BP BHEAD INT H [atlas:bill]

AN ACT Relating to cooperative agreements between the governor in regard to taxation of cigarettes sold within Indian country; adding new sections to chapter 43.06 RCW; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; adding a new section to chapter 82.24 RCW; and creating a new section.

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

NEW SECTION. Sec. 1. The legislature intends to further the government-to-government relationship between the state of Washington and Indians in the state of Washington by authorizing the governor to enter into cooperative agreements concerning the sale of cigarettes. The legislature finds that these agreements will provide a means to promote economic development, provide needed revenues for tribal governments and Indian persons, and enhance enforcement of the state's cigarette tax law, ultimately saving the state money and reducing conflict.

NEW SECTION. Sec. 2. A new section is added to chapter 43.06 RCW to read as follows:

(1) The governor may enter into cooperative agreements concerning the sale of cigarettes. Except for cooperative agreements under section 3 of this act, the rates and revenue sharing terms of a cooperative agreement are not effective unless authorized in a bill enacted by the legislature.

(2) Cooperative agreements shall be in regard to retail sales in which Indian retailers make delivery and physical transfer of possession of the cigarettes from the seller to the buyer within the Indian lands. In addition, cooperative agreements shall provide that retailers shall not sell or give, or permit to be sold or given, cigarettes to any person under the age of eighteen years.

(3) A cooperative agreement shall provide for a tribal cigarette tax in lieu of all state cigarette taxes and state sales and use taxes on sales of cigarettes on Indian lands by Indian retailers. The tribe may allow an exemption for sales to tribal members.

(4) Cooperative agreements shall provide that all cigarettes possessed or sold by a retailer shall bear a tribal cigarette tax stamp obtained by wholesalers from a bank or other suitable stamp vendor and applied to the cigarettes.

(5) Cooperative agreements shall provide that retailers shall purchase cigarettes only from:

(a) Wholesalers or manufacturers licensed to do business in the state of Washington;

(b) Out-of-state wholesalers or manufacturers who, although not licensed to do business in the state of Washington, agree to comply with the terms of the cooperative agreement, are certified to the state as having so agreed, and who do in fact so comply. However, the state may in its sole discretion exercise its administrative and enforcement powers over such wholesalers or manufacturers to the extent permitted by law;

(c) A tribal wholesaler that purchases only from a wholesaler or manufacturer described in (a), (b), or (d) of this subsection; and

(d) A tribal manufacturer.

(6) Cooperative agreements shall be for renewable terms of no more than eight years.

(7) Cooperative agreements shall include provisions for compliance.

(8) Tax revenue retained by a tribe must be used for essential government services.

(9) Cooperative agreements may provide for the submission of disputes regarding the interpretation and administration of their provisions for judicial resolution, and, if such submissions are agreed, shall include provision for a limited waiver of sovereign immunity and consent by the state for the resolution conditioned upon a similar limited waiver of sovereign immunity by the other parties to the agreement.

(10) The governor may delegate the power to negotiate cooperative agreements to the department of revenue.

(11) For purposes of this section and sections 3 through 6 of this act:

(a) "Essential government services" means services such as tribal administration, public facilities, fire, police, public health, education, job services, sewer, water, environmental and land use, transportation, utility services, and economic development excluding retail cigarette-related development;

(b) "Indian lands" means all land within the exterior boundaries of a reservation and land held in trust for a tribe or tribal member by the United States;

(c) "Indian retailer" or "retailer" means a business wholly owned and operated by an Indian tribe or a business wholly owned and operated by a tribal member and licensed by the tribe; and

(d) "Indian tribe" or "tribe" means a federally recognized Indian tribe located within the geographical boundaries of the state of Washington.

NEW SECTION. Sec. 3. A new section is added to chapter 43.06 RCW to read as follows:

(1) The governor is authorized to enter into cooperative agreements with the Squaxin Island Tribe, Nisqually Tribe, Tulalip Tribes, and Muckleshoot Indian Tribe. Each agreement adopted under this section shall provide that the tribal cigarette tax rate be one hundred percent of the state cigarette and state sales and use taxes within three years of enacting the tribal tax and shall be set no lower than eighty percent of the state cigarette and state sales and use taxes during the three-year phase-in period. The tribal cigarette tax is in lieu of the state cigarette and sales and use taxes, as provided in section 2(3) of this act.

(2) A cooperative agreement under this section is subject to section 2 of this act.

NEW SECTION. Sec. 4. A new section is added to chapter 82.08 RCW to read as follows:

The tax levied by RCW 82.08.020 does not apply to sales of cigarettes by an Indian retailer during the effective period of a cooperative agreement subject to section 2 of this act.

NEW SECTION. Sec. 5. A new section is added to chapter 82.12 RCW to read as follows:

The provisions of this chapter shall not apply in respect to the use of cigarettes sold by an Indian retailer during the effective period of a cooperative agreement subject to section 2 of this act.

NEW SECTION. Sec. 6. A new section is added to chapter 82.24 RCW to read as follows:

This chapter does not apply to the sale, use, consumption, handling, possession, or distribution of cigarettes by an Indian retailer during the effective period of a cooperative agreement subject to section 2 of this act.