S-1007.2  _______________________________________________

                         SENATE BILL 5845

          _______________________________________________

State of Washington      55th Legislature     1997 Regular Session

By Senators Swecker, Prentice, Sellar, Hargrove, Benton, Schow, Heavey, Wood, Bauer, Winsley, Wojahn, Haugen, Rasmussen, Jacobsen, McCaslin, Anderson, Newhouse, Johnson, Horn, West, Morton, Hochstatter, Sheldon, Goings, Finkbeiner, Rossi, Hale, Roach and Oke

Read first time 02/17/97.  Referred to Committee on Ways & Means.

Offsetting an increase in beer tax for health services account with corresponding decrease.

    AN ACT Relating to offsetting an increase in the beer tax for the health care services account with a corresponding decrease in other beer taxes; amending RCW 66.24.290, 69.50.520, and 66.08.180; providing an effective date; and declaring an emergency.

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

    Sec. 1.  RCW 66.24.290 and 1995 c 232 s 4 are each amended to read as follows:

    (1) Any brewer or beer wholesaler licensed under this title may sell and deliver beer to holders of authorized licenses direct, but to no other person, other than the board; and every such brewer or beer wholesaler shall report all sales to the board monthly, pursuant to the regulations, and shall pay to the board as an added tax for the privilege of manufacturing and selling the beer within the state a tax of ((two)) one dollar((s)) and ((sixty)) thirty cents per barrel of thirty-one gallons on sales to licensees within the state and on sales to licensees within the state of bottled and canned beer shall pay a tax computed in gallons at the rate of ((two)) one dollar((s)) and ((sixty)) thirty cents per barrel of thirty-one gallons.  Any brewer or beer wholesaler whose applicable tax payment is not postmarked by the twentieth day following the month of sale will be assessed a penalty at the rate of two percent per month or fraction thereof.  Beer shall be sold by brewers and wholesalers in sealed barrels or packages.  The moneys collected under this subsection shall be distributed as follows:  Twenty percent shall be distributed to counties in the same manner as under RCW 66.08.200; and eighty percent shall be distributed to incorporated cities and towns in the same manner as under RCW 66.08.210.

    (2) ((An additional tax is imposed equal to seven percent multiplied by the tax payable under subsection (1) of this section.  All revenues collected during any month from this additional tax shall be transferred to the state general fund by the twenty-fifth day of the following month.

    (3))) An additional tax is imposed on all beer subject to tax under subsection (1) of this section.  The additional tax is equal to ((two)) one dollar((s)) per barrel of thirty-one gallons.  All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.

    (((4))) (3)(a) An additional tax is imposed on all beer subject to tax under subsection (1) of this section.  The additional tax is equal to ninety-six cents per barrel of thirty-one gallons through June 30, 1995, two dollars and thirty-nine cents per barrel of thirty-one gallons for the period July 1, 1995, through June 30, 1997, and four dollars and seventy-eight cents per barrel of thirty-one gallons thereafter.

    (b) The additional tax imposed under this subsection does not apply to the sale of the first sixty thousand barrels of beer each year by breweries that are entitled to a reduced rate of tax under 26 U.S.C. Sec. 5051, as existing on July 1, 1993, or such subsequent date as may be provided by the board by rule consistent with the purposes of this exemption.

    (c) All revenues collected from the additional tax imposed under this subsection (((4))) (3) shall be deposited in the health services account under RCW 43.72.900.

    (((5))) (4) The tax imposed under this section shall not apply to "strong beer" as defined in this title.

    Sec. 2.  RCW 69.50.520 and 1995 2nd sp.s. c 18 s 919 are each amended to read as follows:

    The violence reduction and drug enforcement account is created in the state treasury.  All designated receipts from RCW 9.41.110(((7))) (8), 66.24.210(4), 66.24.290(((3)))(2), 69.50.505(h)(1), 82.08.150(5), 82.24.020(2), 82.64.020, and section 420, chapter 271, Laws of 1989 shall be deposited into the account.  Expenditures from the account may be used only for funding services and programs under chapter 271, Laws of 1989 and chapter 7, Laws of 1994 sp. sess., including state incarceration costs.  After July 1, 1997, at least seven and one-half percent of expenditures from the account shall be used for providing grants to community networks under chapter 70.190 RCW by the family policy council.

    Sec. 3.  RCW 66.08.180 and 1995 c 398 s 16 are each amended to read as follows:

Except as provided in RCW 66.24.290(1), moneys in the liquor revolving fund shall be distributed by the board at least once every three months in accordance with RCW 66.08.190, 66.08.200 and 66.08.210:  PROVIDED, That the board shall reserve from distribution such amount not exceeding five hundred thousand dollars as may be necessary for the proper administration of this title.

    (1) All license fees, penalties and forfeitures derived under this act from class H licenses or class H licensees shall every three months be disbursed by the board as follows:

    (a) Three hundred thousand dollars per biennium, to the University of Washington for the forensic investigations council to conduct the state toxicological laboratory pursuant to RCW 68.50.107; and

    (b) Of the remaining funds:

    (i) 6.06 percent to the University of Washington and 4.04 percent to Washington State University for alcoholism and drug abuse research and for the dissemination of such research; and

    (ii) 89.9 percent to the general fund to be used by the department of social and health services solely to carry out the purposes of RCW 70.96A.050;

    (2) The first fifty-five dollars per license fee provided in RCW 66.24.320 and 66.24.330 up to a maximum of one hundred fifty thousand dollars annually shall be disbursed every three months by the board to the general fund to be used for juvenile alcohol and drug prevention programs for kindergarten through third grade to be administered by the superintendent of public instruction;

    (3) Twenty percent of the remaining total amount derived from license fees pursuant to RCW 66.24.320, 66.24.330, 66.24.340, 66.24.350, 66.24.360, and 66.24.370, shall be transferred to the general fund to be used by the department of social and health services solely to carry out the purposes of RCW 70.96A.050; and

    (4) One-fourth cent per liter of the tax imposed by RCW 66.24.210 shall every three months be disbursed by the board to Washington State University solely for wine and wine grape research, extension programs related to wine and wine grape research, and resident instruction in both wine grape production and the processing aspects of the wine industry in accordance with RCW 28B.30.068.  The director of financial management shall prescribe suitable accounting procedures to ensure that the funds transferred to the general fund to be used by the department of social and health services and appropriated are separately accounted for.

NEW SECTION. Sec. 4.  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 takes effect July 1, 1997.

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