Texas 2021 - 87th Regular

Texas Senate Bill SB248 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	S.B. No. 248
	1	+	87R21306 SRA-D
	2	+	By: Johnson, et al. S.B. No. 248
	3	+	(Thierry)
	4	+	Substitute the following for S.B. No. 248: No.
2	5
3	6
	7	+	A BILL TO BE ENTITLED
4	8		AN ACT
5	9		relating to the sale of cigarettes, tobacco products, and
6	10		e-cigarettes; requiring occupational permits; imposing fees;
7	11		providing civil and administrative penalties; creating criminal
8	12		offenses.
9	13		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	14		SECTION 1. Subtitle G, Title 2, Health and Safety Code, is
11	15		amended by adding Chapter 147 to read as follows:
12	16		CHAPTER 147. E-CIGARETTE RETAILER PERMITS
13	17		SUBCHAPTER A. GENERAL PROVISIONS
14	18		Sec. 147.0001. DEFINITIONS. In this chapter:
15	19		(1) "Commercial business location” means the entire
16	20		premises occupied by a permit applicant or a person required to hold
17	21		a permit under this chapter.
18	22		(2) "E-cigarette" has the meaning assigned by Section
19	23		161.081.
20	24		(3) "E-cigarette retailer" means a person who engages
21	25		in the business of selling e-cigarettes to consumers, including a
22	26		person who sells e-cigarettes to consumers through a marketplace.
23	27		(4) "Marketplace" has the meaning assigned by Section
24	28		151.0242, Tax Code.
25	29		(5) "Permit holder" means a person who obtains a
26	30		permit under Section 147.0052.
27	31		(6) “Place of business” means:
28	32		(A) a commercial business location where
29	33		e-cigarettes are sold;
30	34		(B) a commercial business location where
31	35		e-cigarettes are kept for sale or consumption or otherwise stored;
32	36		or
33	37		(C) a vehicle from which e-cigarettes are sold.
34	38		Sec. 147.0002. INAPPLICABILITY TO CERTAIN PRODUCTS. This
35	39		chapter does not apply to a product described by Section 161.0815.
36	40		Sec. 147.0003. HEARINGS. Unless otherwise provided by this
37	41		chapter, the comptroller shall conduct all hearings required by
38	42		this chapter in accordance with Chapter 2001, Government Code. The
39	43		comptroller may designate one or more representatives to conduct
40	44		the hearings and may prescribe the rules of procedure governing the
41	45		hearings.
42	46		Sec. 147.0004. RULES. The comptroller may adopt rules to
43	47		implement this chapter, including rules exempting a person who
44	48		sells e-cigarettes to consumers through a marketplace from the
45	49		requirements of this chapter.
46	50		SUBCHAPTER B. PERMITS
47	51		Sec. 147.0051. E-CIGARETTE RETAILER PERMIT REQUIRED. (a)
48	52		A person may not engage in business as an e-cigarette retailer in
49	53		this state unless the person has been issued a permit from the
50	54		comptroller.
51	55		(b) An e-cigarette retailer shall obtain a permit for each
52	56		place of business owned or operated by the e-cigarette retailer.
53	57		The comptroller may not issue a permit for a place of business that
54	58		is a residence or a unit in a public storage facility.
55	59		(c) The comptroller shall prescribe the form and content of
56	60		an application for a permit and provide the form on request.
57	61		(d) The applicant shall accurately complete all information
58	62		required by the application and provide the comptroller with
59	63		additional information the comptroller considers necessary.
60	64		(e) Each applicant that applies for a permit to sell
61	65		e-cigarettes from a vehicle must provide the make, model, vehicle
62	66		identification number, registration number, and any other
63	67		information concerning the vehicle the comptroller requires.
64	68		(f) All financial information provided under this section
65	69		is confidential and not subject to Chapter 552, Government Code.
66	70		(g) Permits for engaging in business as an e-cigarette
67	71		retailer are governed exclusively by the provisions of this code.
68	72		Sec. 147.0052. ISSUANCE OF PERMIT. (a) The comptroller
69	73		shall issue a permit to an applicant if the comptroller:
70	74		(1) has received an application and fee;
71	75		(2) does not reject the application and deny the
72	76		permit under Section 147.0053; and
73	77		(3) determines that issuing the permit will not
74	78		jeopardize the administration and enforcement of this chapter.
75	79		(b) The permit shall be issued for a designated place of
76	80		business, except as provided by Section 147.0056.
77	81		(c) The permits are nonassignable.
78	82		(d) The permit must indicate the type of permit and
79	83		authorize the sale of e-cigarettes in this state. The permit must
80	84		show that it is revocable and shall be forfeited or suspended if the
81	85		conditions of issuance, provisions of this chapter, or rules of the
82	86		comptroller are violated.
83	87		Sec. 147.0053. DENIAL OF PERMIT. The comptroller may
84	88		reject an application and deny a permit if the comptroller finds,
85	89		after notice and opportunity for hearing, any of the following:
86	90		(1) the premises where business will be conducted are
87	91		not adequate to protect the e-cigarettes; or
88	92		(2) the applicant or managing employee, or if the
89	93		applicant is a corporation, an officer, director, manager, or any
90	94		stockholder who holds directly or through family or partner
91	95		relationship 10 percent or more of the corporation's stock, or, if
92	96		the applicant is a partnership, a partner or manager:
93	97		(A) has failed to disclose any information
94	98		required by Sections 147.0051(d) and (e); or
95	99		(B) has previously violated provisions of this
96	100		chapter.
97	101		Sec. 147.0054. PERMIT PERIOD; FEES. (a) A permit required
98	102		by this chapter expires on the last day of May of each even-numbered
99	103		year.
100	104		(b) An application for a permit required by this chapter
101	105		must be accompanied by a fee of:
102	106		(1) one-half of the amount of the fee for a retailer's
103	107		permit required by Section 154.111(b), Tax Code, if at the time of
104	108		application the applicant holds a valid retailer's permit under
105	109		Section 154.101, 154.102, or 155.041, Tax Code, for the same place
106	110		of business; or
107	111		(2) the amount of the fee for a retailer's permit
108	112		required by Section 154.111(b), Tax Code.
109	113		(c) For a new permit required by Section 147.0051, the
110	114		comptroller shall prorate the fee according to the number of months
111	115		remaining during the period that the permit is to be in effect.
