By:  Zaffirini                                        S.B. No. 1280
         2001S0733/1                            
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the tax on cigarettes, cigars, and other tobacco
 1-3     products.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 154.001, Tax Code, is amended to read as
 1-6     follows:
 1-7           Sec. 154.001.  DEFINITIONS.  In this chapter:
 1-8                 (1)  "Bonded agent" means a person in this state who is
 1-9     an agent of a person outside this state and receives cigarettes in
1-10     interstate commerce and stores the cigarettes for distribution or
1-11     delivery to distributors under orders from the person outside this
1-12     state.
1-13                 (2)  "Cigarette" means a roll for smoking:
1-14                       (A)  that is made of tobacco or tobacco mixed
1-15     with another ingredient and wrapped or covered with a material
1-16     other than tobacco; and
1-17                       (B)  that is not a cigar.
1-18                 (3)  "Commercial business location" means the entire
1-19     premises occupied by a permit applicant or a person required to
1-20     hold a permit under this chapter.  The term does not include a
1-21     residence or a unit of a public storage facility in which
1-22     cigarettes are stored or kept.
1-23                 (4)  "Common carrier" means a motor carrier registered
1-24     under Chapter 643, Transportation Code, or a motor carrier
1-25     operating under a certificate issued by the Interstate Commerce
 2-1     Commission or a successor agency to the Interstate Commerce
 2-2     Commission.
 2-3                 (5) [(4)]  "Consumer" means a person who possesses
 2-4     cigarettes for personal consumption.
 2-5                 (6) [(5)]  "Counterfeit stamp" means a sticker, label,
 2-6     print, tag, or token that is used or is intended to be used to
 2-7     simulate a stamp and that is not authorized or issued by the
 2-8     comptroller.
 2-9                 (7) [(6)]  "Distributor" means a person who:
2-10                       (A)  is authorized to purchase for the purpose of
2-11     making a first sale in this state cigarettes in unstamped packages
2-12     from manufacturers who distribute cigarettes in this state and to
2-13     stamp cigarette packages;
2-14                       (B)  ships, transports, imports into this state,
2-15     acquires, or possesses cigarettes and makes a first sale of the
2-16     cigarettes in this state;
2-17                       (C)  manufactures or produces cigarettes; or
2-18                       (D)  is an importer or import broker.
2-19                 (8) [(7)]  "Export warehouse" means a person in this
2-20     state who receives cigarettes in unstamped packages from
2-21     manufacturers and stores the cigarettes for the purpose of making
2-22     sales to authorized persons for resale, use, or consumption outside
2-23     the United States.
2-24                 (9) [(8)]  "First sale" means, except as otherwise
2-25     provided by this chapter:
2-26                       (A)  the first transfer of possession in
 3-1     connection with a purchase, sale, or any exchange for value of
 3-2     cigarettes in intrastate commerce;
 3-3                       (B)  the first use or consumption of cigarettes
 3-4     in this state; or
 3-5                       (C)  the loss of cigarettes in this state whether
 3-6     through negligence, theft, or other unaccountable loss.
 3-7                 (10) [(9)]  "Importer" or "import broker" means a
 3-8     person who ships, transports, or imports into this state cigarettes
 3-9     manufactured or produced outside the United States for the purpose
3-10     of making a first sale in this state.
3-11                 (11) [(10)]  "Individual package of cigarettes" means a
3-12     package that contains not fewer than 10 cigarettes.
3-13                 (12) [(11)]  "Manufacturer" means a person who
3-14     manufactures and sells cigarettes to a distributor.
3-15                 (13) [(12)]  "Manufacturer's representative" means a
3-16     person employed by a manufacturer to sell or distribute the
3-17     manufacturer's stamped cigarette packages.
3-18                 (14) [(13)]  "Permit holder" means a bonded agent,
3-19     distributor, wholesaler, or retailer required to obtain a permit
3-20     under Section 154.101.
3-21                 (15) [(14)]  "Place of business" means:
3-22                       (A)  a commercial business location where
3-23     cigarettes are sold;
3-24                       (B)  a commercial business location where
3-25     cigarettes are kept for sale or consumption or otherwise stored; or
3-26                       (C)  a vehicle from which cigarettes are sold.
 4-1                 (16) [(15)]  "Previously used stamp" means a stamp that
 4-2     has been used to show payment of a tax imposed by this chapter and
 4-3     is again used, sold, or possessed for sale or use to show payment
 4-4     of a tax imposed by this chapter.
 4-5                 (17) [(16)]  "Retailer" means a person who engages in
 4-6     the practice of selling cigarettes to consumers and includes the
 4-7     owner of a coin-operated cigarette vending machine.
 4-8                 (18) [(17)]  "Stamp" includes only a stamp that:
 4-9                       (A)  is printed, manufactured, or made by
4-10     authority of the comptroller;
4-11                       (B)  shows payment of the tax imposed by this
4-12     chapter; and
4-13                       (C)  is consecutively numbered and uniquely
4-14     identifiable as a Texas tax stamp.
4-15                 (19) [(18)]  "Wholesaler" means a person, including a
4-16     manufacturer's representative, who sells or distributes cigarettes
4-17     in this state for resale but who is not a distributor.
4-18           SECTION 2.  Subsection (b), Section 154.209, Tax Code, is
4-19     amended to read as follows:
4-20           (b)  If a permit holder's place of business is a vehicle or a
4-21     vending machine, the permit holder shall designate in the
4-22     application for a permit a permanent place of business to keep the
4-23     records.  The permit holder shall keep the records in the
4-24     designated place.
4-25           SECTION 3.  Section 155.001, Tax Code, is amended to read as
4-26     follows:
 5-1           Sec. 155.001.  DEFINITIONS.  In this chapter:
 5-2                 (1)  "Bonded agent" means a person in this state who is
 5-3     an agent of a person outside this state and receives cigars and
 5-4     tobacco products in interstate commerce and stores the cigars and
 5-5     tobacco products for distribution or delivery to distributors under
 5-6     orders from the person outside this state.
 5-7                 (2)  "Cigar" means a roll of fermented tobacco that is
 5-8     wrapped in tobacco and the main stream of smoke from which produces
 5-9     an alkaline reaction to litmus paper.
5-10                 (3)  "Commercial business location" means the entire
5-11     premises occupied by a permit applicant or a person required to
5-12     hold a permit under this chapter.  The term does not include a
5-13     residence or a unit of a public storage facility in which tobacco
5-14     products are stored or kept.
5-15                 (4)  "Common carrier" means a motor carrier registered
5-16     under Chapter 643, Transportation Code, or a motor carrier
5-17     operating under a certificate issued by the Interstate Commerce
5-18     Commission or a successor agency to the Interstate Commerce
5-19     Commission.
5-20                 (5) [(4)]  "Consumer" means a person who possesses
5-21     tobacco products for personal consumption.
5-22                 (6) [(5)]  "Distributor" means a person who:
5-23                       (A)  receives tobacco products for the purpose of
5-24     making a first sale in this state from a manufacturer outside the
5-25     state or within the state or otherwise brings or causes to be
5-26     brought into this state tobacco products for sale, use, or
 6-1     consumption;
 6-2                       (B)  manufactures or produces tobacco products;
 6-3     or
 6-4                       (C)  is an importer or import broker.
 6-5                 (7) [(6)]  "Export warehouse" means a person in this
 6-6     state who receives tobacco products from manufacturers and stores
 6-7     the tobacco products for the purpose of making sales to authorized
 6-8     persons for resale, use, or consumption outside the United States.
 6-9                 (8) [(7)]  "First sale" means, except as otherwise
6-10     provided by this chapter:
6-11                       (A)  the first transfer of possession in
6-12     connection with a purchase, sale, or any exchange for value of
6-13     tobacco products in intrastate commerce;
6-14                       (B)  the first use or consumption of tobacco
6-15     products in this state; or
6-16                       (C)  the loss of tobacco products in this state
6-17     whether through negligence, theft, or other unaccountable loss.
6-18                 (9) [(8)]  "Importer" or "import broker" means a person
6-19     who ships, transports, or imports into this state tobacco products
6-20     manufactured or produced outside the United States for the purpose
6-21     of making a first sale in this state.
6-22                 (10) [(9)]  "Manufacturer" means a person who
6-23     manufactures or produces tobacco products and sells tobacco
6-24     products to a distributor.
6-25                 (11) [(10)]  "Manufacturer's representative" means a
6-26     person employed by a manufacturer to sell or distribute the
 7-1     manufacturer's tobacco products.
 7-2                 (12) [(11)]  "Permit holder" means a bonded agent,
 7-3     distributor, wholesaler, or retailer required to obtain a permit
 7-4     under Section 155.041.
 7-5                 (13) [(12)]  "Place of business" means:
 7-6                       (A)  a commercial business location where tobacco
 7-7     products are sold;
 7-8                       (B)  a commercial business location where tobacco
 7-9     products are kept for sale or consumption or otherwise stored; or
7-10                       (C)  a vehicle from which tobacco products are
7-11     sold.
7-12                 (14) [(13)]  "Retailer" means a person who engages in
7-13     the practice of selling tobacco products to consumers and includes
7-14     the owner of a coin-operated vending machine.
7-15                 (15) [(14)]  "Tobacco product" means:
7-16                       (A)  a cigar;
7-17                       (B)  smoking tobacco, including granulated,
7-18     plug-cut, crimp-cut, ready-rubbed, and any form of tobacco suitable
7-19     for smoking in a pipe or as a cigarette;
7-20                       (C)  chewing tobacco, including Cavendish, Twist,
7-21     plug, scrap, and any kind of tobacco suitable for chewing;
7-22                       (D)  snuff or other preparations of pulverized
7-23     tobacco; or
7-24                       (E)  an article or product that is made of
7-25     tobacco or a tobacco substitute and that is not a cigarette.
7-26                 (16) [(15)]  "Wholesaler" means a person, including a
 8-1     manufacturer's representative, who sells or distributes tobacco
 8-2     products in this state for resale but who is not a distributor.
 8-3           SECTION 4.  Subsection (b), Section 155.110, Tax Code, is
 8-4     amended to read as follows:
 8-5           (b)  If a permit holder's place of business is a vehicle or a
 8-6     vending machine, the permit holder shall designate in the
 8-7     application for a permit a permanent place of business to keep the
 8-8     records.  The permit holder shall keep the records in the
 8-9     designated place.
8-10           SECTION 5.  This Act takes effect September 1, 2001.