House Bill Analysis, HB 2186 - Federal Funds for Economic Development (Hearing Date 1/16/26)

Summary

House Bill Analysis of HB 2186, Supporting the acquisition of federal funds to promote economic development, prepared by the Office of Program Research for the Technology, Economic Development, & Veterans Committee, with a hearing date of 1/16/26. The brief summary says the bill requires the Department of Commerce to support applicants seeking federal funds by identifying federal grants, providing letters of support, and awarding matching funds under scoring criteria updated every two years. It also creates an account for the matching fund awards and directs the Washington State Institute for Public Policy to report on federal funds available for economic development, with a study due June 30, 2027. The analysis lists Appropriation: None and a fiscal note requested on January 6, 2026.

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Full text

Washington State BILL
House of Representatives
Office of Program Research ANALYSIS
Technology, Economic Development, &
Veterans Committee
HB 2186
Brief Description: Supporting the acquisition of federal funds to promote economic
development.

Sponsors: Representatives Barnard, Ryu, Ramel, Reed, Zahn, Salahuddin and Bernbaum.

Brief Summary of Bill
• Requires the Department of Commerce to support applicants seeking
federal funds by identifying federal grants, providing letters of support,
and awarding matching funds based on state priorities and scoring
criteria that are updated every two years.
• Creates an account for the matching fund awards which includes private
donations and unused program funds.
• Directs the Washington State Institute for Public Policy to report on the
federal funds available for economic development projects and the
matching funds needed to obtain those funds.

Hearing Date: 1/16/26

Staff: Martha Wehling (786-7067).

Background:

The Department of Commerce (Commerce) supports economic development by soliciting and
inventorying private and federal grants for economic and community development programs.

Federal agencies provide federal funds, primarily through competitive grants, for a variety of

This analysis was prepared by non-partisan legislative staff for the use of legislative
members in their deliberations. This analysis is not part of the legislation nor does it
constitute a statement of legislative intent.

House Bill Analysis -1- HB 2186
economic development projects. The grant process often requires the applicant to provide
matching funds that are a percentage of the grant funds. Recent federal grants provided funding
for a variety of projects including broadband, clean and efficient energy, climate change
resiliency, disaster mitigation and recovery, housing and homelessness, public infrastructure,
semiconductor technology, transportation, and water and waste management.

Commerce is required to provide an inventory of grant opportunities for state agencies, local
governments, and community organizations. To develop the inventory, Commerce may consult
with federal agencies and include grants identified on the federal register or private grants.
Commerce may also prepare a resource guide for applicants, and may facilitate the coordination
of local and state agencies for grants or the attraction of major events.

In 2023 the Governor's Office initiated the Federal Funding Roadmap Project (Project) to assist
applicants with access to federal funds related to climate, natural resource protection, workforce
development, sustainable economic development, and equity goals. The FundHubWA website
was created as part of the Project, and the website identifies federal funding opportunities for
environmental projects.

Summary of Bill:

Inventory Grant Opportunities.
The Department of Commerce's (Commerce) requirement to develop an inventory of economic
development grants, including regularly reviewing the federal register, maintaining an inventory
of private grants, and consulting with certain federal agencies is made mandatory, rather than
discretionary. Commerce's obligations to provide a resource guide for grant applicants and
facilitate the attraction of major events are removed.

Assist Federal Grant Applicants.
Commerce is required to assist applicants for federal grants in the following ways:
• Commerce is required to expand the FundHubWA website to include all federal funding
opportunities related to economic development by July 1, 2028.
• Upon request, Commerce must provide a letter of support to an applicant for federal funds
within five business days.
• Every two years, Commerce must solicit input from certain economic development
organizations to identify federal funds anticipated in the next two-year period and
prioritize applications for the funds that are most likely to have a significant impact in the
state.
• Commerce must develop scoring criteria to prioritize the award of matching funds, such as
the economic impact of a successful application and whether the project is identified as a
priority for the state.

Award Matching Funds.
Commerce is required to award matching funds through a competitive process. The awards of
matching funds are limited based on the type of applicant and whether other funding is available:

House Bill Analysis -2- HB 2186
• Entities eligible for an award of 100 percent of the matching funds include: political
subdivisions, federally recognized Indian tribes, higher education institutions, consumer-
owned utilities, small businesses, regional planning organizations, economic development
organizations, and nonprofits.
• Other entities are eligible for an award of 50 percent of the matching funds, unless the
project will benefit a distressed area. The award may be increased for those projects.
• When a match is not required for the federal funds, an award of $100,000 is available if
the award will increase the likelihood of the applicant receiving federal funds or increase
the amount of federal funds awarded.
• To receive a matching fund award, the project must produce long-term economic benefits.
• Matching funds are not available if the applicant has funding from other state sources, if
the project requires continuing state support, or if the award would replace private
investment.

Recipients of matching fund awards must report to Commerce on the following metrics:
• the federal funds received;
• the matching funds that are required to obtain the federal funds;
• the amount of matching funds received from Commerce;
• the jobs created or maintained; and
• the annual revenue generated.

Moving Assets to Create Healthy Economic Development Account.
The Moving Assets to Create Healthy Economic Development Account (MATCHED Account)
is created. Expenditures are limited to an award of matching funds needed for an application for
federal funds that will promote economic development. Commerce may solicit private donations
for the MATCHED Account or reallocate program funds that would otherwise revert at the end
of the fiscal biennium.

After Commerce awards matching funds, those funds are reserved unless the application for
federal funds is withdrawn or denied. Commerce may charge projects an administrative fee.

Washington State Institute for Public Policy Study.
The Washington State Institute for Public Policy (WSIPP) must study the federal funds available
for economic development and the amount of matching funds that would be needed for
applicants to obtain those funds. The study, which is due June 30, 2027, must compare the
number of funding opportunities identified on the federal website with the FundHubWA
website. The WSIPP may contact economic development organizations and agencies to
complete the study.

Appropriation: None.

Fiscal Note: Requested on January 6, 2026.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is

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passed.

House Bill Analysis -4- HB 2186

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