AN ACT Relating to enforcement of cigarette and tobacco statutes; amending RCW 19.91.010, 19.91.080, 19.91.130, 19.91.140, 19.91.180, 19.91.190, 66.28.090, 66.44.010, 66.44.370, 82.24.010, 82.24.027, 82.24.030, 82.24.040, 82.24.090, 82.24.110, 82.24.120, 82.24.130, 82.24.135, 82.24.145, 82.24.180, 82.24.190, 82.24.210, 82.24.230, 82.24.250, 82.24.260, 82.24.510, 82.24.520, 82.24.550, 82.24.560, 82.26.010, 82.26.050, 82.26.060, 82.26.080, 82.26.090, 82.26.110, and 82.26.120; adding a new section to chapter 19.91 RCW; adding a new section to chapter 82.24 RCW; adding a new section to chapter 82.26 RCW; adding a new section to chapter 82.32 RCW; creating new sections; and providing an effective date.

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

Sec. 1. Section 3, chapter 2, Laws of 1983 as last amended by section 2, chapter 321, Laws of 1986 and RCW 19.91.010 are each amended to read as follows:

When used in this chapter, the following words and phrases shall have the meaning ascribed to them in this section, except where the context clearly indicates a different meaning:

(1) "Person" means and includes any individual, firm, association, company, partnership, corporation, joint stock company, club, agency, syndicate, municipal corporation, or other political subdivision of this state, trust, receiver, trustee, fiduciary and conservator.

(2) "Wholesaler" includes any person who:

(a) Purchases cigarettes directly from the manufacturer, or

(b) Purchases cigarettes from any other person who purchases from or through the manufacturer, for the purpose of bona fide resale to retail dealers or to other persons for the purpose of resale only, or

(c) Services retail outlets by the maintenance of an established place of business for the purchase of cigarettes, including, but not limited to, the maintenance of warehousing facilities for the storage and distribution of cigarettes.

Nothing contained herein shall prevent a person from qualifying in different capacities as both a "wholesaler" and "retailer" under the applicable provisions of this chapter.

(3) "Retailer" means and includes any person who operates a store, stand, booth, concession, or vending machine for the purpose of making sales of cigarettes at retail.

(4) "Cigarettes" means any roll for smoking made wholly or in part of tobacco, irrespective of size or shape and whether or not such tobacco is flavored, adulterated, or mixed with any other ingredient, the wrapper or cover of which is made of paper or any other substance or material except tobacco.

(5) "Sale" means any transfer for a consideration, exchange, barter, gift, offer for sale and distribution, in any manner, or by any means whatsoever.

(6) "Sell at wholesale", "sale at wholesale" and "wholesale" sales mean and include any bona fide transfer of title to cigarettes for a valuable consideration, made in the ordinary course of trade or in the usual conduct of the wholesaler's business, to a retailer for the purpose of resale.

(7) "Sell at retail", "sale at retail" and "retail sales" mean and include any transfer of title to cigarettes for a valuable consideration, made in the ordinary course of trade or usual conduct of the seller's business, to the purchaser for consumption or use.

(8) "Basic cost of cigarettes" means the invoice cost of cigarettes to the retailer or wholesaler, as the case may be, or the replacement cost of cigarettes to the retailer or wholesaler, as the case may be, in the quantity last purchased, whichever is lower, to which shall be added the full face value of any stamps which may be required by any cigarette tax act of this state and by ordinance of any municipality thereof, now in effect or hereafter enacted, if not already included by the manufacturer in his or her list price. The disposition of the manufacturers' cash discount is at the discretion of the wholesaler. Any retailer or wholesaler who actually receives and sells cigarettes with trade or cash discounts shall execute a sworn affidavit and obtain a sworn affidavit from the person granting the discount, whether a manufacturer or wholesaler, which shows: (a) Amount or rate of the discount, (b) date the discount was granted, (c) names of the persons granting and receiving the discount, and (d) whether the discount is for cash or trade purposes. Sworn affidavits under this section are maintained for five years and available for inspection by the ((~~department of revenue's~~)) liquor control board's request. The ((~~department of revenue~~)) liquor control board may impose a civil penalty not to exceed two hundred fifty dollars for each failure to maintain affidavits under this section.

Nothing in this section may be construed to require any retailer to obtain affidavits from retail purchasers of cigarettes.

(9) (a) The term "cost to the wholesaler" means the "basic cost of cigarettes" to the wholesaler plus the "cost of doing business by the wholesaler" which said cost of doing business amount shall be expressed percentage-wise in the ratio that said wholesalers "cost of doing business" bears to said wholesalers dollar volume for all products sold by the wholesaler per annum, and said "cost of doing business by the wholesaler" shall be evidenced and determined by the standards and methods of accounting regularly employed by him or her for the purpose of federal income tax reporting for the total operation of his or her establishment in his or her allocation of overhead costs and expenses, paid or incurred, and must include, without limitation, labor costs (including reasonable salaries for partners, executives, and officers), rent, depreciation, selling cost, maintenance of equipment, delivery costs, all types of licenses, taxes, insurance and advertising, expressed as a percentage and applied to the "basic cost of cigarettes". Any fractional part of a cent amounting to one-tenth of one cent or more in cost to the wholesaler per carton of ten packages of cigarettes shall be rounded off to the next higher cent.

(b) For the purposes of this chapter the "cost of doing business" may not be computed using a percentage less than the overall percentage shown in subsection (9)(a) of this section or in the absence of the filing with the ((~~department of revenue~~)) liquor control board of satisfactory proof of a lesser or higher cost of doing business by the wholesaler making the sale, the "cost of doing business by the wholesaler" shall be presumed to be the percentage of the "basic cost of cigarettes" to the wholesaler specified in (c) of this subsection, plus cartage to the retail outlet, if performed or paid for by the wholesaler, which cartage cost, in the absence of the filing with the ((~~department of revenue~~)) liquor control board of satisfactory proof of a lesser or higher cost, shall be deemed to be one-half of one percent of the "basic cost of cigarettes" to the wholesaler.

(c) For the purposes of (b) of this subsection, the percentage of the basic cost of cigarettes to the wholesaler shall be:

(i) Four percent until July 1, 1987;

(ii) Three and one-half percent from July 1, 1987, until July 1, 1988;

(iii) Three percent from July 1, 1988, until July 1, 1989;

(iv) Two and one-half percent from July 1, 1989, until July 1, 1990; and

(v) Two percent from July 1, 1990, until July 1, 1991.

(10) (a) The term "cost to the retailer" means the "basic cost of cigarettes" to the retailer plus the "cost of doing business by the retailer" which said cost of doing business amount shall be expressed percentage-wise in the ratio that said retailers "cost of doing business" bears to said retailers dollar volume per annum, and said "cost of doing business by the retailer" shall be evidenced and determined by the standards and methods of accounting regularly employed by him or her for the purpose of federal income tax reporting for the total operation of his or her establishment in his or her allocation of overhead costs and expenses, paid or incurred, and must include, without limitation, labor (including reasonable salaries for partners, executives, and officers), rent, depreciation, selling costs, maintenance of equipment, delivery costs, all types of licenses, taxes, insurance and advertising, expressed as a percentage and applied to the "basic cost of cigarettes": PROVIDED, That any retailer who, in connection with the retailer's purchase, receives not only the discounts ordinarily allowed upon purchases by a retailer but also, in whole or in part, discounts ordinarily allowed upon purchases by a wholesaler shall, in determining "cost to the retailer", pursuant to this subdivision, add the "cost of doing business by the wholesaler," as defined in subdivision (9) of this section, to the "basic cost of cigarettes" to said retailer, as well as the "cost of doing business by the retailer". Any fractional part of a cent amounting to one-tenth of one cent or more in cost to the retailer per carton of ten packages of cigarettes shall be rounded off to the next higher cent.

(b) In the absence of the filing with the ((~~department of revenue~~)) liquor control board of satisfactory proof of a lesser or higher cost of doing business by the retailer making the sale, the "cost of doing business by the retailer" shall be presumed to be the percentage of the "basic cost of cigarettes" to the retailer specified in (d) of this subsection.

(c) In the absence of the filing with the ((~~department of revenue~~)) liquor control board of satisfactory proof of a lesser or higher cost of doing business, the "cost of doing business by the retailer", who, in connection with the retailer's purchase, receives not only the discounts ordinarily allowed upon purchases by a retailer but also, in whole or in part, the discounts ordinarily allowed upon purchases by a wholesaler, shall be presumed to be the percentage of the sum of the "basic cost of cigarettes" and the "cost of doing business by the wholesaler" specified in (d) of this subsection.

(d) For the purposes of (b) and (c) of this subsection, the percentage shall be:

(i) Eleven and one-half percent until July 1, 1987;

(ii) Ten and one-half percent from July 1, 1987, until July 1, 1988;

(iii) Nine and one-half percent from July 1, 1988, until July 1, 1989;

(iv) Eight and one-half percent from July 1, 1989, until July 1, 1990;

(v) Seven and one-half percent from July 1, 1990, until July 1, 1991.

(11) "Business day" means any day other than a Sunday or a legal holiday.

(12) "Master license system" means the mechanism established by chapter 19.02 RCW by which master licenses, endorsed for individual state-issued licenses, are issued and renewed utilizing a master application and a master license expiration date common to each renewable license endorsement.

Sec. 2. Section 8, chapter 286, Laws of 1957 as amended by section 13, chapter 278, Laws of 1975 1st ex. sess. and RCW 19.91.080 are each amended to read as follows:

(1) In determining "cost to the retailer" and "cost to the wholesaler" the ((~~department of revenue~~)) liquor control board or a court shall receive and consider as bearing on the bona fides of the cost, evidence tending to show that any person complained against under any of the provisions of this chapter purchased cigarettes, with respect to the sale of which complaint is made, at a fictitious price, or upon terms, or in such a manner, or under such invoices, as to conceal the true cost, discounts or terms of purchase, and shall also receive and consider as bearing on the bona fides of such cost, evidence of the normal, customary and prevailing terms and discounts in connection with other sales of a similar nature in the trade area or state.

(2) Merchandise given gratis or payment made to a retailer or wholesaler by the manufacturer thereof for display, or advertising, or promotion purposes, or otherwise, shall not be considered in determining the cost of cigarettes to the retailer or wholesaler.

Sec. 3. Section 13, chapter 286, Laws of 1957 as last amended by section 35, chapter 182, Laws of 1982 and RCW 19.91.130 are each amended to read as follows:

The licenses issuable under this chapter shall be as follows:

(1) Wholesalers license.

(2) Retailers license.

Application for the licenses shall be made through the master license system. The ((~~department of revenue~~)) liquor control board shall make rules regarding the regulation of the licenses. The ((~~department of revenue~~)) board may refrain from the issuance of any license under this chapter, where it has reasonable cause to believe that the applicant has willfully withheld information requested of him or her for the purpose of determining the eligibility of the applicant to receive a license, or where it has reasonable cause to believe that information submitted in the application is false or misleading or is not made in good faith. Each such license shall expire on the master license expiration date, and each such license shall be continued annually upon the conditions that the licensee shall have paid the required fee and complied with all the provisions of this chapter and the rules ((~~and regulations~~)) of the ((~~department of revenue~~)) board made pursuant thereto.

Sec. 4. Section 4, chapter 2, Laws of 1983 and RCW 19.91.140 are each amended to read as follows:

A fee of six hundred fifty dollars shall accompany each wholesaler's license application or license renewal application. If a wholesaler sells or intends to sell cigarettes at two or more places of business, whether established or temporary, a separate license with a license fee of one hundred fifteen dollars shall be required for each additional place of business. Each license, or certificate thereof, and such other evidence of license as the ((~~department of revenue~~)) liquor control board shall require, shall be exhibited in the place of business for which it is issued and in such manner as is prescribed for the display of a master license. The ((~~department of revenue~~)) board shall require each licensed wholesaler to file with him or her a bond in an amount not less than one thousand dollars to guarantee the proper performance of his or her duties and the discharge of his or her liabilities under this chapter. The bond shall be executed by such licensed wholesaler as principal, and by a corporation approved by the ((~~department of revenue~~)) liquor control board and authorized to engage in business as a surety company in this state, as surety. The bond shall run concurrently with the wholesaler's license.

Sec. 5. Section 18, chapter 286, Laws of 1957 as last amended by section 4, chapter 16, Laws of 1982 1st ex. sess. and RCW 19.91.180 are each amended to read as follows:

(1) In addition to the penalties and rights imposed and set forth in RCW 19.91.020 and 19.91.110, the ((~~department of revenue~~)) liquor control board may enforce the provisions of this chapter. The ((~~department of revenue~~)) board shall have the power to adopt, amend and repeal rules ((~~and regulations~~)) necessary to enforce and administer the provisions of this chapter. The ((~~department of revenue~~)) board is given full power and authority to revoke or suspend the license or permit of any wholesale or retail cigarette dealer in the state of Washington upon sufficient cause appearing of the violation of this chapter or upon the failure of such licensee or permittee to comply with any of the provisions of this chapter.

