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Published on Friday, April 5, 2013

Lodging tax bill passes Senate committee

It has been a tough battle keeping our priority lodging tax bill, HB 1253, moving, and city support has been invaluable along the way. Thanks to all who have contacted their legislators and reviewed countless drafts of the bill as it has moved through the legislative process.

On Wednesday, the Senate Trade & Economic Development Committee held a last-minute meeting to pass the bill with a striking amendment that stakeholders had been working on. For a while, it appeared the bill was going to die, and since this is the last remaining vehicle on the lodging tax issue, it would have been devastating for some cities.

As session began, our goal was to remove the June 30, 2013, sunset date contained in 2007 legislation. This legislation allowed cities and counties to fund special events, festivals, and the operations and capital needs of tourism facilities owned by nonprofits. Absent a bill passing this year, lodging tax revenues can no longer be used for these purposes.

The striking amendment removes the definition of tourist that would have restricted the use of funds to events and facilities that resulted in people staying overnight or traveling from at least 50 miles away. Our position all along has been that this definition is not helpful to many local communities whose Lodging Tax Advisory Committees (LTAC) and legislative bodies have opted to fund festivals, events, and operations designed to increase tourism and related economic activity that is so vital in these tough economic times.

Instead, the new language puts the “50 miles away or overnight” language in the application and reporting section of the bill, so that recipients of the funds must estimate (pre-funding) and report (post-funding) the number of attendees who fit into these categories. This will provide additional data to the LTAC and the legislative body, which will enable them to make reasonable funding decisions about what activities will bring in visitors and help replenish the funds by putting “heads in beds.” The bill also places more weight on the recommendations of the LTAC.

Finally, the bill eliminates the authority to fund the capital expenses of tourism-related facilities owned by nonprofit organizations, but retains the ability to fund their operations. In addition, the bill retains the ability to fund the marketing and operations of special events and festivals designed to attract tourists and the operations and capital expenditures of tourism-related facilities owned or operated by a municipality or a public facilities district.

We will continue to work to keep this bill moving. The current bill can be found here.

Categories: Budget & finance