AN ACT Relating to community revitalization; amending RCW 43.160.060 and 43.160.070; and reenacting and amending RCW 43.160.030.

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

Sec. 1. Section 13, chapter 6, Laws of 1985 and section 2, chapter 446, Laws of 1985 and RCW 43.160.030 are each reenacted and amended to read as follows:

(1) The community economic revitalization board is hereby created to exercise the powers granted under this chapter.

(2) The board shall consist of the director of trade and economic development, the director of community development, the director of revenue, the commissioner of employment security, the secretary of the department of transportation, the chairman of and one minority member appointed by the speaker of the house of representatives from the committee on trade and economic development of the house of representatives, the chairman of and one minority member appointed by the president of the senate from the committee on commerce and labor of the senate, or the equivalent standing committees, one member each from the committees on ways and means of the senate and house of representatives, or the equivalent standing committees, chosen by the president of the senate or the speaker of the house of representatives, as applicable, and the following members appointed by the governor: A recognized private or public sector economist selected from the governor's council of economic advisors; one port district official; one county official; one city official; one representative of the public; one representative of small businesses each from: (a) The area west of Puget Sound, (b) the area east of Puget Sound and west of the Cascade range, (c) the area east of the Cascade range and west of the Columbia river, and (d) the area east of the Columbia river; one executive from large businesses each from the area west of the Cascades and the area east of the Cascades. The appointive members shall initially be appointed to terms as follows: Three members for one-year terms, three members for two-year terms, and three members for three-year terms which shall include the chairman. Thereafter each succeeding term shall be for three years. ((~~The representative from the governor's council of economic advisors shall serve as chairman of the board.~~)) The governor shall appoint one member of the board who is not an elected or appointed official as the chair of the board. The director of the department of ((~~commerce~~)) trade and economic development shall serve as vice chairman.

(3) Staff support shall be provided by the department of trade and economic development to assist the board in implementing this chapter and the allocation of private activity bonds.

(4) All appointive members of the board shall be compensated in accordance with RCW 43.03.240 and shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.

(5) If a vacancy occurs by death, resignation, or otherwise of appointive members of the board, the governor shall fill the same for the unexpired term. Any members of the board, appointive or otherwise, may be removed for malfeasance or misfeasance in office, upon specific written charges by the governor, under chapter 34.04 RCW.

Sec. 2. Section 6, chapter 40, Laws of 1982 1st ex. sess. as last amended by section 3, chapter 466, Laws of 1985 and RCW 43.160.060 are each amended to read as follows:

The board is authorized to make direct loans to political subdivisions of the state for the purposes of assisting the political subdivisions in financing the cost of public facilities, including development of land and improvements for public facilities, as well as the acquisition, 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. A grant may only be authorized for political subdivisions located in distressed areas as defined in RCW 43.160.076.

The governor shall make a recommendation to the board on every project for financing, including recommending funding amounts, terms, and conditions.

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 make a grant or loan unless the application includes convincing evidence that a specific private development or expansion is ready to occur and will only occur if the grant or loan is made.

(2) The board shall only make grants or loans for those projects which would result in specific private developments or expansions (a) in manufacturing, production, food processing, assembly, warehousing, and industrial distribution, or (b) which substantially support the trading of goods or services outside of the state's borders. In no instance may the board make a grant or loan for a project where the primary purpose is to facilitate or promote a retail shopping development or expansion.

(3) The board shall prioritize each proposed project according to the 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. As long as there is more demand for loans or grants than there are funds available for loans or grants, the board is instructed to fund projects in order of their priority.

(4) The board may not make a grant or loan for any project that probably would result in a development or expansion that would displace existing jobs in any other community in the state.

(5) The board may not make any grant or loan for the acquisition of real property, including buildings and other fixtures which are a part of real property.

(6) A responsible official of the political subdivision shall be present during board deliberations and provide information that the board requests.

(7) The board shall only make loans or grants 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.

(8) Before any loan or grant application is approved, the political subdivision seeking the loan or grant 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. 3. Section 7, chapter 40, Laws of 1982 1st ex. sess. as amended by section 4, chapter 60, Laws of 1983 1st ex. sess. and RCW 43.160.070 are each amended to read as follows:

((~~(1)~~)) Public facilities loans and grants, when authorized by the board, are subject to the following conditions:

((~~(a)~~)) (1) The moneys in the public facilities construction loan revolving account shall be used solely to fulfill commitments arising from loans or grants authorized in this chapter. The total outstanding amount which the board shall dispense at any time pursuant to this section shall not exceed the moneys available from the account. The total amount of outstanding loans and grants in Pierce, King, and Snohomish counties shall never exceed sixty percent of the total amount of outstanding loans and grants disbursed by the board.

((~~(b)~~)) (2) Financial assistance through the loans or grants may be used directly or indirectly for any facility for public purposes, including, but not limited to, sewer or other waste disposal facilities, arterials, bridges, access roads, port facilities, or water distribution and purification facilities.

((~~(c)~~)) (3) On contracts made for public facilities loans the board shall determine the interest rate which loans shall bear. The interest rate shall not exceed ten percent per annum. ((~~The board may provide reasonable terms and conditions for repayment for loans as the board determines.~~)) The board shall commit the least amount of state funds necessary to assure the timely location or expansion of private sector development. Local governments shall be required to bear the greatest amount that is fiscally possible of the public financial burden of a project. The board shall seek to maximize the return to the public facilities construction loan revolving fund through policies such as reducing the terms for loans and requiring balloon payments when a local government is capable of refinancing a project. The loans shall not exceed twenty years in duration.

((~~(d)~~)) (4) Repayments of loans made under the contracts for public facilities construction loans shall be paid into the public facilities construction loan revolving account.

((~~(2) When every feasible effort has been made to provide loans and loans are not possible, the board may provide grants upon finding that unique circumstances exist.~~))