BILL REQ. #:  Z-0476.2 

Read first time 02/17/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to grant and loan programs; amending RCW 43.330.005, 79A.15.070, 79A.15.130, 43.63A.125, 43.63A.135, 43.63A.750, and 27.34.330; and reenacting and amending RCW 79A.15.060 and 79A.15.120.

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

Sec. 1   RCW 43.330.005 and 2010 c 271 s 2 are each amended to read as follows:
     (1) The legislature finds that the long-term economic health of the state and its citizens depends upon the strength and vitality of its communities and businesses. It is the intent of this chapter to create a department of commerce that fosters new partnerships for strong and sustainable communities. The mission of the department is to grow and improve jobs in Washington and facilitate innovation. To carry out its mission, the department will bring together focused efforts to: Streamline access to business assistance and economic development services by providing them through sector-based, cluster-based, and regional partners; provide focused and flexible responses to changing economic conditions; generate greater local capacity to respond to both economic growth and environmental challenges; increase accountability to the public, the executive branch, and the legislature; manage growth and achieve sustainable development; diversify the state's economy and export goods and services; provide greater access to economic opportunity; stimulate private sector investment and entrepreneurship; provide stable family-wage jobs and meet the diverse needs of families; provide affordable housing and housing services; and construct public infrastructure.
     (2) The legislature further finds that as a result of the rapid pace of global social and economic change, the state and local communities will require coordinated and creative responses by every segment of the community. The state can play a role in assisting such local efforts by reorganizing state assistance efforts to promote such partnerships. The department has a primary responsibility to provide financial and technical assistance to the communities of the state, to assist in improving the delivery of federal, state, and local programs, and to provide communities with opportunities for productive and coordinated development beneficial to the well-being of communities and their residents. It is the intent of the legislature in creating the department to maximize the use of local expertise and resources in the delivery of community and economic development services.
     (3)(a) In providing financial assistance, the department may not execute a contract until the following requirements are met:
     (i) Local match funding is secured;
     (ii) The project is ready to proceed with either the preconstruction or construction phase; and
     (iii) The local agency has committed to make timely use of state funds.
     (b) The contract must be for either preconstruction activities or for the construction phase of the project. In no event may a contract be executed or funds awarded for both preconstruction activities and the construction phase at the same time. If a project has both a preconstruction and a construction phase, funding for the construction phase may not be awarded until the preconstruction activities are complete.
     (c) As used in this subsection:
     (i) "Construction phase" means activities directly related to the building of the project and includes site clearing and grading and construction of the foundation. "Construction phase" does not include preconstruction activities.
     (ii) "Preconstruction activities" means the activities that occur prior to the bid phase of a publicly bid project or prior to any self-performed construction activities. Preconstruction activities typically include schematic design, design development, environmental studies, right-of-way acquisition, and construction document services that are required in order to obtain construction permits for a project.
     (iii) "Timely use of state funds" means the full expenditure of state funds within the biennium for which funds are appropriated or requiring no more than one reappropriation for a subsequent two-year period.

Sec. 2   RCW 79A.15.060 and 2009 c 341 s 3 and 2009 c 16 s 1 are each reenacted and amended to read as follows:
     (1) The board may adopt rules establishing acquisition policies and priorities for distributions from the habitat conservation account.
     (2) Except as provided in RCW 79A.15.030(7), moneys appropriated for this chapter may not be used by the board to fund staff positions or other overhead expenses, or by a state, regional, or local agency to fund operation or maintenance of areas acquired under this chapter.
     (3) Moneys appropriated for this chapter may be used by grant recipients for costs incidental to acquisition, including, but not limited to, surveying expenses, fencing, and signing.
     (4) The board may not approve a local project where the local agency share is less than the amount to be awarded from the habitat conservation account.
     (5)(a) The board may not execute a contract until the state or local agency has demonstrated that the following requirements are met:
     (i) The agency share of the project funding is secured;
     (ii) The project is ready to proceed with either the preconstruction or construction phase; and
     (iii) The agency has committed to make timely use of state funds.
     (b) The contract must be for either preconstruction activities or for the construction phase of the project. In no event may a contract be executed or funds awarded for both preconstruction activities and the construction phase at the same time. If a project has both a preconstruction and a construction phase, funding for the construction phase may not be awarded until the preconstruction activities are complete.
     (c) As used in this subsection:
     (i) "Construction phase" means activities directly related to the building of the project and includes site clearing and grading and construction of the foundation. "Construction phase" does not include preconstruction activities.
     (ii) "Preconstruction activities" means the activities that occur prior to the bid phase of a publicly bid project or prior to any self-performed construction activities. Preconstruction activities typically include schematic design, design development, environmental studies, right-of-way acquisition, and construction document services that are required in order to obtain construction permits for a project.
     (iii) "Timely use of state funds" means the full expenditure of state funds within the biennium for which funds are appropriated or requiring no more than one reappropriation for a subsequent two-year period.
     (6) In determining acquisition priorities with respect to the habitat conservation account, the board shall consider, at a minimum, the following criteria:
     (a) For critical habitat and natural areas proposals:
     (i) Community support for the project;
     (ii) The project proposal's ongoing stewardship program that includes control of noxious weeds, detrimental invasive species, and that identifies the source of the funds from which the stewardship program will be funded;
     (iii) Recommendations as part of a watershed plan or habitat conservation plan, or a coordinated regionwide prioritization effort, and for projects primarily intended to benefit salmon, limiting factors, or critical pathways analysis;
     (iv) Immediacy of threat to the site;
     (v) Uniqueness of the site;
     (vi) Diversity of species using the site;
     (vii) Quality of the habitat;
     (viii) Long-term viability of the site;
     (ix) Presence of endangered, threatened, or sensitive species;
     (x) Enhancement of existing public property;
     (xi) Consistency with a local land use plan, or a regional or statewide recreational or resource plan, including projects that assist in the implementation of local shoreline master plans updated according to RCW 90.58.080 or local comprehensive plans updated according to RCW 36.70A.130;
     (xii) Educational and scientific value of the site;
     (xiii) Integration with recovery efforts for endangered, threatened, or sensitive species;
     (xiv) For critical habitat proposals by local agencies, the statewide significance of the site.
     (b) For urban wildlife habitat proposals, in addition to the criteria of (a) of this subsection:
     (i) Population of, and distance from, the nearest urban area;
     (ii) Proximity to other wildlife habitat;
     (iii) Potential for public use; and
     (iv) Potential for use by special needs populations.
     (((6))) (7) Before November 1st of each even-numbered year, the board shall recommend to the governor a prioritized list of all state agency and local projects to be funded under RCW 79A.15.040(1) (a), (b), and (c). The governor may remove projects from the list recommended by the board and shall submit this amended list in the capital budget request to the legislature. The list shall include, but not be limited to, a description of each project and any particular match requirement, and describe for each project any anticipated restrictions upon recreational activities allowed prior to the project.

Sec. 3   RCW 79A.15.070 and 2007 c 241 s 33 are each amended to read as follows:
     (1) In determining which state parks proposals and local parks proposals to fund, the board shall use existing policies and priorities.
     (2) Except as provided in RCW 79A.15.030(7), moneys appropriated for this chapter may not be used by the board to fund staff or other overhead expenses, or by a state, regional, or local agency to fund operation or maintenance of areas acquired under this chapter.
     (3) Moneys appropriated for this chapter may be used by grant recipients for costs incidental to acquisition and development, including, but not limited to, surveying expenses, fencing, and signing.
     (4) The board may not approve a project of a local agency where the share contributed by the local agency is less than the amount to be awarded from the outdoor recreation account.
     (5)(a) The board may not execute a contract until the state or local agency has demonstrated that the following requirements are met:
     (i) The agency share of the project funding is secured;
     (ii) The project is ready to proceed with either the preconstruction or construction phase; and
     (iii) The agency has committed to make timely use of state funds.
     (b) The contract must be for either preconstruction activities or for the construction phase of the project. In no event may a contract be executed or funds awarded for both preconstruction activities and the construction phase at the same time. If a project has both a preconstruction and a construction phase, funding for the construction phase may not be awarded until the preconstruction activities are complete.
     (c) As used in this subsection:
     (i) "Construction phase" means activities directly related to the building of the project and includes site clearing and grading and construction of the foundation. "Construction phase" does not include preconstruction activities.
     (ii) "Preconstruction activities" means the activities that occur prior to the bid phase of a publicly bid project or prior to any self-performed construction activities. Preconstruction activities typically include schematic design, design development, environmental studies, right-of-way acquisition, and construction document services that are required in order to obtain construction permits for a project.
     (iii) "Timely use of state funds" means the full expenditure of state funds within the biennium for which funds are appropriated or requiring no more than one reappropriation for a subsequent two-year period.
     (6) The board may adopt rules establishing acquisition policies and priorities for the acquisition and development of trails and water access sites to be financed from moneys in the outdoor recreation account.
