S.B. No. 1390
 
 
 
 
AN ACT
  relating to taxes and fees imposed on cigarettes and other tobacco
  products, including an exemption to the cigarette tax, related
  administrative matters, and the elements of certain related
  offenses.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 161.604, Health and Safety Code, is
  amended by amending Subsection (b) and adding Subsection (b-1) to
  read as follows:
         (b)  Beginning in January 2014, and in January of each
  subsequent year, the comptroller shall adjust [compute] the rate of
  the fee [applicable during that calendar year] by increasing the
  rate in effect on the date the adjustment is made [for the preceding
  calendar year] by the greater of:
               (1)  three percent; or
               (2)  the actual total percentage change in the Consumer
  Price Index for All Urban Consumers (CPI-U), as published by the
  Bureau of Labor Statistics of the United States Department of
  Labor, during the preceding calendar year, calculated by comparing
  the CPI-U for December of the preceding calendar year with the CPI-U
  for December a year earlier.
         (b-1)  The adjusted rate of the fee determined under
  Subsection (b) takes effect on February 1 of the year in which the
  adjusted rate is determined and remains in effect until January 31
  of the following year.
         SECTION 2.  Section 161.605(e), Health and Safety Code, is
  amended to read as follows:
         (e)  Notwithstanding any other law, a distributor that
  remits a monthly fee under this section is[, subject to Section
  154.051, Tax Code,] entitled to a stamping allowance of three
  percent of the face value of all stamps purchased under Section
  154.041, Tax Code, for providing the service of affixing stamps to
  cigarette packages.
         SECTION 3.  Subchapter B, Chapter 154, Tax Code, is amended
  by adding Section 154.026 to read as follows:
         Sec. 154.026.  CIGARETTES USED EXCLUSIVELY FOR RESEARCH
  PURPOSES. (a)  Cigarettes are exempt from the tax imposed by
  Section 154.021 if the cigarettes are:
               (1)  contained in a package labeled with "Experimental
  Use Only," "Reference Cigarettes," or other similar wording
  indicating that the manufacturer intends for the product to be used
  exclusively for experimental purposes in compliance with 27 C.F.R.
  Section 40.232;
               (2)  sold directly by a manufacturer to a research
  facility in this state, including:
                     (A)  a laboratory, hospital, medical center,
  college, or university; or
                     (B)  a facility designated as a Tobacco Center of
  Regulatory Science by the National Institutes of Health;
               (3)  used by the research facility exclusively for
  experimental purposes; and
               (4)  not resold by the research facility.
         (b)  Sections 154.041, 154.302, 154.502, 154.503, and
  154.515 do not apply to cigarettes exempted by Subsection (a).
         SECTION 4.  Section 154.210(a), Tax Code, is amended to read
  as follows:
         (a)  A distributor shall deliver to the comptroller, on or
  before the 25th [last] day of each month, a report for the preceding
  month.
         SECTION 5.  Section 154.502, Tax Code, is amended to read as
  follows:
         Sec. 154.502.  UNSTAMPED CIGARETTES. Except as provided by
  Section 154.026(b), a [A] person commits an offense if the person:
               (1)  makes a first sale of unstamped cigarettes;
               (2)  sells, offers for sale, or presents as a prize or
  gift unstamped cigarettes; or
               (3)  knowingly consumes, uses, or smokes cigarettes
  taxed under this chapter without a stamp affixed to each individual
  package.
         SECTION 6.  Section 154.503(a), Tax Code, is amended to read
  as follows:
         (a)  Except as provided by Sections 154.026(b) and [Section]
  154.042 [of this code], a person commits an offense if the person
  possesses unstamped cigarettes in quantities less than 10,000.
         SECTION 7.  Section 154.515(a), Tax Code, is amended to read
  as follows:
         (a)  Except as provided by Sections 154.026(b) and [Section]
  154.042 [of this code], a person commits an offense if the person
  possesses unstamped cigarettes in quantities of 10,000 or more.
         SECTION 8.  Section 155.111(a), Tax Code, is amended to read
  as follows:
         (a)  A distributor shall file with the comptroller on or
  before the 25th [last] day of each month[,] a report for the
  preceding month.
         SECTION 9.  (a)  The changes in law made by this Act do not
  affect taxes and fees imposed before the effective date of this Act,
  and the law in effect before the effective date of this Act is
  continued in effect for purposes of the liability for and
  collection of those taxes and fees.
         (b)  The changes in law made by this Act to Sections 154.210
  and 155.111, Tax Code, apply only to a distributor's report
  originally due on or after the effective date of this Act.  A
  distributor's report originally due before that date is governed by
  the law in effect on the date the report was due, and the former law
  is continued in effect for that purpose.
         (c)  The changes in law made by this Act to Sections 154.502,
  154.503, and 154.515, Tax Code, apply only to an offense committed
  on or after the effective date of this Act. An offense committed
  before the effective date of this Act is governed by the law in
  effect when the offense was committed, and the former law is
  continued in effect for that purpose. For purposes of this
  subsection, an offense was committed before the effective date of
  this Act if any element of the offense occurred before that date.
         SECTION 10.  This Act takes effect September 1, 2017.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1390 passed the Senate on
  April 10, 2017, by the following vote:  Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1390 passed the House on May
  4, 2017, by the following vote:  Yeas 142, Nays 1, two present not
  voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor