Background: The legislative body of any county with a population of more than 40,000, or any city or town within such a county, may form a tourism promotion area (TPA) to generate revenue for tourism promotion. Counties with a population of 40,000 or less, and cities or towns within those counties, are not eligible.

A TPA may include the entire jurisdiction or only a portion, and multiple jurisdictions may establish a joint TPA through interlocal agreement. However, a county TPA may only include unincorporated areas, unless the county has signed an interlocal agreement with one or more cities to form a joint TPA.

In a county with a population of 1 million or more, the legislative body must be comprised of two or more jurisdictions acting under an interlocal agreement. In 2015, the Legislature created an exception for Federal Way to form a TPA by itself.

Within the TPA, the legislative body may impose a charge up to $2 per room per night on lodging businesses with 40 or more rooms. The legislative body may establish up to six different lodging classifications, with different rates in each. The classifications must be based on geographic location, number of rooms, or room revenue.

Lodging businesses with less than 40 rooms are exempt and may not be assessed, and some jurisdictions have established other exemptions by policy.

The lodging businesses collect the charges and remit them to the Department of Revenue, which deposits the revenues into the Local Tourism Promotion Account. The state treasurer distributes money in the account monthly to the legislative authority on whose behalf the money was collected.

The revenue must be used for “tourism promotion,” which is defined as activities and expenditures designed to increase tourism and convention business, including but not limited to advertising, publicizing, or otherwise distributing information to attract and welcome tourists, and operating tourism destination marketing organizations.

The legislative body may appoint an existing advisory board or create a new advisory board to make recommendations on the use of the revenues, but the legislative body has sole discretion as to how the funds are used to promote tourism. The legislative authority may contract with tourism destination marketing organizations or other similar organizations to administer the operation of the area.

Formation of a tourism promotion area is initiated by a petition to the legislative body of the city or county. The petition must describe the proposed TPA boundaries, the total estimated revenues, and the proposed uses of the revenues, and it must contain the signatures of people who operate lodging businesses in the proposed TPA who would pay at least 60 percent of the proposed charges. The legislative body must hold a public hearing on the establishment of the TPA.

Summary: A county with a population of 40,000 or less, and cities or towns within those counties, are eligible to form a TPA.

A legislative authority may impose an additional charge up to $3 per night per stay on the furnishing of lodging by a lodging business located in the area. This charge is in addition to the $2 charge and expires July 1, 2027.

To impose the additional charge, signatures of the persons who operate lodging businesses that would pay 60 percent or more of the proposed charges must be provided. In addition, the following information must be provided:

the proposed uses and projects to be funded through the charge;
the total estimated costs;
the estimated rate for the charge; and
a proposed breakdown of charges by class of lodging business for the TPAs that use lodging rate classifications.

The legislative authority's use of revenue derived from the charge must be used to promote tourism that increases the number of tourists to the area.

If a majority of the lodging businesses assessed the charge petition to have the charge removed, the legislative authority must remove the charge within 12 months. The legislative authority may determine when to remove the charge so that the charge expiration date does not adversely impact existing contractual obligations. A legislative authority is not liable for any financial obligations, contractual obligations, or damages for removing the charge.

Each TPA must conduct a program review of the additional TPA charge. The review must be completed and submitted to the appropriate committees of the Legislature by January 1, 2026. The review must:

analyze how TPA charge funds were used during the period when the additional charge was in place;
identify additional marketing and promotional measures conducted or purchased with additional funds beyond the current $2 charge;
assess whether additional TPA charges above $2 contributed to an actual increase in the number of tourists; and
assess the average additional cost per visit per tourist due to additional TPA charges above $2.

A "tourist" means a person who travels for business or pleasure on a trip:

away from the person's place of residence or business and stays overnight in paid accommodations;
to a place at least 50 miles away by driving distance from the person's place of residence or business, one way, for the day or stays overnight, except island communities without land access; or
to another country or state outside of the person's place of residence or business.

Votes on Final Passage:

Senate	43	5
House	89	8	(House amended)
Senate	41	7	(Senate concurred)