Multiple Agency Fiscal Note Summary — 1406 HB, Associate Development Orgs

Summary

Multiple Agency Fiscal Note Summary for 1406 HB, titled Associate development orgs, marked Final, showing zero estimated operating expenditures for the Department of Commerce, followed by its individual fiscal note, checked No Fiscal Impact. The Commerce note says HB 1406 updates funding and performance requirements for Associate Development Organizations, and that Section 2 raises the urban county maximum to $500,000 and sets the rural county base allocation at $85,000 to $150,000. It says in-kind contributions are limited to 25% of the required match and that there will be no additional administrative impact on the division. A local government fiscal note says the bill would not impact local government revenues.

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Multiple Agency Fiscal Note Summary
Bill Number: 1406 HB Title: Associate development orgs

Estimated Cash Receipts
NONE

Agency Name 2025-27 2027-29 2029-31
GF- State Total GF- State Total GF- State Total
Local Gov. Courts
Loc School dist-SPI
Local Gov. Other No fiscal impact

Local Gov. Total

Estimated Operating Expenditures
Agency Name 2025-27 2027-29 2029-31
FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total
Department of .0 0 0 0 .0 0 0 0 .0 0 0 0
Commerce

Total $ 0.0 0 0 0 0.0 0 0 0 0.0 0 0 0

Agency Name 2025-27 2027-29 2029-31
FTEs GF-State Total FTEs GF-State Total FTEs GF-State Total
Local Gov. Courts
Loc School dist-SPI
Local Gov. Other No fiscal impact

Local Gov. Total

Estimated Capital Budget Expenditures
Agency Name 2025-27 2027-29 2029-31
FTEs Bonds Total FTEs Bonds Total FTEs Bonds Total
Department of Commerce .0 0 0 .0 0 0 .0 0 0

Total $ 0.0 0 0 0.0 0 0 0.0 0 0

Agency Name 2025-27 2027-29 2029-31
FTEs GF-State Total FTEs GF-State Total FTEs GF-State Total
Local Gov. Courts
Loc School dist-SPI
Local Gov. Other No fiscal impact

Local Gov. Total

Estimated Capital Budget Breakout
NONE

FNPID 72392
:
FNS029 Multi Agency rollup
Prepared by: Marie Davis, OFM Phone: Date Published:
(360) 890-1163 Final 2/ 4/2025

FNPID 72392
:
FNS029 Multi Agency rollup
Individual State Agency Fiscal Note

Bill Number: 1406 HB Title: Associate development orgs Agency: 103-Department of Commerce

Part I: Estimates
X No Fiscal Impact

Estimated Cash Receipts to:

NONE

Estimated Operating Expenditures from:
NONE

Estimated Capital Budget Impact:

NONE

The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.

Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).

Capital budget impact, complete Part IV.

Requires new rule making, complete Part V.

Legislative Contact: Martha Wehling Phone: 360-786-7067 Date: 01/20/2025
Agency Preparation: Lucas Rubstello Phone: (206) 613-7565 Date: 02/03/2025
Agency Approval: Lucas Rubstello Phone: (206) 613-7565 Date: 02/03/2025
OFM Review: Marie Davis Phone: (360) 890-1163 Date: 02/04/2025

Form FN (Rev 1/00) 200,238.00 Request # 052-700-3
FNS063 Individual State Agency Fiscal Note 1 Bill # 1406 HB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Significant provisions of the bill and any related workload or policy assumptions that have revenue or expenditure impact on the responding agency by
section number.

HB 1406 updates funding and performance requirements for Associate Development Organizations (ADOs) in Washington
State to improve their effectiveness.

Section 1(b) adjusts reporting requirements from associate development organizations

Section 2 increases annual funding allocations, raising the urban county maximum to $500,000 and setting the rural county
base allocation at $85,000 to $150,000. In-kind contributions are limited to 25% of the required match.

The Office of Economic Development and Competitiveness with the Department of Commerce (Department) manages the
contracting process and funding allocations for ADOs. The Department is required to update an existing program,
specifically to funding amounts and adjustments to contracting and reporting requirements.

The Department currently submits a leg report every two years. Therefore, there will be no additional administrative impact
on the division.
II. B - Cash receipts Impact
Cash receipts impact of the legislation on the responding agency with the cash receipts provisions identified by section number and when appropriate, the
detail of the revenue sources. Description of the factual basis of the assumptions and the method by which the cash receipts impact is derived. Explanation
of how workload assumptions translate into estimates. Distinguished between one time and ongoing functions.

