AN ACT

 1-1     relating to the regulation of the sale, distribution, and use of

 1-2     tobacco products; providing penalties.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4         ARTICLE 1.  DISTRIBUTION OF CIGARETTES OR TOBACCO PRODUCTS

 1-5           SECTION 1.01.  Subchapter H, Chapter 161, Health and Safety

 1-6     Code, is amended to read as follows:

 1-7         SUBCHAPTER H.  DISTRIBUTION [SALE] OF CIGARETTES OR TOBACCO

 1-8                            PRODUCTS [TO MINORS]

 1-9           Sec. 161.081.  DEFINITIONS.  In this subchapter:

1-10                 (1)  "Cigarette" has the meaning assigned by Section

1-11     154.001, Tax Code.

1-12                 (2)  "Permit holder" has the meaning assigned by

1-13     Section 154.001 or 155.001, Tax Code, as applicable.

1-14                 (3)  "Retail sale" means a transfer of possession from

1-15     a retailer to a consumer in connection with a purchase, sale, or

1-16     exchange for value of cigarettes or tobacco products.

1-17                 (4)  "Retailer" has the meaning assigned by Section

1-18     154.001 or 155.001, Tax Code, as applicable.

1-19                 (5)  "Tobacco product" has the meaning assigned by

1-20     Section 155.001, Tax Code.

1-21                 (6)  "Wholesaler" has the meaning assigned by Section

1-22     154.001 or 155.001, Tax Code, as applicable.

1-23           Sec. 161.082.  SALE OF CIGARETTES OR TOBACCO PRODUCTS TO

 2-1     PERSONS YOUNGER THAN 18 YEARS OF AGE [MINORS] PROHIBITED; PROOF OF

 2-2     AGE REQUIRED.  (a)  A person commits an offense if the person, with

 2-3     criminal negligence [as a commercial enterprise]:

 2-4                 (1)  sells, gives, or causes to be sold or given a

 2-5     cigarette or [other] tobacco product to someone who [the person

 2-6     knows] is younger than 18 years of age; or

 2-7                 (2)  sells, gives, or causes to be sold or given a

 2-8     cigarette or [other] tobacco product to another person who[,

 2-9     knowing that the person receiving the cigarette or other tobacco

2-10     product] intends to deliver it to someone who is younger than 18

2-11     years of age.

2-12           (b)  If an offense under this section occurs in connection

2-13     with a sale by an employee of the owner of a store in which

2-14     cigarettes or tobacco products are sold at retail, the employee is

2-15     criminally responsible for the offense and is subject to

2-16     prosecution.

2-17           (c)  An offense under this section is a Class C misdemeanor.

2-18           (d) [(c)]  It is a defense to prosecution under Subsection

2-19     (a)(1) [this section] that the person to whom the cigarette or

2-20     [other] tobacco product was sold or given presented to the

2-21     defendant [an] apparently valid proof of [Texas driver's license or

2-22     an] identification.

2-23           (e)  A proof of identification satisfies the requirements of

2-24     Subsection (d) if it contains [card, issued by the Department of

2-25     Public Safety and containing] a physical description and photograph

 3-1     consistent with the person's appearance, purports [that purported]

 3-2     to establish that the person is [was] 18 years of age or older, and

 3-3     was issued by a governmental agency.  The proof of identification

 3-4     may include a driver's license issued by this state or another

 3-5     state, a passport, or an identification card issued by a state or

 3-6     the federal government.

 3-7           Sec. 161.083.  SALE OF CIGARETTES OR TOBACCO PRODUCTS TO

 3-8     PERSONS YOUNGER THAN 27 YEARS OF AGE.  (a)  Pursuant to federal

 3-9     regulation under 21 C.F.R. Section 897.14(b), a person may not

3-10     sell, give, or cause to be sold or given a cigarette or tobacco

3-11     product to someone who is younger than 27 years of age unless the

3-12     person to whom the cigarette or tobacco product was sold or given

3-13     presents an apparently valid proof of identification.

3-14           (b)  A retailer shall adequately supervise and train the

3-15     retailer's agents and employees to prevent a violation of

3-16     Subsection (a).

3-17           (c)  A proof of identification described by Section

3-18     161.082(e) satisfies the requirements of Subsection (a).

3-19           (d)  Notwithstanding any other provision of law, a violation

3-20     of this section is not a violation of this subchapter for purposes

3-21     of Section 154.1142 or 155.0592, Tax Code.

3-22           Sec. 161.084 [161.082].  WARNING NOTICE.  (a)  Each person

3-23     who sells cigarettes or tobacco products at retail or by vending

3-24     machine shall post a sign in a location that is conspicuous to all

3-25     employees and customers and that is close to the place at which the

 4-1     cigarettes or tobacco products may be purchased.

 4-2           (b)  The sign must include the statement:

 4-3                 PURCHASING OR ATTEMPTING TO PURCHASE

 4-4                 TOBACCO PRODUCTS BY A MINOR UNDER 18 YEARS

 4-5                 OF AGE IS PROHIBITED BY LAW.  SALE OR

 4-6                 PROVISION OF TOBACCO PRODUCTS TO A MINOR

 4-7                 UNDER 18 YEARS OF AGE IS PROHIBITED BY LAW.

 4-8                 UPON CONVICTION, A CLASS C MISDEMEANOR,

 4-9                 INCLUDING A [MAXIMUM] FINE OF UP TO $500,

4-10                 [$200] MAY BE IMPOSED.  VIOLATIONS MAY BE

4-11                 REPORTED TO THE TEXAS COMPTROLLER'S OFFICE

4-12                 BY CALLING (insert toll-free telephone

4-13                 number).

4-14           (c)  The comptroller [board] by rule shall determine the

4-15     design and size of the sign.

4-16           (d)  The comptroller [department] on request shall provide

4-17     the sign without charge to any person who sells cigarettes or

4-18     tobacco [cigarette] products.  The comptroller [department] may

4-19     provide the sign without charge to [cigarette] distributors of

4-20     cigarettes or tobacco products or wholesale dealers of cigarettes

4-21     or tobacco [cigarette] products in this state for distribution to

4-22     persons who sell cigarettes or tobacco [cigarette] products.  A

4-23     distributor or wholesale dealer may not charge for distributing a

4-24     sign under this subsection.

