Proposed Rules Title 34

TITLE 34. PUBLIC FINANCE

PART 1. COMPTROLLER OF PUBLIC ACCOUNTS

SUBCHAPTER JJ. CIGARETTE, E-CIGARETTE, AND TOBACCO PRODUCTS REGULATION

The Comptroller of Public Accounts proposes amendments to §3.1203, concerning approved seller training programs. The amendments implement the portion of Senate Bill 248, 87th Legislature, 2021, that requires vendors providing comptroller approved training programs to include training on e-cigarette sales. The comptroller also proposes amendments to require the recertification of approved training programs and to make other minor updates and improve readability.

The comptroller amends the definitions in subsection (a). In paragraph (1), the comptroller removes the definition of "application," which has a plain meaning, and replaces it with the definition of "cigar" from Tax Code, Chapter 155 (Cigar and Tobacco Products Tax). In paragraph (2), the comptroller replaces a reference to the definition of "cigarette" with the actual definition from Tax Code, Chapter 154 (Cigarette Tax). The comptroller adds the definition of "e-cigarette" in paragraph (3) and the definition of "minor" in paragraph (4), both from Health and Safety Code, Chapter 161 (Public Health Provisions), Subchapter H (Distribution of Cigarettes, E-cigarettes, or Tobacco Products) and renumbers the subsequent definitions. The comptroller amends the definition of "second party sales" in renumbered paragraph (5) to prohibit the sale of cigarettes and e-cigarettes that result in the provision of such products to a minor. The comptroller updates renumbered paragraph (6) by replacing the term "this state" with the term "Texas" and to add e-cigarettes to the list of products sold by a "seller." In new paragraph (7), the comptroller replaces a reference to the definition of "tobacco product" with the actual definition from Tax Code, Chapter 155.

The comptroller amends subsection (b) to include e-cigarette sellers in the list of sellers to whom the training curriculum must be focused.

The comptroller amends subsection (d) to clarify that the sale of cigarettes, e-cigarettes, and tobacco products must be included in the required course curriculum.

The comptroller amends subsection (g) to add that a certification expires if not recertified under new subsection (h).

The comptroller adds subsection (h) to establish recertification requirements for a comptroller approved seller course curriculum. The recertification must be renewed every two years to ensure the training includes any changes made during a legislative session. Subsequent subsections are relettered.

The comptroller amends relettered subsection (o) to remove the telephone contact numbers for class cancellations. The comptroller's webpage on Seller Training Programs is the best resource for current information of this sort.

Tetyana Melnyk, Director of Revenue Estimating Division, has determined that during the first five years that the proposed amended rule is in effect, the rule: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rule's applicability; and will not positively or adversely affect this state's economy.

Ms. Melnyk also has determined that the proposed amended rule would benefit the public by conforming the rules to current statute. This rule is proposed under Tax Code, Title 2, and does not require a statement of fiscal implications for small businesses or rural communities. The proposed amended rule would have no significant fiscal impact on the state government, units of local government, or individuals. There would be no anticipated significant economic cost to the public.

You may submit comments on the proposal to Jenny Burleson, Director, Tax Policy Division, P.O. Box 13528, Austin, Texas 78711-3528 or to the email address: tp.rule.comments@cpa.texas.gov. The comptroller must receive your comments no later than 30 days from the date of publication of the proposal in the Texas Register.

The comptroller proposes the amendments under Tax Code, §111.002 (Comptroller's Rules; Compliance; Forfeiture) and §111.0022 (Application to Other Laws Administered by Comptroller) which provide the comptroller with authority to prescribe, adopt, and enforce rules relating to the administration and enforcement provisions of Tax Code, Title 2, and taxes, fees, or other charges which the comptroller administers under other law.

The amendments to this section implement Health & Safety Code, §§161.081 (Definitions), 161.0901 (Disciplinary Action against Cigarette, E-cigarette, and Tobacco Product Retailers), and Tax Code, §155.001 (Definitions).

§3.1203.Approved Seller Training Programs.

(a) Definitions. The following words and terms when used in this section [~~shall~~] have the following meanings, unless the context clearly indicates otherwise.

(1) Cigar--A roll of fermented tobacco that is wrapped in tobacco and the main stream of smoke from which produces an alkaline reaction to litmus paper.

~~[(1) Application--The form provided by the comptroller's office for use by persons interested in performing training under this section.]~~

(2) Cigarette--A roll for smoking:

(A) that is made of tobacco or tobacco mixed with another ingredient and wrapped or covered with a material other than tobacco; and

(B) that is not a cigar.

~~[(2) Cigarettes--Has the meaning assigned by Tax Code, Chapter 154.]~~

(3) E-cigarette--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 a consumable liquid solution or other material aerosolized or vaporized during the use of an electronic cigarette or other device described by this paragraph.

(A) The term "e-cigarette" includes:

(i) a device described by this paragraph 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) a component, part, or accessory for the device, regardless of whether the component, part, or accessory is sold separately from the device.

(B) The term "e-cigarette" does not include a prescription medical device unrelated to the cessation of smoking.

(4) Minor--A person under 21 years of age.

(5) [~~(3)~~] Second party sales--Sales that result [~~A sale which results~~] in the provision of cigarettes, e-cigarettes, or tobacco products to a minor, even though the purchaser of those products [~~the tobacco product~~] is not necessarily a minor.

