BILL REQ. #:  Z-0432.1 

Read first time 01/11/2007.   Referred to Committee on Economic Development, Trade & Management.

     AN ACT Relating to creating a public-private tourism partnership; amending RCW 67.40.040, 43.330.096, 43.330.090, and 43.330.094; adding a new chapter to Title 43 RCW; creating a new section; recodifying RCW 43.330.096; and repealing RCW 43.330.095.

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

NEW SECTION.  Sec. 101   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Commission" means the Washington tourism commission.
     (2) "Department" means the department of community, trade, and economic development.
     (3) "Director" means the director of the department.
     (4) "Executive director" means the executive director of the commission.

NEW SECTION.  Sec. 102   (1) The Washington tourism commission is created.
     (2) The commission shall be cochaired by the director of the department or the director's designee, and by an industry-member representative who is elected by the commission members.
     (3) The commission shall have nineteen members. In appointing members, the governor shall endeavor to balance the geographical composition of the commission to include members with special expertise from tourism organizations, local jurisdictions, and small businesses directly engaged in tourism-related activities. Before making appointments to the Washington tourism commission, the governor may consider nominations from recognized organizations that represent the entities or interests identified in this section. Commission members shall be appointed by the governor as follows:
     (a) Three members to represent the lodging industry. Members should represent all property categories and different regions of the state;
     (b) Three representatives from nonprofit destination marketing organizations or visitor and convention bureaus;
     (c) Three industry representatives from the arts, entertainment, attractions, or recreation industry;
     (d) Four private industry representatives, two from each of the business categories in this subsection:
     (i) The food, beverage, and wine industries; and
     (ii) The travel and transportation industries;
     (e) Four legislative members, one from each major caucus of the senate, designated by the president of the senate, and one from each major caucus of the house of representatives, designated by the speaker of the house of representatives;
     (f) The chairman of the Washington convention and trade center; and
     (g) The director or the director's designee.
     (4)(a) Terms of nonlegislative members shall be three years, except that initial terms shall be staggered such that terms of one-third of the initial members shall expire each year.
     (b) Terms of legislative members shall be two years.
     (c) Vacancies shall be appointed in the same manner as the original appointment.
     (d) A member appointed by the governor may not be absent from more than fifty percent of the regularly scheduled meetings in any one calendar year. Any member who exceeds this absence limitation is deemed to have withdrawn from the office and may be replaced by the governor.
     (5) Members shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.
     (6) The commission shall meet at least four times per year, but may meet more frequently as necessary.
     (7) A majority of members currently appointed constitutes a quorum.
     (8) Staff support shall be provided by the department, and staff shall report to the executive director.
     (9) The director, in consultation with the commission, shall appoint an executive director.
     (10) The commission may adopt rules under chapter 34.05 RCW as necessary to carry out the purposes of this chapter.

NEW SECTION.  Sec. 103   (1) The commission shall pursue a coordinated program to expand the tourism industry throughout the state in cooperation with the public and private tourism development organizations. The commission shall develop and approve, and update as necessary, a six-year strategic plan that includes, but is not limited to:
     (a) Promoting Washington as a tourism destination to national and international markets to include nature-based and wildlife viewing tourism;
     (b) Providing information to businesses and local communities on tourism opportunities that could expand local revenues;
     (c) Assisting local communities to strengthen their tourism partnerships, including their relationships with state and local agencies;
     (d) Providing leadership training and assistance to local communities to facilitate the development and implementation of local tourism plans;
     (e) Coordinating the development of a statewide tourism marketing plan that must be adopted by March 31, 2008, and every two years thereafter. If the commission does not adopt a marketing plan by March 31st of even-numbered years, the director has the authority to approve a tourism marketing plan for implementation. The plan shall specifically address mechanisms for: (i) Funding national and international marketing and nature-based tourism efforts; (ii) interagency cooperation; and (iii) integrating the state plan with local tourism plans.
     (2) The commission may, in carrying out its efforts to expand the tourism industry in the state:
     (a) Solicit and receive gifts, grants, funds, fees, and endowments, in trust or otherwise, from tribal, local, or other governmental entities, as well as private sources, and may expend the same or any income therefrom for tourism purposes. All revenue received for tourism purposes shall be deposited into the tourism enterprise account created in section 105 of this act;
     (b) Host conferences and strategic planning workshops relating to the promotion of nature-based and wildlife viewing tourism;
     (c) Conduct or contract for tourism-related studies;
     (d) Contract with individuals, businesses, or public entities to carry out its tourism-related activities under this section; and
     (e) Provide tourism-related organizations with marketing and other technical assistance.
     (3) Staff shall implement the strategic plan and the tourism marketing plan.

