82R3836 CJC-D

By: Farias H.B. No. 2213

A BILL TO BE ENTITLED

AN ACT

relating to the imposition of a tax on certain sweetened beverages and ingredients used to make certain sweetened beverages and to the use of certain revenue for the promotion of children's health programs; providing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle E, Title 2, Tax Code, is amended by adding Chapter 163 to read as follows:

CHAPTER 163. TAX ON SWEETENED BEVERAGES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 163.001. DEFINITIONS. In this chapter:

(1) "Retailer" means a person, other than a manufacturer, distributor, or wholesaler, who receives, stores, mixes, compounds, or manufactures sweetened beverages and who sells or otherwise distributes sweetened beverages to the ultimate consumer.

(2) "Sweetened beverage" means a carbonated or non-carbonated nonalcoholic beverage that contains natural or artificial sweeteners. The term does not include:

(A) a beverage that:

(i) is sweetened only by a sweetener that does not add calories to the beverage;

(ii) is 100 percent vegetable or fruit juice by volume;

(iii) contains more than one-half of one percent alcohol per ounce;

(iv) is commonly referred to as a "sports drink" or "electrolyte replacement drink" and contains not more than 110 milligrams of potassium and 200 milligrams of sodium per eight-ounce serving;

(v) is intended by the manufacturer for consumption by an infant and is commonly referred to as "infant formula"; or

(vi) is intended by the manufacturer to be sold and used by the ultimate consumer in domestically mixing soft drinks;

(B) milk or milk products that do not contain sweeteners that add calories to the milk or milk products;

(C) non-carbonated water or water without any additional substances except for minerals and flavoring agents that do not add calories to the water; or

(D) coffee or tea that does not contain sweeteners that add calories to the coffee or tea.

(3) "Sweetened beverage powder" means a solid mixture of basic ingredients used to make, mix, or compound sweetened beverages.

(4) "Sweetened beverage syrup" means a liquid mixture of basic ingredients used to make, mix, or compound sweetened beverages.

[Sections 163.002-163.050 reserved for expansion]

SUBCHAPTER B. IMPOSITION AND COLLECTION OF TAX

Sec. 163.051. TAX IMPOSED ON SWEETENED BEVERAGES. (a) A tax is imposed on the sale to a retailer of a sweetened beverage.

(b) A tax is imposed on the importation into this state of a sweetened beverage for sale to the ultimate consumer.

(c) Except as provided by Subsection (d), the rate of the tax imposed by this section is five cents for each 12-ounce increment or fractional part of that increment of sweetened beverage.

(d) On January 1 of each year, the comptroller shall increase the rate of the tax prescribed by Subsection (c) by a percentage equal to the percentage increase in the most recent annual revised Consumer Price Index for All Urban Consumers, as published by the federal Bureau of Labor Statistics of the United States Department of Labor.

Sec. 163.052. TAX IMPOSED ON SWEETENED BEVERAGE POWDER. (a) A tax is imposed on the sale to a retailer of sweetened beverage powder.

(b) A tax is imposed on the importation into this state of sweetened beverage powder for sale to the ultimate consumer.

(c) Except as provided by Subsection (d), the rate of tax imposed by this section is five cents for the greater of:

(1) each 12-ounce increment or fractional part of that increment of sweetened beverage that may be produced from the powder by following the manufacturer's directions; or

(2) each 12-ounce increment or fractional part of that increment of sweetened beverage actually produced by the retailer, as determined by the comptroller.

(d) On January 1 of each year, the comptroller shall increase the rate of the tax prescribed by Subsection (c) by a percentage equal to the percentage increase in the most recent annual revised Consumer Price Index for All Urban Consumers, as published by the federal Bureau of Labor Statistics of the United States Department of Labor.

Sec. 163.053. TAX IMPOSED ON SWEETENED BEVERAGE SYRUP. (a) A tax is imposed on the sale to a retailer of sweetened beverage syrup in this state.

(b) A tax is imposed on the importation into this state of sweetened beverage syrup for sale to the ultimate consumer.

(c) Except as provided by Subsection (d), the rate of tax imposed by this section is five cents for the greater of:

(1) each 12-ounce increment or fractional part of that increment of sweetened beverage that may be produced from the syrup by following the manufacturer's directions; or

(2) each 12-ounce increment or fractional part of that increment of sweetened beverage actually produced by the retailer, as determined by the comptroller.

(d) On January 1 of each year, the comptroller shall increase the rate of the tax prescribed by Subsection (c) by a percentage equal to the percentage increase in the most recent annual revised Consumer Price Index for All Urban Consumers, as published by the federal Bureau of Labor Statistics of the United States Department of Labor.

Sec. 163.054. EXEMPTION FROM TAX. The tax imposed by this chapter does not apply to:

(1) sweetened beverages that:

(A) the comptroller determines are unsalable; or

(B) this state is prohibited from taxing under federal law; or

(2) a sale of sweetened beverages, sweetened beverage powder, or sweetened beverage syrup that occurs after a sale that is taxed under this chapter.

Sec. 163.055. IMPACT OF TAX. The ultimate consumer or user in this state bears the impact of the tax imposed by this chapter. If another person pays the tax, the amount of the tax is added to the price to the ultimate consumer or user.

Sec. 163.056. PAYMENT OF TAX. (a) The manufacturer, distributor, wholesaler, or other person selling sweetened beverages, sweetened beverage syrup, or sweetened beverage powder in this state to a retailer or importing sweetened beverages, sweetened beverage syrup, or sweetened beverage powder for sale in this state to the ultimate consumer shall pay the tax imposed by this chapter.

