79R5197 CBH-D

By:  Howard                                                       H.B. No. 1105



A BILL TO BE ENTITLED

AN ACT

relating to the imposition of a tax on certain beverages and snack 
foods and to the use of the revenue from the tax for public 
education.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subtitle E, Title 2, Tax Code, is amended by 
adding Chapter 164 to read as follows:
	CHAPTER 164.  TAX ON DISCRETIONARY FOOD AND DRINK ITEMS
	SUBCHAPTER A.  GENERAL PROVISIONS
	Sec. 164.001.  DEFINITIONS.  In this chapter:                           
		(1)  "Ale," "beer," "malt liquor," and "wine" have the 
meanings assigned by Section 1.04, Alcoholic Beverage Code.
		(2)  "Snack food" means any item that is ordinarily 
sold for consumption without further preparation and that is not 
generally considered a major component of a well-balanced meal.  
The term includes:
			(A)  bakery items, including pastries, donuts, 
cakes, tortes, pies, tarts, bars, and cookies;
			(B)  candy;                                                           
			(C)  chips, including chips made from potatoes, 
flour, or corn;     
			(D)  popcorn;                                                         
			(E)  pretzels; and                                                    
			(F)  roasted nuts.                                                    
		(3)  "Soft drink" means a nonalcoholic beverage that 
contains natural or artificial sweeteners.  The term does not 
include a beverage that:
			(A)  contains:                                                        
				(i)  milk or milk products;                                          
				(ii)  soy, rice, or similar milk 
substitutes; or                   
				(iii)  more than 50 percent of vegetable or 
fruit juice by volume; 
			(B)  is intended by the manufacturer for 
consumption by an infant and that is commonly referred to as "infant 
formula"; or
			(C)  is intended by the manufacturer for use for 
weight reduction.  
		[Sections 164.002-164.050 reserved for expansion]
	SUBCHAPTER B.  IMPOSITION AND COLLECTION OF TAX
	Sec. 164.051.  TAX IMPOSED.  (a)  A tax is imposed on each  
sale at retail of ale, malt liquor, beer, soft drinks, snack food, 
or wine.
	(b)  The tax rate is three cents on each individual bottle, 
container, or package of ale, malt liquor, beer, soft drinks, snack 
food, or wine, regardless of whether the bottle, container, or 
package is sold individually.
	(c)  The tax imposed under this chapter is in addition to any 
other tax imposed by state law.
	Sec. 164.052.  EXCEPTIONS TO APPLICATION OF TAX.  The tax 
imposed under this chapter does not apply to:
		(1)  food or a beverage sold in or by a restaurant, 
lunch counter, cafeteria, hotel, or other business for consumption 
on the premises of the business; or
		(2)  a beverage if the receipts from the sale of the 
beverage are taxable under Chapter 183.
	Sec. 164.053.  RULES.  The comptroller by rule shall 
prescribe the manner in which the tax imposed under this chapter is 
administered, imposed, and collected.
	[Sections 164.054-164.100 reserved for expansion]

SUBCHAPTER C.  ALLOCATION OF TAX
	Sec. 164.101.  ALLOCATION OF TAX.  The revenue from the tax 
imposed under this chapter shall be deposited to the credit of the 
foundation school fund.
	SECTION 2.  This Act takes effect September 1, 2005.