112	116		(d) A person who does not obtain a renewal permit in a timely
113	117		manner must pay a late fee of $50 in addition to the application fee
114	118		for the permit.
115	119		(e) If on the date of issuance a permit will expire within
116	120		three months, the comptroller may collect the prorated permit fee
117	121		or the fee for the current period and, with the consent of the
118	122		permit holder, may collect the fee for the next permit period and
119	123		issue a permit or permits for both periods, as applicable.
120	124		(f) A person issued a permit for a place of business that
121	125		permanently closes before the permit expiration date is not
122	126		entitled to a refund of the permit fee.
123	127		Sec. 147.0055. PAYMENT FOR PERMITS. (a) An applicant for a
124	128		permit required by Section 147.0051 shall send the required fee
125	129		with the application.
126	130		(b) The payment must be made in cash or by money order,
127	131		check, or credit card.
128	132		(c) The comptroller may not issue a permit in exchange for a
129	133		check until after the comptroller receives full payment on the
130	134		check.
131	135		Sec. 147.0056. DISPLAY OF PERMIT. (a) A permit holder
132	136		shall keep the permit on public display at the place of business for
133	137		which the permit was issued.
134	138		(b) A permit holder who has a permit assigned to a vehicle
135	139		shall post the permit in a conspicuous place on the vehicle.
136	140		Sec. 147.0057. REVENUE. Revenue from the sale of
137	141		e-cigarette retailer's permits shall be deposited as provided by
138	142		Section 161.0903 and may be appropriated only as provided by that
139	143		section.
140	144		SUBCHAPTER C. PERMIT SUSPENSION AND REVOCATION
141	145		Sec. 147.0101. FINAL SUSPENSION OR REVOCATION OF PERMIT.
142	146		(a) The comptroller may revoke or suspend a permit holder's permit
143	147		if the comptroller finds, after notice and hearing as provided by
144	148		this section, that the permit holder violated this chapter or a rule
145	149		adopted under this chapter.
146	150		(b) If the comptroller intends to suspend or revoke a
147	151		permit, the comptroller shall provide the permit holder with
148	152		written notice that includes a statement:
149	153		(1) of the reason for the intended revocation or
150	154		suspension;
151	155		(2) that the permit holder is entitled to a hearing by
152	156		the comptroller on the proposed suspension or revocation; and
153	157		(3) of the date, time, and place of the hearing.
154	158		(c) The comptroller shall deliver the written notice by
155	159		personal service or by mail to the permit holder's mailing address
156	160		as it appears in the comptroller's records. Service by mail is
157	161		complete when the notice is deposited with the United States Postal
158	162		Service.
159	163		(d) The comptroller shall give the permit holder notice
160	164		before the 10th day before the final hearing.
161	165		(e) A permit holder may appeal the comptroller's decision to
162	166		a district court in Travis County not later than the 30th day after
163	167		the date the comptroller's decision becomes final.
164	168		(f) A person whose permit is suspended or revoked may not
165	169		sell, offer for sale, or distribute e-cigarettes from the place of
166	170		business to which the permit applied until a new permit is granted
167	171		or the suspension is removed.
168	172		Sec. 147.0102. SUMMARY SUSPENSION OF PERMIT. (a) The
169	173		comptroller may suspend a permit holder's permit without notice or
170	174		a hearing for the permit holder's failure to comply with this
171	175		chapter or a rule adopted under this chapter if the permit holder's
172	176		continued operation constitutes an immediate and substantial
173	177		threat.
174	178		(b) If the comptroller summarily suspends a permit holder's
175	179		permit, proceedings for a preliminary hearing before the
176	180		comptroller or the comptroller's representative must be initiated
177	181		simultaneously with the summary suspension. The preliminary
178	182		hearing shall be set for a date not later than the 10th day after the
179	183		date of the summary suspension, unless the parties agree to a later
180	184		date.
181	185		(c) At the preliminary hearing, the permit holder must show
182	186		cause why the permit should not remain suspended pending a final
183	187		hearing on suspension or revocation.
184	188		(d) Chapter 2001, Government Code, does not apply to a
185	189		summary suspension under this section.
186	190		(e) To initiate a proceeding to suspend summarily a permit
187	191		holder's permit, the comptroller shall serve notice on the permit
188	192		holder informing the permit holder of the right to a preliminary
189	193		hearing before the comptroller or the comptroller's representative
190	194		and of the time and place of the preliminary hearing. The notice
191	195		must be personally served on the permit holder or an officer,
192	196		employee, or agent of the permit holder or sent by certified or
193	197		registered mail, return receipt requested, to the permit holder's
194	198		mailing address as it appears in the comptroller's records. The
195	199		notice must state the alleged violations that constitute the
196	200		grounds for summary suspension. The suspension is effective at the
197	201		time the notice is served. If notice is served in person, the
198	202		permit holder shall immediately surrender the permit to the
199	203		comptroller. If notice is served by mail, the permit holder shall
200	204		immediately return the permit to the comptroller.
201	205		(f) Section 147.0101, governing hearings for final
202	206		suspension or revocation of a permit under this chapter, governs a
203	207		final administrative hearing.
204	208		SUBCHAPTER D. PENALTIES
205	209		Sec. 147.0151. PENALTIES. (a) A person violates this
206	210		chapter if the person:
207	211		(1) engages in the business of an e-cigarette retailer
208	212		without a permit; or
209	213		(2) is a person who is subject to a provision of this
210	214		chapter or a rule adopted by the comptroller under this chapter and
211	215		who violates the provision or rule.
212	216		(b) A person who violates this section shall pay to the
213	217		state a penalty of not more than $2,000 for each violation.
214	218		(c) Each day on which a violation occurs is a separate
215	219		violation.
216	220		(d) The attorney general shall bring suit to recover
217	221		penalties under this section.
218	222		(e) A suit under this section may be brought in Travis
219	223		County or another county having jurisdiction.
220	224		Sec. 147.0152. FAILURE TO HAVE PERMIT; OFFENSE. (a) A
221	225		person commits an offense if the person acts as an e-cigarette
222	226		retailer and:
223	227		(1) receives or possesses e-cigarettes without having
224	228		a permit;
225	229		(2) receives or possesses e-cigarettes without having
226	230		a permit posted where it can be easily seen by the public; or
227	231		(3) sells e-cigarettes without having a permit.