     (((6))) (7) In determining the acquisition and development priorities, the board shall consider, at a minimum, the following criteria:
     (a) For trails proposals:
     (i) Community support for the project;
     (ii) Immediacy of threat to the site;
     (iii) Linkage between communities;
     (iv) Linkage between trails;
     (v) Existing or potential usage;
     (vi) Consistency with a local land use plan, or a regional or statewide recreational or resource plan, including projects that assist in the implementation of local shoreline master plans updated according to RCW 90.58.080 or local comprehensive plans updated according to RCW 36.70A.130;
     (vii) Availability of water access or views;
     (viii) Enhancement of wildlife habitat; and
     (ix) Scenic values of the site.
     (b) For water access proposals:
     (i) Community support for the project;
     (ii) Distance from similar water access opportunities;
     (iii) Immediacy of threat to the site;
     (iv) Diversity of possible recreational uses;
     (v) Public demand in the area; and
     (vi) Consistency with a local land use plan, or a regional or statewide recreational or resource plan, including projects that assist in the implementation of local shoreline master plans updated according to RCW 90.58.080 or local comprehensive plans updated according to RCW 36.70A.130.
     (((7))) (8) Before November 1st of each even-numbered year, the board shall recommend to the governor a prioritized list of all state agency and local projects to be funded under RCW 79A.15.050(1) (a), (b), (c), and (d). The governor may remove projects from the list recommended by the board and shall submit this amended list in the capital budget request to the legislature. The list shall include, but not be limited to, a description of each project and any particular match requirement, and describe for each project any anticipated restrictions upon recreational activities allowed prior to the project.

Sec. 4   RCW 79A.15.120 and 2009 c 341 s 4 and 2009 c 16 s 2 are each reenacted and amended to read as follows:
     (1) The riparian protection account is established in the state treasury. The board must administer the account in accordance with chapter 79A.25 RCW and this chapter, and hold it separate and apart from all other money, funds, and accounts of the board.
     (2) Moneys appropriated for this chapter to the riparian protection account must be distributed for the acquisition or enhancement or restoration of riparian habitat. All enhancement or restoration projects, except those qualifying under subsection (((9))) (10)(a) of this section, must include the acquisition of a real property interest in order to be eligible.
     (3) State and local agencies and lead entities under chapter 77.85 RCW, nonprofit nature conservancy organizations or associations, and the conservation commission may apply for acquisition and enhancement or restoration funds for riparian habitat projects under subsection (1) of this section. Other state agencies not defined in RCW 79A.15.010, such as the department of transportation and the department of corrections, may enter into interagency agreements with state agencies to apply in partnership for funds under this section.
     (4) The board may adopt rules establishing acquisition policies and priorities for distributions from the riparian protection account.
     (5) Except as provided in RCW 79A.15.030(7), moneys appropriated for this section may not be used by the board to fund staff positions or other overhead expenses, or by a state, regional, or local agency to fund operation or maintenance of areas acquired under this chapter.
     (6) Moneys appropriated for this section may be used by grant recipients for costs incidental to restoration and acquisition, including, but not limited to, surveying expenses, fencing, and signing.
     (7) The board may not approve a local project where the local agency or nonprofit nature conservancy organization or association share is less than the amount to be awarded from the riparian protection account. In-kind contributions, including contributions of a real property interest in land may be used to satisfy the local agency's or nonprofit nature conservancy organization's or association's share.
     (8)(a) The board may not execute a contract until the state or local agency or the nature conservancy organization or association has demonstrated that the following requirements are met:
     (i) The agency nonprofit nature conservancy organization or association share of the required match funding is secured;
     (ii) The project is ready to proceed with either the preconstruction or construction phase; and
     (iii) The agency or nonprofit nature conservancy organization or association has committed to make timely use of state funds.
     (b) The contract must be for either preconstruction activities or for the construction phase of the project. In no event may a contract be executed or funds awarded for both preconstruction activities and the construction phase at the same time. If a project has both a preconstruction and a construction phase, funding for the construction phase may not be awarded until the preconstruction activities are complete.
     (c) As used in this subsection:
     (i) "Construction phase" means activities directly related to the building of the project and includes site clearing and grading and construction of the foundation. "Construction phase" does not include preconstruction activities.
     (ii) "Preconstruction activities" means the activities that occur prior to the bid phase of a publicly bid project or prior to any self-performed construction activities. Preconstruction activities typically include schematic design, design development, environmental studies, right-of-way acquisition, and construction document services that are required in order to obtain construction permits for a project.
     (iii) "Timely use of state funds" means the full expenditure of state funds within the biennium for which funds are appropriated or requiring no more than one reappropriation for a subsequent two-year period.
     (9) State agencies receiving grants for acquisition of land under this section must pay an amount in lieu of real property taxes equal to the amount of tax that would be due if the land were taxable as open space land under chapter 84.34 RCW except taxes levied for any state purpose, plus an additional amount for control of noxious weeds equal to that which would be paid if such lands were privately owned. The county assessor and county legislative authority shall assist in determining the appropriate calculation of the amount of tax that would be due.
     (((9))) (10) In determining acquisition priorities with respect to the riparian protection account, the board must consider, at a minimum, the following criteria:
     (a) Whether the project continues the conservation reserve enhancement program. Applications that extend the duration of leases of riparian areas that are currently enrolled in the conservation reserve enhancement program shall be eligible. Such applications are eligible for a conservation lease extension of at least twenty-five years of duration;
     (b) Whether the projects are identified or recommended in a watershed planning process under chapter 247, Laws of 1998, salmon recovery planning under chapter 77.85 RCW, or other local plans, such as habitat conservation plans, and these must be highly considered in the process;
     (c) Whether there is community support for the project;
     (d) Whether the proposal includes an ongoing stewardship program that includes control of noxious weeds, detrimental invasive species, and that identifies the source of the funds from which the stewardship program will be funded;
     (e) Whether there is an immediate threat to the site;
     (f) Whether the quality of the habitat is improved or, for projects including restoration or enhancement, the potential for restoring quality habitat including linkage of the site to other high quality habitat;
     (g) Whether the project is consistent with a local land use plan, or a regional or statewide recreational or resource plan. The projects that assist in the implementation of local shoreline master plans updated according to RCW 90.58.080 or local comprehensive plans updated according to RCW 36.70A.130 must be highly considered in the process;
     (h) Whether the site has educational or scientific value; and
     (i) Whether the site has passive recreational values for walking trails, wildlife viewing, or the observation of natural settings.
     (((10))) (11) Before November 1st of each even-numbered year, the board will recommend to the governor a prioritized list of projects to be funded under this section. The governor may remove projects from the list recommended by the board and will submit this amended list in the capital budget request to the legislature. The list must include, but not be limited to, a description of each project and any particular match requirement.

Sec. 5   RCW 79A.15.130 and 2009 c 341 s 5 are each amended to read as follows:
     (1) The farmlands preservation account is established in the state treasury. The board will administer the account in accordance with chapter 79A.25 RCW and this chapter, and hold it separate and apart from all other money, funds, and accounts of the board. Moneys appropriated for this chapter to the farmlands preservation account must be distributed for the acquisition and preservation of farmlands in order to maintain the opportunity for agricultural activity upon these lands.
     (2)(a) Moneys appropriated for this chapter to the farmlands preservation account may be distributed for (i) the fee simple or less than fee simple acquisition of farmlands; (ii) the enhancement or restoration of ecological functions on those properties; or (iii) both. In order for a farmland preservation grant to provide for an environmental enhancement or restoration project, the project must include the acquisition of a real property interest.
     (b) If a city, county, nonprofit nature conservancy organization or association, or the conservation commission acquires a property through this program in fee simple, the city, county, nonprofit nature conservancy organization or association, or the conservation commission shall endeavor to secure preservation of the property through placing a conservation easement, or other form of deed restriction, on the property which dedicates the land to agricultural use and retains one or more property rights in perpetuity. Once an easement or other form of deed restriction is placed on the property, the city, county, nonprofit nature conservancy organization or association, or the conservation commission shall seek to sell the property, at fair market value, to a person or persons who will maintain the property in agricultural production. Any moneys from the sale of the property shall either be used to purchase interests in additional properties which meet the criteria in subsection (((9))) (10) of this section, or to repay the grant from the state which was originally used to purchase the property.
     (3) Cities, counties, nonprofit nature conservancy organizations or associations, and the conservation commission may apply for acquisition and enhancement or restoration funds for farmland preservation projects within their jurisdictions under subsection (1) of this section.
     (4) The board may adopt rules establishing acquisition and enhancement or restoration policies and priorities for distributions from the farmlands preservation account.
     (5) The acquisition of a property right in a project under this section by a county, city, nonprofit nature conservancy organization or association, or the conservation commission does not provide a right of access to the property by the public unless explicitly provided for in a conservation easement or other form of deed restriction.
     (6) Except as provided in RCW 79A.15.030(7), moneys appropriated for this section may not be used by the board to fund staff positions or other overhead expenses, or by a city, county, nonprofit nature conservancy organization or association, or the conservation commission to fund operation or maintenance of areas acquired under this chapter.
