HB 2186

H-3536.1
  SECOND SUBSTITUTE HOUSE BILL 2186
State of Washington  69th Legislature     2026 Regular Session
By House Appropriations (originally sponsored by Representatives
Barnard, Ryu, Ramel, Reed, Zahn, Salahuddin, and Bernbaum)
READ FIRST TIME 02/09/26.
1     AN ACT Relating to supporting the acquisition of federal funds to
2 promote economic development; amending RCW 43.330.260; adding new
3 sections to chapter 43.330 RCW; and creating new sections.
4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
5     NEW SECTION. Sec. 1. The legislature finds that the state would
6 economically benefit by increasing the ability of Washington
7 communities to access federal funds.
8     The legislature further finds that, in the last 10 years,
9 thousands of federal funding opportunities were available for
10 economic   development,   including   broadband,   equity,   housing,
11 infrastructure, innovation, regional development, skills training,
12 transportation, and workforce development, although the federal
13 funding opportunities available in each fiscal year vary depending on
14 federal priorities. In the last three fiscal years, the federal
15 government provided $1.1 trillion per year in grants for projects
16 that support economic development.
17     To further promote economic development in local communities, the
18 legislature encourages the department of commerce to solicit private
19 donations to support economic development, and to reallocate program
20 funds that would otherwise revert at the end of the fiscal biennium
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1 to the program created in this act to be used as matching funds for
2 applications for federal grants.
3     Sec. 2.   RCW 43.330.260 and 2024 c 223 s 4 are each amended to
4 read as follows:
5     (1) ((The)) Subject to the availability of amounts appropriated
6 for this specific purpose, the department shall make available,
7 within existing resources, an inventory of grant opportunities for
8 state agencies, local governments, and other community organizations
9 engaged in economic development activities.
10     (2) In developing the inventory of economic development grant
11 opportunities, the department may:
12     (a) Regularly review the federal register for opportunities to
13 apply for grants, research projects, and demonstration projects; and
14     (b) Maintain an inventory of grant opportunities with private
15 foundations and businesses((;
16     (c) Provide a resource guide for applicants for federal grants,
17 including links to federal applications and relevant resources, and
18 contact information for department assistance; and
19     (d) Consult with federal officials, including but not limited to
20 those in the small business administration, the department of labor,
21 the department of commerce, the department of agriculture, the
22 department of ecology, as well as private foundations and businesses,
23 on the prospects for obtaining federal and private funds for economic
24 development purposes in Washington state)).
25     (((3) The department may also facilitate joint efforts between
26 agencies and between local organizations and state agencies that will
27 increase the likelihood of success in grant seeking and the
28 attraction of major events.))
29     NEW SECTION. Sec. 3. A new section is added to chapter 43.330
30 RCW to read as follows:
31     (1) Subject to the availability of amounts appropriated for this
32 specific purpose, the department may develop scoring criteria to
33 prioritize and award matching funds to an applicant for matching
34 funds. The scoring criteria must include:
35     (a) The economic impact of the federal funds, including the
36 number of jobs created, households affected, and businesses impacted;
37     (b) The amount of the federal funding available if the
38 application is successful; and
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1     (c) A prioritization of applications from applicants in rural and
2 frontier counties.
3     (2) The department shall only award matching funds when:
4     (a) The applicant is unable to secure funding from other state
5 sources;
6     (b) The project will produce long-term economic benefits; and
7     (c) The project does not require continuing state support.
8     (3) A successful applicant for an award of matching funds is
9 subject to the following limits:
10     (a) A political subdivision, federally recognized Indian tribe,
11 institution of higher education as defined in RCW 28B.10.016,
12 consumer-owned    utility,   small    business,   regional    planning
13 organization, economic development organization as defined in 13
14 C.F.R. Sec. 312.3 as it existed on December 4, 2025, or nonprofit may
15 receive up to 100 percent of the required match.
16     (b) An investor-owned utility or other applicant may receive a
17 maximum of 50 percent of the required match.
18     (c) If no match is required, an applicant may receive up to
19 $100,000 if the amount would increase the likelihood of receiving
20 federal funds or increase the award of federal funds.
21     (d) If a project will benefit a distressed area as defined in RCW
22 43.168.020, the maximum amount awarded under (b) of this subsection
23 may be increased to 100 percent, and the maximum amount awarded under
24 (c) of this subsection may be increased to $500,000.
25     (4) Subject to the availability of amounts appropriated for this
26 specific purpose, matching funds shall be reserved after an
27 application for federal funds is approved by a federal agency and
28 shall be fully reserved upon federal approval, until the department
29 receives written notice from the applicant that the application for
30 federal funds has been withdrawn or denied.
31     (5) The department may establish an administrative fee, including
32 the amount and collection method.
33     (6) A recipient of matching funds shall report to the department
34 on the amount of matching dollars needed to apply for federal funds,
35 the amount of state matching funds received under this section, the
36 amount of federal funds received in the successful grant, the number
37 of jobs created or maintained as a result of the federal funds, and
38 the annual revenue generated as a result of the successful
39 application for federal funds.
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1     NEW SECTION. Sec. 4. A new section is added to chapter 43.330
2 RCW to read as follows:
3     The moving assets to create healthy economic development account
4 is created in the custody of the state treasurer. Revenues to the
5 account shall consist of appropriations and transfers by the
6 legislature, all other moneys directed for deposit into the account,
7 and any gifts, grants, or donations received by the department for
8 this purpose. The account is subject to allotment procedures under
9 chapter 43.88 RCW, but an appropriation is not required for
10 expenditures. Only the director or the director's designee may
11 authorize expenditures from the account. Expenditures from the
12 account may only be used to award matching funds for an application
13 for federal funds that will promote economic development.
14     NEW SECTION.   Sec. 5. If specific funding for the purposes of
15 this act, referencing this act by bill or chapter number, is not
16 provided by June 30, 2026, in the omnibus appropriations act, this
17 act is null and void.
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