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78R4854 DLF-F

By:  Armbrister                                                   S.B. No. 1253



A BILL TO BE ENTITLED

AN ACT

relating to certain practices in the merchandising of cigarettes; 
providing a penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter H, Chapter 161, Health and Safety 
Code,  is amended by adding Section 161.0875 to read as follows:
	Sec. 161.0875.  MERCHANDISING OF CIGARETTES.  (a)  In this 
section, "manufacturer" means a person who manufactures or produces 
cigarettes.
	(b)  Subject to Subsection (d), a manufacturer may provide, 
and a retailer may participate in, a program in which the retailer 
is compensated for promoting the manufacturer's cigarettes by:
		(1)  providing merchandising services, shelf space, 
advertising, or stocking services or displaying the cigarettes in a 
particular manner; or
		(2)  conducting a consumer promotion or price discount 
program and providing the program to consumers.
	(c)  A manufacturer may:                                                
		(1)  offer and enter into a retailer agreement or 
program described by Subsection (b);
		(2)  pay or provide other compensation to a retailer 
for participating in a retailer agreement or program described by 
Subsection (b); and
		(3)  provide consumer promotions and discounts to a  
retailer for the retailer to provide to consumers.
	(d)  A manufacturer may not, directly or indirectly:                    
		(1)  condition a retailer's participation in or receipt 
of a consumer promotion or price discount described by Subsection 
(b) or (c) on the retailer's conduct relating to the manufacturer's 
cigarettes or the retailer's conduct relating to any other 
manufacturer's cigarettes, except as provided by Subsection (e);
		(2)  require or cause the retailer to allocate a 
specified percentage or fraction of the retailer's shelf, 
advertising, stocking, or display space to the manufacturer's 
cigarettes or otherwise control a retailer's determination of the 
size or location of the space that the retailer uses to merchandise, 
advertise, stock, or display cigarettes;
		(3)  prohibit or restrict a retailer's merchandising, 
advertising, stocking, or displaying of another manufacturer's 
cigarettes;
		(4)  prohibit or restrict a retailer's participation in 
a program of another manufacturer; or
		(5)  require a retailer to raise the price of another 
manufacturer's cigarettes or otherwise prevent the retailer from 
setting, continuing, or reducing the price for which the retailer 
offers another manufacturer's cigarettes.
	(e)  A manufacturer may require a retailer participating in 
or receiving a consumer promotion or price discount described by 
Subsection (b) or (c) to provide the promotion or discount to 
consumers and display and advertise the promotion and the promoted 
or discounted product to consumers.
	(f)  A manufacturer commits an offense if the manufacturer 
violates this section. An offense under this subsection is a Class C 
misdemeanor.
	SECTION 2.  This Act takes effect September 1, 2003.