"Sec. 1   RCW 82.24.010 and 1997 c 420 s 3 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter:
     (1) "Board" means the liquor control board.
     (2) "Cigarette" means any roll for smoking made wholly or in part of tobacco, irrespective of size or shape and irrespective of the tobacco being flavored, adulterated, or mixed with any other ingredient, where such roll has a wrapper or cover made of paper or any material, except where such wrapper is wholly or in the greater part made of natural leaf tobacco in its natural state. "Cigarette" includes a roll-your-own cigarette.
     (3) "Cigarette paper" means any paper or any other material except tobacco, prepared for use as a cigarette wrapper.
     (4) "Cigarette tube" means cigarette paper made into a hollow cylinder for use in making cigarettes.
     (5) "Commercial cigarette-making machine" means a machine that is operated in a retail establishment and that is capable of being loaded with loose tobacco, cigarette paper or tubes, and any other components related to the production of roll-your-own cigarettes, including filters.
     (6) "Indian tribal organization" means a federally recognized Indian tribe, or tribal entity, and includes an Indian wholesaler or retailer that is owned by an Indian who is an enrolled tribal member conducting business under tribal license or similar tribal approval within Indian country. For purposes of this chapter "Indian country" is defined in the manner set forth in 18 U.S.C. Sec. 1151.
     (((4))) (7) "Precollection obligation" means the obligation of a seller otherwise exempt from the tax imposed by this chapter to collect the tax from that seller's buyer.
     (((5))) (8) "Retailer" means every person, other than a wholesaler, who purchases, sells, offers for sale or distributes any one or more of the articles taxed herein, irrespective of quantity or amount, or the number of sales, and all persons operating under a retailer's registration certificate.
     (((6))) (9) "Retail selling price" means the ordinary, customary or usual price paid by the consumer for each package of cigarettes, less the tax levied by this chapter and less any similar tax levied by this state.
     (((7))) (10) "Roll-your-own cigarettes" means cigarettes produced by a commercial cigarette-making machine.
     (11) "Stamp" means the stamp or stamps by use of which the tax levy under this chapter is paid or identification is made of those cigarettes with respect to which no tax is imposed.
     (((8))) (12) "Wholesaler" means every person who purchases, sells, or distributes any one or more of the articles taxed herein to retailers for the purpose of resale only.
     (((9))) (13) The meaning attributed, in chapter 82.04 RCW, to the words "person," "sale," "business" and "successor" applies equally in this chapter.

Sec. 2   RCW 82.24.030 and 2003 c 114 s 2 are each amended to read as follows:
     (1) In order to enforce collection of the tax hereby levied, the department of revenue ((shall)) must design and have printed stamps of such size and denominations as may be determined by the department. The stamps must be affixed on the smallest container or package that will be handled, sold, used, consumed, or distributed, to permit the department to readily ascertain by inspection, whether or not such tax has been paid or whether an exemption from the tax applies.
     (2) Except as otherwise provided in this chapter, only a wholesaler ((shall)) may cause to be affixed on every package of cigarettes, stamps of an amount equaling the tax due thereon or stamps identifying the cigarettes as exempt before he or she sells, offers for sale, uses, consumes, handles, removes, or otherwise disturbs and distributes the same((: PROVIDED, That)). However, where it is established to the satisfaction of the department that it is impractical to affix such stamps to the smallest container or package, the department may authorize the affixing of stamps of appropriate denomination to a large container or package.
     (3) Except as otherwise provided in this chapter, only wholesalers may purchase or obtain cigarette stamps. Wholesalers ((shall)) may not sell or provide stamps to any other wholesaler or person.
     (4) Each roll of stamps, or group of sheets, ((shall)) must have a separate serial number, which ((shall be)) is legible at the point of sale. The department of revenue ((shall)) must keep records of which wholesaler purchases each roll or group of sheets. If the department of revenue permits wholesalers to purchase partial rolls or sheets, in no case may stamps bearing the same serial number be sold to more than one wholesaler. The remainder of the roll or sheet, if any, ((shall)) must either be retained for later purchases by the same wholesaler or destroyed.
     (5) Nothing in this section ((shall)) may be construed as limiting any otherwise lawful activity under a cigarette tax compact pursuant to chapter 43.06 RCW.
     (6) In order to enforce collection of the tax in the case of roll-your-own cigarettes, a retailer must affix a stamp or stamps to each box or similar container provided by the retailer to the consumer. The box or similar container must be used by a consumer to transport roll-your-own cigarettes from the retailer's place of business. A retailer must provide cigarette tubes to a consumer in one or more twenty unit denominations. Stamps must be for an amount equaling the tax due under this chapter. Each cigarette tube or paper provided to the consumer is deemed a cigarette for purposes of imposing and collecting taxes under this chapter. Stamps for roll-your-own cigarettes must be issued and affixed in a manner determined by the department but as consistent as practicable with the stamping requirements for wholesalers.