NEW SECTION.  Sec. 104   (1) A tourism competitive grant program is created as an ongoing program to enhance local efforts that support tourism-related activities. The commission shall develop and publicize formal selection criteria for the grant program. Subject to available funding, the commission shall solicit applications and award grants to successful applicants at least once a year.
     (2) Eligible applicants include, but are not limited to, local governments, nonprofit organizations, and federally recognized Indian tribes.
     (3) Criteria should include the return on investment of state funding, the availability of other financial resources to the applicant, the level of community support, and other criteria deemed necessary by the commission.
     (4) Maximum grant amounts shall be determined by the commission. Grant awards must reflect geographic diversity and a variety of activities. Successful applicants must provide matching funds equal to the amount of the grant. In-kind donations shall not be considered in the match calculation.
     (5) No portion of the grant may be used for an applicant's administrative costs.

NEW SECTION.  Sec. 105   The tourism enterprise account is created in the custody of the state treasurer.
     (1) All receipts from section 103(2)(a) of this act must be deposited into the account. Only the executive director or the executive director's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.
     (2) Moneys transferred from the state convention and trade account to this account, as provided in RCW 67.40.040, shall be available for expenditure in accordance with the requirements of this section. As provided under subsection (3) of this section, moneys must be matched with private sector cash contributions, the value of an advertising equivalency contribution, or through an in-kind contribution. The commission shall determine criteria for what qualifies as an in-kind contribution. The moneys subject to match may be expended as private match is received or with evidence of qualified expenditure.
     (3)(a) Twenty-five percent of the moneys transferred in fiscal year 2009 are subject to a match;
     (b) Fifty percent of the moneys transferred in fiscal year 2010 are subject to a match; and
     (c) One hundred percent of the moneys transferred in fiscal year 2011, and thereafter, are subject to a match.
     (4) Expenditures from the account may be used by the department of community, trade, and economic development only for the purposes of expanding and promoting the tourism industry in the state of Washington.

