1903-S AMH ERIM TAYL 044

SHB 1903 - H AMD

By Representative Ericks

   Strike everything after the enacting clause and insert the following:

   "NEW SECTION. Sec. 1. The legislature has and continues to recognize the vital importance of economic development to the health and prosperity of Washington state as indicated in RCW 43.160.010, 43.155.070(4)(g), 43.163.005, and 43.168.010. The legislature finds that current economic development programs and funding, which are primarily low-interest loan programs, can be enhanced by creating a grant program to assist local governments with public infrastructure projects that directly stimulate community and economic development by supporting the creation of new jobs or the retention of existing jobs.

   NEW SECTION. Sec. 2. A new section is added to chapter 43.155 RCW to read as follows:

   (1) The job development fund program is created. In administering the job development fund, the board shall establish a competitive process to request and prioritize proposals for public infrastructure projects, the primary objective of which is to stimulate community and economic development through development or redevelopment of an area. For the purposes of this act, "public infrastructure projects" has the same meaning as "public facilities" as defined in RCW 43.160.020(11).

   (2) The board shall conduct a statewide request for project applications from political subdivisions or federally recognized Indian tribes in partnership with a political subdivision. The board shall develop criteria on which to evaluate and rank applications, and shall develop performance and evaluation criteria to review how well successful applicants met the community and economic development objectives stated in their applications. Among the priorities for ranking projects, the board shall include consideration of:

   (a) The relative benefits provided to the community by the jobs the project would create, including, but not limited to: (i) The total number of jobs; (ii) the total number of full-time, family wage jobs; (iii) the unemployment rate in the area; and (iv) the increase in employment in comparison to total community population;

   (b) The present level of economic activity in the community and the existing local financial capacity to increase economic activity in the community;

   (c) The rate of return of the state's investment, that includes the expected increase in state and local tax revenues associated with the project;

   (d) The lack of another timely source of funding available to finance the project which would likely prevent the proposed community or economic development, absent the financing available under this act;

   (e) The ability of the project to improve the viability of existing business entities in the project area; and

   (f) Whether or not the project is a partnership of multiple jurisdictions.

   (3) At a minimum, applicants shall demonstrate that the requested assistance will directly stimulate community and economic development by facilitating the creation of new jobs or the retention of existing jobs. The evaluation and ranking process shall also include an examination of existing assets that applicants may apply to projects.

   (4) The board shall not provide financial assistance if the funds will not be used within the jurisdiction or jurisdictions of the local government deemed in need of the community or economic development.

   (5) The board shall not provide financial assistance for any project for which evidence exists that the project would result in a development or expansion that would displace existing jobs in any other community in the state.

   (6) By September 1, 2010, the joint legislative audit and review committee shall submit a report to the appropriate committees of the legislature. The report, at a minimum, should evaluate the effectiveness of the job development fund grant program, including a project by project review. The report should include information regarding the criteria and performance measures used, whether the performance measures were met, and how the funds were used.

   NEW SECTION. Sec. 3. A new section is added to chapter 43.155 RCW to read as follows:

   (1) For the 2005-2007 biennium, the board may solicit and rank applications to the job development fund as provided in section 2(2) of this act, and need not submit the list for approval to the legislature, to the extent funding is included in the 2005-2007 capital budget for purposes of this section and to the extent the legislature has not specified otherwise in the appropriation.

   (2)(a) Beginning with the 2007-2009 biennium, the board may not sign contracts or otherwise financially obligate job development funds until the legislature has approved a specific list of projects. Beginning with the 2007-2009 biennium and thereafter, the board shall submit a prioritized list of recommended projects to the governor and the legislature. The legislature may remove projects from the list recommended by the board.

   The legislature may not change the prioritization of projects recommended for funding by the board. For purposes of the job development funds's biennial capital budget request, the board shall request fifty million dollars per biennium. The total amount of the board's recommended state funding for projects on a biennial job development fund project list submitted by the board may not exceed seventy percent of the biennial budget request. The board may provide an additional alternate job development fund project list up to ten million dollars. The list shall include a description of each project, the amount of recommended state funding, and documentation of nonstate funds to be used for the project. The board shall also describe the expected community or economic development benefits for each of the recommended projects in its budget request.

   (b) The remaining funds not expended or obligated under (a) of this subsection may be expended or obligated by the governor, with the approval of the board, for projects not on the list approved by the legislature if:

   (i) The application was submitted for consideration in the board's biennial application solicitation and ranking process, meets the criteria developed pursuant to section 2(2) of this act, but circumstances have subsequently changed that make the project more urgent and more highly ranked;

   (ii)(A) The application was submitted after the board's biennial application deadline through no fault of the applicant; (B) the application meets the criteria developed pursuant to section 2(2) of this act; and (C) the applicant cannot wait for the next biennial application period due to exigent or emergency circumstances; or

   (iii)(A) Through no fault of the applicant, the project was not proposed in time for consideration in the board's biennial application solicitation; (B) the project meets the criteria developed pursuant to section 2(2) of this act; and (C) the project cannot wait for the next biennial application period due to exigent or emergency circumstances.

   (c) When funds are expended or obligated pursuant to (b) of this subsection, the governor shall inform the speaker and minority leader of the house of representatives, and the president, majority leader, and minority leader of the senate in writing within ten business days of expending or obligating the funds.

   (3) The maximum grant from the job development fund for any one project is ten million dollars. Grant assistance from the job development fund may not exceed thirty-three percent of the total cost of the project. The nonstate portion of the total project cost may include cash, the value of real property when acquired solely for the purpose of the project, and in-kind contributions.

   Sec. 4. RCW 43.155.050 and 2001 c 131 s 2 are each amended to read as follows:

   The public works assistance account is hereby established in the state treasury. Money may be placed in the public works assistance account from the proceeds of bonds when authorized by the legislature or from any other lawful source. Money in the public works assistance account shall be used to make loans and to give financial guarantees to local governments for public works projects. Moneys in the account may also be appropriated to provide for state match requirements under federal law for projects and activities conducted and financed by the board under the drinking water assistance account. Not more than fifteen percent of the biennial capital budget appropriation to the public works board from this account may be expended or obligated for preconstruction loans, emergency loans, or loans for capital facility planning under this chapter; of this amount, not more than ten percent of the biennial capital budget appropriation may be expended for emergency loans and not more than one percent of the biennial capital budget appropriation may be expended for capital facility planning loans. Beginning July 1, 2007, fifty million dollars from the public works assistance account will be appropriated each biennium for the job development fund program grants and administrative expenses.

   NEW SECTION. Sec. 5. The joint legislative audit and review committee shall conduct an inventory of all state public infrastructure programs and funds. The inventory shall identify: the public infrastructure state programs and funds and the purposes each serve; how the program or fund is implemented; the types of public infrastructure projects supported by the program or fund; the dollar amount of the projects funded by each program or fund; the balance of a fund, if applicable; and the geographic distribution of projects supported by a program or fund. Where applicable, the inventory shall identify overlaps or gaps in types of public infrastructure projects supported through state programs or funds. Where appropriate, the inventory shall evaluate the return on investment for economic development infrastructure programs. The inventory shall be delivered to the appropriate committees of the legislature by December 1, 2005.

   NEW SECTION. Sec. 6. This act shall expire June 30, 2011.

   NEW SECTION. Sec. 7. 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."

   Correct the title.

EFFECT: (1) Adds a definition for "public infrastructure projects." (2) Authorizes the Governor to expend or obligate moneys from the Job Development Fund 30 percent reserve fund with approval from the Public Works Board. Directs the Governor to notify the Legislature in writing within 10 working days of obligating or expending the moneys. (3) Eliminates the dedication of the refuse tax proceeds solely to the Job Development Fund. Appropriates $50 million per biennium beginning in the 2007-09 biennium for Job Development Fund grants and related administrative expenses. (4) Eliminates the requirement that a project would have been highly ranked had it been submitted in order to qualify for the Job Development Funds' 30 percent reserve. (5) Directs the Joint Legislative Audit and Review Committee (JLARC) to inventory all state public infrastructure programs and funds and report to the appropriate legislative committees by December 1, 2005. (6) Eliminates the requirement that JLARC submit a report every five years after September 1, 2008. (7) Expires the Job Development Fund program after the JLARC review on June 30, 2011. (8) Eliminates the creation of a separate Job Development Fund account.