(2) No license or licenses shall be suspended or revoked except upon notice to the licensee and after a hearing as prescribed by ((~~said department of revenue~~)) the liquor control board. The ((~~said department of revenue~~)) board, upon a finding by same, that the licensee has failed to comply with any provision of this chapter or any rule ((~~or regulation~~)) promulgated thereunder, shall, in the case of the first offender, suspend the license or licenses of the said licensee for a period of not less than thirty consecutive business days, and, in the case of a second or plural offender, shall suspend said license or licenses for a period of not less than ninety consecutive business days nor more than twelve months, and, in the event the ((~~said department of revenue~~)) board finds the offender has been guilty of willful and persistent violations, it may revoke said person's license or licenses.

(3) Any person whose license or licenses have been so revoked may apply to the ((~~department of revenue~~)) board at the expiration of one year for a reinstatement of his or her license or licenses. Such license or licenses may be reinstated by the ((~~department of revenue~~)) board if it shall appear to the satisfaction of ((~~said department of revenue~~)) the board that the licensee will comply with the provisions of this chapter and the rules ((~~and regulations~~)) promulgated thereunder.

(4) No person whose license has been suspended or revoked shall sell cigarettes or permit cigarettes to be sold during the period of such suspension or revocation on the premises occupied by him or her or upon other premises controlled by him or her or others or in any other manner or form whatever.

(5) Any determination and order by the ((~~department of revenue~~)) board, and any order of suspension or revocation by the ((~~department of revenue~~)) board of the license or licenses, or refusal to reinstate a license or licenses after revocation shall be reviewable by an appeal to the superior court of Thurston county in and for the state of Washington. Said superior court shall review the order or ruling of the ((~~department of revenue~~)) board and may hear the matter de novo, having due regard to the provisions of this chapter, and the duties imposed upon the ((~~department of revenue~~)) board. Said review by the superior court, and any order entered thereon by said superior court, shall be appealable under and by virtue of the procedural law of this state.

Sec. 6. Section 19, chapter 286, Laws of 1957 as last amended by section 2, chapter 107, Laws of 1979 and RCW 19.91.190 are each amended to read as follows:

All fees and penalties received or collected by the ((~~department of revenue~~)) liquor control board pursuant to the provisions of this chapter shall be paid to the state treasurer, to be credited to the general fund.

NEW SECTION. Sec. 7. A new section is added to chapter 19.91 RCW to read as follows:

This chapter shall expire July 1, 1991.

Sec. 8. Section 52, chapter 62, Laws of 1933 ex. sess. as last amended by section 20, chapter 5, Laws of 1981 1st ex. sess. and RCW 66.28.090 are each amended to read as follows:

(1) All licensed premises used in the manufacture, storage, or sale of liquor, or any premises or parts of premises used or in any way connected, physically or otherwise, with the licensed business, and/or any premises where a banquet permit has been granted, shall at all times be open to inspection by any liquor and tobacco enforcement officer, inspector or peace officer.

(2) Every person, being on any such premises and having charge thereof, who refuses or fails to admit a liquor and tobacco enforcement officer, inspector or peace officer demanding to enter therein in pursuance of this section in the execution of his/her duty, or who obstructs or attempts to obstruct the entry of such liquor and tobacco enforcement officer, inspector or officer of the peace, or who refuses to allow a liquor and tobacco enforcement officer, and/or an inspector to examine the books of the licensee, or who refuses or neglects to make any return required by this title or the regulations, shall be guilty of a violation of this title.

Sec. 9. Section 70, chapter 62, Laws of 1933 ex. sess. as last amended by section 224, chapter 202, Laws of 1987 and RCW 66.44.010 are each amended to read as follows:

(1) All county and municipal peace officers are hereby charged with the duty of investigating and prosecuting all violations of this title, and the penal laws of this state relating to the manufacture, importation, transportation, possession, distribution and sale of liquor, and all fines imposed for violations of this title and the penal laws of this state relating to the manufacture, importation, transportation, possession, distribution and sale of liquor shall belong to the county, city or town wherein the court imposing the fine is located, and shall be placed in the general fund for payment of the salaries of those engaged in the enforcement of the provisions of this title and the penal laws of this state relating to the manufacture, importation, transportation, possession, distribution and sale of liquor: PROVIDED, That all fees, fines, forfeitures and penalties collected or assessed by a district court because of the violation of a state law shall be remitted as provided in chapter 3.62 RCW as now exists or is later amended.

(2) In addition to any and all other powers granted, the board shall have the power to enforce the penal provisions of this title and the penal laws of this state relating to the manufacture, importation, transportation, possession, distribution and sale of liquor.

(3) In addition to the other duties under this section, the board shall enforce chapters 19.91, 82.24, and 82.26 RCW.

(4) The board may appoint and employ, assign to duty and fix the compensation of, officers to be designated as liquor and tobacco enforcement officers. Such ((~~liquor~~)) enforcement officers shall have the power, under the supervision of the board, to enforce the penal provisions of this title and the penal laws of this state relating to the manufacture, importation, transportation, possession, distribution and sale of liquor, and the provisions of chapters 19.91, 82.24, and 82.26 RCW relating to cigarettes and tobacco. They shall have the power and authority to serve and execute all warrants and process of law issued by the courts in enforcing the penal provisions of this title or of any penal law of this state relating to the manufacture, importation, transportation, possession, distribution and sale of liquor, and the provisions of chapters 19.91, 82.24, and 82.26 RCW relating to cigarettes and tobacco. They shall have the power to arrest without a warrant any person or persons found in the act of violating any of the penal provisions of this title or of any penal law of this state relating to the manufacture, importation, transportation, possession, distribution and sale of liquor, and the provisions of chapters 19.91, 82.24, and 82.26 RCW relating to cigarettes and tobacco.

Sec. 10. Section 27, chapter 5, Laws of 1981 1st ex. sess. and RCW 66.44.370 are each amended to read as follows:

No person shall knowingly or willfully resist or oppose any state, county, or municipal peace officer, or liquor and tobacco enforcement officer, in the discharge of his/her duties under Title 66 RCW, or aid and abet such resistance or opposition. Any person who violates this section shall be guilty of a violation of this title and subject to arrest by any such officer.