Sec. 106   RCW 67.40.040 and 2005 c 518 s 936 are each amended to read as follows:
     (1) The proceeds from the sale of the bonds authorized in RCW 67.40.030, proceeds of the taxes imposed under RCW 67.40.090 and 67.40.130, and all other moneys received by the state convention and trade center from any public or private source which are intended to fund the acquisition, design, construction, expansion, exterior cleanup and repair of the Eagles building, conversion of various retail and other space to meeting rooms, purchase of the land and building known as the McKay Parcel, development of low-income housing, or renovation of the center, and those expenditures authorized under RCW 67.40.170 shall be deposited in the state convention and trade center account hereby created in the state treasury and in such subaccounts as are deemed appropriate by the directors of the corporation.
     (2) Moneys in the account, including unanticipated revenues under RCW 43.79.270, shall be used exclusively for the following purposes in the following priority:
     (a) For reimbursement of the state general fund under RCW 67.40.060;
     (b) After appropriation by statute:
     (i) For payment of expenses incurred in the issuance and sale of the bonds issued under RCW 67.40.030;
     (ii) For expenditures authorized in RCW 67.40.170;
     (iii) For acquisition, design, and construction of the state convention and trade center; ((and))
     (iv) For debt service for the acquisition, design, and construction and retrofit of the museum of history and industry museum property or other future expansions of the convention center as approved by the legislature; and
     (v) For reimbursement of any expenditures from the state general fund in support of the state convention and trade center; and
     (c) For transfer to the state convention and trade center operations account.
     (3) The corporation shall identify with specificity those facilities of the state convention and trade center that are to be financed with proceeds of general obligation bonds, the interest on which is intended to be excluded from gross income for federal income tax purposes. The corporation shall not permit the extent or manner of private business use of those bond-financed facilities to be inconsistent with treatment of such bonds as governmental bonds under applicable provisions of the Internal Revenue Code of 1986, as amended.
     (4) In order to ensure consistent treatment of bonds authorized under RCW 67.40.030 with applicable provisions of the Internal Revenue Code of 1986, as amended, and notwithstanding RCW 43.84.092, investment earnings on bond proceeds deposited in the state convention and trade center account in the state treasury shall be retained in the account, and shall be expended by the corporation for the purposes authorized under chapter 386, Laws of 1995 and in a manner consistent with applicable provisions of the Internal Revenue Code of 1986, as amended.
     (5) ((During the 2005-2007 fiscal biennium, the legislature may transfer from the state convention and trade center account to the state general fund such amounts as reflect the excess fund balance of the account.)) Subject to the conditions in subsection (6) of this section, starting in fiscal year 2008, the state treasurer shall transfer:
     (a) The sum of four million dollars, or as much as may be available pursuant to conditions set forth in this section, from the state convention and trade center account to the tourism enterprise account, with the maximum transfer being four million dollars per fiscal year; and
     (b) The sum of five hundred thousand dollars, or as much as may be available pursuant to conditions set forth in this section, from the state convention and trade center account to the tourism development and promotion account, with the maximum transfer being five hundred thousand dollars per fiscal year.
     (6)(a) Funds required for debt service payments and reserves for bonds issued under RCW 67.40.030; for debt service authorized under RCW 67.40.170; and for the issuance and sale of financial instruments associated with the acquisition, design, construction, and retrofit of the museum of history and industry museum property or for other future expansions of the center, as approved by the legislature, shall be maintained within the state convention and trade center account.
     (b) No less than six million one hundred fifty thousand dollars per year shall be retained in the state convention and trade center account for funding capital maintenance as required by the center's long-term capital plan, facility enhancements, unanticipated replacements, and operating reserves for the convention center operation. This amount shall be escalated annually as follows:
     (i) Four percent for annual inflation for capital maintenance, repairs, and replacement;
     (ii) An additional two percent for enhancement to the facility; and
     (iii) An additional three percent for growth in expenditure due to aging of the facility and the need to maintain an operating reserve.
     (c) Sufficient funds shall be reserved within the state convention and trade center account to fund operating appropriations for the annual operation of the convention center.

Sec. 107   RCW 43.330.096 and 1998 c 299 s 5 are each amended to read as follows:
     (((1))) On or before June 30th of each fiscal year, the ((department)) commission shall submit a report to the appropriate policy and fiscal committees of the house of representatives and senate that describes the tourism development program for the previous fiscal year and quantifies the financial benefits to the state. The report must contain information concerning targeted markets, benefits to different areas of the state, return on the state's investment, grants disbursed under the tourism competitive grant program, a copy of the most recent strategic plan, and other relevant information related to tourism development.
     (((2) This section expires June 30, 2008.))

