Texas 2021 - 87th Regular

Texas Senate Bill SB216 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	87R2175 SRA-D
2	2	By: Johnson S.B. No. 216
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the regulation of, and taxes imposed on the sale or use
8	8	of, cigarettes, tobacco products, and e-cigarettes; imposing
9	9	taxes; requiring a permit; imposing a fee; providing administrative
10	10	penalties.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Sections 161.081(1-a), (2), and (4), Health and
13	13	Safety Code, are amended to read as follows:
14	14	(1-a) "E-cigarette" means an electronic cigarette or
15	15	any other device that simulates smoking by using a mechanical
16	16	heating element, battery, or electronic circuit to deliver nicotine
17	17	or other substances to the individual inhaling from the device or a
18	18	consumable liquid solution or other material aerosolized or
19	19	vaporized during the use of an electronic cigarette or other device
20	20	described by this subdivision, regardless of whether the liquid or
21	21	other material contains nicotine. The term does not include a
22	22	prescription medical device unrelated to the cessation of smoking.
23	23	The term includes:
24	24	(A) a device described by this subdivision
25	25	regardless of whether the device is manufactured, distributed, or
26	26	sold as an e-cigarette, e-cigar, or e-pipe or under another product
27	27	name or description; and
28	28	(B) a component, part, or accessory for the
29	29	device, regardless of whether the component, part, or accessory is
30	30	sold separately from the device.
31	31	(2) "Permit holder" has the meaning assigned by
32	32	Section 154.001, [or] 155.001, or 164.0001, Tax Code, as
33	33	applicable.
34	34	(4) "Retailer" means a person who engages in the
35	35	practice of selling cigarettes, e-cigarettes, or tobacco products
36	36	to consumers and includes the owner of a coin-operated cigarette,
37	37	e-cigarette, or tobacco product vending machine. The term includes
38	38	a retailer as that term is defined by Section 154.001, [or] 155.001,
39	39	or 164.0001, Tax Code, as applicable.
40	40	SECTION 2. Section 161.083(d), Health and Safety Code, is
41	41	amended to read as follows:
42	42	(d) Notwithstanding any other provision of law, a violation
43	43	of this section is not a violation of this subchapter for purposes
44	44	of Section 161.0901 [154.1142 or 155.0592, Tax Code].
45	45	SECTION 3. Subchapter H, Chapter 161, Health and Safety
46	46	Code, is amended by adding Section 161.0901 to read as follows:
47	47	Sec. 161.0901. DISCIPLINARY ACTION AGAINST CIGARETTE,
48	48	E-CIGARETTE, AND TOBACCO PRODUCTS RETAILERS. (a) A retailer is
49	49	subject to disciplinary action as provided by this section if an
50	50	agent or employee of the retailer commits an offense under this
51	51	subchapter or Subchapter K.
52	52	(b) If the comptroller finds, after notice and an
53	53	opportunity for a hearing as provided by Chapter 2001, Government
54	54	Code, that a permit holder has violated this subchapter or
55	55	Subchapter K at a place of business for which a permit is issued,
56	56	the comptroller may suspend the permit for that place of business
57	57	and administratively assess a fine as follows:
58	58	(1) if the permit holder has not been found to have
59	59	violated this subchapter or Subchapter K at that place of business
60	60	during the 24-month period preceding the violation, the comptroller
61	61	may require the permit holder to pay a fine in an amount not to
62	62	exceed $1,000;
63	63	(2) if the permit holder has been found to have
64	64	violated this subchapter or Subchapter K at that place of business
65	65	once during the 24-month period preceding the violation, the
66	66	comptroller may require the permit holder to pay a fine in an amount
67	67	not to exceed $2,000; and
68	68	(3) if the permit holder has been found to have
69	69	violated this subchapter or Subchapter K at that place of business
70	70	at least twice during the 24-month period preceding the violation,
71	71	the comptroller may:
72	72	(A) require the permit holder to pay a fine in an
73	73	amount not to exceed $3,000; and
74	74	(B) suspend the permit for that place of business
75	75	for not more than five days.
76	76	(c) Except as provided by Subsection (e), if the permit
77	77	holder has been found to have violated this subchapter or
78	78	Subchapter K on four or more previous and separate occasions at the
79	79	same place of business during the 24-month period preceding the
80	80	violation, the comptroller shall revoke the permit issued under
81	81	Chapter 154, 155, or 164, Tax Code, as applicable. If the permit
82	82	holder does not hold a permit under Chapter 154, 155, or 164, Tax
83	83	Code, the comptroller shall revoke the permit issued under Section
84	84	151.201, Tax Code.
85	85	(d) A permit holder whose permit has been revoked under this
86	86	section may not apply for a permit for the same place of business
87	87	before the expiration of six months after the effective date of the
88	88	revocation.
89	89	(e) For purposes of this section, the comptroller may
90	90	suspend a permit but may not revoke the permit under Subsection (c)
91	91	if the comptroller finds that:
92	92	(1) the employer has not violated this subchapter or
93	93	Subchapter K more than seven times at the place of business for
94	94	which the permit is issued in the 48-month period preceding the
95	95	violation in question;
96	96	(2) the employer requires its employees to attend a
97	97	comptroller-approved seller training program;
98	98	(3) the employees have actually attended a
99	99	comptroller-approved seller training program; and
100	100	(4) the employer has not directly or indirectly
101	101	encouraged the employees to violate the law.
102	102	(f) The comptroller may adopt rules to implement this
103	103	section.
104	104	SECTION 4. Section 111.00455(b), Tax Code, is amended to
105	105	read as follows:
106	106	(b) The following are not contested cases under Subsection
107	107	(a) and Section 2003.101, Government Code:
108	108	(1) a show cause hearing or any hearing not related to
109	109	the collection, receipt, administration, or enforcement of the
110	110	amount of a tax or fee imposed, or the penalty or interest
111	111	associated with that amount, except for a hearing under Section
112	112	151.157(f), 151.1575(c), or 151.712(g) of this code or Section
113	113	161.0901, Health and Safety Code [, 154.1142, or 155.0592];
114	114	(2) a property value study hearing under Subchapter M,
115	115	Chapter 403, Government Code;
116	116	(3) a hearing in which the issue relates to:
117	117	(A) Chapters 72-75, Property Code;
118	118	(B) forfeiture of a right to do business;
119	119	(C) a certificate of authority;
120	120	(D) articles of incorporation;
121	121	(E) a penalty imposed under Section 151.703(d);
122	122	(F) the refusal or failure to settle under
123	123	Section 111.101; or
124	124	(G) a request for or revocation of an exemption
125	125	from taxation; and
126	126	(4) any other hearing not related to the collection,
127	127	receipt, administration, or enforcement of the amount of a tax or
128	128	fee imposed, or the penalty or interest associated with that
129	129	amount.
130	130	SECTION 5. Section 154.1135(b), Tax Code, is amended to
131	131	read as follows:
132	132	(b) The payment must be made in cash or by money order, [or]
133	133	check, or credit card.
134	134	SECTION 6. Section 154.121(b), Tax Code, is amended to read
135	135	as follows:
136	136	(b) Revenue from the sale of retailer's permits shall be
137	137	deposited to the general revenue fund and may be appropriated only
138	138	as provided by this section. The money may be appropriated first to
139	139	the comptroller for administering:
140	140	(1) permitting [administration of licensing] of
141	141	retailers under this chapter and Chapters [or Chapter] 155 and 164;
142	142	and
143	143	(2) disciplinary actions taken under Section
144	144	161.0901, Health and Safety Code.
145	145	SECTION 7. Section 155.050(b), Tax Code, is amended to read
146	146	as follows:
147	147	(b) The payment must be made in cash or by money order, [or]
148	148	check, or credit card.
149	149	SECTION 8. Section 155.058(b), Tax Code, is amended to read
150	150	as follows:
151	151	(b) Revenue from the sale of retailer's permits shall be
152	152	deposited to the general revenue fund and may be appropriated only
153	153	as provided by this section. The money may be appropriated first to
154	154	the comptroller for administering:
155	155	(1) permitting [administration of licensing] of
156	156	retailers under this chapter and Chapters [or Chapter] 154 and 164;
157	157	and
158	158	(2) disciplinary actions taken under Section
159	159	161.0901, Health and Safety Code.
160	160	SECTION 9. Subtitle E, Title 2, Tax Code, is amended by
161	161	adding Chapter 164 to read as follows:
162	162	CHAPTER 164. TAX ON E-CIGARETTES
163	163	SUBCHAPTER A. GENERAL PROVISIONS
164	164	Sec. 164.0001. DEFINITIONS. In this chapter:
165	165	(1) "E-cigarette" has the meaning assigned by Section
166	166	161.081, Health and Safety Code.
167	167	(2) "Marketplace" has the meaning assigned by Section
168	168	151.0242.
169	169	(3) "Permit holder" means a person who obtains a
170	170	permit under Section 164.0102.
171	171	(4) "Retailer" means a person who engages in the
172	172	business of selling e-cigarettes to consumers, including a person
173	173	who sells e-cigarettes to consumers through a marketplace.
174	174	Sec. 164.0002. INAPPLICABILITY TO CERTAIN PRODUCTS. This
175	175	chapter does not apply to a product described by Section 161.0815,
176	176	Health and Safety Code.
177	177	Sec. 164.0003. RULES. The comptroller may adopt rules to
178	178	implement this chapter, including rules exempting a person who
179	179	sells e-cigarettes to consumers through a marketplace from the
180	180	requirements of this chapter.
181	181	SUBCHAPTER B. IMPOSITION AND ADMINISTRATION OF E-CIGARETTE SALES
182	182	AND USE TAXES
183	183	Sec. 164.0051. E-CIGARETTE SALES TAX. (a) A tax is imposed
184	184	on each sale of an e-cigarette in this state, including a sale made
185	185	through a marketplace, except that the tax does not apply to a sale
186	186	unless the tax imposed under Subchapter C, Chapter 151, applies to
187	187	the sale.
188	188	(b) The tax under this section is imposed at the rate
189	189	determined under Section 164.0053.
190	190	(c) The tax imposed under this section is in addition to the
191	191	tax imposed under Subchapter C, Chapter 151.
192	192	Sec. 164.0052. E-CIGARETTE USE TAX. (a) A tax is imposed
193	193	on the storage, use, or other consumption in this state of an
194	194	e-cigarette purchased from a retailer for storage, use, or other
195	195	consumption in this state, except that the tax does not apply to the
196	196	storage, use, or other consumption unless the tax imposed under
197	197	Subchapter D, Chapter 151, applies to the storage, use, or other
198	198	consumption.
199	199	(b) The tax under this section is imposed at the rate
200	200	determined under Section 164.0053.
201	201	(c) The tax imposed under this section is in addition to the
202	202	tax imposed under Subchapter D, Chapter 151.
203	203	Sec. 164.0053. TAX RATE. (a) In this section:
204	204	(1) "Cigarette" means a roll for smoking described by
205	205	Section 154.001(2) weighing three pounds or less per thousand.
206	206	(2) "Federal excise tax rate on cigarettes" means the
207	207	tax rate imposed on cigarettes under 26 U.S.C Section 5701(b)(1).
208	208	(3) "First sale" has the meaning assigned by Section
209	209	154.001.
210	210	(4) "State excise tax rate on cigarettes" means the
211	211	tax rate imposed on cigarettes under Section 154.021(b)(1).
212	212	(b) The rate of the taxes imposed under this chapter in a
213	213	calendar year is the rate the comptroller computes and publishes in
214	214	the Texas Register not later than December 1 of the preceding
215	215	calendar year as required by Subsection (c).
216	216	(c) As soon as practicable after the end of each state
217	217	fiscal year but not later than December 1 of each year, the
218	218	comptroller shall:
219	219	(1) determine the tax rate to be imposed under this
220	220	chapter in the subsequent calendar year that is proportionate to
221	221	the state excise tax rate imposed on cigarettes in this state during
222	222	the preceding state fiscal year by:
223	223	(A) determining the estimated mean price of 1,000
224	224	cigarettes on first sale in this state during the preceding state
225	225	fiscal year, including the amount of the federal excise tax imposed
226	226	on cigarettes and excluding the amount of the state excise tax
227	227	imposed on cigarettes, using available data and generally accepted
228	228	statistical methods in making that determination as necessary;
229	229	(B) dividing the state excise tax rate on
230	230	cigarettes by the estimated mean price of 1,000 cigarettes on first
231	231	sale in this state as determined under Paragraph (A); and
232	232	(C) converting the amount computed under
233	233	Paragraph (B) into a percentage and rounding that percentage down
234	234	to the nearest quarter percentage point; and
235	235	(2) publish the tax rate determined under Subdivision
236	236	(1) in the Texas Register.
237	237	Sec. 164.0054. APPLICATION OF OTHER PROVISIONS OF CODE.
238	238	(a) Except as provided by this chapter:
239	239	(1) the taxes imposed under this chapter are
240	240	administered, imposed, collected, and enforced in the same manner
241	241	as the taxes under Chapter 151 are administered, imposed,
242	242	collected, and enforced; and
243	243	(2) the provisions of Chapter 151 applicable to the
244	244	sales tax imposed under Subchapter C, Chapter 151, and the use tax
245	245	imposed under Subchapter D, Chapter 151, apply to the sales and use
246	246	taxes imposed under this chapter.
247	247	(b) A change in law relating to the taxation of the sale or
248	248	use of an e-cigarette under Chapter 151 also applies to the sales or
249	249	use tax imposed under this chapter.
250	250	Sec. 164.0055. REPORTS. (a) A person required to file a
251	251	report under Section 151.403 who is also required to collect or pay
252	252	a tax under this chapter shall file with the comptroller a report
253	253	stating:
254	254	(1) for e-cigarette sales tax purposes, the amount of
255	255	total receipts from e-cigarettes sold by the retailer during the
256	256	reporting period, if the person is a retailer;
257	257	(2) for e-cigarette use tax purposes, the amount of
258	258	total receipts from e-cigarettes sold by the retailer during the
259	259	reporting period for storage, use, or other consumption in this
260	260	state, if the person is a retailer described by Section 151.403(b);
261	261	(3) the amount of the total sales prices of
262	262	e-cigarettes subject to the e-cigarette use tax that were acquired
263	263	during the reporting period for storage, use, or other consumption
264	264	in this state, if the person is a purchaser who did not pay the tax
265	265	to a retailer;
266	266	(4) the amount of the taxes due under this chapter for
267	267	the reporting period; and
268	268	(5) any other information the comptroller requires.
269	269	(b) The report required by this section for a reporting
270	270	period is due on the same date the tax payment for the period is due.
271	271	Sec. 164.0056. RECORDS. (a) A person required to file a
272	272	report under Section 151.403 who is also required to collect or pay
273	273	a tax under this chapter shall keep a complete record of:
274	274	(1) all gross receipts from each sale to which this
275	275	chapter applies occurring during each reporting period, along with
276	276	documentation relating to those receipts;
277	277	(2) all purchases of e-cigarettes, including the
278	278	constituent parts of e-cigarettes, from every source during each
279	279	reporting period, along with documentation relating to those
280	280	purchases;
281	281	(3) all sales and use taxes, and any money represented
282	282	to be sales or use tax, collected under this chapter during each
283	283	reporting period; and
284	284	(4) any other information the comptroller requires.
285	285	(b) A person shall keep the records required by Subsection
286	286	(a) for the period required by Section 151.025(b).
