BILL REQ. #:  H-1297.3 

Read first time 04/01/11.   Referred to Committee on State Government & Tribal Affairs.

     AN ACT Relating to legislative involvement with compacts and compact amendments; amending RCW 43.06.110, 43.06.450, 43.06.455, 43.06.460, 43.06.465, 43.06.466, 43.06.475, 43.06.480, 9.46.360, and 43.06.010; adding a new section to chapter 43.06 RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   This act may be known and cited as the contractual oversight and transparency act.

NEW SECTION.  Sec. 2   (1) The legislature reaffirms the need for it to be vigilant in its oversight of all matters concerning the budget and provide state agencies with sufficient resources to do the people's work. However, the governor is in the unique position to approve agreements, contracts, and compacts with the federal government, other states, and nations, without consultation with the legislature. In those agreements, the governor can obligate the state to spend money or provide services without adequate compensation, and without the legislature being aware until after an agreement is made.
     (2) The legislature intends to provide increased transparency so that the people's representatives have oversight over contracts that bind the state and its resources. This act creates a process by which the governor must work with the legislature to ensure that there is broad-based support before an agreement is signed.

NEW SECTION.  Sec. 3   A new section is added to chapter 43.06 RCW to read as follows:
     (1) The governor may not adopt, execute, or otherwise enter into any compact with another state, the federal government, Indian tribe or band, or other sovereign entity without prior legislative approval as required in this section.
     (2) Prior to the adoption or execution of any compact by the governor, the compact must be submitted to the legislature for its approval in accordance with the procedures set forth in this section. Any compact the governor submits for legislative approval must be in the form of a joint resolution submitted to both houses of the legislature.
     (3) Upon introduction to the legislature of the joint resolution required under this section, the legislature must approve or reject the resolution by adjournment sine die of the regular or special session in which the resolution was introduced. Approval of the resolution requires the affirmative vote of sixty percent of the members of each house of the legislature. The failure of the legislature to act on the resolution by adjournment sine die of the relevant session is deemed to be rejection of the proposed compact.
     (4) If the legislature approves the joint resolution, then the governor may execute the compact.
     (5) If a joint resolution is not introduced to the legislature as required under this section, then the proposed compact is deemed rejected.
     (6) For the purposes of this section, "compact" means any agreement, contract, or covenant between Washington state and the federal government or Indian tribe or another state or other sovereign entity.
     (7) Class III tribal-state gaming compacts must be approved by joint resolutions pursuant to RCW 9.46.360.
     (8) This section does not apply to grant applications for the benefit of Washington state.

Sec. 4   RCW 43.06.110 and 2009 c 549 s 5020 are each amended to read as follows:
     Subject to the provisions of section 3 of this act, the governor, or his or her designee, is hereby authorized and empowered to undertake such programs as will, in the judgment of the governor, or his or her designee, enable families and individuals of all ages, in rural and urban areas, in need of the skills, knowledge, motivations, and opportunities to become economically self-sufficient to obtain and secure such skills, knowledge, motivations, and opportunities. Such programs may be engaged in as solely state operations, or in conjunction or cooperation with any appropriate agency of the federal government, any branch or agency of the government of this state, any city or town, county, municipal corporation, metropolitan municipal corporation or other political subdivision of the state, or any private corporation. Where compliance with the provisions of federal law or rules or regulations promulgated thereunder is a necessary condition to the receipt of federal funds by the state, the governor or his or her designee, is hereby authorized to comply with such laws, rules or regulations to the extent necessary for the state to cooperate most fully with the federal government in furtherance of the programs herein authorized.

Sec. 5   RCW 43.06.450 and 2001 c 235 s 1 are each amended to read as follows:
     Subject to the provisions of section 3 of this act, 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 contracts concerning the sale of cigarettes. The legislature finds that these cigarette tax contracts 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. In addition, it is the intent of the legislature that the negotiations and the ensuing contracts ((shall)) have no impact on the state's share of the proceeds under the master settlement agreement entered into on November 23, 1998, by the state. Chapter 235, Laws of 2001 does not constitute a grant of taxing authority to any Indian tribe nor does it provide precedent for the taxation of non-Indians on fee land.