4-25           (e)  A person commits an offense if the person intentionally

 5-1     fails to display a sign as prescribed by this section.  An offense

 5-2     under this subsection is a Class C misdemeanor.

 5-3           Sec. 161.085.  NOTIFICATION OF EMPLOYEES AND AGENTS.

 5-4     (a)  Each permit holder shall notify each individual employed by

 5-5     that permit holder who is to be engaged in retail sales of

 5-6     cigarettes or tobacco products that state law:

 5-7                 (1)  prohibits the sale or distribution of cigarettes

 5-8     or tobacco products to any person who is younger than 18 years of

 5-9     age as provided by Section 161.082 and that a violation of that

5-10     section is a Class C misdemeanor; and

5-11                 (2)  requires each person who sells cigarettes or

5-12     tobacco products at retail or by vending machine to post a warning

5-13     notice as provided by Section 161.084, requires each employee to

5-14     ensure that the appropriate sign is always properly displayed while

5-15     that employee is exercising the employee's duties, and provides

5-16     that an intentional violation of Section 161.084 is a Class C

5-17     misdemeanor.

5-18           (b)  The notice required by Subsection (a) must be provided

5-19     within 72 hours of the date an individual begins to engage in

5-20     retail sales of tobacco products.  The individual shall signify

5-21     that the individual has received the notice required by Subsection

5-22     (a) by signing a form stating that the law has been fully

5-23     explained, that the individual understands the law, and that the

5-24     individual, as a condition of employment, agrees to comply with the

5-25     law.

 6-1           (c)  Each form signed by an individual under this section

 6-2     shall indicate the date of the signature and the current address

 6-3     and social security number of the individual.  The permit holder

 6-4     shall retain the form signed by each individual employed as a

 6-5     retail sales clerk until the 60th day after the date the individual

 6-6     has left the employer's employ.

 6-7           (d)  A permit holder required by this section to notify

 6-8     employees commits an offense if the permit holder fails, on demand

 6-9     of a peace officer or an agent of the comptroller, to provide the

6-10     notice prescribed by this section.  An offense under this section

6-11     is a Class C misdemeanor.

6-12           (e)  It is a defense to prosecution under Subsection (d) to

6-13     show proof that the employee did complete, sign, and date the

6-14     notice required by Subsection (a).  Proof must be shown to the

6-15     comptroller or an agent of the comptroller within 72 hours of the

6-16     offense.

6-17           Sec. 161.086.  VENDOR ASSISTED SALES REQUIRED; VENDING

6-18     MACHINES.  (a)  Except as provided by Subsection (b), a retailer or

6-19     other person may not:

6-20                 (1)  offer cigarettes or tobacco products for sale in a

6-21     manner that permits a customer direct access to the cigarettes or

6-22     tobacco products; or

6-23                 (2)  install or maintain a vending machine containing

6-24     cigarettes or tobacco products.

6-25           (b)  Subsection (a) does not apply to:

 7-1                 (1)  a facility or business that is not open to persons

 7-2     younger than 18 years of age at any time; or

 7-3                 (2)  that part of a facility or business that is a

 7-4     humidor or other enclosure designed to store cigars in a

 7-5     climate-controlled environment.

 7-6           (c)  The comptroller or a peace officer may, with or without

 7-7     a warrant, seize, seal, or disable a vending machine installed or

 7-8     maintained in violation of this section.  Property seized under

 7-9     this subsection must be seized in accordance with, and is subject

7-10     to forfeiture to the state in accordance with, Subchapter H,

7-11     Chapter 154, Tax Code, and Subchapter E, Chapter 155, Tax Code.

7-12           (d)  A person commits an offense if the person violates

7-13     Subsection (a).  An offense under this subsection is a Class C

7-14     misdemeanor.

7-15           Sec. 161.087.  DISTRIBUTION OF CIGARETTES OR TOBACCO

7-16     PRODUCTS.  (a)  A person may not distribute to persons younger than

7-17     18 years of age:

7-18                 (1)  a free sample of a cigarette or tobacco product;

7-19     or

7-20                 (2)  a coupon or other item that the recipient may use

7-21     to receive a free or discounted cigarette or tobacco product or a

7-22     sample cigarette or tobacco product.

7-23           (b)  Except as provided by Subsection (c), a permit holder

7-24     may not accept or redeem, offer to accept or redeem, or hire a

7-25     person to accept or redeem a coupon or other item that the

 8-1     recipient may use to receive a free or discounted cigarette or

 8-2     tobacco product or a sample cigarette or tobacco product if the

 8-3     recipient is younger than 18 years of age.  A coupon or other item

 8-4     that such a recipient may use to receive a free or discounted

 8-5     cigarette or tobacco product or a sample cigarette or tobacco

 8-6     product may not be redeemable through mail or courier delivery.

 8-7           (c)  Subsections (a)(2) and (b) do not apply to a transaction

 8-8     between permit holders unless the transaction is a retail sale.

 8-9           (d)  A person commits an offense if the person violates this

8-10     section.  An offense under this subsection is a Class C

8-11     misdemeanor.

8-12           Sec. 161.088.  ENFORCEMENT; UNANNOUNCED INSPECTIONS.

8-13     (a)  The comptroller shall enforce this subchapter in partnership

8-14     with county sheriffs and municipal chiefs of police and with their

8-15     cooperation and shall ensure the state's compliance with Section

8-16     1926 of the federal Public Health Service Act (42 U.S.C. Section

8-17     300x-26) and any implementing regulations adopted by the United

8-18     States Department of Health and Human Services.  Except as

8-19     expressly authorized by law, the comptroller may not adopt any

8-20     rules governing the subject matter of this subchapter or Subchapter

8-21     K, N, or O.

8-22           (b)  The comptroller may make block grants to counties and

8-23     municipalities to be used by county sheriffs and municipal chiefs

8-24     of police to enforce this subchapter in a manner that can

8-25     reasonably be expected to reduce the extent to which cigarettes and

 9-1     tobacco products are sold or distributed to persons who are younger

 9-2     than 18 years of age.  At least annually, random unannounced

 9-3     inspections shall be conducted at various locations where

 9-4     cigarettes and tobacco products are sold or distributed to ensure

 9-5     compliance with this subchapter.  The comptroller shall rely, to

 9-6     the fullest extent possible, on sheriffs or chiefs of police or

 9-7     their employees to enforce this subchapter.

