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A BILL TO BE ENTITLED
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AN ACT
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relating to the sale of cigarettes, tobacco products, and |
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e-cigarettes; requiring occupational permits; imposing fees; |
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providing civil and administrative penalties; creating criminal |
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offenses. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle G, Title 2, Health and Safety Code, is |
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amended by adding Chapter 147 to read as follows: |
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CHAPTER 147. E-CIGARETTE RETAILER PERMITS |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 147.0001. DEFINITIONS. In this chapter: |
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(1) "Commercial business location” means the entire |
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premises occupied by a permit applicant or a person required to hold |
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a permit under this chapter. |
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(2) "E-cigarette" has the meaning assigned by Section |
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161.081. |
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(3) "E-cigarette retailer" means a person who engages |
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in the business of selling e-cigarettes to consumers, including a |
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person who sells e-cigarettes to consumers through a marketplace. |
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(4) "Marketplace" has the meaning assigned by Section |
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151.0242, Tax Code. |
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(5) "Permit holder" means a person who obtains a |
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permit under Section 147.0052. |
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(6) “Place of business” means: |
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(A) a commercial business location where |
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e-cigarettes are sold; |
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(B) a commercial business location where |
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e-cigarettes are kept for sale or consumption or otherwise stored; |
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or |
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(C) a vehicle from which e-cigarettes are sold. |
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Sec. 147.0002. INAPPLICABILITY TO CERTAIN PRODUCTS. This |
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chapter does not apply to a product described by Section 161.0815. |
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Sec. 147.0003. HEARINGS. Unless otherwise provided by this |
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chapter, the comptroller shall conduct all hearings required by |
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this chapter in accordance with Chapter 2001, Government Code. The |
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comptroller may designate one or more representatives to conduct |
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the hearings and may prescribe the rules of procedure governing the |
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hearings. |
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Sec. 147.0004. RULES. The comptroller may adopt rules to |
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implement this chapter, including rules exempting a person who |
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sells e-cigarettes to consumers through a marketplace from the |
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requirements of this chapter. |
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SUBCHAPTER B. PERMITS |
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Sec. 147.0051. E-CIGARETTE RETAILER PERMIT REQUIRED. (a) |
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A person may not engage in business as an e-cigarette retailer in |
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this state unless the person has been issued a permit from the |
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comptroller. |
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(b) An e-cigarette retailer shall obtain a permit for each |
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place of business owned or operated by the e-cigarette retailer. |
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The comptroller may not issue a permit for a place of business that |
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is a residence or a unit in a public storage facility. |
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(c) The comptroller shall prescribe the form and content of |
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an application for a permit and provide the form on request. |
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(d) The applicant shall accurately complete all information |
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required by the application and provide the comptroller with |
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additional information the comptroller considers necessary. |
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(e) Each applicant that applies for a permit to sell |
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e-cigarettes from a vehicle must provide the make, model, vehicle |
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identification number, registration number, and any other |
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information concerning the vehicle the comptroller requires. |
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(f) All financial information provided under this section |
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is confidential and not subject to Chapter 552, Government Code. |
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(g) Permits for engaging in business as an e-cigarette |
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retailer are governed exclusively by the provisions of this code. |
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Sec. 147.0052. ISSUANCE OF PERMIT. (a) The comptroller |
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shall issue a permit to an applicant if the comptroller: |
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(1) has received an application and fee; |
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(2) does not reject the application and deny the |
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permit under Section 147.0053; and |
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(3) determines that issuing the permit will not |
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jeopardize the administration and enforcement of this chapter. |
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(b) The permit shall be issued for a designated place of |
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business, except as provided by Section 147.0056. |
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(c) The permits are nonassignable. |
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(d) The permit must indicate the type of permit and |
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authorize the sale of e-cigarettes in this state. The permit must |
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show that it is revocable and shall be forfeited or suspended if the |
