By Zaffirini                                            S.B. No. 55

      75R620 DLF-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the regulation of the sale or distribution of tobacco

 1-3     products; providing penalties.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5         ARTICLE 1.  DISTRIBUTION OF CIGARETTES OR TOBACCO PRODUCTS

 1-6           SECTION 1.01.  Subchapter H, Chapter 161, Health and Safety

 1-7     Code, is amended to read as follows:

 1-8         SUBCHAPTER H.  DISTRIBUTION [SALE] OF CIGARETTES OR TOBACCO

 1-9                            PRODUCTS [TO MINORS]

1-10           Sec. 161.081.  DEFINITIONS.  In this subchapter:

1-11                 (1)  "Cigarette" has the meaning assigned by Section

1-12     154.001, Tax Code.

1-13                 (2)  "Permit holder" has the meaning assigned by

1-14     Section 154.001 or 155.001, Tax Code, as applicable.

1-15                 (3)  "Retail sale" means a transfer of possession from

1-16     a retailer to a consumer in connection with a purchase, sale, or

1-17     exchange for value of cigarettes or tobacco products.

1-18                 (4)  "Retailer" has the meaning assigned by Section

1-19     154.001 or 155.001, Tax Code, as applicable.

1-20                 (5)  "Tobacco product" has the meaning assigned by

1-21     Section 155.001, Tax Code.

1-22                 (6)  "Wholesaler" has the meaning assigned by Section

1-23     154.001 or 155.001, Tax Code, as applicable.

1-24           Sec. 161.082.  ADMINISTRATION AND ENFORCEMENT.  (a)  The

 2-1     department shall administer this subchapter.

 2-2           (b)  The department shall:

 2-3                 (1)  conduct random unannounced inspections of

 2-4     locations where cigarettes or tobacco products are sold or

 2-5     delivered to ensure compliance with this subchapter and related

 2-6     laws;

 2-7                 (2)  establish a system to allow persons to report the

 2-8     sale or delivery of cigarettes or tobacco products to a person

 2-9     younger than 18 years of age, including a sale or delivery by a

2-10     permit holder;

2-11                 (3)  maintain statistics relating to violations of this

2-12     subchapter and related laws, the activities carried out by this

2-13     state to enforce this subchapter and related laws, and the extent

2-14     to which the state has succeeded in reducing the availability of

2-15     cigarettes and tobacco products to persons younger than 18 years of

2-16     age;

2-17                 (4)  develop strategies to increase compliance with

2-18     this subchapter and related laws; and

2-19                 (5)  submit to the federal government any reports

2-20     necessary to comply with federal law.

2-21           Sec. 161.083.  SALE OF CIGARETTES OR TOBACCO PRODUCTS TO

2-22     PERSONS YOUNGER THAN 18 YEARS OF AGE [MINORS] PROHIBITED; PROOF OF

2-23     AGE REQUIRED.  (a)  A person commits an offense if the person, as a

2-24     commercial enterprise and with criminal negligence:

2-25                 (1)  sells, gives, or causes to be sold or given a

2-26     cigarette or [other] tobacco product to someone who [the person

2-27     knows] is younger than 18 years of age; or

 3-1                 (2)  sells, gives, or causes to be sold or given a

 3-2     cigarette or [other] tobacco product to another person who[,

 3-3     knowing that the person receiving the cigarette or other tobacco

 3-4     product] intends to deliver it to someone who is younger than 18

 3-5     years of age.

 3-6           (b)  A retailer commits an offense if:

 3-7                 (1)  an agent or employee of the retailer commits an

 3-8     offense under Subsection (a); and

 3-9                 (2)  the retailer, with criminal negligence, failed to

3-10     prevent the offense through adequate supervision of the agent or

3-11     employee.

3-12           (c)  An offense under this section is a [Class C] misdemeanor

3-13     punishable by a fine of not less than $100 or more than $1,000.  If

3-14     it is shown on the trial of the person that the person previously

3-15     has been convicted of an offense under this section, the offense is

3-16     punishable by a fine of not less than $500 or more than $2,000.