 9-8           (c)  To facilitate the effective administration and

 9-9     enforcement of this subchapter, the comptroller may enter into

9-10     interagency contracts with other state agencies, and those agencies

9-11     may assist the comptroller in the administration and enforcement of

9-12     this subchapter.

9-13           (d)  The use of a person younger than 18 years of age to act

9-14     as a minor decoy to test compliance with this subchapter shall be

9-15     conducted in a fashion that promotes fairness.  A person may be

9-16     enlisted by the comptroller to act as a minor decoy only if the

9-17     following requirements are met:

9-18                 (1)  written parental consent is obtained for the use

9-19     of a person younger than 18 years of age to act as a minor decoy to

9-20     test compliance with this subchapter;

9-21                 (2)  at the time of the inspection, the minor decoy is

9-22     younger than 17 years of age;

9-23                 (3)  the minor decoy has an appearance that would cause

9-24     a reasonably prudent seller of cigarettes or tobacco products to

9-25     request identification and proof of age;

 10-1                (4)  the minor decoy carries either the minor's own

 10-2    identification showing the minor's correct date of birth or carries

 10-3    no identification, and a minor decoy who carries identification

 10-4    presents it on request to any seller of cigarettes or tobacco

 10-5    products; and

 10-6                (5)  the minor decoy answers truthfully any questions

 10-7    about the minor's age.

 10-8          (e)  The comptroller shall annually prepare for submission by

 10-9    the governor to the secretary of the United States Department of

10-10    Health and Human Services the report required by Section 1926 of

10-11    the federal Public Health Service Act (42 U.S.C. Section 300x-26).

10-12          Sec. 161.089.  PREEMPTION OF LOCAL LAW.  This subchapter does

10-13    not preempt a local regulation of the sale, distribution, or use of

10-14    cigarettes or tobacco products or affect the authority of a

10-15    political subdivision to adopt or enforce an ordinance or

10-16    requirement relating to the sale, distribution, or use of

10-17    cigarettes or tobacco products if the regulation, ordinance, or

10-18    requirement:

10-19                (1)  is compatible with and equal to or more stringent

10-20    than a requirement prescribed by this subchapter; or

10-21                (2)  relates to an issue that is not specifically

10-22    addressed by this subchapter or Chapter 154 or 155, Tax Code.

10-23          Sec. 161.090.  REPORTS OF VIOLATION.  A local or state law

10-24    enforcement agency or other governmental unit shall notify the

10-25    comptroller, on the 10th day of each month, or the first working

 11-1    day after that date, of any violation of this subchapter that

 11-2    occurred in the preceding month that the agency or unit detects,

 11-3    investigates, or prosecutes.

 11-4          Sec. 161.0901.  REPORT OF OFFICE OF SMOKING AND

 11-5    HEALTH.  (a)  Not later than January 5th of each odd-numbered year

 11-6    the Office of Smoking and Health of the department shall report to

 11-7    the governor, lieutenant governor, and the speaker of the house of

 11-8    representatives on the status of smoking and the use of tobacco and

 11-9    tobacco products in this state.

11-10          (b)  The report must include, at a minimum:

11-11                (1)  a baseline of statistics and analysis regarding

11-12    retail compliance with this subchapter, Subchapter K, and Chapters

11-13    154 and 155, Tax Code;

11-14                (2)  a baseline of statistics and analysis regarding

11-15    illegal tobacco sales, including:

11-16                      (A)  sales to minors;

11-17                      (B)  enforcement actions concerning minors; and

11-18                      (C)  sources of citations;

11-19                (3)  tobacco controls and initiatives by the Office of

11-20    Smoking and Health of the department, or any other state agency,

11-21    including an evaluation of the effectiveness of the controls and

11-22    initiatives;

11-23                (4)  the future goals and plans of the Office of

11-24    Smoking and Health of the department to decrease the use of tobacco

11-25    and tobacco products;

 12-1                (5)  the educational programs of the Office of Smoking

 12-2    and Health of the department and the effectiveness of those

 12-3    programs; and

 12-4                (6)  the incidence of use of tobacco and tobacco

 12-5    products by regions in this state, including use of cigarettes and

 12-6    tobacco products by ethnicity.

 12-7         ARTICLE 2.  ADVERTISING OF CIGARETTES OR TOBACCO PRODUCTS

 12-8          SECTION 2.01.  Subchapter K, Chapter 161, Health and Safety

 12-9    Code, is amended to read as follows:

12-10        SUBCHAPTER K.  PROHIBITION OF CERTAIN CIGARETTE OR TOBACCO

12-11                         PRODUCT ADVERTISING; FEE

12-12          Sec. 161.121.  DEFINITIONS.  In this subchapter:

12-13                (1)  "Church" means a facility that is owned by a

12-14    religious organization and that is used primarily for religious

12-15    services.

12-16                (2)  "Cigarette" has the meaning assigned by Section

12-17    154.001, Tax Code.

12-18                (3)  "School" means a private or public elementary or

12-19    secondary school.

12-20                (4) [(3)]  "Sign" means an outdoor medium, including a

12-21    structure, display, light device, figure, painting, drawing,

12-22    message, plaque, poster, or billboard, that is:

12-23                      (A)  used to advertise or inform; and

12-24                      (B)  visible from the main-traveled way of a

12-25    street or highway.

 13-1                (5) [(4)]  "Tobacco product" has the meaning assigned

 13-2    by Section 155.001, Tax Code.

 13-3          Sec. 161.122.  PROHIBITION RELATING TO CERTAIN SIGNS;

 13-4    EXCEPTIONS.  (a)  Except as provided by this section, a [A] sign

 13-5    containing an advertisement for cigarettes or tobacco products may

 13-6    not be located closer than 1,000 [500] feet to a church or school.

 13-7          (b)  The measurement of the distance between the sign

 13-8    containing an advertisement for cigarettes or tobacco products and

 13-9    an institution listed in Subsection (a) is from the nearest

13-10    property line of the institution to a point on a street or highway

13-11    closest to the sign, along street lines and in direct lines across

13-12    intersections.

