E2SHB 2325
SignedHouse
Tourism assessment
Establishing a tourism self-supported assessment program to fund statewide tourism promotion.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill creates a self-supported tourism promotion program funded by assessments on tourism-related businesses, rather than state taxes. It establishes a new oversight board made up of industry representatives to design and manage the assessment program, including setting rates and approving budgets, with voter approval required before collections begin.
- Establishes a new 'tourism assessment program' administered by the Washington tourism marketing authority, funded by annual fees (assessments) on tourism-related businesses (e.g., lodging, attractions, food and beverage producers).
- Creates a 'ratepayer oversight board' composed of industry representatives (minimum 10 members, with geographic and sector diversity) to design the assessment program, approve budgets, and monitor performance — not state officials.
- Requires a referendum among affected businesses before assessments can begin; each business gets a weighted vote based on its projected assessment payment, and sector-specific approval is required for each sector’s assessment rate.
- Assessment funds are deposited into a dedicated 'tourism assessment account' — these funds are not state money, cannot be appropriated by the legislature, and must be used only for tourism promotion and program administration as defined in the ratified program.
- Makes financial and commercial information submitted for the assessment program confidential and exempt from public records requests (under the state Public Records Act), except for aggregated, non-identifiable summaries.
- Sets a sunset date of June 1, 2031, for the new tourism assessment program chapter (unless extended by law).
Who is affected
- Lodging businesses — Lodging businesses (e.g., hotels, motels, vacation rentals) that derive significant revenue from tourists will be required to pay an annual assessment based on a percentage of their gross tourism-related revenue, unless they opt out (if allowed by the program).
- Food and beverage businesses — Restaurants, bars, and other food and beverage producers that rely on tourist customers will contribute to the tourism promotion fund through assessments tied to their gross revenue from tourism-related sales.
- Attractions, recreation, and retail businesses — Attractions, tour operators, recreation providers (e.g., parks, museums, guided tours), and retail businesses that serve tourists may be assessed based on their tourism-related revenue, with oversight and voting rights in the assessment program.
- Washington tourism marketing authority — The Washington tourism marketing authority and its board will gain new authority to implement and manage the assessment program, with day-to-day operations governed by a new ratepayer oversight board made up of industry representatives.
- State agencies (e.g., Department of Commerce) — State agencies like the Department of Commerce will provide administrative support to the tourism marketing authority for the assessment program but will not control how assessment funds are spent.
Pro/Con Analysis
Potential Benefits (4)
By funding tourism promotion through assessments on participating businesses rather than general fund taxes, the program avoids diverting public tax dollars—potentially preserving general fund resources for other public services like education, healthcare, or infrastructure—while directly linking costs to beneficiaries.
Business & EmploymentPeopleRef: Sec. 7(2)Sector-specific ratification ensures that each industry (e.g., lodging vs. attractions) only pays for promotion that it votes to approve, reducing the risk of cross-subsidization and giving smaller or niche sectors veto power over assessments they deem unjustified.
Business & EmploymentPeopleRef: Sec. 6(1)(d)The requirement for the ratepayer oversight board to monitor program effectiveness and recommend adjustments creates a feedback loop that could improve targeting of tourism marketing and reduce wasteful spending—potentially increasing ROI for participating businesses.
Business & EmploymentPeopleRef: Sec. 4(3)(c)The bill explicitly aims to expand communication and partnership between public and private sectors to meet mutual needs—this could strengthen collaboration between small tourism operators and local governments, leading to better-aligned marketing, shared infrastructure investment, and more equitable distribution of tourism benefits across urban and rural communities.
Business & EmploymentPeopleRef: Sec. 1(1)(d)(vi)
Potential Concerns (4)
Confidentiality of financial and commercial information submitted to the tourism assessment program prevents public scrutiny of how assessments are calculated and how funds are spent, reducing transparency and accountability for a program that affects business operations and public resources.
Local GovernmentRef: Sec. 9(1)Assessment funds are excluded from legislative appropriation and cannot be redirected to other public priorities, potentially limiting the state’s flexibility to respond to emerging needs (e.g., infrastructure strain from tourism, climate resilience, or budget shortfalls), even if tourism promotion yields unexpected fiscal returns.
Local GovernmentRef: Sec. 7(2)The weighted voting system—where businesses with higher projected assessments get proportionally more voting power—gives larger tourism businesses disproportionate influence over program design and rates, potentially marginalizing small operators and skewing priorities toward high-revenue sectors.
Business & EmploymentRef: Sec. 6(1)(c)The bill allows sector-specific revenue thresholds for assessments but does not require minimum participation or enforce uniform coverage—this could lead to fragmented implementation, inconsistent burden-sharing, and potential free-rider problems where some businesses avoid contributing despite benefiting from tourism promotion.
Business & EmploymentRef: Sec. 5(1)(e)
Who Is Most Affected
Lodging businesses (hotels, motels, vacation rentals) are likely to be assessed based on gross tourism revenue. While they may benefit from increased visitor volume and spending, they also bear a direct cost and have significant voting weight in the referendum process—making them both funders and primary beneficiaries. Net impact is mixed: likely positive for large chains, uncertain for small independent operators.
Small food and beverage businesses (e.g., restaurants, cafes) serving tourists may be assessed but lack the bargaining power or revenue volume to influence program design significantly. They benefit from increased foot traffic but pay for promotion they cannot control—making this group more vulnerable to free-rider dynamics if large competitors opt out or underpay.
Large tourism corporations (e.g., hotel chains, major attraction operators) benefit disproportionately from the weighted voting system and revenue thresholds, giving them outsized influence over assessment design and rates. They are likely to see a net positive return on assessment payments due to scale and marketing leverage.
Local governments in tourism-dependent communities (e.g., Olympic Peninsula, Eastern WA) may benefit indirectly from increased local spending and tax revenue, but lose flexibility to redirect assessment funds if local needs shift (e.g., wildfire response, housing shortages). The program’s rigidity could constrain local fiscal autonomy.
The Washington Tourism Marketing Authority and its board gain operational autonomy over tourism promotion, but their authority is now split between the governor-appointed board (for general operations) and the industry-led ratepayer oversight board (for assessment program). This creates potential for jurisdictional conflict and reduced state accountability.