SRC-DPW S.B. 1122 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 1122
76R8565 DAK-DBy: Armbrister
Human Services
3/29/1999
As Filed


DIGEST 

Currently, wholesalers are legally able to buy large volumes of cigarettes
manufactured in the United States but intended for export, pay all required
taxes and duties for reimportation of the products, and market the export
products at a significant discount from the product sold for domestic
consumption. This retailing process has the capacity to deceive consumers
who believe that the export cigarettes are of the same quality as
cigarettes intended for U.S. consumption.  Cigarettes manufactured for
foreign markets have different additive, tar, and nicotine levels, and
cigarettes intended for export are not required to carry warning labels.
This bill prohibits stamps from being affixed on certain cigarette packages
and provides penalties for violations of this Act. 

PURPOSE

As proposed, S.B. 1122 prohibits stamps from being affixed on certain
cigarette packages and provides penalties for violations of this Act. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 154C, Tax Code, by adding Section 154.0415, as
follows: 

Sec. 154.0415. CIGARETTES TO WHICH STAMPS MAY NOT BE AFFIXED.  Prohibits a
person from affixing a stamp to cigarette packages that: do not comply with
the Cigarette Labeling Advertising Act; are labeled by phrases that
indicate that the manufacturer did not intend the product to be sold in the
United States; have been altered by adding or deleting wording, labels, or
warnings; have been imported after January 1, 2000; or violate any federal
trademark or copyright laws. 

SECTION 2. Amends Section 154.4045(b), Tax Code, to provide that if the
seized cigarettes are in packages described by Section 154.0415 or stamped,
the comptroller may not sell the cigarettes but may destroy, dispose, or
return the cigarettes solely for the purpose of export, to the manufacturer
for credit.  

SECTION 3. Amends Chapter 154H, Tax Code, by adding Section 154.4095, as
follows: 

Sec. 154.4095. DECEPTIVE TRADE PRACTICES. Provides that selling a package
of cigarettes described by Section 154.0415, with or without a stamp, is a
deceptive trade practice. 

SECTION 4. Amends Chapter 154I, Tax Code, by adding Section 154.5025, as
follows: 

Sec. 154.5025. AFFIXING STAMPS TO CERTAIN CIGARETTES. Provides that a
person commits an offense for affixing stamps to cigarettes in violation of
Section 154.0415. 

SECTION 5.Emergency clause.
  Effective date: upon passage.