13-13          (c)  This section does not apply to[:]

13-14                [(1)]  a sign located on or in a facility owned or

13-15    leased by a professional sports franchise or in a facility where

13-16    professional sports events are held at least 10 times during a

13-17    12-month period[; or]

13-18                [(2)  a contract for a cigarette or other tobacco

13-19    product advertisement entered into before August 26, 1991].

13-20          (d)  In Subsection (c) [(c)(1)], a "facility" includes a

13-21    stadium, arena, or events center and any land or property owned or

13-22    leased by the professional sports franchise that is connected to or

13-23    immediately contiguous to the stadium, arena, or events center.

13-24          (e)  Subsection (a) does not apply to a sign containing an

13-25    advertisement for cigarettes or tobacco products that, before

 14-1    September 1, 1997, was located closer than 1,000 feet to a church

 14-2    or school but that was not located closer than 500 feet to the

 14-3    church or school.

 14-4          Sec. 161.123.  ADVERTISING FEE.  (a)  A purchaser of

 14-5    advertising is liable for and shall remit to the comptroller a fee

 14-6    that is 10 percent of the gross sales price of any outdoor

 14-7    advertising of cigarettes and tobacco products in this state.

 14-8          (b)  The comptroller shall collect the fee and deposit the

 14-9    money as provided in this section.

14-10          (c)  The liability for the payment of fees under this section

14-11    may not be nullified by contract.

14-12          (d)  The comptroller shall establish by rule the periods for

14-13    collection of the fees and the methods of payment and shall adopt

14-14    other rules necessary to administer and enforce this section.

14-15          (e)  In this section, "gross sales price" means the sum of:

14-16                (1)  production costs;

14-17                (2)  media cost; and

14-18                (3)  cost of sales or commissions paid to an agency or

14-19    broker.

14-20          Sec. 161.124.  USE OF ADVERTISING FEE.  (a)  The comptroller

14-21    shall deposit the fee collected under Section 161.123 to a special

14-22    account in the state treasury called the tobacco education and

14-23    enforcement education fund.

14-24          (b)  Money in the account may be appropriated only for

14-25    administration and enforcement of this section, enforcement of law

 15-1    relating to cigarettes and tobacco products, and the education

 15-2    advertising campaign and grant program established under Subchapter

 15-3    O, Chapter 161.

 15-4          Sec. 161.125.  ADMINISTRATIVE PENALTY.  (a)  The comptroller

 15-5    by order may impose an administrative penalty against a purchaser

 15-6    of advertising required to comply with Section 161.123 who violates

 15-7    that section or a rule or order adopted under that section.

 15-8          (b)  The penalty for a violation may be in an amount not to

 15-9    exceed $5,000.  Each day a violation continues or occurs is a

15-10    separate violation for purposes of imposing a penalty.

15-11          (c)  The amount of the penalty shall be based on:

15-12                (1)  the amount of fees due and owing;

15-13                (2)  attempted concealment of misconduct by the person

15-14    who committed the violation;

15-15                (3)  premeditated misconduct by the person who

15-16    committed the violation;

15-17                (4)  intentional misconduct by the person who committed

15-18    the violation;

15-19                (5)  the motive of the person who committed the

15-20    violation;

15-21                (6)  prior misconduct of a similar or related nature by

15-22    the person who committed the violation;

15-23                (7)  prior written warnings or written admonishments

15-24    from any government agency or official regarding statutes or

15-25    regulations pertaining to the misconduct;

 16-1                (8)  violation by the person who committed the

 16-2    violation of an order of the comptroller;

 16-3                (9)  lack of rehabilitative potential or likelihood for

 16-4    future misconduct of a similar nature;

 16-5                (10)  relevant circumstances increasing the seriousness

 16-6    of the misconduct; and

 16-7                (11)  any other matter justice may require.

 16-8          (d)  The comptroller shall prescribe the procedure by which

 16-9    the comptroller may impose an administrative penalty under this

16-10    section.

16-11          (e)  A proceeding under this section is subject to Chapter

16-12    2001, Government Code.

16-13          (f)  If the comptroller by order finds that a violation has

16-14    occurred and imposes an administrative penalty, the comptroller

16-15    shall give notice to the person of the comptroller's order.  The

16-16    notice must include a statement of the rights of the person to

16-17    judicial review of the order.

16-18          (g)  If the purchaser of advertising does not pay the amount

16-19    of the penalty, the comptroller may refer the matter to the

16-20    attorney general for collection of the amount of the penalty.

16-21          (h)  A penalty collected under this section shall be

16-22    deposited in the general revenue fund.

16-23                       ARTICLE 3.  YOUTH TOBACCO USE

16-24          SECTION 3.01.  Chapter 161, Health and Safety Code, is

16-25    amended by adding Subchapters N and O to read as follows:

 17-1                   SUBCHAPTER N.  TOBACCO USE BY MINORS

 17-2          Sec. 161.251.  DEFINITIONS.  In this subchapter:

 17-3                (1)  "Cigarette" has the meaning assigned by Section

 17-4    154.001, Tax Code.

 17-5                (2)  "Tobacco product" has the meaning assigned by

 17-6    Section 155.001, Tax Code.

 17-7          Sec. 161.252.  POSSESSION, PURCHASE, CONSUMPTION, OR RECEIPT

 17-8    OF CIGARETTES OR TOBACCO PRODUCTS BY MINORS PROHIBITED.  (a)  An

 17-9    individual who is younger than 18 years of age commits an offense

17-10    if the individual:

17-11                (1)  possesses, purchases, consumes, or accepts a

17-12    cigarette or tobacco product; or

17-13                (2)  falsely represents himself or herself to be 18

17-14    years of age or older by displaying proof of age that is false,

17-15    fraudulent, or not actually proof of the individual's own age in

17-16    order to obtain possession of, purchase, or receive a cigarette or

17-17    tobacco product.

17-18          (b)  It is an exception to the application of this section

17-19    that the individual younger than 18 years of age possessed the

17-20    cigarette or tobacco product in the presence of:

17-21                (1)  an adult parent, a guardian, or a spouse of the

17-22    individual; or

17-23                (2)  an employer of the individual, if possession or

17-24    receipt of the tobacco product is required in the performance of

17-25    the employee's duties as an employee.

