S.B. No. 248
AN ACT
relating to the sale of cigarettes, tobacco products, and
e-cigarettes; requiring occupational permits; imposing fees;
providing civil and administrative penalties; creating criminal
offenses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle G, Title 2, Health and Safety Code, is
amended by adding Chapter 147 to read as follows:
CHAPTER 147. E-CIGARETTE RETAILER PERMITS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 147.0001. DEFINITIONS. In this chapter:
(1) "Commercial business location” means the entire
premises occupied by a permit applicant or a person required to hold
a permit under this chapter.
(2) "E-cigarette" has the meaning assigned by Section
161.081.
(3) "E-cigarette retailer" means a person who engages
in the business of selling e-cigarettes to consumers, including a
person who sells e-cigarettes to consumers through a marketplace.
(4) "Marketplace" has the meaning assigned by Section
151.0242, Tax Code.
(5) "Permit holder" means a person who obtains a
permit under Section 147.0052.
(6) “Place of business” means:
(A) a commercial business location where
e-cigarettes are sold;
(B) a commercial business location where
e-cigarettes are kept for sale or consumption or otherwise stored;
or
(C) a vehicle from which e-cigarettes are sold.
Sec. 147.0002. INAPPLICABILITY TO CERTAIN PRODUCTS. This
chapter does not apply to a product described by Section 161.0815.
Sec. 147.0003. HEARINGS. Unless otherwise provided by this
chapter, the comptroller shall conduct all hearings required by
this chapter in accordance with Chapter 2001, Government Code. The
comptroller may designate one or more representatives to conduct
the hearings and may prescribe the rules of procedure governing the
hearings.
Sec. 147.0004. RULES. The comptroller may adopt rules to
implement this chapter, including rules exempting a person who
sells e-cigarettes to consumers through a marketplace from the
requirements of this chapter.
SUBCHAPTER B. PERMITS
Sec. 147.0051. E-CIGARETTE RETAILER PERMIT REQUIRED. (a)
A person may not engage in business as an e-cigarette retailer in
this state unless the person has been issued a permit from the
comptroller.
(b) An e-cigarette retailer shall obtain a permit for each
place of business owned or operated by the e-cigarette retailer.
The comptroller may not issue a permit for a place of business that
is a residence or a unit in a public storage facility.
(c) The comptroller shall prescribe the form and content of
an application for a permit and provide the form on request.
(d) The applicant shall accurately complete all information
required by the application and provide the comptroller with
additional information the comptroller considers necessary.
(e) Each applicant that applies for a permit to sell
e-cigarettes from a vehicle must provide the make, model, vehicle
identification number, registration number, and any other
information concerning the vehicle the comptroller requires.
(f) All financial information provided under this section
is confidential and not subject to Chapter 552, Government Code.
(g) Permits for engaging in business as an e-cigarette
retailer are governed exclusively by the provisions of this code.
Sec. 147.0052. ISSUANCE OF PERMIT. (a) The comptroller
shall issue a permit to an applicant if the comptroller:
(1) has received an application and fee;
(2) does not reject the application and deny the
permit under Section 147.0053; and
(3) determines that issuing the permit will not
jeopardize the administration and enforcement of this chapter.
(b) The permit shall be issued for a designated place of
business, except as provided by Section 147.0056.
(c) The permits are nonassignable.
(d) The permit must indicate the type of permit and
authorize the sale of e-cigarettes in this state. The permit must
show that it is revocable and shall be forfeited or suspended if the
conditions of issuance, provisions of this chapter, or rules of the
comptroller are violated.
Sec. 147.0053. DENIAL OF PERMIT. The comptroller may
reject an application and deny a permit if the comptroller finds,
after notice and opportunity for hearing, any of the following:
(1) the premises where business will be conducted are
not adequate to protect the e-cigarettes; or
(2) the applicant or managing employee, or if the
applicant is a corporation, an officer, director, manager, or any
stockholder who holds directly or through family or partner
relationship 10 percent or more of the corporation's stock, or, if
the applicant is a partnership, a partner or manager:
(A) has failed to disclose any information
required by Sections 147.0051(d) and (e); or
(B) has previously violated provisions of this
chapter.
Sec. 147.0054. PERMIT PERIOD; FEES. (a) A permit required
by this chapter expires on the last day of May of each even-numbered
year.
(b) An application for a permit required by this chapter
must be accompanied by a fee of:
(1) one-half of the amount of the fee for a retailer's
permit required by Section 154.111(b), Tax Code, if at the time of
application the applicant holds a valid retailer's permit under
Section 154.101, 154.102, or 155.041, Tax Code, for the same place
of business; or
(2) the amount of the fee for a retailer's permit
required by Section 154.111(b), Tax Code.
(c) For a new permit required by Section 147.0051, the
comptroller shall prorate the fee according to the number of months
remaining during the period that the permit is to be in effect.
(d) A person who does not obtain a renewal permit in a timely
manner must pay a late fee of $50 in addition to the application fee
for the permit.
