H-0122

AN ACT Relating to the rural area marketing plan; amending RCW 43.168.140, 43.163.210, 43.160.080, 43.160.080, 19.85.011, 19.85.020, 19.85.025, 19.85.030, 19.85.040, 19.85.050, and 19.85.070; adding new sections to chapter 43.31 RCW; adding a new section to chapter 28C.04 RCW; adding a new section to chapter 19.85 RCW; adding a new section to chapter 43.63A RCW; and creating new sections.

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

NEW SECTION. Sec. 1. LEGISLATIVE RECOGNITION AND INTENT. The legislature recognizes the economic hardship that rural distressed areas throughout the state have undergone in recent years. Numerous rural distressed areas across the state have encountered serious economic downturns resulting in significant job loss and business failure. In 1991 the legislature enacted two major pieces of legislation to promote economic development and job creation, with particular emphasis on worker training, income, and emergency services support, along with community revitalization through planning services and infrastructure assistance. However even though these programs have been of assistance, rural distressed areas still face serious economic problems including: Above-average unemployment rates from job losses and below-average employment growth; low rate of business start-ups; and persistent erosion of vitally important resource-driven industries.

The legislature also recognizes that rural distressed areas in Washington have an abiding ability and consistent will to overcome these economic obstacles by building upon their historic foundations of business enterprise, local leadership, and outstanding work ethic.

The legislature intends to assist rural distressed areas in their ongoing efforts to address these difficult economic problems by providing a comprehensive and significant array of economic tools, necessary to harness the persistent and undaunted spirit of enterprise that resides in the citizens of rural distressed areas throughout the state.

The further intent of this act is to provide:

(1) A strategically designed plan of assistance, emphasizing state, local, and private sector leadership and partnership;

(2) A comprehensive and significant array of business assistance, services, and tax incentives that are accountable and performance driven;

(3) An array of community assistance including infrastructure development and business retention, attraction, and expansion programs that will provide a competitive advantage to rural distressed areas throughout Washington; and

(4) Regulatory relief to reduce and streamline zoning, permitting, and regulatory requirements in order to enhance the capability of businesses to grow and prosper in rural distressed areas.

NEW SECTION. Sec. 2. GOALS. The primary goals of chapter . . ., Laws of 1999 (this act) are to:

(1) Promote the ongoing operation of business in rural distressed areas;

(2) Promote the expansion of existing businesses in rural distressed areas;

(3) Attract new businesses to rural distressed areas;

(4) Assist in the development of new businesses from within rural distressed areas;

(5) Provide family wage jobs to the citizens of rural distressed areas; and

(6) Promote the development of communities of excellence in rural distressed areas.

PART I

BUSINESS ASSISTANCE

NEW SECTION. Sec. 3. A new section is added to chapter 43.31 RCW to read as follows:

STATE OFFICE OF BUSINESS ASSISTANCE AND RECRUITMENT FOR RURAL DISTRESSED AREAS. There is established within the department of community, trade, and economic development the office of business assistance and recruitment for rural distressed areas. The primary responsibilities of the office are to coordinate and administer a comprehensive and effective set of business assistance programs and services including:

(1) Business recruitment. The office shall: Provide a comprehensive and aggressive program to attract viable businesses to rural distressed areas; work with local communities to identify select industry sectors that have a competitive advantage in specific rural distressed areas; collaborate with state and local officials to modify their infrastructure plans and priorities to facilitate business growth; and assist rural distressed areas in developing strategic business recruitment plans.

(2) Business permitting and zoning one-stop shop. The office shall: Provide a streamlined and customer driven siting service to businesses in order to promote their attraction and expansion in rural distressed areas; provide preliminary permit application and zoning information and services for businesses in order to attract firms and facilitate business growth in rural distressed areas.

(3) Business regulatory assistance and ombudsman services. The office shall: Provide comprehensive business regulatory services to assist businesses in addressing and responding to local, state, and federal regulations; and provide recommendations on streamlining and modifying government regulations.

(a) The office is authorized to review state zoning, permitting, or regulatory requirements that pose difficulty for businesses wishing or likely to site in a rural enterprise area. In situations where the office considers the zoning, permitting, or regulatory requirements placed on a business in a rural enterprise area unfairly burdensome the director may petition the regulatory agency or agencies for regulatory relief. In addition the director may petition the agency or agencies for relief under the regulatory fairness act, chapter 19.85 RCW.

(b) In situations where a business or entity in a rural enterprise area is encountering regulatory oversight from more than one state agency and is experiencing conflicting direction or confusing process, the business or entity may petition the director to intercede. The director upon review of the circumstances involved is authorized to designate a lead agency to collaborate with other state agencies in order to streamline and reduce the regulatory difficulties.

(c) Businesses or entities in a rural enterprise zone may petition the director for an accelerated zoning, permitting, or regulatory process. The director upon reviewing the petition and the circumstances involved may make a finding of regulatory unfairness and may direct the state agency or agencies to process the business or entities application in an expeditious manner with a maximum timeline of six months from the director's receipt of the petition.

(4) "Brown Fields" Program. The office shall develop with the department of ecology and recommend to the legislature a streamlined and cost-effective process to redevelop hazardous industrial sites in order to promote business growth in rural distressed areas.

(5) Rural enterprise zone development and foreign trade zone. The office is authorized to provide technical assistance to local governments in rural distressed areas to establish rural enterprise zones and foreign trade zones. The office shall target rural enterprise zones and foreign trade zones in the delivery of its services in order to maximize the impact of its economic development assistance as outlined in section 18 of this act to businesses and rural distressed areas.

NEW SECTION. Sec. 4. A new section is added to chapter 43.31 RCW to read as follows:

OFFICE ADMINISTRATION. The office shall be administered by a director appointed by the director of community, trade, and economic development, in consultation with the rural distressed areas economic recovery coordination board. The office director shall coordinate activities with the rural distressed areas resource coordinator and report on the activities and performance of the office on a quarterly basis.

NEW SECTION. Sec. 5. A new section is added to chapter 28C.04 RCW to read as follows:

JOB SKILLS/RURAL DISTRESSED AREA EMPLOYEE TRAINING. At least seventy-five percent of all discretionary expenditures in the job skills program shall be made to assist businesses in rural distressed areas. For the purposes of this section, "rural distressed area" means the same as "rural natural resources impact area" under RCW 43.31.601.

Sec. 6. RCW 43.168.140 and 1995 c 226 s 28 are each amended to read as follows:

RURAL DISTRESSED AREAS. Any funds appropriated by the legislature to the development loan fund for purposes of the timber recovery act shall be used for development loans in rural ((~~natural resources impact areas as defined in RCW 43.31.601~~)) distressed areas. At least seventy-five percent of all discretionary expenditures shall be made on behalf of businesses in rural distressed areas. For the purposes of this section, "rural distressed area" means the same as "rural natural resources impact area" under RCW 43.31.601.

Sec. 7. RCW 43.163.210 and 1998 c 48 s 2 are each amended to read as follows:

For the purpose of facilitating economic development in the state of Washington and encouraging the employment of Washington workers at meaningful wages:

(1) The authority may develop and conduct a program or programs to provide nonrecourse revenue bond financing for the project costs for economic development activities.

(2) The authority may develop and conduct a program that will stimulate and encourage the development of new products within Washington state by the infusion of financial aid for invention and innovation in situations in which the financial aid would not otherwise be reasonably available from commercial sources. The authority is authorized to provide nonrecourse revenue bond financing for this program.

(a) For the purposes of this program, the authority shall have the following powers and duties:

(i) To enter into financing agreements with eligible persons doing business in Washington state, upon terms and on conditions consistent with the purposes of this chapter, for the advancement of financial and other assistance to the persons for the development of specific products, procedures, and techniques, to be developed and produced in this state, and to condition the agreements upon contractual assurances that the benefits of increasing or maintaining employment and tax revenues shall remain in this state and accrue to it;

(ii) Own, possess, and take license in patents, copyrights, and proprietary processes and negotiate and enter into contracts and establish charges for the use of the patents, copyrights, and proprietary processes when the patents and licenses for products result from assistance provided by the authority;

(iii) Negotiate royalty payments to the authority on patents and licenses for products arising as a result of assistance provided by the authority;

(iv) Negotiate and enter into other types of contracts with eligible persons that assure that public benefits will result from the provision of services by the authority; provided that the contracts are consistent with the state Constitution;

(v) Encourage and provide technical assistance to eligible persons in the process of developing new products;

(vi) Refer eligible persons to researchers or laboratories for the purpose of testing and evaluating new products, processes, or innovations; and

(vii) To the extent permitted under its contract with eligible persons, to consent to a termination, modification, forgiveness, or other change of a term of a contractual right, payment, royalty, contract, or agreement of any kind to which the authority is a party.

(b) Eligible persons seeking financial and other assistance under this program shall forward an application, together with an application fee prescribed by rule, to the authority. An investigation and report concerning the advisability of approving an application for assistance shall be completed by the staff of the authority. The investigation and report may include, but is not limited to, facts about the company under consideration as its history, wage standards, job opportunities, stability of employment, past and present financial condition and structure, pro forma income statements, present and future markets and prospects, integrity of management as well as the feasibility of the proposed product and invention to be granted financial aid, including the state of development of the product as well as the likelihood of its commercial feasibility. After receipt and consideration of the report set out in this subsection and after other action as is deemed appropriate, the application shall be approved or denied by the authority. The applicant shall be promptly notified of action by the authority. In making the decision as to approval or denial of an application, priority shall be given to those persons operating or planning to operate businesses of special importance to Washington's economy, including, but not limited to: (i) Existing resource-based industries of agriculture, forestry, and fisheries; (ii) existing advanced technology industries of electronics, computer and instrument manufacturing, computer software, and information and design; and (iii) emerging industries such as environmental technology, biotechnology, biomedical sciences, materials sciences, and optics.

(3) The authority may also develop and implement, if authorized by the legislature, such other economic development financing programs adopted in future general plans of economic development finance objectives developed under RCW 43.163.090.

(4) The authority shall develop a program and target their resources in assisting rural distressed areas in their business and job creation and assistance efforts under chapter . . ., Laws of 1999 (this act). For the purposes of this section, "rural distressed area" means the same as "rural natural resources impact area" under RCW 43.31.601.

(5) The authority may not issue any bonds for the programs authorized under this section after June 30, 2004.

PART II

COMMUNITY INFRASTRUCTURE

Sec. 8. RCW 43.160.080 and 1992 c 235 s 10 are each amended to read as follows:

PUBLIC FACILITIES CONSTRUCTION LOAN REVOLVING ACCOUNT. There shall be a fund in the state treasury known as the public facilities construction loan revolving account, which shall consist of all moneys collected under this chapter, except moneys of the board collected in connection with the issuance of industrial development revenue bonds, and any moneys appropriated to it by law((: PROVIDED, That seventy-five percent of all principal and interest payments on loans made with the proceeds deposited in the account under section 901, chapter 57, Laws of 1983 1st ex. sess. shall be deposited in the general fund as reimbursement for debt service payments on the bonds authorized in RCW 43.83.184)). Disbursements from the revolving account shall be on authorization of the board. In order to maintain an effective expenditure and revenue control, the public facilities construction loan revolving account shall be subject in all respects to chapter 43.88 RCW.

Sec. 9. RCW 43.160.080 and 1998 c 321 s 30 are each amended to read as follows:

There shall be a fund in the state treasury known as the public facilities construction loan revolving account, which shall consist of all moneys collected under this chapter, except moneys of the board collected in connection with the issuance of industrial development revenue bonds and moneys deposited in the distressed county public facilities construction loan account under RCW 43.160.220, and any moneys appropriated to it by law((: PROVIDED, That seventy-five percent of all principal and interest payments on loans made with the proceeds deposited in the account under section 901, chapter 57, Laws of 1983 1st ex. sess. shall be deposited in the general fund as reimbursement for debt service payments on the bonds authorized in RCW 43.83.184)). Disbursements from the revolving account shall be on authorization of the board. In order to maintain an effective expenditure and revenue control, the public facilities construction loan revolving account shall be subject in all respects to chapter 43.88 RCW.

PART III

REGULATORY FAIRNESS

Sec. 10. RCW 19.85.011 and 1994 c 249 s 9 are each amended to read as follows:

RURAL DISTRESSED AREAS REGULATORY FAIRNESS ACT. The legislature finds that administrative rules adopted by state agencies can have a disproportionate impact on the state's small businesses and rural distressed areas because of the size of those businesses and communities. This disproportionate impact reduces competition, innovation, employment, and new employment opportunities, and threatens the very existence of some small businesses and rural distressed areas. The legislature therefore enacts the Regulatory Fairness Act with the intent of reducing the disproportionate impact of state administrative rules on small business and rural distressed areas.

Sec. 11. RCW 19.85.020 and 1994 c 249 s 10 are each amended to read as follows:

Unless the context clearly indicates otherwise, the definitions in this section apply through this chapter.

(1) "Small business" means any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is owned and operated independently from all other businesses, that has the purpose of making a profit, and that has fifty or fewer employees.

(2) "Small business or rural distressed areas economic impact statement" means a statement meeting the requirements of RCW 19.85.040 prepared by a state agency pursuant to RCW 19.85.030.

(3) "Industry" means all of the businesses in this state in any one four-digit standard industrial classification as published by the United States department of commerce. However, if the use of a four-digit standard industrial classification would result in the release of data that would violate state confidentiality laws, "industry" means all businesses in a three-digit standard industrial classification.

(4) "Rural distressed areas" means the same as natural resource impact area under RCW 43.31.601.

Sec. 12. RCW 19.85.025 and 1997 c 409 s 212 are each amended to read as follows:

(1) Unless an agency receives a written objection to the expedited repeal of a rule, this chapter does not apply to a rule proposed for expedited repeal pursuant to RCW 34.05.354. If an agency receives a written objection to expedited repeal of the rule, this chapter applies to the rule-making proceeding.

(2) This chapter does not apply to a rule proposed for expedited adoption under RCW 34.05.230 (1) through (8), unless a written objection is timely filed with the agency and the objection is not withdrawn.

(3) This chapter does not apply to the adoption of a rule described in RCW 34.05.310(4).

(4) An agency is not required to prepare a separate small business or rural distressed areas economic impact statement under RCW 19.85.040 if it prepared an analysis under RCW 34.05.328 that meets the requirements of a small business or rural distressed areas economic impact statement, and if the agency reduced the costs imposed by the rule on small business or rural distressed areas to the extent required by RCW 19.85.030(3). The portion of the analysis that meets the requirements of RCW 19.85.040 shall be filed with the code reviser and provided to any person requesting it in lieu of a separate small business or rural distressed areas economic impact statement.

Sec. 13. RCW 19.85.030 and 1995 c 403 s 402 are each amended to read as follows:

(1) In the adoption of a rule under chapter 34.05 RCW, an agency shall prepare a small business or rural distressed areas economic impact statement: (a) If the proposed rule will impose more than minor costs on businesses in an industry or rural distressed areas; or (b) if requested to do so by a majority vote of the joint administrative rules review committee within forty-five days of receiving the notice of proposed rule making under RCW 34.05.320. However, if the agency has completed the pilot rule process as defined by RCW 34.05.313 before filing the notice of a proposed rule, the agency is not required to prepare a small business or rural distressed areas economic impact statement.

An agency shall prepare the small business or rural distressed areas economic impact statement in accordance with RCW 19.85.040, and file it with the code reviser along with the notice required under RCW 34.05.320. An agency shall file a statement prepared at the request of the joint administrative rules review committee with the code reviser upon its completion before the adoption of the rule. An agency shall provide a copy of the small business or rural distressed areas economic impact statement to any person requesting it.

An agency may request assistance from ((~~the business assistance center~~)) the affected businesses or rural distressed areas in the preparation of the small business or rural distressed areas economic impact statement.

(2) ((~~The business assistance center~~)) Agencies shall develop guidelines to assist ((~~agencies~~)) in determining whether a proposed rule will impose more than minor costs on businesses in an industry or rural distressed areas and therefore require preparation of a small business or rural distressed areas economic impact statement. The ((~~business assistance center~~)) affected businesses or rural distressed areas may review an agency determination that a proposed rule will not impose such costs, and shall advise the joint administrative rules review committee on disputes involving agency determinations under this section.

(3) Based upon the extent of disproportionate impact on small business or rural distressed areas identified in the statement prepared under RCW 19.85.040, the agency shall, where legal and feasible in meeting the stated objectives of the statutes upon which the rule is based, reduce the costs imposed by the rule on small businesses or rural distressed areas. Methods to reduce the costs on small businesses or rural distressed areas may include:

(a) Reducing, modifying, or eliminating substantive regulatory requirements;

(b) Simplifying, reducing, or eliminating recordkeeping and reporting requirements;

(d) Delaying compliance timetables;

(e) Reducing or modifying fine schedules for noncompliance; or

(f) Any other mitigation techniques.

Sec. 14. RCW 19.85.040 and 1995 c 403 s 403 are each amended to read as follows:

(1) A small business or rural distressed areas economic impact statement must include a brief description of the reporting, recordkeeping, and other compliance requirements of the proposed rule, and the kinds of professional services that a small business or rural distressed areas is likely to need in order to comply with such requirements. It shall analyze the costs of compliance for businesses or rural distressed areas required to comply with the proposed rule adopted pursuant to RCW 34.05.320, including costs of equipment, supplies, labor, and increased administrative costs. It shall consider, based on input received, whether compliance with the rule will cause businesses or rural distressed areas to lose sales or revenue. To determine whether the proposed rule will have a disproportionate impact on small businesses or rural distressed areas, the impact statement must compare the cost of compliance for small business or rural distressed areas with the cost of compliance for the ten percent of businesses or rural distressed areas that are the largest businesses or rural distressed areas required to comply with the proposed rules using one or more of the following as a basis for comparing costs:

(a) Cost per employee;

(b) Cost per hour of labor; or

(2) A small business or rural distressed areas economic impact statement must also include:

(a) A statement of the steps taken by the agency to reduce the costs of the rule on small businesses or rural distressed areas as required by RCW 19.85.030(3), or reasonable justification for not doing so, addressing the options listed in RCW 19.85.030(3);

(b) A description of how the agency will involve small businesses and rural distressed areas in the development of the rule; and

(c) A list of industries or rural distressed areas that will be required to comply with the rule. However, this subsection (2)(c) shall not be construed to preclude application of the rule to any business ((or)), industry, or rural distressed areas to which it would otherwise apply.

(3) To obtain information for purposes of this section, an agency may survey a representative sample of affected businesses ((or)), trade associations, and rural distressed areas and should, whenever possible, appoint a committee under RCW 34.05.310(2) to assist in the accurate assessment of the costs of a proposed rule, and the means to reduce the costs imposed on small business and rural distressed areas.

Sec. 15. RCW 19.85.050 and 1989 c 175 s 74 are each amended to read as follows:

(1) Within one year after ((~~June 10, 1982~~)) the effective date of this act, each agency shall publish and deliver to the office of financial management and to all persons who make requests of the agency for a copy of a plan to periodically review all rules then in effect and which have been issued by the agency which have an economic impact on more than twenty percent of all industries or ten percent of the businesses in any one industry or significant number of rural distressed areas. Such plan may be amended by the agency at any time by publishing a revision to the review plan and delivering such revised plan to the office of financial management and to all persons who make requests of the agency for the plan. The purpose of the review is to determine whether such rules should be continued without change or should be amended or rescinded, consistent with the stated objectives of applicable statutes, to minimize the economic impact on small businesses or rural distressed areas as described by this chapter. The plan shall provide for the review of all such agency rules in effect on ((~~June 10, 1982~~)) the effective date of this act, within ten years of that date.

(2) In reviewing rules to minimize any significant economic impact of the rule on small businesses or rural distressed areas as described by this chapter, and in a manner consistent with the stated objectives of applicable statutes, the agency shall consider the following factors:

(a) The continued need for the rule;

(b) The nature of complaints or comments received concerning the rule from the public;

(d) The extent to which the rule overlaps, duplicates, or conflicts with other state or federal rules, and, to the extent feasible, with local governmental rules; and

(e) The degree to which technology, economic conditions, or other factors have changed in the subject area affected by the rule.