 18-1          (c)  It is an exception to the application of this section

 18-2    that the individual younger than 18 years of age is participating

 18-3    in an inspection or test of compliance in accordance with Section

 18-4    161.088.

 18-5          (d)  An offense under this section is punishable by a fine

 18-6    not to exceed $250.

 18-7          Sec. 161.253.  TOBACCO AWARENESS PROGRAM; COMMUNITY SERVICE.

 18-8    (a)  On conviction of an individual for an offense under Section

 18-9    161.252, the court shall suspend execution of sentence and shall

18-10    require the defendant to attend a tobacco awareness program

18-11    approved by the commissioner.  The court may require the parent or

18-12    guardian of the defendant to attend the tobacco awareness program

18-13    with the defendant.

18-14          (b)  On request, a tobacco awareness program may be taught in

18-15    languages other than English.

18-16          (c)  If the defendant resides in a rural area of this state

18-17    or another area of this state in which access to a tobacco

18-18    awareness program is not readily available, the court shall require

18-19    the defendant to perform eight to 12 hours of tobacco-related

18-20    community service instead of attending the tobacco awareness

18-21    program.

18-22          (d)  The tobacco awareness program and the tobacco-related

18-23    community service are remedial and are not punishment.

18-24          (e)  Not later than the 90th day after the date of a

18-25    conviction under Section 161.252, the defendant shall present to

 19-1    the court, in the manner required by the court, evidence of

 19-2    satisfactory completion of the tobacco awareness program or the

 19-3    tobacco-related community service.

 19-4          (f)  On receipt of the evidence required under Subsection

 19-5    (e), the court shall:

 19-6                (1)  if the defendant has been previously convicted of

 19-7    an offense under Section 161.252, execute the sentence, and at the

 19-8    discretion of the court, reduce the fine imposed to not less than

 19-9    half the fine previously imposed by the court; or

19-10                (2)  if the defendant has not been previously convicted

19-11    of an offense under Section 161.252, discharge the defendant and

19-12    dismiss the complaint or information against the defendant.

19-13          (g)  If the court discharges the defendant under Subsection

19-14    (f)(2), the defendant is released from all penalties and

19-15    disabilities resulting from the offense except that the defendant

19-16    is considered to have been convicted of the offense if the

19-17    defendant is subsequently convicted of an offense under Section

19-18    161.252 committed after the dismissal under Subsection (f)(2).

19-19          Sec. 161.254.  DRIVER'S LICENSE SUSPENSION OR DENIAL.

19-20    (a)  If the defendant does not provide the evidence required under

19-21    Section 161.253(e) within the period specified by that subsection,

19-22    the court shall order the Department of Public Safety to suspend or

19-23    deny issuance of any driver's license or permit to the defendant.

19-24    The order must specify the period of the suspension or denial,

19-25    which may not exceed 180 days after the date of the order.

 20-1          (b)  The Department of Public Safety shall send to the

 20-2    defendant notice of court action under Subsection (a) by certified

 20-3    mail, return receipt requested.  The notice must include the date

 20-4    of the order and the reason for the order and must specify the

 20-5    period of the suspension or denial.

 20-6          Sec. 161.255.  EXPUNGEMENT OF CONVICTION.  An individual

 20-7    convicted of an offense under Section 161.252 may apply to the

 20-8    court to have the conviction expunged.  If the court finds that the

 20-9    individual satisfactorily completed the tobacco awareness program

20-10    or tobacco-related community service ordered by the court, the

20-11    court shall order the conviction and any complaint, verdict,

20-12    sentence, or other document relating to the offense to be expunged

20-13    from the individual's record and the conviction may not be shown or

20-14    made known for any purpose.

20-15          Sec. 161.256.  JURISDICTION OF COURTS.  A justice court or

20-16    municipal court may exercise jurisdiction over any matter in which

20-17    a court under this subchapter may:

20-18                (1)  impose a requirement that a defendant attend a

20-19    tobacco awareness program or perform tobacco-related community

20-20    service; or

20-21                (2)  order the suspension or denial of a driver's

20-22    license or permit.

20-23          Sec. 161.257.  APPLICATION OF OTHER LAW.  Title 3, Family

20-24    Code, does not apply to a proceeding under this subchapter.

20-25             (Sections 161.258-161.300 reserved for expansion

 21-1            SUBCHAPTER O.  PREVENTION OF TOBACCO USE BY MINORS

 21-2          Sec. 161.301.  TOBACCO USE PUBLIC AWARENESS CAMPAIGN.

 21-3    (a)  The commissioner shall develop and implement a public

 21-4    awareness campaign designed to reduce tobacco use by minors in this

 21-5    state.  The campaign may use advertisements or similar media to

 21-6    provide educational information about tobacco use.

 21-7          (b)  The commissioner may contract with another person to

 21-8    develop and implement the public awareness campaign.  The contract

 21-9    shall be awarded on the basis of competitive bids.

21-10          (c)  A contract awarded under Subsection (b) may be awarded

21-11    only to a business that has a proven background in advertising and

21-12    public relations campaigns.

21-13          (d)  The commissioner may not award a contract under

21-14    Subsection (b) to:

21-15                (1)  a person or entity that is required to register

21-16    with the Texas Ethics Commission under Chapter 305, Government

21-17    Code;

21-18                (2)  any partner, employee, employer, relative,

21-19    contractor, consultant, or related entity of a person or entity

21-20    described by Subdivision (1); or

21-21                (3)  a person or entity who has been hired to represent

21-22    associations or other entities for the purpose of affecting the

21-23    outcome of legislation, agency rules, or other government policies

21-24    through grassroots or media campaigns.

21-25          (e)  The persons or entities described by Subsection (d) are

 22-1    not eligible to receive the money or participate either directly or

 22-2    indirectly in the public awareness campaign.

 22-3          Sec. 161.302.  GRANT PROGRAM FOR YOUTH GROUPS.  (a)  The

 22-4    entity administering Section 161.301 shall also develop and

 22-5    implement a grant program to support youth groups that include as a

 22-6    part of the group's program components related to reduction of

 22-7    tobacco use by the group's members.

