Texas 2021 - 87th Regular

Texas House Bill HB4089 Compare Versions

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1	1	By: Talarico H.B. No. 4089
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the regulation of the cultivation, manufacture,
7	7	processing, distribution, sale, testing, transportation, delivery,
8	8	transfer, possession, use, and taxation of cannabis and cannabis
9	9	products; authorizing the imposition of fees; requiring an
10	10	occupational license; creating a criminal offense; imposing a tax.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. This Act may be cited as the Texas Regulation of
13	13	Cannabis Act.
14	14	SECTION 2. Subtitle C, Title 6, Health and Safety Code, is
15	15	amended by adding Chapter 491 to read as follows:
16	16	CHAPTER 491. REGULATION OF CANNABIS
17	17	SUBCHAPTER A. GENERAL PROVISIONS
18	18	Sec. 491.0001. DEFINITIONS. In this chapter:
19	19	(1) "Adult" means an individual 21 years of age or
20	20	older.
21	21	(2) "Cannabis" means the plant Cannabis sativa L.,
22	22	whether growing or not, the seeds of that plant, and every compound,
23	23	manufacture, salt, derivative, mixture, or preparation of that
24	24	plant or its seeds. The term includes cannabis concentrate. The
25	25	term does not include:
26	26	(A) the mature stalks of the plant or fiber
27	27	produced from the stalks;
28	28	(B) oil or cake made from the seeds of the plant;
29	29	(C) a compound, manufacture, salt, derivative,
30	30	mixture, or preparation of the mature stalks, fiber, oil, or cake;
31	31	or
32	32	(D) the sterilized seeds of the plant that are
33	33	incapable of beginning germination.
34	34	(3) "Cannabis concentrate" means the resin extracted
35	35	from a part of the plant Cannabis sativa L. or a compound,
36	36	manufacture, salt, derivative, mixture, or preparation of the
37	37	resin.
38	38	(4) "Cannabis establishment" means an entity licensed
39	39	by the department under this chapter to process and dispense
40	40	cannabis and cannabis products to an adult.
41	41	(5) "Cannabis grower" means an entity licensed by the
42	42	department to cultivate cannabis for sale and distribution to a
43	43	cannabis establishment.
44	44	(6) "Cannabis product" means a product that contains
45	45	cannabis and is intended for use or consumption by humans,
46	46	including as an edible product or as a topical product, ointment,
47	47	oil, or tincture. The term includes products that consist of
48	48	cannabis and other ingredients.
49	49	(7) "Cannabis-related drug paraphernalia" means
50	50	equipment, a product, or material that is used or intended for use
51	51	in:
52	52	(A) planting, propagating, cultivating, growing,
53	53	harvesting, manufacturing, compounding, converting, producing,
54	54	processing, preparing, testing, analyzing, packaging, repackaging,
55	55	storing, or containing cannabis or a cannabis product; or
56	56	(B) introducing cannabis or a cannabis product
57	57	into the human body.
58	58	(8) "Cannabis secure transporter" means an entity
59	59	licensed by the department under this chapter to transport cannabis
60	60	from a cannabis grower to a cannabis establishment.
61	61	(9) "Cannabis testing facility" means an entity
62	62	licensed by the department under this chapter to analyze the safety
63	63	and potency of cannabis and cannabis products.
64	64	(10) "Commission" means the Texas Commission of
65	65	Licensing and Regulation.
66	66	(11) "Cultivate" means to propagate, breed, grow,
67	67	harvest, dry, cure, or separate parts of the cannabis plant by
68	68	manual or mechanical means.
69	69	(12) "Department" means the Texas Department of
70	70	Licensing and Regulation.
71	71	(13) "Executive director" means the executive
72	72	director of the department.
73	73	(14) "Marihuana" has the meaning assigned by Section
74	74	481.002.
75	75	(15) "Process" means to separate or otherwise prepare
76	76	parts of the cannabis plant and to compound, blend, extract,
77	77	infuse, or otherwise make or prepare cannabis concentrate or
78	78	cannabis products.
79	79	SUBCHAPTER B. PROTECTIONS FROM LEGAL ACTION RELATED TO CANNABIS
80	80	Sec. 491.0051. AUTHORIZED CONDUCT: PERSONAL USE OF
81	81	CANNABIS. An adult is authorized under this chapter to:
82	82	(1) use, possess, and transport not more than 2.5
83	83	ounces of cannabis, except that not more than 15 grams of that
84	84	amount may be in the form of cannabis concentrate;
85	85	(2) transfer without remuneration to another adult not
86	86	more than 2.5 ounces of cannabis, except that not more than 15 grams
87	87	of that amount may be in the form of cannabis concentrate and
88	88	provided that the transfer is not advertised or promoted to the
89	89	public;
90	90	(3) cultivate for personal use not more than 12
91	91	cannabis plants in an area on the premises of the adult's private
92	92	residence, provided that the cultivation occurs in an enclosed area
93	93	that is:
94	94	(A) equipped with locks or other security devices
95	95	that restrict access to the area; and
96	96	(B) not visible from a public place without the
97	97	use of aircraft or optical aids;
98	98	(4) possess, store, or process on the premises of the
99	99	adult's private residence not more than:
100	100	(A) the amount of cannabis produced from cannabis
101	101	plants cultivated on the premises, provided that:
102	102	(i) not more than 12 cannabis plants are
103	103	possessed, cultivated, or processed on the premises at one time;
104	104	and
105	105	(ii) any amount of cannabis in excess of 2.5
106	106	ounces is stored in a container or area equipped with locks or other
107	107	security devices that restrict access to the contents of the
108	108	container or area; and
109	109	(B) 10 ounces of cannabis that were not produced
110	110	from cannabis plants cultivated on the premises, provided that the
111	111	amount in excess of 2.5 ounces is stored in a container or area
112	112	described by Paragraph (A)(ii);
113	113	(5) use, possess, process, transport, or transfer to
114	114	another adult without remuneration an amount of cannabis products
115	115	specified by rule of the commission as the allowable amount of
116	116	cannabis for purposes of this subdivision; and
117	117	(6) use, possess, transport, or transfer to another
118	118	adult without remuneration cannabis-related drug paraphernalia.
119	119	Sec. 491.0052. AUTHORIZED CONDUCT: RETAIL CANNABIS
120	120	OPERATIONS. This chapter authorizes the conduct of:
121	121	(1) a cannabis grower director, manager, or employee
122	122	who, acting within the scope of the grower's license:
123	123	(A) cultivates cannabis or produces cannabis
124	124	products for sale or transfer to a cannabis establishment; and
125	125	(B) possesses cannabis or cannabis-related drug
126	126	paraphernalia;
127	127	(2) a cannabis establishment director, manager, or
128	128	employee who, acting within the scope of the establishment's
129	129	license, possesses cannabis or cannabis products or transfers or
130	130	sells cannabis, cannabis products, or cannabis-related drug
131	131	paraphernalia to an adult;
132	132	(3) a cannabis secure transporter director, manager,
133	133	or employee who, acting within the scope of the secure
134	134	transporter's license, transports, transfers, or delivers cannabis
135	135	or cannabis products from a cannabis grower to a cannabis
136	136	establishment; and
137	137	(4) a cannabis testing facility director, manager, or
138	138	employee who, acting within the scope of the facility's license,
139	139	possesses or tests cannabis, cannabis products, or
140	140	cannabis-related drug paraphernalia.
141	141	Sec. 491.0053. PROTECTION FROM LEGAL ACTION FOR AUTHORIZED
142	142	CONDUCT. (a) A person is not subject to arrest, prosecution,
143	143	forfeiture of property, or penalty in any manner or denial of any
144	144	right or privilege, including any civil penalty or disciplinary
145	145	action by a court or occupational or professional licensing board
146	146	or bureau solely due to conduct authorized under Section 491.0051
147	147	or 491.0052.
148	148	(b) The fact that a person engages in conduct authorized by
149	149	Section 491.0051 or 491.0052 does not in itself constitute grounds
150	150	for denying, limiting, or restricting conservatorship or
151	151	possession of or access to a child under Title 5, Family Code.
152	152	Sec. 491.0054. PROHIBITION OF CANNABIS ON PRIVATE PROPERTY;
153	153	EXCEPTION. (a) Except as otherwise provided by Subsection (b), a
154	154	person may prohibit or restrict the possession, consumption,
155	155	cultivation, distribution, processing, sale, or display of
156	156	cannabis or cannabis products on property the person owns,
157	157	occupies, or manages.
158	158	(b) A person may not prohibit a residential tenant under a
159	159	lease agreement from possessing cannabis, cannabis products, or
160	160	cannabis-related drug paraphernalia or consuming cannabis by means
161	161	other than smoking on the premises.
162	162	Sec. 491.0055. CONDUCT NOT AUTHORIZED UNDER THIS CHAPTER.
163	163	This chapter does not authorize the following conduct:
164	164	(1) operating a motor vehicle while intoxicated or
165	165	otherwise violating Chapter 49, Penal Code;
166	166	(2) smoking or otherwise consuming cannabis in:
167	167	(A) a motor vehicle while the vehicle is on a
168	168	public road;
169	169	(B) an aircraft, while the aircraft is in flight
170	170	or in a public area;
171	171	(C) a watercraft, while the watercraft is on a
172	172	public waterway; or
173	173	(D) a public place, unless:
174	174	(i) the public place is an area designated
175	175	by the applicable political subdivision as an area where using
176	176	cannabis is permissible; and
177	177	(ii) the area described by Subparagraph (i)
178	178	is not accessible to persons younger than 21 years of age;
179	179	(3) possessing or consuming cannabis or cannabis
180	180	products or possessing cannabis-related drug paraphernalia:
181	181	(A) on the premises of a public or private
182	182	child-care facility, prekindergarten, or primary or secondary
183	183	school;
184	184	(B) on a school bus that serves a facility or
185	185	school described by Paragraph (A); or
186	186	(C) on the premises of a correctional facility,
187	187	as defined by Article 18A.251, Code of Criminal Procedure, or a
188	188	civil commitment facility; or
189	189	(4) separating resin from the cannabis plant by butane
190	190	extraction or another method that uses a substance with a
191	191	flashpoint below 100 degrees Fahrenheit in a public place or motor
192	192	vehicle or within the curtilage of a residential structure.
193	193	SUBCHAPTER C. DUTIES OF DEPARTMENT
194	194	Sec. 491.0101. DUTIES OF DEPARTMENT. The department shall
195	195	administer this chapter.
196	196	Sec. 491.0102. RULES; FEES. (a) The commission shall adopt
197	197	all necessary rules for the administration and enforcement of this
198	198	chapter, including rules imposing fees under this chapter in
199	199	amounts sufficient to cover the cost of administering this chapter.
200	200	(b) The commission by rule shall set application and license
201	201	fees under this chapter in amounts sufficient to administer this
202	202	chapter and may annually adjust the fees for inflation.
203	203	(c) A fee collected under this chapter shall be deposited to
204	204	the credit of the cannabis regulation account established under
205	205	Section 491.0251.
206	206	(d) The commission shall adopt rules for the reasonable
207	207	regulation of cannabis growers and cannabis establishments,
208	208	including rules that:
209	209	(1) restrict the use of dangerous pesticides;
210	210	(2) regulate the packaging and labeling of cannabis
211	211	products available at a cannabis establishment;
212	212	(3) restrict advertising and display of cannabis and
213	213	cannabis products;
214	214	(4) restrict the maximum amount of
215	215	tetrahydrocannabinol that may be contained in a cannabis product
216	216	sold to a consumer;
217	217	(5) require recordkeeping and monitoring to track the
218	218	transfer of cannabis and cannabis products between license holders;
219	219	and
220	220	(6) require security measures, provided that the
221	221	security measures do not restrict the cultivation of cannabis
222	222	outdoors or in greenhouses.
223	223	Sec. 491.0103. TESTING, PACKAGING, AND LABELING STANDARDS.
224	224	(a) The commission by rule shall establish standards for:
225	225	(1) the operation of cannabis testing facilities;
226	226	(2) the testing of cannabis and cannabis products; and
227	227	(3) packaging and labeling requirements for cannabis
228	228	and cannabis products.
229	229	(b) In establishing standards for packaging and labeling
230	230	requirements under Subsection (a)(3), the commission shall require
231	231	that:
232	232	(1) cannabis and cannabis products be packaged in
233	233	opaque, resealable, child-resistant packaging that does not
234	234	resemble and may not be easily confused with typical packaging for
235	235	commercially sold candy;
236	236	(2) cannabis and cannabis products be clearly labeled;
237	237	and
238	238	(3) the label for a cannabis product disclose the
239	239	amount of cannabis contained in that product.
240	240	Sec. 491.0104. SECURE TRANSPORTATION OF CANNABIS. The
241	241	commission by rule shall establish standards applicable to cannabis
242	242	secure transporters, including standards to ensure all cannabis
243	243	establishments are properly served.
244	244	Sec. 491.0105. CONFLICT OF INTEREST. (a) A person who is
245	245	involved in the implementation, administration, or enforcement of
246	246	this chapter as a member of the commission, an employee of the
247	247	department, or a consultant to the commission or the department may
248	248	not also hold a pecuniary interest in any entity licensed by the
249	249	department under this chapter.
250	250	(b) A person who holds a pecuniary interest in a cannabis
251	251	testing facility or a cannabis secure transporter who holds a
252	252	license issued under this chapter may not hold a pecuniary interest
253	253	in any entity that holds a cannabis establishment or cannabis
254	254	grower license issued under this chapter.
255	255	(c) A person may not hold a pecuniary interest in more than
256	256	five entities that are licensed under this chapter as a cannabis
257	257	grower, except as provided by department rule.
258	258	Sec. 491.0106. ANNUAL REPORT. The executive director shall
259	259	annually submit to the governor a report providing the following
260	260	information regarding licensing and regulation under this chapter:
261	261	(1) the number of applications received for each class
262	262	of license under this chapter;
263	263	(2) the number of licenses issued for each class of
264	264	license under this chapter;
265	265	(3) demographic information pertaining to license
266	266	holders;
267	267	(4) a description of any fines imposed on a license
268	268	holder or disciplinary actions taken against a license holder by
269	269	the department; and
270	270	(5) a statement of revenues and expenses of the
271	271	department related to the implementation, administration, and
272	272	enforcement of this chapter.
273	273	SUBCHAPTER D. LICENSING
274	274	Sec. 491.0151. LICENSE REQUIRED. A person must hold a
275	275	license issued by the department under this chapter to operate as a
276	276	cannabis grower, cannabis establishment, cannabis secure
277	277	transporter, or cannabis testing facility.
278	278	Sec. 491.0152. QUALIFICATIONS FOR LICENSURE. The
279	279	commission by rule shall provide for each class of license issued
280	280	under this chapter qualifications for licensure that are
281	281	demonstrably related to the operations authorized and duties
282	282	imposed under that class of license.
283	283	Sec. 491.0153. APPLICATION. (a) A person may apply for an
284	284	initial or renewal license under this chapter by submitting a form
285	285	prescribed by the department along with the application fee in an
286	286	amount set by the commission.
287	287	(b) The application must indicate the class of license
288	288	sought and include the name and address of the applicant, the name
289	289	and address of each of the applicant's directors, managers, and
290	290	employees, and any other information considered necessary by the
291	291	department to determine the applicant's eligibility for the
292	292	license.
293	293	Sec. 491.0154. ISSUANCE, RENEWAL, OR DENIAL OF LICENSE.
294	294	(a) The department shall issue or renew a license under this
295	295	chapter only if:
296	296	(1) the department determines the applicant meets the
297	297	qualifications for the class of license sought established under
298	298	Section 491.0152; and
299	299	(2) the applicant is in compliance with any applicable
300	300	local regulations.
301	301	(b) If the department denies the issuance or renewal of a
302	302	license under Subsection (a), the department shall give written
303	303	notice of the grounds for denial to the applicant.
