JWB S.B. 1266 75(R)     BILL ANALYSIS


WAYS & MEANS
S.B. 1266
By: Armbrister (Oliveira)
5-6-97
Committee Report (Amended)

BACKGROUND 

On September 1, 1996, the office of the state treasurer was abolished and
all powers, duties, obligations, rights, and contracts transferred to the
comptroller of public accounts.  The comptroller acquired responsibility
for the sale and storage of cigarette tax stamps; the collection of
cigarette and tobacco taxes; cigarette, cigar, and tobacco products audit
and enforcement; the issuance of permits for the sale and distribution of
cigarettes and tobacco products; and administration of the Cigarette Tax
Stamp Recovery Fund.  

This bill amends current law to update and clarify both administrative and
enforcement provisions.  S.B. 1266 also amends and adds certain
definitions, and deletes certain references to stamp meter machines since
such machines are no longer used.  In addition, this bill would amend
current administrative hearings procedures to make them consistent with
current procedures for the Comptroller's Hearing Division and pursuant to
general tax hearing procedures.  This bill would also add the requirement
that distributor records and reports include the manufacturer's list price
for tobacco products.  Finally, this bill would change all references from
"treasurer" to "comptroller." 

PURPOSE

The bill updates and clarifies administrative and enforcement provisions
regarding cigarettes and tobacco products.  It also makes changes to
certain hearing procedures and record and reporting requirements, and
changes all references from "treasurer" to "comptroller." 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.Amends Section 154.001, Tax Code (Definitions), to redefine
"common carrier," "counterfeit stamp," "distributor," "individual package
of cigarettes," "place of business," and "stamp."  Defines "export
warehouse," "importer" and "import broker."  Makes conforming changes. 

SECTION 2. Amends Subchapter C, Chapter 154, Tax Code, by deleting the
words "and Meters" from the heading of Subchapter C. 

     SUBCHAPTER C.  New heading:  TAX STAMPS

SECTION 3.Amends Section 154.050, Tax Code (Payment), to require the
comptroller, rather than the treasurer, to require that payment in full
for stamps, rather than for stamps or meter settings, be made within 30
days after the date stamps, rather than after the date stamps or a set
meter, and an accompanying invoice from the comptroller, rather than
treasurer, are received by the distributor, except that at the close of
each biennium, payment for stamps, rather than payment for stamps or meter
settings, purchased or received on or before August 31 of that fiscal year
shall be made in full on or before August 31 of that fiscal year,
providing that such payment be received in the office of the comptroller,
rather than treasurer, no  later than August 31 of that fiscal year
notwithstanding any other statute regarding tax due dates to the contrary.
Makes conforming and nonsubstantive changes. 

SECTION 4. Amends Sections 154.051(a)-(c), (e)-(k), (n), and (o), Tax Code
(Cigarette Tax Recovery Trust Fund), to provide that in  investing the
assets of the fund, the comptroller has the obligations, duties, and
powers provided for the investment of state funds by Sections 404.021
through 404.0245, Government Code (under Subchapter C: State Depositories
and Investments of State Funds), and by the orders of the State Depository
Board.  Makes conforming changes. 

SECTION 5. Amends Sections 154.405(b)-(d), Tax Code (Forfeiture of
Property), to require the comptroller to include with the notice an
inventory of the property seized and a statement that the owner of
property seized is entitled to a hearing on the seizure, rather than a
statement of the date, time, and place of a hearing on the seizure.
Authorizes the comptroller, if a hearing is requested under Subsection
(b), to order the forfeiture to the state of any property seized under
this chapter or the proceeds of the sale of any cigarettes seized under
this chapter under certain conditions. Makes conforming changes. 

SECTION 6. Amends Section 154.415, Tax Code (Additional Enforcement
Powers), as follows: 

      New heading for the Section:  DONATIONS.  Deletes Subsection (a)
regarding the rights of the  treasurer.  Makes conforming changes. 

SECTION 7. Amends Section 155.001, Tax Code (Definitions), to redefine
"common carrier," "distributor," and "place of business."  Defines "export
warehouse," and "importer" or "import broker." 

SECTION 8. Amends Section 155.101, Tax Code (Record of Purchase or
Receipt), to require records kept by each distributor, wholesaler, bonded
agent, and export warehouse to include certain information. 

SECTION 9. Amends Section 155.102(b), Tax Code (Report of Sale or Use), to
require the records for each sale, distribution, exchange, or use of
tobacco products to show, for sales from a manufacturer to a distributor,
the manufacturer's list price for the tobacco products.  Makes conforming
changes. 

SECTION 10.Amends Section 155.111, Tax Code (Distributor's Report), to
require a distributor to file with the comptroller on or before the 30th
day of each month, a report for the preceding month showing the
manufacturer's list price of tobacco products purchased, received, and
acquired.  Makes conforming changes. 

SECTION 11.Amends Section 155.141, Tax Code (Enforcement Powers), as
follows: 

    New heading for the Section: DONATIONS.  Deletes text regarding the
rights and powers of the treasurer.  Makes a conforming change. 

SECTION 12.Amends Sections 155.145(b)-(d), Tax Code (Forfeiture
Proceeding), to make conforming changes. 

SECTION 13.Repealer:  Sections 111.1041, 154.048, 154.049, Tax Code
(Application of Subchapter to Treasurer, Settlements, Refunds, and
Credits, Collection Procedures; Stamp Meters, Tax Stamps and Meters,
Cigarette Tax; Meter Settings, Tax Stamps and Meters, Cigarette Tax). 

SECTION 14.Effective date:  October 1, 1997.

SECTION 15. Emergency clause.
 
EXPLANATION OF AMENDMENTS

Committee Amendment #1
In defining "individual pack of cigarettes" in Section 1 of the bill, the
amendment stipulates that an "individual pack of cigarettes" contains not
fewer than 10 cigarettes, rather than the 20 cigarette minimum in the
original bill. 

Committee Amendment #2
Adds a new SECTION 14, and renumbers the remaining sections accordingly:

SECTION 14.  In addition to duties prescribed by other law, any state
agency responsible for compliance with section 1926 of the federal Public
Health Service Act (42 U.S.C. * 300x-26) regarding the sale of tobacco
products to individuals under 18 shall file with the comptroller a copy of
the reports and agreements required under such federal act.  If the state
agency fails to file a copy of the reports and agreements within 10 days
after such information is due under section 1926, the comptroller shall
withhold expense appropriations.  The comptroller may enter into
agreements with responsible state agencies and may promulgate rules as
necessary to facilitate compliance.