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conditions of issuance, provisions of this chapter, or rules of the |
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comptroller are violated. |
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Sec. 147.0053. DENIAL OF PERMIT. The comptroller may |
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reject an application and deny a permit if the comptroller finds, |
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after notice and opportunity for hearing, any of the following: |
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(1) the premises where business will be conducted are |
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not adequate to protect the e-cigarettes; or |
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(2) the applicant or managing employee, or if the |
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applicant is a corporation, an officer, director, manager, or any |
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stockholder who holds directly or through family or partner |
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relationship 10 percent or more of the corporation's stock, or, if |
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the applicant is a partnership, a partner or manager: |
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(A) has failed to disclose any information |
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required by Sections 147.0051(d) and (e); or |
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(B) has previously violated provisions of this |
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chapter. |
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Sec. 147.0054. PERMIT PERIOD; FEES. (a) A permit required |
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by this chapter expires on the last day of May of each even-numbered |
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year. |
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(b) An application for a permit required by this chapter |
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must be accompanied by a fee of: |
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(1) one-half of the amount of the fee for a retailer's |
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permit required by Section 154.111(b), Tax Code, if at the time of |
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application the applicant holds a valid retailer's permit under |
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Section 154.101, 154.102, or 155.041, Tax Code, for the same place |
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of business; or |
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(2) the amount of the fee for a retailer's permit |
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required by Section 154.111(b), Tax Code. |
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(c) For a new permit required by Section 147.0051, the |
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comptroller shall prorate the fee according to the number of months |
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remaining during the period that the permit is to be in effect. |
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(d) A person who does not obtain a renewal permit in a timely |
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manner must pay a late fee of $50 in addition to the application fee |
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for the permit. |
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(e) If on the date of issuance a permit will expire within |
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three months, the comptroller may collect the prorated permit fee |
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or the fee for the current period and, with the consent of the |
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permit holder, may collect the fee for the next permit period and |
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issue a permit or permits for both periods, as applicable. |
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(f) A person issued a permit for a place of business that |
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permanently closes before the permit expiration date is not |
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entitled to a refund of the permit fee. |
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Sec. 147.0055. PAYMENT FOR PERMITS. (a) An applicant for a |
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permit required by Section 147.0051 shall send the required fee |
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with the application. |
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(b) The payment must be made in cash or by money order, |
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check, or credit card. |
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(c) The comptroller may not issue a permit in exchange for a |
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check until after the comptroller receives full payment on the |
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check. |
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Sec. 147.0056. DISPLAY OF PERMIT. (a) A permit holder |
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shall keep the permit on public display at the place of business for |
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which the permit was issued. |
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(b) A permit holder who has a permit assigned to a vehicle |
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shall post the permit in a conspicuous place on the vehicle. |
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Sec. 147.0057. REVENUE. Revenue from the sale of |
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e-cigarette retailer's permits shall be deposited as provided by |
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Section 161.0903 and may be appropriated only as provided by that |
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section. |
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SUBCHAPTER C. PERMIT SUSPENSION AND REVOCATION |
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Sec. 147.0101. FINAL SUSPENSION OR REVOCATION OF PERMIT. |
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(a) The comptroller may revoke or suspend a permit holder's permit |
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if the comptroller finds, after notice and hearing as provided by |
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this section, that the permit holder violated this chapter or a rule |
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adopted under this chapter. |
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(b) If the comptroller intends to suspend or revoke a |
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permit, the comptroller shall provide the permit holder with |
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written notice that includes a statement: |
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(1) of the reason for the intended revocation or |
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suspension; |
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(2) that the permit holder is entitled to a hearing by |
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the comptroller on the proposed suspension or revocation; and |
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(3) of the date, time, and place of the hearing. |
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(c) The comptroller shall deliver the written notice by |
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personal service or by mail to the permit holder's mailing address |
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as it appears in the comptroller's records. Service by mail is |
