1-1     By:  Moncrief                                         S.B. No. 1080
 1-2           (In the Senate - Filed March 5, 2001; March 6, 2001, read
 1-3     first time and referred to Committee on Health and Human Services;
 1-4     April 17, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 7, Nays 0; April 17, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1080                By:  Moncrief
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to certain distressed or reconditioned food, drugs,
1-11     devices, and cosmetics and certain licensed persons.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Subchapter A, Chapter 431, Health and Safety
1-14     Code, is amended by adding Section 431.008 to read as follows:
1-15           Sec. 431.008.  APPLICABILITY OF CHAPTER TO DISTRESSED OR
1-16     RECONDITIONED MERCHANDISE AND CERTAIN LICENSED ENTITIES.  (a)  This
1-17     chapter applies to a food, drug, device, or cosmetic that is
1-18     distressed merchandise for purposes of Chapter 432 or that has been
1-19     subject to reconditioning in accordance with Chapter 432.
1-20           (b)  Except as provided by Subsection (c), this chapter
1-21     applies to the conduct of a person licensed under Chapter 432.
1-22           (c)  A person who holds a license under Chapter 432 and is
1-23     engaging in conduct within the scope of that license is not
1-24     required to hold a license as a wholesale drug distributor under
1-25     Subchapter I, a food wholesaler under Subchapter J, or a device
1-26     distributor under Subchapter L.
1-27           SECTION 2.  Subchapter B, Chapter 431, Health and Safety
1-28     Code, is amended by adding Section 431.023 to read as follows:
1-29           Sec. 431.023.  LIMITED EXEMPTION FOR DISTRESSED FOOD, DRUGS,
1-30     DEVICES, OR COSMETICS.  In relation to a food, drug, device, or
1-31     cosmetic that is distressed merchandise for purposes of Chapter
1-32     432, Sections 431.021(a), (c), and (d) do not prohibit:
1-33                 (1)  the introduction or delivery for introduction into
1-34     commerce of the merchandise for the purpose of reconditioning in
1-35     accordance with Chapter 432 and not for sale to the ultimate
1-36     consumer;
1-37                 (2)  the receipt in commerce of the merchandise for the
1-38     purpose of reconditioning in accordance with Chapter 432 and  not
1-39     for sale to the ultimate consumer;
1-40                 (3)  the holding of merchandise for the purpose of
1-41     reconditioning in accordance with Chapter 432 and not for resale to
1-42     the ultimate consumer; or
1-43                 (4)  the reconditioning of the merchandise in
1-44     accordance with Chapter 432.
1-45           SECTION 3.  Section 431.048, Health and Safety Code, is
1-46     amended by adding Subsection (e) to read as follows:
1-47           (e)  The commissioner or an authorized agent may not detain
1-48     or embargo an article, including an article that is distressed
1-49     merchandise, that is in the possession of a person licensed under
1-50     Chapter 432 and that is being held for the purpose of
1-51     reconditioning in accordance with Chapter 432, unless the
1-52     commissioner or an authorized agent finds or has probable cause to
1-53     believe that the article cannot be adequately reconditioned in
1-54     accordance with that chapter and applicable rules.
1-55           SECTION 4.  Section 431.059, Health and Safety Code, is
1-56     amended by adding Subsection (e) to read as follows:
1-57           (e)  It is an affirmative defense to prosecution under
1-58     Subsection (a)  that the conduct charged is exempt, in accordance
1-59     with Section 431.023, from the application of Section 431.021.
1-60           SECTION 5.  Subdivision (6), Section 432.003, Health and
1-61     Safety Code, is amended to read as follows:
1-62                 (6)  "Distressed merchandise" means any food, drug,
1-63     device, or cosmetic that is adulterated or misbranded for purposes
1-64     of Section 431.081 (Adulterated Food), 431.082 (Misbranded Food),
 2-1     431.111 (Adulterated Drug or Device), 431.112 (Misbranded Drug or
 2-2     Device), 431.141 (Adulterated Cosmetic), or 431.142 (Misbranded
 2-3     Cosmetic), as interpreted by board rule and judicial decision.  The
 2-4     term includes a food, drug, device, or cosmetic that:
 2-5                       (A)  has lost its label or is otherwise
 2-6     unidentified;
 2-7                       (B)  has been subjected to prolonged or improper
 2-8     storage;
 2-9                       (C)  has been subjected for any reason to
2-10     abnormal environmental conditions, including temperature extremes,
2-11     humidity, smoke, water, fumes, pressure, or radiation; [or]
2-12                       (D)  has been subjected to conditions that result
2-13     in either its strength, purity, or quality falling below that which
2-14     it purports or is represented to possess; or
2-15                       (E)  may have been rendered unsafe or unsuitable
2-16     for human consumption or use for any reason other than those
2-17     specified by this subdivision.
