BP BHEAD INT H

AN ACT Relating to imposing taxes on cigarettes and tobacco products to fund health care; amending RCW 82.24.020 and 82.26.020; adding a new section to chapter 43.70 RCW; and creating new sections.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that tobacco use is the single most preventable cause of death and disease in Washington state, and that the direct and in-direct medical cost associated with tobacco use is approaching one billion dollars in this state. Increases in the price of cigarettes have proven to prevent smoking among youth and reduce smoking prevalence among adults. Further, educational and smoking cessation programs have proven to be successful in addressing the use of tobacco by youths, pregnant women, and others. One out of every five deaths in Washington is due to tobacco-related causes. Over eight thousand of our residents die each year from illnesses caused by tobacco use. It is therefore the intent of the legislature to create the Washington health protection fund for the purpose of providing a financial disincentive to smoking, a funding source for needed health care programs, and education and cessation programs to encourage a tobacco-free population.

Sec. 2. RCW 82.24.020 and 1989 c 271 s 504 are each amended to read as follows:

(1) There is levied and there shall be collected as hereinafter provided, a tax upon the sale, use, consumption, handling, possession or distribution of all cigarettes((,)) as follows: In an amount equal to the rate of ((~~eleven and one-half~~)) 11.5 mills per cigarette through June 30, 1994, 24 mills per cigarette for the period July 1, 1994, through June 30, 1995, 36.5 mills per cigarette for the period July 1, 1995, through June 30, 1996, 49.0 mills per cigarette for the period July 1, 1996, through June 30, 1997, 61.5 mills per cigarette beginning July 1, 1997. The legislature shall review the need for increasing the tax.

(2) Until July 1, 1995, an additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of one and one-half mills per cigarette. All revenues collected during any month from this additional tax shall be deposited in the drug enforcement and education account under RCW 69.50.520 by the twenty-fifth day of the following month.

(3) Wholesalers and retailers subject to the payment of this tax may, if they wish, absorb one-half mill per cigarette of the tax and not pass it on to purchasers without being in violation of this section or any other act relating to the sale or taxation of cigarettes.

(4) For purposes of this chapter, "possession" shall mean both (a) physical possession by the purchaser and, (b) when cigarettes are being transported to or held for the purchaser or his designee by a person other than the purchaser, constructive possession by the purchaser or his designee, which constructive possession shall be deemed to occur at the location of the cigarettes being so transported or held.

Sec. 3. RCW 82.26.020 and 1983 2nd ex.s. c 3 s 16 are each amended to read as follows:

(1) From and after June 1, 1971, there is levied and there shall be collected a tax upon the sale, use, consumption, handling, or distribution of all tobacco products in this state at the rate of forty-five percent of the wholesale sales price of such tobacco products. Such tax shall be imposed at the time the distributor (a) brings, or causes to be brought, into this state from without the state tobacco products for sale, (b) makes, manufactures, or fabricates tobacco products in this state for sale in this state, or (c) ships or transports tobacco products to retailers in this state, to be sold by those retailers.

(2) An additional tax is imposed equal to the rate specified in RCW 82.02.030 multiplied by the tax payable under subsection (1) of this section.

(3) An additional tax is imposed on the wholesale price of tobacco products as follows: For the period June 30, 1994, through June 30, 1995, the rate is forty-nine and one-half percent; for the period July 1, 1995, through June 30, 1996, the rate is fifty-nine and one-half percent; for the period July 1, 1996, through June 30, 1997, the rate is sixty-nine and one-half percent; and from July 1, 1997, and thereafter, the rate is seventy-nine and one-half percent.

NEW SECTION. Sec. 4. A new section is added to chapter 43.70 RCW to read as follows:

The Washington health protection fund is established in the state treasury. Proceeds under RCW 82.24.020(1) attributable to the amount over 11.5 mills per cigarette and proceeds under RCW 82.26.020(3) shall be deposited in the Washington health protection fund and shall be expended in the following manner: Eighty percent shall be used to fund the basic health plan trust account. Twenty percent shall be appropriated from the Washington health protection fund to the department of health for the purposes of tobacco use prevention and cessation programs. One-half of this money shall be used for programs that include advertising that uses diverse media types, print, radio, television, posters, and strives to reach all high-risk groups across the state and in local communities. The media campaign will educate the public on the health dangers of smoking. One-half of this money shall be used for cessation and shall be allocated to those programs that directly aid the individual in the pursuit of overcoming tobacco addiction.

NEW SECTION. Sec. 5. This act is null and void if a health reform measure that includes cigarette and tobacco product tax levels at least equal to the level in this act is enacted by the 1993 legislature.