 22-8          (b)  "Youth group" means a nonprofit organization that:

 22-9                (1)  is chartered as a national or statewide

22-10    organization;

22-11                (2)  is organized and operated exclusively for youth

22-12    recreational or educational purposes and that includes, as part of

22-13    the group's program, in addition to the components described by

22-14    Subsection (a), components relating to:

22-15                      (A)  prevention of drug abuse;

22-16                      (B)  character development;

22-17                      (C)  citizenship training; and

22-18                      (D)  physical and mental fitness;

22-19                (3)  has been in existence for at least 10 years; and

22-20                (4)  has a membership of which at least 65 percent is

22-21    younger than 22 years of age.

22-22                  ARTICLE 4.  RELATED TAX CODE PROVISIONS

22-23          SECTION 4.01.  (a)  Section 154.111, Tax Code, is amended by

22-24    amending Subsection (b) and adding Subsection (g) to read as

22-25    follows:

 23-1          (b)  An application for a permit required by this chapter

 23-2    must be accompanied by a fee of:

 23-3                (1)  $300 [$100] for a bonded agent's permit;

 23-4                (2)  $300 [$100] for a distributor's permit;

 23-5                (3)  $200 [$50] for a wholesaler's permit; [and]

 23-6                (4)  $15 for each permit for a vehicle if the applicant

 23-7    is also applying for a permit as a bonded agent, distributor, or

 23-8    wholesaler or has received a current permit from the comptroller

 23-9    [treasurer] under Sections 154.101 and 154.110; and

23-10                (5)  $180 for a retailer's permit.

23-11          (g)  Notwithstanding Subsection (b)(5), an application for a

23-12    retailer's permit issued or renewed before September 1, 1999, must

23-13    be accompanied by a fee of $125.  This subsection expires December

23-14    31, 1999.

23-15          (b)  Subsection (c), Section 154.111, Tax Code, is repealed.

23-16          SECTION 4.02.  Section 154.121, Tax Code, is amended to read

23-17    as follows:

23-18          Sec. 154.121.  REVENUE.  (a)  Except as provided by

23-19    Subsection (b), revenue [Revenue] from the sale of permits to

23-20    distributors, wholesalers, and bonded agents is allocated in the

23-21    same manner as other revenue allocated by Subchapter J.

23-22          (b)  Revenue from the sale of retailer's permits shall be

23-23    deposited to the general revenue fund and may be appropriated only

23-24    as provided by this section.  The money may be appropriated first

23-25    to the comptroller for administration of licensing of retailers

 24-1    under this chapter or Chapter 155.

 24-2          (c)  If, after any appropriation is made under Subsection

 24-3    (b), revenue remains from the sale of retailer's permits, the

 24-4    remaining money may be appropriated to the comptroller for

 24-5    administration and enforcement of Subchapters H, K, and N, Chapter

 24-6    161, Health and Safety Code, and to the Texas Department of Health,

 24-7    for the administration and enforcement of Section 161.253, Health

 24-8    and Safety Code.

 24-9          (d)  If, after any appropriation is made under Subsections

24-10    (b) and (c), revenue remains from the sale of retailer's permits,

24-11    the remaining money may be appropriated to the Texas Department of

24-12    Health to administer the commissioner of public health's

24-13    responsibilities under Section 161.301, Health and Safety Code.

24-14          (e)  If, after any appropriation is made under Subsections

24-15    (b), (c), and (d), revenue remains from the sale of retailer's

24-16    permits, the remaining money may be appropriated to the appropriate

24-17    entity to administer that entity's responsibilities under Section

24-18    161.302, Health and Safety Code.

24-19          SECTION 4.03.  Subchapter D, Chapter 154, Tax Code, is

24-20    amended by adding Section 154.1142 to read as follows:

24-21          Sec. 154.1142.  DISCIPLINARY ACTION FOR CERTAIN VIOLATIONS.

24-22    (a)  A retailer is subject to disciplinary action as provided by

24-23    this section if:

24-24                (1)  an agent or employee of the retailer commits an

24-25    offense under Subchapter H, Chapter 161, Health and Safety Code;

 25-1    and

 25-2                (2)  the retailer, with criminal negligence, failed to

 25-3    prevent the offense through adequate supervision and training of

 25-4    the agent or employee.

 25-5          (b)  If the comptroller finds, after notice and hearing as

 25-6    provided by this subchapter, that a permit holder has violated

 25-7    Subchapter H or K, Chapter 161, Health and Safety Code, at a place

 25-8    of business for which a permit is issued, the comptroller may

 25-9    suspend the permit for that place of business or administratively

25-10    assess a fine as follows:

25-11                (1)  if the permit holder has not been found to have

25-12    violated Subchapter H or K, Chapter 161, Health and Safety Code, at

25-13    that place of business during the preceding 12 months, the

25-14    comptroller may require the permit holder to pay a fine in an

25-15    amount not to exceed $500;

25-16                (2)  if the permit holder has been found to have

25-17    violated Subchapter H or K, Chapter 161, Health and Safety Code, at

25-18    that place of business once during the preceding 12 months, the

25-19    comptroller may require the permit holder to pay a fine in an

25-20    amount not to exceed $750; and

25-21                (3)  if the permit holder has been found to have

25-22    violated Subchapter H or K, Chapter 161, Health and Safety Code, at

25-23    that place of business at least twice during the preceding 12

25-24    months, the comptroller may require the permit holder to pay a fine

25-25    in an amount not to exceed $1,000 or suspend the permit for that

 26-1    place of business for not more than three days.

 26-2          (c)  Except as provided by Section 154.1143, if the permit

 26-3    holder has been found to have violated Section 161.082(b), Health

 26-4    and Safety Code, on four or more previous and separate occasions at

 26-5    the same place of business during the preceding 12 months, the

 26-6    comptroller shall revoke the permit.

 26-7          (d)  A retailer whose permit has been revoked under this

 26-8    section may not apply for a retailer's permit for the same place of

 26-9    business before the expiration of six months after the effective

26-10    date of the revocation.