Sec. 11. Section 82.24.010, chapter 15, Laws of 1961 and RCW 82.24.010 are each amended to read as follows:

For the purposes of this chapter, unless otherwise required by the context:

(1) "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;

(2) "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;

(3) "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;

(4) "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;

(5) "Stamp" means the stamp or stamps or meter impressions by use of which the tax levy under this chapter is paid;

(6) "Board" means the liquor control board;

(7) The meaning attributed, in chapter 82.04 RCW, to the words "person," "sale," "business" and "successor" shall apply equally in the provisions of this chapter.

Sec. 12. Section 12, chapter 3, Laws of 1986 and RCW 82.24.027 are each amended to read as follows:

There is hereby levied and there shall be collected by the ((~~department of revenue~~)) board from the persons mentioned in and in the manner provided by this chapter, an additional tax upon the sale, use, consumption, handling, possession, or distribution of cigarettes in an amount equal to the rate of four mills per cigarette.

The moneys collected under this section shall be deposited in the water quality account under RCW 70.146.030 through June 30, 2021, and in the general fund thereafter.

Sec. 13. Section 82.24.030, chapter 15, Laws of 1961 as amended by section 61, chapter 278, Laws of 1975 1st ex. sess. and RCW 82.24.030 are each amended to read as follows:

In order to enforce collection of the tax hereby levied, the ((~~department of revenue~~)) board shall design and have printed stamps of such size and denominations as may be determined by the ((~~department~~)) board, such stamps to be affixed on the smallest container or package that will be handled, sold, used, consumed, or distributed, to permit the ((~~department~~)) board to readily ascertain by inspection, whether or not such tax has been paid. Every person shall cause to be affixed on every package of cigarettes on which a tax is due, stamps of an amount equaling the tax due thereon before he or she sells, offers for sale, uses, consumes, handles, removes, or otherwise disturbs and distributes the same: PROVIDED, That where it is established to the satisfaction of the ((~~department~~)) board that it is impractical to affix such stamps to the smallest container or package, the ((~~department~~)) board may authorize the affixing of stamps of appropriate denomination to a large container or package.

The ((~~department~~)) board may authorize the use of meter stamping machines for imprinting stamps, which imprinted stamps shall be in lieu of those otherwise provided for under this chapter, and if such use is authorized, shall provide reasonable rules ((~~and regulations~~)) with respect thereto.

Sec. 14. Section 82.24.040, chapter 15, Laws of 1961 as amended by section 1, chapter 214, Laws of 1969 ex. sess. and RCW 82.24.040 are each amended to read as follows:

Every wholesaler in this state shall, within a reasonable time after receipt of any of the articles taxed herein, cause the same to have the requisite denomination and amount of stamps affixed to represent the tax imposed herein: PROVIDED, That any wholesaler who furnishes surety bond in a sum satisfactory to the ((~~department~~)) board, shall be permitted to set aside, without affixing the stamps required by this chapter, such part of his or her stock as may be necessary for the conduct of his or her business in making sales to persons in another state or foreign country, to instrumentalities of the federal government, or to the established governing bodies of any Indian tribe, recognized as such by the United States Department of the Interior. Such unstamped stock shall be kept separate and apart from stamped stock: PROVIDED FURTHER, That every wholesaler shall, at the time of shipping or delivering any of the articles taxed herein to a point outside of this state, or to a federal instrumentality, or to an Indian tribal organization, make a true duplicate invoice of the same which shall show full and complete details of the sale or delivery, whether or not stamps were affixed thereto, and shall transmit such true duplicate invoice to the main office of the ((~~department~~)) board, at Olympia, not later than the fifteenth day of the following calendar month, and for failure to comply with the requirements of this section the ((~~department~~)) board may revoke the permission granted to the taxpayer to maintain a stock of goods to which the stamps required by this chapter have not been affixed. The ((~~department~~)) board may also revoke this permission to maintain a stock of unstamped goods for sale to a specific Indian tribal organization when it appears that sales of unstamped cigarettes to persons who are not enrolled members of a recognized Indian tribe are taking place, or have taken place, within the exterior boundaries of the reservation occupied by that tribe.

Sec. 15. Section 82.24.090, chapter 15, Laws of 1961 as amended by section 62, chapter 278, Laws of 1975 1st ex. sess. and RCW 82.24.090 are each amended to read as follows:

Every wholesaler or retailer subject to the provisions of this chapter shall keep and preserve for a period of five years an accurate set of records, showing all transactions had with reference to the purchase and sale of any of the articles taxed herein and such persons shall also keep separately all invoices, and shall keep a record of all stamps purchased, and all such records and all stock of taxable articles on hand shall be open to inspection at all reasonable times by the ((~~department of revenue~~)) board or its duly authorized agent.

All wholesalers shall within fifteen days after the first day of each month file with the ((~~department of revenue~~)) board a report of all drop shipment sales made by them to retailers within this state during the preceding month, which report shall show the name and address of the retailer to whom the cigarettes were sold, the kind and quantity, and the date of delivery thereof.

Sec. 16. Section 82.24.110, chapter 15, Laws of 1961 as last amended by section 1, chapter 496, Laws of 1987 and RCW 82.24.110 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 registered wholesaler or retailer engaged in interstate commerce as to the article being taxed herein, without the stamp first being affixed;

(b) To use or have in possession knowingly or intentionally any forged or counterfeit stamps;

(c) For any person other than the ((~~department of revenue~~)) board 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;

(d) To violate any of the provisions of this chapter;

(e) To violate any lawful rule ((~~or regulation~~)) made and published by the ((~~department of revenue~~)) board;

(f) To use any stamps more than once;

(g) To refuse to allow the ((~~department of revenue~~)) board or any duly authorized agent thereof, 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;

(h) For any retailer, except one permitted to maintain an unstamped stock to engage in interstate business as provided herein, to have in possession in any place of business any of the articles herein taxed, unless the same have the proper stamps attached;

(i) For any person to make, use, or present or exhibit to the department of revenue or any duly authorized agent thereof, 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;

(j) For any wholesaler or retailer or his or her agents or employees to fail to produce on demand of the ((~~department of revenue~~)) board 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;

(k) 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;

(l) For any person to possess or transport upon the public highways, roads, or streets of this state a quantity of sixty thousand cigarettes or less unless the proper stamps required by this chapter have been affixed or unless the person transporting the cigarettes has in actual possession invoices or delivery tickets therefor which show 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 so transported and unless the cigarettes are consigned to or purchased by any person in this state who is a purchaser or consignee authorized by this chapter to possess unstamped cigarettes in this state.