228	232		(b) An offense under this section is a Class A misdemeanor.
229	233		SECTION 2. Sections 161.081(1-a), (2), and (4), Health and
230	234		Safety Code, are amended to read as follows:
231	235		(1-a) (A) "E-cigarette" means:
232	236		(i) an electronic cigarette or any other
233	237		device that simulates smoking by using a mechanical heating
234	238		element, battery, or electronic circuit to deliver nicotine or
235	239		other substances to the individual inhaling from the device; or
236	240		(ii) a consumable liquid solution or other
237	241		material aerosolized or vaporized during the use of an electronic
238	242		cigarette or other device described by this subdivision.
239	243		(B) The term "e-cigarette" does not include a
240	244		prescription medical device unrelated to the cessation of smoking.
241	245		(C) The term "e-cigarette" includes:
242	246		(i) [(A)] a device described by this
243	247		subdivision regardless of whether the device is manufactured,
244	248		distributed, or sold as an e-cigarette, e-cigar, or e-pipe or under
245	249		another product name or description; and
246	250		(ii) [(B)] a component, part, or accessory
247	251		for the device, regardless of whether the component, part, or
248	252		accessory is sold separately from the device.
249	253		(2) "Permit holder" has the meaning assigned by
250	254		Section 147.0001 of this code or Section 154.001 or 155.001, Tax
251	255		Code, as applicable.
252	256		(4) "Retailer" means a person who engages in the
253	257		practice of selling cigarettes, e-cigarettes, or tobacco products
254	258		to consumers and includes the owner of a coin-operated cigarette,
255	259		e-cigarette, or tobacco product vending machine. The term includes
256	260		a retailer as [that term is] defined by Section 154.001 or 155.001,
257	261		Tax Code, and an e-cigarette retailer as defined by Section
258	262		147.0001 of this code, as applicable.
259	263		SECTION 3. Section 161.083(d), Health and Safety Code, is
260	264		amended to read as follows:
261	265		(d) Notwithstanding any other provision of law, a violation
262	266		of this section is not a violation of this subchapter for purposes
263	267		of Section 161.0901 [154.1142 or 155.0592, Tax Code].
264	268		SECTION 4. Subchapter H, Chapter 161, Health and Safety
265	269		Code, is amended by adding Sections 161.0901 and 161.0903 to read as
266	270		follows:
267	271		Sec. 161.0901. DISCIPLINARY ACTION AGAINST CIGARETTE,
268	272		E-CIGARETTE, AND TOBACCO PRODUCT RETAILERS. (a) A retailer is
269	273		subject to disciplinary action as provided by this section if an
270	274		agent or employee of the retailer commits an offense under this
271	275		subchapter.
272	276		(b) If the comptroller finds, after notice and an
273	277		opportunity for a hearing as provided by Chapter 2001, Government
274	278		Code, that a permit holder has violated this subchapter at a place
275	279		of business for which a permit is issued, the comptroller may
276	280		suspend the permit for that place of business and administratively
277	281		assess a fine as follows:
278	282		(1) for the first violation of this subchapter during
279	283		the 24-month period preceding the violation at that place of
280	284		business, the comptroller may require the permit holder to pay a
281	285		fine in an amount not to exceed $1,000;
282	286		(2) for the second violation of this subchapter during
283	287		the 24-month period preceding the most recent violation at that
284	288		place of business, the comptroller may require the permit holder to
285	289		pay a fine in an amount not to exceed $2,000; and
286	290		(3) for the third violation of this subchapter during
287	291		the 24-month period preceding the most recent violation at that
288	292		place of business, the comptroller may:
289	293		(A) require the permit holder to pay a fine in an
290	294		amount not to exceed $3,000; and
291	295		(B) suspend the permit for that place of business
292	296		for not more than five days.
293	297		(c) Except as provided by Subsection (e), for the fourth or
294	298		a subsequent violation of this subchapter during the 24-month
295	299		period preceding the most recent violation at that place of
296	300		business, the comptroller shall revoke the permit issued under
297	301		Chapter 147 of this code or Chapter 154 or 155, Tax Code, as
298	302		applicable. If the permit holder does not hold a permit under
299	303		Chapter 147 of this code or Chapter 154 or 155, Tax Code, the
300	304		comptroller shall revoke the permit issued under Section 151.201,
301	305		Tax Code.
302	306		(d) A permit holder whose permit has been revoked under this
303	307		section may not apply for a permit for the same place of business
304	308		before the expiration of six months after the effective date of the
305	309		revocation.
306	310		(e) For purposes of this section, the comptroller may
307	311		suspend a permit for a place of business but may not revoke the
308	312		permit under Subsection (c) if the comptroller finds that:
309	313		(1) the permit holder has not violated this subchapter
310	314		more than seven times at the place of business in the 48-month
311	315		period preceding the violation in question;
312	316		(2) the permit holder requires its employees to attend
313	317		a comptroller-approved seller training program;
314	318		(3) the employees have actually attended a
315	319		comptroller-approved seller training program; and
316	320		(4) the permit holder has not directly or indirectly
317	321		encouraged the employees to violate the law.
318	322		(f) The comptroller may adopt rules to implement this
319	323		section.
320	324		Sec. 161.0903. USE OF CERTAIN REVENUE. Revenue from fees
321	325		collected under Section 161.123 and from the sale of permits under
322	326		Chapter 147 of this code, retailer permits under Chapter 154, Tax
323	327		Code, and retailer permits under Chapter 155, Tax Code, shall be
324	328		deposited in the general revenue fund and may be appropriated only
325	329		as provided by this section. The revenue shall be appropriated, in
326	330		order of priority, to:
327	331		(1) the comptroller for the purpose of administering
328	332		retailer permitting under Chapter 147 of this code and Chapters 154
329		-	and 155, Tax Code; ~~and~~
	333	+	and 155, Tax Code;
330	334		(2) the comptroller for the purpose of administering
331		-	and enforcing this subchapter and Subchapters K and N.
	335	+	and enforcing this subchapter and Subchapters K and N;
	336	+	(3) the department for the purpose of administering
	337	+	programs under Sections 161.253 and 161.301; and
	338	+	(4) the appropriate entity for the purpose of
	339	+	administering that entity's responsibilities under Section
	340	+	161.302.