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complete when the notice is deposited with the United States Postal |
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Service. |
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(d) The comptroller shall give the permit holder notice |
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before the 10th day before the final hearing. |
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(e) A permit holder may appeal the comptroller's decision to |
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a district court in Travis County not later than the 30th day after |
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the date the comptroller's decision becomes final. |
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(f) A person whose permit is suspended or revoked may not |
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sell, offer for sale, or distribute e-cigarettes from the place of |
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business to which the permit applied until a new permit is granted |
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or the suspension is removed. |
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Sec. 147.0102. SUMMARY SUSPENSION OF PERMIT. (a) The |
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comptroller may suspend a permit holder's permit without notice or |
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a hearing for the permit holder's failure to comply with this |
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chapter or a rule adopted under this chapter if the permit holder's |
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continued operation constitutes an immediate and substantial |
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threat. |
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(b) If the comptroller summarily suspends a permit holder's |
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permit, proceedings for a preliminary hearing before the |
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comptroller or the comptroller's representative must be initiated |
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simultaneously with the summary suspension. The preliminary |
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hearing shall be set for a date not later than the 10th day after the |
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date of the summary suspension, unless the parties agree to a later |
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date. |
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(c) At the preliminary hearing, the permit holder must show |
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cause why the permit should not remain suspended pending a final |
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hearing on suspension or revocation. |
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(d) Chapter 2001, Government Code, does not apply to a |
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summary suspension under this section. |
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(e) To initiate a proceeding to suspend summarily a permit |
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holder's permit, the comptroller shall serve notice on the permit |
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holder informing the permit holder of the right to a preliminary |
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hearing before the comptroller or the comptroller's representative |
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and of the time and place of the preliminary hearing. The notice |
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must be personally served on the permit holder or an officer, |
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employee, or agent of the permit holder or sent by certified or |
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registered mail, return receipt requested, to the permit holder's |
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mailing address as it appears in the comptroller's records. The |
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notice must state the alleged violations that constitute the |
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grounds for summary suspension. The suspension is effective at the |
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time the notice is served. If notice is served in person, the |
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permit holder shall immediately surrender the permit to the |
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comptroller. If notice is served by mail, the permit holder shall |
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immediately return the permit to the comptroller. |
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(f) Section 147.0101, governing hearings for final |
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suspension or revocation of a permit under this chapter, governs a |
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final administrative hearing. |
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SUBCHAPTER D. PENALTIES |
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Sec. 147.0151. PENALTIES. (a) A person violates this |
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chapter if the person: |
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(1) engages in the business of an e-cigarette retailer |
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without a permit; or |
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(2) is a person who is subject to a provision of this |
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chapter or a rule adopted by the comptroller under this chapter and |
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who violates the provision or rule. |
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(b) A person who violates this section shall pay to the |
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state a penalty of not more than $2,000 for each violation. |
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(c) Each day on which a violation occurs is a separate |
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violation. |
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(d) The attorney general shall bring suit to recover |
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penalties under this section. |
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(e) A suit under this section may be brought in Travis |
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County or another county having jurisdiction. |
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Sec. 147.0152. FAILURE TO HAVE PERMIT; OFFENSE. (a) A |
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person commits an offense if the person acts as an e-cigarette |
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retailer and: |
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(1) receives or possesses e-cigarettes without having |
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a permit; |
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(2) receives or possesses e-cigarettes without having |
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a permit posted where it can be easily seen by the public; or |
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(3) sells e-cigarettes without having a permit. |
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(b) An offense under this section is a Class A misdemeanor. |
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SECTION 2. Sections 161.081(1-a), (2), and (4), Health and |
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|
Safety Code, are amended to read as follows: |
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(1-a) (A) "E-cigarette" means: |
