Bill - House Bill 2523, Community Reinvestment Program (Washington Legislature, 2026 Regular Session)

Summary

House Bill 2523 of the 69th Legislature, 2026 Regular Session, State of Washington, is by Representatives Reeves, Hill, Davis, Gregerson, Parshley, Ormsby, Santos, Donaghy, Scott, and Obras and is referred to the Committee on Technology, Economic Development, & Veterans. The act relates to the community reinvestment program and amends RCW 43.79.567. Section 1 states the legislature initially appropriated $1,000,000 for development of a community reinvestment plan and $200,000,000 for implementation, and later appropriated an additional $60,000,000 and $50,000,000. Section 4 directs the Washington state institute for public policy to study the department of commerce's distribution of the funds and report by June 30, 2027.

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Full text

     H-2939.1

                                HOUSE BILL 2523


     State of Washington        69th Legislature         2026 Regular Session

     By Representatives Reeves, Hill, Davis, Gregerson, Parshley, Ormsby,
     Santos, Donaghy, Scott, and Obras

     Read first time 01/16/26.      Referred   to   Committee   on   Technology,
     Economic Development, & Veterans.




 1       AN ACT Relating to the community reinvestment program; amending
 2   RCW 43.79.567; adding a new section to chapter 43.330 RCW; creating
 3   new sections; and providing an expiration date.


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


 5       NEW SECTION.   Sec. 1.   The legislature finds that in order to
 6   address racial, economic, and social disparities in communities
 7   across the state created by the historical design and enforcement of
 8   state and federal criminal laws and penalties for drug possession and
 9   use in Washington state, aggressive approaches and targeted resources
10   to support local design and control of community-based responses to
11   these outcomes are required.
12       The legislature further finds that it initially appropriated
13   $1,000,000 for the development of a community reinvestment plan and
14   $200,000,000 for implementation of the plan in the 2023-2025 fiscal
15   biennium through the community reinvestment account in RCW 43.79.567.
16   The legislature subsequently appropriated an additional $60,000,000
17   and $50,000,000 for the 2025-2027 and 2027-2029 fiscal biennia. The
18   legislature finds that the initial phase of the program required use
19   of the department of commerce's existing programs and networks to
20   distribute money as quickly as possible. The department of commerce
21   and the office of equity published a preliminary report on December
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 1   1, 2022, a community reinvestment plan report on September 19, 2023,
 2   and a community investment plan implementation report in October
 3   2025. The legislature intends to transfer an amount no less than
 4   $100,000,000 per year for continued implementation of the community
 5   investment plan, annual reporting on the plan, and updates to the
 6   plan.
 7       The legislature recognizes that despite the development of a
 8   community investment plan and reporting on implementation of the
 9   plan, existing programs and networks may not reach the people who are
10   most affected by the historic laws and penalties for drug possession.
11   Therefore,   the  legislature   intends   for   the  next  phase   of
12   implementation to include policy direction for expenditure of the
13   legislative appropriations, annual reporting on distribution of the
14   appropriated funds, direction to update the community investment plan
15   every 10 years, and review of implementation of the program to date
16   by the Washington state institute for public policy.


17       Sec. 2. RCW 43.79.567 and 2025 c 424 s 952 are each amended to
18   read as follows:
19       (1) The community reinvestment account is created in the state
20   treasury. Revenues to the account shall consist of appropriations and
21   transfers by the legislature and all other moneys directed for
22   deposit into the account. Moneys in the account may be spent only
23   after appropriation.
24       (2) Expenditures from the account may be used by the department
25   of commerce for:
26       (a) Economic development, which includes addressing wealth
27   disparities to promote asset building such as homeownership and
28   expanding access to financial resources including, but not limited
29   to, grants and loans for small businesses and entrepreneurs,
30   financial literacy training, and other small business training and
31   support activities;
32       (b) Civil and criminal legal assistance to provide postconviction
33   relief and case assistance, including the expungement of criminal
34   records and vacation of criminal convictions;
35       (c)   Community-based   violence   intervention  and   prevention
36   services, which may include after-school programs focused on
37   providing education and mentorship to youths;



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 1       (d) Reentry services to facilitate successful transitions for
 2   persons formerly incarcerated in an adult correctional facility or
 3   juvenile residential facility in Washington; and
 4       (e) ((Beginning July 1, 2025, agricultural)) Agricultural and
 5   economic support and services available to historically marginalized
 6   communities.
 7       (3) The distribution of the grants under this section must be
 8   done in collaboration with "by and for community organizations" as
 9   defined by the department of commerce and the office of equity. ((For
10   the 2025-2027 fiscal biennium, "by)) "By and for community
11   organizations" include, but are not limited to, those operated by and
12   for Black, Latino, Native American, Asian, Native Hawaiian, and
13   Pacific Islander communities.


14       NEW SECTION. Sec. 3. A new section is added to chapter 43.330
15   RCW to read as follows:
16       (1) The department shall, in partnership with the office of
17   equity, and "by and for community organizations" as used in RCW
18   43.79.567, update the community reinvestment plan every 10 years to
19   identify the distribution of funds allocated to the community
20   reinvestment account in RCW 43.79.567. The plan must include criteria
21   for eligible communities and programs, development of accountability
22   measures to ensure that distribution and use of funding meets
23   intended purposes, and tracking of outcomes for the funds.
24       (2) At a minimum, the plan must address how the community
25   reinvestment account funding will:
26       (a) Produce significant long-term economic benefits to the state,
27   a region of the state, or a particular community in the state;
28       (b) Result in significant long-term economic benefits in the form
29   of new jobs, job retention, increased personal wealth, or higher
30   incomes for citizens of the state or a particular community in the
31   state; and
32       (c) Ensure that:
33       (i) Projects or programs do not require continuing state support;
34       (ii) An expenditure will not supplant private investment;
35       (iii) An expenditure is accompanied by additional public or
36   private investment; and
37       (iv) Nonprofit, faith-based, and grassroots organizations are
38   prioritized for funding.


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 1       (3) In updating the plan, the department is encouraged to
 2   incorporate existing and ongoing work from relevant task forces and
 3   work groups including, but not limited to, the social equity in
 4   cannabis task force, the statewide reentry council, and the
 5   homeownership disparities workgroup.
 6       (4) The department shall submit a report consistent with RCW
 7   43.01.036 to the governor and relevant committees of the legislature
 8   by June 30, 2027, and every two years thereafter, that includes a
 9   summary of implementation of the plan, including outcome-based
10   metrics.
11       (5) The office of equity must review the plan and the report.
12       (6) The department shall use the plan to guide the distribution
13   of appropriated funds. The department must review and update the plan
14   every 10 years, with the first update due in 2032.
15       (7) For the purposes of this section, "plan" means the community
16   reinvestment plan.


17       NEW SECTION.   Sec. 4.    (1) The Washington state institute for
18   public policy must conduct a study researching, analyzing, and
19   determining, to the extent practicable, the department of commerce's
20   distribution of and the recipient organizations' use of the funds
21   allocated under the community reinvestment account in RCW 43.79.567.
22       (2) In conducting the study, the Washington state institute for
23   public policy may conduct fact-finding and stakeholder discussions
24   with the department of commerce, the office of equity, organizations
25   that received funds, and organizations that were eligible for funds
26   but did not receive funds.
27       (3) The department of commerce and the office of equity must
28   cooperate with the Washington state institute for public policy to
29   facilitate access to data or other resources necessary to complete
30   the work of this section.
31       (4) By June 30, 2027, and in compliance with RCW 43.01.036, the
32   Washington state institute for public policy shall submit a report to
33   the appropriate committees of the legislature with the findings of
34   its study under this section.
35       (5) This section expires June 1, 2028.

                                  --- END ---




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