332	341		SECTION 5. Section 161.123(b), Health and Safety Code, is
333	342		amended to read as follows:
334	343		(b) The comptroller shall collect the fee [and deposit the
335	344		money] as provided in this section.
336	345		SECTION 6. Section 111.00455(b), Tax Code, is amended to
337	346		read as follows:
338	347		(b) The following are not contested cases under Subsection
339	348		(a) and Section 2003.101, Government Code:
340	349		(1) a show cause hearing or any hearing not related to
341	350		the collection, receipt, administration, or enforcement of the
342	351		amount of a tax or fee imposed, or the penalty or interest
343	352		associated with that amount, except for a hearing under Section
344	353		151.157(f), 151.1575(c), or 151.712(g) of this code or Section
345	354		161.0901, Health and Safety Code[, 154.1142, or 155.0592];
346	355		(2) a property value study hearing under Subchapter M,
347	356		Chapter 403, Government Code;
348	357		(3) a hearing in which the issue relates to:
349	358		(A) Chapters 72-75, Property Code;
350	359		(B) forfeiture of a right to do business;
351	360		(C) a certificate of authority;
352	361		(D) articles of incorporation;
353	362		(E) a penalty imposed under Section 151.703(d);
354	363		(F) the refusal or failure to settle under
355	364		Section 111.101; or
356	365		(G) a request for or revocation of an exemption
357	366		from taxation; and
358	367		(4) any other hearing not related to the collection,
359	368		receipt, administration, or enforcement of the amount of a tax or
360	369		fee imposed, or the penalty or interest associated with that
361	370		amount.
362	371		SECTION 7. Section 154.001, Tax Code, is amended by
363	372		amending Subdivisions (9), (14), and (19) and adding Subdivisions
364	373		(11-a) and (11-b) to read as follows:
365	374		(9) "First sale" means, except as otherwise provided
366	375		by this chapter:
367	376		(A) the first transfer of possession in
368	377		connection with a purchase, sale, or any exchange for value of
369	378		cigarettes in or into this state, which:
370	379		(i) includes the sale of cigarettes by:
371	380		(a) a distributor in or outside this
372	381		state to a distributor, wholesaler, or retailer in this state; and
373	382		(b) a manufacturer in this state who
374	383		transfers the cigarettes in this state; and
375	384		(ii) does not include:
376	385		(a) the sale of cigarettes by a
377	386		manufacturer outside this state to a distributor in this state;
378	387		[or]
379	388		(b) the transfer of cigarettes from a
380	389		manufacturer outside this state to a bonded agent in this state;
381	390		(c) the sale of cigarettes by a
382	391		manufacturer, bonded agent, distributor, or importer to an
383	392		interstate warehouse in this state; or
384	393		(d) the transfer of cigarettes by an
385	394		interstate warehouse in an interstate warehouse transaction;
386	395		(B) the first use or consumption of cigarettes in
387	396		this state; or
388	397		(C) the loss of cigarettes in this state whether
389	398		through negligence, theft, or other unaccountable loss.
390	399		(11-a) "Interstate warehouse" means a person in this
391	400		state who receives unstamped cigarettes from a manufacturer, bonded
392	401		agent, distributor, or importer and stores the cigarettes
393	402		exclusively for an interstate warehouse transaction.
394	403		(11-b) "Interstate warehouse transaction" means the
395	404		sale or delivery of cigarettes from an interstate warehouse to a
396	405		person located in another state who is licensed or permitted by the
397	406		other state to affix that state's cigarette stamps or otherwise pay
398	407		the state's excise tax on cigarettes as required.
399	408		(14) "Permit holder" means a bonded agent, interstate
400	409		warehouse, distributor, wholesaler, manufacturer, importer, export
401	410		warehouse, or retailer who obtains a permit under Section 154.101.
402	411		(19) "Wholesaler" means a person, including a
403	412		manufacturer's representative, who sells or distributes cigarettes
404	413		in this state for resale but who is not a distributor or interstate
405	414		warehouse.
406	415		SECTION 8. Section 154.041, Tax Code, is amended by adding
407	416		Subsection (f) to read as follows:
408	417		(f) No stamp is required on the transfer of possession of
409	418		cigarettes described by Section 154.001(9)(A)(ii)(d).
410	419		SECTION 9. Section 154.101, Tax Code, is amended by
411	420		amending Subsections (a), (b), and (h) and adding Subsection (k) to
412	421		read as follows:
413	422		(a) A person may not engage in business as a distributor,
414	423		wholesaler, bonded agent, interstate warehouse, manufacturer,
415	424		export warehouse, importer, or retailer unless the person has
416	425		applied for and received the applicable permit from the
417	426		comptroller.
418	427		(b) Each distributor, wholesaler, bonded agent, interstate
419	428		warehouse, manufacturer, export warehouse, importer, or retailer
420	429		shall obtain a permit for each place of business owned or operated
421	430		by the distributor, wholesaler, bonded agent, interstate
422	431		warehouse, manufacturer, export warehouse, importer, or
423	432		retailer. The comptroller may not issue a permit for a place of
424	433		business that is a residence or a unit in a public storage facility.
425	434		(h) Permits for engaging in business as a distributor,
426	435		wholesaler, bonded agent, interstate warehouse, manufacturer,
427	436		export warehouse, importer, or retailer shall be governed
428	437		exclusively by the provisions of this code.
429	438		(k) A person may not hold a distributor's permit issued by
430	439		this state and an interstate warehouse's permit for the same
431	440		location.
432	441		SECTION 10. Section 154.1015, Tax Code, is amended by
433	442		amending Subsections (c), (d), and (e) and adding Subsection (j) to
434	443		read as follows:
435	444		(c) A manufacturer outside this state who is not a permitted
436	445		distributor may sell cigarettes only to a permitted distributor or
437	446		permitted interstate warehouse.
438	447		(d) A permitted distributor may sell cigarettes only to a
439	448		permitted distributor, wholesaler, or retailer. A permitted
440	449		distributor who manufactures or produces cigarettes in this state
441	450		may sell those cigarettes to a permitted interstate warehouse.
442	451		(e) A permitted importer may sell cigarettes only to a
443	452		permitted interstate warehouse, distributor, wholesaler, or
444	453		retailer.