26-11          SECTION 4.04.  Subchapter D, Chapter 154, Tax Code, is

26-12    amended by adding Section 154.1143 to read as follows:

26-13          Sec. 154.1143.  ACTIONS OF EMPLOYEE.  (a)  For purposes of

26-14    Subchapter H, Chapter 161, Health and Safety Code, and the

26-15    provisions of this code relating to the sale or delivery of

26-16    cigarettes or tobacco products to a minor, the comptroller may

26-17    suspend a permit but may not revoke the permit under Section

26-18    154.1142(c) if the comptroller finds that:

26-19                (1)  the employer has not violated Section 161.082(b),

26-20    Health and Safety Code, more than seven times at the place of

26-21    business for which the permit is issued in the 24-month period

26-22    preceding the violation in question;

26-23                (2)  the employer requires its employees to attend a

26-24    comptroller-approved seller training program;

26-25                (3)  the employee has actually attended a

 27-1    comptroller-approved seller training program; and

 27-2                (4)  the employer has not directly or indirectly

 27-3    encouraged the employee to violate the law.

 27-4          (b)  The comptroller shall adopt rules or policies

 27-5    establishing the minimum requirements for approved seller training

 27-6    programs.  On application, the comptroller shall approve seller

 27-7    training programs meeting the requirements that are sponsored

 27-8    privately or by public community colleges.  The comptroller may

 27-9    charge an application fee in an amount necessary to defray the

27-10    expense of processing the application.

27-11          (c)  The comptroller may approve under this section a seller

27-12    training program sponsored by a permit holder for the purpose of

27-13    training its employees without regard to whether the employees are

27-14    located at the same place of business.  This subsection applies

27-15    only to a permit holder who employs at least 100 persons at any one

27-16    time during the permit year who sell cigarettes or tobacco

27-17    products.

27-18          SECTION 4.05.  Section 154.504, Tax Code, is amended to read

27-19    as follows:

27-20          Sec. 154.504.  POSSESSION OF QUANTITIES LESS THAN INDIVIDUAL

27-21    PACKAGE.  A person commits an offense and is subject to a $100 fine

27-22    if the person sells cigarettes in quantities less than an

27-23    individual package containing at least 20 cigarettes.

27-24          SECTION 4.06.  (a)  Section 155.049, Tax Code, is amended by

27-25    amending Subsection (b) and adding Subsection (g) to read as

 28-1    follows:

 28-2          (b)  An application for a permit required by this chapter

 28-3    must be accompanied by a fee of:

 28-4                (1)  $300 [$100] for a bonded agent's permit;

 28-5                (2)  $300 [$100] for a distributor's permit;

 28-6                (3)  $200 [$50] for a wholesaler's permit; [and]

 28-7                (4)  $15 for each permit for a vehicle if the applicant

 28-8    is also applying for a permit as a bonded agent, distributor, or

 28-9    wholesaler or has received a current permit from the comptroller

28-10    [treasurer] under Sections 155.041 and 155.048; and

28-11                (5)  $180 for a retailer's permit.

28-12          (g)  Notwithstanding Subsection (b)(5), an application for a

28-13    retailer's permit issued or renewed before September 1, 1999, must

28-14    be accompanied by a fee of $125.  This subsection expires December

28-15    31, 1999.

28-16          (b)  Subsection (c), Section 155.049, Tax Code, is repealed.

28-17          SECTION 4.07.  Section 155.058, Tax Code, is amended to read

28-18    as follows:

28-19          Sec. 155.058.  REVENUE.  (a)  Except as provided by

28-20    Subsection (b), revenue [Revenue] from the sale of permits to

28-21    distributors, wholesalers, and bonded agents is allocated in the

28-22    same manner that other revenue is allocated by Subchapter H.

28-23          (b)  Revenue from the sale of retailer's permits shall be

28-24    deposited to the general revenue fund and may be appropriated only

28-25    as provided by this section.  The money may be appropriated first

 29-1    to the comptroller for administration of licensing of retailers

 29-2    under this chapter or Chapter 154.

 29-3          (c)  If, after any appropriation is made under Subsection

 29-4    (b), revenue remains from the sale of retailer's permits, the

 29-5    remaining money may be appropriated to the comptroller for

 29-6    administration and enforcement of Subchapters H, K, and N, Chapter

 29-7    161, Health and Safety Code, and to the Texas Department of Health,

 29-8    for the administration and enforcement of Section 161.253, Health

 29-9    and Safety Code.

29-10          (d)  If, after any appropriation is made under Subsections

29-11    (b) and (c), revenue remains from the sale of retailer's permits,

29-12    the remaining money may be appropriated to the Texas Department of

29-13    Health to administer the commissioner of public health's

29-14    responsibilities under Section 161.301, Health and Safety Code.

29-15          (e)  If, after any appropriation is made under Subsections

29-16    (b), (c), and (d), revenue remains from the sale of retailer's

29-17    permits, the remaining money may be appropriated to the appropriate

29-18    entity to administer that entity's responsibilities under Section

29-19    161.302, Health and Safety Code.

29-20          SECTION 4.08.  Subchapter C, Chapter 155, Tax Code, is

29-21    amended by adding Section 155.0592 to read as follows:

29-22          Sec. 155.0592.  DISCIPLINARY ACTION FOR CERTAIN VIOLATIONS.

29-23    (a)  A retailer is subject to disciplinary action as provided by

29-24    this section if:

29-25                (1)  an agent or employee of the retailer commits an

 30-1    offense under Subchapter H, Chapter 161, Health and Safety Code;

 30-2    and

 30-3                (2)  the retailer, with criminal negligence, failed to

 30-4    prevent the offense through adequate supervision and training of

 30-5    the agent or employee.

 30-6          (b)  If the comptroller finds, after notice and hearing as

 30-7    provided by this subchapter, that a permit holder has violated

 30-8    Subchapter H or K, Chapter 161, Health and Safety Code, at a place

 30-9    of business for which a permit is issued, the comptroller may

30-10    suspend the permit for that place of business or administratively

30-11    assess a fine as follows:

30-12                (1)  if the permit holder has not been found to have

30-13    violated Subchapter H or K, Chapter 161, Health and Safety Code, at

30-14    that place of business during the preceding 12 months, the

30-15    comptroller may require the permit holder to pay a fine in an

30-16    amount not to exceed $500;

30-17                (2)  if the permit holder has been found to have

30-18    violated Subchapter H or K, Chapter 161, Health and Safety Code, at

30-19    that place of business once during the preceding 12 months, the

30-20    comptroller may require the permit holder to pay a fine in an

30-21    amount not to exceed $750; and

30-22                (3)  if the permit holder has been found to have

30-23    violated Subchapter H or K, Chapter 161, Health and Safety Code, at

30-24    that place of business at least twice during the preceding 12

30-25    months, the comptroller may require the permit holder to pay a fine

 31-1    in an amount not to exceed $1,000 or suspend the permit for that

 31-2    place of business for not more than three days.