Sec. 3   RCW 82.24.035 and 1999 c 193 s 5 are each amended to read as follows:
     (1) No stamp may be affixed to, or made upon, any container or package of cigarettes if:
     (a) The container or package differs in any respect with the requirements of the federal cigarette labeling and advertising act (15 U.S.C. Sec. 1331 et seq.) for the placement of labels, warnings, or any other information upon a package of cigarettes that is to be sold within the United States;
     (b) The container or package has been imported into the United States after January 1, 2000, in violation of 26 U.S.C. Sec. 5754;
     (c) The container or package, including a container of individually stamped containers or packages, is labeled "For Export Only," "U.S. Tax Exempt," "For Use Outside U.S.," or similar wording indicating that the manufacturer did not intend that the product be sold in the United States; or
     (d) The container or package has been altered by adding or deleting the wording, labels, or warnings described in (a) or (c) of this subsection.
     (2) In addition to the penalty and forfeiture provisions otherwise provided for in this chapter, a violation of this section is a deceptive act or practice under the consumer protection act, chapter 19.86 RCW.
     (3) Subsection (1)(a) of this section does not apply to boxes or similar containers used by a consumer to transport roll-your-own cigarettes.

Sec. 4   RCW 82.24.050 and 2003 c 114 s 4 are each amended to read as follows:
     (1) No retailer in this state may possess unstamped cigarettes within this state unless the person is also a wholesaler in possession of the cigarettes in accordance with RCW 82.24.040.
     (2) A retailer may obtain cigarettes only from a wholesaler subject to the provisions of this chapter.
     (3) Only a retailer licensed under this chapter may provide consumers with access to a commercial cigarette-making machine to make roll-your-own cigarettes. A retailer is prohibited from allowing the use of a commercial cigarette-making machine by a person unless, contemporaneously to the person's use of the machine, the retailer provides the consumer with a box or similar container to transport roll-your-own cigarettes and such box is affixed with the appropriate stamp or stamps as required under RCW 82.24.030(6). A consumer must transport roll-your-own cigarettes from a retailer's place of business only in such box or similar container.
     (4) A commercial cigarette-making machine must have a secure meter that counts the number of cigarettes made, manufactured, or fabricated by the machine and that cannot be accessed, except for the sole purpose of taking meter readings, altered or reset by the machine operator.

Sec. 5   RCW 82.24.060 and 1961 c 15 s 82.24.060 are each amended to read as follows:
     (1) Except as otherwise provided in this chapter, stamps ((shall)) must be affixed in such manner that they cannot be removed from the package or container without being mutilated or destroyed, which stamps so affixed ((shall be)) are evidence of the tax imposed.
     (2) In the case of cigarettes contained in individual packages, as distinguished from cartons or larger units, the stamps ((shall)) must be affixed securely on each individual package.
     (3) With respect to roll-your-own cigarettes, stamps must be affixed securely on each individual box or similar container provided by the retailer to the consumer.

