BILL REQ. #:  S-3586.1 

Read first time 01/13/12.   Referred to Committee on Ways & Means.

     AN ACT Relating to cigarette tax revenue for tobacco usage prevention and treatment programs; amending RCW 82.24.020 and 43.79.480; and providing an effective date.

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

Sec. 1   RCW 82.24.020 and 2010 1st sp.s. c 22 s 2 are each amended to read as follows:
     (1) There is levied and collected as provided in this chapter((,)) a tax upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to ((12.125)) 17.125 cents per cigarette. Revenues collected under this section must be distributed as follows:
     (a) Each fiscal year the sum of one million seven hundred thousand dollars 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; and
     (b) The remaining revenues must be deposited into the general fund.
     (2) Wholesalers subject to the payment of this tax may, if they wish, absorb five one-hundredths cents 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.
     (3) For purposes of this chapter, "possession" means both (a) physical possession by the purchaser, and((,)) (b) when cigarettes are being transported to or held for the purchaser or his or her designee by a person other than the purchaser, constructive possession by the purchaser or his or her designee, which constructive possession is deemed to occur at the location of the cigarettes being so transported or held.
     (4) In accordance with federal law and rules prescribed by the department, an enrolled member of a federally recognized Indian tribe may purchase cigarettes from an Indian tribal organization under the jurisdiction of the member's tribe for the member's own use exempt from the applicable taxes imposed by this chapter. Except as provided in subsection (5) of this section, any person, who purchases cigarettes from an Indian tribal organization and who is not an enrolled member of the federally recognized Indian tribe within whose jurisdiction the sale takes place, is not exempt from the applicable taxes imposed by this chapter.
     (5) If the state enters into a cigarette tax contract or agreement with a federally recognized Indian tribe under chapter 43.06 RCW, the terms of the contract or agreement take precedence over any conflicting provisions of this chapter while the contract or agreement is in effect.

Sec. 2   RCW 43.79.480 and 2011 1st sp.s. c 50 s 947 are each amended to read as follows:
     (1) Moneys received by the state of Washington in accordance with the settlement of the state's legal action against tobacco product manufacturers, exclusive of costs and attorneys' fees, shall be deposited in the tobacco settlement account created in this section except as these moneys are sold or assigned under chapter 43.340 RCW.
     (2) The tobacco settlement account is created in the state treasury. Moneys in the tobacco settlement account may only be transferred to the state general fund, and to the tobacco prevention and control account for purposes set forth in this section. The legislature shall transfer amounts received as strategic contribution payments as defined in RCW 43.350.010 to the life sciences discovery fund created in RCW 43.350.070. During the 2009-2011 and 2011-2013 fiscal biennia, the legislature may transfer less than the entire strategic contribution payments, and may transfer amounts attributable to strategic contribution payments into the basic health plan stabilization account.
     (3) The tobacco prevention and control account is created in the state treasury. The source of revenue for this account is moneys transferred to the account from the tobacco settlement account, cigarette tax revenues pursuant to RCW 82.24.020(1)(a), investment earnings, donations to the account, and other revenues as directed by law. Expenditures from the account are subject to appropriation. Moneys in the tobacco prevention and control account may only be used for tobacco usage prevention and treatment programs. During the 2009-2011 fiscal biennium, the legislature may transfer from the tobacco prevention and control account to the state general fund such amounts as represent the excess fund balance of the account.

NEW SECTION.  Sec. 3   This act takes effect July 1, 2012.