LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              March 19, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB2378  by Kuempel (Relating to the cigarette tax.), As
               Introduced
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would amend Chapter 154 of the Tax Code.  Cigarettes reimported
into the United States for resale would be subject to all provisions
relating to tax stamps.  Persons importing cigarettes for sale in Texas
would have to submit to the Comptroller, on a monthly basis, copies of
customs certificates for those cigarettes.  The Comptroller would be
directed to distribute cigarette tax stamps that would, by the use of
serial numbers or marks, allow the identification of the person applying
those tax stamps.

Cigarettes not in compliance with federal laws and regulations, as well
as those that could not receive a tax stamp under state law, could not be
acquired, held, owned, possessed, transported, imported, sold, or
distributed in Texas.  Such cigarettes would be subject to seizure and
forfeiture; such seized and forfeited cigarettes would be destroyed.

The bill would reinforce existing laws relating to the importation of
cigarettes that had been exported by American manufacturers for foreign
markets.  Such importation of cigarettes is a violation of federal law.
Under current state law, tax stamps cannot be applied to cigarettes that
do not comply with federal standards for labels and warnings, are labeled
in a fashion indicating they were intended for sale outside the U.S.,
have packages that have been altered, have been imported into the U.S. in
violation of federal law after January 1, 2000, or that violate federal
trademark or copyright laws.

This bill would take effect September 1, 2001.
  
Local Government Impact
  
No significant fiscal implication to units of local government is
anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, SD