(1) There is levied and there shall be 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 the rate of eleven and one-half mills per cigarette. An amount of the proceeds equal to the rate of five mills per cigarette shall be deposited into the local public health financing account created in section 3 of this act.

   (2) An additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of five and one-fourth mills per cigarette. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.

   (3) An additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of ten mills per cigarette through June 30, 1994, eleven and one-fourth mills per cigarette for the period July 1, 1994, through June 30, 1995, twenty mills per cigarette for the period July 1, 1995, through June 30, 1996, and twenty and one-half mills per cigarette thereafter. All revenues collected during any month from this additional tax shall be deposited in the health services account created under RCW 43.72.900 by the twenty-fifth day of the following month.

   (4) Wholesalers subject to the payment of this tax may, if they wish, absorb one-half mill 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.

   (5) For purposes of this chapter, "possession" shall mean 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 shall be deemed to occur at the location of the cigarettes being so transported or held."

   Renumber remaining sections consecutively and correct internal references accordingly. Correct the title.

   On page 3, line 15, after "treasury." strike all material through "this account" on line 17 and insert "A portion of the proceeds from taxes on cigarettes must be deposited into the account, as provided in RCW 82.24.020(1). Money in the account may be spent only after appropriation"

EFFECT: Provides five mills per cigarette (or 10 cents per pack of 20 cigarettes), equal to $21 million in the first year, for the purposes of public health financing from cigarette tax receipts that would otherwise be deposited to the State General Fund. Deposits the amounts to the new Local Public Health Financing account.