HB 5596 – Prevents HOT tax abuse

HB 5596 aims to stop coastal cities from misusing hotel occupancy tax (HOT) funds that are meant to support tourism, events, and visitor amenities. Some cities have been spending this money on general government operations instead of tourism-related purposes, bypassing their park boards. SB 2532 fixes this by penalizing cities that divert HOT funds — lowering the property tax rate they can adopt without a public vote. It calculates a “misspent money rate” and subtracts it from the voter-approval tax rate, meaning cities that misuse funds lose taxing flexibility. This ties HOT fund accountability directly to property tax authority. From a fiscally conservative view, the bill promotes transparency and protects tax dollars from misuse.