445	454		(j) A permitted interstate warehouse may sell cigarettes
446	455		only in an interstate warehouse transaction. An interstate
447	456		warehouse may not make an intrastate sale of cigarettes without
448	457		written authorization by the comptroller.
449	458		SECTION 11. Section 154.102(a), Tax Code, is amended to
450	459		read as follows:
451	460		(a) The comptroller may issue a combination permit for
452	461		cigarettes and tobacco products to a person who is a distributor,
453	462		wholesaler, bonded agent, interstate warehouse, manufacturer,
454	463		importer, or retailer as defined by this chapter and Chapter 155 for
455	464		both cigarettes and tobacco products. An interstate warehouse may
456	465		not hold a combination permit as a retailer of cigarettes or tobacco
457	466		products.
458	467		SECTION 12. Sections 154.110(a) and (d), Tax Code, are
459	468		amended to read as follows:
460	469		(a) The comptroller shall issue a permit to a distributor,
461	470		wholesaler, bonded agent, interstate warehouse, manufacturer,
462	471		export warehouse, importer, or retailer if the comptroller:
463	472		(1) has received an application and fee, if required;
464	473		(2) believes that the applicant has complied with
465	474		Section 154.101; and
466	475		(3) determines that issuing the permit will not
467	476		jeopardize the administration and enforcement of this chapter.
468	477		(d) The permit must indicate the type of permit that it is
469	478		and authorize the sale of cigarettes in this state, except as
470	479		provided by Section 154.1015(j). The permit must show that it is
471	480		revocable and shall be forfeited or suspended if the conditions of
472	481		issuance, provisions of this chapter, or rules of the comptroller
473	482		are violated.
474	483		SECTION 13. Section 154.111(b), Tax Code, is amended to
475	484		read as follows:
476	485		(b) An application for a permit required by this chapter
477	486		must be accompanied by a fee of:
478	487		(1) $300 for a bonded agent's permit;
479	488		(1-a) $300 for an interstate warehouse's permit;
480	489		(2) $300 for a distributor's permit;
481	490		(3) $200 for a wholesaler's permit;
482	491		(4) $15 for each permit for a vehicle if the applicant
483	492		is also applying for a permit as a bonded agent, distributor, or
484	493		wholesaler or has received a current permit from the comptroller
485	494		under Sections 154.101 and 154.110; and
486	495		(5) $180 for a retailer's permit.
487	496		SECTION 14. Section 154.1135(b), Tax Code, is amended to
488	497		read as follows:
489	498		(b) The payment must be made in cash or by money order, [or]
490	499		check, or credit card.
491	500		SECTION 15. Sections 154.121(a) and (b), Tax Code, are
492	501		amended to read as follows:
493	502		(a) Except as provided by Subsection (b), revenue from the
494	503		sale of permits to distributors, wholesalers, [and] bonded agents,
495	504		and interstate warehouses is allocated in the same manner as other
496	505		revenue allocated by Subchapter J.
497	506		(b) Revenue from the sale of retailer's permits shall be
498	507		deposited as provided by Section 161.0903, Health and Safety Code,
499	508		[to the general revenue fund] and may be appropriated only as
500	509		provided by that [this] section. [The money may be appropriated
501	510		first to the comptroller for administration of licensing of
502	511		retailers under this chapter or Chapter 155.]
503	512		SECTION 16. Section 154.152(c), Tax Code, is amended to
504	513		read as follows:
505	514		(c) A person may not transport or cause to be transported
506	515		from this state cigarettes for sale in another state without first
507	516		affixing to the cigarettes the stamp required by the state in which
508	517		the cigarettes are to be sold or paying any other excise tax on the
509	518		cigarettes imposed by the state in which the cigarettes are to be
510	519		sold. This subsection does not apply to the distribution, sale, or
511	520		transportation of cigarettes sold by an interstate warehouse in an
512	521		interstate warehouse transaction.
513	522		SECTION 17. Section 154.201, Tax Code, is amended to read as
514	523		follows:
515	524		Sec. 154.201. RECORD OF PURCHASE OR RECEIPT. Each
516	525		distributor, wholesaler, bonded agent, interstate warehouse, and
517	526		export warehouse shall keep records at each place of business of all
518	527		cigarettes purchased or received, including records of those
519	528		cigarettes for which no tax is due under federal law. Each
520	529		retailer shall keep records at a single commercial business
521	530		location, which the retailer shall designate as its principal place
522	531		of business in this state, of all cigarettes purchased and
523	532		received. These records must include:
524	533		(1) the name and address of the shipper or carrier and
525	534		the mode of transportation;
526	535		(2) all shipping records or copies of records,
527	536		including invoices, bills of lading, waybills, freight bills, and
528	537		express receipts;
529	538		(3) the date and the name of the place of origin of the
530	539		cigarette shipment;
531	540		(4) the date and the name of the place of arrival of
532	541		the cigarette shipment;
533	542		(5) a statement of the number, kind, and price paid for
534	543		cigarettes, including cigarettes in stamped and unstamped
535	544		packages;
536	545		(6) the name, address, permit number, and tax
537	546		identification number of the seller;
538	547		(7) in the case of a distributor, copies of the customs
539	548		certificates required by 19 U.S.C. Section 1681a(c), as amended,
540	549		for all cigarettes imported into the United States to which the
541	550		distributor has affixed a tax stamp; and
542	551		(8) any other information required by rules of the
543	552		comptroller.
544	553		SECTION 18. Section 154.203, Tax Code, is amended by
545	554		amending Subsection (a) and adding Subsection (c) to read as
546	555		follows:
547	556		(a) Each interstate warehouse, distributor, and wholesaler
548	557		shall keep at each place of business in this state records of each
549	558		sale, distribution, exchange, or use of cigarettes whether taxed
550	559		under this chapter or not. Each interstate warehouse, distributor,
551	560		and wholesaler shall prepare and retain an original invoice for
552	561		each transaction involving cigarettes. Each interstate warehouse,
553	562		distributor, or wholesaler shall keep any supporting
554	563		documentation, including bills of lading, showing shipment and
555	564		receipt used in preparing the invoices at the place of business of
556	565		the interstate warehouse, distributor, or wholesaler. The
557	566		interstate warehouse, distributor, or wholesaler shall prepare and
558	567		deliver a duplicate invoice to the purchaser.