     (7) Moneys appropriated for this section may be used by grant recipients for costs incidental to restoration and acquisition, including, but not limited to, surveying expenses, fencing, and signing.
     (8) The board may not approve a local project where the local agency's or nonprofit nature conservancy organization's or association's share is less than the amount to be awarded from the farmlands preservation account. In-kind contributions, including contributions of a real property interest in land, may be used to satisfy the local agency's or nonprofit nature conservancy organization's or association's share.
     (9)(a) The board may not execute a contract until the state or local agency or nonprofit nature conservancy organization or association has demonstrated that the following requirements are met:
     (i) The agency or nonprofit nature conservancy organization or association share of the required match funding is secured;
     (ii) The project is ready to proceed with either the preconstruction or construction phase; and
     (iii) The agency or nonprofit nature conservancy organization or association has committed to make timely use of state funds.
     (b) The contract must be for either preconstruction activities or for the construction phase of the project. In no event may a contract be executed or funds awarded for both preconstruction activities and the construction phase at the same time. If a project has both a preconstruction and a construction phase, funding for the construction phase may not be awarded until the preconstruction activities are complete.
     (c) As used in this subsection:
     (i) "Construction phase" means activities directly related to the building of the project and includes site clearing and grading and construction of the foundation. "Construction phase" does not include preconstruction activities.
     (ii) "Preconstruction activities" means the activities that occur prior to the bid phase of a publicly bid project or prior to any self-performed construction activities. Preconstruction activities typically include schematic design, design development, environmental studies, right-of-way acquisition, and construction document services that are required in order to obtain construction permits for a project.
     (iii) "Timely use of state funds" means the full expenditure of state funds within the biennium for which funds are appropriated or requiring no more than one reappropriation for a subsequent two-year period.
     (10) In determining the acquisition priorities, the board must consider, at a minimum, the following criteria:
     (a) Community support for the project;
     (b) A recommendation as part of a limiting factors or critical pathways analysis, a watershed plan or habitat conservation plan, or a coordinated regionwide prioritization effort;
     (c) The likelihood of the conversion of the site to nonagricultural or more highly developed usage;
     (d) Consistency with a local land use plan, or a regional or statewide recreational or resource plan. The projects that assist in the implementation of local shoreline master plans updated according to RCW 90.58.080 or local comprehensive plans updated according to RCW 36.70A.130 must be highly considered in the process;
     (e) Benefits to salmonids;
     (f) Benefits to other fish and wildlife habitat;
     (g) Integration with recovery efforts for endangered, threatened, or sensitive species;
     (h) The viability of the site for continued agricultural production, including, but not limited to:
     (i) Soil types;
     (ii) On-site production and support facilities such as barns, irrigation systems, crop processing and storage facilities, wells, housing, livestock sheds, and other farming infrastructure;
     (iii) Suitability for producing different types or varieties of crops;
     (iv) Farm-to-market access;
     (v) Water availability; and
     (i) Other community values provided by the property when used as agricultural land, including, but not limited to:
     (i) Viewshed;
     (ii) Aquifer recharge;
     (iii) Occasional or periodic collector for storm water runoff;
     (iv) Agricultural sector job creation;
     (v) Migratory bird habitat and forage area; and
     (vi) Educational and curriculum potential.
     (((10))) (11) In allotting funds for environmental enhancement or restoration projects, the board will require the projects to meet the following criteria:
     (a) Enhancement or restoration projects must further the ecological functions of the farmlands;
     (b) The projects, such as fencing, bridging watercourses, replanting native vegetation, replacing culverts, clearing of waterways, etc., must be less than fifty percent of the acquisition cost of the project including any in-kind contribution by any party;
     (c) The projects should be based on accepted methods of achieving beneficial enhancement or restoration results; and
     (d) The projects should enhance the viability of the preserved farmland to provide agricultural production while conforming to any legal requirements for habitat protection.
     (((11))) (12) Before November 1st of each even-numbered year, the board will recommend to the governor a prioritized list of all projects to be funded under this section. The governor may remove projects from the list recommended by the board and must submit this amended list in the capital budget request to the legislature. The list must include, but not be limited to, a description of each project and any particular match requirement.

Sec. 6   RCW 43.63A.125 and 2008 c 327 s 15 are each amended to read as follows:
     (1) The department shall establish the building communities fund program. Under the program, capital and technical assistance grants may be made to nonprofit organizations for acquiring, constructing, or rehabilitating facilities used for the delivery of nonresidential community services, including social service centers and multipurpose community centers, including those serving a distinct or ethnic population. Such facilities must be located in a distressed community or serve a substantial number of low-income or disadvantaged persons.
