wa-law.org > bill > 2025-26 > HB 2186 > Second Substitute
The legislature finds that the state would economically benefit by increasing the ability of Washington communities to access federal funds.
The legislature further finds that, in the last 10 years, thousands of federal funding opportunities were available for economic development, including broadband, equity, housing, infrastructure, innovation, regional development, skills training, transportation, and workforce development, although the federal funding opportunities available in each fiscal year vary depending on federal priorities. In the last three fiscal years, the federal government provided $1.1 trillion per year in grants for projects that support economic development.
To further promote economic development in local communities, the legislature encourages the department of commerce to solicit private donations to support economic development, and to reallocate program funds that would otherwise revert at the end of the fiscal biennium to the program created in this act to be used as matching funds for applications for federal grants.
Subject to the availability of amounts appropriated for this specific purpose, the department shall make available, within existing resources, an inventory of grant opportunities for state agencies, local governments, and other community organizations engaged in economic development activities.
In developing the inventory of economic development grant opportunities, the department may:
Regularly review the federal register for opportunities to apply for grants, research projects, and demonstration projects; and
Maintain an inventory of grant opportunities with private foundations and businesses
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Subject to the availability of amounts appropriated for this specific purpose, the department may develop scoring criteria to prioritize and award matching funds to an applicant for matching funds. The scoring criteria must include:
The economic impact of the federal funds, including the number of jobs created, households affected, and businesses impacted;
The amount of the federal funding available if the application is successful; and
A prioritization of applications from applicants in rural and frontier counties.
The department shall only award matching funds when:
The applicant is unable to secure funding from other state sources;
The project will produce long-term economic benefits; and
The project does not require continuing state support.
A successful applicant for an award of matching funds is subject to the following limits:
A political subdivision, federally recognized Indian tribe, institution of higher education as defined in RCW 28B.10.016, consumer-owned utility, small business, regional planning organization, economic development organization as defined in 13 C.F.R. Sec. 312.3 as it existed on December 4, 2025, or nonprofit may receive up to 100 percent of the required match.
An investor-owned utility or other applicant may receive a maximum of 50 percent of the required match.
If no match is required, an applicant may receive up to $100,000 if the amount would increase the likelihood of receiving federal funds or increase the award of federal funds.
If a project will benefit a distressed area as defined in RCW 43.168.020, the maximum amount awarded under (b) of this subsection may be increased to 100 percent, and the maximum amount awarded under (c) of this subsection may be increased to $500,000.
Subject to the availability of amounts appropriated for this specific purpose, matching funds shall be reserved after an application for federal funds is approved by a federal agency and shall be fully reserved upon federal approval, until the department receives written notice from the applicant that the application for federal funds has been withdrawn or denied.
The department may establish an administrative fee, including the amount and collection method.
A recipient of matching funds shall report to the department on the amount of matching dollars needed to apply for federal funds, the amount of state matching funds received under this section, the amount of federal funds received in the successful grant, the number of jobs created or maintained as a result of the federal funds, and the annual revenue generated as a result of the successful application for federal funds.
The moving assets to create healthy economic development account is created in the custody of the state treasurer. Revenues to the account shall consist of appropriations and transfers by the legislature, all other moneys directed for deposit into the account, and any gifts, grants, or donations received by the department for this purpose. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures. Only the director or the director's designee may authorize expenditures from the account. Expenditures from the account may only be used to award matching funds for an application for federal funds that will promote economic development.
If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2026, in the omnibus appropriations act, this act is null and void.