READ FIRST TIME 03/10/03.   

     AN ACT Relating to authorizing special assessments to fund convention and tourism promotion; reenacting and amending RCW 43.79A.040; and adding a new chapter to Title 35 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Area" means a tourism promotion area.
     (2) "Legislative authority" means the legislative authority of any county with a population greater than forty thousand but less than one million, or of any city or town within such a county, including unclassified cities or towns operating under special charters.
     (3) "Lodging business" means a person that furnishes lodging taxable by the state under chapter 82.08 RCW that has forty or more lodging units.
     (4) "Tourism promotion" means activities and expenditures designed to increase tourism and convention business, including but not limited to advertising, publicizing, or otherwise distributing information for the purpose of attracting and welcoming tourists, and operating tourism destination marketing organizations.

NEW SECTION.  Sec. 2   For the purpose of establishing a tourism promotion area, an initiation petition must be presented to the legislative authority having jurisdiction of the area in which the proposed tourism promotion area is to be located. The initiation petition must include the following:
     (1) A description of the boundaries of the proposed area;
     (2) The proposed uses and projects to which the proposed revenue from the charge shall be put and the total estimated costs;
     (3) The estimated rate for the charge with a proposed breakdown by class of lodging business if such classification is to be used; and
     (4) The signatures of the persons who operate lodging businesses in the proposed area who would pay sixty percent or more of the proposed charges.

NEW SECTION.  Sec. 3   A legislative authority shall, after receiving a valid initiation petition under section 2 of this act, adopt a resolution of intention to establish an area. The resolution must state:
     (1) The time and place of a hearing to be held by the legislative authority to consider the establishment of an area;
     (2) A description of boundaries in the proposed area;
     (3) The proposed area uses and projects to which the proposed revenues from the charge shall be dedicated and the total estimated cost of projects; and
     (4) The estimated rate or rates of the charge with a proposed breakdown of classifications as described in section 5 of this act.

NEW SECTION.  Sec. 4   (1) Except as provided in subsection (2) of this section, no legislative authority may establish a tourism promotion area that includes within the boundaries of the area:
     (a) Any portion of an incorporated city or town, if the legislative authority is that of the county; and
     (b) Any portion of the county outside of an incorporated city or town, if the legislative authority is that of the city or town.
     (2) By interlocal agreement adopted pursuant to chapter 39.34 RCW, a county, city, or town may establish a tourism promotion area that includes within the boundaries of the area portions of its own jurisdiction and another jurisdiction, if the other jurisdiction is party to the agreement.

NEW SECTION.  Sec. 5   A legislative authority may impose a charge on the furnishing of lodging by a lodging business located in the area.
     (1) There shall not be more than six classifications upon which a charge can be imposed.
     (2) Classifications can be based upon the number of rooms, room revenue, or location within the area.
     (3) Each classification may have its own rate, which shall be expressed in terms of nights of stay.
     (4) In no case may the rate under this section be in excess of two dollars per night of stay.

NEW SECTION.  Sec. 6   Notice of a hearing held under section 3 of this act shall be given by:
     (1) One publication of the resolution of intention in a newspaper of general circulation in the city or county in which the area is to be established; and
     (2) Mailing a complete copy of the resolution of intention to each lodging business in the proposed area.
     Publication and mailing shall be completed at least ten days prior to the date and time of the hearing.

NEW SECTION.  Sec. 7   Whenever a hearing is held under section 3 of this act, the legislative authority shall hear all protests and receive evidence for or against the proposed action. The legislative authority may continue the hearing from time to time. Proceedings shall terminate if protest is made by the lodging businesses in the area which would pay a majority of the proposed charges.