     (2) The department shall establish a competitive process to solicit and evaluate applications for the building communities fund program as follows:
     (a) The department shall conduct a statewide solicitation of project applications from nonprofit organizations.
     (b) The department shall evaluate applications in consultation with a citizen advisory committee using objective criteria. To be considered qualified, applicants must demonstrate that the proposed project:
     (i) Will increase the range, efficiency, or quality of the services provided to citizens;
     (ii) Will be located in a distressed community or will serve a substantial number of low-income or disadvantaged persons;
     (iii) Will offer a diverse set of activities that meet multiple community service objectives, including but not limited to: Providing social services; expanding employment opportunities for or increasing the employability of community residents; or offering educational or recreational opportunities separate from the public school system or private schools, as long as recreation is not the sole purpose of the facility;
     (iv) Reflects a long-term vision for the development of the community, shared by residents, businesses, leaders, and partners;
     (v) Requires state funding to accomplish a discrete, usable phase of the project;
     (vi) Is ready to proceed and will make timely use of the funds;
     (vii) Is sponsored by one or more entities that have the organizational and financial capacity to fulfill the terms of the grant agreement and to maintain the project into the future;
     (viii) Fills an unmet need for community services;
     (ix) Will achieve its stated objectives; and
     (x) Is a community priority as shown through tangible commitments of existing or future assets made to the project by community residents, leaders, businesses, and government partners.
     (c) The evaluation process shall also include an examination of existing assets that applicants may apply to projects. Grant assistance under this section shall not exceed twenty-five percent of the total cost of the project, except, under exceptional circumstances, the department may reduce the amount of nonstate match required. 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.
     (d) The department may not set a monetary limit to funding requests.
     (3)(a) The department may not execute a contract until the applicant has demonstrated that the following requirements are met:
     (i) The applicant share of the nonstate match funding for the project is secured;
     (ii) The project is ready to proceed with either the preconstruction or construction phase; and
     (iii) The applicant has committed to make timely use of state funds.
     (b) The contract must be for either preconstruction activities or for the construction phase of the project. In no event may a contract be executed or funds awarded for both preconstruction activities and the construction phase at the same time. If a project has both a preconstruction and a construction phase, funding for the construction phase may not be awarded until the preconstruction activities are complete.
     (c) As used in this subsection:
     (i) "Construction phase" means activities directly related to the building of the project and includes site clearing and grading and construction of the foundation. "Construction phase" does not include preconstruction activities.
     (ii) "Preconstruction activities" means the activities that occur prior to the bid phase of a publicly bid project or prior to any self-performed construction activities. Preconstruction activities typically include schematic design, design development, environmental studies, right-of-way acquisition, and construction document services that are required in order to obtain construction permits for a project.
     (iii) "Timely use of state funds" means the full expenditure of state funds within the biennium for which funds are appropriated or requiring no more than one reappropriation for a subsequent two-year period.
     (4) The department shall submit annually to the governor and the legislature in the department's capital budget request an unranked list of the qualified eligible projects for which applications were received. The list must include a description of each project, its total cost, and the amount of state funding requested. The appropriate fiscal committees of the legislature shall use this list to determine building communities fund projects that may receive funding in the capital budget. The total amount of state capital funding available for all projects on the annual list shall be determined by the capital budget beginning with the 2009-2011 biennium and thereafter. In addition, if cash funds have been appropriated, up to three million dollars may be used for technical assistance grants. The department shall not sign contracts or otherwise financially obligate funds under this section until the legislature has approved a specific list of projects.
     (((4))) (5) In addition to the list of qualified eligible projects, the department shall submit to the appropriate fiscal committees of the legislature a summary report that describes the solicitation and evaluation processes, including but not limited to the number of applications received, the total amount of funding requested, issues encountered, if any, and any recommendations for process improvements.
     (((5))) (6) After the legislature has approved a specific list of projects in law, the department shall develop and manage appropriate contracts with the selected applicants; monitor project expenditures and grantee performance; report project and contract information; and exercise due diligence and other contract management responsibilities as required.
     (((6))) (7) In contracts for grants authorized under this section the department shall include provisions which require that capital improvements shall be held by the grantee for a specified period of time appropriate to the amount of the grant and that facilities shall be used for the express purpose of the grant. If the grantee is found to be out of compliance with provisions of the contract, the grantee shall repay to the state general fund the principal amount of the grant plus interest calculated at the rate of interest on state of Washington general obligation bonds issued most closely to the date of authorization of the grant.