(e) If on the date of issuance a permit will expire within
three months, the comptroller may collect the prorated permit fee
or the fee for the current period and, with the consent of the
permit holder, may collect the fee for the next permit period and
issue a permit or permits for both periods, as applicable.
(f) A person issued a permit for a place of business that
permanently closes before the permit expiration date is not
entitled to a refund of the permit fee.
Sec. 147.0055. PAYMENT FOR PERMITS. (a) An applicant for a
permit required by Section 147.0051 shall send the required fee
with the application.
(b) The payment must be made in cash or by money order,
check, or credit card.
(c) The comptroller may not issue a permit in exchange for a
check until after the comptroller receives full payment on the
check.
Sec. 147.0056. DISPLAY OF PERMIT. (a) A permit holder
shall keep the permit on public display at the place of business for
which the permit was issued.
(b) A permit holder who has a permit assigned to a vehicle
shall post the permit in a conspicuous place on the vehicle.
Sec. 147.0057. REVENUE. Revenue from the sale of
e-cigarette retailer's permits shall be deposited as provided by
Section 161.0903 and may be appropriated only as provided by that
section.
SUBCHAPTER C. PERMIT SUSPENSION AND REVOCATION
Sec. 147.0101. FINAL SUSPENSION OR REVOCATION OF PERMIT.
(a) The comptroller may revoke or suspend a permit holder's permit
if the comptroller finds, after notice and hearing as provided by
this section, that the permit holder violated this chapter or a rule
adopted under this chapter.
(b) If the comptroller intends to suspend or revoke a
permit, the comptroller shall provide the permit holder with
written notice that includes a statement:
(1) of the reason for the intended revocation or
suspension;
(2) that the permit holder is entitled to a hearing by
the comptroller on the proposed suspension or revocation; and
(3) of the date, time, and place of the hearing.
(c) The comptroller shall deliver the written notice by
personal service or by mail to the permit holder's mailing address
as it appears in the comptroller's records. Service by mail is
complete when the notice is deposited with the United States Postal
Service.
(d) The comptroller shall give the permit holder notice
before the 10th day before the final hearing.
(e) A permit holder may appeal the comptroller's decision to
a district court in Travis County not later than the 30th day after
the date the comptroller's decision becomes final.
(f) A person whose permit is suspended or revoked may not
sell, offer for sale, or distribute e-cigarettes from the place of
business to which the permit applied until a new permit is granted
or the suspension is removed.
Sec. 147.0102. SUMMARY SUSPENSION OF PERMIT. (a) The
comptroller may suspend a permit holder's permit without notice or
a hearing for the permit holder's failure to comply with this
chapter or a rule adopted under this chapter if the permit holder's
continued operation constitutes an immediate and substantial
threat.
(b) If the comptroller summarily suspends a permit holder's
permit, proceedings for a preliminary hearing before the
comptroller or the comptroller's representative must be initiated
simultaneously with the summary suspension. The preliminary
hearing shall be set for a date not later than the 10th day after the
date of the summary suspension, unless the parties agree to a later
date.
(c) At the preliminary hearing, the permit holder must show
cause why the permit should not remain suspended pending a final
hearing on suspension or revocation.
(d) Chapter 2001, Government Code, does not apply to a
summary suspension under this section.
(e) To initiate a proceeding to suspend summarily a permit
holder's permit, the comptroller shall serve notice on the permit
holder informing the permit holder of the right to a preliminary
hearing before the comptroller or the comptroller's representative
and of the time and place of the preliminary hearing. The notice
must be personally served on the permit holder or an officer,
employee, or agent of the permit holder or sent by certified or
registered mail, return receipt requested, to the permit holder's
mailing address as it appears in the comptroller's records. The
notice must state the alleged violations that constitute the
grounds for summary suspension. The suspension is effective at the
time the notice is served. If notice is served in person, the
permit holder shall immediately surrender the permit to the
comptroller. If notice is served by mail, the permit holder shall
immediately return the permit to the comptroller.
(f) Section 147.0101, governing hearings for final
suspension or revocation of a permit under this chapter, governs a
final administrative hearing.
SUBCHAPTER D. PENALTIES
Sec. 147.0151. PENALTIES. (a) A person violates this
chapter if the person:
(1) engages in the business of an e-cigarette retailer
without a permit; or
(2) is a person who is subject to a provision of this
chapter or a rule adopted by the comptroller under this chapter and
who violates the provision or rule.
(b) A person who violates this section shall pay to the
state a penalty of not more than $2,000 for each violation.
(c) Each day on which a violation occurs is a separate
violation.
(d) The attorney general shall bring suit to recover
penalties under this section.
(e) A suit under this section may be brought in Travis
County or another county having jurisdiction.
Sec. 147.0152. FAILURE TO HAVE PERMIT; OFFENSE. (a) A
person commits an offense if the person acts as an e-cigarette
retailer and:
(1) receives or possesses e-cigarettes without having
a permit;
(2) receives or possesses e-cigarettes without having
a permit posted where it can be easily seen by the public; or
(3) sells e-cigarettes without having a permit.
(b) An offense under this section is a Class A misdemeanor.
