BILL REQ. #:  H-4324.1 

Read first time 01/16/08.   Referred to Committee on Local Government.

     AN ACT Relating to promoting housing affordability through financial assistance programs; amending RCW 43.160.060, 43.160.230, and 47.26.282; reenacting and amending RCW 43.155.070; creating a new section; and providing an expiration date.

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

NEW SECTION.  Sec. 1   It is the intent of the legislature to promote the achievement of statewide growth management act housing affordability goals through grants and loans, transportation-oriented development, infrastructure projects, zoning ordinances, local improvement district or tax increment financing, and economic development.

Sec. 2   RCW 43.155.070 and 2007 c 341 s 24 and 2007 c 231 s 2 are each reenacted and amended to read as follows:
     (1) To qualify for loans or pledges under this chapter the board must determine that a local government meets all of the following conditions:
     (a) The city or county must be imposing a tax under chapter 82.46 RCW at a rate of at least one-quarter of one percent;
     (b) The local government must have developed a capital facility plan; and
     (c) The local government must be using all local revenue sources which are reasonably available for funding public works, taking into consideration local employment and economic factors.
     (2) Except where necessary to address a public health need or substantial environmental degradation, a county, city, or town planning under RCW 36.70A.040 must have adopted a comprehensive plan, including a capital facilities plan element, and development regulations as required by RCW 36.70A.040. This subsection does not require any county, city, or town planning under RCW 36.70A.040 to adopt a comprehensive plan or development regulations before requesting or receiving a loan or loan guarantee under this chapter if such request is made before the expiration of the time periods specified in RCW 36.70A.040. A county, city, or town planning under RCW 36.70A.040 which has not adopted a comprehensive plan and development regulations within the time periods specified in RCW 36.70A.040 is not prohibited from receiving a loan or loan guarantee under this chapter if the comprehensive plan and development regulations are adopted as required by RCW 36.70A.040 before submitting a request for a loan or loan guarantee.
     (3) In considering awarding loans for public facilities to special districts requesting funding for a proposed facility located in a county, city, or town planning under RCW 36.70A.040, the board shall consider whether the county, city, or town planning under RCW 36.70A.040 in whose planning jurisdiction the proposed facility is located has adopted a comprehensive plan and development regulations as required by RCW 36.70A.040.
     (4) The board shall only award loans to local governments if the jurisdiction has adopted a housing ordinance that includes at least two of the following:
     (a) A plan to more effectively enhance the availability of new affordable housing and implementation of the housing element adopted under chapter 36.70A RCW;
     (b) A plan for transportation-oriented development that will serve housing;
     (c) A plan to fulfill the affordability provisions specified in a housing element adopted under chapter 36.70A RCW;
     (d) A plan for additional infrastructure capacity to increase housing affordability and affordable housing inventory, including adding infrastructure capacity for infill in established residential neighborhoods; or
     (e) A plan for greater equity between employment projections for the jurisdiction and the number of housing units needed for the projected workforce.
     (5) The board shall develop a priority process for public works projects as provided in this section. The intent of the priority process is to maximize the value of public works projects accomplished with assistance under this chapter. The board shall attempt to assure a geographical balance in assigning priorities to projects. The board shall consider at least the following factors in assigning a priority to a project:
     (a) Whether the local government receiving assistance has experienced severe fiscal distress resulting from natural disaster or emergency public works needs;
     (b) Except as otherwise conditioned by RCW 43.155.110, whether the entity receiving assistance is a Puget Sound partner, as defined in RCW 90.71.010;
     (c) Whether the project is referenced in the action agenda developed by the Puget Sound partnership under RCW 90.71.310;
     (d) Whether the project is critical in nature and would affect the health and safety of a great number of citizens;
     (e) Whether the applicant has developed and adhered to guidelines regarding its permitting process for those applying for development permits consistent with section 1(2), chapter 231, Laws of 2007;
     (f) The cost of the project compared to the size of the local government and amount of loan money available;
     (g) The number of communities served by or funding the project;
     (h) Whether the project is located in an area of high unemployment, compared to the average state unemployment;
     (i) Whether the project is the acquisition, expansion, improvement, or renovation by a local government of a public water system that is in violation of health and safety standards, including the cost of extending existing service to such a system;
     (j) The relative benefit of the project to the community, considering the present level of economic activity in the community and the existing local capacity to increase local economic activity in communities that have low economic growth; and
     (k) Other criteria that the board considers advisable.
     (((5))) (6) Existing debt or financial obligations of local governments shall not be refinanced under this chapter. Each local government applicant shall provide documentation of attempts to secure additional local or other sources of funding for each public works project for which financial assistance is sought under this chapter.
     (((6))) (7) Before November 1st of each year, the board shall develop and submit to the appropriate fiscal committees of the senate and house of representatives a description of the loans made under RCW 43.155.065, 43.155.068, and subsection (((9))) (10) of this section during the preceding fiscal year and a prioritized list of projects which are recommended for funding by the legislature, including one copy to the staff of each of the committees. The list shall include, but not be limited to, a description of each project and recommended financing, the terms and conditions of the loan or financial guarantee, the local government jurisdiction and unemployment rate, demonstration of the jurisdiction's critical need for the project and documentation of local funds being used to finance the public works project. The list shall also include measures of fiscal capacity for each jurisdiction recommended for financial assistance, compared to authorized limits and state averages, including local government sales taxes; real estate excise taxes; property taxes; and charges for or taxes on sewerage, water, garbage, and other utilities.
     (((7))) (8) The board shall not sign contracts or otherwise financially obligate funds from the public works assistance account before the legislature has appropriated funds for a specific list of public works projects. The legislature may remove projects from the list recommended by the board. The legislature shall not change the order of the priorities recommended for funding by the board.
     (((8))) (9) Subsection (((7))) (8) of this section does not apply to loans made under RCW 43.155.065, 43.155.068, and subsection (((9))) (10) of this section.
     (((9))) (10) Loans made for the purpose of capital facilities plans shall be exempted from subsection (((7))) (8) of this section.
     (((10))) (11) To qualify for loans or pledges for solid waste or recycling facilities under this chapter, a city or county must demonstrate that the solid waste or recycling facility is consistent with and necessary to implement the comprehensive solid waste management plan adopted by the city or county under chapter 70.95 RCW.
     (((11))) (12) After January 1, 2010, any project designed to address the effects of storm water or wastewater on Puget Sound may be funded under this section only if the project is not in conflict with the action agenda developed by the Puget Sound partnership under RCW 90.71.310.