Sec. 6   RCW 43.06.455 and 2001 c 235 s 2 are each amended to read as follows:
     (1) Subject to the provisions of section 3 of this act, the governor may enter into cigarette tax contracts concerning the sale of cigarettes. All cigarette tax contracts ((shall)) must meet the requirements for cigarette tax contracts under this section. Except for cigarette tax contracts under RCW 43.06.460, the rates, revenue sharing, and exemption terms of a cigarette tax contract are not effective unless authorized in a bill enacted by the legislature.
     (2) Cigarette tax contracts ((shall)) must 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 Indian country, and are not in regard to transactions by non-Indian retailers. In addition, contracts ((shall)) must provide that retailers ((shall)) may not sell or give, or permit to be sold or given, cigarettes to any person under the age of eighteen years.
     (3) A cigarette tax contract with a tribe ((shall)) must provide for a tribal cigarette tax in lieu of all state cigarette taxes and state and local sales and use taxes on sales of cigarettes in Indian country by Indian retailers. The tribe may allow an exemption for sales to tribal members.
     (4) Cigarette tax contracts ((shall)) must provide that all cigarettes possessed or sold by a retailer ((shall)) must bear a cigarette stamp obtained by wholesalers from a bank or other suitable stamp vendor and applied to the cigarettes. The procedures to be used by the tribe in obtaining tax stamps must include a means to assure that the tribal tax will be paid by the wholesaler obtaining such cigarettes. Tribal stamps must have serial numbers or some other discrete identification so that each stamp can be traced to its source.
     (5) Cigarette tax contracts ((shall)) must provide that retailers ((shall)) must 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 cigarette tax contract, 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) Cigarette tax contracts ((shall)) must be for renewable periods of no more than eight years. A renewal may not include a renewal of the phase-in period.
     (7) Cigarette tax contracts ((shall)) must include provisions for compliance, such as transport and notice requirements, inspection procedures, stamping requirements, recordkeeping, and audit requirements.
     (8) Tax revenue retained by a tribe must be used for essential government services. Use of tax revenue for subsidization of cigarette and food retailers is prohibited.
     (9) The cigarette tax contract may include provisions to resolve disputes using a nonjudicial process, such as mediation.
     (10) The governor may delegate the power to negotiate cigarette tax contracts to the department of revenue. The department of revenue ((shall)) must consult with the liquor control board during the negotiations.
     (11) Information received by the state or open to state review under the terms of a contract is subject to the provisions of RCW 82.32.330.
     (12) It is the intent of the legislature that the liquor control board and the department of revenue continue the division of duties and shared authority under chapter 82.24 RCW and therefore the liquor control board is responsible for enforcement activities that come under the terms of chapter 82.24 RCW.
     (13) Each cigarette tax contract ((shall)) must include a procedure for notifying the other party that a violation has occurred, a procedure for establishing whether a violation has in fact occurred, an opportunity to correct such violation, and a provision providing for termination of the contract should the violation fail to be resolved through this process, such termination subject to mediation should the terms of the contract so allow. A contract ((shall)) must provide for termination of the contract if resolution of a dispute does not occur within twenty-four months from the time notification of a violation has occurred. Intervening violations do not extend this time period. In addition, the contract ((shall)) must include provisions delineating the respective roles and responsibilities of the tribe, the department of revenue, and the liquor control board.
     (14) For purposes of this section and RCW 43.06.460, 82.08.0316, 82.12.0316, and 82.24.295:
     (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;
     (b) "Indian retailer" or "retailer" means (i) a retailer wholly owned and operated by an Indian tribe, (ii) a business wholly owned and operated by a tribal member and licensed by the tribe, or (iii) a business owned and operated by the Indian person or persons in whose name the land is held in trust; and
     (c) "Indian tribe" or "tribe" means a federally recognized Indian tribe located within the geographical boundaries of the state of Washington.

Sec. 7   RCW 43.06.460 and 2008 c 241 s 1 are each amended to read as follows:
     (1) Subject to the provisions of section 3 of this act, the governor is authorized to enter into cigarette tax contracts with the Squaxin Island Tribe, the Nisqually Tribe, Tulalip Tribes, the Muckleshoot Indian Tribe, the Quinault Nation, the Jamestown S'Klallam Indian Tribe, the Port Gamble S'Klallam Tribe, the Stillaguamish Tribe, the Sauk-Suiattle Tribe, the Skokomish Indian Tribe, the Yakama Nation, the Suquamish Tribe, the Nooksack Indian Tribe, the Lummi Nation, the Chehalis Confederated Tribes, the Upper Skagit Tribe, the Snoqualmie Tribe, the Swinomish Tribe, the Samish Indian Nation, the Quileute Tribe, the Kalispel Tribe, the Confederated Tribes of the Colville Reservation, the Cowlitz Indian Tribe, the Lower Elwha Klallam Tribe, the Makah Tribe, the Hoh Tribe, the Spokane Tribe, and the Shoalwater Bay Tribe. Each contract adopted under this section ((shall)) must provide that the tribal cigarette tax rate be one hundred percent of the state cigarette and state and local sales and use taxes within three years of enacting the tribal tax and ((shall)) must be set no lower than eighty percent of the state cigarette and state and local sales and use taxes during the three-year phase-in period. The three-year phase-in period ((shall)) must be shortened by three months each quarter the number of cartons of nontribal manufactured cigarettes is at least ten percent or more than the quarterly average number of cartons of nontribal manufactured cigarettes from the six-month period preceding the imposition of the tribal tax under the contract. Sales at a retailer operation not in existence as of the date a tribal tax under this section is imposed are subject to the full rate of the tribal tax under the contract. The tribal cigarette tax is in lieu of the state cigarette and state and local sales and use taxes, as provided in RCW 43.06.455(3).
     (2) A cigarette tax contract under this section is subject to RCW 43.06.455.

