Report - 2023 03 21 A31087 D258511 Bill Report 1258 S Sbr Bfgt Ta 23

Summary

A Senate Bill Report on SHB 1258, as of March 14, 2023, concerning the statewide tourism marketing account and its match requirements, prepared by staff of the Senate Committee on Business, Financial Services, Gaming & Trade. The report records that the bill passed the House 96-0 and is sponsored by the House Committee on Appropriations. Its background describes the Washington Tourism Marketing Authority, created in 2018, and the Statewide Tourism Marketing Account, into which up to $3 million per biennium may be deposited. The report states the bill changes the match requirement from two-to-one to one-to-one and increases deposits into the Account to $9 million per biennium. It closes with supporting testimony, including requests to raise the cap to $26 million per biennium.

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                            SENATE BILL REPORT
                                 SHB 1258

                                      As of March 14, 2023

Title: An act relating to increasing tourism to Washington state through enhancement of the
     statewide tourism marketing account and changing necessary match requirements.

Brief Description: Increasing tourism to Washington state through enhancement of the
     statewide tourism marketing account and changing necessary match requirements.

Sponsors: House Committee on Appropriations (originally sponsored by Representatives Ryu,
    Volz, Steele, Walen, Reeves, Waters, Chambers, Reed, Christian, Cortes, Callan, Schmidt,
    Barkis and Fosse).

Brief History: Passed House: 3/1/23, 96-0.
     Committee Activity: Business, Financial Services, Gaming & Trade: 3/14/23.


                                     Brief Summary of Bill
           • Changes the matching funds requirement from two-to-one to one-to-one
             for expenditures from the Statewide Tourism Marketing Account
             (Account).
           • Increases the amount that may be deposited into the Account to $9
             million per biennium from future revenue collections.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES, GAMING & TRADE

     Staff: Kellee Gunn (786-7429)

     Background: The Legislature created the Washington Tourism Marketing Authority
     (Authority) in 2018 as a public entity to manage financial resources and contract for
     statewide tourism marketing services. The Authority is governed by a board of directors,
     with assistance from a nonvoting advisory committee.




     This analysis was prepared by non-partisan legislative staff for the use of legislative
     members in their deliberations. This analysis is not part of the legislation nor does it
     constitute a statement of legislative intent.

Senate Bill Report                              -1-                                        SHB 1258
     Up to $3 million from revenue per biennium from a 0.2 percent of tax collected on retail
     sales of lodging, car rentals, and restaurants may be deposited into the Statewide Tourism
     Marketing Account (Account). Money in the Account can only be spent after appropriation.
     A match of two-to-one nonstate or state fund, other than general fund state, must be
     provided for all expenditures from the account. The Account may be used for the operation
     of the Authority and the Statewide Tourism Marketing Program and for certain allowable
     expenses.

     Allowable expenses include entering into a contract for a multiple-year statewide tourism
     marketing plan with an existing statewide nonprofit organization, which must 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;
        • assistance for tourism areas adversely impacted by natural disasters;
        • contracting for the evaluation of the impact of the statewide tourism marketing
           program; and
        • administrative expenses of the Authority.

     Summary of Bill: The match requirement for expenditures from the Account is changed
     from two-to-one nonstate or state fund, other than general fund state, to one-to-one.

     The portion of revenue collected on retail sales of lodging, car rentals, and restaurants and
     deposited into the Account is increased from $3 to $9 million per biennium.

     Appropriation: None.

     Fiscal Note: Available.

     Creates Committee/Commission/Task Force that includes Legislative members: No.

     Effective Date: Ninety days after adjournment of session in which bill is passed.

     Staff Summary of Public Testimony: PRO: We zeroed out the tourism account during the
     pandemic. Increasing the match, and the deposits, is a small task. The FIFA World Cup is
     coming. This bill will allow cities to coordinate hosting the World Cup. This is about local
     jobs and revenue generated. This is about serving our communities, and entire state. This is
     a modest investment.

     Please increase the cap on the funds deposited to $26 million per biennium. The requested
     amount is needed to fund the program year-round. Last year we received many applications
     for grant funding and were not able to fund them fully. A fully operating program will build
     back jobs and insulate downturns. Oregon's biennial budget is $91 million, and the average


Senate Bill Report                             -2-                                       SHB 1258
     investment by all states is over $40 million. There needs to be a technical amendment. The
     original intent of the bill from 2018 was to take 0.2% of all sales on certain hospitality
     industries. I have double-checked this with members, and they agree this was the original
     intent. With the law as it now stands, with the cap of $3 million, we did not realize this
     issue. Without the rate change, the higher requested cap will not be met.

     Local tourism dollars have already been bonded to pay for other things, or are being used
     for infrastructure. This funding is vital to tourism marketing, nationally and internationally.
     This program brings in a return on investment, and we need to keep it going. Tacoma will
     benefit from the increase in state funds. This is an ecosystem, which works together. The
     private industry will scale up the funds to make Washington more competitive. This public-
     private investment has resulted in a $33-$1 return-on-investment. I came from working on
     tourism in southern Utah to working in the tri-cities. In Utah, state funding for tourism is
     much more significant than in Washington. The state office provides critical support
     through relationships, expertise, and resources. A similar model to Utah would benefit
     Washington.

     Woodinville represents the heart of wine tourism. Tourism dollars support agricultural
     industry and service industry. COVID has had an impact on this industry. Last year,
     visitation dropped below 450,000. The tourism industry understands the challenges of
     competing funds. The state program provides more reach than a local tourism program can
     provide. Our state program is incredibly effective in bringing visitors to the state. Without
     this investment these people will go elsewhere, and we will lose that revenue. This
     investment brings in money that supports local governments, local businesses, and the state
     of Washington.

     This program has languished for years. Restarting this program five years ago, this program
     is now poised to bring in many international visitors. These people stay twice as long and
     spend twice as much money. Supporting Washington state tourism will build infrastructure
     throughout the state. Expanding financial support to this industry, will provide access to
     tourism to businesses that would otherwise not or have not marketed their businesses in this
     way. Expanding this funding will allow marketing to historically marginalized people and
     businesses, such as LGBTQ +.

     Please amend the funding cap to $26 million.

     Persons Testifying: PRO: Representative Cindy Ryu, Prime Sponsor; Krista Bentley,
     Expedia Group; Emily Shay, Association of Washington Business; Dean Burke, Travel
     Tacoma - Mt. Rainier, Tourism & Sports; Adam Acampora, Woodinville Wine Country;
     Kevin Lewis, Visit Tri-Cities; David Blandford, Washington Tourism Alliance; Becky
     Bogard, State of Washington Tourism; Annette Pitts, Experience Olympia; Daylan Gibbard;
     John Cooper, Yakima Valley Tourism; Sam Cho, Port of Seattle Commissioner; Annie
     McGrath, Seattle Southside Chamber of Commerce; Gabriel Neuman, GSBA.



Senate Bill Report                              -3-                                       SHB 1258
     Persons Signed In To Testify But Not Testifying: No one.




Senate Bill Report                         -4-                  SHB 1258


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