[atlas:bill]

AN ACT Relating to restructuring the litter tax and a portion of the hazardous substance tax to simplify the taxes while maintaining funding; amending RCW 82.04.270, 82.04.272, and 82.21.020; reenacting and amending RCW 82.04.250; adding new sections to chapter 82.04 RCW; creating new sections; repealing RCW 82.19.010, 82.19.020, 82.19.030, 82.19.040, and 82.19.050; and providing an effective date.

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

NEW SECTION. Sec. 1. The legislature finds that roadside littering and illegal dumping negatively impact our state's beauty and quality of life, and the health and safety of our residents.

The legislature further finds that all purchased tangible personal property, its packaging, and related services contribute to the litter and waste streams. But not all purchased tangible personal property and related services, including substantial contributors to the litter and waste streams, are reached under the litter tax and hazardous substance tax, which together fund waste reduction, waste management, and site clean-up programs. Both taxes are based on individual inventory items, rather than gross proceeds, and have proved difficult for taxpayers to remit correctly. Additionally, both taxes have not been reliable program funding sources.

Therefore, the legislature intends that taxes dedicated to the waste reduction, waste management, and site clean-up programs should provide stable funding, should be easy for taxpayers to understand and pay, and should come from a base that truly reflects the scope of the contributing sources.

Sec. 2. RCW 82.04.250 and 1998 c 343 s 5 and 1998 c 312 s 4 are each reenacted and amended to read as follows:

(1)(a) Upon every person except persons taxable under RCW 82.04.260(5), 82.04.272, or subsection (2) of this section engaging within this state in the business of making sales at retail, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the business, multiplied by the rate of 0.471 percent.

(b) In addition to the tax imposed in (a) of this subsection, a litter control tax is imposed equal to the rate specified in section 5 of this act upon every person taxable under (a) of this subsection.

(2) Upon every person engaging within this state in the business of making sales at retail that are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the business, multiplied by the rate of 0.484 percent.

Sec. 3. RCW 82.04.270 and 1999 c 358 s 2 are each amended to read as follows:

(1) Upon every person except persons taxable under RCW 82.04.260(5) or 82.04.272 engaging within this state in the business of making sales at wholesale; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of such business multiplied by the rate of 0.484 percent.

(2) In addition to the tax imposed in subsection (1) of this section, a litter control tax is imposed equal to the rate specified in section 5 of this act upon every person taxable under subsection (1) of this section.

Sec. 4. RCW 82.04.272 and 1998 c 343 s 1 are each amended to read as follows:

(1)(a) Upon every person engaging within this state in the business of warehousing and reselling prescription drugs; as to such persons, the amount of the tax shall be equal to the gross income of the business multiplied by the rate of 0.138 percent.

(2) For the purposes of this section:

(a) "Prescription drug" has the same meaning as that term is given in RCW 82.08.0281; and

(b) "Warehousing and reselling prescription drugs" means the buying of prescription drugs from a manufacturer or another wholesaler, and reselling of the drugs to persons selling at retail or to hospitals, clinics, health care providers, or other providers of health care services, by a wholesaler or retailer who is registered with the federal drug enforcement administration and licensed by the state board of pharmacy.

NEW SECTION. Sec. 5. A new section is added to chapter 82.04 RCW to read as follows:

(1) The rate of the litter control tax under RCW 82.04.250(1)(b), 82.04.270(2), and 82.04.272(1)(b) shall be six one-thousandths of one percent.

(2) Sixty-two percent of the taxes collected under RCW 82.04.250(1)(b), 82.04.270(2), and 82.04.272(1)(b) shall be deposited in the waste reduction, recycling, and litter control account under RCW 70.93.180 and thirty-eight percent shall be deposited in the toxics control accounts under RCW 70.105D.070.

