House Bill 2186 - Federal Funds for Economic Development (Washington, 2026 Regular Session)

Summary

House Bill 2186 (H-2600.1), State of Washington, 69th Legislature, 2026 Regular Session, with sponsors beginning Representatives Barnard, Ryu and Ramel, prefiled 12/23/25, read first time 01/12/26 and referred to the Committee on Technology, Economic Development, & Veterans. The act relates to supporting the acquisition of federal funds to promote economic development and amends RCW 43.330.260. The text lets an applicant for federal funds request a letter of support from the department, directs the department to develop scoring criteria to prioritize and award matching funds, and creates the moving assets to create healthy economic development account in the custody of the state treasurer. It also directs the Washington state institute for public policy to conduct a study and submit a report by June 30, 2027.

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Full text

     H-2600.1

                                HOUSE BILL 2186


     State of Washington       69th Legislature       2026 Regular Session

     By Representatives Barnard, Ryu, Ramel, Reed, Zahn, Salahuddin, and
     Bernbaum

     Prefiled 12/23/25. Read first time 01/12/26. Referred to Committee
     on Technology, Economic Development, & Veterans.




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; creating new sections; and providing
4    an expiration date.


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


 6       NEW SECTION. Sec. 1. The legislature finds that the state would
 7   economically benefit by increasing the ability of Washington
 8   communities to access federal funds.
 9       The legislature further finds that, in the last 10 years,
10   thousands of federal funding opportunities were available for
11   economic   development,   including   broadband,   equity,   housing,
12   infrastructure, innovation, regional development, skills training,
13   transportation, and workforce development, although the federal
14   funding opportunities available in each fiscal year vary depending on
15   federal priorities. In the last three fiscal years, the federal
16   government provided $1.1 trillion per year in grants for projects
17   that support economic development.
18       The legislature further finds that a state program that creates
19   scoring criteria to prioritize the award of matching funds, adopts
20   award tiers, and establishes a state account to create a pool of
21   matching dollars, including private donations, will enhance the
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 1   ability of local communities to access federal funds that will
 2   contribute to the state's economic development, including funds for
 3   education, public safety, housing, transportation, and child care.
 4       The legislature further finds that the state recognized the value
 5   of matching dollars to access federal funds for clean energy,
 6   climate, clean technology, and resilience, and that it should expand
 7   its efforts to include all of the federal government's economic
 8   development fund opportunities.
 9       To further promote economic development in local communities, the
10   legislature encourages the department of commerce to solicit private
11   donations to support economic development, and to reallocate program
12   funds that would otherwise revert at the end of the fiscal biennium
13   to the program created in this act to be used as matching funds for
14   applications for federal grants.


