By: Hinojosa, Campbell S.B. No. 1505
A BILL TO BE ENTITLED
AN ACT
relating to the application of and allocation of revenue from
certain taxes imposed on certain tobacco products.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 58A.002(b), Education Code, is amended
to read as follows:
(b) The permanent fund supporting graduate medical
education is a special fund in the treasury outside the general
revenue fund. The fund is composed of:
(1) money transferred or appropriated to the fund by
the legislature;
(2) money deposited to the credit of the fund under
Section 154.603, Tax Code;
(3) gifts and grants contributed to the fund; and
(4) [(3)] the returns received from investment of
money in the fund.
SECTION 2. Section 61.5391(b), Education Code, is amended
to read as follows:
(b) Money in the account may not be appropriated for any
purpose except[:
[(1)] to provide loan repayment assistance to eligible
physicians under this subchapter[; or
[(2) to provide loan repayment assistance under Subchapter
JJ if reallocated under Section 61.9826].
SECTION 3. Section 61.9823(c), Education Code, is amended
to read as follows:
(c) The total amount of loan repayment assistance provided
under this subchapter may not exceed the total amount of gifts and
grants accepted by the board for the repayment assistance and other
funds available to the board for the repayment assistance[,
including any money reallocated under Section 61.9826].
SECTION 4. Subchapter JJ, Chapter 61, Education Code, is
amended by adding Section 61.9829 to read as follows:
Sec. 61.9829. NURSING FACULTY LOAN REPAYMENT ASSISTANCE
PROGRAM ACCOUNT. (a) The nursing faculty loan repayment
assistance program account is an account in the general revenue
fund. The account is composed of:
(1) gifts and grants contributed to the account under
Section 61.9827;
(2) earnings on the principal of the account; and
(3) other amounts deposited to the credit of the
account, including:
(A) legislative appropriations;
(B) money deposited under Section 155.2415, Tax
Code, and
(c) money deposited under Section 154.603, Tax
Code.
(b) Money in the account may not be appropriated for any
purpose except to provide loan repayment assistance to eligible
nursing faculty under this subchapter.
SECTION 5. Section 154.001, Tax Code, is amended by adding
Subdivisions (1-a) and (11-a) and amending Subdivision (2) to read
as follows:
(1-a) "Cigar" has the meaning assigned by Section
155.001.
(2) "Cigarette" means a roll for smoking[:
[(A)] that is made of tobacco or tobacco mixed
with another ingredient and wrapped or covered with a material
other than tobacco[;] and
[(B)] that is not a cigar. For purposes of this
chapter, the term includes a little cigar.
(11-a) "Little cigar" means a roll for smoking that:
(A) is made of tobacco or tobacco mixed with
another ingredient;
(B) contains an integrated cellulose filter or
other similar filter; and
(C) is wrapped with a material other than natural
leaf tobacco.
SECTION 6. Section 154.603, Tax Code, is amended to read as
follows:
Sec. 154.603. DISPOSITION OF REVENUE. (a) Subject to
Subsection (b), all proceeds from the collection of taxes imposed
by this chapter remaining after [After] the deductions authorized
[for the purposes provided] by Section 154.602 shall be deposited
to the credit of [this code, the revenue remaining of the first $2
of tax received per 1,000 cigarettes for cigarettes weighing three
pounds or less per thousand and the first $4.10 per 1,000 cigarettes
of the tax received for cigarettes weighing more than three pounds
per thousand is allocated:
[(1) 18.75 percent to the foundation school fund; and
[(2) 81.25 percent to] the general revenue fund.
(b) Beginning September 1, 2017, the comptroller shall
determine the increase in the amount of revenue derived from the tax
imposed under Section 154.021 that is attributable to the inclusion
of little cigar in the definition of cigarette. Each state fiscal
year, the comptroller shall deposit an amount of money equal to that
increase for the state fiscal year, less any amount required to be
deposited to the property tax relief fund under Section 154.6035,
as follows:
(1) two-thirds to the credit of the permanent fund
supporting graduate medical education; and
(2) the remainder to the credit of the nursing faculty loan
repayment assistance program. [The revenue remaining after the
deductions for the purposes provided by Section 154.602 of this
code and allocation under Subsection (a) of this section is
allocated to the general revenue fund.]