(2) It is unlawful for any person knowingly or intentionally to possess or to transport upon the public highways, roads, or streets of this state a quantity in excess of sixty thousand cigarettes unless the proper stamps required by this chapter are affixed thereto or unless 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 of the consignee or purchaser, and the quantity and brands of the cigarettes so transported. Violation of this section shall be punished as a class C felony under Title 9A RCW.

(3) 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 guilty and punishable as principals, to the same extent as any wholesaler or retailer or any other person violating the provisions thereof.

Sec. 17. Section 82.24.120, chapter 15, Laws of 1961 as amended by section 64, chapter 278, Laws of 1975 1st ex. sess. and RCW 82.24.120 are each amended to read as follows:

If any person, subject to the provisions of this chapter or any rules ((~~and regulations~~)) promulgated by the ((~~department of revenue~~)) board under authority hereof, is found to have failed to affix the stamps required, or to have them affixed as herein provided, or to pay any tax due hereunder, or to have violated any of the provisions of this chapter or rules ((~~and regulations~~)) promulgated by the ((~~department of revenue~~)) board in the administration hereof, there shall be assessed and collected from such person, in addition to any tax that may be found due, a penalty equal to the amount of any tax found to be due plus interest thereon at the rate of one percent for each thirty days or portions thereof from the date the tax became due, and upon notice mailed to the last known address of the taxpayer said amount shall become due and payable in ten days, at which time the ((~~department~~)) board or its duly authorized agent may make immediate demand upon such person for the payment of all such taxes and penalties. The ((~~department~~)) board, for good reason shown, may remit all or any part of penalties imposed, but the taxpayer must pay all taxes due and interest thereon, at the rate of one percent for each thirty days or portion thereof. The keeping of any unstamped articles coming within the provisions of this chapter shall be prima facie evidence of intent to violate the provisions of this chapter.

Sec. 18. Section 82.24.130, chapter 15, Laws of 1961 as last amended by section 2, chapter 496, Laws of 1987 and RCW 82.24.130 are each 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.

(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.

(2) Property subject to forfeiture under this chapter may be seized by any agent of the ((~~department~~)) board authorized to collect taxes 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~~)) board or 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 or retailer, licensed by the ((~~department~~)) board, pursuant to the provisions of chapter 19.91 RCW for a period of time necessary to affix the stamps after receipt of the articles, shall not be considered contraband.

Sec. 19. Section 3, chapter 496, Laws of 1987 and RCW 82.24.135 are each amended to read as follows:

In all cases of seizure of any property made subject to forfeiture under this chapter the ((~~department~~)) board shall proceed as follows:

(1) Forfeiture shall be deemed to have commenced by the seizure. Notice of seizure shall be given to the ((~~department~~)) board immediately if the seizure is made by someone other than an agent of the ((~~department~~)) board authorized to collect taxes.

(2) Upon notification or seizure by the ((~~department~~)) board or upon receipt of property subject to forfeiture under this chapter from any other person, the ((~~department~~)) board shall list and particularly describe the property seized in duplicate and have the property appraised by a qualified person not employed by the ((~~department~~)) board or acting as its agent. Listing and appraisement of the property shall be properly attested by the ((~~department~~)) board and the appraiser, who shall be allowed a reasonable appraisal fee. No appraisal is required if the property seized is judged by the ((~~department~~)) board to be less than one hundred dollars in value.

(3) The ((~~department~~)) board shall cause notice to be served within five days following the seizure or notification to the ((~~department~~)) board of the seizure on the owner of the property seized, if known, on the person in charge thereof, and on any other person having any known right or interest therein, of the seizure and intended forfeiture of the seized property. The notice may be served by any method authorized by law or court rule including but not limited to service by mail. If service is by mail it shall be by both certified mail with return receipt requested and regular mail. Service by mail shall be deemed complete upon mailing within the five-day period following the seizure or notification of the seizure to the ((~~department~~)) board.

(4) If no person notifies the ((~~department~~)) board in writing of the person's claim of ownership or right to possession of the items seized within fifteen days of the date of the notice of seizure, the item seized shall be considered forfeited.

(5) If any person notifies the ((~~department~~)) board, in writing, of the person's claim of ownership or right to possession of the items seized within fifteen days of the date of the notice of seizure, the person or persons shall be afforded a reasonable opportunity to be heard as to the claim or right. The hearing shall be before the ((~~director~~)) board or the ((~~director's~~)) board's designee, except that any person asserting a claim or right may bring an action for return of the seized items in the superior court of the county in which such property was seized, if the aggregate value of the article or articles involved is more than five hundred dollars. A hearing before the seizing agency and any appeal therefrom shall be in accordance with chapter 34.05 RCW. The burden of proof by a preponderance of the evidence shall be upon the person claiming to be the lawful owner or the person claiming to have the lawful right to possession of the items seized. The ((~~department~~)) board shall promptly return the article or articles to the claimant upon a determination that the claimant is the present lawful owner or is lawfully entitled to possession thereof of the items seized.

Sec. 20. Section 4, chapter 496, Laws of 1987 and RCW 82.24.145 are each amended to read as follows:

When property is forfeited under this chapter the ((~~department~~)) board may:

(1) Retain the property or any part thereof for official use or upon application by any law enforcement agency of this state, another state, or the District of Columbia, or of the United States for the exclusive use of enforcing the provisions of this chapter or the laws of any other state or the District of Columbia or of the United States.

(2) Sell the property at public auction to the highest bidder after due advertisement, but the ((~~department~~)) board before delivering any of the goods so seized shall require the person to whom the property is sold to affix the proper amount of stamps. The proceeds of the sale and all moneys forfeited under this chapter shall be first applied to the payment of all proper expenses of any investigation leading to the seizure and of the proceedings for forfeiture and sale, including expenses of seizure, maintenance of custody, advertising, and court costs. The balance of the proceeds and all moneys shall be deposited in the general fund of the state. Proper expenses of investigation includes costs incurred by any law enforcement agency or any federal, state, or local agency.

Sec. 21. Section 82.24.180, chapter 15, Laws of 1961 as amended by section 66, chapter 278, Laws of 1975 1st ex. sess. and RCW 82.24.180 are each amended to read as follows:

The ((~~department of revenue~~)) board 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.

When any property is seized, under the provisions of this chapter, the ((~~department~~)) board 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~~)) board as penalty an amount equal to twenty-five percent of the amount of tax due and interest thereon at the rate of one percent for each thirty days or portion thereof from the date the tax became due, and in such cases, no advertisement shall be made or notices posted in connection with said seizure.