 31-3          (c)  Except as provided by Section 155.0593, if the permit

 31-4    holder has been found to have violated Section 161.082(b), Health

 31-5    and Safety Code, on four or more previous and separate occasions at

 31-6    the same place of business during the preceding 12 months, the

 31-7    comptroller shall revoke the permit.

 31-8          (d)  A retailer whose permit has been revoked under this

 31-9    section may not apply for a retailer's permit for the same place of

31-10    business before the expiration of six months after the effective

31-11    date of the revocation.

31-12          SECTION 4.09.  Subchapter C, Chapter 155, Tax Code, is

31-13    amended by adding Section 155.0593 to read as follows:

31-14          Sec. 155.0593.  ACTIONS OF EMPLOYEE.  (a)  For purposes of

31-15    Subchapter H, Chapter 161, Health and Safety Code, and the

31-16    provisions of this code relating to the sale or delivery of

31-17    cigarettes or tobacco products to a minor, the comptroller may

31-18    suspend a permit but may not revoke the permit under Section

31-19    155.0592 if the comptroller finds that:

31-20                (1)  the employer has not violated Section 161.082(b),

31-21    Health and Safety Code, more than seven times at the place of

31-22    business for which the permit is issued in the 24-month period

31-23    preceding the violation in question;

31-24                (2)  the employer requires its employees to attend a

31-25    comptroller-approved seller training program;

 32-1                (3)  the employee has actually attended a

 32-2    comptroller-approved seller training program; and

 32-3                (4)  the employer has not directly or indirectly

 32-4    encouraged the employee to violate the law.

 32-5          (b)  The comptroller shall adopt rules or policies

 32-6    establishing the minimum requirements for approved seller training

 32-7    programs.  On application, the comptroller shall approve seller

 32-8    training programs meeting the requirements that are sponsored

 32-9    privately or by public community colleges.  The comptroller may

32-10    charge an application fee in an amount necessary to defray the

32-11    expense of processing the application.

32-12          (c)  The comptroller may approve under this section a seller

32-13    training program sponsored by a permit holder for the purpose of

32-14    training its employees without regard to whether the employees are

32-15    located at the same place of business.  This subsection applies

32-16    only to a permit holder who employs at least 100 persons at any one

32-17    time during the permit year who sell cigarettes or tobacco

32-18    products.

32-19          ARTICLE 5.  FEDERAL WAIVER; TRANSITION; EFFECTIVE DATE;

32-20                             EMERGENCY CLAUSE

32-21          SECTION 5.01.  (a)  If, before the changes in law made by

32-22    this Act to Subchapter H or K, Chapter 161, Health and Safety Code,

32-23    take effect, the comptroller of public accounts determines that an

32-24    exemption from federal preemption from the federal Food and Drug

32-25    Administration is necessary for implementation, the comptroller

 33-1    shall request the exemption and may delay implementing the affected

 33-2    provision of law until the exemption is granted.

 33-3          (b)  If a provision of law affected by a delay in

 33-4    implementation under Subsection (a) of this section contains a

 33-5    criminal penalty:

 33-6                (1)  the comptroller of public accounts shall publish

 33-7    in the Texas Register notice of:

 33-8                      (A)  the delay in implementation; and

 33-9                      (B)  the grant of an exemption from preemption

33-10    requested under Subsection (a) of this section; and

33-11                (2)  the provision takes effect on the 90th day after

33-12    the date that notice of the grant of an exemption is published

33-13    under Paragraph (B) of Subdivision (1) of this subsection.

33-14          SECTION 5.02.  (a)  Except as provided by Subsection (b) of

33-15    this section, this Act takes effect September 1, 1997.

33-16          (b)  Sections 161.083, 161.085, and 161.086, Health and

33-17    Safety Code, and Subchapter N, Chapter 161, Health and Safety Code,

33-18    as added by this Act, take effect January 1, 1998.

33-19          (c)  The change in law made by this Act applies only to an

33-20    offense committed on or after the effective date of this Act.  For

33-21    purposes of this subsection, an offense is committed before the

33-22    effective date of this Act if any element of the offense occurs

33-23    before that date.  An offense committed before the effective date

33-24    of this Act is governed by the law in effect when the offense was

33-25    committed, and the former law is continued in effect for that

 34-1    purpose.

 34-2          (d)  This Act applies to the sale or distribution of coupons,

 34-3    cigarettes, or tobacco products on or after the effective date of

 34-4    this Act.  The sale or distribution of a coupon, cigarette, or

 34-5    tobacco product before the effective date of this Act is governed

 34-6    by the law in effect when the sale or distribution was made, and

 34-7    that law is continued in effect for that purpose.

 34-8          (e)  The increase in the amount of a fee as provided by

 34-9    Section 154.111 or 155.049, Tax Code, as amended by this Act, takes

34-10    effect for and is applicable to the permit years beginning on or

34-11    after March 1, 1998, and June 1, 1998, as applicable.

34-12          SECTION 5.03.  Notwithstanding any other law, the

34-13    implementation and execution of the programs established by the

34-14    change in law made by this Act are contingent on the availability

34-15    of funds for those programs, as determined by the comptroller of

34-16    public accounts, from:

34-17                (1)  the permit fee imposed on retailers under Chapters

34-18    154 and 155, Tax Code, as amended by this Act; and

34-19                (2)  the fee on outdoor advertising of cigarette and

34-20    tobacco products imposed under Subchapter K, Chapter 161, Health

34-21    and Safety Code, as amended by this Act.

34-22          SECTION 5.04.  The importance of this legislation and the

34-23    crowded condition of the calendars in both houses create an

34-24    emergency and an imperative public necessity that the

34-25    constitutional rule requiring bills to be read on three several

 35-1    days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 55 passed the Senate on

         April 24, 1997, by a viva-voce vote; and that the Senate concurred

         in House amendments on May 28, 1997, by a viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 55 passed the House, with

         amendments, on May 25, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor