BP BHEAD INT H

AN ACT Relating to ensuring tax equity and fair competition; and creating new sections.

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

NEW SECTION. Sec. 1. (1) The legislature finds that:

(a) Indian tribes sell liquor, tobacco, fireworks, gasoline, food, and other consumer goods at retail to nontribal members on reservation land;

(b) Indian tribes provide gambling and other entertainment services to nontribal members on reservation land;

(c) State law requires Indians to collect state taxes from nontribal members on the retail sale of certain goods and services to nontribal members on reservation land;

(d) There is no federal or state law that permits state officials to enter reservation land to ensure these taxes are being collected as required and no court has interpreted existing law to allow state officials to enter reservation land for these purposes; and

(e) No state agency is entering reservation land to ensure compliance with state law so the state does not know what the rates of compliance or violation are pertaining to state laws requiring Indian tribes to collect state taxes from nontribal members on the retail sale of certain products and services to nontribal members on reservation land.

(2) The legislature further finds that the loss of legitimate tax revenues and the inability to access records, observe consumer behavior, perform audits, and ensure collection of the revenues:

(a) Has a negative fiscal impact on state and local governments; and

(b) Creates unfair competition for nontribal providers of such products and services off reservation land.

NEW SECTION. Sec. 2. (1) The tax equity and fairness in competition task force is hereby established. The task force shall be for the purposes of:

(a) Developing strategies for ensuring the collection of taxes from the retail sale by Indian tribes of certain products and services to nontribal members on reservation land; and

(b) Eliminating the unfair competition that results against nonreservation sellers of the goods and services who do pay the taxes.

(2) The task force shall be composed of the following members:

(a) The director of revenue or the director's designee, who shall serve as chair;

(b) The governor or the governor's designee;

(c) A representative from each caucus of the house of representatives, to be appointed by the speaker of the house of representatives;

(d) A representative from each caucus of the senate, to be appointed by the president of the senate;

(e) Two representatives from a major state-wide retail sellers association, to be appointed by the governor in consultation with the speaker of the house of representatives and president of the senate;

(f) Two representatives from the Indian tribes, to be appointed by the governor in consultation with the speaker of the house of representatives and president of the senate; and

(g) Three representatives from the general public, to be appointed by the governor in consultation with the speaker of the house of representatives and president of the senate.

(3) The task force shall:

(a) Perform a thorough review and inventory of all products and services provided by Indian tribes to nontribal members at retail sale on reservation land and the quantity of the sale of such products;

(b) Determine rates of compliance or violation pertaining to state laws requiring Indian tribes to collect state taxes from nontribal members on the retail sale of certain products and services to nontribal members on reservation land;

(c) Determine the loss in revenues to state and local governments from state taxes uncollected from Indian tribes on the retail sale of certain products and services to nontribal members on reservation land;

(d) Determine the loss of revenues to nontribal providers of the products and services off reservation land caused by unfair competition as a result of the failure to collect state taxes from Indian tribes on the retail sale of certain products and services to nontribal members on reservation land;

(e) Review and analyze all applicable state and federal laws and court opinions to determine the precise legal authority of state government to collect and to ensure collection of state taxes from nontribal members on the retail sale of certain products and services to nontribal members on reservation land;

(f) Investigate efforts made by other states to collect state taxes due from Indian tribes on the retail sale of certain products and services to nontribal members on reservation land;

(g) Develop comprehensive recommendations to ensure the collection of state taxes from Indian tribes on the retail sale of certain products and services to nontribal members on reservation land;

(h) Develop comprehensive ways to ensure tax equity and fairness in competition between Indian tribes and nontribal sellers in the retail sale of goods and services;

(i) Develop policies that will ensure all tax policies, laws, and regulations are equally applied to and enforced against Indian tribes and nontribal entities;

(j) Develop policies that will ensure all gambling policies, laws, and regulations are equally applied to and enforced against Indian tribes and nontribal entities;

(k) Develop policies that will ensure Indian tribes submit a weekly report to the department of revenue of the gross sales of goods and services to nontribal members on reservation land;

(l) Develop policies that will ensure Indian tribes report gambling winnings by nontribal members on reservation land, including the name, address, and phone number of the winners, to the department of revenue within forty-eight hours of disbursing such winnings;

(m) Determine what changes in state and federal law must be made in order to achieve tax equity and fairness in competition between Indian tribes and nontribal sellers in the retail sale of goods and services and develop strategies to achieve the changes in state and federal law; and

(n) Report its final findings and recommendations to the legislature no later than December 15, 1996, including any legislation the task force finds necessary for the implementation of its findings and recommendations.

(4) The office of financial management shall provide the necessary staff support for the purposes of the task force.

(5) The task force shall expire December 31, 1996.