SECTION 2. Sections 161.081(1-a), (2), and (4), Health and
Safety Code, are amended to read as follows:
(1-a) (A) "E-cigarette" means:
(i) an electronic cigarette or any other
device that simulates smoking by using a mechanical heating
element, battery, or electronic circuit to deliver nicotine or
other substances to the individual inhaling from the device; or
(ii) a consumable liquid solution or other
material aerosolized or vaporized during the use of an electronic
cigarette or other device described by this subdivision.
(B) The term "e-cigarette" does not include a
prescription medical device unrelated to the cessation of smoking.
(C) The term "e-cigarette" includes:
(i) [(A)] a device described by this
subdivision regardless of whether the device is manufactured,
distributed, or sold as an e-cigarette, e-cigar, or e-pipe or under
another product name or description; and
(ii) [(B)] a component, part, or accessory
for the device, regardless of whether the component, part, or
accessory is sold separately from the device.
(2) "Permit holder" has the meaning assigned by
Section 147.0001 of this code or Section 154.001 or 155.001, Tax
Code, as applicable.
(4) "Retailer" means a person who engages in the
practice of selling cigarettes, e-cigarettes, or tobacco products
to consumers and includes the owner of a coin-operated cigarette,
e-cigarette, or tobacco product vending machine. The term includes
a retailer as [that term is] defined by Section 154.001 or 155.001,
Tax Code, and an e-cigarette retailer as defined by Section
147.0001 of this code, as applicable.
SECTION 3. Section 161.083(d), Health and Safety Code, is
amended to read as follows:
(d) Notwithstanding any other provision of law, a violation
of this section is not a violation of this subchapter for purposes
of Section 161.0901 [154.1142 or 155.0592, Tax Code].
SECTION 4. Subchapter H, Chapter 161, Health and Safety
Code, is amended by adding Sections 161.0901 and 161.0903 to read as
follows:
Sec. 161.0901. DISCIPLINARY ACTION AGAINST CIGARETTE,
E-CIGARETTE, AND TOBACCO PRODUCT RETAILERS. (a) A retailer is
subject to disciplinary action as provided by this section if an
agent or employee of the retailer commits an offense under this
subchapter.
(b) If the comptroller finds, after notice and an
opportunity for a hearing as provided by Chapter 2001, Government
Code, that a permit holder has violated this subchapter at a place
of business for which a permit is issued, the comptroller may
suspend the permit for that place of business and administratively
assess a fine as follows:
(1) for the first violation of this subchapter during
the 24-month period preceding the violation at that place of
business, the comptroller may require the permit holder to pay a
fine in an amount not to exceed $1,000;
(2) for the second violation of this subchapter during
the 24-month period preceding the most recent violation at that
place of business, the comptroller may require the permit holder to
pay a fine in an amount not to exceed $2,000; and
(3) for the third violation of this subchapter during
the 24-month period preceding the most recent violation at that
place of business, the comptroller may:
(A) require the permit holder to pay a fine in an
amount not to exceed $3,000; and
(B) suspend the permit for that place of business
for not more than five days.
(c) Except as provided by Subsection (e), for the fourth or
a subsequent violation of this subchapter during the 24-month
period preceding the most recent violation at that place of
business, the comptroller shall revoke the permit issued under
Chapter 147 of this code or Chapter 154 or 155, Tax Code, as
applicable. If the permit holder does not hold a permit under
Chapter 147 of this code or Chapter 154 or 155, Tax Code, the
comptroller shall revoke the permit issued under Section 151.201,
Tax Code.
(d) A permit holder whose permit has been revoked under this
section may not apply for a permit for the same place of business
before the expiration of six months after the effective date of the
revocation.
(e) For purposes of this section, the comptroller may
suspend a permit for a place of business but may not revoke the
permit under Subsection (c) if the comptroller finds that:
(1) the permit holder has not violated this subchapter
more than seven times at the place of business in the 48-month
period preceding the violation in question;
(2) the permit holder requires its employees to attend
a comptroller-approved seller training program;
(3) the employees have actually attended a
comptroller-approved seller training program; and
(4) the permit holder has not directly or indirectly
encouraged the employees to violate the law.
(f) The comptroller may adopt rules to implement this
section.
Sec. 161.0903. USE OF CERTAIN REVENUE. Revenue from fees
collected under Section 161.123 and from the sale of permits under
Chapter 147 of this code, retailer permits under Chapter 154, Tax
Code, and retailer permits under Chapter 155, Tax Code, shall be
deposited in the general revenue fund and may be appropriated only
as provided by this section. The revenue shall be appropriated, in
order of priority, to:
(1) the comptroller for the purpose of administering
retailer permitting under Chapter 147 of this code and Chapters 154
and 155, Tax Code; and
(2) the comptroller for the purpose of administering
and enforcing this subchapter and Subchapters K and N.
SECTION 5. Section 161.123(b), Health and Safety Code, is
amended to read as follows:
(b) The comptroller shall collect the fee [and deposit the
money] as provided in this section.
