HOUSE BILL REPORT
E2SHB 2325
As Amended by the Senate
Title: An act relating to establishing a tourism self-supported assessment program to fund statewide tourism promotion.
Brief Description: Establishing a tourism self-supported assessment program to fund statewide tourism promotion.
Sponsors: House Committee on Finance (originally sponsored by Representatives Paul, Steele, Reed, Doglio, Stonier, Zahn, Barkis, Shavers and Bernbaum).
Brief History:
Committee Activity:
Technology, Economic Development, & Veterans: 1/21/26, 1/28/26 [DPS];
Finance: 2/5/26, 2/9/26 [DP2S(w/o sub TEDV)].
Floor Activity:
Passed House: 2/23/26, 84-5.
Senate Amended.
Passed Senate: 3/10/26, 43-5.
Brief Summary of Engrossed Second Substitute Bill
  • Creates a Tourism Assessment Program (TAP) to promote tourism in the state, which will be developed in a subsequent process.
  • Requires the Washington Tourism Marketing Authority to levy an annual assessment on tourism businesses providing lodging, travel services, attractions, recreation, beverage producers, certain restaurants, and certain retailers, and to penalize businesses that do not comply.
  • Appoints a Ratepayer Oversight Board to design the assessment program and approve expenditure of funds collected under the TAP.
HOUSE COMMITTEE ON TECHNOLOGY, ECONOMIC DEVELOPMENT, & VETERANS
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass.Signed by 12 members:Representatives Ryu, Chair; Kloba, Vice Chair; Barnard, Ranking Minority Member; Cortes, Donaghy, Keaton, Paul, Penner, Shavers, Simmons, Thomas and Waters.
Staff: Martha Wehling (786-7067).
HOUSE COMMITTEE ON FINANCE
Majority Report: The second substitute bill be substituted therefor and the second substitute bill do pass and do not pass the substitute bill by Committee on Technology, Economic Development, & Veterans.Signed by 8 members:Representatives Berg, Chair; Street, Vice Chair; Mena, Ramel, Scott, Springer, Wylie and Zahn.
Minority Report: Do not pass.Signed by 5 members:Representatives Orcutt, Ranking Minority Member; Jacobsen, Assistant Ranking Minority Member; Abell, Chase and Penner.
Minority Report: Without recommendation.Signed by 1 member:Representative Santos.
Staff: Kristina King (786-7190).
Background:

State Tourism Programs.

Tourism Promotion Areas.

Beginning in 2003 certain counties, cities, and towns created Tourism Promotion Areas to generate revenue for tourism promotion through a charge of up to $5 per room per night on lodging businesses with 40 or more rooms.  Revenue is deposited into the Local Tourism Promotion Account, and must be used for "tourism promotion," defined as activities and expenditures to increase tourism and convention business.

 

Washington Tourism Marketing Authority.

The Washington Tourism Marketing Authority (Authority) was established in 2018 to contract for statewide tourism marketing services to promote tourism in the state.  The Authority is governed by a board of directors (Board) consisting of four members of the Legislature and nine representatives, appointed by the Governor, with expertise in the tourism industry and related businesses, including hotel, restaurant, outdoor recreation, attractions, retail, and rental car businesses.  The chair of the Board must be a member of the tourism industry or related business.  The Department of Commerce provides staff support for the Authority.  The Board has a nonvoting four-member advisory committee, including the Department of Commerce, the State Parks and Recreation Commission, the Department of Transportation, and a federally recognized Indian tribe.  The Authority's contract to promote tourism is required to 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.

 

Statewide Tourism Marketing Account.

The Statewide Tourism Marketing Account (Account) is funded from tax revenues on lodging, car rentals, and restaurants.  Revenue collected may be expended only to implement the statewide tourism program and operation of the Authority.  A one-to-one match must be provided for all expenditures from the Account to be used for a statewide tourism marketing plan, evaluation of the program, and the administrative expenses of the Authority.  Until July 1, 2025, 0.2 percent of the tax revenues were deposited into the Account, the Legislature was required to authorize the deposit, and the Account was limited to $3 million per biennium.  After July 1, 2025, the Legislature is not required to authorize the deposit.

 

Tourism Self-Supported Assessment Advisory Group.

The Authority appointed members to a Tourism Self-Supported Assessment Advisory Group (Group) in 2025, which was required to evaluate the viability of an industry self-supported assessment to fund statewide tourism promotion.  The Group submitted its recommendations in a report titled Tourism Self-Supported Assessment Advisory Group:  Report to the Legislature on October 31, 2025.

 

Public Records.