559	568		(c) On request by the comptroller, an interstate warehouse
560	569		shall provide to the comptroller copies of periodic cigarette
561	570		reports filed with each state into which the interstate warehouse
562	571		sells cigarettes and copies of each report required under 15 U.S.C.
563	572		Section 376.
564	573		SECTION 19. Section 154.501(a), Tax Code, is amended to
565	574		read as follows:
566	575		(a) A person violates this chapter if the person:
567	576		(1) is a distributor, wholesaler, manufacturer,
568	577		export warehouse, importer, bonded agent, interstate warehouse,
569	578		manufacturer's representative, or retailer and fails to keep
570	579		records required by this chapter;
571	580		(2) engages in the business of a bonded agent,
572	581		interstate warehouse, distributor, wholesaler, manufacturer,
573	582		export warehouse, importer, or retailer without a valid permit;
574	583		(3) is a distributor, wholesaler, manufacturer,
575	584		export warehouse, importer, bonded agent, interstate warehouse, or
576	585		retailer and fails to make a report or makes a false or incomplete
577	586		report or application required by this chapter to the comptroller;
578	587		or
579	588		(4) is a person affected by this chapter and fails or
580	589		refuses to abide by or violates a provision of this chapter or a
581	590		rule adopted by the comptroller under this chapter.
582	591		SECTION 20. Section 154.503(a), Tax Code, is amended to
583	592		read as follows:
584	593		(a) Except as provided by Sections 154.026(b), 154.041(f),
585	594		and 154.042, a person commits an offense if the person possesses
586	595		unstamped cigarettes in quantities less than 10,000.
587	596		SECTION 21. Section 154.509, Tax Code, is amended to read as
588	597		follows:
589	598		Sec. 154.509. PERMITS. A person commits an offense if the
590	599		person acting:
591	600		(1) as a distributor, interstate warehouse,
592	601		wholesaler, or retailer, receives or possesses cigarettes without
593	602		having a valid permit;
594	603		(2) as a distributor, interstate warehouse,
595	604		wholesaler, or retailer, receives or possesses cigarettes without
596	605		having a permit posted where it can be easily seen by the public;
597	606		(3) as a distributor, interstate warehouse, or
598	607		wholesaler, does not deliver an invoice to the purchaser as
599	608		required by Section 154.203;
600	609		(4) as a distributor, interstate warehouse,
601	610		wholesaler, or retailer, sells cigarettes without having a valid
602	611		permit; or
603	612		(5) as a bonded agent, interstate warehouse, or export
604	613		warehouse, stores, distributes, or delivers cigarettes in
605	614		unstamped packages without having a valid permit, except as
606	615		provided by Section 154.041(f).
607	616		SECTION 22. Section 154.511, Tax Code, is amended to read as
608	617		follows:
609	618		Sec. 154.511. TRANSPORTATION OF CIGARETTES. A person,
610	619		other than a common carrier, commits an offense if the person:
611	620		(1) knowingly transports cigarettes without a stamp
612	621		affixed to each individual package, except as provided by Section
613	622		154.024(a) or 154.152(c);
614	623		(2) wilfully refuses to stop a motor vehicle operated
615	624		to transport cigarettes after a request to stop from an authorized
616	625		person; or
617	626		(3) while transporting cigarettes refuses to permit a
618	627		complete inspection of the cargo by an authorized person.
619	628		SECTION 23. Section 154.515(a), Tax Code, is amended to
620	629		read as follows:
621	630		(a) Except as provided by Sections 154.026(b), 154.041(f),
622	631		and 154.042, a person commits an offense if the person possesses
623	632		unstamped cigarettes in quantities of 10,000 or more.
624	633		SECTION 24. Section 155.001, Tax Code, is amended by
625	634		amending Subdivisions (8), (12), and (16) and adding Subdivisions
626	635		(9-a) and (9-b) to read as follows:
627	636		(8) "First sale" means, except as otherwise provided
628	637		by this chapter:
629	638		(A) the first transfer of possession in
630	639		connection with a purchase, sale, or any exchange for value of
631	640		tobacco products in or into this state, which:
632	641		(i) includes the sale of tobacco products
633	642		by:
634	643		(a) a distributor in or outside this
635	644		state to a distributor, wholesaler, or retailer in this state; and
636	645		(b) a manufacturer in this state who
637	646		transfers the tobacco products in this state; and
638	647		(ii) does not include:
639	648		(a) the sale of tobacco products by a
640	649		manufacturer outside this state to a distributor in this state;
641	650		[or]
642	651		(b) the transfer of tobacco products
643	652		from a manufacturer outside this state to a bonded agent in this
644	653		state; or
645	654		(c) the sale of tobacco products by a
646	655		manufacturer, bonded agent, distributor, or importer to an
647	656		interstate warehouse in this state;
648	657		(B) the first use or consumption of tobacco
649	658		products in this state; or
650	659		(C) the loss of tobacco products in this state
651	660		whether through negligence, theft, or other unaccountable loss.
652	661		(9-a) "Interstate warehouse" means a person in this
653	662		state who receives untaxed tobacco products from a manufacturer,
654	663		bonded agent, distributor, or importer and stores the tobacco
655	664		products exclusively for an interstate warehouse transaction.
656	665		(9-b) "Interstate warehouse transaction" means the
657	666		sale or delivery of tobacco products from an interstate warehouse
658	667		to a person located in another state who is licensed or permitted by
659	668		the other state to pay the state's excise tax on tobacco products as
660	669		required.
661	670		(12) "Permit holder" means a bonded agent, interstate
662	671		warehouse, distributor, wholesaler, manufacturer, importer, export
663	672		warehouse, or retailer who obtains a permit under Section 155.041.
664	673		(16) "Wholesaler" means a person, including a
665	674		manufacturer's representative, who sells or distributes tobacco
666	675		products in this state for resale but who is not a distributor or
667	676		interstate warehouse.
668	677		SECTION 25. Section 155.041, Tax Code, is amended by
669	678		amending Subsections (a), (b), and (h) and adding Subsection (i) to
670	679		read as follows:
671	680		(a) A person may not engage in business as a distributor,
672	681		wholesaler, bonded agent, interstate warehouse, manufacturer,
673	682		export warehouse, importer, or retailer unless the person has
674	683		applied for and received the applicable permit from the
675	684		comptroller.
676	685		(b) Each distributor, wholesaler, bonded agent, interstate
677	686		warehouse, manufacturer, export warehouse, importer, or retailer
678	687		shall obtain a permit for each place of business owned or operated
679	688		by the distributor, wholesaler, bonded agent, interstate
680	689		warehouse, manufacturer, export warehouse, importer, or retailer.
681	690		(h) Permits for engaging in business as a distributor,
682	691		wholesaler, bonded agent, interstate warehouse, manufacturer,
683	692		export warehouse, importer, or retailer shall be governed
684	693		exclusively by the provisions of this code.
685	694		(i) A person may not hold a distributor's permit issued by
686	695		this state and an interstate warehouse's permit for the same
687	696		location.
688	697		SECTION 26. Section 155.0415, Tax Code, is amended by
689	698		amending Subsections (c), (d), (e), and (f) and adding Subsection
690	699		(j) to read as follows:
691	700		(c) A manufacturer outside this state who is not a permitted
692	701		distributor may sell tobacco products only to a permitted
693	702		distributor or a permitted interstate warehouse.
694	703		(d) A permitted distributor may sell tobacco products only
695	704		to a permitted distributor, wholesaler, or retailer. A permitted
696	705		distributor who manufactures or produces tobacco products in this
697	706		state may sell those tobacco products to a permitted interstate
698	707		warehouse.
699	708		(e) A permitted importer may sell tobacco products only to a
700	709		permitted interstate warehouse, distributor, wholesaler, or
701	710		retailer.
702	711		(f) A permitted wholesaler may sell tobacco products only to
703	712		a permitted interstate warehouse, distributor, wholesaler, or
704	713		retailer.
705	714		(j) A permitted interstate warehouse may sell tobacco
706	715		products only in an interstate warehouse transaction. An
707	716		interstate warehouse may not make an intrastate sale of tobacco
708	717		products without written authorization by the comptroller.
709	718		SECTION 27. Sections 155.048(a) and (d), Tax Code, are
710	719		amended to read as follows:
711	720		(a) The comptroller shall issue a permit to a distributor,
712	721		wholesaler, bonded agent, interstate warehouse, manufacturer,
713	722		importer, or retailer if the comptroller:
714	723		(1) has received an application and fee, if required;
715	724		(2) does not reject the application and deny the
716	725		permit under Section 155.0481; and
717	726		(3) determines that issuing the permit will not
718	727		jeopardize the administration and enforcement of this chapter.
719	728		(d) The permit must indicate the type of permit that it is
720	729		and authorize the sale of tobacco products in this state, except as
721	730		provided by Section 155.0415(j). The permit must show that it is
722	731		revocable and shall be forfeited or suspended if the conditions of
723	732		issuance, provisions of this chapter, or rules of the comptroller
724	733		are violated.
725	734		SECTION 28. Section 155.049(b), Tax Code, is amended to
726	735		read as follows:
727	736		(b) An application for a permit required by this chapter
728	737		must be accompanied by a fee of:
729	738		(1) $300 for a bonded agent's permit;
730	739		(1-a) $300 for an interstate warehouse's permit;
731	740		(2) $300 for a distributor's permit;
732	741		(3) $200 for a wholesaler's permit;
733	742		(4) $15 for each permit for a vehicle if the applicant
734	743		is also applying for a permit as a bonded agent, distributor, or
735	744		wholesaler or has received a current permit from the comptroller
736	745		under Sections 155.041 and 155.048; and
737	746		(5) $180 for a retailer's permit.
738	747		SECTION 29. Section 155.050(b), Tax Code, is amended to
739	748		read as follows:
740	749		(b) The payment must be made in cash or by money order, [or]
741	750		check, or credit card.
742	751		SECTION 30. Sections 155.058(a) and (b), Tax Code, are
743	752		amended to read as follows:
744	753		(a) Except as provided by Subsection (b), revenue from the
745	754		sale of permits to distributors, wholesalers, [and] bonded agents,
746	755		and interstate warehouses is allocated in the same manner that
747	756		other revenue is allocated by Subchapter H.
748	757		(b) Revenue from the sale of retailer's permits shall be
749	758		deposited as provided by Section 161.0903, Health and Safety Code,
750	759		[to the general revenue fund] and may be appropriated only as
751	760		provided by that [this] section. [The money may be appropriated
752	761		first to the comptroller for administration of licensing of
753	762		retailers under this chapter or Chapter 154.]
754	763		SECTION 31. Section 155.101, Tax Code, is amended to read as
755	764		follows:
756	765		Sec. 155.101. RECORD OF PURCHASE OR RECEIPT. Each
757	766		distributor, wholesaler, bonded agent, interstate warehouse, and
758	767		export warehouse shall keep records at each place of business of all
759	768		tobacco products purchased or received. Each retailer shall keep
760	769		records at a single commercial business location, which the
761	770		retailer shall designate as its principal place of business in the
762	771		state, of all tobacco products purchased and received. These
763	772		records must include [the following, except that Subdivision (7)
764	773		applies to distributors only and Subdivision (8) applies only to
765	774		the purchase or receipt of tobacco products other than cigars]:
766	775		(1) the name and address of the shipper or carrier and
767	776		the mode of transportation;
768	777		(2) all shipping records or copies of records,
769	778		including invoices, bills of lading, waybills, freight bills, and
770	779		express receipts;
771	780		(3) the date and the name of the place of origin of the
772	781		tobacco product shipment;
773	782		(4) the date and the name of the place of arrival of
774	783		the tobacco product shipment;
775	784		(5) a statement of the number, kind, and price paid for
776	785		the tobacco products;
777	786		(6) the name, address, permit number, and tax
778	787		identification number of the seller;
779	788		(7) in the case of a distributor, the manufacturer's
780	789		list price for the tobacco products;
781	790		(8) for tobacco products other than cigars, the net
782	791		weight as listed by the manufacturer for each unit; and
783	792		(9) any other information required by rules of the
784	793		comptroller.
