22-209.00 WA Department of Revenue: Administration of TPA Fees AGREEMENT FOR THE STATE ADMINISTRATION OF
TOURISM PROMOTION AREA FEES WITH CITY OF SPOKANE VALLEY
THIS AGREEMENT("Agreement") is entered into by and between City of Spokane
Valley, a political subdivision of the State of Washington (herein referred to as"City")
and the State of Washington Department of Revenue ("Department") for the
administration of the tourism promotion area lodging charge imposed by the City of
Spokane Valley. This Agreement is effective January 1, 2023.
RECITALS
WHEREAS, the Legislature of the State of Washington by RCW 35.101
authorizes a City to establish a Tourism Promotion Area to permit the levy of lodging
charges to be expended exclusively for tourism promotion, and;
WHEREAS, RCW 35.101 provides that a City imposing a lodging charge by
resolution or ordinance shall contract with the Department for the administration and
collection of the levy of lodging charges, and;
WHEREAS, The City has by ordinance, copy attached hereto, indicated its
intention to impose a lodging charge of$2.00 to $4.00 per night/per room in addition to
all other sales and use taxes and any special assessments that may be levied (City of
Spokane Valley Ordinance No. 22-016).
NOW, THEREFORE, to provide for the administration of lodging charges, the
parties agree as follows:
AGREEMENT
1. Incorporation of Recitals. The above recitals are true and correct and are
incorporated herein by this reference as if fully set forth.
2. Functions of the Department. The Department shall exclusively perform all
functions incident to the administration and collection for the lodging charges imposed by
the ordinance. The Department shall collect the charges from lodging businesses that
furnish lodging taxable by the state under Chapter 82.08 RCW.
3. Collection Not Authorized. Pursuant to RCW 35.101.050, the Department is not
authorized or required to administer and collect on behalf of the City any charge for
which there are more than six classifications.
4. New or Additional Legislation. In addition to the Ordinance attached hereto, the
City shall provide the Department with copies of any new and/or additional ordinances
imposing any new charges or changing the rate of any charge. Such copies shall be
provided to the Department no later than 75 days prior to the effective date of the
resolution. Subject to the limitations under RCW 35.101.050,the Department shall
administer and collect those charges that are identified in the new and/or additional
ordinance pursuant to this Agreement under the same terms and conditions as for the
charges imposed under the Ordinance.
5. Collection of Lodging Charges. The Department shall collect the lodging
charges by the end of the following month after the due date of the taxable period for
which lodging charges are imposed pursuant to the ordinance. In accordance with RCW
35.101.090, the charges so collected shall be deposited by the Department in the local
tourism promotion account in the custody of the state treasurer. The Department shall
provide the state treasurer with instructions on the proper monthly distribution of the
deposited funds in accordance with RCW 35.101.100.
6. Rules and Regulations Adopted by the Department.Any specific rules and
regulations adopted by the Department to facilitate the administration and distribution of
the lodging charges shall be in accordance with the State Administrative Procedure Act
and RCW 35.101. Until specific rules and regulations are adopted, the Department shall
apply the provisions contained in chapters 82.03, 82.08, 82.12, 82.14, and 82.32 RCW, as
the same exist or may hereafter be amended and insofar as the same are relevant to
lodging charges. Such provisions shall have full force and effect of Department rules
when applied to lodging charges.
7. Uniform Collection. The Department performs its duties hereunder so that as far
as possible the lodging charges shall be administered and collected uniformly with the
state's sales and use taxes.
8. Refunds or Credits. Any refunds or credits the Department fmds are owed
relating to the lodging charges shall be refunded to the taxpayer from the City's portion
of the local tourism promotion account.
9. Notification of Error of Fund Distribution.Either party shall have six months
from the date funds are distributed by the state treasurer to notify the other party in
writing of any error in the amount of distributed funds. The party receiving such notice
shall have sixty (60)days to review the claim. Upon agreement of the parties, the
Department shall deposit any necessary additional funds with the state treasurer for
distribution to the City; or in the event of an over-distribution to the City, the City shall
return such over-distribution to the Department. If the City and the Department cannot
reach an agreement, the parties agree to attempt mediation or other dispute resolution
process prior to instigating litigation in Superior Court.
10. Disclosure of Taxpayer Information,Documentation and Reports. The
Department shall provide taxpayer information, documentation and reports to the City in
accordance with the disclosure limitations of RCW 82.32.330. The City shall require its
authorized representatives that have access to confidential taxpayer information to sign a
Department Secrecy Clause and shall ensure such representatives comply with RCW
82.32.330.
