C.S.H.B. 3139 78(R)    BILL ANALYSIS
         

C.S.H.B. 3139
By: Wilson
Ways & Means
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Legislative proposals have been introduced at the state and federal level
to govern the sale of tobacco by use of the telephone or other methods of
voice transmission, through mail order sales or over the Internet. 

There are currently 533 million Internet users, with 945 million users
worldwide projected by 2004. As a result, e-commerce is a growing
industry, generating approximately $32.6 billion in 2001, up more than 19%
from 2000. There also has been a rise in cigarette purchases through the
Internet. 

C.S.H.B. 3139 requires compliance will all applicable laws, including the
collection of state excise taxes, when cigarettes are sold to a consumer
in this state by mail, by telephone or over the Internet. It provides that
cigarettes may not be delivered to an individual for personal consumption
without age verification and confirmation of the payment of state excise
taxes. 

At the request of the American Cancer Society, C.S.H.B. 3139 adds new
language to include a person's phone number and e-mail address & deletes
language in Sec. 161.454 on disclosure requirements prescribed by the
Federal Cigarette and Advertising Act. 

RULEMAKING AUTHORITY

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

SECTION-BY-SECTION ANALYSIS

SECTION 1.  Amends Chapter 161, Health & Safety Code by adding language to
provide for the regulation of the sale of cigarettes through means of
telephone, mail, or the Internet.  It would require that no such delivery
sale be made to a person under the legal age and requires verification of
the purchasers age.  It provides for requirements for shipping cigarettes
pursuant to a delivery sale and imposes regulation and reporting
requirements.  It requires that a person who makes a delivery sale provide
for the collection of the taxes by any person accepting a purchase.  It
establishes penalties for violation of any of these requirements.   
SECTION 2.  The effective date of the bill is September 1, 2003. 

EFFECTIVE DATE

September 1, 2003.

COMPARISON OF ORGINAL TO SUBSTITUTE 

C.S.H.B. 3139 differs from the original bill by deleting wording that
relates to the Master Settlement Agreement and Settling States agreements
that Texas is not a party to.  

Deletes language in Sec. 161.462 pertaining only to a person who holds a
permit under 26 U.S.C., Section 5713 (as amended).   

Deletes Sec. 161.454 (4) language pertaining to the Federal Cigarette
Labeling and Advertising Act (15 U.S.C. Section 1333 (a) (1)), as amended.
 
Adds language to Sec. 161.456 (a)(2) and Sec. 161.456 (b)(1) to include a
person's phone number and e-mail address.