NEW SECTION. Sec. 6. A new section is added to chapter 82.04 RCW to read as follows:

A credit is allowed against the tax imposed under RCW 82.04.250(1)(b), 82.04.270(2), and 82.04.272(1)(b) equal to the rate in section 5 of this act multiplied by the gross proceeds of the sales specified in RCW 82.04.050(2) (e) and (f); RCW 82.04.050(3) (a), (b), (c), (d), (f), and (g); and RCW 82.04.060(2). For those persons subject to tax under RCW 82.04.250(2), a credit is allowed against the tax imposed under RCW 82.04.250(1)(b), 82.04.270(2), and 82.04.272(1)(b) equal to the rate in section 5 of this act multiplied by the gross proceeds of sales specified in RCW 82.04.270.

Sec. 7. RCW 82.21.020 and 1989 c 2 s 9 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Hazardous substance" means:

(a) ((Any substance that, on March 1, 1989, is a hazardous substance under section 101(14) of the federal comprehensive environmental response, compensation, and liability act of 1980, 42 U.S.C. Sec. 9601(14), as amended by Public Law 99-499;

~~(b)~~)) Petroleum products;

((~~(c) Any pesticide product required to be registered under the federal insecticide, fungicide and rodenticide act; and~~

~~(d)~~)) (b) Any other substance, category of substance, and any product or category of product determined by the director of ecology by rule to present a threat to human health or the environment if released into the environment. The director of ecology shall not add or delete substances from this definition more often than twice during each calendar year. For tax purposes, changes in this definition shall take effect on the first day of the next month that is at least thirty days after the effective date of the rule. The word "product" or "products" as used in this ((~~paragraph (d)~~)) subsection (1)(b) means an item or items containing both: (i) One or more substances that are hazardous substances under (a)((~~, (b), or (c)~~)) of this subsection or that are substances or categories of substances determined under this ((~~paragraph (d)~~)) subsection (1)(b) to present a threat to human health or the environment if released into the environment; and (ii) one or more substances that are not hazardous substances.

(2) "Petroleum product" means plant condensate, lubricating oil, gasoline, aviation fuel, kerosene, diesel motor fuel, benzol, fuel oil, residual oil, liquefied or liquefiable gases such as butane, ethane, and propane, and every other product derived from the refining of crude oil, but the term does not include crude oil. Petroleum product does not include a product that is packaged for sale to the ultimate consumer and possessed by a wholesaler or retailer.

(3) "Possession" means the control of a hazardous substance located within this state and includes both actual and constructive possession. "Actual possession" occurs when the person with control has physical possession. "Constructive possession" occurs when the person with control does not have physical possession. "Control" means the power to sell or use a hazardous substance or to authorize the sale or use by another.

(4) "Previously taxed hazardous substance" means a hazardous substance in respect to which a tax has been paid under this chapter and which has not been remanufactured or reprocessed in any manner (other than mere repackaging or recycling for beneficial reuse) since the tax was paid.

(5) "Wholesale value" means fair market wholesale value, determined as nearly as possible according to the wholesale selling price at the place of use of similar substances of like quality and character, in accordance with rules of the department.

(6) Except for terms defined in this section, the definitions in chapters 82.04, 82.08, and 82.12 RCW apply to this chapter.

NEW SECTION. Sec. 8. The following acts or parts of acts are each repealed:

(1) RCW 82.19.010 (Litter tax imposed--Report to the legislature--Time of collection) and 1998 c 257 s 7, 1992 c 175 s 3, & 1971 ex.s. c 307 s 12;

(2) RCW 82.19.020 (Application to certain products) and 1992 c 175 s 4 & 1971 ex.s. c 307 s 13;

(3) RCW 82.19.030 (Rule-making authority tax--Items subject to--Reporting and accounting) and 1992 c 175 s 5 & 1971 ex.s. c 307 s 14;

(4) RCW 82.19.040 (Application of chapters 82.04 and 82.32 RCW--Disposition of revenue) and 1992 c 175 s 6 & 1971 ex.s. c 307 s 16; and

(5) RCW 82.19.050 (Exemptions) and 1992 c 175 s 7 & 1971 ex.s. c 307 s 17.

NEW SECTION. Sec. 9. This act does not affect any existing right acquired or liability or obligation incurred under the sections repealed or under any rule or order adopted under those statutes nor does it affect any proceeding instituted under those sections.

NEW SECTION. Sec. 10. This act takes effect January 1, 2002.