Sec. 7   RCW 43.63A.135 and 2006 c 371 s 234 are each amended to read as follows:
     (1) The department of ((community, trade, and economic development)) commerce must establish a competitive process to solicit proposals for and prioritize projects whose primary objective is to assist nonprofit youth organizations in acquiring, constructing, or rehabilitating facilities used for the delivery of nonresidential services, excluding outdoor athletic fields.
     (2) The department of ((community, trade, and economic development)) commerce must establish a competitive process to prioritize applications for the assistance as follows:
     (a) The department of ((community, trade, and economic development)) commerce must conduct a statewide solicitation of project applications from local governments, nonprofit organizations, and other entities, as determined by the department of ((community, trade, and economic development)) commerce. The department of ((community, trade, and economic development)) commerce must evaluate and rank applications in consultation with a citizen advisory committee using objective criteria. Projects must have a major recreational component, and must have either an educational or social service component. At a minimum, applicants must demonstrate that the requested assistance will increase the efficiency or quality of the services it provides to youth. The evaluation and ranking process must also include an examination of existing assets that applicants may apply to projects. Grant assistance under this section may not exceed twenty-five 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.
     (b)(i) The department may not execute a contract until the applicant has demonstrated that the following requirements are met:
     (A) The applicant share of the required match funding is secured;
     (B) The project is ready to proceed with either the preconstruction or construction phase; and
     (C) The applicant has committed to make timely use of state funds.
     (ii) The contract must be for either preconstruction activities or for the construction phase of the project. In no event may a contract be executed or funds awarded for both preconstruction activities and the construction phase at the same time. If a project has both a preconstruction and a construction phase, funding for the construction phase may not be awarded until the preconstruction activities are complete.
     (iii) As used in this subsection (2)(b):
     (A) "Construction phase" means activities directly related to the building of the project and includes site clearing and grading and construction of the foundation. "Construction phase" does not include preconstruction activities.
     (B) "Preconstruction activities" means the activities that occur prior to the bid phase of a publicly bid project or prior to any self-performed construction activities. Preconstruction activities typically include schematic design, design development, environmental studies, right-of-way acquisition, and construction document services that are required in order to obtain construction permits for a project.
     (C) "Timely use of state funds" means the full expenditure of state funds within the biennium for which funds are appropriated or requiring no more than one reappropriation for a subsequent two-year period.
     (c) The department of ((community, trade, and economic development)) commerce must submit a prioritized list of recommended projects to the governor and the legislature in the ((department of community, trade, and economic development's)) department's biennial capital budget request beginning with the 2005-2007 biennium and thereafter. The list must include a description of each project, the amount of recommended state funding, and documentation of nonstate funds to be used for the project. The total amount of recommended state funding for projects on a biennial project list must not exceed eight million dollars. The department of ((community, trade, and economic development)) commerce may not sign contracts or otherwise financially obligate funds under this section until the legislature has approved a specific list of projects.
     (((c))) (d) In contracts for grants authorized under this section the department of ((community, trade, and economic development)) commerce must include provisions that require that capital improvements be held by the grantee for a specified period of time appropriate to the amount of the grant and that facilities be used for the express purpose of the grant. If the grantee is found to be out of compliance with provisions of the contract, the grantee must repay to the state general fund the principal amount of the grant plus interest calculated at the rate of interest on state of Washington general obligation bonds issued most closely to the date of authorization of the grant.

Sec. 8   RCW 43.63A.750 and 2006 c 371 s 235 are each amended to read as follows:
     (1) A competitive grant program to assist nonprofit organizations in acquiring, constructing, or rehabilitating performing arts, art museums, and cultural facilities is created.
     (2)(a) The department shall submit a list of recommended performing arts, art museum projects, and cultural organization projects eligible for funding to the governor and the legislature in the department's biennial capital budget request beginning with the 2001-2003 biennium and thereafter. The list, in priority order, 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 total amount of recommended state funding for projects on a biennial project list shall not exceed twelve million dollars.
     (b) The department shall establish a competitive process to prioritize applications for state assistance as follows:
     (i) The department shall conduct a statewide solicitation of project applications from nonprofit organizations, local governments, and other entities, as determined by the department. The department shall evaluate and rank applications in consultation with a citizen advisory committee, including a representative from the state arts commission, using objective criteria. The evaluation and ranking process shall also consider local community support for projects and an examination of existing assets that applicants may apply to projects.