Sec. 201   RCW 43.330.090 and 2006 c 105 s 1 are each amended to read as follows:
     (1) The department shall work with private sector organizations, industry and cluster associations, federal agencies, state agencies that use a cluster-based approach to service delivery, local governments, local associate development organizations, and higher education and training institutions in the development of industry cluster-based strategies to diversify the economy, facilitate technology transfer and diffusion, and increase value-added production. The industry clusters targeted by the department may include, but are not limited to, aerospace, agriculture, food processing, forest products, marine services, health and biomedical, software, digital and interactive media, transportation and distribution, and microelectronics. The department shall, on a continuing basis, evaluate the potential return to the state from devoting additional resources to an industry cluster-based approach to economic development and identifying and assisting additional clusters. The department shall use information gathered in each service delivery region in formulating its industry cluster-based strategies and shall assist local communities in identifying regional industry clusters and developing industry cluster-based strategies.
     (2) ((The department shall pursue a coordinated program to expand the tourism industry throughout the state in cooperation with the public and private tourism development organizations. The department, in operating its tourism program, shall:
     (a) Promote Washington as a tourism destination to national and international markets to include nature-based and wildlife viewing tourism;
     (b) Provide information to businesses and local communities on tourism opportunities that could expand local revenues;
     (c) Assist local communities to strengthen their tourism partnerships, including their relationships with state and local agencies;
     (d) Provide leadership training and assistance to local communities to facilitate the development and implementation of local tourism plans;
     (e) Coordinate the development of a statewide tourism and marketing plan. The department's tourism planning efforts shall be carried out in conjunction with public and private tourism development organizations including the department of fish and wildlife and other appropriate agencies. The plan shall specifically address mechanisms for: (i) Funding national and international marketing and nature-based tourism efforts; (ii) interagency cooperation; and (iii) integrating the state plan with local tourism plans.
     (3) The department may, in carrying out its efforts to expand the tourism industry in the state:
     (a) Solicit and receive gifts, grants, funds, fees, and endowments, in trust or otherwise, from tribal, local or other governmental entities, as well as private sources, and may expend the same or any income therefrom for tourism purposes. All revenue received for tourism purposes shall be deposited into the tourism development and promotion account created in RCW 43.330.094;
     (b) Host conferences and strategic planning workshops relating to the promotion of nature-based and wildlife viewing tourism;
     (c) Conduct or contract for tourism-related studies;
     (d) Contract with individuals, businesses, or public entities to carry out its tourism-related activities under this section;
     (e) Provide tourism-related organizations with marketing and other technical assistance;
     (f) Evaluate and make recommendations on proposed tourism-related policies.
     (4)))(a) The department shall promote, market, and encourage growth in the production of films and videos, as well as television commercials within the state; to this end the department is directed to assist in the location of a film and video production studio within the state.
     (b) The department may, in carrying out its efforts to encourage film and video production in the state, solicit and receive gifts, grants, funds, fees, and endowments, in trust or otherwise, from tribal, local, or other governmental entities, as well as private sources, and may expend the same or any income therefrom for the encouragement of film and video production. All revenue received for such purposes shall be deposited into the film and video promotion account created in RCW 43.330.092.
     (((5))) (3) In assisting in the development of regional and statewide industry cluster-based strategies, the department's activities shall include, but are not limited to:
     (a) Facilitating regional focus group discussions and conducting studies to identify industry clusters, appraise the current information linkages within a cluster, and identify issues of common concern within a cluster;
     (b) Supporting industry and cluster associations, publications of association and cluster directories, and related efforts to create or expand the activities of industry and cluster associations;
     (c) Administering a competitive grant program to fund activities designed to further regional cluster growth. In administering the program, the department shall work with an industry cluster advisory committee with equal representation from the work force training and education coordinating board, the state board for community and technical colleges, the employment security department, business, and labor.
     (i) The industry cluster advisory committee shall recommend criteria for evaluating applications for grant funds and recommend applicants for receipt of grant funds.
     (ii) Applicants must include organizations from at least two counties and participants from the local business community. Eligible organizations include, but are not limited to, local governments, economic development councils, chambers of commerce, federally recognized Indian tribes, work force development councils, and educational institutions.
     (iii) Applications must evidence financial participation of the partner organizations.
     (iv) Priority shall be given to applicants which will use the grant funds to build linkages and joint projects, to develop common resources and common training, and to develop common research and development projects or facilities.
     (v) The maximum amount of a grant is one hundred thousand dollars.
     (vi) A maximum of one hundred thousand dollars total can go to King, Pierce, Kitsap, and Snohomish counties combined.
     (vii) No more than ten percent of funds received for the grant program may be used by the department for administrative costs.
     (((6))) (4) As used in subsection (((5))) (3) of this section, "industry cluster" means a geographic concentration of interdependent competitive firms that do business with each other. "Industry cluster" also includes firms that sell inside and outside of the geographic region as well as support firms that supply raw materials, components, and business services.

Sec. 202   RCW 43.330.094 and 2003 c 153 s 4 are each amended to read as follows:
     The tourism development and promotion account is created in the state treasury. All receipts from RCW 36.102.060(10) ((and 43.330.090(3)(a))) must be deposited into the account. Moneys in the account ((received under RCW 36.102.060(10))) may be spent only after appropriation. ((No appropriation is required for expenditures from moneys received under RCW 43.330.090(3)(a).)) Expenditures from the account may be used by the department of community, trade, and economic development only for the purposes of expanding and promoting the tourism industry in the state of Washington.

NEW SECTION.  Sec. 203   RCW 43.330.095 (Tourism development advisory committee) and 1998 c 299 s 2 are each repealed.

NEW SECTION.  Sec. 204   Part headings used in this act are not any part of the law.

NEW SECTION.  Sec. 205   RCW 43.330.096 is recodified in the new chapter created in section 206 of this act.

NEW SECTION.  Sec. 206   Sections 101 through 105 of this act constitute a new chapter in Title 43 RCW.