15       Sec. 2.   RCW 43.330.260 and 2024 c 223 s 4 are each amended to
16   read as follows:
17       (1) The department shall make available, within existing
18   resources, an inventory of grant opportunities for state agencies,
19   local governments, and other community organizations engaged in
20   economic development activities.
21       (2) In developing the inventory of economic development grant
22   opportunities, the department ((may)) shall:
23       (a) Regularly review the federal register for opportunities to
24   apply for grants, research projects, and demonstration projects;
25       (b) Maintain an inventory of grant opportunities with private
26   foundations and businesses; and
27       (c) ((Provide a resource guide for applicants for federal grants,
28   including links to federal applications and relevant resources, and
29   contact information for department assistance; and
30       (d))) Consult with federal officials, including but not limited
31   to those in the small business administration, the department of
32   labor, the department of commerce, the department of agriculture, the
33   department of ecology, as well as private foundations and businesses,
34   on the prospects for obtaining federal and private funds for economic
35   development purposes in Washington state.
36       (3) The department may also facilitate joint efforts between
37   agencies and between local organizations and state agencies that will
38   increase the likelihood of success in grant seeking ((and the
39   attraction of major events)).
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 1       NEW SECTION. Sec. 3. A new section is added to chapter 43.330
 2   RCW to read as follows:
 3       (1) An applicant for federal funds that will promote economic
 4   development may request a letter of support from the department. The
 5   department shall provide the applicant with a letter that identifies
 6   the state's opportunity for matching funds for the application within
 7   five business days of the request.
 8       (2) Each fiscal biennium, the department shall solicit input from
 9   associate development organizations, ports, chambers of commerce,
10   workforce development boards, state agencies, local governments, and
11   the governor's office to identify the federal funds that will likely
12   be available in the biennium and to prioritize the federal funds that
13   will have the most significant impact on economic development in
14   Washington.
15       (3) Subject to available funds, the department shall develop
16   scoring criteria to prioritize and award matching funds to an
17   applicant with a letter of opportunity for matching funds. The
18   scoring criteria must include:
19       (a) The economic impact of the federal funds, including the
20   number of jobs created, households affected, and businesses impacted;
21       (b) The amount of the federal funding available if the
22   application is successful;
23       (c) Whether the application meets one of the priorities
24   identified in subsection (2) of this section;
25       (d) A prioritization of applications from applicants in rural and
26   frontier counties; and
27       (e) Criteria developed by the department including, but not
28   limited to, collaborative efforts and projects, timing of available
29   funds, and alignment with state priorities.
30       (4) The department shall only award matching funds when:
31       (a) The applicant is unable to secure funding from other state
32   sources;
33       (b) The project will produce long-term economic benefits;
34       (c) The project does not require continuing state support; and
35       (d) The award will not supplant private investment.
36       (5) Successful applicants for an award of matching funds will be
37   subject to the following limits:
38       (a) Political subdivisions, federally recognized Indian tribes,
39   institutions of higher education as defined in RCW 28B.10.016,
40   consumer-owned   utilities,   small  businesses,   regional   planning
                                     p. 3                          HB 2186
 1   organizations, economic development organizations as defined in 13
 2   C.F.R. Sec. 312.3 as it existed on December 4, 2025, and nonprofits
 3   may receive up to 100 percent of the required match.
 4       (b) Investor-owned utilities and other applicants may receive a
 5   maximum of 50 percent of the required match.
 6       (c) If no match is required, an applicant may receive up to
 7   $100,000 if the amount would increase the likelihood of receiving
 8   federal funds or increase the award of federal funds.
 9       (d) If a project will benefit a distressed area as defined in RCW
10   43.168.020, the maximum amount awarded under (b) of this subsection
11   may be increased to 100 percent, and the maximum amount awarded under
12   (c) of this subsection may be increased to $500,000.
13       (6) Subject to available funds, matching funds shall be reserved
14   after an application for federal funds is approved by a federal
15   agency and shall be unavailable for reservation or appropriation for
16   other applicants until the department receives written notice from
17   the applicant that the application for federal funds has been
18   withdrawn or denied.
19       (7) The department shall establish a competitive process to
20   evaluate and award matching funds. Final awards shall be determined
21   by the department, subject to the provisions in this section. The
22   department may charge projects an administrative fee.
23       (8) A recipient of matching funds shall report to the department
24   on the amount of matching dollars needed to apply for federal funds,
25   the amount of state matching funds received under this section, the
26   amount of federal funds received in the successful grant, the number
27   of jobs created or maintained as a result of the federal funds, and
28   the annual revenue generated as a result of the successful
29   application for federal funds.
30       (9)   By  July   1,  2028,   the  department   shall expand  the
31   fundhub.wa.gov website to include federal funds available for
32   economic development. The department shall update the website at
33   least quarterly.


34       NEW SECTION. Sec. 4. A new section is added to chapter 43.330
35   RCW to read as follows:
36       The moving assets to create healthy economic development account
37   is created in the custody of the state treasurer. Revenues to the
38   account shall consist of appropriations and transfers by the
39   legislature, all other moneys directed for deposit into the account,
                                     p. 4                          HB 2186
1    and any gifts, grants, or donations received by the department for
2    this purpose. The account is subject to allotment procedures under
3    chapter 43.88 RCW, but an appropriation is not required for
4    expenditures. Only the director or the director's designee may
5    authorize expenditures from the account. Expenditures from the
6    account may only be used to award matching funds for an application
7    for federal funds that will promote economic development, as
8    described in section 3 of this act.

 9       NEW SECTION.   Sec. 5.    (1) The Washington state institute for
10   public policy must conduct a study researching, analyzing, and
11   determining, to the extent practicable, the average number and amount
12   of federal funds available for economic development and the amount of
13   matching funds needed to apply for those federal funds.
14       (2) The study must compare the number and dollar amount of
15   federal funds identified on the state's fundhub.wa.gov website to the
16   number and dollar amount of federal funds available for economic
17   development on the federal grants.gov website. This comparison must
18   identify the number and dollar amount of federal funds available but
19   not identified on the fundhub.wa.gov website.
20       (3) In conducting the study, the Washington state institute for
21   public policy may conduct fact-finding and stakeholder discussions
22   with the department of commerce's office of economic development,
23   associate development organizations, ports, chambers of commerce,
24   workforce development boards, and the governor's office.
25       (4) The department of commerce must cooperate with the Washington
26   state institute for public policy to facilitate access to data or
27   other resources necessary to complete the work of this section.
28       (5) By June 30, 2027, and in compliance with RCW 43.01.036, the
29   Washington state institute for public policy shall submit a report to
30   the appropriate committees of the legislature with the findings of
31   its study under this section.
32       (6) This section expires June 1, 2028.

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