This bill adds a new section to chapter 67.28 RCW and amends RCW 67.28.1815 to allow a municipality with a population of less than 5,000 to use up to 15 percent of the prior fiscal year’s revenue from lodging taxes imposed under chapter 67.28 RCW for infrastructure, secondary roadways, recreational facilities, and tourist-season law enforcement. It is a change to how lodging tax revenues may be allocated in qualifying small municipalities (an allocation/municipal finance change), and it creates procedural requirements for adopting such an alternative use. Before a city may adopt an ordinance authorizing the alternative use of lodging tax revenues, the governing body must give public notice of the intent to adopt the ordinance in a legal newspaper of general circulation, publish and post notice of a public hearing (publication in a local legal newspaper, posting in at least three conspicuous public places, and posting on the city website), describe the intended use of funds in the notices, hold a public hearing, and provide opportunities for substantial input from business stakeholders and other members of the public. The amendment to RCW 67.28.1815 otherwise preserves the rule that lodging tax revenues are credited to a special fund and used solely for tourism promotion, acquisition, or operation of tourism-related facilities, and it retains the ability to enter interlocal agreements under chapter 39.34 RCW to fund multijurisdictional tourism-related facilities. The extracted text does not show the final section number for the new provision, does not include the text of RCW 67.28.180 (which is referenced as an exception), does not specify how population is measured or the date for that determination, and does not include an effective date or fiscal impact information.

If enacted, small cities under 5,000 people would be able to redirect up to 15% of the prior fiscal year’s lodging tax revenue away from its usual tourism-promotion uses and instead spend that portion on local infrastructure, secondary road repairs, recreational facilities, or hiring seasonal law enforcement for tourist season. City councils would need to follow specific public notice and hearing steps and solicit substantial input from businesses and residents before adopting an ordinance to make that change, and the rest of lodging tax revenue would still be dedicated to tourism-related purposes except as otherwise allowed. The groups most affected are the small municipalities and their governing bodies, which gain more flexibility over a modest share of lodging tax money but also take on the work and timing of required public outreach; local tourism organizations and business owners could see smaller tourism-promotion budgets and will have formal opportunities to object. Key details are unclear from the provided text—such as how population is determined, the scope of the exception referenced in RCW 67.28.180, and the bill’s effective date—so the practical timing and some limits on use remain uncertain.