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Published on Monday, January 29, 2018

City officials express their support for local infrastructure financing bill

Sen. Sharon Brown’s (R-Kennewick) Building Business Ecosystems (BBE) Act, SB 6499, received a public hearing on Thursday, January 25 where city officials, port representatives and labor representatives were on hand to provide supportive testimony.

SB 6499 would allow cities to create “business ecosystems areas” to target and incentivize development. The BBE program is modeled after the Local Revitalization Financing (LRF) tool that is now closed to new applications.

Under the bill a sponsoring local government – a city, town, or county – creates a business ecosystems area from which annual increases in revenues from local sales and use taxes and local property taxes are measured. Such increases in revenues and any additional funds from other local public sources are then used to pay for public improvements in the business ecosystems area and are also used to match a state contribution.

Local governments would need to apply to the Department of Commerce to receive a state contribution. Projection application criteria includes evaluation of the project's potential to increase state and local property and sales and use tax revenues, employment, wages and benefits, and economic health and vitality.

The annual state contribution limit for all projects is initially set at $5 million, with required increases in fiscal years 2021 through 2024 based on state property value increases occurring in calendar years 2018 through 2021. The state contribution limit for each project is set at $500,000 annually.

In addition to port and labor representatives, Kennewick Mayor Don Britain and City Manager Marie Mosley provided testimony in support of the legislation. In their testimony they detailed how Kennewick has taken advantage of the LRF program, and the resounding success they’ve seen as a result. In its first six years, the Kennewick LRF area has returned over $14 million in state benefits, and received $3 million locally. The LRF program is now closed to new applicants and this is one of the many reasons AWC is so supportive of a new program like the BBE.

Cities are very supportive of SB 6499 and hope to see the bill moved out of committee. We will continue to provide updates as they become available.

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