11. Parties' Communication and Cooperation. The parties agree to establish and
maintain open lines of communication and to work cooperatively in order to improve
administration and public understanding of the City lodging charges (special
assessments). Either party may initiate a meeting, to be held at a mutually convenient
time and place,to share information and to discuss matters related to administration and
collection of the City lodging charges.
12. Disputes. In the event a dispute arises under this Agreement that cannot be
resolved by mutual agreement of the parties, either party may elect arbitration in which
the Department and City shall each individually appoint one member to a Dispute Board
and those members shall select a third member. The Dispute Board shall evaluate the
dispute and make a written determination after considering the relevant facts and legal
authorities. The Dispute Board's determination shall be given significant weight by both
parties who will meet after the determination is issued to resolve the dispute. If a
resolution is not reached,the determination of the Dispute Board shall be admissible in
any future legal proceeding between the parties concerning the dispute. Each party shall
be responsible for a proportionate share of the costs of the member of the Dispute Board.
This remedy is not intended to be exclusive of other remedies existing in law, by statute,
or otherwise.
13. Indemnification. To the extent permitted by law, the City agrees to indemnify,
defend, and hold harmless the Department for the State of Washington from claims that
challenge the authority of the City to impose lodging charges pursuant to the Ordinance.
The City agrees that in the event there shall be a legal challenge to the Ordinance or
resolutions, the Department shall not be obligated to represent the City or otherwise
defend its position in any proceeding relating to such challenge.
14. Effective Date. This Agreement shall take effect at 12:01, January 1, 2023 and
shall thereafter be automatically renewed on December 31, of each year unless one of the
parties gives written notice of termination on or before November 1, or each year. The
parties to this Agreement will notify each other in a timely manner when they find it
necessary to request an amendment to this Agreement.
15. Waiver. Any failure by any party to insist upon strict performance of any
provision of this Agreement shall not be deemed a waiver of the right to require future
strict performance of such provision;No failure or delay in exercising any right or
remedy hereunder shall be deemed a waiver of such right or remedy. No term or
condition of this Agreement shall be waived, modified or deleted except by an
instrument, in writing, signed by personnel authorized to bind each of the parties.
16. Modification. This Agreement may be amended by mutual agreement of the
parties. Such amendments shall not be binding unless they are in writing and signed by
personnel authorized to bind each of the parties.
17. Entire Agreement. This Agreement contains all the terms and conditions agreed
upon by the parties. No other understandings, oral or otherwise, regarding the subject
matter of this Agreement shall be deemed to exist or to bind any of the parties hereto.
18. Counterparts. This agreement may be executed in two or more counterparts,
each of which shall be deemed an original and which together constitute one and the
same.
IN WITNESS WHEREOF, the State of Washington, Department of Revenue and City
of Spokane Valley have executed this contract as of the day and year written below.
Fouts, AIySOI l Datea2022.12.061334.17-0800'
Date SR ASD OPS, Department of Revenue
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Approved as to Form only:
Nam Nguyen, Assistant Attorney General
CITY OF SPOKANE VALLEY
SPOKANE COUNTY,WASHINGTON
ORDINANCE NO.22-016
AN ORDINANCE OF THE CITY OF SPOKANE VALLEY, SPOKANE COUNTY,
WASHINGTON,ADOPTING CHAPTER 3.21 OF THE SPOKANE VALLEY MUNICIPAL
CODE TO ESTABLISH A TOURISM PROMOTION AREA, AND OTHER MATTERS
RELATING THERETO.
WHEREAS,the City of Spokane Valley desires to create a Spokane Valley Tourism Promotion
Area(TPA)comprised entirely of the corporate limits of the City as they currently exist, or as they may be
amended in the future as a result of annexation; and
WHEREAS,RCW 35.101.020 permits the City Council to establish a TPA within the City limits
following submission and acceptance of a petition requesting the same from at least 60%of the qualifying
hoteliers in the proposed TPA; and
WHEREAS, the City Council has received a petition which contains a description of the
boundaries of the proposed area; contains the proposed uses and projects to which the proposed revenue
from the charge shall be put;the estimated rate for the charge which does not include a proposed breakdown
by class of lodging business since there would only be one class in the TPA; and the signatures of the
persons who operate lodging businesses in the proposed area who pay 60%or more of the proposed charges
which is based upon the revenues of the previous quarter as identified by the Department of Revenue; and
WHEREAS,on August 23,2022,City Council adopted Resolution 22-017,entitled"A Resolution
of the City of Spokane Valley,Spokane County,Washington,of Intention to Establish a Tourism Promotion
Area; Setting the Public Hearing Date to Consider the Same; Describing the Proposed Boundaries;
Describing the Proposed Uses and Projects with the Funds; Identifying the Estimated Rate of the Charge;
and Other Matters Related Thereto." Resolution 22-017 accepted the petition and set a public hearing for
September 13, 2022 to take public testimony regarding the establishment of the Spokane Valley TPA.