SECTION 7. Section 155.001, Tax Code, is amended by
amending Subdivision (2) and adding Subdivision (9-a) to read as
follows:
(2) "Cigar" means a roll of fermented tobacco that is
wrapped in tobacco and the main stream of smoke from which produces
an alkaline reaction to litmus paper. For purposes of this chapter,
the term does not include a little cigar.
(9-a) "Little cigar" has the meaning assigned by
Section 154.001.
SECTION 8. Section 155.2415, Tax Code, is amended to read as
follows:
Sec. 155.2415. ALLOCATION OF CERTAIN REVENUE TO PROPERTY
TAX RELIEF FUND AND CERTAIN OTHER FUNDS. (a) Notwithstanding
Section 155.241, the proceeds from the collection of taxes imposed
by Section 155.0211 shall be allocated as follows:
(1) the amount of the proceeds that is equal to the
amount that, if the taxes imposed by Section 155.0211 were imposed
at a rate of 40 percent of the manufacturer's list price, exclusive
of any trade discount, special discount, or deal, would be
attributable to the portion of that tax rate in excess of 35.213
percent, shall be deposited to the credit of the property tax relief
fund under Section 403.109, Government Code;
(2) the amount of the proceeds that is equal to the
amount that would be attributable to a tax rate of 35.213 percent of
the manufacturer's list price, exclusive of any trade discount,
special discount, or deal, if the taxes were imposed by Section
155.0211 at that rate, shall be deposited to the credit of the
general revenue fund; and
(3) out [100 percent] of the remaining proceeds:
(A) 98 percent shall be deposited to the credit
of:
(i) [(A)] the physician education loan
repayment program account established under Subchapter J, Chapter
61, Education Code; or
(ii) [(B)] the general revenue fund, if the
comptroller determines that the unencumbered beginning balance of
the physician education loan repayment account established under
Subchapter J, Chapter 61, Education Code, is sufficient to fund
appropriations and other direct and indirect costs from that
account for the fulfillment of existing and expected physician loan
repayment commitments during the current state fiscal biennium; and
(B) two percent shall be deposited to the credit
of the nursing faculty loan repayment assistance program account
established under Subchapter JJ, Chapter 61, Education Code.
(b) Proceeds deposited in accordance with Subsection
(a)(3)(A)(ii) [(a)(3)(B)] may be appropriated only for health care
purposes.
SECTION 9. Sections 61.9823(b) and 61.9826, Education Code,
are repealed.
SECTION 10. In addition to the substantive changes made by
this Act, this Act conforms Section 154.603, Tax Code, to the method
of allocating cigarette tax revenue in effect before the effective
date of this Act. Section 11.04, Chapter 4 (S.B. 3), Acts of the
72nd Legislature, 1st Called Session, 1991, enacted former Section
403.094(h), Government Code, which abolished certain state fund
dedications and resulted in the abolition of the allocation to the
foundation school fund effective August 31, 1995.
SECTION 11. The change in law made by this Act does not
affect tax liability accruing before the effective date of this
Act. That liability continues in effect as if this Act had not been
enacted, and the former law is continued in effect for the
collection of taxes due and for civil and criminal enforcement of
the liability for those taxes.
SECTION 12. The changes in law made by this Act to
Subchapters J and JJ, Chapter 61, Education Code, apply beginning
with loan repayment assistance awarded for the 2017-2018 academic
year. Loan repayment assistance awarded for an academic year
before the 2017-2018 academic year is governed by the law in effect
immediately before the effective date of this Act, and the former
law is continued in effect for that purpose.
SECTION 13. This Act takes effect September 1, 2017.