Background:

State Tourism.

The State Tourism Commission (Commission) was created in 2007 to direct the state tourism program administered through the Department of Commerce (Department). The Commission was comprised of public and private industry representatives and was directed to promote and expand the state tourism industry. The Commission could raise funds and owned an account.

The Legislature terminated the State Tourism Program and the Commission at the end of the 2009-11 biennium. In the same year, the Washington Tourism Alliance (WTA) was formed to assume official state tourism marketing and promotion activities. The WTA is a private nonprofit organization comprised of members of the state tourism industry. The WTA receives funding from its members. Among its activities, the WTA operates a state tourism website, publishes the official state tourism guide, and holds an annual tourism summit.

In 2014 the Legislature directed the WTA to propose a private funding mechanism for a state tourism marketing program, including how revenues would be allocated and collected from each tourism industry sector. The Departments of Revenue (DOR), the Department, the Office of the State Treasurer, and the Office of the Secretary of State (OSOS) were required to assist the WTA in developing the funding mechanism. The WTA was also directed to propose a governance structure that includes a board representing the five industry sectors as well as destination marketing organizations.

Sales and Use Tax.

Retail sales taxes are imposed on retail sales of most articles of tangible personal property, digital products, and some services. A retail sale is a sale to the final consumer or end user of the property, digital product, or service. If retail sales taxes were not collected when the user acquired the property, digital products, or services, then use taxes apply to the value of property, digital product, or service when used in this state. The state, most cities, and all counties levy retail sales and use taxes. The state sales and use tax rate is 6.5 percent; local sales and use tax rates vary from 1.0 percent to 3.3 percent, depending on the location.

Joint Legislative Audit and Review Committee (JLARC).

The Joint Legislative Audit and Review Committee (JLARC) is comprised of an equal number of House and Senate members, Democrats and Republicans. The non-partisan staff of the JLARC conduct performance audits, program evaluations, sunset reviews, and other analyses assigned by the Legislature and the Committee itself.

Summary of Bill:

The Washington Tourism Marketing Authority (Authority) is established as a public entity to manage state revenues and contract for statewide tourism marketing services. The Authority receives administrative support from the Department, and is governed by a board of directors (Board) comprised of 13 voting members:

one member from each of the two major caucuses of the House of Representatives and the Senate (four members and alternates for each appointed by the Speaker of the House and President of the Senate respectively); and
nine representatives from the tourism industry and related businesses—tourism and related businesses include: restaurant, outdoor recreation, attractions, retail, and rental car businesses.

The Director of the Department appoints all voting, non-legislative representatives of the board, and must take into consideration contributions of a particular industry, and accept and consider nominations from a tourism industry or related business when making appointments. The chair of the board must be a member from a tourism industry or related business.

A nonvoting advisory committee to the board is also established. The advisory board consists of:

four ex-officio members from the Department, Department of Revenue, State Parks Department, and the Department of Transportation; and
one member from a federally recognized Indian tribe (appointed by the Director of the Department).

Appointments must reflect diversity in geography, business size, gender, and ethnicity. Appointments last for four years, though initial appointments are staggered between two and four year terms. Board members are not compensated, but may be reimbursed for expenses.

Statewide Tourism Marketing Account.

The Statewide Tourism Marketing Account (Account) is created in the custody of the state treasurer, as an appropriated account. Expenditures from the account may only be made by the chair of the Authority or the chair’s designee for allowable expenses related to implementation of the statewide tourism program. Allowable expenses include:

entering into a contract for a multiple-year statewide tourism marketing plan with an existing statewide nonprofit organization, which must include focuses on rural tourism-dependent counties, natural wonders and outdoor recreation opportunities of the state, attraction of international tourists, identification of local offerings for tourists, and assistance for tourism areas adversely impacted by natural disasters;
contracting for the evaluation of the impact of the statewide tourism marketing program; and
paying for administrative expenses of the authority.

Expenditures may only be made when a two-to-one private to state match has been provided.

At the end of the 2017-2019 biennium, all revenues that remain in the Account that are not matched by private funds will revert back to the General Fund.

Sales and Use Tax.

Beginning July 1, 2017, 0.1 percent of taxes collected on retail sales of lodging, car rental, and restaurants must be deposited into the Statewide Tourism Marketing Account, up to five million dollars per biennium. Funds collected are subject to private matching funds prior to expenditure.

Joint Legislative Audit and Review Committee (JLARC).

The JLARC must evaluate the performance of the Authority, and report back to the Governor and economic development committees of the Legislature by December 1, 2020, to determine the extent to which the Authority contributed to the growth of the tourism industry and economic development of the state.

By December 1, 2018, the Authority must provide an interim report to the Governor and economic development committees of the Legislature, reporting its progress in implementing a statewide tourism marketing program.