By Kuempel                                            H.B. No. 2378
         77R8477 DAK-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the cigarette tax.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1. Subchapter C, Chapter 154, Tax Code, is amended by
 1-5     adding Section 154.0401 to read as follows:
 1-6           Sec. 154.0401.  APPLICABILITY. (a)  Except as provided by
 1-7     Subsection (b), this subchapter does not apply to cigarettes:
 1-8                 (1)  imported or brought into the United States for
 1-9     personal use; or
1-10                 (2)  sold or intended to be sold as duty-free
1-11     merchandise by a duty-free sales enterprise in accordance with 19
1-12     U.S.C. Section 1555(b), as amended, and any implementing
1-13     regulations.
1-14           (b)  This subchapter applies to cigarettes brought back into
1-15     the customs territory for resale within the customs territory.
1-16           SECTION 2. Section 154.042, Tax Code, is amended by adding
1-17     Subsection (e) to read as follows:
1-18           (e)  On or before the 15th business day of each month, each
1-19     distributor shall file with the comptroller, for all cigarettes
1-20     imported into the United States to which the distributor has
1-21     affixed the tax stamp in the preceding month, copies of the customs
1-22     certificates for the cigarettes required by 19 U.S.C. Section
1-23     1681a(c), as amended.
1-24           SECTION 3. Section 154.053, Tax Code, is amended by adding
 2-1     Subsection (c) to read as follows:
 2-2           (c)  The comptroller shall design and furnish stamps in a
 2-3     manner that permits identification of the person that affixed the
 2-4     stamp to the particular package of cigarettes by means of a serial
 2-5     number or other mark on the stamp.  The comptroller shall maintain
 2-6     for at least three years the information identifying the person
 2-7     that affixed the stamp to each package of cigarettes.  The
 2-8     information is not confidential or exempt from disclosure to the
 2-9     public.
2-10           SECTION 4. Subchapter H, Chapter 154, Tax Code, is amended by
2-11     adding Section 154.402 to read as follows:
2-12           Sec. 154.402.  SEIZURE AND DESTRUCTION OF CERTAIN CONTRABAND
2-13     CIGARETTES. (a)  This section applies only to cigarettes:
2-14                 (1)  that do not comply with all applicable
2-15     requirements imposed by or under federal law and implementing
2-16     regulations; or
2-17                 (2)  to which stamps may not be affixed under Section
2-18     154.0415.
2-19           (b)  A person may not:
2-20                 (1)  sell or distribute in this state cigarettes to
2-21     which this section applies;
2-22                 (2)  acquire, hold, own, possess, or transport, for
2-23     sale or distribution in this state, cigarettes to which this
2-24     section applies; or
2-25                 (3)  import, or cause to be imported, into this state
2-26     for sale or distribution in this state cigarettes to which this
2-27     section applies.
 3-1           (c)  Cigarettes that are acquired, held, owned, possessed,
 3-2     transported, imported into, or sold or distributed in this state in
 3-3     violation of Subsection (b) are subject to seizure and forfeiture
 3-4     under Sections 154.403 and 154.405, without regard to whether the
 3-5     violation was knowing or otherwise.
 3-6           (d)  Any cigarettes seized and forfeited under this section
 3-7     shall be destroyed.
 3-8           SECTION 5. This Act takes effect September 1, 2001.