Sec. 22. Section 82.24.190, chapter 15, Laws of 1961 as last amended by section 244, chapter 202, Laws of 1987 and RCW 82.24.190 are each amended to read as follows:

When the ((~~department of revenue~~)) board has good reason to believe that any of the articles taxed herein are being kept, sold, offered for sale, or given away in violation of the provisions of this chapter or ((~~regulations~~)) rules issued under authority hereof, it may make affidavit of such fact, describing the place or thing to be searched, before any judge of any court in this state, and such judge shall issue a search warrant directed to the sheriff, any deputy, police officer, or duly authorized agent of the ((~~department of revenue~~)) board commanding him or her diligently to search any building, room in a building, place or vehicle as may be designated in the affidavit and search warrant, and to seize such tobacco so possessed and to hold the same until disposed of by law, and to arrest the person in possession or control thereof. If upon the return of such warrant, it shall appear that any of the articles taxed herein, unlawfully possessed, were seized, the same shall be sold as provided in this chapter.

Sec. 23. Section 82.24.210, chapter 15, Laws of 1961 as amended by section 68, chapter 278, Laws of 1975 1st ex. sess. and RCW 82.24.210 are each amended to read as follows:

The ((~~department of revenue~~)) board may promulgate rules ((~~and regulations~~)) providing for the refund to dealers for the cost of stamps affixed to articles taxed herein, which by reason of damage become unfit for sale and are destroyed by the dealer or returned to the manufacturer or jobber. In the case of any articles to which stamps have been affixed, and which articles have been sold and shipped to a regular dealer in such articles in another state, the seller in this state shall be entitled to a refund of the actual amount of the stamps so affixed, less the affixing discount, upon condition that the seller in this state makes affidavit that the articles were sold and shipped outside of the state and that he or she has received from the purchaser outside the state a written acknowledgment that he or she has received such articles with the amount of stamps affixed thereto, together with the name and address of such purchaser. The ((~~department of revenue~~)) board may redeem any unused stamps purchased from it at the face value thereof less the affixing discount.

Sec. 24. Section 82.24.230, chapter 15, Laws of 1961 and RCW 82.24.230 are each amended to read as follows:

All of the provisions contained in chapter 82.32 RCW except RCW 82.32.050, 82.32.060, 82.32.070, 82.32.100 and 82.32.270 shall have full force and application with respect to taxes imposed under the provisions of this chapter, ((~~except the following sections thereof: RCW 82.32.050, 82.32.060, 82.32.070, 82.32.100 and 82.32.270~~)); except that "department of revenue" or "department" means board.

Sec. 25. Section 6, chapter 157, Laws of 1972 ex. sess. and RCW 82.24.250 are each amended to read as follows:

Every person who shall transport cigarettes not having the stamps affixed to the packages or containers, upon the public highways, roads or streets of this state shall have in his or her actual possession invoices or delivery tickets for such cigarettes, which shall show 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 so transported. If the cigarettes are consigned to or purchased by any person in this state such purchaser or consignee must be a person who is authorized by chapter 82.24 RCW to possess unstamped cigarettes in this state. In the absence of such invoices or delivery tickets, or, if the name or address of the consignee or purchaser is falsified or if the purchaser or consignee is not authorized by chapter 82.24 RCW to possess unstamped cigarettes, the cigarettes so transported shall be deemed contraband subject to seizure and sale under the provisions of RCW 82.24.130.

Transportation of cigarettes from a point outside this state to a point in some other state will not be considered a violation of this section provided that the person so transporting such cigarettes has in his or her possession adequate invoices or delivery tickets which give the true name and address of such out-of-state seller or consignor and such out-of-state purchaser or consignee.

In any case where the ((~~department~~)) board or its duly authorized agent, or any peace officer of the state, has knowledge or reasonable grounds to believe that any vehicle is transporting cigarettes in violation of this section, the ((~~department~~)) board, such agent, or such police officer, is authorized to stop such vehicle and to inspect the same for contraband cigarettes.

For purposes of this section, the term "person authorized by chapter 82.24 RCW to possess unstamped cigarettes" shall mean a wholesaler or retailer licensed pursuant to the provisions of chapter 19.91 RCW, the United States or an agency thereof, and any Indian tribal organization authorized to possess unstamped cigarettes.

Sec. 26. Section 13, chapter 3, Laws of 1986 as amended by section 3, chapter 80, Laws of 1987 and RCW 82.24.260 are each amended to read as follows:

Any retailer who sells or otherwise disposes of any unstamped cigarettes other than (1) a federal instrumentality with respect to sales to authorized military personnel and (2) a federally recognized Indian tribal organization with respect to sales to enrolled members of the tribe shall collect from the buyer or transferee thereof the tax imposed on such buyer or transferee by this chapter and remit the same to the ((~~department~~)) board after deducting from the tax collected the compensation he or she would have been entitled to under the provisions of this chapter if he or she had affixed stamps to the unstamped cigarettes. Such remittance shall be made at the same time and manner as remittances of the retail sales tax as required under chapters 82.08 and 82.32 RCW. In the event the retailer fails to collect the tax from the buyer or transferee, or fails to remit the same, the retailer shall be personally liable therefor, and shall be subject to the administrative provisions of RCW 82.24.230 with respect to the collection thereof by the board or by the department of revenue on the board's behalf. The provisions of this section shall not relieve the buyer or possessor of unstamped cigarettes from personal liability for the tax imposed by this chapter.

Nothing in this section shall relieve a wholesaler or a retailer from the requirements of affixing stamps pursuant to RCW 82.24.040 and 82.24.050.

Sec. 27. Section 5, chapter 321, Laws of 1986 and RCW 82.24.510 are each amended to read as follows:

(1) The licenses issuable under this chapter are as follows:

(a) A wholesaler's license.

(b) A retailer's license.

(2) Application for the licenses shall be made through the master license system under chapter 19.02 RCW. The ((~~department of revenue~~)) board shall adopt rules regarding the regulation of the licenses. The ((~~department of revenue~~)) board may refrain from the issuance of any license under this chapter if the ((~~department~~)) board has reasonable cause to believe that the applicant has willfully withheld information requested for the purpose of determining the eligibility of the applicant to receive a license, or if the ((~~department~~)) board has reasonable cause to believe that information submitted in the application is false or misleading or is not made in good faith. Each such license shall expire on the master license expiration date, and each such license shall be continued annually if the licensee has paid the required fee and complied with all the provisions of this chapter and the rules of the ((~~department of revenue~~)) board made pursuant thereto.