     (ii) The department may establish the amount of state grant assistance for individual project applications but the amount shall not exceed twenty percent of the estimated total capital cost or actual cost of a project, whichever is less. The remaining portions of the project capital cost shall be a match from nonstate sources. The nonstate match may include cash, the value of real property when acquired solely for the purpose of the project, and in-kind contributions. The department is authorized to set matching requirements for individual projects. State assistance may be used to fund separate definable phases of a project if the project demonstrates adequate progress and has secured the necessary match funding.
     (iii) The department shall not sign contracts or otherwise financially obligate funds under this section until the legislature has approved a specific list of projects. In contracts for grants authorized under this section, the department shall include provisions requiring that capital improvements be held by the grantee for a specified period of time appropriate to the amount of the grant and that facilities be used for the express purpose of the grant. If the grantee is found to be out of compliance with provisions of the contract, the grantee shall repay to the state general fund the principal amount of the grant plus interest calculated at the rate of interest on state of Washington general obligation bonds issued most closely to the date of authorization of the grant.
     (3)(a) In providing funding under this section, the department may not execute a contract until the applicant has demonstrated that the following requirements are met:
     (i) The applicant share of the required match funding is secured;
     (ii) The project is ready to proceed with either the preconstruction or construction phase; and
     (iii) The applicant has committed to make timely use of state funds.
     (b) The contract must be for either preconstruction activities or for the construction phase of the project. In no event may a contract be executed or funds awarded for both preconstruction activities and the construction phase at the same time. If a project has both a preconstruction and a construction phase, funding for the construction phase may not be awarded until the preconstruction activities are complete.
     (c) As used in this subsection:
     (i) "Construction phase" means activities directly related to the building of the project and includes site clearing and grading and construction of the foundation. "Construction phase" does not include preconstruction activities.
     (ii) "Preconstruction activities" means the activities that occur prior to the bid phase of a publicly bid project or prior to any self-performed construction activities. Preconstruction activities typically include schematic design, design development, environmental studies, right-of-way acquisition, and construction document services that are required in order to obtain construction permits for a project.
     (iii) "Timely use of state funds" means the full expenditure of state funds within the biennium for which funds are appropriated or requiring no more than one reappropriation for a subsequent two-year period.

Sec. 9   RCW 27.34.330 and 2006 c 371 s 232 are each amended to read as follows:
     (1) The Washington state historical society shall establish a competitive process to solicit proposals for and prioritize heritage capital projects for potential funding in the state capital budget. The society shall adopt rules governing project eligibility and evaluation criteria. Application for funding of specific projects may be made to the society by local governments, public development authorities, nonprofit corporations, tribal governments, and other entities, as determined by the society. The society, with the advice of leaders in the heritage field, including but not limited to representatives from the office of the secretary of state, the eastern Washington state historical society, and the department of archaeology and historic preservation, shall establish and submit a prioritized list of heritage capital projects to the governor and the legislature in the society's biennial capital budget request. 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 total amount of recommended state funding for projects on a biennial project list shall not exceed ten million dollars. The prioritized list shall be developed through open and public meetings and the amount of state funding shall 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. The department shall not sign contracts or otherwise financially obligate funds under this section until the legislature has approved a specific list of projects. In contracts for grants authorized under this section, the society shall include provisions requiring that capital improvements be held by the grantee for a specified period of time appropriate to the amount of the grant and that facilities be used for the express purpose of the grant. If the grantee is found to be out of compliance with provisions of the contract, the grantee shall repay to the state general fund the principal amount of the grant plus interest calculated at the rate of interest on state of Washington general obligation bonds issued most closely to the date of authorization of the grant.
     (2)(a) The historical society may not execute a contract until the applicant has demonstrated that the following requirements are met:
     (i) The applicant share of the required match funding is secured;
     (ii) The project is ready to proceed with either the preconstruction or construction phase; and
     (iii) The applicant has committed to make timely use of state funds.
     (b) The contract must be for either preconstruction activities or for the construction phase of the project. In no event may a contract be executed or funds awarded for both preconstruction activities and the construction phase at the same time. If a project has both a preconstruction and a construction phase, funding for the construction phase may not be awarded until the preconstruction activities are complete.
     (c) As used in this subsection:
     (i) "Construction phase" means activities directly related to the building of the project and includes site clearing and grading and construction of the foundation. "Construction phase" does not include preconstruction activities.
     (ii) "Preconstruction activities" means the activities that occur prior to the bid phase of a publicly bid project or prior to any self-performed construction activities. Preconstruction activities typically include schematic design, design development, environmental studies, right-of-way acquisition, and construction document services that are required in order to obtain construction permits for a project.
     (iii) "Timely use of state funds" means the full expenditure of state funds within the biennium for which funds are appropriated or requiring no more than one reappropriation for a subsequent two-year period.