Notice of Introduction for Engrossed Second Substitute House Bill 2325 - 10 Year Analysis Complete - System Update

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E2SHB 2325, titled AN ACT Relating to establishing a tourism self-supported assessment program to fund statewide tourism promotion, has been introduced in the House of Representatives. The Office of Financial Management has identified this bill as requiring a ten-year projection of increased cost to the taxpayers or affected fee payers.

Ten-year projection:

Fiscal Year		Tourism Self-Supported Assessment Program
2026		$0
2027		$0
2028		$0
2029		$267,360
2030		$468,360
2031		$468,360
2032		$468,360
2033		$468,360
2034		$468,360
2035		$468,360
Total:		$3,077,520

Department of Commerce:

E2SHB 2325 Section 7(2)(b) allows for the tourism assessment program to cover administrative costs. Expenditures incurred by the Department of Commerce as outlined in this fiscal note will be billed to the Ratepayer Authority Board to be reimbursed to the state. The Department of Commerce assumes that funds will be available for reimbursement of expenses in FY 29 per section 6(1)(a) that requires the Ratepayer Oversight Board to conduct a referendum on the assessment program by that time.

Estimated amounts:

FY 29: $267,360

FY 30: $468,360

FY 31: $468,360

FY 32: $468,360

FY 33: $468,360

FY 34: $468,360

FY 35: $468,360

FY 26-35 total: 3,077,520

E2SHB 2325 maintains the establishment an industry assessment program that would result in the collection of fees to support state tourism initiatives. Per Section 7, assessment funds are to be deposited in a separate non-state Tourism Assessment Account. Funds are not to be considered state funds and are not subject to legislative appropriation.

Projected total fees to be collected are indeterminate as the participating industries are yet to be identified nor ratified by participating industries. The process of assessment development is outlined in Sections 5 and 6 of this act. 

Estimated funding amounts collected for the Tourism Assessment Account can be made by using values from a comparable program in California and using Department of Revenue data, comprehensive of the state tourism and hospitality industries business and occupation (B&O) tax paid in fiscal year 2025. The following assumptions are made: 

•           The assessment is based on the gross business income. In 2025, there were 28,487 businesses that paid B&O tax totaling $57,242,481,643 in gross business revenue.

•           The 2025 B&O revenue paid to the state totaled $201,538,567.

•           In a similar model to this proposed bill, the state of California assesses tourism businesses at a rate range of 0.000975 to 0.00195 assessment to participating industries. For illustrative purposes, using Washington’s tourism and hospitality industry’s gross business revenue, and applying these rates to the full gross business income example, the Tourism Assessment Account would generate between $55,811,420 to $111,622,839 per fiscal year. 

*In California: Each business can use any method to determine the percentage of revenue from tourism but may be required by the Office of Tourism to provide the documentation of the findings if the percentages are inconsistent with numbers reported in the given area. This will result in the ranges provided being reduced significantly. https://tourism.ca.gov/s/calculate-assessment?language=en_US

•           For illustrative purposes we are applying an example tourism percentage of gross business income at 50%. Adjusting the range as follows, $27,905,710 to $55,811,420

Estimated Revenue for Tourism Assessment Account:

FY 29: $27,905,710 to $55,811,420

FY 30: $27,905,710 to $55,811,420

FY 31: $27,905,710 to $55,811,420

FY 32: $27,905,710 to $55,811,420

FY 33: $27,905,710 to $55,811,420

FY 34: $27,905,710 to $55,811,420

FY 35: $27,905,710 to $55,811,420

FY26-35 total: $195,339,969 to $390,679,937

Ten-year projection prepared in consultation with the following agencies:

Department of Commerce

This engrossed bill is proposed by the House of Representatives.

The second substitute bill was proposed by:

House Committee on Finance
(360) 786-7155



The original bill sponsors and contact information are:

Representative Dave Paul, Prime Sponsor
Democrat
(360) 786-7914
dave.paul@leg.wa.gov

Representative Mike Steele
Republican
(360) 786-7832
mike.steele@leg.wa.gov

Representative Julia Reed
Democrat
(360) 786-7814
Julia.Reed@leg.wa.gov

Representative Beth Doglio
Democrat
(360) 786-7940
beth.doglio@leg.wa.gov

Representative Monica Jurado Stonier
Democrat
(360) 786-7872
monica.stonier@leg.wa.gov

Representative Janice Zahn
Democrat
(360) 786-7894
Janice.Zahn@leg.wa.gov

Representative Andrew Barkis
Republican
(360) 786-7824
andrew.barkis@leg.wa.gov

Representative Clyde Shavers
Democrat
(360) 786-7884
Clyde.Shavers@leg.wa.gov

Representative Adam Bernbaum
Democrat
(360) 786-7916
BERNBAUM_AD@leg.wa.gov




Legislative Bill Information Website: http://apps.leg.wa.gov/billinfo/

Initiative 960 Website: http://www.ofm.wa.gov/tax/default.asp