The opening statement by the acting chairman of the subcommittee profiles the problem that S. 1487 is designed to address. He notes that over the past 10 to 12 years the increasing disparity of cigarette tax rates of various States has made it profitable to transport large quantities of cigarettes from low-tax States to high-tax States, where they are then sold at prevailing rates. By avoiding the taxes in high-tax States, illegal profits of $1.50 to $2.50 per carton can be realized. When this figure is translated into large quantities, a bootlegger can realize a profit of $93,000 to $180,000 per tractor-trailer load. The legislation targets the organized smuggling of large quantities of bootlegged cigarettes by major crime groups. Consequences of cigarette smuggling by these crime groups include significant losses in tax revenues and in income to legitimate wholesalers, retailers, drivers, packers, and salespersons. Also, associated with the smuggling operations are extortion and bribery, truck hijackings, armed robberies, serious assaults, and murder. The proposed legislation would require that certain recordkeeping procedures be observed and various records maintained, so as to facilitate effective law enforcement. Testimony by various representatives of State tax departments, tobacco distributors, and law enforcement officials describes the scope and effects of the problem and offers general support for the proposed legislation, along with other recommendations for Federal-State cooperation to address the problem. Exhibits and written statements are provided.