304	304	(c) A license issued or renewed under this section expires
305	305	as determined by the department in accordance with Section 411.511,
306	306	Government Code.
307	307	Sec. 491.0155. DUTY TO MAINTAIN QUALIFICATIONS. A license
308	308	holder shall maintain compliance at all times with the
309	309	qualifications for the applicable class of license established
310	310	under Section 491.0152.
311	311	Sec. 491.0156. LICENSE SUSPENSION OR REVOCATION. (a) The
312	312	department may at any time suspend or revoke a license issued under
313	313	this chapter if the department determines that the license holder
314	314	has not maintained the qualifications established under Section
315	315	491.0152 or has failed to comply with a duty imposed under this
316	316	chapter.
317	317	(b) The department shall give written notice to a license
318	318	holder of a license suspension or revocation under this section and
319	319	the grounds for the suspension or revocation. The notice must be
320	320	sent by certified mail, return receipt requested.
321	321	(c) After suspending or revoking a license issued under this
322	322	chapter, the department shall notify the Department of Public
323	323	Safety. The public safety director of the Department of Public
324	324	Safety may seize or place under seal all cannabis, cannabis
325	325	products, and cannabis-related drug paraphernalia owned or
326	326	possessed by the license holder. If the license is revoked, a
327	327	disposition may not be made of the seized or sealed cannabis,
328	328	cannabis products, or drug paraphernalia until the time for
329	329	administrative appeal of the order has elapsed or until all appeals
330	330	have been concluded. When a revocation order becomes final, all
331	331	cannabis, cannabis products, and drug paraphernalia may be
332	332	forfeited to the state as provided under Subchapter E, Chapter 481.
333	333	(d) Chapter 2001, Government Code, applies to a proceeding
334	334	under this section.
335	335	Sec. 491.0157. CRIMINAL HISTORY BACKGROUND CHECK. (a) In
336	336	addition to satisfying the other requirements provided by
337	337	commission rule under this chapter, an applicant for a license
338	338	under this chapter must submit to the department a complete and
339	339	legible set of fingerprints, on a form prescribed by the
340	340	commission, for the purpose of obtaining criminal history record
341	341	information from the Department of Public Safety and the Federal
342	342	Bureau of Investigation.
343	343	(b) The department may deny a license to an applicant who
344	344	does not comply with the requirement of Subsection (a). Issuance of
345	345	a license by the department is conditioned on the department
346	346	obtaining the applicant's criminal history record information
347	347	under this section.
348	348	(c) The commission by rule shall establish criteria for
349	349	determining whether a person passes the criminal history background
350	350	check for purposes of this section. The rules adopted under this
351	351	section may not disqualify a person for licensure solely for a
352	352	conviction of an offense that involves the possession of marihuana
353	353	or the delivery of marihuana to a person 18 years of age or older.
354	354	SUBCHAPTER E. DUTIES OF LICENSE HOLDERS
355	355	Sec. 491.0201. DUTIES RELATING TO DISPENSING CANNABIS OR
356	356	CANNABIS PRODUCTS. Before dispensing cannabis or cannabis products
357	357	to an adult, a cannabis establishment must make reasonable efforts
358	358	to verify that:
359	359	(1) the person receiving the cannabis or cannabis
360	360	product is an adult;
361	361	(2) the cannabis or cannabis product complies with
362	362	department testing and labeling rules; and
363	363	(3) the amount dispensed is not greater than the
364	364	amount of cannabis or cannabis product allowed for personal use as
365	365	provided by Section 491.0051.
366	366	Sec. 491.0202. DUTIES RELATING TO SECURITY. (a) A license
367	367	holder shall ensure that the cultivation, processing, sale, or
368	368	display of cannabis, cannabis products, and cannabis-related drug
369	369	paraphernalia is not visible from a public place without the use of
370	370	optical aids or aircraft.
371	371	(b) A license holder may not cultivate, process, store, or
372	372	sell cannabis, cannabis products, or cannabis-related drug
373	373	paraphernalia at a location other than the physical address
374	374	approved by the department for the establishment under the license
375	375	issued to the establishment under this chapter.
376	376	(c) A license holder shall adopt reasonable security
377	377	measures necessary to restrict access to areas where cannabis,
378	378	cannabis products, or cannabis-related drug paraphernalia are
379	379	stored and to prevent theft of cannabis, cannabis products, and
380	380	cannabis-related drug paraphernalia.
381	381	Sec. 491.0203. LICENSE HOLDER OPERATIONS. (a) A license
382	382	holder may not employ or otherwise accept the services of a person
383	383	younger than 21 years of age.
384	384	(b) A cannabis establishment may not sell tobacco products,
385	385	as defined by Section 155.001, Tax Code.
386	386	Sec. 491.0204. MONTHLY SALES REPORT. A cannabis
387	387	establishment shall monthly submit a report to the comptroller
388	388	specifying the amount of cannabis sold, the number of cannabis
389	389	products sold, the number and types of cannabis-related drug
390	390	paraphernalia sold, and the amount of money collected in sales by
391	391	the establishment during the preceding month.
392	392	SUBCHAPTER F. FUNDING FOR REGULATION, OVERSIGHT, TESTING, AND
393	393	QUALITY CONTROL
394	394	Sec. 491.0251. CANNABIS REGULATION ACCOUNT. (a) The
395	395	cannabis regulation account is an account in the general revenue
396	396	fund administered by the department.
397	397	(b) The account consists of:
398	398	(1) money deposited to the credit of the account under
399	399	Section 166.0004, Tax Code; and
400	400	(2) fees deposited to the credit of the account under
401	401	Section 491.0102.
402	402	(c) Money in the account may be appropriated only to the
403	403	department for implementing and administering this chapter.
404	404	Sec. 491.0252. CANNABIS TESTING AND QUALITY CONTROL
405	405	ACCOUNT. (a) The cannabis testing and quality control account is
406	406	an account in the general revenue fund administered by the
407	407	Department of Public Safety.
408	408	(b) The account consists of money deposited to the credit of
409	409	the account under Section 166.0004, Tax Code.
410	410	(c) Money in the account may be appropriated only to the
411	411	Department of Public Safety for monitoring compliance with testing
412	412	and quality control requirements imposed on license holders by this
413	413	chapter or by commission rules adopted under this chapter.
414	414	Sec. 491.0253. CANNABIS ESTABLISHMENT REGULATION AND
415	415	OVERSIGHT LOCAL SHARE ACCOUNT; PAYMENT FROM ACCOUNT. (a) In this
416	416	section:
417	417	(1) "Account" means the cannabis establishment
418	418	regulation and oversight local share account created under this
419	419	section.
420	420	(2) "Fiscal year" means the fiscal year of a
421	421	qualifying local government.
422	422	(3) "Qualifying local government" means a
423	423	municipality or county in which at least one cannabis establishment
424	424	is located during any portion of the applicable fiscal year.
425	425	(b) The cannabis establishment regulation and oversight
426	426	local share account is an account in the general revenue fund
427	427	administered by the comptroller.
428	428	(c) The account consists of money deposited to the credit of
429	429	the account under Section 166.0004, Tax Code.
430	430	(d) Money in the account may be used by the comptroller only
431	431	to make a cannabis establishment regulation assistance payment to a
432	432	qualifying local government in the manner provided by this section.
433	433	(e) To serve the state purpose of ensuring that local
434	434	governments in which cannabis establishments are located may
435	435	effectively participate in the regulation and oversight of those
436	436	establishments, a qualifying local government is entitled to a
437	437	cannabis establishment regulation assistance payment from the
438	438	state for each fiscal year that the local government is a qualifying
439	439	local government.
440	440	(f) Except as provided by Subsection (j), the amount of the
441	441	cannabis establishment regulation assistance payment to which a
442	442	qualifying local government is entitled for a fiscal year is equal
443	443	to the cost incurred by the local government to enforce regulations
444	444	adopted under Subchapter G.
445	445	(g) Not later than April 1 of the year following the end of a
446	446	fiscal year for which a qualifying local government is entitled to a
447	447	cannabis establishment regulation assistance payment, the
448	448	qualifying local government may submit an application to the
449	449	comptroller to receive a cannabis establishment regulation
450	450	assistance payment for that fiscal year. The application must be
451	451	made on a form prescribed by the comptroller. The comptroller may
452	452	require the qualifying local government to submit any information
453	453	the comptroller needs to determine the amount of the cannabis
454	454	establishment regulation assistance payment to which the
455	455	qualifying local government is entitled.
456	456	(h) A qualifying local government that does not submit an
457	457	application to the comptroller by the date prescribed by Subsection
458	458	(g) is not entitled to a cannabis establishment regulation
459	459	assistance payment for the fiscal year for which that deadline
460	460	applies.
461	461	(i) The comptroller shall review each application by a local
462	462	government to determine whether the local government is entitled to
463	463	a cannabis establishment regulation assistance payment. If the
464	464	comptroller determines that the local government is entitled to the
465	465	payment, the comptroller shall remit the payment using available
466	466	money in the account to the qualifying local government not later
467	467	than the 30th day after the date the application for the payment is
468	468	made.
469	469	(j) If at the time a cannabis establishment regulation
470	470	assistance payment must be remitted to a qualifying local
471	471	government under Subsection (i) the comptroller determines the
472	472	available amount in the account is insufficient to make the
473	473	payment, the comptroller may reduce the amount of the payment to the
474	474	qualifying local government. If more than one payment must be
475	475	remitted at a time when the available amount in the account is
476	476	insufficient to make those payments, the comptroller shall make
477	477	reduced payments to each qualifying local government. The
478	478	comptroller shall allocate the reductions in the amount of the
479	479	payments in a manner that is proportionate to the number of cannabis
480	480	establishments in each qualifying local government.
481	481	(k) The comptroller shall adopt rules necessary to
482	482	implement this section.
483	483	SUBCHAPTER G. LOCAL REGULATION AND OVERSIGHT
484	484	Sec. 491.0301. DEFINITION. In this subchapter, "health
485	485	authority" has the meaning assigned by Section 431.002.
486	486	Sec. 491.0302. PROHIBITED LOCAL REGULATION. A political
487	487	subdivision of this state may not enact, adopt, or enforce a rule,
488	488	ordinance, order, resolution, or other regulation that prohibits or
489	489	unreasonably restricts the cultivation, production, processing,
490	490	dispensing, transportation, or possession of cannabis or cannabis
491	491	products or the operation of a cannabis grower, cannabis
492	492	establishment, cannabis secure transporter, or cannabis testing
493	493	facility as authorized by this chapter.
494	494	Sec. 491.0303. PERMISSIBLE LOCAL REGULATION. A political
495	495	subdivision may adopt regulations consistent with this chapter
496	496	governing the hours of operation, location, manner of conducting
497	497	business, and number of cannabis growers, cannabis establishments,
498	498	or cannabis testing facilities.
499	499	Sec. 491.0304. PUBLIC HEALTH INSPECTIONS. A health
500	500	authority may, on presenting appropriate credentials to the license
501	501	holder or employee of the cannabis establishment:
502	502	(1) enter at reasonable times the premises of a
503	503	cannabis establishment;
504	504	(2) enter a vehicle being used to transport cannabis;
505	505	or
506	506	(3) inspect at reasonable times, within reasonable
507	507	limits, and in a reasonable manner, the establishment or vehicle
508	508	and all equipment, finished and unfinished materials, containers,
509	509	and labeling of any item.
510	510	Sec. 491.0305. COMPLAINTS. (a) A political subdivision or
511	511	health authority shall maintain a record of any complaints made to
512	512	the political subdivision or health authority regarding the
513	513	operations of a cannabis establishment.
514	514	(b) A political subdivision or health authority shall
515	515	investigate a complaint or refer the complaint to the department,
516	516	as appropriate.
517	517	SUBCHAPTER H. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS PRODUCT
518	518	TO MINORS PROHIBITED
519	519	Sec. 491.0351. DEFINITION. In this subchapter, "minor"
520	520	means a person younger than 21 years of age.
521	521	Sec. 491.0352. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS
522	522	PRODUCT TO MINORS PROHIBITED; PROOF OF AGE REQUIRED. (a) A person
523	523	commits an offense if the person, under the authority of this
524	524	chapter:
525	525	(1) sells, gives, or causes to be sold or given
526	526	cannabis or cannabis products to a minor; or
527	527	(2) sells, gives, or causes to be sold or given
528	528	cannabis or cannabis products to another person who intends to
529	529	deliver the cannabis or cannabis products to a minor.
530	530	(b) If an offense under this section occurs in connection
531	531	with a sale by an employee of the owner of a cannabis establishment,
532	532	the employee is criminally responsible for the offense and is
533	533	subject to prosecution.
534	534	(c) An offense under this section is a Class C misdemeanor.
535	535	(d) It is a defense to prosecution under Subsection (a)(1)
536	536	that the person to whom the cannabis or cannabis products were sold
537	537	or given presented to the defendant apparently valid proof of
538	538	identification.
539	539	(e) A proof of identification satisfies the requirements of
540	540	Subsection (d) if it contains a physical description and photograph
541	541	consistent with the person's appearance, purports to establish that
542	542	the person is 21 years of age or older, and was issued by a
543	543	governmental agency. The proof of identification may include a
544	544	driver's license issued by this state or another state, a passport,
545	545	or an identification card issued by a state or the federal
546	546	government.
547	547	SECTION 3. Section 122.103(c), Agriculture Code, is amended
548	548	to read as follows:
549	549	(c) A qualified applicant who along with the application
550	550	submits proof to the department that the applicant holds a license
551	551	under Chapter 487 or 491, Health and Safety Code, is not required to
552	552	pay an application fee, and the department shall issue the license
553	553	to the applicant within the time prescribed by Subsection (b).
554	554	SECTION 4. Subchapter C, Chapter 42, Human Resources Code,
555	555	is amended by adding Section 42.068 to read as follows:
556	556	Sec. 42.068. CHILD CARE SERVICES PROGRAM SUPPORT ACCOUNT.
557	557	(a) The child care services program support account is an account
558	558	in the general revenue fund administered by the agency.
559	559	(b) The account consists of money deposited to the account
560	560	under Section 166.0004, Tax Code.
561	561	(c) Money in the account may be appropriated only to the
562	562	agency for the purpose of increasing subsidy funding for the child
563	563	care services program.
564	564	SECTION 5. Section 411.0891(a), Government Code, is amended
565	565	to read as follows:
566	566	(a) Subject to Section 411.087, the department is
567	567	authorized to obtain and use criminal history record information
568	568	maintained by the Federal Bureau of Investigation or the department
569	569	that relates to a person who:
570	570	(1) is an applicant for or holds a registration issued
571	571	by the director under Subchapter C, Chapter 481, Health and Safety
572	572	Code, that authorizes the person to manufacture, distribute,
573	573	analyze, or conduct research with a controlled substance;
574	574	(2) is an applicant for or holds a registration issued
575	575	by the department under Chapter 487, Health and Safety Code, to be a
576	576	director, manager, or employee of a dispensing organization, as
577	577	defined by Section 487.001, Health and Safety Code;
578	578	(2-a) is an applicant for or holds a license issued
579	579	under Chapter 491, Health and Safety Code, to be a cannabis grower,
580	580	cannabis establishment, cannabis secure transporter, or cannabis
581	581	testing facility, as defined by Section 491.0001, Health and Safety
582	582	Code;
583	583	(3) is an applicant for or holds an authorization
584	584	issued by the department under Section 521.2476, Transportation
585	585	Code, to do business in this state as a vendor of ignition interlock
586	586	devices;
587	587	(4) is an applicant for or holds certification by the
588	588	department as an inspection station or an inspector under
589	589	Subchapter G, Chapter 548, Transportation Code, holds an inspection
590	590	station or inspector certificate issued under that subchapter, or
591	591	is the owner of an inspection station operating under that chapter;
592	592	or
593	593	(5) is an applicant for or holds a certificate of
594	594	registration issued by the department under Chapter 1956,
595	595	Occupations Code, to act as a metal recycling entity.
596	596	SECTION 6. Section 411.502, Government Code, is amended to
597	597	read as follows:
598	598	Sec. 411.502. APPLICABILITY. This subchapter applies to a
599	599	program, and persons regulated under the program, administered by
600	600	the department under the following laws, including rules adopted
601	601	under those laws:
602	602	(1) Section 411.0625;
603	603	(2) Chapter 487, Health and Safety Code;
604	604	(2-a) Chapter 491, Health and Safety Code;
605	605	(3) Chapter 1702, Occupations Code;
606	606	(4) Chapter 1956, Occupations Code;
607	607	(5) Section 521.2476, Transportation Code; and
608	608	(6) Subchapter G, Chapter 548, Transportation Code.
609	609	SECTION 7. Section 443.202(a), Health and Safety Code, is
610	610	amended to read as follows:
611	611	(a) This section does not apply to low-THC cannabis
612	612	regulated under Chapter 487 or cannabis regulated under Chapter
613	613	491.
614	614	SECTION 8. Section 443.2025(a), Health and Safety Code, is
615	615	amended to read as follows:
616	616	(a) This section does not apply to low-THC cannabis
617	617	regulated under Chapter 487 or cannabis regulated under Chapter
618	618	491.
619	619	SECTION 9. Section 481.062, Health and Safety Code, is
620	620	amended to read as follows:
621	621	Sec. 481.062. EXEMPTIONS. (a) The following persons are
622	622	not required to register and may possess a controlled substance
623	623	under this chapter [without registering with the Federal Drug
624	624	Enforcement Administration]:
625	625	(1) an agent or employee of a registered manufacturer,
626	626	distributor, analyzer, or dispenser of the controlled substance
627	627	[who is registered with the Federal Drug Enforcement Administration
628	628	and] acting in the usual course of business or employment;
629	629	(2) a common or contract carrier, a warehouseman, or
630	630	an employee of a carrier or warehouseman whose possession of the
631	631	controlled substance is in the usual course of business or
632	632	employment;
633	633	(3) an ultimate user or a person in possession of the
634	634	controlled substance under a lawful order of a practitioner or in
635	635	lawful possession of the controlled substance if it is listed in
636	636	Schedule V;
637	637	(4) an officer or employee of this state, another
638	638	state, a political subdivision of this state or another state, or
639	639	the United States who is lawfully engaged in the enforcement of a
640	640	law relating to a controlled substance or drug or to a customs law
641	641	and authorized to possess the controlled substance in the discharge
642	642	of the person's official duties;
643	643	(5) if the substance is tetrahydrocannabinol or one of
644	644	its derivatives:
645	645	(A) a Department of State Health Services
646	646	official, a medical school researcher, or a research program
647	647	participant possessing the substance as authorized under
648	648	Subchapter G; or
649	649	(B) a practitioner or an ultimate user possessing
650	650	the substance as a participant in a federally approved therapeutic
651	651	research program that the commissioner has reviewed and found, in
652	652	writing, to contain a medically responsible research protocol; [or]
653	653	(6) a dispensing organization licensed under Chapter
654	654	487 that possesses low-THC cannabis;
655	655	(7) a cannabis grower, cannabis establishment,
656	656	cannabis secure transporter, or cannabis testing facility licensed
657	657	under Chapter 491 that possesses cannabis or cannabis products; or
658	658	(8) a person who possesses cannabis or cannabis
659	659	products in accordance with Chapter 491.
660	660	(b) In this section, "cannabis" and "cannabis product" have
661	661	the meanings assigned to those terms by Section 491.0001.
662	662	SECTION 10. Section 481.111, Health and Safety Code, is
663	663	amended by adding Subsections (g) and (h) to read as follows:
664	664	(g) Sections 481.113, 481.116, 481.120, 481.121, and
665	665	481.125 do not apply to a person who engages in the acquisition,
666	666	possession, production, processing, cultivation, delivery,
667	667	transportation, disposal, transfer, or use of a raw material used
668	668	in or by-product created by the production or cultivation of
669	669	cannabis or cannabis products if the conduct is expressly
670	670	authorized by Subchapter B, Chapter 491.
671	671	(h) For purposes of Subsection (g), "cannabis" and
672	672	"cannabis product" have the meanings assigned to those terms by
673	673	Section 491.0001.
674	674	SECTION 11. Section 551.004, Occupations Code, is amended
675	675	by amending Subsection (a) and adding Subsection (a-1) to read as
676	676	follows:
677	677	(a) This subtitle does not apply to:
678	678	(1) a practitioner licensed by the appropriate state
679	679	board who supplies a patient of the practitioner with a drug in a
680	680	manner authorized by state or federal law and who does not operate a
681	681	pharmacy for the retailing of prescription drugs;
682	682	(2) a member of the faculty of a college of pharmacy
683	683	recognized by the board who is a pharmacist and who performs the
684	684	pharmacist's services only for the benefit of the college;
685	685	(3) a person who procures prescription drugs for
686	686	lawful research, teaching, or testing and not for resale;
687	687	(4) a home and community support services agency that
688	688	possesses a dangerous drug as authorized by Section 142.0061,
689	689	142.0062, or 142.0063, Health and Safety Code; [or]
690	690	(5) a dispensing organization[, as defined by Section
691	691	487.001, Health and Safety Code,] that cultivates, processes, and
692	692	dispenses low-THC cannabis, as authorized by Chapter 487, Health
693	693	and Safety Code, to a patient listed in the compassionate-use
694	694	registry established under that chapter;
695	695	(6) a cannabis grower, cannabis establishment,
696	696	cannabis secure transporter, or cannabis testing facility licensed
697	697	under Chapter 491, Health and Safety Code, that cultivates,
698	698	manufactures, processes, distributes, delivers sells, tests,
699	699	transports, or dispenses cannabis or a cannabis product as
700	700	authorized by that chapter; or
701	701	(7) a person who transfers cannabis without
702	702	remuneration as authorized by Section 491.0051, Health and Safety
703	703	Code.
704	704	(a-1) For purposes of this section:
705	705	(1) "Cannabis," "cannabis establishment," "cannabis
706	706	grower," "cannabis product," "cannabis secure transporter," and
707	707	"cannabis testing facility" have the meanings assigned by Section
708	708	491.0001, Health and Safety Code.
709	709	(2) "Dispensing organization" and "low-THC cannabis"
710	710	have the meanings assigned by Section 487.001, Health and Safety
711	711	Code.
712	712	SECTION 12. Section 151.313(c), Tax Code, is amended to
713	713	read as follows:
714	714	(c) A product is a drug or medicine for purposes of this
715	715	section if the product:
716	716	(1) is intended for use in the diagnosis, cure,
717	717	mitigation, treatment, or prevention of disease, illness, injury,
718	718	or pain;
719	719	(2) is applied to the human body or is a product that a
720	720	human ingests or inhales;
721	721	(3) is not an appliance or device; [and]
722	722	(4) is not food; and
723	723	(5) is not cannabis or a cannabis product, as those
724	724	terms are defined by Section 491.0001, Health and Safety Code.
725	725	SECTION 13. Section 151.314, Tax Code, is amended by adding
726	726	Subsection (i) to read as follows:
727	727	(i) The exemption provided by Subsection (a) does not apply
728	728	to a cannabis product, as defined by Section 491.0001, Health and
729	729	Safety Code.
730	730	SECTION 14. Section 151.316, Tax Code, is amended by adding
731	731	Subsection (e) to read as follows:
732	732	(e) The exemption provided by Subsection (a)(5) does not
733	733	apply to cannabis, as defined by Section 491.0001, Health and
734	734	Safety Code.
735	735	SECTION 15. Subtitle E, Title 2, Tax Code, is amended by
736	736	adding Chapter 166 to read as follows:
737	737	CHAPTER 166. TAX ON CANNABIS AND RELATED PRODUCTS
738	738	Sec. 166.0001. DEFINITIONS. In this chapter, "cannabis"
739	739	and "cannabis product" have the meanings assigned by Section
740	740	491.0001, Health and Safety Code.
741	741	Sec. 166.0002. CANNABIS SALES TAX. (a) A tax is imposed on
742	742	each sale in this state of cannabis and cannabis products.
743	743	(b) The tax rate is 10 percent of the sales price of cannabis
744	744	or a cannabis product.
745	745	Sec. 166.0003. APPLICATION OF OTHER PROVISIONS OF CODE.
746	746	(a) The tax imposed under this chapter is in addition to the taxes
747	747	imposed under Chapter 151.
748	748	(b) Except as provided by this chapter:
749	749	(1) the tax imposed under this chapter is
750	750	administered, imposed, collected, and enforced in the same manner
751	751	as the taxes under Chapter 151 are administered, imposed,
752	752	collected, and enforced; and
753	753	(2) the provisions of Chapter 151 applicable to the
754	754	sales tax imposed under Subchapter C, Chapter 151, apply to the tax
755	755	imposed under this chapter.
756	756	Sec. 166.0004. DISPOSITION OF PROCEEDS. The comptroller
757	757	shall deposit the proceeds from the tax imposed under this chapter
758	758	as follows:
759	759	(1) 10 percent to the credit of the cannabis
760	760	regulation account under Section 491.0251, Health and Safety Code;
761	761	(2) 10 percent to the credit of the cannabis testing
762	762	and quality control account under Section 491.0252, Health and
763	763	Safety Code;
764	764	(3) 20 percent to the credit of the cannabis
765	765	establishment regulation and oversight local share account under
766	766	Section 491.0253, Health and Safety Code; and
767	767	(4) the remainder to the credit of the child care
768	768	services program support account under Section 42.068, Human
769	769	Resources Code.
770	770	SECTION 16. (a) Not later than July 1, 2022, the Texas
771	771	Commission of Licensing and Regulation shall adopt rules as
772	772	required to implement, administer, and enforce Chapter 491, Health
773	773	and Safety Code, as added by this Act.
774	774	(b) Not later than November 1, 2022, the Texas Department of
775	775	Licensing and Regulation shall begin licensing cannabis growers,
776	776	cannabis establishments, cannabis secure transporters, and
777	777	cannabis testing facilities in accordance with Chapter 491, Health
778	778	and Safety Code, as added by this Act, provided that the applicants
779	779	for a license have met all requirements for approval under Chapter
780	780	491, Health and Safety Code, as added by this Act.
781	781	SECTION 17. The changes in law made by this Act do not
782	782	affect tax liability accruing before the effective date of this
783	783	Act. That liability continues in effect as if this Act had not been
784	784	enacted, and the former law is continued in effect for the
785	785	collection of taxes due and for civil and criminal enforcement of
786	786	the liability for those taxes.
787	787	SECTION 18. This Act takes effect September 1, 2021.