education account to the criminal justice training commission for the purposes of training local law enforcement officers in the effective implementation of gang resistance programs within their local school districts.

B. Violence Prevention and Intervention

Sec. 405. RCW 43.270.010 and 1989 c 271 s 315 are each amended to read as follows:

The legislature recognizes that state-wide efforts aimed at reducing the incidence of substance abuse and violence must be increased. The legislature further recognizes that the most effective strategy for reducing the impact of alcohol ((~~and~~)), other drug abuse, and violence is through the collaborative efforts of educators, law enforcement, local government officials, local treatment providers, and concerned community and citizens' groups.

The legislature intends to support the development and activities of community mobilization strategies against substance abuse or violence through the following efforts:

(1) Provide funding support for prevention, treatment, and enforcement activities identified by communities that have brought together education, treatment, local government, law enforcement, and other key elements of the community;

(2) Provide technical assistance and support to help communities develop and carry out effective activities; and

(3) Provide communities with opportunities to share suggestions for state program operations and budget priorities.

Sec. 406. RCW 43.270.020 and 1989 c 271 s 316 are each amended to read as follows:

There is established in the ((~~office of the governor~~)) department of community, trade, and economic development a grant program to provide incentive for and support for communities to develop targeted and coordinated strategies to reduce the incidence and impact of either substance abuse or violence.

Activities which may be funded through this grant program include those which:

(1) Prevent either substance abuse or violent behavior through educational and self-esteem efforts, development of positive alternatives, intervention with high-risk groups, and other prevention strategies;

(2) Support effective treatment by increasing access to and availability of treatment opportunities, particularly for underserved or highly impacted populations, developing aftercare and support mechanisms, and other strategies to increase the availability and effectiveness of treatment;

(3) Provide meaningful consequences for participation in illegal activity and promote safe and healthy communities through support of law enforcement strategies;

(4) Create or build on efforts by existing community programs, coordinate their efforts, and develop cooperative efforts or other initiatives to make most effective use of resources to carry out the community's strategy against either substance abuse or violence; and

(5) Other activities which demonstrate both feasibility and a rationale for how the activity will achieve measurable results in the strategy against either substance abuse or violence.

Sec. 407. RCW 43.270.030 and 1989 c 271 s 317 are each amended to read as follows:

Applications for funding under this chapter must:

(1) Demonstrate that the community has developed and is committed to carrying out a coordinated strategy of prevention, treatment, and law enforcement activities; and

(2)(a) For applications for substance abuse prevention or intervention activities, contain evidence of active participation of the community and specific commitments to implementing the community-wide agenda by leadership from at least education, law enforcement, local government, tribal government, and treatment entities in the community, and the opportunity for meaningful involvement from others such as neighborhood and citizen groups, businesses, human service, health and job training organizations, and other key elements of the community, particularly those whose responsibilities in law enforcement, treatment, prevention, or other community efforts provide direct, ongoing contact with substance abusers; or

(b) For applications for violence prevention or intervention activities, contain evidence of active participation of the community and specific commitments to implement the community-wide agenda by leadership from at least education, law enforcement, local government, and tribal government, and the opportunity for meaningful involvement from others such as neighborhood and citizen groups, businesses, human service, health and job training organizations, and other key elements of the community, particularly those that are involved in violence prevention or intervention activities.

Sec. 408. RCW 43.270.040 and 1989 c 271 s 318 are each amended to read as follows:

This grant program will be available to communities of any geographic size but will encourage and reward communities which develop coordinated or complimentary strategies within geographic areas such as county areas or groups of county areas which correspond to units of government with significant responsibilities in the area of substance abuse or violence prevention, existing coalitions, or other entities important to the success of a community's strategy against either substance abuse or violence.

