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.