The Public Records Act (PRA) requires all state agencies to make all public records available to the public, unless a specific exemption applies or disclosure is prohibited.  Public records are records prepared or retained by an agency that relate to the conduct of government or the performance of a governmental function.  The PRA exempts certain financial, commercial, and proprietary information.  The PRA must be liberally construed; any exemptions to the disclosure requirement must be interpreted narrowly.  Exemptions are permissive, meaning that an agency, although not required to disclose, has the discretion to provide an exempt record.

Summary of Engrossed Second Substitute Bill:

Tourism Assessment Program.

The Authority is authorized to develop and administer a Tourism Assessment Program (TAP), subject to governance by the Ratepayer Oversight Board (ROB), described below.  The Authority is required to levy and collect a percentage of a business's gross revenue as an annual assessment.  The assessments will be collected on an annual basis, after ratification by the businesses in each industry sector.

 

The membership of the Authority's Board is modified by expanding the number of members from 13 to 17, and specifying the non-legislative membership as follows:

  • eight members must be nominated by the ROB and must represent businesses paying the assessments;
  • two members must represent destination marketing organizations; and
  • three members must represent tourism businesses.

 

Annual Assessment on Businesses.

The Authority is required to collect assessments annually and deposit the money into the Tourism Assessment Account.  The affected tourism business sector must complete a referendum process before assessments are collected, described below.  "Assessment" is defined as "the annual fee levied on tourism businesses to fund tourism promotion."  "Tourism business" is defined as "businesses that derive a significant portion of revenue from tourism activity in Washington in the following sectors:  (a) lodging; (b) travel services; (c) attractions; (d) recreation; (e) beverage producers; (f) full-service restaurant locations with revenue exceeding $5 million per year; and (g) retailer locations with revenues exceeding $5 million per year."

 

The assessments are not state funds and are not subject to legislative appropriation.  The funds must be used:

  • for tourism promotion as defined by the referendum process, described below; and
  • to cover the Authority's administrative and enforcement costs.

 

A business's failure to pay an assessment is a personal debt.  The Authority has the discretion to impose a penalty up to 10 percent of the unpaid assessment and bring a civil action in court to recover unpaid assessments.

 

Ratepayer Oversight Board.

The Authority is required to appoint a 10-member ROB.  The Group is required to identify nominees for the initial board.  The ROB must elect a chair and meet at least quarterly.  A ROB member must be an employee or officer of a business subject to the assessment.  A ROB member may be removed for inefficiency, neglect of duty, malfeasance, or four unexcused absences in one year.

 

The ROB is required to oversee the tourism assessment funds and programming, approve an annual budget and expenditure plan, provide an annual report to the Authority and Legislature, and monitor the program effectiveness and recommend adjustments. 

 

The ROB will design the proposed assessment program, which must include:

  • sector-specific classifications;
  • assessment methodology and rates for each business sector;
  • a referendum process for ratification;
  • opt-out provisions, if applicable;
  • revenue thresholds for businesses assessed in each sector, where applicable;
  • program term length; and
  • appointment process for the ROB.

 

The ROB is required to conduct a referendum among all businesses affected by the proposed assessment program within three years of enactment of the legislation.  If the referendum is not successful, the ROB may continue to resubmit the same proposal or modify its proposal.  For the referendum to be approved, each assessed business is entitled to a weighted vote equal to the amount the business will pay.  The initial referendum must be approved by a majority of the weighted votes.  The cost of the referendum is paid by the Authority, reimbursed from the assessments collected from the businesses.

 

Statewide Tourism Marketing Plan.

The Authority's statewide tourism marketing plan must be equitably inclusive of diverse communities across the state, particularly tribal nations, rural communities, and population centers that historically have not been consulted in the development of destination marketing efforts by the state.  The marketing plan elements are required to include historically and culturally unique communities.

 

Public Records Act Exemption.

Financial and commercial information submitted to the Authority and the ROB, and related to the TAP, is exempt from disclosure under the PRA.  The exemption does not apply to general statistical summaries that do not identify individual businesses.

EFFECT OF SENATE AMENDMENT(S):

The Senate amendment:

  • adds definitions for the Department of Commerce and its Director, and requires the agency to provide administrative assistance to the Washington Tourism Marketing Authority (Authority) and serve as its fiscal agent until June 30, 2030;
  • requires the Tourism Assessment Program (TAP) to be reviewed by the Director, in addition to ratified by the affected businesses;
  • modifies the Ratepayer Oversight Board (ROB) membership to include tourism businesses proposed to be subject to the assessment, rather than subject to the assessment;
  • requires that the initial appointment of eight of the Authority members to be made by the Authority;
  • requires two of the Authority members to be tourism businesses subject to the assessment, rather than three tourism businesses;
  • requires one Authority member to represent a trade association that represents businesses that are subject to the assessment;
  • requires that two Authority members represent official state destination marketing organizations, rather than state destination marketing organizations;
  • allows the Authority to remove a ROB member with review by the Director;
  • requires the ROB to develop an annual budget and annual report, rather than approve a budget and provide a report;
  • requires the Authority, with review by the Director, to approve an annual budget and approve and submit an annual report to the Legislature and Governor;
  • requires the Authority to approve or reject the annual budget recommended by the ROB, and prohibits the Authority from amending, replacing, or independently adopting policies or provisions not submitted by the ROB;
  • requires the ROB to propose the structure of the TAP to the Authority, rather than design the TAP;
  • requires the proposed TAP to include reauthorization and termination procedures for the TAP;
  • requires the proposed TAP to include a nomination process for the ROB, rather than an appointment process;
  • requires the Authority, rather than the ROB, to conduct the referendum to ratify the TAP;
  • requires the assessments collected by the TAP to be used to pay the Department of Commerce’s costs, regardless of whether the referendum passes or fails;
  • creates a Tourism Assessment Program Reimbursement Account and requires a portion of the assessments collected by the TAP to be distributed into that account;
  • limits the use of remaining funds collected through the TAP assessment to be used for tourism promotion;
  • provides detailed definition of tourism promotion as including programs, projects, and activities undertaken to advertise, market, encourage, and support travel to and within the state and to strengthen or improve the visitor economy, industry, communities, or regions, in accordance with policies adopted by the Authority;
  • requires the budget to be transparent, explanatory, describe how the funding is used, and include reasons for any changes in expenditure or revenue;
  • requires a regular audit of the budget, and requires the costs to be reimbursed from the Tourism Assessment Program Reimbursement Account; and
  • exempts the state from liability for claims against the Authority or ROB.
Appropriation: None.
Fiscal Note: Available.  New fiscal note requested on March 10, 2026.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.
Staff Summary of Public Testimony (Technology, Economic Development, & Veterans):

(In support) The state is not devoting nearly enough resources to tourism.  Tourism is declining in Washington compared to neighboring states, which are spending more on tourism.  Tourism spending took until 2024 to reach pre-COVID levels.  Local community members welcome the idea of the industry assessing itself to create a program to promote tourism.  It is a model by and for the industry, and can bring in $25 million of sustainable funds that will allow the state to compete nationally and internationally.  Promoting FIFA and the Seahawks will help bring visitors to the whole state that no single business could achieve alone.

 

Tourism is vital to the success of hotels and restaurants.  There are unique destinations to visit in Washington, including breweries and wineries.  Visitors statewide help small businesses.  Rural destinations cannot participate meaningfully without state support.  The Port of Seattle is also promoting tourism, through the airport and cruise terminals.  The businesses will set the assessment rate, which can be passed to the visitors, and will target the sectors that target tourism.  It is robust, sustainable, and fair, and modeled after California where businesses voted to renew the assessment.

 

(Opposed) Affordability is a big issue, and this proposes more taxes above those placed on businesses last year.  Allowing unelected authorities to impose taxes are beholden to the authorities that appointed them.  Business owners are taxpayers.

 

Staff Summary of Public Testimony (Finance):

(In support) The amount of tourism promotion funding available to small communities pales in comparison to dollars available to larger neighboring communities.  This is a program based off a similar program in California, and the businesses there voted recently to renew their program and to reassess themselves.  To encourage tourism in smaller cities, this bill was created.  This bill will help small businesses survive, especially in shoulder seasons.  The bill involves assessing the businesses with their consent and control.  This can return $14.6 billion in visitor spending to Washington.  This is a robust, sustainable, and fair way to fund tourism in Washington.  Washington wineries and craft breweries have been struggling for the past few years.  Tourism is very important to the success of the wine and craft brewery industries in this state.  This bill creates a solid framework for tourist dollars that will keep the wine and craft brewery industries thriving.

 

(Opposed) None.

Persons Testifying (Technology, Economic Development, & Veterans):

(In support) Representative Dave Paul, prime sponsor; Shelly Stevens, Tri County Economic Development District; David Blandford, State of Washington Tourism; Annie McGrath, State of Washington Tourism; Anthony Anton, Washington Hospitality Association; Josh McDonald, Washington Wine Institute; Daniel Olson, WA Brewers Guild; and Nick Leonti, Port of Seattle.

(Opposed) Jeff Pack, Washington Citizens Against Unfair Taxes.
Persons Testifying (Finance):

Representative Dave Paul, prime sponsor; Mike Moe, State of Washington Tourism; Annie McGrath, State of Washington Tourism; Anthony Anton, Washington Hospitality Association; Josh McDonald, Washington Wine Institute; and Daniel Olson, Washington Brewers Guild.

Persons Signed In To Testify But Not Testifying (Technology, Economic Development, & Veterans): None.
Persons Signed In To Testify But Not Testifying (Finance): None.