(3) Each year each agency shall publish a list of rules which are to be reviewed pursuant to this section during the next twelve months and deliver a copy of the list to the office of financial management and all persons who make requests of the agency for the list. The list shall include a brief description of the legal basis for each rule as described by RCW 34.05.360, and shall invite public comment upon the rule.

Sec. 16. RCW 19.85.070 and 1992 c 197 s 1 are each amended to read as follows:

When any rule is proposed for which a small business or rural distressed areas economic impact statement is required, the adopting agency shall provide notice to small businesses and rural distressed areas of the proposed rule through any of the following:

(1) Direct notification of known interested small businesses ((or)), trade organizations, and rural distressed areas affected by the proposed rule; or

(2) Providing information of the proposed rule making to publications likely to be obtained by small businesses and the legislative authority of rural distressed areas of the types affected by the proposed rule.

NEW SECTION. Sec. 17. A new section is added to chapter 19.85 RCW to read as follows:

The office of business assistance and recruitment for rural distressed areas is authorized to:

(1) Petition state agencies for regulatory relief for businesses or other entities in rural distressed areas that encounter regulatory problems;

(2) Designate a lead state agency when businesses or other entities in a rural enterprise zone are encountering conflicting or confusing regulatory requirements from more than one state agency; and

(3) Direct a state regulatory agency or agencies to accelerate a permitting, zoning, or regulatory requirement according to the requirements outlined in section 3(3) of this act. The maximum time length of the accelerated process is six months from the time of the petition to the office by the business or entity located in a rural area enterprise zone.

NEW SECTION. Sec. 18. A new section is added to chapter 43.63A RCW to read as follows:

RURAL ENTERPRISE ZONES. The legislature recognizes the unique difficulties encountered by communities in rural distressed areas wishing to promote business development, increase employment opportunities, and provide a high quality of life for its citizens. In response the legislature authorizes the establishment of rural enterprise zones that will allow the targeting of state services and resources in the form of business, industry recruitment, regulatory relief, and infrastructure development. It is the intent of the legislature to provide the critical level of resources and services to businesses and entities located in these rural enterprise zones that they will be the catalyst for economic prosperity and diversity throughout rural distressed areas in Washington.

(1) The department in cooperation with the department of revenue and other state agencies shall approve applications submitted by local governments in rural distressed areas. The application shall be in the form and manner and contain the necessary information designated by the department. The application shall:

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

(b) Outline the purpose for the economic development enterprise zone and the process in which the application was developed;

(d) Outline the manner in which the enterprise zone will be governed and report its activities to the local government and the department; and

(e) Designate the geographic area in which the rural enterprise zone will exist.

(2) Rural enterprise zones are authorized to:

(a) Hire a director or designate an individual to oversee operations;

(b) Seek federal, state, and local government support in its efforts to target, develop, and attract viable businesses;

(c) Work with the office of business assistance and recruitment for rural distressed areas in the pursuit of its economic development activities;

(d) Provide a local one-stop shop for businesses intending to locate, retain, expand, or start their businesses within its zone;

(e) Provide comprehensive permitting, zoning, and regulatory assistance to businesses or entities within the zone; and

(f) Petition the office of business assistance and recruitment for rural distressed areas for regulatory relief, or designation of a lead regulatory agency, or accelerated permitting, zoning, or regulatory process as provided in section 17 of this act.

(3) Rural enterprise zones are authorized to receive the services and funding resources as provided under the rural area marketing plan and other resources assisting rural distressed areas.

(4) Rural enterprise zones may be established in conjunction with a foreign trade zone.

PART IV

EVALUATION

NEW SECTION. Sec. 19. REVIEW AND EVALUATION. The joint legislative audit and review committee shall design an evaluation mechanism for economically distressed counties under this act and undertake an evaluation of this act's effectiveness by November 1, 2000. The agencies implementing the programs under this act shall assist the joint legislative audit and review committee evaluation.

PART V

MISCELLANEOUS

NEW SECTION. Sec. 20. If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. The rules under this act shall meet federal requirements that are a necessary condition to the receipt of federal funds by the state.

NEW SECTION. Sec. 21. Section captions and part headings used in this act are not any part of the law.