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(i) an electronic cigarette or any other |
|
|
device that simulates smoking by using a mechanical heating |
|
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element, battery, or electronic circuit to deliver nicotine or |
|
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other substances to the individual inhaling from the device; or |
|
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(ii) a consumable liquid solution or other |
|
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material aerosolized or vaporized during the use of an electronic |
|
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cigarette or other device described by this subdivision. |
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(B) The term "e-cigarette" does not include a |
|
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prescription medical device unrelated to the cessation of smoking. |
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(C) The term "e-cigarette" includes: |
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(i) [(A)] a device described by this |
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subdivision regardless of whether the device is manufactured, |
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distributed, or sold as an e-cigarette, e-cigar, or e-pipe or under |
|
|
another product name or description; and |
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(ii) [(B)] a component, part, or accessory |
|
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for the device, regardless of whether the component, part, or |
|
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accessory is sold separately from the device. |
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(2) "Permit holder" has the meaning assigned by |
|
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Section 147.0001 of this code or Section 154.001 or 155.001, Tax |
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Code, as applicable. |
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(4) "Retailer" means a person who engages in the |
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practice of selling cigarettes, e-cigarettes, or tobacco products |
|
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to consumers and includes the owner of a coin-operated cigarette, |
|
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e-cigarette, or tobacco product vending machine. The term includes |
|
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a retailer as [that term is] defined by Section 154.001 or 155.001, |
|
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Tax Code, and an e-cigarette retailer as defined by Section |
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147.0001 of this code, as applicable. |
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SECTION 3. Section 161.083(d), Health and Safety Code, is |
|
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amended to read as follows: |
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(d) Notwithstanding any other provision of law, a violation |
|
|
of this section is not a violation of this subchapter for purposes |
|
|
of Section 161.0901 [154.1142 or 155.0592, Tax Code]. |
|
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SECTION 4. Subchapter H, Chapter 161, Health and Safety |
|
|
Code, is amended by adding Sections 161.0901 and 161.0903 to read as |
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follows: |
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Sec. 161.0901. DISCIPLINARY ACTION AGAINST CIGARETTE, |
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E-CIGARETTE, AND TOBACCO PRODUCT RETAILERS. (a) A retailer is |
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subject to disciplinary action as provided by this section if an |
|
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agent or employee of the retailer commits an offense under this |
|
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subchapter. |
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(b) If the comptroller finds, after notice and an |
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opportunity for a hearing as provided by Chapter 2001, Government |
|
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Code, that a permit holder has violated this subchapter at a place |
|
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of business for which a permit is issued, the comptroller may |
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suspend the permit for that place of business and administratively |
|
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assess a fine as follows: |
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(1) for the first violation of this subchapter during |
|
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the 24-month period preceding the violation at that place of |
|
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business, the comptroller may require the permit holder to pay a |
|
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fine in an amount not to exceed $1,000; |
|
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(2) for the second violation of this subchapter during |
|
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the 24-month period preceding the most recent violation at that |
|
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place of business, the comptroller may require the permit holder to |
|
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pay a fine in an amount not to exceed $2,000; and |
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(3) for the third violation of this subchapter during |
|
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the 24-month period preceding the most recent violation at that |
|
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place of business, the comptroller may: |
|
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(A) require the permit holder to pay a fine in an |
|
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amount not to exceed $3,000; and |
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(B) suspend the permit for that place of business |
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for not more than five days. |
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(c) Except as provided by Subsection (e), for the fourth or |
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a subsequent violation of this subchapter during the 24-month |
|
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period preceding the most recent violation at that place of |
|
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business, the comptroller shall revoke the permit issued under |
|
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Chapter 147 of this code or Chapter 154 or 155, Tax Code, as |
|
|
applicable. If the permit holder does not hold a permit under |
|
|
Chapter 147 of this code or Chapter 154 or 155, Tax Code, the |
|
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comptroller shall revoke the permit issued under Section 151.201, |
|
|
Tax Code. |
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(d) A permit holder whose permit has been revoked under this |
|
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section may not apply for a permit for the same place of business |
|
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before the expiration of six months after the effective date of the |
|
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revocation. |
|
|
(e) For purposes of this section, the comptroller may |
|
|
suspend a permit for a place of business but may not revoke the |
|
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permit under Subsection (c) if the comptroller finds that: |
|
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(1) the permit holder has not violated this subchapter |
|
|
more than seven times at the place of business in the 48-month |
|
|
period preceding the violation in question; |
|
|
(2) the permit holder requires its employees to attend |
|
|
a comptroller-approved seller training program; |
|
|
(3) the employees have actually attended a |
|
|
comptroller-approved seller training program; and |
|
|
(4) the permit holder has not directly or indirectly |
|
|
encouraged the employees to violate the law. |
|
|
(f) The comptroller may adopt rules to implement this |
|
|
section. |
|
|
Sec. 161.0903. USE OF CERTAIN REVENUE. Revenue from fees |
|
|
collected under Section 161.123 and from the sale of permits under |
|
|
Chapter 147 of this code, retailer permits under Chapter 154, Tax |
|
|
Code, and retailer permits under Chapter 155, Tax Code, shall be |
|
|
deposited in the general revenue fund and may be appropriated only |
|
|
as provided by this section. The revenue shall be appropriated, in |
|
|
order of priority, to: |
|
|
(1) the comptroller for the purpose of administering |
|
|
retailer permitting under Chapter 147 of this code and Chapters 154 |
|
|
and 155, Tax Code; |
|
|
(2) the comptroller for the purpose of administering |
|
|
and enforcing this subchapter and Subchapters K and N; |
|
|
(3) the department for the purpose of administering |
|
|
programs under Sections 161.253 and 161.301; and |
|
|
(4) the appropriate entity for the purpose of |
|
|
administering that entity's responsibilities under Section |
|
|
161.302. |
|
|
SECTION 5. Section 161.123(b), Health and Safety Code, is |
|
|
amended to read as follows: |
|
|
(b) The comptroller shall collect the fee [and deposit the |
|
|
money] as provided in this section. |
|
|
SECTION 6. Section 111.00455(b), Tax Code, is amended to |
|
|
read as follows: |
|
|
(b) The following are not contested cases under Subsection |
|
|
(a) and Section 2003.101, Government Code: |
|
|
(1) a show cause hearing or any hearing not related to |
|
|
the collection, receipt, administration, or enforcement of the |
|
|
amount of a tax or fee imposed, or the penalty or interest |
|
|
associated with that amount, except for a hearing under Section |
|
|
151.157(f), 151.1575(c), or 151.712(g) of this code or Section |
|
|
161.0901, Health and Safety Code[, 154.1142, or 155.0592]; |
|
|
(2) a property value study hearing under Subchapter M, |
|
|
Chapter 403, Government Code; |
|
|
(3) a hearing in which the issue relates to: |
|
|
(A) Chapters 72-75, Property Code; |
|
|
(B) forfeiture of a right to do business; |
|
|
(C) a certificate of authority; |
|
|
(D) articles of incorporation; |
|
|
(E) a penalty imposed under Section 151.703(d); |
|
|
(F) the refusal or failure to settle under |
|
|
Section 111.101; or |
|
|
(G) a request for or revocation of an exemption |
|
|
from taxation; and |
|
|
(4) any other hearing not related to the collection, |
|
|
receipt, administration, or enforcement of the amount of a tax or |
|
|
fee imposed, or the penalty or interest associated with that |
|
|
amount. |
|
|
SECTION 7. Section 154.001, Tax Code, is amended by |
|
|
amending Subdivisions (9), (14), and (19) and adding Subdivisions |
|
|
(11-a) and (11-b) to read as follows: |
|
|
(9) "First sale" means, except as otherwise provided |
|
|
by this chapter: |
|
|
(A) the first transfer of possession in |
|
|
connection with a purchase, sale, or any exchange for value of |
|
|
cigarettes in or into this state, which: |
|
|
(i) includes the sale of cigarettes by: |
|
|
(a) a distributor in or outside this |
|
|
state to a distributor, wholesaler, or retailer in this state; and |
|
|
(b) a manufacturer in this state who |
|
|
transfers the cigarettes in this state; and |
|
|
(ii) does not include: |
|
|
(a) the sale of cigarettes by a |
|
|
manufacturer outside this state to a distributor in this state; |
|
|
[or] |
|
|
(b) the transfer of cigarettes from a |
|
|
manufacturer outside this state to a bonded agent in this state; |
|
|
(c) the sale of cigarettes by a |
|
|
manufacturer, bonded agent, distributor, or importer to an |
|
|
interstate warehouse in this state; or |
|
|
(d) the transfer of cigarettes by an |
|
|
interstate warehouse in an interstate warehouse transaction; |
|
|
(B) the first use or consumption of cigarettes in |
|
|
this state; or |
|
|
(C) the loss of cigarettes in this state whether |
|
|
through negligence, theft, or other unaccountable loss. |
|
|
(11-a) "Interstate warehouse" means a person in this |
|
|
state who receives unstamped cigarettes from a manufacturer, bonded |
|
|
agent, distributor, or importer and stores the cigarettes |
|
|
exclusively for an interstate warehouse transaction. |
|
|
(11-b) "Interstate warehouse transaction" means the |
|
|
sale or delivery of cigarettes from an interstate warehouse to a |
|
|
person located in another state who is licensed or permitted by the |
|
|
other state to affix that state's cigarette stamps or otherwise pay |
|
|
the state's excise tax on cigarettes as required. |
|
|
(14) "Permit holder" means a bonded agent, interstate |
|
|
warehouse, distributor, wholesaler, manufacturer, importer, export |
|
|
warehouse, or retailer who obtains a permit under Section 154.101. |
|
|
(19) "Wholesaler" means a person, including a |
|
|
manufacturer's representative, who sells or distributes cigarettes |
|
|
in this state for resale but who is not a distributor or interstate |
|
|
warehouse. |
|
|
SECTION 8. Section 154.041, Tax Code, is amended by adding |
|
|
Subsection (f) to read as follows: |
|
|
(f) No stamp is required on the transfer of possession of |
|
|
cigarettes described by Section 154.001(9)(A)(ii)(d). |
|
|
SECTION 9. Section 154.101, Tax Code, is amended by |
|
|
amending Subsections (a), (b), and (h) and adding Subsection (k) to |
|
|
read as follows: |
|
|
(a) A person may not engage in business as a distributor, |
|
|
wholesaler, bonded agent, interstate warehouse, manufacturer, |
|
|
export warehouse, importer, or retailer unless the person has |
|
|
applied for and received the applicable permit from the |
|
|
comptroller. |
|
|
(b) Each distributor, wholesaler, bonded agent, interstate |
|
|
warehouse, manufacturer, export warehouse, importer, or retailer |
|
|
shall obtain a permit for each place of business owned or operated |
|
|
by the distributor, wholesaler, bonded agent, interstate |
|
|
warehouse, manufacturer, export warehouse, importer, or |
|
|
retailer. The comptroller may not issue a permit for a place of |
|
|
business that is a residence or a unit in a public storage facility. |
|
|
(h) Permits for engaging in business as a distributor, |
|
|
wholesaler, bonded agent, interstate warehouse, manufacturer, |
|
|
export warehouse, importer, or retailer shall be governed |
|
|
exclusively by the provisions of this code. |
|
|
(k) A person may not hold a distributor's permit issued by |
|
|
this state and an interstate warehouse's permit for the same |
|
|
location. |
|
|
SECTION 10. Section 154.1015, Tax Code, is amended by |
|
|
amending Subsections (c), (d), and (e) and adding Subsection (j) to |
|
|
read as follows: |
|
|
(c) A manufacturer outside this state who is not a permitted |
|
|
distributor may sell cigarettes only to a permitted distributor or |
|
|
permitted interstate warehouse. |
|
|
(d) A permitted distributor may sell cigarettes only to a |
|
|
permitted distributor, wholesaler, or retailer. A permitted |
|
|
distributor who manufactures or produces cigarettes in this state |
|
|
may sell those cigarettes to a permitted interstate warehouse. |
|
|
(e) A permitted importer may sell cigarettes only to a |
|
|
permitted interstate warehouse, distributor, wholesaler, or |
|
|
retailer. |
|
|
(j) A permitted interstate warehouse may sell cigarettes |
|
|
only in an interstate warehouse transaction. An interstate |
|
|
warehouse may not make an intrastate sale of cigarettes without |
|
|
written authorization by the comptroller. |
|
|
SECTION 11. Section 154.102(a), Tax Code, is amended to |
|
|
read as follows: |
|
|
(a) The comptroller may issue a combination permit for |
|
|
cigarettes and tobacco products to a person who is a distributor, |
|
|
wholesaler, bonded agent, interstate warehouse, manufacturer, |
|
|
importer, or retailer as defined by this chapter and Chapter 155 for |
|
|
both cigarettes and tobacco products. An interstate warehouse may |
|
|
not hold a combination permit as a retailer of cigarettes or tobacco |
|
|
products. |
|
|
SECTION 12. Sections 154.110(a) and (d), Tax Code, are |
|
|
amended to read as follows: |
|
|
(a) The comptroller shall issue a permit to a distributor, |
|
|
wholesaler, bonded agent, interstate warehouse, manufacturer, |
|
|
export warehouse, importer, or retailer if the comptroller: |
|
|
(1) has received an application and fee, if required; |
|
|
(2) believes that the applicant has complied with |
|
|
Section 154.101; and |
|
|
(3) determines that issuing the permit will not |
|
|
jeopardize the administration and enforcement of this chapter. |
|
|
(d) The permit must indicate the type of permit that it is |
|
|
and authorize the sale of cigarettes in this state, except as |
|
|
provided by Section 154.1015(j). The permit must show that it is |
|
|
revocable and shall be forfeited or suspended if the conditions of |
|
|
issuance, provisions of this chapter, or rules of the comptroller |
|
|
are violated. |
|
|
SECTION 13. Section 154.111(b), Tax Code, is amended to |
|
|
read as follows: |
|
|
(b) An application for a permit required by this chapter |
|
|
must be accompanied by a fee of: |
|
|
(1) $300 for a bonded agent's permit; |
|
|
(1-a) $300 for an interstate warehouse's permit; |
|
|
(2) $300 for a distributor's permit; |
|
|
(3) $200 for a wholesaler's permit; |
|
|
(4) $15 for each permit for a vehicle if the applicant |
|
|
is also applying for a permit as a bonded agent, distributor, or |
|
|
wholesaler or has received a current permit from the comptroller |
|
|
under Sections 154.101 and 154.110; and |
|
|
(5) $180 for a retailer's permit. |
|
|
SECTION 14. Section 154.1135(b), Tax Code, is amended to |
|
|
read as follows: |
|
|
(b) The payment must be made in cash or by money order, [or] |
|
|
check, or credit card. |
|
|
SECTION 15. Sections 154.121(a) and (b), Tax Code, are |
|
|
amended to read as follows: |
|
|
(a) Except as provided by Subsection (b), revenue from the |
|
|
sale of permits to distributors, wholesalers, [and] bonded agents, |
|
|
and interstate warehouses is allocated in the same manner as other |
|
|
revenue allocated by Subchapter J. |
|
|
(b) Revenue from the sale of retailer's permits shall be |
|
|
deposited as provided by Section 161.0903, Health and Safety Code, |
|
|
[to the general revenue fund] and may be appropriated only as |
|
|
provided by that [this] section. [The money may be appropriated |
|
|
first to the comptroller for administration of licensing of |
|
|
retailers under this chapter or Chapter 155.] |
|
|
SECTION 16. Section 154.152(c), Tax Code, is amended to |
|
|
read as follows: |
|
|
(c) A person may not transport or cause to be transported |
|
|
from this state cigarettes for sale in another state without first |
|
|
affixing to the cigarettes the stamp required by the state in which |
|
|
the cigarettes are to be sold or paying any other excise tax on the |
|
|
cigarettes imposed by the state in which the cigarettes are to be |
|
|
sold. This subsection does not apply to the distribution, sale, or |
|
|
transportation of cigarettes sold by an interstate warehouse in an |
|
|
interstate warehouse transaction. |
|
|
SECTION 17. Section 154.201, Tax Code, is amended to read as |
|
|
follows: |
|
|
Sec. 154.201. RECORD OF PURCHASE OR RECEIPT. Each |
|
|
distributor, wholesaler, bonded agent, interstate warehouse, and |
|
|
export warehouse shall keep records at each place of business of all |
|
|
cigarettes purchased or received, including records of those |
|
|
cigarettes for which no tax is due under federal law. Each |
|
|
retailer shall keep records at a single commercial business |
|
|
location, which the retailer shall designate as its principal place |
|
|
of business in this state, of all cigarettes purchased and |
|
|
received. These records must include: |
|
|
(1) the name and address of the shipper or carrier and |
|
|
the mode of transportation; |
|
|
(2) all shipping records or copies of records, |
|
|
including invoices, bills of lading, waybills, freight bills, and |
|
|
express receipts; |
|
|
(3) the date and the name of the place of origin of the |
|
|
cigarette shipment; |
|
|
(4) the date and the name of the place of arrival of |
|
|
the cigarette shipment; |
|
|
(5) a statement of the number, kind, and price paid for |
|
|
cigarettes, including cigarettes in stamped and unstamped |
|
|
packages; |
|
|
(6) the name, address, permit number, and tax |
|
|
identification number of the seller; |
|
|
(7) in the case of a distributor, copies of the customs |
|
|
certificates required by 19 U.S.C. Section 1681a(c), as amended, |
|
|
for all cigarettes imported into the United States to which the |
|
|
distributor has affixed a tax stamp; and |
|
|
(8) any other information required by rules of the |
|
|
comptroller. |
|
|
SECTION 18. Section 154.203, Tax Code, is amended by |
|
|
amending Subsection (a) and adding Subsection (c) to read as |
|
|
follows: |
|
|
(a) Each interstate warehouse, distributor, and wholesaler |
|
|
shall keep at each place of business in this state records of each |
|
|
sale, distribution, exchange, or use of cigarettes whether taxed |
|
|
under this chapter or not. Each interstate warehouse, distributor, |
|
|
and wholesaler shall prepare and retain an original invoice for |
|
|
each transaction involving cigarettes. Each interstate warehouse, |
|
|
distributor, or wholesaler shall keep any supporting |
|
|
documentation, including bills of lading, showing shipment and |
|
|
receipt used in preparing the invoices at the place of business of |
|
|
the interstate warehouse, distributor, or wholesaler. The |
|
|
interstate warehouse, distributor, or wholesaler shall prepare and |
|
|
deliver a duplicate invoice to the purchaser. |
|
|
(c) On request by the comptroller, an interstate warehouse |
|
|
shall provide to the comptroller copies of periodic cigarette |
|
|
reports filed with each state into which the interstate warehouse |
|
|
sells cigarettes and copies of each report required under 15 U.S.C. |
|
|
Section 376. |
|
|
SECTION 19. Section 154.501(a), Tax Code, is amended to |
|
|
read as follows: |
|
|
(a) A person violates this chapter if the person: |
|
|
(1) is a distributor, wholesaler, manufacturer, |
|
|
export warehouse, importer, bonded agent, interstate warehouse, |
|
|
manufacturer's representative, or retailer and fails to keep |
|
|
records required by this chapter; |
|
|
(2) engages in the business of a bonded agent, |
|
|
interstate warehouse, distributor, wholesaler, manufacturer, |
|
|
export warehouse, importer, or retailer without a valid permit; |
|
|
(3) is a distributor, wholesaler, manufacturer, |
|
|
export warehouse, importer, bonded agent, interstate warehouse, or |
|
|
retailer and fails to make a report or makes a false or incomplete |
|
|
report or application required by this chapter to the comptroller; |
|
|
or |
|
|
(4) is a person affected by this chapter and fails or |
|
|
refuses to abide by or violates a provision of this chapter or a |
|
|
rule adopted by the comptroller under this chapter. |
|
|
SECTION 20. Section 154.503(a), Tax Code, is amended to |
|
|
read as follows: |
|
|
(a) Except as provided by Sections 154.026(b), 154.041(f), |
|
|
and 154.042, a person commits an offense if the person possesses |
|
|
unstamped cigarettes in quantities less than 10,000. |
|
|
SECTION 21. Section 154.509, Tax Code, is amended to read as |
|
|
follows: |
|
|
Sec. 154.509. PERMITS. A person commits an offense if the |
|
|
person acting: |
|
|