Sec. 409. RCW 43.270.050 and 1989 c 271 s 319 are each amended to read as follows:

At a minimum, grant applications must include the following:

(1) Definition of geographic area;

(2) A description of the extent and impact of substance abuse or violence in the community, including an explanation of those who are most severely impacted and those most at risk of substance abuse or violence;

(3) An explanation of the community-wide strategy for prevention, treatment, and law enforcement activities related to substance abuse or violence with particular attention to those who are most severely impacted and those most at risk of substance abuse or violence;

(4) Explanation of who was involved in development of the strategy and what specific commitments have been made to carrying it out;

(5) Identification of existing prevention, treatment, and law enforcement resources committed by the community, including financial and other support, and an explanation of how the community's strategy involves and builds on the efforts of existing organizations or coalitions that have been carrying out community efforts against substance abuse or violence;

(6) Identification of activities that address specific objectives in the strategy for which additional resources are needed;

(7) Identification of additional local resources, including public or private funds, donated goods or services, and other measurable commitments, that have been committed to the activities identified in subsection (6) of this section;

(8) Identification of activities which address specific objectivities in the strategy for which funding is requested. Activities should be presented in priority order;

(9) Each activity for which funding is requested must be explained in sufficient detail to demonstrate:

(a) Feasibility through deliberative design, specific objectivities, and realistic plan for implementation;

(b) A rationale for how this activity will achieve measurable results and how it will be evaluated;

(10) Identification of a fiscal agent meeting state requirements for each activity proposed for funding.

Sec. 410. RCW 43.270.060 and 1989 c 271 s 320 are each amended to read as follows:

The ((~~governor~~)) director of community, trade, and economic development shall make awards, subject to funds appropriated by the legislature, under the following terms:

(1) In order to be eligible for consideration, applications must demonstrate, at a minimum:

(a) That proposals submitted for funding are based on and address specific objectives contained in a coordinated strategy of prevention, treatment, and law enforcement against substance abuse or violence;

(b)(i) For applications for substance abuse prevention or intervention activities, evidence of active participation in preparation of the proposal and specific commitments to implementing the community-wide agenda by leadership from at least education, law enforcement, local government, tribal government, and treatment entities in the community, and the opportunity for meaningful involvement from others such as neighborhood and citizen groups, businesses, human service, health and job training organizations, and other key elements of the community, particularly those whose responsibilities in law enforcement, treatment, prevention, or other community efforts provide direct, ongoing contact with substance abusers, or those at risk for substance abuse; or

(ii) For applications for violence prevention or intervention activities, evidence of active participation of the community and specific commitments to implement the community-wide agenda by leadership from at least education, law enforcement, local government, and tribal organizations, and the opportunity for meaningful involvement from others such as neighborhood and citizen groups, businesses, human service, health and job training organizations, and other key elements of the community, particularly those that are involved in violence prevention or intervention activities;

(d) Evidence of additional local resources committed to its strategy totaling at least twenty-five percent of funds awarded under this section. These resources may consist of public or private funds, donated goods or services, and other measurable commitments, including in-kind contributions such as volunteer services, materials, supplies, physical facilities or a combination thereof; and

(e) That the funds applied for, if received, will not be used to replace funding for existing activities.

(2) In order to encourage and reward communities which develop coordinated or complementary strategies within geographic areas which correspond to units of government with significant responsibilities in the area of substance abuse or violence prevention, up to fifty percent of funds appropriated for the purposes of this chapter may be awarded on a per capita basis to eligible applications reflecting coordinated strategy from a county area or group of county areas. The ((~~governor~~)) director of community, trade, and economic development may establish minimum allotments per eligible county areas up to fifteen thousand dollars; and

(3) No less than fifty percent of funds appropriated under this chapter shall be awarded on a competitive basis for activities by communities not participating in a county-wide strategy and activities identified by county-wide strategies but not funded through per capita grants. Eligible applications will be assessed and compared by a peer review committee whose members have experience in prevention, treatment, law enforcement, and other community efforts against substance abuse or violence using the following criteria:

(a) The extent and impact of substance abuse or violence;

(b) The extent to which key elements of the community are involved in and committed to the coordinated strategy;

(d) The extent to which any activities in a community's strategy offer an innovative approach to a chronic, wide-spread problem.

The peer review committee will advise the ((~~governor~~)) director of community, trade, and economic development on the extent to which each eligible applicant has met these criteria. The ((~~governor~~)) director of community, trade, and economic development will distribute available funds based on this information.

(4) ((~~The governor shall distribute fifty percent of the initial appropriation for the purposes of this chapter no later than October 1, 1989, and the remainder no later than July 1, 1990.~~

~~(5)~~)) Activities funded under this section may be considered for funding in future years, but will be considered under the same terms and criteria of new activities. Funding under this section shall not constitute an obligation by the state of Washington to provide ongoing funding.