287	287	SUBCHAPTER C. E-CIGARETTE RETAILER PERMITS
288	288	Sec. 164.0101. PERMITS REQUIRED. (a) A person may not
289	289	engage in business as a retailer in this state unless the person has
290	290	been issued a permit from the comptroller. A person shall obtain a
291	291	permit for each place of business the person owns or operates at
292	292	which sales of e-cigarettes are made.
293	293	(b) The comptroller shall prescribe the form and content of
294	294	an application for a permit and provide the form on request.
295	295	(c) The applicant shall accurately complete all information
296	296	required by the application and provide the comptroller with
297	297	additional information the comptroller considers necessary.
298	298	(d) The comptroller may require each corporation,
299	299	association, joint venture, syndicate, partnership, or
300	300	proprietorship to provide:
301	301	(1) financial information regarding the applicant;
302	302	and
303	303	(2) the identity of each officer, director,
304	304	stockholder owning 10 percent or more of the outstanding stock,
305	305	partner, member, owner, or managing employee.
306	306	(e) Each applicant that applies for a permit to sell
307	307	e-cigarettes from a vehicle must provide the make, model, vehicle
308	308	identification number, registration number, and any other
309	309	information concerning the vehicle the comptroller requires.
310	310	(f) All financial information provided under this section
311	311	is confidential and not subject to Chapter 552, Government Code.
312	312	(g) Permits for engaging in business as an e-cigarette
313	313	retailer are governed exclusively by the provisions of this code.
314	314	Sec. 164.0102. ISSUANCE OF PERMIT. (a) The comptroller
315	315	shall issue a permit to an applicant if the comptroller:
316	316	(1) has received an application and fee, if required;
317	317	(2) does not reject the application and deny the
318	318	permit under Section 164.0103; and
319	319	(3) determines that issuing the permit will not
320	320	jeopardize the administration and enforcement of this chapter.
321	321	(b) The permit shall be issued for a designated place of
322	322	business, except as provided by Section 164.0106.
323	323	(c) The permits are nonassignable.
324	324	(d) The permit must indicate the type of permit that it is
325	325	and authorize the sale of e-cigarettes in this state. The permit
326	326	must show that it is revocable and shall be forfeited or suspended
327	327	if the conditions of issuance, provisions of this chapter, or rules
328	328	of the comptroller are violated.
329	329	Sec. 164.0103. DENIAL OF PERMIT. The comptroller may
330	330	reject an application and deny a permit if the comptroller finds,
331	331	after notice and opportunity for hearing, any of the following:
332	332	(1) the premises where business will be conducted are
333	333	not adequate to protect the e-cigarettes; or
334	334	(2) the applicant or managing employee, or if the
335	335	applicant is a corporation, an officer, director, manager, or any
336	336	stockholder who holds directly or through family or partner
337	337	relationship 10 percent or more of the corporation's stock, or, if
338	338	the applicant is a partnership, a partner or manager:
339	339	(A) has failed to disclose any information
340	340	required by Sections 164.0101(c), (d), and (e), including previous
341	341	business experience, financial condition of the applicant, present
342	342	or previous business affiliations, previous employment, and any
343	343	conviction of a felony, or has made a false statement in the
344	344	application; or
345	345	(B) has previously violated provisions of this
346	346	chapter.
347	347	Sec. 164.0104. PERMIT YEAR; FEES. (a) A permit required
348	348	by this chapter expires on the last day of May of each even-numbered
349	349	year.
350	350	(b) An application for a permit required by this chapter
351	351	must be accompanied by a fee of:
352	352	(1) one-half of the amount of the fee for a retailer's
353	353	permit required by Section 154.111(b) if the applicant holds a
354	354	valid retailer's permit under Section 154.101, 154.102, or 155.041;
355	355	or
356	356	(2) the amount of the fee for a retailer's permit
357	357	required by Section 154.111(b).
358	358	(c) For a new or renewal permit required by Section
359	359	164.0101, the comptroller shall prorate the fee according to the
360	360	number of months remaining during the calendar year that the permit
361	361	is to be in effect.
362	362	(d) A person who does not obtain a permit each year in a
363	363	timely manner must pay a late fee of $50 in addition to the
364	364	application fee for the permit.
365	365	(e) If on the date of issuance a permit will expire within
366	366	three months, the comptroller may collect the prorated permit fee
367	367	or the fee for the current year and, with the consent of the permit
368	368	holder, may collect the fee for the next permit year and issue a
369	369	permit or permits for both periods, as applicable.
370	370	(f) A person issued a permit for a place of business that
371	371	permanently closes before the permit expiration date is not
372	372	entitled to a refund of the permit fee.
373	373	Sec. 164.0105. PAYMENT FOR PERMITS. (a) An applicant for a
374	374	permit required by Section 164.0101 shall send the required fee
375	375	with the application.
376	376	(b) The payment must be made in cash or by money order,
377	377	check, or credit card.
378	378	(c) The comptroller may not issue a permit in exchange for a
379	379	check until after the comptroller receives full payment on the
380	380	check.
381	381	Sec. 164.0106. DISPLAY OF PERMIT. (a) A permit holder
382	382	shall keep the permit on public display at the place of business for
383	383	which the permit was issued.
384	384	(b) A permit holder who has a permit assigned to a vehicle
385	385	shall post the permit in a conspicuous place on the vehicle.
386	386	Sec. 164.0107. REVENUE. Revenue from the sale of
387	387	retailer's permits shall be deposited to the general revenue fund
388	388	and may be appropriated only as provided by this section. The money
389	389	may be appropriated first to the comptroller for administering:
390	390	(1) permitting of retailers under this chapter and
391	391	Chapters 154 and 155; and
392	392	(2) disciplinary actions taken under Section
393	393	161.0901, Health and Safety Code.
394	394	Sec. 164.0108. FINAL SUSPENSION OR REVOCATION OF PERMIT.
395	395	(a) The comptroller may revoke or suspend a permit holder's permit
396	396	if the comptroller finds, after notice and hearing as provided by
397	397	this section, that the permit holder violated this chapter or a rule
398	398	adopted under this chapter.
399	399	(b) If the comptroller intends to suspend or revoke a
400	400	permit, the comptroller shall provide the permit holder with
401	401	written notice that includes a statement:
402	402	(1) of the reason for the intended revocation or
403	403	suspension;
404	404	(2) that the permit holder is entitled to a hearing by
405	405	the comptroller on the proposed suspension or revocation; and
406	406	(3) of the date, time, and place of the hearing.
407	407	(c) The comptroller shall deliver the written notice by
408	408	personal service or by mail to the permit holder's mailing address
409	409	as it appears in the comptroller's records. Service by mail is
410	410	complete when the notice is deposited with the United States Postal
411	411	Service.
412	412	(d) The comptroller shall give the permit holder notice
413	413	before the 10th day before the final hearing.
414	414	(e) A permit holder may appeal the comptroller's decision to
415	415	a district court in Travis County not later than the 30th day after
416	416	the date the comptroller's decision becomes final.
417	417	(f) A person whose permit is suspended or revoked may not
418	418	sell, offer for sale, or distribute e-cigarettes from the place of
419	419	business to which the permit applied until a new permit is granted
420	420	or the suspension is removed.
421	421	Sec. 164.0109. SUMMARY SUSPENSION OF PERMIT. (a) The
422	422	comptroller may suspend a permit holder's permit without notice or
423	423	a hearing for the permit holder's failure to comply with this
424	424	chapter or a rule adopted under this chapter if the permit holder's
425	425	continued operation constitutes an immediate and substantial
426	426	threat to the collection of taxes imposed by this chapter and
427	427	attributable to the permit holder's operation.
428	428	(b) If the comptroller summarily suspends a permit holder's
429	429	permit, proceedings for a preliminary hearing before the
430	430	comptroller or the comptroller's representative must be initiated
431	431	simultaneously with the summary suspension. The preliminary
432	432	hearing shall be set for a date not later than the 10th day after the
433	433	date of the summary suspension, unless the parties agree to a later
434	434	date.
435	435	(c) At the preliminary hearing, the permit holder must show
436	436	cause why the permit should not remain suspended pending a final
437	437	hearing on suspension or revocation.
438	438	(d) Chapter 2001, Government Code, does not apply to a
439	439	summary suspension under this section.
440	440	(e) To initiate a proceeding to suspend summarily a permit
441	441	holder's permit, the comptroller shall serve notice on the permit
442	442	holder informing the permit holder of the right to a preliminary
443	443	hearing before the comptroller or the comptroller's representative
444	444	and of the time and place of the preliminary hearing. The notice
445	445	must be personally served on the permit holder or an officer,
446	446	employee, or agent of the permit holder or sent by certified or
447	447	registered mail, return receipt requested, to the permit holder's
448	448	mailing address as it appears in the comptroller's records. The
449	449	notice must state the alleged violations that constitute the
450	450	grounds for summary suspension. The suspension is effective at the
451	451	time the notice is served. If notice is served in person, the
452	452	permit holder shall immediately surrender the permit to the
453	453	comptroller. If notice is served by mail, the permit holder shall
454	454	immediately return the permit to the comptroller.
455	455	(f) Section 164.0108, governing hearings for final
456	456	suspension or revocation of a permit under this subchapter, governs
457	457	a final administrative hearing.
458	458	Sec. 164.0110. HEARINGS. Unless otherwise provided by this
459	459	chapter, the comptroller shall conduct all hearings required by
460	460	this subchapter in accordance with Chapter 2001, Government Code.
461	461	The comptroller may designate one or more representatives to
462	462	conduct the hearings and may prescribe the rules of procedure
463	463	governing the hearings.
464	464	SUBCHAPTER D. DISPOSITION OF PROCEEDS
465	465	Sec. 164.0151. DEPOSIT AND USE OF PROCEEDS. The
466	466	comptroller shall deposit the proceeds from taxes imposed under
467	467	this chapter as follows:
468	468	(1) 25 percent to the credit of an account in the
469	469	general revenue fund that may be appropriated only to the
470	470	Department of State Health Services for the purposes of tobacco and
471	471	e-cigarette use prevention, control, and enforcement; and
472	472	(2) the remainder to the credit of the general revenue
473	473	fund.
474	474	SECTION 10. The following provisions of the Tax Code are
475	475	repealed:
476	476	(1) Section 154.1142;
477	477	(2) Section 154.1143;
478	478	(3) Section 155.0592; and
479	479	(4) Section 155.0593.
480	480	SECTION 11. Section 161.0901, Health and Safety Code, as
481	481	added by this Act, applies only to a violation that occurs on or
482	482	after the effective date of this Act. A violation that occurs
483	483	before the effective date of this Act is governed by the law in
484	484	effect on the date the violation occurred, and the former law is
485	485	continued in effect for that purpose.
486	486	SECTION 12. (a) Notwithstanding Sections 164.0051 and
487	487	164.0052, Tax Code, as added by this Act, the taxes imposed under
488	488	those sections apply only to a sale, storage, use, or other
489	489	consumption of e-cigarettes that occurs on or after January 1,
490	490	2022.
491	491	(b) The comptroller of public accounts shall determine and
492	492	publish the initial tax rate for the taxes imposed under Sections
493	493	164.0051 and 164.0052, Tax Code, as added by this Act, in the manner
494	494	required by Section 164.0053, Tax Code, as added by this Act, not
495	495	later than December 1, 2021. The initial tax rate applies beginning
496	496	January 1, 2022.
497	497	SECTION 13. (a) Notwithstanding Section 164.0101, Tax
498	498	Code, as added by this Act, a person is not required to hold a permit
499	499	under that section to engage in business as a retailer of
500	500	e-cigarettes in this state until January 1, 2022.
501	501	(b) The comptroller of public accounts shall prescribe the
502	502	form and content of an application for a permit under Section
503	503	164.0101, Tax Code, as added by this Act, and begin accepting
504	504	applications for the permit not later than October 1, 2021.
505	505	SECTION 14. This Act takes effect September 1, 2021.