Sec. 28. Section 6, chapter 321, Laws of 1986 and RCW 82.24.520 are each amended to read as follows:

A fee of six hundred fifty dollars shall accompany each wholesaler's license application or license renewal application. If a wholesaler sells or intends to sell cigarettes at two or more places of business, whether established or temporary, a separate license with a license fee of one hundred fifteen dollars shall be required for each additional place of business. Each license, or certificate thereof, and such other evidence of license as the ((~~department of revenue~~)) board requires, shall be exhibited in the place of business for which it is issued and in such manner as is prescribed for the display of a master license. The ((~~department of revenue~~)) board shall require each licensed wholesaler to file with the ((~~department~~)) board a bond in an amount not less than one thousand dollars to guarantee the proper performance of the duties and the discharge of the liabilities under this chapter. The bond shall be executed by such licensed wholesaler as principal, and by a corporation approved by the ((~~department of revenue~~)) board and authorized to engage in business as a surety company in this state, as surety. The bond shall run concurrently with the wholesaler's license.

Sec. 29. Section 9, chapter 321, Laws of 1986 and RCW 82.24.550 are each amended to read as follows:

(1) The ((~~department of revenue~~)) board shall enforce the provisions of this chapter. The ((~~department of revenue~~)) board may adopt, amend, and repeal rules necessary to enforce and administer the provisions of this chapter. The ((~~department of revenue~~)) board has full power and authority to revoke or suspend the license or permit of any wholesale or retail cigarette dealer in the state upon sufficient cause appearing of the violation of this chapter or upon the failure of such licensee to comply with any of the provisions of this chapter.

(2) A license shall not be suspended or revoked except upon notice to the licensee and after a hearing as prescribed by the ((~~department of revenue~~)) board. The ((~~department of revenue~~)) board, upon a finding by same, that the licensee has failed to comply with any provision of this chapter or any rule promulgated thereunder, shall, in the case of the first offender, suspend the license or licenses of the licensee for a period of not less than thirty consecutive business days, and, in the case of a second or plural offender, shall suspend the license or licenses for a period of not less than ninety consecutive business days nor more than twelve months, and, in the event the ((~~department of revenue~~)) board finds the offender has been guilty of willful and persistent violations, it may revoke the license or licenses.

(3) Any person whose license or licenses have been so revoked may apply to the ((~~department of revenue~~)) board at the expiration of one year for a reinstatement of the license or licenses. The license or licenses may be reinstated by the ((~~department of revenue~~)) board if it appears to the satisfaction of the ((~~department of revenue~~)) board that the licensee will comply with the provisions of this chapter and the rules promulgated thereunder.

(4) A person whose license has been suspended or revoked shall not sell cigarettes or permit cigarettes to be sold during the period of such suspension or revocation on the premises occupied by the person or upon other premises controlled by the person or others or in any other manner or form whatever.

(5) Any determination and order by the ((~~department of revenue~~)) board, and any order of suspension or revocation by the ((~~department of revenue~~)) board of the license or licenses, or refusal to reinstate a license or licenses after revocation shall be reviewable by an appeal to the superior court of Thurston county. The superior court shall review the order or ruling of the ((~~department of revenue~~)) board and may hear the matter de novo, having due regard to the provisions of this chapter and the duties imposed upon the ((~~department of revenue~~)) board.

Sec. 30. Section 10, chapter 321, Laws of 1986 and RCW 82.24.560 are each amended to read as follows:

All fees and penalties received or collected by the ((~~department of revenue~~)) board pursuant to this chapter shall be paid to the state treasurer, to be credited to the general fund.

NEW SECTION. Sec. 31. A new section is added to chapter 82.24 RCW to read as follows:

The board may adopt rules to implement this chapter.

Sec. 32. Section 82.26.010, chapter 15, Laws of 1961 as amended by section 70, chapter 278, Laws of 1975 1st ex. sess. and RCW 82.26.010 are each amended to read as follows:

As used in this chapter:

(1) "Tobacco products" means cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco, snuff, snuff flour, cavendish, plug and twist tobacco, fine-cut and other chewing tobaccos, shorts, refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking, but shall not include cigarettes as defined in RCW 82.24.010(4);

(2) "Manufacturer" means a person who manufactures and sells tobacco products;

(3) "Distributor" means (a) any person engaged in the business of selling tobacco products in this state who brings, or causes to be brought, into this state from without the state any tobacco products for sale, (b) any person who makes, manufactures, or fabricates tobacco products in this state for sale in this state, (c) any person engaged in the business of selling tobacco products without this state who ships or transports tobacco products to retailers in this state, to be sold by those retailers;

(4) "Subjobber" means any person, other than a manufacturer or distributor, who buys tobacco products from a distributor and sells them to persons other than the ultimate consumers;

(5) "Retailer" means any person engaged in the business of selling tobacco products to ultimate consumers;

(6) "Sale" means any transfer, exchange, or barter, in any manner or by any means whatsoever, for a consideration, and includes and means all sales made by any person. It includes a gift by a person engaged in the business of selling tobacco products, for advertising, as a means of evading the provisions of this chapter, or for any other purposes whatsoever.

(7) "Wholesale sales price" means the established price for which a manufacturer sells a tobacco product to a distributor, exclusive of any discount or other reduction;

(8) "Business" means any trade, occupation, activity, or enterprise engaged in for the purpose of selling or distributing tobacco products in this state;

(9) "Place of business" means any place where tobacco products are sold or where tobacco products are manufactured, stored, or kept for the purpose of sale or consumption, including any vessel, vehicle, airplane, train, or vending machine;

(10) "Retail outlet" means each place of business from which tobacco products are sold to consumers;

(11) ((~~"Department" means the state department of revenue~~)) "Board" means the liquor control board.

Sec. 33. Section 82.26.050, chapter 15, Laws of 1961 as amended by section 72, chapter 278, Laws of 1975 1st ex. sess. and RCW 82.26.050 are each amended to read as follows:

((~~From and after July 1, 1959~~)) No person shall engage in the business of a distributor or subjobber of tobacco products at any place of business without first having received from the ((~~department of revenue~~)) board a certificate of registration ((~~as provided in RCW 82.32.030~~)).

Sec. 34. Section 82.26.060, chapter 15, Laws of 1961 as amended by section 73, chapter 278, Laws of 1975 1st ex. sess. and RCW 82.26.060 are each amended to read as follows:

Every distributor shall keep at each registered place of business complete and accurate records for that place of business, including itemized invoices, of tobacco products held, purchased, manufactured, brought in or caused to be brought in from without the state, or shipped or transported to retailers in this state, and of all sales of tobacco products made, except sales to the ultimate consumer.

These records shall show the names and addresses of purchasers, the inventory of all tobacco products on hand on July 1, 1959, and other pertinent papers and documents relating to the purchase, sale, or disposition of tobacco products.

When a registered distributor sells tobacco products exclusively to the ultimate consumer at the address given in the certificate, no invoice of those sales shall be required, but itemized invoices shall be made of all tobacco products transferred to other retail outlets owned or controlled by that registered distributor. All books, records, and other papers and documents required by this section to be kept shall be preserved for a period of at least five years after the date of the documents, as aforesaid, or the date of the entries thereof appearing in the records, unless the ((~~department of revenue~~)) board, in writing, authorizes their destruction or disposal at an earlier date. At any time during usual business hours the ((~~department~~)) board, or its duly authorized agents or employees, may enter any place of business of a distributor, without a search warrant, and inspect the premises, the records required to be kept under this chapter, and the tobacco products contained therein, to determine whether or not all the provisions of this chapter are being fully complied with. If the ((~~department~~)) board, or any of its agents or employees, are denied free access or are hindered or interfered with in making such examination, the registration certificate of the distributor at such premises shall be subject to revocation by the ((~~department~~)) board.

Sec. 35. Section 82.26.080, chapter 15, Laws of 1961 as amended by section 74, chapter 278, Laws of 1975 1st ex. sess. and RCW 82.26.080 are each amended to read as follows:

Every retailer and subjobber shall procure itemized invoices of all tobacco products purchased. The invoices shall show the name and address of the seller and the date of purchase. The retailer and subjobber shall preserve a legible copy of each such invoice for five years from the date of purchase. Invoices shall be available for inspection by the ((~~department of revenue~~)) board or its authorized agents or employees at the retailer's or subjobber's place of business.

Sec. 36. Section 82.26.090, chapter 15, Laws of 1961 as amended by section 75, chapter 278, Laws of 1975 1st ex. sess. and RCW 82.26.090 are each amended to read as follows:

Records of all deliveries or shipments of tobacco products from any public warehouse of first destination in this state shall be kept by the warehouse and be available to the ((~~department of revenue~~)) board for inspection. They shall show the name and address of the consignee, the date, the quantity of tobacco products delivered, and such other information as the ((~~department~~)) board may require. These records shall be preserved for five years from the date of delivery of the tobacco products.

Sec. 37. Section 82.26.110, chapter 15, Laws of 1961 as amended by section 76, chapter 278, Laws of 1975 1st ex. sess. and RCW 82.26.110 are each amended to read as follows:

Where tobacco products upon which the tax imposed by this chapter has been reported and paid, are shipped or transported by the distributor to retailers without the state, to be sold by those retailers, or are returned to the manufacturer by the distributor or destroyed by the distributor, credit of such tax may be made to the distributor in accordance with ((~~regulations~~)) rules prescribed by the ((~~department of revenue~~)) board.

Sec. 38. Section 5, chapter 28, Laws of 1963 ex. sess. and RCW 82.26.120 are each amended to read as follows:

All of the provisions contained in chapter 82.32 RCW shall have full force and application with respect to taxes imposed under the provisions of this chapter; except that "department of revenue" or "department" means board.

NEW SECTION. Sec. 39. A new section is added to chapter 82.26 RCW to read as follows:

The board may adopt rules to implement this chapter.

NEW SECTION. Sec. 40. A new section is added to chapter 82.32 RCW to read as follows:

The liquor control board may contract with the department for the collection of taxes, penalties, and interest, and the making of refunds, related to the administration and enforcement of chapters 19.91, 82.24, and 82.26 RCW.

NEW SECTION. Sec. 41. All powers, duties, and functions of the department of revenue pertaining to chapters 19.91, 82.24, and 82.26 RCW are transferred to the liquor control board. All references to the director or department of revenue in the Revised Code of Washington shall be construed to mean the liquor control board when referring to the functions transferred in this section.

NEW SECTION. Sec. 42. All reports, documents, surveys, books, records, files, papers, or written material in the possession of the department of revenue pertaining to the powers, functions, and duties transferred shall be delivered to the custody of the liquor control board. All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the department of revenue in carrying out the powers, functions, and duties transferred shall be made available to the liquor control board. All funds, credits, or other assets held in connection with the powers, functions, and duties transferred shall be assigned to the liquor control board.

Any appropriations made to the department of revenue for carrying out the powers, functions, and duties transferred shall, on the effective date of this section, be transferred and credited to the liquor control board.

Whenever any question arises as to the transfer of any personnel, funds, books, documents, records, papers, files, equipment, or other tangible property used or held in the exercise of the powers and the performance of the duties and functions transferred, the director of financial management shall make a determination as to the proper allocation and certify the same to the state agencies concerned.

NEW SECTION. Sec. 43. All employees of the department of revenue engaged in performing the powers, functions, and duties transferred are transferred to the jurisdiction of the liquor control board. All employees classified under chapter 41.06 RCW, the state civil service law, are assigned to the liquor control board to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.

NEW SECTION. Sec. 44. All rules and all pending business before the department of revenue pertaining to the powers, functions, and duties transferred shall be continued and acted upon by the liquor control board. All existing contracts and obligations shall remain in full force and shall be performed by the liquor control board.

NEW SECTION. Sec. 45. The transfer of the powers, duties, functions, and personnel of the department of revenue shall not affect the validity of any act performed prior to the effective date of this section.

NEW SECTION. Sec. 46. If apportionments of budgeted funds are required because of the transfers directed by sections 42 through 45 of this act, the director of financial management shall certify the apportionments to the agencies affected, the state auditor, and the state treasurer. Each of these shall make the appropriate transfer and adjustments in funds and appropriation accounts and equipment records in accordance with the certification.

NEW SECTION. Sec. 47. Nothing contained in sections 41 through 46 of this act may be construed to alter any existing collective bargaining unit or the provisions of any existing collective bargaining agreement until the agreement has expired or until the bargaining unit has been modified by action of the personnel board as provided by law.

NEW SECTION. Sec. 48. Sections 27 through 30 of this act shall take effect July 1, 1991.

NEW SECTION. Sec. 49. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.