Notice of the public hearing was published in The Valley News Herald and mailed to hoteliers in Spokane
Valley pursuant to RCW 35.101.060(2); and
WHEREAS, the City Council conducted the public hearing on September 13, 2022 at Spokane
Valley City Hall, 10210 East Sprague, Spokane Valley, WA; and
WHEREAS, the money generated by the charge authorized pursuant to Ordinance 22-016 may
only be used for tourism promotion defined in RCW 35.101.010(4)as"activities and expenditures designed
to increase tourism and convention business, including but not limited to advertising, publicizing, or
otherwise distributing information for the purpose of attracting and welcoming tourists, and operating
tourism destination marketing organizations";and
WHEREAS, the petition to establish the Spokane Valley TPA seeks to impose a $2.00 charge
pursuant to RCW 35.101.050, and an additional $2.00 pursuant to RCW 35.101.057 for a total charge of
$4.00 per night on qualifying lodging businesses; and
WHEREAS, the City Council desires to establish the Hotel/Motel Tourism Promotion Area
Commission. The intent of the Hotel/Motel Tourism Promotion Area Commission is to appoint individuals
who represent a cross-section of City hotels in terms of size and services offered to the traveling public.
City Council would seek to rely on these hoteliers' expertise in proposing an annual work plan/budget for
Ordinance 22-016 Establishing Tourism Promotion Area Page 1 of 6
expenditure of the funds generated from the TPA charges,which would guide Council in allocating TPA
funds for tourism promotion; and
WHEREAS, pursuant to RCW 35.101.090, the City will contract with the Washington State
Department of Revenue for the collection of applicable charges from affected businesses,with the funds to
be deposited in the Spokane Valley tourism promotion account to be created by the Washington State
Treasurer; and
WHEREAS,a new fund must be established within the City's annual budget for deposit and use
of the funds sent to the City; and
WHEREAS, creation of a Spokane Valley Tourism Promotion Area is in the best interest of the
City, its businesses,and citizens for the purpose of expanding tourism promotion.
NOW, THEREFORE, the City Council of the City of Spokane Valley, Washington ordains as
follows:
Section 1. New Code Section. Spokane Valley Municipal Code section 3.21.010 is hereby
established as follows:
SVMC 3.21.010—Tourism Promotion Area Established. There is hereby established pursuant to
RCW 35.101.080 a tourism promotion area to be known as the Spokane Valley Tourism Promotion
Area, the boundaries of which shall be the jurisdictional boundaries of the City as they currently
exist or as they may be expanded in the future through annexation.
Section 2. New Code Section. Spokane Valley Municipal Code section 3.21.020 is hereby
established as follows:
SVMC 3.21.020—Definitions. Other than definitions specifically set forth herein, the definitions
for chapter 3.21 SVMC shall be the same as those used in chapter 35.101 RCW, which are
incorporated herein by reference.
Section 3. New Code Section. Spokane Valley Municipal Code section 3.21.030 is hereby
established as follows:
SVMC 3.21.030—Imposition of Lodging Charge. There shall be one classification upon which a
charge can be imposed,to be uniformly applied as follows:
(A)There is imposed,pursuant to RCW 35.101.050,a lodging charge on the furnishing of lodging
by lodging businesses located within the Tourism Promotion Area established by chapter 3.21
SVMC in the amount of$2.00 per night.
(B) There is imposed, pursuant to RCW 35.101.057, an additional lodging tax of$2.00 on the
furnishing of lodging by lodging businesses located within the Tourism Promotion Area established
by chapter 3.21 SVMC in the amount of$2.00 per night. This subsection SVMC 3.21.030(B)and
the additional charges authorized by it shall expire July 1, 2027 unless prior to that date the
Washington State Legislature extends the expiration date found in RCW 35.101.057(2), in which
case the expiration date in this section SVMC 3.21.030 shall be extended to the new expiration
date, if any,set forth in RCW 35.101.057.
Ordinance 22-016 Establishing Tourism Promotion Area Page 2 of 6
Section 4. New Code Section. Spokane Valley Municipal Code section 3.21.040 is hereby
established as follows:
SVMC 3.21.040 — Exemption for Lodging Charge. Pursuant to RCW 35.101.055, the lodging
charge imposed by SVMC 3.21.030 shall not apply to temporary medical housing exempt pursuant
to RCW 82.08.997.
Section 5. New Code Section. Spokane Valley Municipal Code section 3.21.050 is hereby
established as follows:
SVMC 3.21.050—Uses of Lodging Charge Revenue.
(A) The uses described in SVMC 3.21.050 are limited to tourism promotion pursuant to RCW
35.101.010(4) and may include payment of administrative costs associated with operation of the
Tourism Promotion Area as determined by the City Council.
(B)Revenue from lodging charges collected from the charges under chapter 3.21 SVMC shall only
be used for the following purposes:
1. The general promotion of tourism within Spokane Valley and the Spokane metropolitan
area as specified in the annual Tourism Promotion Area work plan/budget,to be adopted
annually;
2. The marketing of convention and trade shows that benefit local tourism and the lodging
business in Spokane Valley;
3 The marketing of Spokane Valley and the Spokane metropolitan area to the travel
industry to benefit local tourism and the lodging businesses in Spokane Valley;and
4.The marketing of Spokane Valley and the Spokane metropolitan area to recruit sporting
events in order to benefit local tourism and the lodging businesses in Spokane Valley.
(C)Pursuant to RCW 35.101.130,the City Council shall have sole discretion as to how the revenue
derived from the lodging charge imposed pursuant to chapter 3.21 SVMC is to be used for tourism
promotion. In exercising its discretion on use of these funds, City Council shall consider the
recommendation(s) of the Spokane Valley Hotel/Motel Tourism Promotion Area Commission
established pursuant to SVMC 3.21.070.
Section 6. New Code Section. Spokane Valley Municipal Code section 3.21.060 is hereby
established as follows:
SVMC 3.21.060 — Collection and Administration. The lodging charge shall be collected and
administered by the Washington State Department of Revenue and State Treasurer pursuant to
chapter 35.101 RCW. The City Manager is authorized to execute any contracts with the state that
are necessary to provide for the collection or administration of the lodging charge. All funds
disbursed by the state to the City shall be deposited into a City tourism promotion area fund.
Section 7. New Code Section. Spokane Valley Municipal Code section 3.21.070 is hereby
established as follows:
SVMC 3.21.070—Hotel/Motel Tourism Promotion Area Commission.
Ordinance 22-016 Establishing Tourism Promotion Area Page 3 of 6
(A)The Hotel/Motel Tourism Promotion Area Commission is created as an advisory body to make
recommendations to the City Council for use of the revenue derived from the charge.
Appointments to or removals from the Hotel/Motel Tourism Promotion Area Commission shall be
made by the Mayor, with confirmation by a majority of Council pursuant to the then-currently
adopted Governance Manual.
(B) The Hotel/Motel Tourism Promotion Area Commission shall be composed of five voting
representatives from the following hotel chain scales,as defined by Smith Travel Research(STR).
If no representative from a hotel in the corresponding chain scale is willing or able to serve on the
Hotel/Motel Tourism Promotion Area Commission, that position may be made available to a
representative of any lodging business within the boundaries of the Tourism Promotion Area:
(1)one economy hotel;
(2)one midscale hotel;
(3)one upper midscale hotel;
(4)one upscale hotel;
(5)one full-service hotel over 200 rooms.
A Commission member may only represent one type of property identified in SVMC
3.21.070(B)(1-5) above at any given time, and an ownership group may only represent one such
property on the Commission at any given time.
(C)In addition to the above voting Commission members,there shall be one non-voting ex officio
member as assigned by the City Manager,who will function as a liaison between the City Council
and the HoteVMotel Tourism Promotion Area Commission.
(D) For appointment of the initial Hotel/Motel Tourism Promotion Area Commission, three
members shall have a three-year term, and two members shall have a two-year term. Upon the
expiration of the initial three-year term,the term for those three positions shall thereafter convert
to a two-year term.