Sec. 411. RCW 43.270.070 and 1989 c 271 s 321 are each amended to read as follows:

The ((~~governor~~)) director of community, trade, and economic development shall ask communities for suggestions on state practices, policies, and priorities that would help communities implement their strategies against substance abuse or violence. The ((~~governor~~)) director of community, trade, and economic development or appropriate agency officials shall review and respond to those suggestions making necessary changes where feasible, making recommendations to the legislature where appropriate, and providing an explanation as to why suggested changes cannot be accomplished, if the suggestions cannot be acted upon.

NEW SECTION. Sec. 412. The sum of one million five hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1995, from the general fund to the department of community, trade, and economic development for the purposes of sections 405 through 411 of this act.

C. Community Policing Assistance

NEW SECTION. Sec. 413. The department of community, trade, and economic development shall administer a grant program which makes matching grants to local governments under section 414 of this act to develop effective crime-fighting partnerships between law enforcement and the community using a problem-oriented approach.

NEW SECTION. Sec. 414. (1) Eligibility for matching grants under this section shall be limited to:

(a) Local governments that have developed an overall plan or strategy to address crime and related problems through community policing in designated community empowerment zones; and

(b) Community policing activities to address crime problems, including but not limited to multidisciplinary crime prevention teams, public education programs, neighborhood resource centers, and foot patrols.

(2) A grant of up to twenty percent of salaries and fringe benefits of additional newly sworn law enforcement officers, excluding overtime, for a three-year period may be made under this section to local governments.

(3) The department of community, trade, and economic development may enact rules to carry out this section.

(4) As used in this section, "community empowerment zone" has the same meaning as in section 201 of this act.

NEW SECTION. Sec. 415. The sum of five hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1995, from the general fund to the department of community, trade, and economic development for the purposes of sections 413 and 414 of this act.

D. Homeownership Assistance for Law Enforcement Officers

NEW SECTION. Sec. 416. A new section is added to chapter 43.185A RCW to read as follows:

(1) Notwithstanding the provisions of this chapter, for the period beginning July 1, 1994, through June 30, 1995, the department shall give preference to applications for projects that provide down payment or closing costs assistance to law enforcement officers who: (a) Purchase and occupy single-family residences, including condominiums, located in designated community empowerment zones; (b) are first-time home buyers; and (c) are considered low-income households. As used in this section, "community empowerment zone" has the same meaning as in section 201 of this act.

(2) The provisions of this chapter shall apply to grants awarded under this section.

(3) This section shall expire June 30, 1995.

NEW SECTION. Sec. 417. The sum of one hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1995, from the general fund to the department of community, trade, and economic development for the purpose of section 416 of this act.

PART V. TECHNICAL PROVISIONS

NEW SECTION. Sec. 501. (1) For the purposes of sections 201, 402, 403, 406, 410 through 415, and 417 of this act, "department" and "department of community, trade, and economic development" mean the department of community development and "director" and "director of community, trade, and economic development" mean the director of community development.

(2) This section shall expire July 1, 1994.

NEW SECTION. Sec. 502. (1) Sections 1 and 201 of this act shall constitute a new chapter in Title 43 RCW.

(2) Sections 101 through 106 of this act shall constitute a new chapter in Title 50 RCW.

(3) Sections 301 through 306 of this act shall constitute a new chapter in Title 82 RCW.

(4) Sections 312 through 315 of this act shall constitute a new chapter in Title 82 RCW.

(5) Sections 413 and 414 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 503. RCW 43.63A.700 and 43.63A.710 as amended by this act are each recodified as sections in the new chapter created by section 502(1) of this act.

NEW SECTION. Sec. 504. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 505. Part and subpart headings as used in this act do not constitute any part of the law.

NEW SECTION. Sec. 506. Sections 312 through 315 of this act shall take effect July 1, 1994.

NEW SECTION. Sec. 507. Sections 1, 201 through 203, 401 through 417, and 501 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.

NEW SECTION. Sec. 508. (1) Sections 1 and 201 through 203 of this act may be known and cited as the community empowerment act.

(2) Sections 101 through 106 of this act may be known and cited as the youthbuild violence prevention act.