(b) On or before the 25th day of each month, the person responsible for paying the tax shall send to the comptroller the amount of tax due under this chapter for the preceding month.

Sec. 163.057. REPORTS. On or before the 25th day of each month, the person responsible for paying the tax under this chapter shall file with the comptroller a report stating:

(1) the volume of sweetened beverages, sweetened beverage powder, and sweetened beverage syrup sold in this state to retailers;

(2) the volume of sweetened beverages, sweetened beverage powder, and sweetened beverage syrup imported into this state for sale in this state to the ultimate consumer; and

(3) any other information required by the comptroller.

Sec. 163.058. RECORDS. (a) The person responsible for paying the tax under this chapter shall keep a complete record of:

(1) the volume of sweetened beverages, sweetened beverage powder, and sweetened beverage syrup sold in this state to retailers;

(2) the volume of sweetened beverages, sweetened beverage powder, and sweetened beverage syrup imported into this state for sale in this state to the ultimate consumer; and

(3) any other information required by the comptroller.

(b) A record required by this section must be kept or maintained for at least two years after the date the record is made.

[Sections 163.059-163.100 reserved for expansion]

SUBCHAPTER C. SALES PERMITS

Sec. 163.101. SALES PERMITS. (a) The comptroller shall issue to an applicant who qualifies under Section 163.102 a separate permit for each place of business in this state.

(b) The holder of a permit shall display it conspicuously in the place of business to which it applies.

(c) A permit is valid only for the person and the place of business to which it applies and is non-assignable.

(d) A permit issued under this chapter must be renewed annually.

Sec. 163.102. APPLICATION FOR PERMIT. (a) A person desiring to sell to a retailer in this state, or import for sale to the ultimate consumer in this state, sweetened beverages, sweetened beverage powder, or sweetened beverage syrup shall file with the comptroller an application for a permit for each place of business.

(b) The application must:

(1) be on a form prescribed by the comptroller;

(2) state the name under which the applicant transacts or intends to transact business;

(3) give the address of the place of business to which the permit is to apply;

(4) contain any other information required by the comptroller; and

(5) be signed by the applicant or a person authorized to act on behalf of the applicant.

[Sections 163.103-163.150 reserved for expansion]

SUBCHAPTER D. PENALTIES AND OFFENSES

Sec. 163.151. INTEREST ON DELINQUENT TAX. A tax imposed by this chapter that is delinquent draws interest as provided by Section 111.060.

Sec. 163.152. PENALTY. (a) A person who is responsible for paying the tax imposed by this chapter and who fails to file a report as required by this chapter or does not pay the tax when it is due forfeits to the state a penalty of 50 percent of the amount of the delinquent tax.

(b) The minimum penalty under this section is $1.

Sec. 163.153. CRIMINAL PENALTY. (a) A person who violates this chapter commits an offense.

(b) An offense under this section is a Class C misdemeanor.

[Sections 163.154-163.200 reserved for expansion]

SUBCHAPTER E. DISPOSITION OF REVENUE

Sec. 163.201. ALLOCATION OF REVENUE. The revenue from the tax imposed by this chapter shall be deposited as follows:

(1) 40 percent to the credit of the children's health promotion account established under Subchapter F; and

(2) the remainder to the credit of the general revenue fund.

[Sections 163.202-163.250 reserved for expansion]

SUBCHAPTER F. CHILDREN'S HEALTH PROMOTION ACCOUNT

Sec. 163.251. ACCOUNT. (a) The children's health promotion account is a separate account in the general revenue fund.

(b) The account consists of:

(1) certain revenue from the tax imposed under this chapter;

(2) any gifts or grants received for the purposes of this subchapter; and

(3) interest earned on money in the account.

(c) The account is exempt from the application of Section 403.095, Government Code.

Sec. 163.252. USE OF ACCOUNT. (a) Money in the account may be appropriated only as follows:

(1) 80 percent to the Texas Education Agency for the purposes authorized by Subsection (b); and

(2) 20 percent to the Department of State Health Services for the purposes authorized by Subsection (c).

(b) Money appropriated to the Texas Education Agency under this section may be used only to:

(1) implement and maintain coordinated school health programs, which may include enhancements to the basic school health program; or

(2) improve the school health environment through activities, which may include:

(A) improving or building recreational facilities used for physical education and related activities at public elementary and secondary schools;

(B) providing continuing education training for physical education teachers;

(C) hiring qualified physical education teachers;

(D) implementing Safe Routes to Schools programs;

(E) improving the quality and nutrition of foods served at public elementary and secondary schools;

(F) ensuring, at no cost, access to clean drinking water throughout the school day; and

(G) incorporating nutrition and health into the standard educational curriculum.

(c) Money appropriated to the Department of State Health Services under this section may be used only to fund training and technical assistance for the implementation and maintenance of coordinated school health programs in public elementary and secondary schools.

(d) Money appropriated under this section may be used only to supplement and not to supplant current federal, state, and local funding for children's health programs in public elementary and secondary schools.

SECTION 2. Chapter 163, Tax Code, as added by this Act, applies to a sweetened beverage, sweetened beverage powder, or sweetened beverage syrup sold or imported on or after the effective date of this Act. A sweetened beverage, sweetened beverage powder, or sweetened beverage syrup sold or imported before that date is governed by the law in effect when the sweetened beverage, sweetened beverage powder, or sweetened beverage syrup was sold or imported, and that law is continued in effect for that purpose.

SECTION 3. This Act takes effect September 1, 2011.