By: Wilson H.B. No. 3139
Substitute the following for H.B. No. 3139:
By: Wilson C.S.H.B. No. 3139
A BILL TO BE ENTITLED
AN ACT
relating to delivery sales of cigarettes; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 161, Health and Safety Code, is amended
by adding Subchapter R to read as follows:
SUBCHAPTER R. DELIVERY SALES OF CIGARETTES
Sec. 161.451. DEFINITIONS. In this subchapter:
(1) "Delivery sale" means a sale of cigarettes to a
consumer in this state in which the purchaser submits the order for
the sale by means of a telephonic or other method of voice
transmission, by using the mails or any other delivery service, or
through the Internet or another on-line service, or the cigarettes
are delivered by use of the mails or another delivery service. A
sale of cigarettes is a delivery sale regardless of whether the
seller is located within or without this state. A sale of
cigarettes not for personal consumption to a person who is a
wholesale dealer or a retail dealer is not a delivery sale.
(2) "Delivery service" means a person, including the
United States Postal Service, that is engaged in the commercial
delivery of letters, packages, or other containers.
(3) "Shipping container" means a container in which
cigarettes are shipped in connection with a delivery sale.
(4) "Shipping documents" means a bill of lading,
airbill, United States Postal Service form, or any other document
used to evidence the undertaking by a delivery service to deliver
letters, packages, or other containers.
Sec. 161.452. REQUIREMENTS FOR DELIVERY SALES. (a) In this
section:
(1) "Master Settlement Agreement" means the
settlement agreement and related documents entered into on November
23, 1998, by the settling states and certain tobacco product
manufacturers and subsequently entered into by certain other
tobacco product manufacturers. The term includes any amendments to
the agreement or related documents.
(2) "Settling state" has the meaning assigned that
term by Section II(qq) of the Master Settlement Agreement.
(b) (a) A person may not make a delivery sale of cigarettes
to an individual who is under the age prescribed by Section 161.082.
(c) (b) A person taking a delivery sale order shall comply
with:
(1) the age verification requirements prescribed by
Section 161.453;
(2) the disclosure requirements prescribed by Section
161.454;
(3) the shipping requirements prescribed by Section
161.455;
(4) the registration and reporting requirements
prescribed by Section 161.456;
(5) the tax collection requirements prescribed by
Section 161.457; and
(6) each law of this state that generally applies to
sales of cigarettes that occur entirely within this state,
including a law:
(A) imposing a tax; or
(B) prescribing a permitting or tax-stamping
requirement; or.
(C) imposing an escrow payment obligation as
prescribed by a statute enacted by a settling state to implement
Exhibit T of the Master Settlement Agreement.
Sec. 161.453. AGE VERIFICATION REQUIREMENT. (a) A person
may not mail or ship cigarettes in connection with a delivery sale
order unless before mailing or shipping the cigarettes the person
accepting the delivery sale order first:
(1) obtains from the prospective customer a
certification that includes:
(A) reliable confirmation that the purchaser is
at least 18 years of age; and
(B) a statement signed by the prospective
purchaser in writing and under penalty of law:
(i) certifying the prospective purchaser's
address and date of birth;
(ii) confirming that the prospective
purchaser understands that signing another person's name to the
certification is illegal, that sales of cigarettes to an individual
under the age prescribed by Section 161.082 are illegal under state
law, and that the purchase of cigarettes by an individual under that
age is illegal under state law; and
(iii) confirming that the prospective
purchaser wants to receive mailings from a tobacco company;
(2) makes a good faith effort to verify the
information contained in the certification provided by the
prospective purchaser under Subdivision (1) against a commercially
available database or obtains a photocopy or other image of a
government-issued identification bearing a photograph of the
prospective purchaser and stating the date of birth or age of the
prospective purchaser;
(3) sends to the prospective purchaser, by e-mail or
other means, a notice that complies with Section 161.454; and
(4) for an order made over the Internet or as a result
of an advertisement, receives payment for the delivery sale from
the prospective purchaser by a credit or debit card that has been
issued in the purchaser's name or by check.
(b) A person taking a delivery sale order may request that a
prospective purchaser provide the purchaser's e-mail address.
Sec. 161.454. DISCLOSURE REQUIREMENTS. The notice
required by Section 161.453(a)(3) must include a prominent and
clearly legible statement that:
(1) cigarette sales to individuals who are below the
age prescribed by Section 161.082 are illegal under state law;
(2) sales of cigarettes are restricted to those
individuals who provide verifiable proof of age in accordance with
Section 161.453; and
(3) cigarette sales are taxable under Chapter 154, Tax
Code, and an explanation of how that tax has been or is to be paid
with respect to the delivery sale;. and
(4) includes one of the warnings prescribed by Section
4(a)(1), Federal Cigarette Labeling and Advertising Act (15 U.S.C.
Section 1333(a)(1)), as amended, rotated on a quarterly basis.
Sec. 161.455. SHIPPING REQUIREMENTS. (a) A person who
mails or ships cigarettes in connection with a delivery sale order
shall:
(1) include as part of the shipping documents a clear
and conspicuous statement: "CIGARETTES: TEXAS LAW PROHIBITS
SHIPPING TO INDIVIDUALS UNDER 18 YEARS OF AGE AND REQUIRES THE
PAYMENT OF ALL APPLICABLE TAXES";
(2) use a method of mailing or shipping that obligates
the delivery service to require:
(A) the purchaser placing the delivery sale
order, or an adult who is at least 18 years of age and who resides at
the purchaser's address, to sign to accept delivery of the shipping
container; and
(B) the person signing to accept delivery of the
shipping container to provide proof, in the form of a
government-issued identification bearing a photograph that the
person is:
(i) the addressee or an adult who is at
least 18 years of age and who resides at the purchaser's address;
and
(ii) at least 18 years of age if the person
appears to be younger than 27 years of age; and
(3) provide to the delivery service retained to make
the delivery evidence of full compliance with Section 161.457.
(b) A person taking a delivery sale order who delivers the
cigarettes without using a third-party delivery service shall
comply with the requirements prescribed by this subchapter that
apply to a delivery service.
Sec. 161.456. REGISTRATION AND REPORTING REQUIREMENTS. (a)
A person may not make a delivery sale or ship cigarettes in
connection with a delivery sale unless the person first files with
the comptroller a statement that includes:
(1) the person's name and trade name; and
(2) the address of the person's principal place of
business and any other place of business, and the person's
telephone number and e-mail address.
(b) Not later than the 10th day of each month, each person
who has made a delivery sale or shipped or delivered cigarettes in
connection with a delivery sale during the previous month shall
file with the comptroller a memorandum or a copy of the invoice that
provides for each delivery sale:
(1) the name, address, telephone number and e-mail
address of the individual to whom the delivery sale was made;
(2) the brand or brands of the cigarettes that were
sold; and
(3) the quantity of cigarettes that were sold.
(c) A person who complies with 15 U.S.C. Section 376, as
amended, is considered to have complied with this section.
Sec. 161.457. COLLECTION OF TAXES. A person who makes a
delivery sale shall collect and remit to the comptroller any taxes
imposed by this state in relation to the delivery sale. A person is
not required to collect and remit any taxes for which the person has
obtained proof, in the form of the presence of applicable tax stamps
or otherwise, that the taxes have already been paid to this state.
Sec. 161.458. GENERAL OFFENSES. (a) A person commits an
offense if the person violates a provision of this subchapter for
which a criminal penalty is not otherwise provided.
(b) An offense under Subsection (a) is a Class C
misdemeanor.
(c) If it is shown on the trial of a person that the person
has previously been convicted of an offense under this section, the
offense is a Class B misdemeanor.
Sec. 161.459. KNOWING VIOLATION. (a) A person who
knowingly violates a provision of this subchapter or who knowingly
submits a certification under Section 161.453(a)(1) in another
person's name commits an offense.
(b) An offense under this section is a felony of the third
degree.
Sec. 161.460. CIVIL PENALTY FOR NONPAYMENT OF TAX. A person
who fails to pay a tax imposed in connection with a delivery sale
shall pay to the state a civil penalty in an amount equal to five
times the amount of the tax due. The penalty provided by this
section is in addition to any other penalty provided by law.
Sec. 161.461. FORFEITURE. (a) Cigarettes sold or that a
person attempted to sell in a delivery sale that does not comply
with this subchapter are forfeited to the state and shall be
destroyed.
(b) A fixture, equipment, or other material or personal
property on the premises of a person who, with the intent to defraud
this state, fails to comply with this subchapter is forfeited to the
state.
Sec. 161.462. ENFORCEMENT. The attorney general[,] or the
attorney general's designee, or a person who holds a permit under 26
U.S.C. Section 5713, as amended,may bring an action in a court of
this state to prevent or restrain a violation of this subchapter by
any person or by a person controlling such a person.
SECTION 2. This Act takes effect September 1, 2003.