Sec. 8   RCW 43.06.465 and 2005 c 11 s 2 are each amended to read as follows:
     (1) Subject to the provisions of section 3 of this act, the governor may enter into a cigarette tax agreement with the Puyallup Tribe of Indians concerning the sale of cigarettes, subject to the limitations in this section. The legislature intends to address the uniqueness of the Puyallup Indian reservation and its selling environment through pricing and compliance strategies, rather than through the imposition of equivalent taxes. It is the legislature's intent (a) that an increase in prices through a flat tax will reduce much of the competitive advantage that has historically existed due to the discrepancy in the difference between state and tribal taxes, and (b) that the tribal retailers can remain in business under the changed circumstances. The governor may delegate the authority to negotiate a cigarette tax agreement with the Puyallup Tribe to the department of revenue. The department of revenue ((shall)) must consult with the liquor control board during the negotiations.
     (2) Any agreement must require the tribe to impose a tax of eleven dollars and seventy-five cents on each carton of cigarettes, with ten packs a carton and twenty cigarettes per pack being the industry standard. This tax ((shall)) must be prorated for cartons and packs that are nonstandard. This tribal tax is in lieu of the combined state and local sales and use taxes, and state cigarette taxes, and as such these state taxes are not imposed during the term of the agreement on any transaction governed by the agreement. The tribal tax ((shall)) must increase or decrease by the same dollar amount as any increase or decrease in the state cigarette tax.
     (3) The agreement must include a provision requiring the tribe to transmit thirty percent of the tribal tax revenue on all cigarette sales to the state. The funds ((shall)) must be transmitted to the state treasurer on a quarterly basis for deposit by the state treasurer into the general fund. The remaining tribal tax revenue must be used for essential government services, as that term is defined in RCW 43.06.455.
     (4) The agreement is limited to retail sales in which Indian retailers make delivery and physical transfer of possession of the cigarettes from the seller to the buyer within Indian country, and are not in regard to transactions by non-Indian retailers. In addition, agreements ((shall)) must provide that retailers ((shall)) must not sell or give, or permit to be sold or given, cigarettes to any person under the age of eighteen years.
     (5)(a) The agreement must include a provision to price and sell the cigarettes so that the retail selling price is not less than the price paid by the retailer for the cigarettes.
     (b) The tribal tax is in addition to the retail selling price.
     (c) The agreement must include a provision to assure the price paid to the retailer includes the tribal tax, as evidenced by the tribe's cigarette stamp.
     (d) If the tribe is acting as a wholesaler to tribal retailers, the retail selling price must not be less than the price the tribe paid for such cigarettes plus the tribal tax, as evidenced by the tribe's cigarette stamp.
     (6)(a) The agreement must include provisions regarding enforcement and compliance by the tribe in regard to enrolled tribal members who sell cigarettes and ((shall)) must describe the individual and joint responsibilities of the tribe, the department of revenue, and the liquor control board.
     (b) The agreement must include provisions for tax administration and compliance, such as transport and notice requirements, inspection procedures, stamping requirements, recordkeeping, and audit requirements.
     (c) The agreement must include provisions for sharing of information among the tribe, the department of revenue, and the liquor control board.
     (7) The agreement must provide that all cigarettes possessed or sold by a tribal retailer ((shall)) must bear a tribal cigarette stamp obtained by wholesalers from a bank or other suitable stamp vendor and applied to the cigarettes. Tribal stamps must have serial numbers or some other discrete identification so that each stamp can be traced to its source.
     (8) The agreement must provide that retailers ((shall)) must purchase cigarettes only from wholesalers or manufacturers licensed to do business in the state of Washington.
     (9) The agreement must be for a renewable period of no more than eight years.
     (10) The agreement must include provisions to resolve disputes using a nonjudicial process, such as mediation, and ((shall)) must include a dispute resolution protocol. The protocol ((shall)) must include a procedure for notifying the other party that a violation has occurred, a procedure for establishing whether a violation has in fact occurred, an opportunity to correct such violation, and a provision providing for termination of the agreement should the violation fail to be resolved through this process, such termination subject to mediation should the terms of the agreement so allow. An agreement must provide for termination of the agreement if resolution of a dispute does not occur within twenty-four months from the time notification of a violation has occurred. Intervening violations do not extend this time period.
     (11) The agreement may not include any provisions that impact the state's share of the master settlement agreement, and as such this agreement does not authorize negotiation regarding a redistribution of the state's proceeds under the master settlement agreement.
     (12) Information received by the state or open to state review under the terms of an agreement is subject to RCW 82.32.330.
     (13) It is the intent of the legislature that the liquor control board and the department of revenue continue the division of duties and shared authority under chapter 82.24 RCW.
     (14) For purposes of this section:
     (a) "Indian country" has the same meaning as in chapter 82.24 RCW.
     (b) "Indian retailer" or "retailer" means (i) a retailer wholly owned and operated by an Indian tribe or (ii) a business wholly owned and operated by an enrolled tribal member and licensed by the tribe.
     (c) "Indian tribe" or "tribe" means the Puyallup Tribe of Indians, which is a federally recognized Indian tribe located within the geographical boundaries of the state of Washington.