SECTION 6. Section 111.00455(b), Tax Code, is amended to
read as follows:
(b) The following are not contested cases under Subsection
(a) and Section 2003.101, Government Code:
(1) a show cause hearing or any hearing not related to
the collection, receipt, administration, or enforcement of the
amount of a tax or fee imposed, or the penalty or interest
associated with that amount, except for a hearing under Section
151.157(f), 151.1575(c), or 151.712(g) of this code or Section
161.0901, Health and Safety Code[, 154.1142, or 155.0592];
(2) a property value study hearing under Subchapter M,
Chapter 403, Government Code;
(3) a hearing in which the issue relates to:
(A) Chapters 72-75, Property Code;
(B) forfeiture of a right to do business;
(C) a certificate of authority;
(D) articles of incorporation;
(E) a penalty imposed under Section 151.703(d);
(F) the refusal or failure to settle under
Section 111.101; or
(G) a request for or revocation of an exemption
from taxation; and
(4) any other hearing not related to the collection,
receipt, administration, or enforcement of the amount of a tax or
fee imposed, or the penalty or interest associated with that
amount.
SECTION 7. Section 154.001, Tax Code, is amended by
amending Subdivisions (9), (14), and (19) and adding Subdivisions
(11-a) and (11-b) to read as follows:
(9) "First sale" means, except as otherwise provided
by this chapter:
(A) the first transfer of possession in
connection with a purchase, sale, or any exchange for value of
cigarettes in or into this state, which:
(i) includes the sale of cigarettes by:
(a) a distributor in or outside this
state to a distributor, wholesaler, or retailer in this state; and
(b) a manufacturer in this state who
transfers the cigarettes in this state; and
(ii) does not include:
(a) the sale of cigarettes by a
manufacturer outside this state to a distributor in this state;
[or]
(b) the transfer of cigarettes from a
manufacturer outside this state to a bonded agent in this state;
(c) the sale of cigarettes by a
manufacturer, bonded agent, distributor, or importer to an
interstate warehouse in this state; or
(d) the transfer of cigarettes by an
interstate warehouse in an interstate warehouse transaction;
(B) the first use or consumption of cigarettes in
this state; or
(C) the loss of cigarettes in this state whether
through negligence, theft, or other unaccountable loss.
(11-a) "Interstate warehouse" means a person in this
state who receives unstamped cigarettes from a manufacturer, bonded
agent, distributor, or importer and stores the cigarettes
exclusively for an interstate warehouse transaction.
(11-b) "Interstate warehouse transaction" means the
sale or delivery of cigarettes from an interstate warehouse to a
person located in another state who is licensed or permitted by the
other state to affix that state's cigarette stamps or otherwise pay
the state's excise tax on cigarettes as required.
(14) "Permit holder" means a bonded agent, interstate
warehouse, distributor, wholesaler, manufacturer, importer, export
warehouse, or retailer who obtains a permit under Section 154.101.
(19) "Wholesaler" means a person, including a
manufacturer's representative, who sells or distributes cigarettes
in this state for resale but who is not a distributor or interstate
warehouse.
SECTION 8. Section 154.041, Tax Code, is amended by adding
Subsection (f) to read as follows:
(f) No stamp is required on the transfer of possession of
cigarettes described by Section 154.001(9)(A)(ii)(d).
SECTION 9. Section 154.101, Tax Code, is amended by
amending Subsections (a), (b), and (h) and adding Subsection (k) to
read as follows:
(a) A person may not engage in business as a distributor,
wholesaler, bonded agent, interstate warehouse, manufacturer,
export warehouse, importer, or retailer unless the person has
applied for and received the applicable permit from the
comptroller.
(b) Each distributor, wholesaler, bonded agent, interstate
warehouse, manufacturer, export warehouse, importer, or retailer
shall obtain a permit for each place of business owned or operated
by the distributor, wholesaler, bonded agent, interstate
warehouse, manufacturer, export warehouse, importer, or
retailer. The comptroller may not issue a permit for a place of
business that is a residence or a unit in a public storage facility.
(h) Permits for engaging in business as a distributor,
wholesaler, bonded agent, interstate warehouse, manufacturer,
export warehouse, importer, or retailer shall be governed
exclusively by the provisions of this code.
(k) A person may not hold a distributor's permit issued by
this state and an interstate warehouse's permit for the same
location.
SECTION 10. Section 154.1015, Tax Code, is amended by
amending Subsections (c), (d), and (e) and adding Subsection (j) to
read as follows:
(c) A manufacturer outside this state who is not a permitted
distributor may sell cigarettes only to a permitted distributor or
permitted interstate warehouse.
(d) A permitted distributor may sell cigarettes only to a
permitted distributor, wholesaler, or retailer. A permitted
distributor who manufactures or produces cigarettes in this state
may sell those cigarettes to a permitted interstate warehouse.
(e) A permitted importer may sell cigarettes only to a
permitted interstate warehouse, distributor, wholesaler, or
retailer.
(j) A permitted interstate warehouse may sell cigarettes
only in an interstate warehouse transaction. An interstate
warehouse may not make an intrastate sale of cigarettes without
written authorization by the comptroller.