(E) Members of the Hotel/Motel Tourism Promotion Area Commission shall serve without
compensation.
(F) All meetings of the Hotel/Motel Tourism Promotion Area Commission are subject to
Washington's Open Public Meetings Act, chapter 42.30 RCW, and Washington's Public Record
Act,chapter 42.56 RCW.
Section 8. New Code Section. Spokane Valley Municipal Code section 3.21.080 is hereby
established as follows:
SVMC 3.21.080—Spokane Valley Tourism Promotion Area Annual Work Plan/Budget.
(A)The Hotel/Motel Tourism Promotion Area Commission shall develop a recommended annual
work plan/budget for use of Spokane Valley TPA revenues, including recommended activities and
programs for funding from the charge authorized by chapter 3.21 SVMC,and including a complete
list of projects for which application was made for funding for that year. The recommended work
plan/budget shall be submitted to the City Council in written form no later than September 30 of
each calendar year for inclusion in the City's annual budget adoption process.
Ordinance 22-016 Establishing Tourism Promotion Area Page 4 of 6
(B)The City Council may by motion approve the proposed work plan/budget, or instead return the
proposed work plan/budget to the Hotel/Motel Tourism Promotion Area Commission for further
recommendations.
(C)The City Council may not add a project to the annual work plan/budget that was not previously
considered by the Hotel/Motel Tourism Promotion Area Commission. If such action is proposed
by City Council, the proposed work plan/budget shall be returned to the Hotel/Motel Tourism
Promotion Area Commission for further discussion and recommendation,providing at least 20 days
for comment unless the comment period is waived by the Hotel/Motel Tourism Promotion Area
Commission. After the comment period, the City Council may exercise its sole discretion as to
how the revenue derived from the charge is to be used to promote tourism, pursuant to RCW
35.101.130(1).
(D)After the annual work plan/budget is adopted by City Council,it shall govern the use of revenue
derived from the charges during the calendar year in which annual work plan/budget was approved.
The City Council may make amendments to the annual work plan/budget by motion, subject to
compliance with the requirements of SVMC 3.21.080(3)regarding review and comment period by
the Hotel/Motel Tourism Promotion Area Commission.
(E) The Hotel/Motel Tourism Promotion Area Commission shall provide a written report to the
City Council at least 45 days prior to when the annual work plan/budget is due to the City Council.
The report shall include information on the previous year's operations of the Tourism Promotion
Area such as(but not limited to):
(1)The number of hoteliers paying the Tourism Promotion Area fee;
(2) A summary of key factors influencing Spokane Valley's visitor industry in the past
year;
(3)An outline of major initiatives including visitor marketing and promotion,recruitment
of group meetings or sporting events occurring in the past year;
(4)The level of hotel occupancy and associated room demand contrasted to previous year;
(5)The level of TPA per-room night proceeds contrasted to previous year;
(6) The number of group meetings or sporting events that were booked, or in which
significant support services were provided by the booking organization.This would include
the number of participants and estimated economic impacts;
(7)Other relevant efforts and impacts of the TPA activities.
Section 9. New Code Section. Spokane Valley Municipal Code section 3.21.090 is hereby
established as follows:
SVMC 3.21.090 — Contracts Authorized for Operation of Tourism Promotion Area. Pursuant to
RCW 35.101.130(2), the City may contract with a tourism destination marketing organization or
other similar organization to administer the operation of the tourism promotion area.
Section 10. Severability. If any section, sentence, clause or phrase of this Ordinance should be
held to be invalid or unconstitutional by a court of competent jurisdiction,such invalidity or unconstitutionality
shall not affect the validity or constitutionality of any other section,sentence,clause or phrase ofthis Ordinance.
Section 11. Effective Date. This Ordinance shall be in full force and effect on January 1,2023 so
long as publication of the Ordinance Summary has occurred at least 30 days prior to that date.
Ordinance 22-016 Establishing Tourism Promotion Area Page 5 of 6
Passed this 20th day of September,2422.
qiV 00-3
Pam Haley, Mayor
ATTES
,y j aL
hristine Bainbridge,City Clerk J
Approved As To Form:
CL ' IIOffice of ti City ey
Date of Publication: 49 "3.4 '4,1007.,Z.
Effective Date: / ''/ `02Iot 3
Ordinance 22-016 Establishing Tourism Promotion Area Page 6 of 6