Sec. 9   RCW 43.06.466 and 2008 c 228 s 1 are each amended to read as follows:
     (1)(a) The legislature finds that entering into a cigarette tax agreement with the Yakama Nation is a positive step and that such an agreement will support a stable and orderly environment on the Yakima Reservation for regulation of cigarette sales. The legislature further finds that the very special circumstances of the Yakama Nation pursuant to the Treaty with the Yakamas of 1855 (12 Stat. 951) support a cigarette tax agreement that reflects those circumstances. The legislature also finds that the provisions of the agreement with the Yakama Nation authorized by chapter 228, Laws of 2008 are reasonably necessary to prevent fraudulent transactions and place a minimal burden on the Yakama Nation, pursuant to the United States supreme court's decision in Washington v. Confederated Tribes of the Colville Indian Reservation, 447 U.S. 134 (1980).
     (b) It is the intent of the legislature that the cigarette tax agreement with the Yakama Nation reflects the uniqueness of the Yakama Nation's Treaty through specific terms that govern pricing of cigarettes, tribal cigarette tax revenue, information sharing, and administration of the agreement.
     (2) For purposes of this section:
     (a) "Cigarette" has the same meaning as in chapter 82.24 RCW; and
     (b) "Tribal retailer" means a cigarette retailer as that term is defined in RCW 82.24.010 that is licensed by and located within the jurisdiction of the Yakama Nation and is wholly owned by the Yakama Nation or any of its enrolled members.
     (3) Subject to the provisions of section 3 of this act, the governor may enter into a cigarette tax agreement with the Yakama Nation, a federally recognized Indian tribe located within the geographical boundaries of the state of Washington, concerning the sale of cigarettes, subject to the provisions of this section. The governor may delegate the authority to negotiate the agreement to the department of revenue.
     (4) The agreement must be for a renewable period of no more than eight years.
     (5) All cigarettes possessed or sold by tribal retailers must be subject to the agreement, except cigarettes manufactured within the jurisdiction of the Yakama Nation by the Yakama Nation or its enrolled members.
     (6) The agreement must allow the Yakama Nation to exempt its enrolled members from the tribal cigarette tax imposed under subsection (7) of this section.
     (a) Sales of cigarettes exempt under this subsection must be subject to the requirements of subsection (9) of this section.
     (b) The exemption must be provided only at the point of sale and reimbursement provided to the tribal retailer by the Yakama Nation.
     (7) The agreement must require the Yakama Nation to impose and maintain in effect on the sale of cigarettes by tribal retailers a tax as provided in this subsection.
     (a) The rate of tax will be expressed in dollars and cents and must be the percentage of tax imposed by the state under chapter 82.24 RCW for the period of the agreement as ((stated here)) follows:
     (i) Eighty percent during the first six years;
     (ii) Eighty-four percent during the seventh year; and
     (iii) Eighty-seven and six-tenths percent during the eighth year.
     (b) The tax must be imposed on each carton, or portion of a carton, of cigarettes, with ten packs per carton and twenty cigarettes per pack being the industry standard, and prorated for cartons and packs that are not standard.
     (c) The tax must be in lieu of the combined state and local sales and use taxes, and state cigarette taxes, and, as provided in RCW 82.24.302, 82.08.0316, and 82.12.0316, the taxes imposed by chapters 82.08, 82.12, and 82.24 RCW do not apply during the term of the agreement on any transaction governed by the agreement.
     (d) Throughout the term of the agreement and any renewal of the agreement, the tax must increase or decrease in correspondence with the state cigarette tax by applying the percentages in (a) of this subsection.
     (8) The revenue generated by the tax imposed under subsection (7) of this section must be used by the Yakama Nation for essential government services, as that term is defined in RCW 43.06.455.
     (9) All cigarettes possessed or sold by a tribal retailer must bear a tribal cigarette tax stamp as provided in this subsection.
     (a) The Yakama Nation may act as its own stamp vendor, subject to meeting reasonable requirements for internal controls.
     (b) The stamps must have serial numbers or other discrete identification that allow stamps to be traced to their source.
     (10) The price paid by the tribal retailer to the wholesaler must not be less than the total of the price paid by the Yakama Nation or other wholesaler and the tax imposed under subsection (7) of this section.
     (11) The retail selling price of cigarettes sold by tribal retailers must not be less than the price paid by them under subsection (10) of this section.
     (12) Tribal retailers must not sell or give, or permit to be sold or given, cigarettes to any person under the age of eighteen years.
     (13) The authority and the individual and joint responsibility of the Yakama Nation, the department of revenue, and the liquor control board for administration and enforcement must be specified in the agreement including, but not limited to, requirements regarding transport of cigarettes, keeping of records, reporting, notice, inspection, audit, and mutual exchange of information.
     (a) Requirements must provide for sharing of information regarding transport of cigarettes in the state of Washington by the Yakama Nation or its enrolled members, reporting of information on sales to customers located outside the jurisdiction of the Yakama Nation, and authority for unannounced inspection by the state of tribal retailers to verify compliance with stamping and pricing provisions.
     (b) Information received by the state or open to state review under the terms of the agreement is subject to RCW 82.32.330.
     (14) The agreement must provide for resolution of disputes using a nonjudicial process, such as mediation, and establish a dispute resolution protocol that includes the following elements:
     (a) A procedure for notifying the other party that a violation has occurred;
     (b) A procedure for establishing whether a violation has in fact occurred;
     (c) An opportunity to correct the violation;
     (d) A procedure for terminating the agreement in the event of a failure to correct the violation, such termination subject to mediation should the terms of the agreement so allow; and
     (e) Termination of the agreement for cause.
     (15) The agreement may not include any provisions that impact the state's share of the master settlement agreement or concern redistribution of the state's proceeds under the master settlement agreement.
     (16) The department of revenue may share with the Yakama Nation tax information under RCW 82.32.330 that is necessary for the Yakama Nation's compliance with the agreement.