Sec. 6   RCW 82.24.110 and 2008 c 226 s 4 are each amended to read as follows:
     (1) Each of the following acts is a gross misdemeanor and punishable as such:
     (a) To sell, except as a licensed wholesaler engaged in interstate commerce as to the article being taxed herein, without the stamp first being affixed;
     (b) To sell in Washington as a wholesaler to a retailer who does not possess and is required to possess a current cigarette retailer's license;
     (c) To use or have in possession knowingly or intentionally any forged or counterfeit stamps;
     (d) For any person other than the department of revenue or its duly authorized agent to sell any stamps not affixed to any of the articles taxed herein whether such stamps are genuine or counterfeit;
     (e) For any person other than the department of revenue, its duly authorized agent, or a licensed wholesaler who has lawfully purchased or obtained them to possess any stamps not affixed to any of the articles taxed herein whether such stamps are genuine or counterfeit;
     (f) To violate any of the provisions of this chapter;
     (g) To violate any lawful rule made and published by the department of revenue or the board;
     (h) To use any stamps more than once or any individual stamped box or similar container used to transport roll-your-own cigarettes more than once;
     (i) To refuse to allow the department of revenue or its duly authorized agent, on demand, to make full inspection of any place of business where any of the articles herein taxed are sold or otherwise hinder or prevent such inspection;
     (j) Except as otherwise provided in this chapter, for any retailer to have in possession in any place of business any of the articles herein taxed, unless the same have the proper stamps attached;
     (k) For any person to make, use, or present or exhibit to the department of revenue or its duly authorized agent, any invoice for any of the articles herein taxed which bears an untrue date or falsely states the nature or quantity of the goods therein invoiced;
     (l) For any wholesaler or retailer or his or her agents or employees to fail to produce on demand of the department of revenue all invoices of all the articles herein taxed or stamps bought by him or her or received in his or her place of business within five years prior to such demand unless he or she can show by satisfactory proof that the nonproduction of the invoices was due to causes beyond his or her control;
     (m) For any person to receive in this state any shipment of any of the articles taxed herein, when the same are not stamped, for the purpose of avoiding payment of tax. It is presumed that persons other than dealers who purchase or receive shipments of unstamped cigarettes do so to avoid payment of the tax imposed herein;
     (n) For any person to possess or transport in this state a quantity of ten thousand cigarettes or less unless the proper stamps required by this chapter have been affixed or unless: (i) Notice of the possession or transportation has been given as required by RCW 82.24.250; (ii) the person transporting the cigarettes has in actual possession invoices or delivery tickets which show the true name and address of the consignor or seller, the true name and address of the consignee or purchaser, and the quantity and brands of the cigarettes so transported; and (iii) the cigarettes are consigned to or purchased by any person in this state who is authorized by this chapter to possess unstamped cigarettes in this state;
     (o) For any person to possess or receive in this state a quantity of ten thousand cigarettes or less unless the proper stamps required by this chapter have been affixed or unless the person is authorized by this chapter to possess unstamped cigarettes in this state and is in compliance with the requirements of this chapter; ((and))
     (p) To possess, sell, distribute, purchase, receive, ship, or transport within this state any container or package of cigarettes that does not comply with this chapter; and
     (q) For a retailer to provide consumers with access to a commercial cigarette-making machine without providing a box or similar container that has a properly affixed stamp or stamps.
     (2) It is unlawful for any person knowingly or intentionally to possess or to:
     (a) Transport in this state a quantity in excess of ten thousand cigarettes unless the proper stamps required by this chapter are affixed thereto or unless: (i) Proper notice as required by RCW 82.24.250 has been given; (ii) the person transporting the cigarettes actually possesses invoices or delivery tickets showing the true name and address of the consignor or seller, the true name and address of the consignee or purchaser, and the quantity and brands of the cigarettes so transported; and (iii) the cigarettes are consigned to or purchased by a person in this state who is authorized by this chapter to possess unstamped cigarettes in this state; or
     (b) Receive in this state a quantity in excess of ten thousand cigarettes unless the proper stamps required by this chapter are affixed thereto or unless the person is authorized by this chapter to possess unstamped cigarettes in this state and is in compliance with this chapter.
     (3) Violation of ((this)) subsection (2) ((shall be)) of this section is punished as a class C felony under Title 9A RCW.
     (((3))) (4) All agents, employees, and others who aid, abet, or otherwise participate in any way in the violation of the provisions of this chapter or in any of the offenses described in this chapter ((shall be)) are guilty and punishable as principals, to the same extent as any wholesaler or retailer or any other person violating this chapter.
     (((4))) (5) For purposes of this section, "person authorized by this chapter to possess unstamped cigarettes in this state" has the same meaning as in RCW 82.24.250.