NEW SECTION.  Sec. 8   Only after an initiation petition has been presented to the legislative authority under section 2 of this act and only after the legislative authority has conducted a hearing under section 3 of this act, may the legislative authority adopt an ordinance to establish an area. If the legislative authority adopts an ordinance to establish an area, the ordinance shall contain the following information:
     (1) The number, date, and title of the resolution of intention pursuant to which it was adopted;
     (2) The time and place the hearing was held concerning the formation of the area;
     (3) The description of the boundaries of the area;
     (4) The initial or additional rate of charges to be imposed with a breakdown by classification, if such classification is used;
     (5) A statement that an area has been established; and
     (6) The uses to which the charge revenue shall be put. Uses shall conform to the uses declared in the initiation petition under section 2 of this act.

NEW SECTION.  Sec. 9   (1) The charge authorized by this chapter shall be administered by the department of revenue and shall be collected by lodging businesses from those persons who are taxable by the state under chapter 82.08 RCW. Chapter 82.32 RCW applies to the charge imposed under this chapter.
     (2) At least seventy-five days prior to the effective date of the resolution or ordinance imposing the charge, the legislative authority shall contract for the administration and collection by the department of revenue.
     (3) The charges authorized by this chapter that are collected by the department of revenue shall be deposited by the department in the local tourism promotion account created in section 10 of this act.

NEW SECTION.  Sec. 10   The local tourism promotion account is created in the custody of the state treasurer. All receipts from the charges for tourism promotion must be deposited into this account. Expenditures from the account may only be used for tourism promotion. The state treasurer shall distribute the money in the account on a monthly basis to the legislative authority on whose behalf the money was collected.

NEW SECTION.  Sec. 11   The charges imposed under this chapter are in addition to the special assessments that may be levied under chapter 35.87A RCW.

NEW SECTION.  Sec. 12   The charges imposed under this chapter are not a tax on the "sale of lodging" for the purposes of RCW 82.14.410.

NEW SECTION.  Sec. 13   (1) The legislative authority imposing the charge shall have sole discretion as to how the revenue derived from the charge is to be used to promote tourism. However, the legislative authority may appoint existing advisory boards or commissions to make recommendations as to its use, or the legislative authority may create a new advisory board or commission for the purpose.
     (2) The legislative authority may contract with tourism destination marketing organizations or other similar organizations to administer the operation of the area, so long as the administration complies with all applicable provisions of law, including this chapter, and with all county, city, or town resolutions and ordinances, and with all regulations lawfully imposed by the state auditor or other state agencies.

NEW SECTION.  Sec. 14   The legislative authority may disestablish an area by ordinance after a hearing before the legislative authority. The legislative authority shall adopt a resolution of intention to disestablish the area at least fifteen days prior to the hearing required by this section. The resolution shall give the time and place of the hearing.

Sec. 15   RCW 43.79A.040 and 2002 c 322 s 5, 2002 c 204 s 7, and 2002 c 61 s 6 are each reenacted and amended to read as follows:
     (1) Money in the treasurer's trust fund may be deposited, invested, and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.
     (2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.
     (3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.
     (4)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.
     (b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The Washington promise scholarship account, the college savings program account, the Washington advanced college tuition payment program account, the agricultural local fund, the American Indian scholarship endowment fund, the basic health plan self-insurance reserve account, the Washington state combined fund drive account, the Washington international exchange scholarship endowment fund, the developmental disabilities endowment trust fund, the energy account, the fair fund, the fruit and vegetable inspection account, the game farm alternative account, the grain inspection revolving fund, the juvenile accountability incentive account, the local tourism promotion account, the rural rehabilitation account, the stadium and exhibition center account, the youth athletic facility account, the self-insurance revolving fund, the sulfur dioxide abatement account, and the children's trust fund. However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (c) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advanced right of way revolving fund, the advanced environmental mitigation revolving account, the city and county advance right-of-way revolving fund, the federal narcotics asset forfeitures account, the high occupancy vehicle account, the local rail service assistance account, and the miscellaneous transportation programs account.
     (5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 16   Sections 1 through 14 of this act constitute a new chapter in Title 35 RCW.