SECTION 11. Section 154.102(a), Tax Code, is amended to
read as follows:
(a) The comptroller may issue a combination permit for
cigarettes and tobacco products to a person who is a distributor,
wholesaler, bonded agent, interstate warehouse, manufacturer,
importer, or retailer as defined by this chapter and Chapter 155 for
both cigarettes and tobacco products. An interstate warehouse may
not hold a combination permit as a retailer of cigarettes or tobacco
products.
SECTION 12. Sections 154.110(a) and (d), Tax Code, are
amended to read as follows:
(a) The comptroller shall issue a permit to a distributor,
wholesaler, bonded agent, interstate warehouse, manufacturer,
export warehouse, importer, or retailer if the comptroller:
(1) has received an application and fee, if required;
(2) believes that the applicant has complied with
Section 154.101; and
(3) determines that issuing the permit will not
jeopardize the administration and enforcement of this chapter.
(d) The permit must indicate the type of permit that it is
and authorize the sale of cigarettes in this state, except as
provided by Section 154.1015(j). The permit must show that it is
revocable and shall be forfeited or suspended if the conditions of
issuance, provisions of this chapter, or rules of the comptroller
are violated.
SECTION 13. Section 154.111(b), Tax Code, is amended to
read as follows:
(b) An application for a permit required by this chapter
must be accompanied by a fee of:
(1) $300 for a bonded agent's permit;
(1-a) $300 for an interstate warehouse's permit;
(2) $300 for a distributor's permit;
(3) $200 for a wholesaler's permit;
(4) $15 for each permit for a vehicle if the applicant
is also applying for a permit as a bonded agent, distributor, or
wholesaler or has received a current permit from the comptroller
under Sections 154.101 and 154.110; and
(5) $180 for a retailer's permit.
SECTION 14. Section 154.1135(b), Tax Code, is amended to
read as follows:
(b) The payment must be made in cash or by money order, [or]
check, or credit card.
SECTION 15. Sections 154.121(a) and (b), Tax Code, are
amended to read as follows:
(a) Except as provided by Subsection (b), revenue from the
sale of permits to distributors, wholesalers, [and] bonded agents,
and interstate warehouses is allocated in the same manner as other
revenue allocated by Subchapter J.
(b) Revenue from the sale of retailer's permits shall be
deposited as provided by Section 161.0903, Health and Safety Code,
[to the general revenue fund] and may be appropriated only as
provided by that [this] section. [The money may be appropriated
first to the comptroller for administration of licensing of
retailers under this chapter or Chapter 155.]
SECTION 16. Section 154.152(c), Tax Code, is amended to
read as follows:
(c) A person may not transport or cause to be transported
from this state cigarettes for sale in another state without first
affixing to the cigarettes the stamp required by the state in which
the cigarettes are to be sold or paying any other excise tax on the
cigarettes imposed by the state in which the cigarettes are to be
sold. This subsection does not apply to the distribution, sale, or
transportation of cigarettes sold by an interstate warehouse in an
interstate warehouse transaction.
SECTION 17. Section 154.201, Tax Code, is amended to read as
follows:
Sec. 154.201. RECORD OF PURCHASE OR RECEIPT. Each
distributor, wholesaler, bonded agent, interstate warehouse, and
export warehouse shall keep records at each place of business of all
cigarettes purchased or received, including records of those
cigarettes for which no tax is due under federal law. Each
retailer shall keep records at a single commercial business
location, which the retailer shall designate as its principal place
of business in this state, of all cigarettes purchased and
received. These records must include:
(1) the name and address of the shipper or carrier and
the mode of transportation;
(2) all shipping records or copies of records,
including invoices, bills of lading, waybills, freight bills, and
express receipts;
(3) the date and the name of the place of origin of the
cigarette shipment;
(4) the date and the name of the place of arrival of
the cigarette shipment;
(5) a statement of the number, kind, and price paid for
cigarettes, including cigarettes in stamped and unstamped
packages;
(6) the name, address, permit number, and tax
identification number of the seller;
(7) in the case of a distributor, copies of the customs
certificates required by 19 U.S.C. Section 1681a(c), as amended,
for all cigarettes imported into the United States to which the
distributor has affixed a tax stamp; and
(8) any other information required by rules of the
comptroller.
SECTION 18. Section 154.203, Tax Code, is amended by
amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) Each interstate warehouse, distributor, and wholesaler
shall keep at each place of business in this state records of each
sale, distribution, exchange, or use of cigarettes whether taxed
under this chapter or not. Each interstate warehouse, distributor,
and wholesaler shall prepare and retain an original invoice for
each transaction involving cigarettes. Each interstate warehouse,
distributor, or wholesaler shall keep any supporting
documentation, including bills of lading, showing shipment and
receipt used in preparing the invoices at the place of business of
the interstate warehouse, distributor, or wholesaler. The
interstate warehouse, distributor, or wholesaler shall prepare and
deliver a duplicate invoice to the purchaser.
(c) On request by the comptroller, an interstate warehouse
shall provide to the comptroller copies of periodic cigarette
reports filed with each state into which the interstate warehouse
sells cigarettes and copies of each report required under 15 U.S.C.
Section 376.
SECTION 19. Section 154.501(a), Tax Code, is amended to
read as follows:
(a) A person violates this chapter if the person:
(1) is a distributor, wholesaler, manufacturer,
export warehouse, importer, bonded agent, interstate warehouse,
manufacturer's representative, or retailer and fails to keep
records required by this chapter;
(2) engages in the business of a bonded agent,
interstate warehouse, distributor, wholesaler, manufacturer,
export warehouse, importer, or retailer without a valid permit;
(3) is a distributor, wholesaler, manufacturer,
export warehouse, importer, bonded agent, interstate warehouse, or
retailer and fails to make a report or makes a false or incomplete
report or application required by this chapter to the comptroller;
or
(4) is a person affected by this chapter and fails or
refuses to abide by or violates a provision of this chapter or a
rule adopted by the comptroller under this chapter.
SECTION 20. Section 154.503(a), Tax Code, is amended to
read as follows:
(a) Except as provided by Sections 154.026(b), 154.041(f),
and 154.042, a person commits an offense if the person possesses
unstamped cigarettes in quantities less than 10,000.
SECTION 21. Section 154.509, Tax Code, is amended to read as
follows:
Sec. 154.509. PERMITS. A person commits an offense if the
person acting:
(1) as a distributor, interstate warehouse,
wholesaler, or retailer, receives or possesses cigarettes without
having a valid permit;
(2) as a distributor, interstate warehouse,
wholesaler, or retailer, receives or possesses cigarettes without
having a permit posted where it can be easily seen by the public;
(3) as a distributor, interstate warehouse, or
wholesaler, does not deliver an invoice to the purchaser as
required by Section 154.203;
(4) as a distributor, interstate warehouse,
wholesaler, or retailer, sells cigarettes without having a valid
permit; or
(5) as a bonded agent, interstate warehouse, or export
warehouse, stores, distributes, or delivers cigarettes in
unstamped packages without having a valid permit, except as
provided by Section 154.041(f).
SECTION 22. Section 154.511, Tax Code, is amended to read as
follows:
Sec. 154.511. TRANSPORTATION OF CIGARETTES. A person,
other than a common carrier, commits an offense if the person:
(1) knowingly transports cigarettes without a stamp
affixed to each individual package, except as provided by Section
154.024(a) or 154.152(c);
(2) wilfully refuses to stop a motor vehicle operated
to transport cigarettes after a request to stop from an authorized
person; or
(3) while transporting cigarettes refuses to permit a
complete inspection of the cargo by an authorized person.
SECTION 23. Section 154.515(a), Tax Code, is amended to
read as follows:
(a) Except as provided by Sections 154.026(b), 154.041(f),
and 154.042, a person commits an offense if the person possesses
unstamped cigarettes in quantities of 10,000 or more.
SECTION 24. Section 155.001, Tax Code, is amended by
amending Subdivisions (8), (12), and (16) and adding Subdivisions
(9-a) and (9-b) to read as follows:
(8) "First sale" means, except as otherwise provided
by this chapter:
(A) the first transfer of possession in
connection with a purchase, sale, or any exchange for value of
tobacco products in or into this state, which:
(i) includes the sale of tobacco products
by:
(a) a distributor in or outside this
state to a distributor, wholesaler, or retailer in this state; and
(b) a manufacturer in this state who
transfers the tobacco products in this state; and
(ii) does not include:
(a) the sale of tobacco products by a
manufacturer outside this state to a distributor in this state;
[or]
(b) the transfer of tobacco products
from a manufacturer outside this state to a bonded agent in this
state; or
(c) the sale of tobacco products by a
manufacturer, bonded agent, distributor, or importer to an
interstate warehouse in this state;
(B) the first use or consumption of tobacco
products in this state; or
(C) the loss of tobacco products in this state
whether through negligence, theft, or other unaccountable loss.
(9-a) "Interstate warehouse" means a person in this
state who receives untaxed tobacco products from a manufacturer,
bonded agent, distributor, or importer and stores the tobacco
products exclusively for an interstate warehouse transaction.
(9-b) "Interstate warehouse transaction" means the
sale or delivery of tobacco products from an interstate warehouse
to a person located in another state who is licensed or permitted by
the other state to pay the state's excise tax on tobacco products as
required.
(12) "Permit holder" means a bonded agent, interstate
warehouse, distributor, wholesaler, manufacturer, importer, export
warehouse, or retailer who obtains a permit under Section 155.041.
(16) "Wholesaler" means a person, including a
manufacturer's representative, who sells or distributes tobacco
products in this state for resale but who is not a distributor or
interstate warehouse.
SECTION 25. Section 155.041, Tax Code, is amended by
amending Subsections (a), (b), and (h) and adding Subsection (i) to
read as follows:
(a) A person may not engage in business as a distributor,
wholesaler, bonded agent, interstate warehouse, manufacturer,
export warehouse, importer, or retailer unless the person has
applied for and received the applicable permit from the
comptroller.
(b) Each distributor, wholesaler, bonded agent, interstate
warehouse, manufacturer, export warehouse, importer, or retailer
shall obtain a permit for each place of business owned or operated
by the distributor, wholesaler, bonded agent, interstate
warehouse, manufacturer, export warehouse, importer, or retailer.
(h) Permits for engaging in business as a distributor,
wholesaler, bonded agent, interstate warehouse, manufacturer,
export warehouse, importer, or retailer shall be governed
exclusively by the provisions of this code.
(i) A person may not hold a distributor's permit issued by
this state and an interstate warehouse's permit for the same
location.
SECTION 26. Section 155.0415, Tax Code, is amended by
amending Subsections (c), (d), (e), and (f) and adding Subsection
(j) to read as follows:
(c) A manufacturer outside this state who is not a permitted
distributor may sell tobacco products only to a permitted
distributor or a permitted interstate warehouse.
(d) A permitted distributor may sell tobacco products only
to a permitted distributor, wholesaler, or retailer. A permitted
distributor who manufactures or produces tobacco products in this
state may sell those tobacco products to a permitted interstate
warehouse.
(e) A permitted importer may sell tobacco products only to a
permitted interstate warehouse, distributor, wholesaler, or
retailer.
(f) A permitted wholesaler may sell tobacco products only to
a permitted interstate warehouse, distributor, wholesaler, or
retailer.
(j) A permitted interstate warehouse may sell tobacco
products only in an interstate warehouse transaction. An
interstate warehouse may not make an intrastate sale of tobacco
products without written authorization by the comptroller.
SECTION 27. Sections 155.048(a) and (d), Tax Code, are
amended to read as follows:
(a) The comptroller shall issue a permit to a distributor,
wholesaler, bonded agent, interstate warehouse, manufacturer,
importer, or retailer if the comptroller:
(1) has received an application and fee, if required;
(2) does not reject the application and deny the
permit under Section 155.0481; and
(3) determines that issuing the permit will not
jeopardize the administration and enforcement of this chapter.
(d) The permit must indicate the type of permit that it is
and authorize the sale of tobacco products in this state, except as
provided by Section 155.0415(j). The permit must show that it is
revocable and shall be forfeited or suspended if the conditions of
issuance, provisions of this chapter, or rules of the comptroller
are violated.
SECTION 28. Section 155.049(b), Tax Code, is amended to
read as follows:
(b) An application for a permit required by this chapter
must be accompanied by a fee of:
(1) $300 for a bonded agent's permit;
(1-a) $300 for an interstate warehouse's permit;
(2) $300 for a distributor's permit;
(3) $200 for a wholesaler's permit;
(4) $15 for each permit for a vehicle if the applicant
is also applying for a permit as a bonded agent, distributor, or
wholesaler or has received a current permit from the comptroller
under Sections 155.041 and 155.048; and
(5) $180 for a retailer's permit.
SECTION 29. Section 155.050(b), Tax Code, is amended to
read as follows:
(b) The payment must be made in cash or by money order, [or]
check, or credit card.
SECTION 30. Sections 155.058(a) and (b), Tax Code, are
amended to read as follows:
(a) Except as provided by Subsection (b), revenue from the
sale of permits to distributors, wholesalers, [and] bonded agents,
and interstate warehouses is allocated in the same manner that
other revenue is allocated by Subchapter H.
(b) Revenue from the sale of retailer's permits shall be
deposited as provided by Section 161.0903, Health and Safety Code,
[to the general revenue fund] and may be appropriated only as
provided by that [this] section. [The money may be appropriated
first to the comptroller for administration of licensing of
retailers under this chapter or Chapter 154.]
SECTION 31. Section 155.101, Tax Code, is amended to read as
follows:
Sec. 155.101. RECORD OF PURCHASE OR RECEIPT. Each
distributor, wholesaler, bonded agent, interstate warehouse, and
export warehouse shall keep records at each place of business of all
tobacco products purchased or received. Each retailer shall keep
records at a single commercial business location, which the
retailer shall designate as its principal place of business in the
state, of all tobacco products purchased and received. These
records must include [the following, except that Subdivision (7)
applies to distributors only and Subdivision (8) applies only to
the purchase or receipt of tobacco products other than cigars]:
(1) the name and address of the shipper or carrier and
the mode of transportation;
(2) all shipping records or copies of records,
including invoices, bills of lading, waybills, freight bills, and
express receipts;
(3) the date and the name of the place of origin of the
tobacco product shipment;
(4) the date and the name of the place of arrival of
the tobacco product shipment;
(5) a statement of the number, kind, and price paid for
the tobacco products;
(6) the name, address, permit number, and tax
identification number of the seller;
(7) in the case of a distributor, the manufacturer's
list price for the tobacco products;
(8) for tobacco products other than cigars, the net
weight as listed by the manufacturer for each unit; and
(9) any other information required by rules of the
comptroller.