3-17           (d) [(c)]  It is a defense to prosecution under Subsection

3-18     (a)(1) [this section] that the person to whom the cigarette or

3-19     [other] tobacco product was sold or given presented to the

3-20     defendant [an] apparently valid proof of [Texas driver's license or

3-21     an] identification.

3-22           (e)  A proof of identification satisfies the requirements of

3-23     Subsection (d) if it contains [card, issued by the Department of

3-24     Public Safety and containing] a physical description and photograph

3-25     consistent with the person's appearance, purports [that purported]

3-26     to establish that the person is [was] 18 years of age or older, and

3-27     was issued by a governmental agency.  The proof of identification

 4-1     may include a driver's license issued by this state or another

 4-2     state, a passport, or an identification card issued by a state or

 4-3     the federal government.

 4-4           Sec. 161.084.  SALE OF CIGARETTES OR TOBACCO PRODUCTS TO

 4-5     PERSONS YOUNGER THAN 27 YEARS OF AGE.  (a)  A person may not sell,

 4-6     give, or cause to be sold or given a cigarette or tobacco product

 4-7     to someone who is younger than 27 years of age unless the person to

 4-8     whom the cigarette or tobacco product was sold or given presents an

 4-9     apparently valid proof of identification.

4-10           (b)  A retailer shall adequately supervise the retailer's

4-11     agents and employees to prevent a violation of Subsection (a).

4-12           (c)  A proof of identification described by Section

4-13     161.083(e) satisfies the requirements of Subsection (a).

4-14           Sec. 161.085 [161.082].  Warning Notice.  (a)  Each person

4-15     who sells cigarettes or tobacco products at retail or by vending

4-16     machine shall post a sign in a location that is conspicuous to all

4-17     employees and customers and that is close to the place at which the

4-18     cigarettes or tobacco products may be purchased.

4-19           (b)  The sign must include the statement:

4-20                 SALE OR PROVISION OF TOBACCO PRODUCTS TO A

4-21                 MINOR UNDER 18 YEARS OF AGE IS PROHIBITED

4-22                 BY LAW.  UPON CONVICTION, A MAXIMUM FINE OF

4-23                 UP TO $2,000 [$200] MAY BE IMPOSED.

4-24           (c)  The board by rule shall determine the design and size of

4-25     the sign.

4-26           (d)  The department on request shall provide the sign without

4-27     charge to any person who sells cigarettes or tobacco [cigarette]

 5-1     products.  The department may provide the sign without charge to

 5-2     [cigarette] distributors of cigarettes or tobacco products or

 5-3     wholesale dealers of cigarettes or tobacco [cigarette] products in

 5-4     this state for distribution to persons who sell cigarettes or

 5-5     tobacco [cigarette] products.  A distributor or wholesale dealer

 5-6     may not charge for distributing a sign under this subsection.

 5-7           (e)  A person commits an offense if the person intentionally

 5-8     fails to display a sign as prescribed by this section.  An offense

 5-9     under this subsection is a Class C misdemeanor.

5-10           Sec. 161.086.  VENDOR ASSISTED SALES REQUIRED; VENDING

5-11     MACHINES.  (a)  Except as provided by Subsection (b), a retailer or

5-12     other person may not:

5-13                 (1)  offer cigarettes or tobacco products for sale in a

5-14     manner that permits a customer direct access to the cigarettes or

5-15     tobacco products; or

5-16                 (2)  install or maintain a vending machine containing

5-17     cigarettes or tobacco products.

5-18           (b)  Subsection (a) does not apply to:

5-19                 (1)  a bar, lounge, or other similar place that, as its

5-20     primary business, sells or serves alcoholic beverages for

5-21     on-premises consumption; or

5-22                 (2)  a facility or business that is not open to persons

5-23     younger than 18 years of age.

