Federal funds

AN ACT Relating to supporting the acquisition of federal funds to 1
promote economic development; amending RCW 43.330.260; adding new 2
sections to chapter 43.330 RCW; creating new sections; and providing 3
an expiration date. 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
The legislature further finds that a state program that creates 18
scoring criteria to prioritize the award of matching funds, adopts 19
award tiers, and establishes a state account to create a pool of 20
matching dollars, including private donations, will enhance the 21
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.
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ability of local communities to access federal funds that will 1
contribute to the state's economic development, including funds for 2
education, public safety, housing, transportation, and child care.3
The legislature further finds that the state recognized the value 4
of matching dollars to access federal funds for clean energy, 5
climate, clean technology, and resilience, and that it should expand 6
its efforts to include all of the federal government's economic 7
development fund opportunities. 8
To further promote economic development in local communities, the 9
legislature encourages the department of commerce to solicit private 10
donations to support economic development, and to reallocate program 11
funds that would otherwise revert at the end of the fiscal biennium 12
to the program created in this act to be used as matching funds for 13
applications for federal grants. 14
Sec. 2. RCW 43.330.260 and 2024 c 223 s 4 are each amended to 15
read as follows: 16
(1) The department shall make available, within existing 17
resources, an inventory of grant opportunities for state agencies, 18
local governments, and other community organizations engaged in 19
economic development activities. 20
(2) In developing the inventory of economic development grant 21
opportunities, the department ((may)) shall: 22
(a) Regularly review the federal register for opportunities to 23
apply for grants, research projects, and demonstration projects;24
(b) Maintain an inventory of grant opportunities with private 25
foundations and businesses; and26
(c) ((Provide a resource guide for applicants for federal grants, 27
including links to federal applications and relevant resources, and 28
contact information for department assistance; and29
(d))) Consult with federal officials, including but not limited 30
to those in the small business administration, the department of 31
labor, the department of commerce, the department of agriculture, the 32
department of ecology, as well as private foundations and businesses, 33
on the prospects for obtaining federal and private funds for economic 34
development purposes in Washington state. 35
(3) The department may also facilitate joint efforts between 36
agencies and between local organizations and state agencies that will 37
increase the likelihood of success in grant seeking ((and the 38
attraction of major events)). 39
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NEW SECTION. Sec. 3. A new section is added to chapter 43.330 1
RCW to read as follows: 2
(1) An applicant for federal funds that will promote economic 3
development may request a letter of support from the department. The 4
department shall provide the applicant with a letter that identifies 5
the state's opportunity for matching funds for the application within 6
five business days of the request. 7
(2) Each fiscal biennium, the department shall solicit input from 8
associate development organizations, ports, chambers of commerce, 9
workforce development boards, state agencies, local governments, and 10
the governor's office to identify the federal funds that will likely 11
be available in the biennium and to prioritize the federal funds that 12
will have the most significant impact on economic development in 13
Washington. 14
(3) Subject to available funds, the department shall develop 15
scoring criteria to prioritize and award matching funds to an 16
applicant with a letter of opportunity for matching funds. The 17
scoring criteria must include: 18
(a) The economic impact of the federal funds, including the 19
number of jobs created, households affected, and businesses impacted;20
(b) The amount of the federal funding available if the 21
application is successful; 22
(c) Whether the application meets one of the priorities 23
identified in subsection (2) of this section; 24
(d) A prioritization of applications from applicants in rural and 25
frontier counties; and 26
(e) Criteria developed by the department including, but not 27
limited to, collaborative efforts and projects, timing of available 28
funds, and alignment with state priorities. 29
(4) The department shall only award matching funds when:30
(a) The applicant is unable to secure funding from other state 31
sources; 32
(b) The project will produce long-term economic benefits;33
(c) The project does not require continuing state support; and34
(d) The award will not supplant private investment.35
(5) Successful applicants for an award of matching funds will be 36
subject to the following limits: 37
(a) Political subdivisions, federally recognized Indian tribes, 38
institutions of higher education as defined in RCW 28B.10.016, 39
consumer-owned utilities, small businesses, regional planning 40
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organizations, economic development organizations as defined in 13 1
C.F.R. Sec. 312.3 as it existed on December 4, 2025, and nonprofits 2
may receive up to 100 percent of the required match.3
(b) Investor-owned utilities and other applicants may receive a 4
maximum of 50 percent of the required match. 5
(c) If no match is required, an applicant may receive up to 6
$100,000 if the amount would increase the likelihood of receiving 7
federal funds or increase the award of federal funds.8
(d) If a project will benefit a distressed area as defined in RCW 9
43.168.020, the maximum amount awarded under (b) of this subsection 10
may be increased to 100 percent, and the maximum amount awarded under 11
(c) of this subsection may be increased to $500,000.12
(6) Subject to available funds, matching funds shall be reserved 13
after an application for federal funds is approved by a federal 14
agency and shall be unavailable for reservation or appropriation for 15
other applicants until the department receives written notice from 16
the applicant that the application for federal funds has been 17
withdrawn or denied. 18
(7) The department shall establish a competitive process to 19
evaluate and award matching funds. Final awards shall be determined 20
by the department, subject to the provisions in this section. The 21
department may charge projects an administrative fee.22
(8) A recipient of matching funds shall report to the department 23
on the amount of matching dollars needed to apply for federal funds, 24
the amount of state matching funds received under this section, the 25
amount of federal funds received in the successful grant, the number 26
of jobs created or maintained as a result of the federal funds, and 27
the annual revenue generated as a result of the successful 28
application for federal funds. 29
(9) By July 1, 2028, the department shall expand the 30
fundhub.wa.gov website to include federal funds available for 31
economic development. The department shall update the website at 32
least quarterly. 33
NEW SECTION. Sec. 4. A new section is added to chapter 43.330 34
RCW to read as follows: 35
The moving assets to create healthy economic development account 36
is created in the custody of the state treasurer. Revenues to the 37
account shall consist of appropriations and transfers by the 38
legislature, all other moneys directed for deposit into the account, 39
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and any gifts, grants, or donations received by the department for 1
this purpose. The account is subject to allotment procedures under 2
chapter 43.88 RCW, but an appropriation is not required for 3
expenditures. Only the director or the director's designee may 4
authorize expenditures from the account. Expenditures from the 5
account may only be used to award matching funds for an application 6
for federal funds that will promote economic development, as 7
described in section 3 of this act. 8
NEW SECTION. Sec. 5. (1) The Washington state institute for 9
public policy must conduct a study researching, analyzing, and 10
determining, to the extent practicable, the average number and amount 11
of federal funds available for economic development and the amount of 12
matching funds needed to apply for those federal funds.13
(2) The study must compare the number and dollar amount of 14
federal funds identified on the state's fundhub.wa.gov website to the 15
number and dollar amount of federal funds available for economic 16
development on the federal grants.gov website. This comparison must 17
identify the number and dollar amount of federal funds available but 18
not identified on the fundhub.wa.gov website. 19
(3) In conducting the study, the Washington state institute for 20
public policy may conduct fact-finding and stakeholder discussions 21
with the department of commerce's office of economic development, 22
associate development organizations, ports, chambers of commerce, 23
workforce development boards, and the governor's office.24
(4) The department of commerce must cooperate with the Washington 25
state institute for public policy to facilitate access to data or 26
other resources necessary to complete the work of this section.27
(5) By June 30, 2027, and in compliance with RCW 43.01.036, the 28
Washington state institute for public policy shall submit a report to 29
the appropriate committees of the legislature with the findings of 30
its study under this section. 31
(6) This section expires June 1, 2028. 32
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