Fiscal Note, Bill S 4500 — Definition of rural county (Department of Revenue, 2/3/2026)
Summary
Individual State Agency Fiscal Note for Bill Number S 4500, an act relating to the definition of "rural county" for purposes of public facilities funding, from agency 140 Department of Revenue, with agency approval dated 2/3/2026. Part I lists General Fund-State expenditures of 25,800 in Fiscal Year 2026 and 41,300 in Fiscal Year 2027, for 67,100 over 2025-2027, and checks the box for impact of less than $50,000 per fiscal year. The narrative lists labor costs including amending one administrative rule, amending two excise tax advisories, and computer system changes. Part V says the department would use the expedited process to amend a rule titled "Manufacturer's new employee tax credits."
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“Fiscal Note, Bill S 4500 — Definition of rural county (Department of Revenue, 2/3/2026).”
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Individual State Agency Fiscal Note
Bill Number: S 4500 Bill Title: AN ACT Relating to the definition of Agency: 140
"rural county" for purposes of public facilities Department of Revenue
funding
Part I: Estimates
[ ] No Fiscal Impact
Estimated Cash Receipts to:
Fund Fiscal Year 2026 Fiscal Year 2027 2025-2027 Total 2027-29 Biennium 2029-31 Biennium
Total
Estimated Expenditures from:
Fiscal Year 2026 Fiscal Year 2027 2025-2027 Total 2027-29 Biennium 2029-31 Biennium
FTE Staff Years .19 .3 .24
Fund
GF-State 001 25,800 41,300 67,100
Total 25,800 41,300 67,100
The revenue and expenditures 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.
[X] 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: WILLIAM BRIDGES Phone: 360-786-7424 Date: 1/30/2026
Agency Preparation: DIANA TIBBETTS Phone: (360) 534-1520 Date: 1/30/2026
Agency Approval Valerie Torres Phone: (360) 534-1521 Date: 2/3/2026
OFM Review: Phone: Date:
OFM Form FN (10/95)
Fiscal Note # S4500-1
Bill # S 4500
1
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
CURRENT LAW:
Rural counties may impose a state-shared tax to finance public facilities that serve economic development purposes. The
tax rate is up to 0.09%. Rural counties are counties with a population density of less than 100 people per square mile or an
area of less than 225 square miles.
In addition to the rural county tax, the definition of rural county (RCW 82.14.370) is used for the new employee business
and occupation (B&O) tax credit. This credit is for new qualified employment positions at eligible business projects in
rural counties. The credit is worth $4,000 for each qualified employment position with wages and benefits over $40,000
annually, or $2,000 for each qualified employment position with wages and benefits of $40,000 or less annually, that is
directly created in an eligible business project. The B&O credit has an annual cap of $7.5 million.
PROPOSAL:
This bill additionally allows a county with a population density of 100 people per square mile or greater, with no city with
a population greater than 45,000 people, to meet the definition of a rural county.
EFFECTIVE DATE:
The bill takes effect 90 days after the final adjournment of the session.
II. B - Revenue Impact
ASSUMPTIONS:
- This legislation results in no revenue impact on taxes the Department of Revenue (department) administers.
- This proposal adds Cowlitz County as a rural county.
- Cowlitz County imposed the rural county tax before August 1, 2009, which allows the county to continue to receive
rural county tax distributions until December 31, 2054.
- The local impact is beyond the timeframe of this fiscal note.
DATA SOURCES:
Office of Financial Management, Population forecasts and projections
II. C - Expenditure Impact
ASSUMPTIONS:
Implementation of this legislative proposal will require additional tribal consultation. While the exact level of engagement
required is unknown, the department will incur costs for tribal consultation and will absorb them within current funding.
FIRST YEAR COSTS:
The department will incur total costs of $25,800 in fiscal year 2026. These costs include:
Labor Costs – Time and effort equate to 0.19 FTE.
- Create a special notice and update relevant information on the department’s website.
- As a part of implementing this legislation, the department will incur additional costs for engaging in tribal
consultation, and those costs will be absorbed within current funding.
SECOND YEAR COSTS:
The department will incur total costs of $41,300 in fiscal year 2027. These costs include:
OFM Form FN (10/95)
Fiscal Note # S4500-1
Bill # S 4500
2
Labor Costs – Time and effort equate to 0.3 FTE.
- Amend one administrative rule.
- Amend two excise tax advisories.
- Set up, program, and test computer system changes.
- As a part of implementing this legislation, the department will incur additional costs for engaging in tribal
consultation, and those costs will be absorbed within current funding.
Object Costs - $500.
- Computer system changes, including contract programming.
ONGOING COSTS:
There are no ongoing costs.
Part III: Expenditure Detail
III. A - Expenditures by Object or Purpose:
Fiscal Year 2026 Fiscal Year 2027 2025-2027 Total 2027-29 Biennium 2029-31 Biennium
Salaries and Wages 16,400 26,700 43,100
Benefits 5,900 9,600 15,500
Personal Service Contracts 500 500
Supplies & Material 2,700 3,500 6,200
Office Equipment 800 1,000 1,800
Total 25,800 41,300 67,100
III. B - FTE Detail:
Job Classification Salary FY 2026 FTEs FY 2027 FTEs 2025 - 2027 Total 2027 - 2029 2029 - 2031
EMS BAND 4 139,704 .01 .01
EMS BAND 5 163,205 .01 .01
IT SYS ADM-JOURNEY 102,427 .2 .1
MGMT ANALYST4 80,822 .01 .01
TAX POLICY SP 2 82,874 .12 .01 .07
TAX POLICY SP 3 93,800 .06 .04 .05
TAX POLICY SP 4 100,981 .01 .01
WMS BAND 2 100,662 .01 .01
WMS BAND 3 114,564 .01 .01
Total .19 .3 .28
III. C - Expenditures by Program (optional):
Fiscal Year 2026 Fiscal Year 2027 2025-2027 Total 2027-29 Biennium 2029-31 Biennium
Total
Part IV: Capital Budget Impact
OFM Form FN (10/95)
Fiscal Note # S4500-1
Bill # S 4500
3
None.
Part V: New Rule Making Required
Should this legislation become law, the department will use the expedited process to amend WAC 485-20-240, titled:
"Manufacturer's new employee tax credits."
This rulemaking would affect rural data centers, certain manufacturers, and research and development facilities.
OFM Form FN (10/95)
Fiscal Note # S4500-1
Bill # S 4500
4
Revenue Impact Detail
First Biennium Second Biennium Third Biennium
FUND SOURCE CODE 1st YEAR 2nd YEAR 3rd YEAR 4th YEAR 5th YEAR 6th YEAR
Total
OTHER
Total
Net
Revenue Impact - by Biennium
FUND SOURCE CODE 1st Biennium 2nd Biennium 3rd Biennium
Total
OTHER
Total
Net
OFM Form FN (10/95)
Fiscal Note # S4500-1
Bill # S 4500
5
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