785	794		SECTION 32. Section 155.102, Tax Code, is amended by
786	795		amending Subsections (a) and (b) and adding Subsection (d) to read
787	796		as follows:
788	797		(a) Each interstate warehouse, distributor, and wholesaler
789	798		shall keep at each place of business in this state records of each
790	799		sale, distribution, exchange, or use of tobacco products whether
791	800		taxed under this chapter or not. Each interstate warehouse,
792	801		distributor, and wholesaler shall prepare and retain an original
793	802		invoice for each transaction involving tobacco products. Each
794	803		interstate warehouse, distributor, or wholesaler shall keep any
795	804		supporting documentation, including bills of lading, showing
796	805		shipment and receipt used in preparing the invoices at the place of
797	806		business of the interstate warehouse, distributor, or wholesaler.
798	807		The interstate warehouse, distributor, or wholesaler shall prepare
799	808		and deliver a duplicate invoice to the purchaser.
800	809		(b) The records for each sale, distribution, exchange, or
801	810		use of tobacco products must show:
802	811		(1) the purchaser's name and address, permit number,
803	812		or tax identification number;
804	813		(2) the method of delivery and the name of the common
805	814		carrier or other person delivering the tobacco products;
806	815		(3) the date, amount, and type of tobacco products
807	816		sold, distributed, exchanged, or used;
808	817		(4) the price received for the tobacco products;
809	818		(5) the number and kind of tobacco products on which
810	819		the tax has been paid; and
811	820		(6) for sales from a manufacturer to a distributor or
812	821		interstate warehouse, the manufacturer's list price for the tobacco
813	822		products.
814	823		(d) On request by the comptroller, an interstate warehouse
815	824		shall provide to the comptroller copies of periodic tobacco product
816	825		reports filed with each state into which the interstate warehouse
817	826		sells tobacco products and copies of each report required under 15
818	827		U.S.C. Section 376.
819	828		SECTION 33. Section 155.201(a), Tax Code, is amended to
820	829		read as follows:
821	830		(a) A person violates this chapter if the person:
822	831		(1) is a distributor, wholesaler, manufacturer,
823	832		export warehouse, importer, bonded agent, interstate warehouse,
824	833		manufacturer's representative, or retailer and fails to keep
825	834		records required by this chapter;
826	835		(2) engages in the business of a bonded agent,
827	836		interstate warehouse, distributor, wholesaler, manufacturer,
828	837		export warehouse, importer, or retailer without a valid permit;
829	838		(3) is a distributor, wholesaler, manufacturer,
830	839		export warehouse, importer, bonded agent, interstate warehouse, or
831	840		retailer and fails to make a report required by this chapter to the
832	841		comptroller or makes a false or incomplete report or application
833	842		required by this chapter to the comptroller; or
834	843		(4) is a person affected by this chapter and fails or
835	844		refuses to abide by or violates a provision of this chapter or a
836	845		rule adopted by the comptroller under this chapter.
837	846		SECTION 34. Section 155.207, Tax Code, is amended to read as
838	847		follows:
839	848		Sec. 155.207. PERMITS. A person commits an offense if the
840	849		person acting:
841	850		(1) as a distributor, interstate warehouse,
842	851		wholesaler, or retailer, receives or possesses tobacco products
843	852		without having a valid permit;
844	853		(2) as a distributor, interstate warehouse,
845	854		wholesaler, or retailer, receives or possesses tobacco products
846	855		without having a permit posted where it can be easily seen by the
847	856		public;
848	857		(3) as a distributor, interstate warehouse, or
849	858		wholesaler, does not deliver an invoice to the purchaser as
850	859		required by Section 155.102;
851	860		(4) as a distributor, interstate warehouse,
852	861		wholesaler, or retailer, sells tobacco products without having a
853	862		valid permit; or
854	863		(5) as a bonded agent, interstate warehouse, or
855	864		export warehouse, stores, distributes, or delivers tobacco
856	865		products on which the tax has not been paid without having a valid
857	866		permit.
858	867		SECTION 35. (a) Section 161.124, Health and Safety Code, is
859	868		repealed.
860	869		(b) The following provisions of the Tax Code are repealed:
861	870		(1) Section 154.1142;
862	871		(2) Section 154.1143;
863	872		(3) Sections 154.121(c), (d), and (e);
864	873		(4) Sections 155.058(c), (d), and (e);
865	874		(5) Section 155.0592; and
866	875		(6) Section 155.0593.
867	876		SECTION 36. Section 161.0901, Health and Safety Code, as
868	877		added by this Act, applies only to a violation that occurs on or
869	878		after the effective date of this Act. A violation that occurs
870	879		before the effective date of this Act is governed by the law in
871	880		effect on the date the violation occurred, and the former law is
872	881		continued in effect for that purpose.
873	882		SECTION 37. (a) Notwithstanding Sections 147.0051,
874	883		147.0151, and 147.0152, Health and Safety Code, as added by this
875	884		Act, a person is not required to hold a permit under Section
876	885		147.0051 to engage in business as a retailer of e-cigarettes in this
877	886		state until January 1, 2022.
878	887		(b) The comptroller of public accounts shall prescribe the
879	888		form and content of an application for a permit under Section
880	889		147.0051, Health and Safety Code, as added by this Act, and begin
881	890		accepting applications for the permit not later than October 1,
882	891		2021.
883	892		SECTION 38. This Act takes effect September 1, 2021.
884		-	______________________________ ______________________________
885		-	President of the Senate Speaker of the House
886		-	I hereby certify that S.B. No. 248 passed the Senate on
887		-	April 8, 2021, by the following vote: Yeas 27, Nays 3;
888		-	May 28, 2021, Senate refused to concur in House amendments and
889		-	requested appointment of Conference Committee; May 28, 2021, House
890		-	granted request of the Senate; May 30, 2021, Senate adopted
891		-	Conference Committee Report by the following vote: Yeas 27,
892		-	Nays 4.
893		-	______________________________
894		-	Secretary of the Senate
895		-	I hereby certify that S.B. No. 248 passed the House, with
896		-	amendments, on May 26, 2021, by the following vote: Yeas 97,
897		-	Nays 51, one present not voting; May 28, 2021, House granted
898		-	request of the Senate for appointment of Conference Committee;
899		-	May 30, 2021, House adopted Conference Committee Report by the
900		-	following vote: Yeas 81, Nays 62, two present not voting.
901		-	______________________________
902		-	Chief Clerk of the House
903		-	Approved:
904		-	______________________________
905		-	Date
906		-	______________________________
907		-	Governor