Sec. 7   RCW 82.24.120 and 2007 c 111 s 102 are each amended to read as follows:
     (1) If any person, subject to the provisions of this chapter or any rules adopted by the department of revenue under authority ((hereof)) of this section, is found to have failed to affix the stamps required, or to have them affixed as ((herein)) provided in this section, or to pay any tax due ((hereunder)) under this section, or to have violated any of the provisions of this chapter or rules adopted by the department of revenue in the administration ((hereof)) of this chapter, there ((shall)) must be assessed and collected from such person, in addition to any tax that may be found due, a remedial penalty equal to the greater of ten dollars per package of unstamped cigarettes or ten dollars per twenty roll-your-own cigarettes, or two hundred fifty dollars, plus interest on the amount of the tax at the rate as computed under RCW 82.32.050(2) from the date the tax became due until the date of payment, and upon notice mailed to the last known address of the person or provided electronically as provided in RCW 82.32.135. The amount ((shall become)) is due and payable in thirty days from the date of the notice. If the amount remains unpaid, the department or its duly authorized agent may make immediate demand upon such person for the payment of all such taxes, penalties, and interest.
     (2) The department, for good reason shown, may waive or cancel all or any part of penalties imposed, but the taxpayer must pay all taxes due and interest thereon, at the rate as computed under RCW 82.32.050(2) from the date the tax became due until the date of payment.
     (3) The keeping of any unstamped articles coming within the provisions of this chapter ((shall be)) is prima facie evidence of intent to violate the provisions of this chapter.
     (4) This section does not apply to taxes or tax increases due under RCW 82.24.280.

Sec. 8   RCW 82.24.130 and 2003 c 114 s 7, 2003 c 113 s 4, and 2003 c 25 s 9 are each reenacted and amended to read as follows:
     (1) The following are subject to seizure and forfeiture:
     (a) Subject to RCW 82.24.250, any articles taxed in this chapter that are found at any point within this state, which articles are held, owned, or possessed by any person, and that do not have the stamps affixed to the packages or containers; any container or package of cigarettes possessed or held for sale that does not comply with this chapter; and any container or package of cigarettes that is manufactured, sold, or possessed in violation of RCW 82.24.570.
     (b) All conveyances, including aircraft, vehicles, or vessels, which are used, or intended for use, to transport, or in any manner to facilitate the transportation, for the purpose of sale or receipt of property described in (a) of this subsection, except:
     (i) A conveyance used by any person as a common or contract carrier having in actual possession invoices or delivery tickets showing the true name and address of the consignor or seller, the true name of the consignee or purchaser, and the quantity and brands of the cigarettes transported, unless it appears that the owner or other person in charge of the conveyance is a consenting party or privy to a violation of this chapter;
     (ii) A conveyance subject to forfeiture under this section by reason of any act or omission of which the owner thereof establishes to have been committed or omitted without his or her knowledge or consent;
     (iii) A conveyance encumbered by a bona fide security interest if the secured party neither had knowledge of nor consented to the act or omission.
     (c) Any vending machine or commercial cigarette-making machine used for the purpose of violating the provisions of this chapter.
     (d) Any cigarettes that are stamped, sold, imported, or offered or possessed for sale in this state in violation of RCW 70.158.030(3). For the purposes of this subsection (1)(d), "cigarettes" has the meaning as provided in RCW 70.158.020(3).
     (((e) All cigarettes sold, delivered, or attempted to be delivered in violation of RCW 70.155.105.))
     (2) Property subject to forfeiture under this chapter may be seized by any agent of the department authorized to collect taxes, any enforcement officer of the board, or law enforcement officer of this state upon process issued by any superior court or district court having jurisdiction over the property. Seizure without process may be made if:
     (a) The seizure is incident to an arrest or a search under a search warrant or an inspection under an administrative inspection warrant; or
     (b) The department, the board, or the law enforcement officer has probable cause to believe that the property was used or is intended to be used in violation of this chapter and exigent circumstances exist making procurement of a search warrant impracticable.
     (3) Notwithstanding the foregoing provisions of this section, articles taxed in this chapter which are in the possession of a wholesaler, licensed under Washington state law, for a period of time necessary to affix the stamps after receipt of the articles, ((shall)) are not ((be)) considered contraband unless they are manufactured, sold, or possessed in violation of RCW 82.24.570.