SECTION 32. Section 155.102, Tax Code, is amended by
amending Subsections (a) and (b) and adding Subsection (d) to read
as follows:
(a) Each interstate warehouse, distributor, and wholesaler
shall keep at each place of business in this state records of each
sale, distribution, exchange, or use of tobacco products whether
taxed under this chapter or not. Each interstate warehouse,
distributor, and wholesaler shall prepare and retain an original
invoice for each transaction involving tobacco products. Each
interstate warehouse, distributor, or wholesaler shall keep any
supporting documentation, including bills of lading, showing
shipment and receipt used in preparing the invoices at the place of
business of the interstate warehouse, distributor, or wholesaler.
The interstate warehouse, distributor, or wholesaler shall prepare
and deliver a duplicate invoice to the purchaser.
(b) The records for each sale, distribution, exchange, or
use of tobacco products must show:
(1) the purchaser's name and address, permit number,
or tax identification number;
(2) the method of delivery and the name of the common
carrier or other person delivering the tobacco products;
(3) the date, amount, and type of tobacco products
sold, distributed, exchanged, or used;
(4) the price received for the tobacco products;
(5) the number and kind of tobacco products on which
the tax has been paid; and
(6) for sales from a manufacturer to a distributor or
interstate warehouse, the manufacturer's list price for the tobacco
products.
(d) On request by the comptroller, an interstate warehouse
shall provide to the comptroller copies of periodic tobacco product
reports filed with each state into which the interstate warehouse
sells tobacco products and copies of each report required under 15
U.S.C. Section 376.
SECTION 33. Section 155.201(a), Tax Code, is amended to
read as follows:
(a) A person violates this chapter if the person:
(1) is a distributor, wholesaler, manufacturer,
export warehouse, importer, bonded agent, interstate warehouse,
manufacturer's representative, or retailer and fails to keep
records required by this chapter;
(2) engages in the business of a bonded agent,
interstate warehouse, distributor, wholesaler, manufacturer,
export warehouse, importer, or retailer without a valid permit;
(3) is a distributor, wholesaler, manufacturer,
export warehouse, importer, bonded agent, interstate warehouse, or
retailer and fails to make a report required by this chapter to the
comptroller or makes a false or incomplete report or application
required by this chapter to the comptroller; or
(4) is a person affected by this chapter and fails or
refuses to abide by or violates a provision of this chapter or a
rule adopted by the comptroller under this chapter.
SECTION 34. Section 155.207, Tax Code, is amended to read as
follows:
Sec. 155.207. PERMITS. A person commits an offense if the
person acting:
(1) as a distributor, interstate warehouse,
wholesaler, or retailer, receives or possesses tobacco products
without having a valid permit;
(2) as a distributor, interstate warehouse,
wholesaler, or retailer, receives or possesses tobacco products
without having a permit posted where it can be easily seen by the
public;
(3) as a distributor, interstate warehouse, or
wholesaler, does not deliver an invoice to the purchaser as
required by Section 155.102;
(4) as a distributor, interstate warehouse,
wholesaler, or retailer, sells tobacco products without having a
valid permit; or
(5) as a bonded agent, interstate warehouse, or
export warehouse, stores, distributes, or delivers tobacco
products on which the tax has not been paid without having a valid
permit.
SECTION 35. (a) Section 161.124, Health and Safety Code, is
repealed.
(b) The following provisions of the Tax Code are repealed:
(1) Section 154.1142;
(2) Section 154.1143;
(3) Sections 154.121(c), (d), and (e);
(4) Sections 155.058(c), (d), and (e);
(5) Section 155.0592; and
(6) Section 155.0593.
SECTION 36. Section 161.0901, Health and Safety Code, as
added by this Act, applies only to a violation that occurs on or
after the effective date of this Act. A violation that occurs
before the effective date of this Act is governed by the law in
effect on the date the violation occurred, and the former law is
continued in effect for that purpose.
SECTION 37. (a) Notwithstanding Sections 147.0051,
147.0151, and 147.0152, Health and Safety Code, as added by this
Act, a person is not required to hold a permit under Section
147.0051 to engage in business as a retailer of e-cigarettes in this
state until January 1, 2022.
(b) The comptroller of public accounts shall prescribe the
form and content of an application for a permit under Section
147.0051, Health and Safety Code, as added by this Act, and begin
accepting applications for the permit not later than October 1,
2021.
SECTION 38. This Act takes effect September 1, 2021.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 248 passed the Senate on
April 8, 2021, by the following vote: Yeas 27, Nays 3;
May 28, 2021, Senate refused to concur in House amendments and
requested appointment of Conference Committee; May 28, 2021, House
granted request of the Senate; May 30, 2021, Senate adopted
Conference Committee Report by the following vote: Yeas 27,
Nays 4.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 248 passed the House, with
amendments, on May 26, 2021, by the following vote: Yeas 97,
Nays 51, one present not voting; May 28, 2021, House granted
request of the Senate for appointment of Conference Committee;
May 30, 2021, House adopted Conference Committee Report by the
following vote: Yeas 81, Nays 62, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor