BP BHEAD INT H

AN ACT Relating to the negotiation of cooperative agreements concerning the sales of cigarettes between the governor of the state of Washington and federally recognized Indian tribes within the borders of the state of Washington; adding a new section to chapter 43.06 RCW; adding a new section to chapter 82.01 RCW; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; adding a new section to chapter 82.14 RCW; adding a new section to chapter 82.24 RCW; creating a new section; and declaring an emergency.

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

NEW SECTION. Sec. 1. (1) The legislature intends by authorizing the governor to enter into cooperative agreements concerning the sales of cigarettes with federally recognized Indian tribes to enhance the government-to-government relationship enjoyed by both the state of Washington and the federally recognized Indian tribes.

(2) The United States Constitution provides that congress has the exclusive power to conduct affairs among the various Indian tribes, to the exclusion of the states where the power is exercised. In its interpretation of this constitutional provision, the supreme court of the United States has held that federally recognized Indian tribes and nations are free to engage in sales of cigarettes to their members free of state taxation when made within the borders of their own Indian reservation. The supreme court has further held that a state is prohibited from bringing a lawsuit against an Indian tribe or nation to compel the tribe or nation to collect state taxes on sales made in Indian country to either members or nonmembers of the tribe or nation without a waiver of immunity by the tribe or nation or congressional action authorizing the state's lawsuit. Finally, the supreme court has suggested that a state may provide other methods of collection of state taxes on sales of cigarettes made by Indian tribes or nations to persons who are not members of the tribe or nation, such as entering into mutually satisfactory agreements with Indian tribes or nations.

(3) The legislature intends to follow a path of mutual cooperation with federally recognized Indian tribes in the state by authorizing the governor to negotiate revenue-sharing agreements with those tribes. While recognizing the individual sovereignty of both tribes and the state, such agreements can provide for increased revenues for both the state and the tribes. In addition, by allowing for the possibility of simultaneously negotiating the removal of unstamped cigarettes from the reservations, enforcement of the state's cigarette tax laws can be greatly enhanced.

NEW SECTION. Sec. 2. A new section is added to chapter 43.06 RCW to read as follows:

(1) The governor is authorized to enter into revenue-sharing cooperative agreements concerning the sales of cigarettes with federally recognized Indian tribes or nations.

(2) A revenue-sharing cooperative agreement shall provide for a negotiated payment to the state in lieu of all cigarette and retail sales state and local taxes on sales of cigarettes by a tribe on the reservation, or in tribally licensed stores, as the agreement may provide.

(3) The negotiated payment in lieu of all cigarette and retail sales state and local taxes on a sale of cigarettes contained in a revenue-sharing cooperative agreement may be either an amount or at a rate less than the amount or rate of state and local taxes otherwise imposed on sales of cigarettes.

(4) Such agreements may permit the submission of disputes regarding the interpretation and administration of their provisions for judicial resolution, provided that a waiver of sovereign immunity and consent by the state for such resolution shall be conditioned upon a similar waiver of sovereign immunity by the Indian tribe, which waiver shall be approved or otherwise confirmed by the United States as may be required by law.

(5) The governor may delegate the power to negotiate such agreements.

(6) For purposes of this section, a "federally recognized Indian tribe or nation" means an Indian tribal entity that is recognized as an Indian tribe by the United States bureau of Indian affairs.

NEW SECTION. Sec. 3. A new section is added to chapter 82.01 RCW to read as follows:

Sales of cigarettes made by federally recognized Indian tribes or nations or their licensees, during the effective period of a revenue-sharing cooperative agreement entered into between the state and a federally recognized Indian tribe pursuant to sections 1 and 2 of this act, whereby the tribe may impose a tax in lieu of all other cigarette and retail sales state and local taxes imposed by chapters 82.08, 82.12, 82.14, and 82.24 RCW shall be exempt from any taxes otherwise due under this title.

NEW SECTION. Sec. 4. A new section is added to chapter 82.08 RCW to read as follows:

Sales of cigarettes made by federally recognized Indian tribes or nations or their licensees, during the effective period of a revenue-sharing cooperative agreement entered into between the state and a federally recognized Indian tribe pursuant to sections 1 and 2 of this act, whereby the tribe imposes a tax in lieu of all other cigarette and retail sales state and local taxes imposed by this chapter and chapters 82.12, 82.14, and 82.24 RCW shall be exempt from any taxes otherwise due under this chapter.

NEW SECTION. Sec. 5. A new section is added to chapter 82.12 RCW to read as follows:

Sales of cigarettes made by federally recognized Indian tribes or nations or their licensees, during the effective period of a revenue-sharing cooperative agreement entered into between the state and a federally recognized Indian tribe pursuant to sections 1 and 2 of this act, whereby the tribe imposes a tax in lieu of all other cigarette and retail sales state and local taxes imposed by this chapter and chapters 82.08, 82.14, and 82.24 RCW shall be exempt from any taxes otherwise due under this chapter.

NEW SECTION. Sec. 6. A new section is added to chapter 82.14 RCW to read as follows:

Sales of cigarettes made by federally recognized Indian tribes or nations or their licensees, during the effective period of a revenue-sharing cooperative agreement entered into between the state and a federally recognized Indian tribe pursuant to sections 1 and 2 of this act, whereby the tribe imposes a tax in lieu of all other cigarette and retail sales state and local taxes imposed by this chapter and chapters 82.08, 82.12, and 82.24 RCW shall be exempt from any taxes otherwise due under this chapter.

NEW SECTION. Sec. 7. A new section is added to chapter 82.24 RCW to read as follows:

Sales of cigarettes made by federally recognized Indian tribes or nations or their licensees, during the effective period of a revenue-sharing cooperative agreement entered into between the state and a federally recognized Indian tribe pursuant to sections 1 and 2 of this act, whereby the tribe imposes a tax in lieu of all other cigarette and retail sales state and local taxes imposed by this chapter and chapters 82.08, 82.12, and 82.14 RCW shall be exempt from any taxes otherwise due under this chapter.

NEW SECTION. Sec. 8. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.