(1) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, receives or possesses cigarettes without |
|
|
having a valid permit; |
|
|
(2) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, receives or possesses cigarettes without |
|
|
having a permit posted where it can be easily seen by the public; |
|
|
(3) as a distributor, interstate warehouse, or |
|
|
wholesaler, does not deliver an invoice to the purchaser as |
|
|
required by Section 154.203; |
|
|
(4) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, sells cigarettes without having a valid |
|
|
permit; or |
|
|
(5) as a bonded agent, interstate warehouse, or export |
|
|
warehouse, stores, distributes, or delivers cigarettes in |
|
|
unstamped packages without having a valid permit, except as |
|
|
provided by Section 154.041(f). |
|
|
SECTION 22. Section 154.511, Tax Code, is amended to read as |
|
|
follows: |
|
|
Sec. 154.511. TRANSPORTATION OF CIGARETTES. A person, |
|
|
other than a common carrier, commits an offense if the person: |
|
|
(1) knowingly transports cigarettes without a stamp |
|
|
affixed to each individual package, except as provided by Section |
|
|
154.024(a) or 154.152(c); |
|
|
(2) wilfully refuses to stop a motor vehicle operated |
|
|
to transport cigarettes after a request to stop from an authorized |
|
|
person; or |
|
|
(3) while transporting cigarettes refuses to permit a |
|
|
complete inspection of the cargo by an authorized person. |
|
|
SECTION 23. Section 154.515(a), Tax Code, is amended to |
|
|
read as follows: |
|
|
(a) Except as provided by Sections 154.026(b), 154.041(f), |
|
|
and 154.042, a person commits an offense if the person possesses |
|
|
unstamped cigarettes in quantities of 10,000 or more. |
|
|
SECTION 24. Section 155.001, Tax Code, is amended by |
|
|
amending Subdivisions (8), (12), and (16) and adding Subdivisions |
|
|
(9-a) and (9-b) to read as follows: |
|
|
(8) "First sale" means, except as otherwise provided |
|
|
by this chapter: |
|
|
(A) the first transfer of possession in |
|
|
connection with a purchase, sale, or any exchange for value of |
|
|
tobacco products in or into this state, which: |
|
|
(i) includes the sale of tobacco products |
|
|
by: |
|
|
(a) a distributor in or outside this |
|
|
state to a distributor, wholesaler, or retailer in this state; and |
|
|
(b) a manufacturer in this state who |
|
|
transfers the tobacco products in this state; and |
|
|
(ii) does not include: |
|
|
(a) the sale of tobacco products by a |
|
|
manufacturer outside this state to a distributor in this state; |
|
|
[or] |
|
|
(b) the transfer of tobacco products |
|
|
from a manufacturer outside this state to a bonded agent in this |
|
|
state; or |
|
|
(c) the sale of tobacco products by a |
|
|
manufacturer, bonded agent, distributor, or importer to an |
|
|
interstate warehouse in this state; |
|
|
(B) the first use or consumption of tobacco |
|
|
products in this state; or |
|
|
(C) the loss of tobacco products in this state |
|
|
whether through negligence, theft, or other unaccountable loss. |
|
|
(9-a) "Interstate warehouse" means a person in this |
|
|
state who receives untaxed tobacco products from a manufacturer, |
|
|
bonded agent, distributor, or importer and stores the tobacco |
|
|
products exclusively for an interstate warehouse transaction. |
|
|
(9-b) "Interstate warehouse transaction" means the |
|
|
sale or delivery of tobacco products from an interstate warehouse |
|
|
to a person located in another state who is licensed or permitted by |
|
|
the other state to pay the state's excise tax on tobacco products as |
|
|
required. |
|
|
(12) "Permit holder" means a bonded agent, interstate |
|
|
warehouse, distributor, wholesaler, manufacturer, importer, export |
|
|
warehouse, or retailer who obtains a permit under Section 155.041. |
|
|
(16) "Wholesaler" means a person, including a |
|
|
manufacturer's representative, who sells or distributes tobacco |
|
|
products in this state for resale but who is not a distributor or |
|
|
interstate warehouse. |
|
|
SECTION 25. Section 155.041, Tax Code, is amended by |
|
|
amending Subsections (a), (b), and (h) and adding Subsection (i) to |
|
|
read as follows: |
|
|
(a) A person may not engage in business as a distributor, |
|
|
wholesaler, bonded agent, interstate warehouse, manufacturer, |
|
|
export warehouse, importer, or retailer unless the person has |
|
|
applied for and received the applicable permit from the |
|
|
comptroller. |
|
|
(b) Each distributor, wholesaler, bonded agent, interstate |
|
|
warehouse, manufacturer, export warehouse, importer, or retailer |
|
|
shall obtain a permit for each place of business owned or operated |
|
|
by the distributor, wholesaler, bonded agent, interstate |
|
|
warehouse, manufacturer, export warehouse, importer, or retailer. |
|
|
(h) Permits for engaging in business as a distributor, |
|
|
wholesaler, bonded agent, interstate warehouse, manufacturer, |
|
|
export warehouse, importer, or retailer shall be governed |
|
|
exclusively by the provisions of this code. |
|
|
(i) A person may not hold a distributor's permit issued by |
|
|
this state and an interstate warehouse's permit for the same |
|
|
location. |
|
|
SECTION 26. Section 155.0415, Tax Code, is amended by |
|
|
amending Subsections (c), (d), (e), and (f) and adding Subsection |
|
|
(j) to read as follows: |
|
|
(c) A manufacturer outside this state who is not a permitted |
|
|
distributor may sell tobacco products only to a permitted |
|
|
distributor or a permitted interstate warehouse. |
|
|
(d) A permitted distributor may sell tobacco products only |
|
|
to a permitted distributor, wholesaler, or retailer. A permitted |
|
|
distributor who manufactures or produces tobacco products in this |
|
|
state may sell those tobacco products to a permitted interstate |
|
|
warehouse. |
|
|
(e) A permitted importer may sell tobacco products only to a |
|
|
permitted interstate warehouse, distributor, wholesaler, or |
|
|
retailer. |
|
|
(f) A permitted wholesaler may sell tobacco products only to |
|
|
a permitted interstate warehouse, distributor, wholesaler, or |
|
|
retailer. |
|
|
(j) A permitted interstate warehouse may sell tobacco |
|
|
products only in an interstate warehouse transaction. An |
|
|
interstate warehouse may not make an intrastate sale of tobacco |
|
|
products without written authorization by the comptroller. |
|
|
SECTION 27. Sections 155.048(a) and (d), Tax Code, are |
|
|
amended to read as follows: |
|
|
(a) The comptroller shall issue a permit to a distributor, |
|
|
wholesaler, bonded agent, interstate warehouse, manufacturer, |
|
|
importer, or retailer if the comptroller: |
|
|
(1) has received an application and fee, if required; |
|
|
(2) does not reject the application and deny the |
|
|
permit under Section 155.0481; and |
|
|
(3) determines that issuing the permit will not |
|
|
jeopardize the administration and enforcement of this chapter. |
|
|
(d) The permit must indicate the type of permit that it is |
|
|
and authorize the sale of tobacco products in this state, except as |
|
|
provided by Section 155.0415(j). The permit must show that it is |
|
|
revocable and shall be forfeited or suspended if the conditions of |
|
|
issuance, provisions of this chapter, or rules of the comptroller |
|
|
are violated. |
|
|
SECTION 28. Section 155.049(b), Tax Code, is amended to |
|
|
read as follows: |
|
|
(b) An application for a permit required by this chapter |
|
|
must be accompanied by a fee of: |
|
|
(1) $300 for a bonded agent's permit; |
|
|
(1-a) $300 for an interstate warehouse's permit; |
|
|
(2) $300 for a distributor's permit; |
|
|
(3) $200 for a wholesaler's permit; |
|
|
(4) $15 for each permit for a vehicle if the applicant |
|
|
is also applying for a permit as a bonded agent, distributor, or |
|
|
wholesaler or has received a current permit from the comptroller |
|
|
under Sections 155.041 and 155.048; and |
|
|
(5) $180 for a retailer's permit. |
|
|
SECTION 29. Section 155.050(b), Tax Code, is amended to |
|
|
read as follows: |
|
|
(b) The payment must be made in cash or by money order, [or] |
|
|
check, or credit card. |
|
|
SECTION 30. Sections 155.058(a) and (b), Tax Code, are |
|
|
amended to read as follows: |
|
|
(a) Except as provided by Subsection (b), revenue from the |
|
|
sale of permits to distributors, wholesalers, [and] bonded agents, |
|
|
and interstate warehouses is allocated in the same manner that |
|
|
other revenue is allocated by Subchapter H. |
|
|
(b) Revenue from the sale of retailer's permits shall be |
|
|
deposited as provided by Section 161.0903, Health and Safety Code, |
|
|
[to the general revenue fund] and may be appropriated only as |
|
|
provided by that [this] section. [The money may be appropriated |
|
|
first to the comptroller for administration of licensing of |
|
|
retailers under this chapter or Chapter 154.] |
|
|
SECTION 31. Section 155.101, Tax Code, is amended to read as |
|
|
follows: |
|
|
Sec. 155.101. RECORD OF PURCHASE OR RECEIPT. Each |
|
|
distributor, wholesaler, bonded agent, interstate warehouse, and |
|
|
export warehouse shall keep records at each place of business of all |
|
|
tobacco products purchased or received. Each retailer shall keep |
|
|
records at a single commercial business location, which the |
|
|
retailer shall designate as its principal place of business in the |
|
|
state, of all tobacco products purchased and received. These |
|
|
records must include [the following, except that Subdivision (7) |
|
|
applies to distributors only and Subdivision (8) applies only to |
|
|
the purchase or receipt of tobacco products other than cigars]: |
|
|
(1) the name and address of the shipper or carrier and |
|
|
the mode of transportation; |
|
|
(2) all shipping records or copies of records, |
|
|
including invoices, bills of lading, waybills, freight bills, and |
|
|
express receipts; |
|
|
(3) the date and the name of the place of origin of the |
|
|
tobacco product shipment; |
|
|
(4) the date and the name of the place of arrival of |
|
|
the tobacco product shipment; |
|
|
(5) a statement of the number, kind, and price paid for |
|
|
the tobacco products; |
|
|
(6) the name, address, permit number, and tax |
|
|
identification number of the seller; |
|
|
(7) in the case of a distributor, the manufacturer's |
|
|
list price for the tobacco products; |
|
|
(8) for tobacco products other than cigars, the net |
|
|
weight as listed by the manufacturer for each unit; and |
|
|
(9) any other information required by rules of the |
|
|
comptroller. |
|
|
SECTION 32. Section 155.102, Tax Code, is amended by |
|
|
amending Subsections (a) and (b) and adding Subsection (d) to read |
|
|
as follows: |
|
|
(a) Each interstate warehouse, distributor, and wholesaler |
|
|
shall keep at each place of business in this state records of each |
|
|
sale, distribution, exchange, or use of tobacco products whether |
|
|
taxed under this chapter or not. Each interstate warehouse, |
|
|
distributor, and wholesaler shall prepare and retain an original |
|
|
invoice for each transaction involving tobacco products. Each |
|
|
interstate warehouse, distributor, or wholesaler shall keep any |
|
|
supporting documentation, including bills of lading, showing |
|
|
shipment and receipt used in preparing the invoices at the place of |
|
|
business of the interstate warehouse, distributor, or wholesaler. |
|
|
The interstate warehouse, distributor, or wholesaler shall prepare |
|
|
and deliver a duplicate invoice to the purchaser. |
|
|
(b) The records for each sale, distribution, exchange, or |
|
|
use of tobacco products must show: |
|
|
(1) the purchaser's name and address, permit number, |
|
|
or tax identification number; |
|
|
(2) the method of delivery and the name of the common |
|
|
carrier or other person delivering the tobacco products; |
|
|
(3) the date, amount, and type of tobacco products |
|
|
sold, distributed, exchanged, or used; |
|
|
(4) the price received for the tobacco products; |
|
|
(5) the number and kind of tobacco products on which |
|
|
the tax has been paid; and |
|
|
(6) for sales from a manufacturer to a distributor or |
|
|
interstate warehouse, the manufacturer's list price for the tobacco |
|
|
products. |
|
|
(d) On request by the comptroller, an interstate warehouse |
|
|
shall provide to the comptroller copies of periodic tobacco product |
|
|
reports filed with each state into which the interstate warehouse |
|
|
sells tobacco products and copies of each report required under 15 |
|
|
U.S.C. Section 376. |
|
|
SECTION 33. Section 155.201(a), Tax Code, is amended to |
|
|
read as follows: |
|
|
(a) A person violates this chapter if the person: |
|
|
(1) is a distributor, wholesaler, manufacturer, |
|
|
export warehouse, importer, bonded agent, interstate warehouse, |
|
|
manufacturer's representative, or retailer and fails to keep |
|
|
records required by this chapter; |
|
|
(2) engages in the business of a bonded agent, |
|
|
interstate warehouse, distributor, wholesaler, manufacturer, |
|
|
export warehouse, importer, or retailer without a valid permit; |
|
|
(3) is a distributor, wholesaler, manufacturer, |
|
|
export warehouse, importer, bonded agent, interstate warehouse, or |
|
|
retailer and fails to make a report required by this chapter to the |
|
|
comptroller or makes a false or incomplete report or application |
|
|
required by this chapter to the comptroller; or |
|
|
(4) is a person affected by this chapter and fails or |
|
|
refuses to abide by or violates a provision of this chapter or a |
|
|
rule adopted by the comptroller under this chapter. |
|
|
SECTION 34. Section 155.207, Tax Code, is amended to read as |
|
|
follows: |
|
|
Sec. 155.207. PERMITS. A person commits an offense if the |
|
|
person acting: |
|
|
(1) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, receives or possesses tobacco products |
|
|
without having a valid permit; |
|
|
(2) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, receives or possesses tobacco products |
|
|
without having a permit posted where it can be easily seen by the |
|
|
public; |
|
|
(3) as a distributor, interstate warehouse, or |
|
|
wholesaler, does not deliver an invoice to the purchaser as |
|
|
required by Section 155.102; |
|
|
(4) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, sells tobacco products without having a |
|
|
valid permit; or |
|
|
(5) as a bonded agent, interstate warehouse, or |
|
|
export warehouse, stores, distributes, or delivers tobacco |
|
|
products on which the tax has not been paid without having a valid |
|
|
permit. |
|
|
SECTION 35. (a) Section 161.124, Health and Safety Code, is |
|
|
repealed. |
|
|
(b) The following provisions of the Tax Code are repealed: |
|
|
(1) Section 154.1142; |
|
|
(2) Section 154.1143; |
|
|
(3) Sections 154.121(c), (d), and (e); |
|
|
(4) Sections 155.058(c), (d), and (e); |
|
|
(5) Section 155.0592; and |
|
|
(6) Section 155.0593. |
|
|
SECTION 36. Section 161.0901, Health and Safety Code, as |
|
|
added by this Act, applies only to a violation that occurs on or |
|
|
after the effective date of this Act. A violation that occurs |
|
|
before the effective date of this Act is governed by the law in |
|
|
effect on the date the violation occurred, and the former law is |
|
|
continued in effect for that purpose. |
|
|
SECTION 37. (a) Notwithstanding Sections 147.0051, |
|
|
147.0151, and 147.0152, Health and Safety Code, as added by this |
|
|
Act, a person is not required to hold a permit under Section |
|
|
147.0051 to engage in business as a retailer of e-cigarettes in this |
|
|
state until January 1, 2022. |
|
|
(b) The comptroller of public accounts shall prescribe the |
|
|
form and content of an application for a permit under Section |
|
|
147.0051, Health and Safety Code, as added by this Act, and begin |
|
|
accepting applications for the permit not later than October 1, |
|
|
2021. |
|
|
SECTION 38. This Act takes effect September 1, 2021. |