Sec. 9   RCW 82.24.180 and 1996 c 149 s 8 are each amended to read as follows:
     (1) The department of revenue may return any property seized under the provisions of this chapter when it is shown that there was no intention to violate the provisions thereof.
     (2) When any property is returned under this section, the department may return such goods to the parties from whom they were seized if and when such parties affix the proper amount of stamps thereto, and pay to the department as penalty an amount equal to the greater of ten dollars per package of unstamped cigarettes or ten dollars per twenty roll-your-own cigarettes, or two hundred fifty dollars, and interest on the amount of the tax at the rate as computed under RCW 82.32.050(2) from the date the tax became due until the date of payment, and in such cases, no advertisement shall be made or notices posted in connection with said seizure.

Sec. 10   RCW 82.24.295 and 2001 c 235 s 6 are each amended to read as follows:
     (1) The taxes imposed by this chapter do not apply to the sale, use, consumption, handling, possession, or distribution of cigarettes by an Indian retailer during the effective period of a cigarette tax contract subject to RCW 43.06.455.
     (2) Effective July 1, 2002, wholesalers and retailers subject to the provisions of this chapter ((shall be)) are allowed compensation for their services in affixing the stamps required under this chapter a sum computed at the rate of six dollars per one thousand stamps purchased or affixed by them.
     (3) In addition to the compensation allowed under subsection (2) of this section, retailers purchasing stamps for roll-your-own cigarettes are allowed additional compensation to offset the cost of the tax under chapter 82.26 RCW. The amount equals five cents per cigarette.

Sec. 11   RCW 82.24.500 and 2003 c 114 s 10 are each amended to read as follows:
     No person may engage in or conduct the business of purchasing, selling, consigning, or distributing cigarettes in this state without a license under this chapter, or providing consumers with access to a commercial cigarette-making machine without a license under this chapter. A violation of this section is a class C felony.

Sec. 12   RCW 82.24.530 and 1993 c 507 s 15 are each amended to read as follows:
     A fee of ninety-three dollars ((shall)) must accompany each retailer's license application or license renewal application. A separate license is required for each separate location at which the retailer operates. A fee of thirty additional dollars for each vending machine ((shall)) must accompany each application or renewal for a license issued to a retail dealer operating a cigarette vending machine. An additional fee of ninety-three dollars shall accompany each application or renewal for a license issued to a retail dealer operating a cigarette-making machine.

NEW SECTION.  Sec. 13   A new section is added to chapter 82.26 RCW to read as follows:
     (1) A person holding a tobacco products retailer's license issued under this chapter may apply through the master license system under chapter 19.02 RCW for a special endorsement as a cigar lounge or retail tobacconist shop subject to the requirements of this section.
     (2) A fee of seventeen thousand five hundred dollars must accompany each special license endorsement application under subsection (3) of this section and a fee of six thousand dollars must accompany each special license endorsement application under subsection (4) of this section.
     (3) The board must issue an endorsement as a cigar lounge to a business that meets the requirements of subsections (1) and (2) of this section and that has submitted an affidavit to the board certifying that it:
     (a) Is an establishment or part of an establishment specifically designated for the smoking of tobacco products, purchased on the premises or elsewhere, which is physically separated from any areas of the same or adjacent location where smoking is prohibited under state law. For the purposes of this subsection, "physically separated" means an area that is enclosed on all sides by solid, impermeable walls or windows extending from the floor to ceiling with self-closing doors.
     (b) Will not allow cigarettes to be smoked in the area designated in (a) of this subsection;
     (c) Holds a valid spirits, beer, and wine license in good standing from the board;
     (d) Has a valid uniform business identifier number and, if it is an established business with reportable gross receipts, has paid all applicable state business and occupation taxes in the year prior to application for endorsement;
     (e) In the year immediately preceding initial application or renewal, derived at least twenty-five thousand dollars of the business' annual gross income from the combination of the sale of tobacco products, tobacco products related paraphernalia, and the rental of on-site humidor space. In the case where this is the first endorsement application, the applicant may use any year prior to the initial application to meet the requirements of this subsection or must show proof that it has purchased, at wholesale, at least twelve thousand five hundred dollars in tobacco products and tobacco products related paraphernalia;
     (f) Has obtained a signed letter, on appropriate letterhead, from a heating, ventilation, and air-conditioning, and refrigeration contractor holding a valid registration with the department of labor and industries pursuant to chapter 18.27 RCW, which certifies that the ventilation and exhaust system for the area designated in (a) of this subsection:
     (i) Is separate and distinct from the location's general heating, ventilation, and air-conditioning system;
     (ii) Has an air flow, as calculated in cubic feet per minute, that will provide for at least thirteen or more air changes within the space served by the ventilation and exhaust system;
     (iii) Uses the correct quantity of filters recommended by the manufacturer of the ventilation and exhaust system and that those filters have a minimum efficiency rating value of fourteen or higher. For the purposes of this subsection, "minimum efficiency rating value" means the air-cleaning performance rating value as expressed in American society of heating, refrigerating, and air-conditioning engineers standard 52.2-2007; and
     (iv) Uses a loose-fill, rechargeable-type sorbent material positioned across the airflow in such a configuration that gaseous contaminants will have a residence time of one-tenth of one second or more within the sorbent material. For the purposes of this section, "residence time" must be calculated consistent with the recommendations outlined in Chapter 45 of the 2007 American society of heating, refrigerating, and air-conditioning engineers handbook - HVAC applications entitled "Control of Gaseous Indoor Air Contaminants";
     (g) Has on file, from each employee that may work in the area designated in (a) of this subsection, a signed acknowledgment that the employee has been advised of and accepts that environmental tobacco smoke may be present in their potential work area. The acknowledgment must contain the signature of the employee, the employer, and a disinterested third-party witness;
     (h) Will post signage indicating that environmental tobacco smoke may be present in the establishment or part of the establishment. This signage must be in the form and manner provided by the board and must be placed in a conspicuous location at each entry to the area designated in (a) of this subsection.
     (4) The board must issue an endorsement as a retail tobacconist shop to a business that meets the requirements of subsections (1) and (2) of this section and that has submitted an affidavit to the board certifying that it:
     (a) Is an establishment whose primary purpose is the sale of tobacco products and tobacco product related paraphernalia and that is physically separated from any adjacent location where smoking is prohibited under state law. For the purposes of this subsection, "physically separated" means an area that is enclosed on all sides by solid, impermeable walls or windows extending from the floor to ceiling with self-closing doors;
     (b) Will not allow cigarettes to be smoked in the area designated in (a) of this subsection;
     (c) Will prohibit entry into the area designated in subsection (3)(a) of this section to any person under the age of eighteen;
     (d) Has a valid uniform business identifier number and, if an established business with reportable gross receipts, has paid all applicable state business and occupation taxes in the year prior to application for endorsement;
     (e) In the year immediately preceding initial application or renewal, derived at least seventy-five percent of the business' annual gross income from the combination of the sale of tobacco products and tobacco product related paraphernalia. In the case where this is the first endorsement application, the applicant may use any year prior to the initial application to meet the requirements of this subsection or must show proof that it has purchased, at wholesale, at least twenty-five thousand dollars in tobacco products and tobacco products related paraphernalia;