Sec. 10   RCW 43.06.475 and 2007 c 69 s 2 are each amended to read as follows:
     (1) Subject to the provisions of section 3 of this act, the governor may enter into timber harvest excise tax agreements concerning the harvest of timber. All timber harvest excise tax agreements must meet the requirements for timber harvest excise tax agreements under this section. The terms of a timber harvest excise tax agreement are not effective unless the agreement is authorized in RCW 43.06.480.
     (2) Timber harvest excise tax agreements ((shall)) must be in regard to timber harvests on fee land within the exterior boundaries of the reservation of the Indian tribe and are not in regard to timber harvests on trust land or land owned by the tribe within the exterior boundaries of the reservation.
     (3) The agreement must provide that the tribal tax ((shall be)) is credited against the state and county taxes imposed under RCW 84.33.041 and 84.33.051.
     (4) Tribal ordinances for timber harvest excise taxation, or other authorizing tribal laws, which implement the timber harvest excise tax agreement with the state, must incorporate or contain provisions identical to chapter 84.33 RCW that relate to the tax rates and measures, such as stumpage values.
     (5) Timber harvest excise tax agreements must be for renewable periods of no more than eight years.
     (6) Timber harvest excise tax agreements must include provisions for compliance, such as inspection procedures, recordkeeping, and audit requirements.
     (7) Tax revenue retained by the tribe must be used for essential government services. Use of tax revenue for subsidization of timber harvesters is prohibited.
     (8) The timber harvest excise tax agreement may include provisions to resolve disputes using a nonjudicial process, such as mediation.
     (9) The governor may delegate the power to negotiate the timber harvest excise tax agreements to the department of revenue.
     (10) Information received by the state or open to state review under the terms of a timber harvest excise tax agreement is subject to the provisions of RCW 82.32.330. The department of revenue may enter into an information sharing agreement with the tribe to facilitate sharing information to improve tax collection.
     (11) The timber harvest excise tax agreement must include dispute resolution procedures, contract termination procedures, and provisions delineating the respective roles and responsibilities of the tribe and the department of revenue.
     (12) The timber harvest excise tax agreement must include provisions to require taxpayers to submit information that may be required by the department of revenue or tribe.
     (13) For the purposes of this section:
     (a) "Essential government services" means services such as forest land management; protection, enhancement, regulation, and stewardship of forested land; land consolidation; tribal administration; public facilities; fire; police; public health; education; job services; sewer; water; environmental and land use; transportation; utility services; and public facilities serving economic development purposes as those terms are defined in RCW 82.14.370(3)(c);
     (b) "Forest land" has the same meaning as in RCW 84.33.035;
     (c) "Harvester" has the same meaning as in RCW 84.33.035;
     (d) "Indian tribe" or "tribe" means a federally recognized Indian tribe located within the geographical boundaries of the state of Washington; and
     (e) "Timber" has the same meaning as in RCW 84.33.035.

Sec. 11   RCW 43.06.480 and 2007 c 69 s 3 are each amended to read as follows:
     (1) Subject to the provisions of section 3 of this act, the governor is authorized to enter into a timber harvest excise tax agreement with the Quinault Nation. Agreements adopted under this section must provide that the tribal timber harvest excise tax rate be one hundred percent of the state timber harvest excise tax.
     (2) A timber harvest excise tax agreement under this section is subject to RCW 43.06.475.

Sec. 12   RCW 9.46.360 and 1992 c 172 s 2 are each amended to read as follows:
     (1) The negotiation process for compacts, or compact amendments, with federally recognized Indian tribes for conducting class III gaming, as defined in the Indian Gaming Regulatory Act, 25 U.S.C. Sec. 2701 et seq., on federal Indian lands is governed by this section.
     (2)(a) The ((gambling)) commission through the director or the director's designee ((shall)) must negotiate compacts, including compact amendments, for class III gaming on behalf of the state with federally recognized Indian tribes in the state of Washington. Nothing in this section authorizes the governor to execute a compact without the approval of the legislature.
     (b) Negotiations should include an expectation that the tribe will make payments to the state based on the gross gaming revenue generated from all class III gaming activities consistent with the following graduated scale:

Sec. 13   RCW 43.06.010 and 1994 c 223 s 3 are each amended to read as follows:
     In addition to those prescribed by the Constitution, the governor may exercise the powers and perform the duties prescribed in this and the following sections:
     (1) The governor ((shall)) must supervise the conduct of all executive and ministerial offices;
     (2) The governor ((shall)) must see that all offices are filled, including as provided in RCW 42.12.070, and the duties thereof performed, or in default thereof, apply such remedy as the law allows; and if the remedy is imperfect, acquaint the legislature therewith at its next session;
     (3) The governor ((shall)) must make the appointments and supply the vacancies mentioned in this title;
     (4) The governor is the sole official organ of communication between the government of this state and the government of any other state or territory, or of the United States;
     (5) Whenever any suit or legal proceeding is pending against this state, or which may affect the title of this state to any property, or which may result in any claim against the state, the governor may direct the attorney general to appear on behalf of the state, and report the same to the governor, or to any grand jury designated by the governor, or to the legislature when next in session;
     (6) The governor may require the attorney general or any prosecuting attorney to inquire into the affairs or management of any corporation existing under the laws of this state, or doing business in this state, and report the same to the governor, or to any grand jury designated by the governor, or to the legislature when next in session;
     (7) The governor may require the attorney general to aid any prosecuting attorney in the discharge of the prosecutor's duties;
     (8) The governor may offer rewards, not exceeding one thousand dollars in each case, payable out of the state treasury, for information leading to the apprehension of any person convicted of a felony who has escaped from a state correctional institution or for information leading to the arrest of any person who has committed or is charged with the commission of a felony;
     (9) The governor ((shall)) must perform such duties respecting fugitives from justice as are prescribed by law;
     (10) The governor ((shall)) must issue and transmit election proclamations as prescribed by law;
     (11) The governor may require any officer or board to make, upon demand, special reports to the governor, in writing;
     (12) The governor may, after finding that a public disorder, disaster, energy emergency, or riot exists within this state or any part thereof which affects life, health, property, or the public peace, proclaim a state of emergency in the area affected, and the powers granted the governor during a state of emergency ((shall be)) are effective only within the area described in the proclamation;
     (13) The governor may, after finding that there exists within this state an imminent danger of infestation of plant pests as defined in RCW 17.24.007 or plant diseases which seriously endangers the agricultural or horticultural industries of the state of Washington, or which seriously threatens life, health, or economic well-being, order emergency measures to prevent or abate the infestation or disease situation, which measures, after thorough evaluation of all other alternatives, may include the aerial application of pesticides;
     (14) ((On all)) With respect to compacts approved and forwarded to the governor by the legislature pursuant to RCW 9.46.360(((6))), the governor is authorized and empowered to execute, on behalf of the state compacts with federally recognized Indian tribes in the state of Washington pursuant to the federal Indian gaming regulatory act, 25 U.S.C. Sec. 2701 et seq., for conducting class III gaming, as defined in the federal act, on Indian lands.

NEW SECTION.  Sec. 14   Sections 12 and 13 of this act apply to all tribal-state class III compacts and compact amendments that have not been finally executed by the governor as of the effective date of this section.