2-18           SECTION 6.  Section 432.005, Health and Safety Code, is
2-19     amended by adding Subsection (c) to read as follows:
2-20           (c)  A salvage operator or salvage broker who is engaging
2-21     only within the scope of the license issued under this chapter is
2-22     not required to also be licensed under Chapter 431.
2-23           SECTION 7.  Section 432.011, Health and Safety Code, is
2-24     amended to read as follows:
2-25           Sec. 432.011.  MINIMUM STANDARDS.  (a)  The board shall adopt
2-26     rules prescribing minimum standards or related requirements for:
2-27                 (1)  the operation of salvage establishments and
2-28     salvage warehouses; and
2-29                 (2)  qualifications for licenses issued under this
2-30     chapter.
2-31           (b)  The rules shall prescribe standards for food, drugs,
2-32     devices, and cosmetics in separate subchapters.
2-33           SECTION 8.  Chapter 432, Health and Safety Code, is amended
2-34     by adding Section 432.026 to read as follows:
2-35           Sec. 432.026.  DETAINED OR EMBARGOED ARTICLE.  In accordance
2-36     with Subchapter C, Chapter 431, the department may detain or
2-37     embargo an article, including an article that is distressed
2-38     merchandise, that is in the possession of a person licensed under
2-39     this chapter and that is being held for the purpose of
2-40     reconditioning in accordance with this chapter if the department
2-41     makes the finding required by Section 431.048(e).
2-42           SECTION 9.  Subsection (c), Section 483.041, Health and
2-43     Safety Code, is amended to read as follows:
2-44           (c)  Subsection (a)  does not apply to the possession of a
2-45     dangerous drug in the usual course of business or practice or in
2-46     the performance of official duties by the following persons or an
2-47     agent or employee of the person:
2-48                 (1)  a pharmacy licensed by the board;
2-49                 (2)  a practitioner;
2-50                 (3)  a person who obtains a dangerous drug for lawful
2-51     research, teaching, or testing, but not for resale;
2-52                 (4)  a hospital that obtains a dangerous drug for
2-53     lawful administration by a practitioner;
2-54                 (5)  an officer or employee of the federal, state, or
2-55     local government;
2-56                 (6)  a manufacturer or wholesaler licensed by the
2-57     commissioner of health under Chapter 431 (Texas Food, Drug, and
2-58     Cosmetic Act);
2-59                 (7)  a carrier or warehouseman;
2-60                 (8)  a home and community support services agency
2-61     licensed under and acting in accordance with Chapter 142;  [or]
2-62                 (9)  a documented midwife who obtains oxygen for
2-63     administration to a mother or newborn or who obtains a dangerous
2-64     drug for the administration of prophylaxis to a newborn for the
2-65     prevention of ophthalmia neonatorum in accordance with Section
2-66     203.353, Occupations Code; or
2-67                 (10)  a salvage broker or salvage operator licensed
2-68     under Chapter 432 [16A, Texas Midwifery Act (Article 4512i,
2-69     Vernon's Texas Civil Statutes)].
 3-1           SECTION 10.  (a)  The change in law made by this Act by the
 3-2     addition of Subsection (e), Section 431.059, Health and Safety
 3-3     Code, applies only to the punishment for an offense committed on or
 3-4     after the effective date of this Act.  For purposes of this
 3-5     section, an offense is committed before the effective date of this
 3-6     Act if any element of the offense occurs before the effective date.
 3-7           (b)  An offense committed before the effective date of this
 3-8     Act is covered by the law in effect when the offense was committed,
 3-9     and the former law is continued in effect for that purpose.
3-10           SECTION 11.  This Act takes effect immediately if it receives
3-11     a vote of two-thirds of all the members elected to each house, as
3-12     provided by Section 39, Article III, Texas Constitution.  If this
3-13     Act does not receive the vote necessary for immediate effect, this
3-14     Act takes effect September 1, 2001.
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