     (f) Has obtained a signed letter, on appropriate letterhead, from a heating, ventilation, and air-conditioning, and refrigeration contractor holding a valid registration with the department of labor and industries pursuant to chapter 18.27 RCW, which certifies that the ventilation and exhaust system for the area designated in (a) of this subsection:
     (i) Is separate and distinct from the location's general heating, ventilation, and air-conditioning system;
     (ii) Has an airflow, as calculated in cubic feet per minute, that provides for at least thirteen or more air changes within the space served by the ventilation and exhaust system; and
     (iii) Uses the correct quantity of filters recommended by the manufacturer of the ventilation and exhaust system and that those filters have a minimum efficiency rating value of fourteen or higher. For the purposes of this subsection, "minimum efficiency rating value" means the air-cleaning performance rating value as expressed in American society of heating, refrigerating, and air-conditioning engineers standard 52.2-2007; and
     (iv) Uses a loose-fill, rechargeable-type sorbent material positioned across the airflow in such a configuration that gaseous contaminants will have a residence time of one-tenth of one second or more within the sorbent material. For the purposes of this section, "residence time" must be calculated consistent with the recommendations outlined in Chapter 45 of the 2007 American society of heating, refrigerating, and air-conditioning engineers handbook - HVAC applications entitled "Control of Gaseous Indoor Air Contaminants";     
     (g) Has on file, from each employee that may work in the area designated in (a) of this subsection, a signed acknowledgment that the employee has been advised of and accepts that environmental tobacco smoke may be present in their potential work area. The acknowledgment must contain the signature of the employee, the employer, and a disinterested third-party witness;
     (h) Will post signage indicating that environmental tobacco smoke may be present in the establishment or part of the establishment. This signage must be in the form and manner provided by the board and must be placed in a conspicuous location at each entry to the area designated in (a) of this subsection.
     (5) No employer may discharge, threaten to discharge, demote, deny a promotion to, sanction, discipline, retaliate against, harass, or otherwise discriminate against an employee, employed by the employer on or before the effective date of this section, solely for refusing to consent to or sign the acknowledgment required in subsections (3)(g) or (4)(g) of this section.
     (6) The affidavits required under this section must be submitted in a form and manner as prescribed by the board to effectively administer the provisions of this chapter.
     (7) The board may request additional documentation or information from an applicant in order to verify that the business meets the requirements of this section. The applicant must comply with requests from the department under this subsection or the board may withhold issuance of an endorsement.
     (8) Endorsements granted under this section are effective for the same period as provided in the tobacco products retailer's license granted to the applicant under this chapter. However, the affidavit required under this section must be completed and verified each year by the board and the appropriate fee paid in full before any endorsement to a tobacco retailer license is issued or renewed.
     (9) Endorsement decisions by the board must be made no later than twenty-one business days following the submittal of a completed affidavit together with the appropriate fee. Rejections of an application for an endorsement under this section may be appealed under the same process provided for other licenses issued by the board.
     (10) At no point during any calendar year may the board allow the total number of cigar lounge endorsements in the state to exceed one hundred or the total number of retail tobacco shop endorsements in the state to exceed five hundred. The board must administer the distribution of cigar lounge or retail tobacco shop endorsements and must ensure that the collective number of cigar lounge or retail tobacco shop endorsements located within all counties with a population of over five hundred thousand never exceed one-half of the endorsements allowed under this subsection for each endorsement respectively. Renewing applicants must be given priority over new applicants for endorsements under these limitations.

NEW SECTION.  Sec. 14   A new section is added to chapter 82.26 RCW to read as follows:
     (1) Up to five percent of the fees collected under section 13 of this act must be deposited into the liquor revolving fund created in RCW 66.08.170, to be used to cover the administrative costs of implementing and enforcing the endorsements created in section 13 of this act.
     (2) The remaining funds collected under section 13 of this act must be deposited into the tobacco prevention and control account created in RCW 43.79.480 solely for appropriation for tobacco usage prevention and treatment programs.

Sec. 15   RCW 70.160.060 and 1995 c 369 s 60 are each amended to read as follows:
     This chapter is not intended to:
     (1) Regulate smoking in a private enclosed workplace, within a public place, even though such workplace may be visited by nonsmokers, excepting places in which smoking is prohibited by the chief of the Washington state patrol, through the director of fire protection, or by other law, ordinance, or regulation;
     (2) Regulate use or smoking of tobacco products, as that term is defined under chapter 82.26 RCW, in a public place or place of employment that holds a valid endorsement to their tobacco products retailer's license under section 13 of this act. The liquor control board has sole enforcement authority under this chapter regarding the designated areas which receive an endorsement under section 13 of this act.

NEW SECTION.  Sec. 16   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, 2012."