II. C - Expenditures
Agency expenditures necessary to implement this legislation (or savings resulting from this legislation), with the provisions of the legislation that result in
the expenditures (or savings) identified by section number. Description of the factual basis of the assumptions and the method by which the expenditure
impact is derived. Explanation of how workload assumptions translate into cost estimates. Distinguished between one time and ongoing functions.

The amendments in HB 1406 result in no fiscal impact for the Office of Economic Development and Competitiveness
(OEDC)

The reporting requirements outlined in Section 1 (b) will be reviewed in the larger existing process. Reporting will remain
the same with minor criteria changes, resulting in no measurable fiscal impact.

Funding changes in Section 2 will be addressed in the existing process, resulting in no fiscal impact on the Department.

Part III: Expenditure Detail
III. A - Operating Budget Expenditures
NONE
III. B - Expenditures by Object Or Purpose
NONE

III. C - Operating FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part I
and Part IIIA.
NONE

III. D - Expenditures By Program (optional)
NONE

Associate development orgs 103-Department of Commerce
Form FN (Rev 1/00) 200,238.00 Request # 052-700-3
FNS063 Individual State Agency Fiscal Note 2 Bill # 1406 HB
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE

IV. B - Expenditures by Object Or Purpose
NONE

IV. C - Capital Budget Breakout
Acquisition and construction costs not reflected elsewhere on the fiscal note and description of potential financing methods.
NONE

IV. D - Capital FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part IVB.

NONE

Part V: New Rule Making Required
Provisions of the bill that require the agency to adopt new administrative rules or repeal/revise existing rules.

Associate development orgs 103-Department of Commerce
Form FN (Rev 1/00) 200,238.00 Request # 052-700-3
FNS063 Individual State Agency Fiscal Note 3 Bill # 1406 HB
LOCAL GOVERNMENT FISCAL NOTE
Department of Commerce

Bill Number: 1406 HB Title: Associate development orgs

Part I: Jurisdiction-Location, type or status of political subdivision defines range of fiscal impacts.
Legislation Impacts:
Cities:
Counties:
Special Districts:

Specific jurisdictions only:
Variance occurs due to:

Part II: Estimates
X No fiscal impacts.

Expenditures represent one-time costs:

X Legislation provides local option: Local match limits have been adjusted, local governments could choose to provide more
matching funds.
Key variables cannot be estimated with certainty at this time:

Estimated revenue impacts to:
None

Estimated expenditure impacts to:
None

Part III: Preparation and Approval
Fiscal Note Analyst: Dalton Huey Phone: 360-725-5035 Date: 01/28/2025
Leg. Committee Contact: Martha Wehling Phone: 360-786-7067 Date: 01/20/2025
Agency Approval: Alice Zillah Phone: 360-725-5035 Date: 01/28/2025
OFM Review: Marie Davis Phone: (360) 890-1163 Date: 02/02/2025
Page 1 of 2 Bill Number: 1406 HB
FNS060 Local Government Fiscal Note
Part IV: Analysis
A. SUMMARY OF BILL
Description of the bill with an emphasis on how it impacts local government.
The amount of funds provided annually to an associate development organization (ADO) with a contract with the
Department of Commerce (Commerce) is adjusted:

ADOs serving urban counties receive a matched allocation, and a maximum of $500,000 per organization.

ADOs serving rural counties receive a matched allocation, and a minimum per county base allocation of $85,000 and a
maximum allocation of $150,000.

The matched allocation may be provided through cash, in-kind, or a combination. Any in-kind match is limited to 25
percent of the local match.

The bill takes effect 90 days after adjournment of the session in which the bill is passed.
B. SUMMARY OF EXPENDITURE IMPACTS
Expenditure impacts of the legislation on local governments with the expenditure provisions identified by section number and when
appropriate, the detail of expenditures. Delineated between city, county and special district impacts.

This bill would not impact local government expenditures.

Local option - The legislation would remove the $.90 per capita limit and increase per organization maximum allocations.
Local governments could choose to increase matching funds to take advantage of these higher limits but are not required
to.
C. SUMMARY OF REVENUE IMPACTS
Revenue impacts of the legislation on local governments, with the revenue provisions identified by section number, and when
appropriate, the detail of revenue sources. Delineated between city, county and special district impacts.

This bill would not impact local government revenues.

SOURCES:

House Bill Report, 1406 HB (2025)
Logal Government Division Fiscal Note, 1870 HB (2024)
Associate Development Organization Biennial Report (2020)

Page 2 of 2 Bill Number: 1406 HB
FNS060 Local Government Fiscal Note

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