5-24           (c)  The comptroller or a peace officer may, with or without

5-25     a warrant, seize, seal, or disable a vending machine installed or

5-26     maintained in violation of this section.  Property seized under

5-27     this subsection must be seized in accordance with, and is subject

 6-1     to forfeiture to the state in accordance with, Subchapter H,

 6-2     Chapter 154, Tax Code, and Subchapter E, Chapter 155, Tax Code.

 6-3           (d)  A person commits an offense if the person violates

 6-4     Subsection (a).  An offense under this subsection is punishable by

 6-5     a fine of not less than $100 or more than $1,000.  If it is shown

 6-6     on the trial of the person that the person previously has been

 6-7     convicted of an offense under this subsection, the offense is

 6-8     punishable by a fine of not less than $500 or more than $2,000.

 6-9           Sec. 161.087.  DISTRIBUTION OF CIGARETTES OR TOBACCO

6-10     PRODUCTS.  (a)  A person may not distribute:

6-11                 (1)  a free sample of a cigarette or tobacco product;

6-12     or

6-13                 (2)  a coupon or other item that the recipient may use

6-14     to receive a free or discounted cigarette or tobacco product or a

6-15     sample cigarette or tobacco product.

6-16           (b)  Except as provided by Subsection (c), a permit holder

6-17     may not accept or redeem, offer to accept or redeem, or hire a

6-18     person to accept or redeem a coupon or other item that the

6-19     recipient may use to receive a free or discounted cigarette or

6-20     tobacco product or a sample cigarette or tobacco product.

6-21           (c)  Subsections (a)(2) and (b) do not apply to a transaction

6-22     between permit holders unless the transaction is a retail sale.

6-23           (d)  A person commits an offense if the person violates this

6-24     section.  An offense under this subsection is punishable by a fine

6-25     of not less than $100 or more than $1,000.  If it is shown on the

6-26     trial of the person that the person previously has been convicted

6-27     of an offense under this subsection, the offense is punishable by a

 7-1     fine of not less than $500 or more than $2,000.

 7-2           Sec. 161.088.  JURISDICTION OF CRIMINAL PROCEEDING.  (a)  A

 7-3     municipal court, including a municipal court of record, has

 7-4     jurisdiction in all criminal cases arising under this subchapter

 7-5     that:

 7-6                 (1)  arise within the territorial limits of the

 7-7     municipality; and

 7-8                 (2)  are punishable only by a fine not to exceed

 7-9     $2,000.

7-10           (b)  This section prevails over any other law, ordinance, or

7-11     charter.

7-12           Sec. 161.089.  MUNICIPAL ENFORCEMENT.  (a)  The governing

7-13     body of a municipality may grant authority under this section to a

7-14     municipal employee who is not a peace officer and who is employed

7-15     by:

7-16                 (1)  a health authority appointed under Section

7-17     121.021;

7-18                 (2)  a local health department established under

7-19     Section 121.031; or

7-20                 (3)  a public health district established under Section

7-21     121.041.

7-22           (b)  The governing body may grant to the employee the power

7-23     to conduct random unannounced inspections of locations where

7-24     cigarettes or tobacco products are sold or delivered within the

7-25     territorial limits of the municipality.

7-26           (c)  The governing body may also grant to the employee the

7-27     authority to issue a citation in the territorial limits of the

 8-1     municipality to enforce a provision of this subchapter.  The

 8-2     citation must state the name of the person cited, the violation

 8-3     charged, and the time and place the person is required to appear in

 8-4     court.

 8-5           (d)  The court in which a person who receives a citation

 8-6     under Subsection (c) is to appear may issue an arrest warrant for

 8-7     the person for the violation described in the citation if the

 8-8     person fails to appear on or before the return date stated in the

 8-9     citation.

8-10           Sec. 161.090.  CIVIL PENALTY.  (a)  A person is subject to a

8-11     civil penalty of not less than $100 or more than $2,000 for each

8-12     day of violation and each act of violation of Section 161.083,

8-13     161.086, or 161.087.  In determining the amount of the civil

8-14     penalty, the court shall consider:

8-15                 (1)  the person's previous violations;

8-16                 (2)  the seriousness of the violation, including the

8-17     nature, circumstances, extent, and gravity of the violation;

8-18                 (3)  the demonstrated good faith of the person; and

8-19                 (4)  the amount necessary to deter future violations.

8-20           (b)  At the request of the department or on the initiative of

8-21     the attorney general or district or county attorney, the attorney

8-22     general or the appropriate district or county attorney shall

8-23     institute and conduct the suit authorized by this section in the

8-24     name of the state.

8-25           (c)  The department and the attorney bringing the suit may

8-26     recover reasonable expenses incurred in obtaining civil penalties,

8-27     including investigation costs, court costs, reasonable attorney's

 9-1     fees, witness fees, and deposition expenses.

 9-2           (d)  A penalty collected under this section by the attorney

 9-3     general shall be deposited to the credit of the general revenue

 9-4     fund.  A penalty collected under this section by a district or

 9-5     county attorney shall be deposited to the credit of the general

 9-6     fund of the county in which the suit was heard.

 9-7           (e)  The civil penalty authorized by this section is in

 9-8     addition to any other civil, administrative, or criminal penalty

 9-9     provided by law.

9-10           Sec. 161.0901.  PREEMPTION OF LOCAL LAW.  This subchapter

9-11     does not preempt a local regulation of the sale, distribution, or

9-12     use of cigarettes or tobacco products or affect the authority of a

9-13     political subdivision to adopt or enforce an ordinance or

9-14     requirement relating to the sale, distribution, or use of

9-15     cigarettes or tobacco products if the regulation, ordinance, or

9-16     requirement:

9-17                 (1)  is compatible with and equal to or more stringent

9-18     than a requirement prescribed by this subchapter; or

9-19                 (2)  relates to an issue that is not specifically

9-20     addressed by this subchapter or Chapter 154 or 155, Tax Code.

9-21           Sec. 161.0902.  REPORTS OF VIOLATION.  A local or state law

9-22     enforcement agency or other governmental unit shall notify the

9-23     department of any violation of this subchapter that the agency or

9-24     unit detects, investigates, or prosecutes.

9-25          ARTICLE 2.  ADVERTISING OF CIGARETTES OR TOBACCO PRODUCTS

9-26           SECTION 2.01.  Subchapter K, Chapter 161, Health and Safety

9-27     Code, is amended to read as follows:

 10-1        SUBCHAPTER K.  PROHIBITION OF CERTAIN CIGARETTE OR TOBACCO

 10-2                            PRODUCT ADVERTISING

 10-3          Sec. 161.121.  DEFINITIONS.  In this subchapter:

 10-4                (1)  "Church" means a facility that is owned by a

 10-5    religious organization and that is used primarily for religious

 10-6    services.

 10-7                (2)  "Cigarette" has the meaning assigned by Section

 10-8    154.001, Tax Code.

 10-9                (3)  "School" means a private or public elementary or

10-10    secondary school.

10-11                (4) [(3)]  "Sign" means an outdoor medium, including a

10-12    structure, display, light device, figure, painting, drawing,

10-13    message, plaque, poster, or billboard, that is:

10-14                      (A)  used to advertise or inform; and

10-15                      (B)  visible from the main-traveled way of a

10-16    street or highway.

10-17                (5) [(4)]  "Tobacco product" has the meaning assigned

10-18    by Section 155.001, Tax Code.

10-19          Sec. 161.122.  GENERAL PROHIBITION.  (a)  A person may not

10-20    use a sign to advertise a cigarette or tobacco product.

10-21          (b)  This section does not apply to a contract for an

10-22    advertisement for a cigarette or tobacco product entered into

10-23    before September 1, 1997.

10-24          Sec. 161.123.  PROHIBITION RELATING TO CERTAIN SIGNS;

10-25    EXCEPTIONS.  (a)  A sign excepted from the application of Section

10-26    161.122 under Section 161.122(b) that contains [containing] an

10-27    advertisement for cigarettes or tobacco products may not be located

 11-1    closer than 500 feet to a church or school.

 11-2          (b)  The measurement of the distance between the sign

 11-3    containing an advertisement for cigarettes or tobacco products and

 11-4    an institution listed in Subsection (a) is from the nearest

 11-5    property line of the institution to a point on a street or highway

 11-6    closest to the sign, along street lines and in direct lines across

 11-7    intersections.

 11-8          (c)  This section does not apply to:

 11-9                (1)  a sign located on or in a facility owned or leased

11-10    by a professional sports franchise or in a facility where

11-11    professional sports events are held at least 10 times during a

11-12    12-month period; or

11-13                (2)  a contract for a cigarette or [other] tobacco

11-14    product advertisement entered into before August 26, 1991.

11-15          (d)  In Subsection (c)(1), a "facility" includes a stadium,

11-16    arena, or events center and any land or property owned or leased by

11-17    the professional sports franchise that is connected to or

11-18    immediately contiguous to the stadium, arena, or events center.

11-19                       ARTICLE 3.  YOUTH TOBACCO USE

11-20          SECTION 3.01.  Chapter 161, Health and Safety Code, is

11-21    amended by adding Subchapters N and O to read as follows:

11-22                   SUBCHAPTER N.  TOBACCO USE BY MINORS

11-23          Sec. 161.251.  DEFINITIONS.  In this subchapter:

11-24                (1)  "Cigarette" has the meaning assigned by Section

11-25    154.001, Tax Code.

11-26                (2)  "Tobacco product" has the meaning assigned by

11-27    Section 155.001, Tax Code.

 12-1          Sec. 161.252.  PROHIBITION.  A person younger than 18 years

 12-2    of age may not use or possess a cigarette or tobacco product.

 12-3          Sec. 161.253.  CIVIL FINE; CITATION.  (a)  A peace officer

 12-4    may issue a citation for a violation of Section 161.252.  The

 12-5    citation must state:

 12-6                (1)  that the person is required to participate in an

 12-7    approved tobacco use prevention program under this subchapter;

 12-8                (2)  the requirements relating to participation

 12-9    prescribed by Section 161.254; and

12-10                (3)  a telephone number the person may call at the

12-11    department to obtain information about approved programs.

12-12          (b)  On issuance of a citation under this section, the peace

12-13    officer shall mail a copy of the citation to the department.

12-14          Sec. 161.254.  PARTICIPATION REQUIREMENTS.  (a)  A person to

12-15    whom a citation is issued under Section 161.253 shall mail or

12-16    deliver to the department a certificate evidencing that the person

12-17    has completed an approved program not later than the 90th day after

12-18    the date the citation is issued.

12-19          (b)  On application of a person to whom a citation is issued

12-20    under Section 161.253, for good cause shown, the department may:

12-21                (1)  dismiss the citation;

12-22                (2)  waive participation; or

12-23                (3)  extend the period for completion of a program

12-24    under Subsection (a) to a date not later than the 180th day after

12-25    the date the citation is issued.

12-26          (c)  A person who violates this section is subject to a civil

12-27    fine of not more than $100.

 13-1          Sec. 161.255.  PROGRAM REQUIREMENTS.  (a)  The department

 13-2    shall:

 13-3                (1)  adopt criteria, application and renewal

 13-4    procedures, and other rules necessary for approval of tobacco use

 13-5    prevention programs; and

 13-6                (2)  establish reasonable application and renewal fees

 13-7    for the approval of tobacco use prevention programs in amounts

 13-8    necessary to administer this subchapter.

 13-9          (b)  The department may require the person participating in

13-10    the program to pay the cost of the program.  The department may

13-11    adopt rules restricting the amount that a program provider may

13-12    charge for providing the program.

13-13          (c)  The department may waive the application or renewal fee

13-14    for a program operated by a school district.

13-15          Sec. 161.256.  DEPARTMENT ADMINISTRATION OF CIVIL FINE.  (a)

13-16    The department shall:

13-17                (1)  establish an administrative adjudication hearing

13-18    procedure under which a civil fine under this subchapter may be

13-19    imposed; and

13-20                (2)  adopt and distribute forms to be used by a peace

13-21    officer in issuing a citation under Section 161.253.

13-22          (b)  The procedure adopted under Subsection (a)(1) must allow

13-23    a charged person to appear by telephone or in writing.

13-24          Sec. 161.257.  ORDER.  The hearing officer at an

13-25    administrative adjudication hearing under this subchapter shall

13-26    issue an order stating:

13-27                (1)  whether the person charged with the violation of

 14-1    Section 161.254 is liable for the violation; and

 14-2                (2)  the amount of the fine assessed against the

 14-3    person.

 14-4          Sec. 161.258.  APPEAL.  (a)  A person whom the hearing

 14-5    officer determines to be in violation of Section 161.254 may appeal

 14-6    the determination in the municipal court of a municipality in which

 14-7    the violation occurred or, if the violation did not occur in a

 14-8    municipality, in a justice court of the county in which the

 14-9    violation occurred.  The appeal shall be brought by filing a

14-10    petition with the clerk of the court and paying the required court

14-11    costs not later than the 30th day after the date the order is

14-12    filed.

14-13          (b)  An appeal does not stay enforcement and collection of

14-14    the order unless the person, before appealing, posts bond with the

14-15    court.  The court may stay the enforcement and collection of the

14-16    order on the filing of a sworn affidavit of the person stating that

14-17    the person is financially unable to post the bond.

14-18            SUBCHAPTER O.  PREVENTION OF TOBACCO USE BY MINORS

14-19          Sec. 161.301.  TOBACCO USE PUBLIC AWARENESS CAMPAIGN.  (a)

14-20    The department shall develop and implement a public awareness

14-21    campaign designed to reduce tobacco use by minors in this state.

14-22    The campaign may use advertisements or similar media to provide

14-23    educational information about tobacco use.

14-24          (b)  The department may contract with another person to

14-25    develop and implement the public awareness campaign.

14-26                  ARTICLE 4.  RELATED TAX CODE PROVISIONS

14-27          SECTION 4.01.  (a)  Section 154.111(b), Tax Code, is amended

 15-1    to read as follows:

 15-2          (b)  An application for a permit required by this chapter

 15-3    must be accompanied by a fee of:

 15-4                (1)  $300 [$100] for a bonded agent's permit;

 15-5                (2)  $300 [$100] for a distributor's permit;

 15-6                (3)  $200 [$50] for a wholesaler's permit; [and]

 15-7                (4)  $15 for each permit for a vehicle if the applicant

 15-8    is also applying for a permit as a bonded agent, distributor, or

 15-9    wholesaler or has received a current permit from the comptroller

15-10    [treasurer] under Sections 154.101 and 154.110; and

15-11                (5)  $200 for a retailer's permit.

15-12          (b)  Section 154.111(c), Tax Code, is repealed.

15-13          SECTION 4.02.  Section 154.121, Tax Code, is amended to read

15-14    as follows:

15-15          Sec. 154.121.  REVENUE.  (a)  Except as provided by

15-16    Subsection (b), revenue [Revenue] from the sale of permits to

15-17    distributors, wholesalers, and bonded agents is allocated in the

15-18    same manner as other revenue allocated by Subchapter J.

15-19          (b)  Revenue from the sale of retailer's permits shall be

15-20    deposited to the general revenue fund and may be appropriated only

15-21    as provided by this section.  The money may be appropriated first

15-22    to the comptroller for administration of licensing of retailers

15-23    under this chapter or Chapter 155.

15-24          (c)  If, after any appropriation is made under Subsection

15-25    (b), revenue remains from the sale of retailer's permits, the

15-26    remaining money may be appropriated to the Texas Department of

15-27    Health for administration and enforcement of Subchapters H, K, and

 16-1    N, Chapter 161, Health and Safety Code.

 16-2          (d)  If, after any appropriation is made under Subsections

 16-3    (b) and (c), revenue remains from the sale of retailer's permits,

 16-4    the remaining money may be appropriated to the Texas Department of

 16-5    Health to administer its responsibilities under Subchapter O,

 16-6    Chapter 161, Health and Safety Code.

 16-7          SECTION 4.03.  Subchapter D, Chapter 154, Tax Code, is

 16-8    amended by adding Section 154.1142 to read as follows:

 16-9          Sec. 154.1142.  DISCIPLINARY ACTION FOR CERTAIN VIOLATIONS.

16-10    (a)  If the comptroller finds, after notice and hearing as provided

16-11    by this subchapter, that a permit holder has violated  Subchapter H

16-12    or K, Chapter 161, Health and Safety Code, the comptroller may

16-13    revoke the permit or suspend the permit for not more than 60 days.

16-14          (b)  If the permit holder has been found to have violated

16-15    Subchapter H or K, Chapter 161, Health and Safety Code, once before

16-16    during the preceding 36 months, the comptroller may revoke the

16-17    permit or suspend the permit for not more than 90 days.

16-18          (c)  If the permit holder has been found to have violated

16-19    Subchapter H or K, Chapter 161, Health and Safety Code, twice

16-20    before during the preceding 36 months, the comptroller may revoke

16-21    the permit or suspend the permit for not more than 12 months.

16-22          (d)  If the permit holder has been found to have violated

16-23    Section 161.083(b), Health and Safety Code, on four previous and

16-24    separate occasions, the comptroller shall revoke the permit.

16-25          SECTION 4.04.  Section 154.504, Tax Code, is amended to read

16-26    as follows:

16-27          Sec. 154.504.  POSSESSION OF QUANTITIES LESS THAN INDIVIDUAL

 17-1    PACKAGE.  A person commits an offense if the person sells

 17-2    cigarettes in quantities less than an individual package containing

 17-3    at least 20 cigarettes.

 17-4          SECTION 4.05.  (a)  Section 155.049(b), Tax Code, is amended

 17-5    to read as follows:

 17-6          (b)  An application for a permit required by this chapter

 17-7    must be accompanied by a fee of:

 17-8                (1)  $300 [$100] for a bonded agent's permit;

 17-9                (2)  $300 [$100] for a distributor's permit;

17-10                (3)  $200 [$50] for a wholesaler's permit; [and]

17-11                (4)  $15 for each permit for a vehicle if the applicant

17-12    is also applying for a permit as a bonded agent, distributor, or

17-13    wholesaler or has received a current permit from the comptroller

17-14    [treasurer] under Sections 155.041 and 155.048; and

17-15                (5)  $200 for a retailer's permit.

17-16          (b)  Section 155.049(c), Tax Code, is repealed.

17-17          SECTION 4.06.  Section 155.058, Tax Code, is amended to read

17-18    as follows:

17-19          Sec. 155.058.  REVENUE.  (a)  Except as provided by

17-20    Subsection (b), revenue [Revenue] from the sale of permits to

17-21    distributors, wholesalers, and bonded agents is allocated in the

17-22    same manner that other revenue is allocated by Subchapter H.

17-23          (b)  Revenue from the sale of retailer's permits shall be

17-24    deposited to the general revenue fund and may be appropriated only

17-25    as provided by this section.  The money may be appropriated first

17-26    to the comptroller for administration of licensing of retailers

17-27    under this chapter or Chapter 154.

 18-1          (c)  If, after any appropriation is made under Subsection

 18-2    (b), revenue remains from the sale of retailer's permits, the

 18-3    remaining money may be appropriated to the Texas Department of

 18-4    Health for administration and enforcement of Subchapters H, K, and

 18-5    N, Chapter 161, Health and Safety Code.

 18-6          (d)  If, after any appropriation is made under Subsections

 18-7    (b) and (c), revenue remains from the sale of retailer's permits,

 18-8    the remaining money may be appropriated to the Texas Department of

 18-9    Health to administer its responsibilities under Subchapter O,

18-10    Chapter 161, Health and Safety Code.

18-11          SECTION 4.07.  Subchapter C, Chapter 155, Tax Code, is

18-12    amended by adding Section 155.0592 to read as follows:

18-13          Sec. 155.0592.  DISCIPLINARY ACTION FOR CERTAIN VIOLATIONS.

18-14    (a)  If the comptroller finds, after notice and hearing as provided

18-15    by this subchapter, that a permit holder has violated  Subchapter H

18-16    or K, Chapter 161, Health and Safety Code, the comptroller may

18-17    revoke the permit or suspend the permit for not more than 60 days.

18-18          (b)  If the permit holder has been found to have violated

18-19    Subchapter H or K, Chapter 161, Health and Safety Code, once before

18-20    during the preceding 36 months, the comptroller may revoke the

18-21    permit or suspend the permit for not more than 90 days.

18-22          (c)  If the permit holder has been found to have violated

18-23    Subchapter H or K, Chapter 161, Health and Safety Code, twice

18-24    before during the preceding 36 months, the comptroller may revoke

18-25    the permit or suspend the permit for not more than 12 months.

18-26          (d)  If the permit holder has been found to have violated

18-27    Section 161.083(b), Health and Safety Code, on four previous and

 19-1    separate occasions, the comptroller shall revoke the permit.

 19-2          ARTICLE 5.  FEDERAL WAIVER; TRANSITION; EFFECTIVE DATE;

 19-3                             EMERGENCY CLAUSE

 19-4          SECTION 5.01.  (a)  If, before the changes in law made by

 19-5    this Act to Subchapter H or K, Health and Safety Code, take effect,

 19-6    the Texas Board of Health determines that an exemption from federal

 19-7    preemption from the federal Food and Drug Administration is

 19-8    necessary for implementation, the board shall request the exemption

 19-9    and may delay implementing the affected provision of law until the

19-10    exemption is granted.

19-11          (b)  If a provision of law affected by a delay in

19-12    implementation under Subsection (a) of this section contains a

19-13    criminal penalty:

19-14                (1)  the Texas Board of Health shall publish in the

19-15    Texas Register notice of:

19-16                      (A)  the delay in implementation; and

19-17                      (B)  the grant of an exemption from preemption

19-18    requested under Subsection (a); and

19-19                (2)  the provision is effective on the 90th day after

19-20    the date that notice of the grant of an exemption is published

19-21    under Subdivision (1)(B) of this subsection.

19-22          SECTION 5.02.  (a)  Except as provided by Subsection (b) of

19-23    this section, this Act takes effect September 1, 1997.

19-24          (b)  Sections 161.084, 161.086, and 161.087, Health and

19-25    Safety Code, and Subchapter N, Chapter 161, Health and Safety Code,

19-26    as added by this Act, take effect January 1, 1998.

19-27          (c)  The change in law made by this Act applies only to an

 20-1    offense committed on or after the effective date of this Act.  For

 20-2    purposes of this subsection, an offense is committed before the

 20-3    effective date of this Act if any element of the offense occurs

 20-4    before that date.  An offense committed before the effective date

 20-5    of this Act is governed by the law in effect when the offense was

 20-6    committed, and the former law is continued in effect for that

 20-7    purpose.

 20-8          (d)  This Act applies to the sale or distribution of coupons,

 20-9    cigarettes, or tobacco products on or after the effective date of

20-10    this Act.  The sale or distribution of a coupon, cigarette, or

20-11    tobacco product before the effective date of this Act is governed

20-12    by the law in effect when the sale or distribution was made, and

20-13    that law is continued in effect for that purpose.

20-14          (e)  The increase in the amount of a fee as provided by

20-15    Sections 154.111(b) and 155.049(b), Tax Code, as amended by this

20-16    Act, takes effect for and is applicable to the permit years

20-17    beginning on or after March 1, 1998, and June 1, 1998, as

20-18    applicable.

20-19          SECTION 5.03.  The importance of this legislation and the

20-20    crowded condition of the calendars in both houses create an

20-21    emergency and an imperative public necessity that the

20-22    constitutional rule requiring bills to be read on three several

20-23    days in each house be suspended, and this rule is hereby suspended.