Sec. 3   RCW 43.160.060 and 2007 c 231 s 3 are each amended to read as follows:
     The board is authorized to make direct loans to political subdivisions of the state and to federally recognized Indian tribes for the purposes of assisting the political subdivisions and federally recognized Indian tribes in financing the cost of public facilities, including development of land and improvements for public facilities, project-specific environmental, capital facilities, land use, permitting, feasibility, and marketing studies and plans; project design, site planning, and analysis; project debt and revenue impact analysis; as well as the construction, rehabilitation, alteration, expansion, or improvement of the facilities. A grant may also be authorized for purposes designated in this chapter, but only when, and to the extent that, a loan is not reasonably possible, given the limited resources of the political subdivision or the federally recognized Indian tribe and the finding by the board that financial circumstances require grant assistance to enable the project to move forward. However, at least ten percent of all financial assistance provided by the board in any biennium shall consist of grants to political subdivisions and federally recognized Indian tribes.
     Application for funds shall be made in the form and manner as the board may prescribe. In making grants or loans the board shall conform to the following requirements:
     (1) The board shall not provide financial assistance:
     (a) For a project the primary purpose of which is to facilitate or promote a retail shopping development or expansion.
     (b) For any project that evidence exists would result in a development or expansion that would displace existing jobs in any other community in the state.
     (c) For the acquisition of real property, including buildings and other fixtures which are a part of real property.
     (d) For a project the primary purpose of which is to facilitate or promote gambling.
     (e) For projects within a political subdivision or a federally recognized Indian tribe that have not adopted a housing ordinance that includes at least two of the following:
     (i) A plan to more effectively enhance the availability of new affordable housing and implementation of the housing element adopted under chapter 36.70A RCW;
     (ii) A plan for transportation-oriented development that will serve housing;
     (iii) A plan to fulfill the affordability provisions specified in a housing element adopted under chapter 36.70A RCW;
     (iv) A plan for additional infrastructure capacity to increase housing affordability and affordable housing inventory, including adding infrastructure capacity for infill in established residential neighborhoods; or
     (v) A plan for greater equity between employment projections for the jurisdiction and the number of housing units needed for the projected workforce.
     (2) The board shall only provide financial assistance:
     (a) For those projects which would result in specific private developments or expansions (i) in manufacturing, production, food processing, assembly, warehousing, advanced technology, research and development, and industrial distribution; (ii) for processing recyclable materials or for facilities that support recycling, including processes not currently provided in the state, including but not limited to, de-inking facilities, mixed waste paper, plastics, yard waste, and problem-waste processing; (iii) for manufacturing facilities that rely significantly on recyclable materials, including but not limited to waste tires and mixed waste paper; (iv) which support the relocation of businesses from nondistressed urban areas to rural counties or rural natural resources impact areas; or (v) which substantially support the trading of goods or services outside of the state's borders.
     (b) For projects which it finds will improve the opportunities for the successful maintenance, establishment, or expansion of industrial or commercial plants or will otherwise assist in the creation or retention of long-term economic opportunities.
     (c) When the application includes convincing evidence that a specific private development or expansion is ready to occur and will occur only if the public facility improvement is made.
     (3) The board shall prioritize each proposed project according to:
     (a) The relative benefits provided to the community by the jobs the project would create, not just the total number of jobs it would create after the project is completed and according to the unemployment rate in the area in which the jobs would be located;
     (b) The rate of return of the state's investment, that includes the expected increase in state and local tax revenues associated with the project; and
     (c) Whether the applicant has developed and adhered to guidelines regarding its permitting process for those applying for development permits consistent with section 1(2), chapter 231, Laws of 2007.
     (4) A responsible official of the political subdivision or the federally recognized Indian tribe shall be present during board deliberations and provide information that the board requests.
     Before any financial assistance application is approved, the political subdivision or the federally recognized Indian tribe seeking the assistance must demonstrate to the community economic revitalization board that no other timely source of funding is available to it at costs reasonably similar to financing available from the community economic revitalization board.

Sec. 4   RCW 43.160.230 and 2007 c 231 s 4 are each amended to read as follows:
     (1) The job development fund program is created to provide grants for public infrastructure projects that will stimulate job creation or assist in job retention. The program is to be administered by the board. The board shall establish a competitive process to request and prioritize proposals and make grant awards.
     (2) For the purposes of chapter 425, Laws of 2005, "public infrastructure projects" has the same meaning as "public facilities" as defined in RCW 43.160.020(11).
     (3) The board shall conduct a statewide request for project applications. The board shall apply the following criteria for evaluation and ranking of applications:
     (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) Whether the applicant has developed and adhered to guidelines regarding its permitting process for those applying for development permits consistent with section 1(2), chapter 231, Laws of 2007;
     (d) The rate of return of the state's investment, that includes the expected increase in state and local tax revenues associated with the project;
     (e) 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 chapter 425, Laws of 2005;
     (f) The ability of the project to improve the viability of existing business entities in the project area;
     (g) Whether or not the project is a partnership of multiple jurisdictions;
     (h) Demonstration that the requested assistance will directly stimulate community and economic development by facilitating the creation of new jobs or the retention of existing jobs; and
     (i) The availability of existing assets that applicants may apply to projects.
     (4) Job development fund program grants may only be awarded to those applicants that have entered into or expect to enter into a contract with a private developer relating to private investment that will result in the creation or retention of jobs upon completion of the project. Job development fund program grants shall not be provided for any project where:
     (a) The funds will not be used within the jurisdiction or jurisdictions of the applicants; ((or))
     (b) Evidence exists that the project would result in a development or expansion that would displace existing jobs in any other community in the state; or
     (c) The applicant has not adopted a housing ordinance that includes at least two of the following:
     (i) A plan to more effectively enhance the availability of new affordable housing and implementation of the housing element adopted under chapter 36.70A RCW;
     (ii) A plan for transportation-oriented development that will serve housing;
     (iii) A plan to fulfill the affordability provisions specified in a housing element adopted under chapter 36.70A RCW;
     (iv) A plan for additional infrastructure capacity to increase housing affordability and affordable housing inventory, including adding infrastructure capacity for infill in established residential neighborhoods; or
     (v) A plan for greater equity between employment projections for the jurisdiction and the number of housing units needed for the projected workforce.
     (5) The board shall, with the joint legislative audit and review committee, develop performance criteria for each grant and evaluation criteria to be used to evaluate both how well successful applicants met the community and economic development objectives stated in their applications, and how well the job development fund program performed in creating and retaining jobs.

Sec. 5   RCW 47.26.282 and 2002 c 189 s 5 are each amended to read as follows:
     (1) In any project funded by the transportation improvement board, except for projects in cities having a population of less than five thousand persons, and in addition to any other items required to be considered by statute, the board also shall consider the land use implications of the project, such as whether the programs and projects:
     (((1))) (a) Support development in and revitalization of existing downtowns;
     (((2))) (b) Implement local comprehensive plans for rural and urban residential and nonresidential densities;
     (((3))) (c) Have land use planning and regulations encouraging compact development for rural and urban residential and nonresidential densities; and
     (((4))) (d) Promote the use of multimodal transportation.
     (2) The transportation improvement board shall only award funds to jurisdictions that have adopted a housing ordinance that includes at least two of the following:
     (a) A plan to more effectively enhance the availability of new affordable housing and implementation of the housing element adopted under chapter 36.70A RCW;
     (b) A plan for transportation-oriented development that will serve housing;
     (c) A plan to fulfill the affordability provisions specified in a housing element adopted under chapter 36.70A RCW;
     (d) A plan for additional infrastructure capacity to increase housing affordability and affordable housing inventory, including adding infrastructure capacity for infill in established residential neighborhoods; or
     (e) A plan for greater equity between employment projections for the jurisdiction and the number of housing units needed for the projected workforce.

NEW SECTION.  Sec. 6   Section 4 of this act expires June 30, 2011.