(6) [~~(4)~~] Seller--Any person who sells cigarettes, e-cigarettes, or tobacco products in Texas [~~this state~~].

~~[(5) Tobacco products--Has the meaning assigned by Tax Code, Chapter 155.]~~

(7) Tobacco product--A tobacco product is:

(A) a cigar;

(B) smoking tobacco, including granulated, plug-cut, crimp-cut, ready-rubbed, and any form of tobacco suitable for smoking in a pipe or as a cigarette;

(D) snuff or other preparations of pulverized tobacco; or

(E) an article or product that is made of tobacco or a tobacco substitute and that is not a cigarette or an e-cigarette.

(b) Application process. In order for a vendor to be certified to provide employers and employees engaged in the retail sales of cigarettes, e-cigarettes, or tobacco products with training regarding provisions in [~~the~~] Health and Safety Code, Chapter 161 and in [~~the~~] Tax Code, Chapters 154 and 155, regarding regulation of sales, distribution, and use of tobacco products, the vendor's training program must meet the minimum curriculum requirements established by the comptroller and be certified by the comptroller. Vendors must make application to the comptroller's office on a prescribed application form. The comptroller's office will review qualified applications and certify vendors interested in providing a seller training program.

(c) Curriculum information. Vendors interested in obtaining certification must apply in writing and provide a written description detailing curriculum information, including:

(1) the presentation;

(2) specific course objectives;

(3) academic content;

(4) learning activities;

(5) audio-visual materials, if any;

(6) written materials (including instructor manual and participant workbook); and

(7) course evaluation or feedback forms.

(d) Curriculum requirements. The curriculum of the training program presented should include, but is not limited to, the following components.

(1) Component One--tobacco-related health hazards. Statistical information regarding tobacco-related health hazards as published by the U.S. Food and Drug Administration must be included in this component.

(2) Component Two--federal and state laws. Discussion and comparison of the provisions of current federal law with the provisions of current state law pertaining to minors and cigarettes, e-cigarettes, and tobacco products must be included in this component. In particular, this component must include a review and explanation of all provisions relating to:

(A) prohibiting the distribution of cigarettes, e-cigarettes, or tobacco products to minors;

(B) prohibiting the purchase, possession, or consumption of cigarettes, e-cigarettes, or tobacco products by minors (citing examples of tobacco products included);

(D) statistics on cigarette, e-cigarette, and tobacco usage by adults and minors; and

(E) the placement of cigarettes, e-cigarettes, and tobacco products in retail locations.

(3) Component Three--detection of minors. This component must identify and discuss:

(A) observation techniques for determining when a customer is a minor;

(B) common physical and behavioral signs of underage status; and

(C) behaviors indicative of adolescence, including current clothing trends and fads, and physical appearance preferences, according to generally recognized experts in the field.

(4) Component Four--personal identification. This component must:

(A) identify, discuss, and provide actual samples of acceptable forms of identification, including, but not limited to:

(i) a valid state driver's license issued by the Texas Department of Public Safety; and

(ii) other state or U.S. government issued forms of identification (with photograph);

(B) identify, discuss, and provide actual samples of unacceptable forms of identification including, but not limited to:

(i) a temporary state driver's license;

(ii) a birth certificate;

(iii) a school or work ID;

(iv) a social security card; and

(v) a professionally printed identification card.

(C) explain how to detect invalid identification documents used in attempts to establish proof of age and provide examples of the following:

(i) unofficial documents that look similar to official documents;

(ii) types of document counterfeiting and alteration; and

(iii) warning signs of document counterfeiting and alterations.

(5) Component Five--second party sales. This component must:

(A) explain and define second party sales; and

(B) provide examples of second party sales including, but not limited to, the following:

(i) a minor loitering outside a store in the store parking lot;

(ii) a minor loitering around a store, either inside or outside, after having been refused a cigarette, e-cigarette, or tobacco product purchase; and

(iii) a minor randomly approaching an adult customer to solicit the adult customer to purchase cigarettes, e-cigarettes, or tobacco products and giving the adult customer money.

(6) Component Six--refusing a sale. This component must:

(A) identify and discuss techniques to prevent an illegal sale of cigarettes, e-cigarettes, or tobacco products to a minor or second party;

(B) identify and discuss techniques to terminate an illegal sale of cigarettes, e-cigarettes, or tobacco products to a minor or second party; and

(C) provide examples of words and actions that may be used by a seller to amicably avoid or terminate illegal attempts to purchase cigarettes, e-cigarettes, or tobacco products by a minor.

(e) Class length. The time length of the seller training class should be a minimum of two actual clock hours, including class breaks.

(f) Notice of certification or denial. The comptroller shall notify each applicant with a letter of certification or denial, including reasons for the denial, within 15 business days from the date the application is received by the comptroller. The certification or denial letter will be mailed to the address on the vendor's application.

(g) Certification. A qualified vendor is certified to provide seller training until the certification expires under subsection (h) of this section or [~~unless the certification~~] is revoked or suspended by the comptroller.

(h) Recertification of curriculum.

(1) Every two years, a previously certified vendor must submit a new application to ensure the vendor's course curriculum aligns with federal law, state law, and policy changes relating to cigarettes, e-cigarettes, and tobacco products.

(2) The seller training certification is valid until the last day of each odd numbered year.

(i) [~~(h)~~] Denial. Applications for certification will be denied based on the following factors:

(1) the curriculum information submitted does not meet the minimum requirements set out in subsection (d) of this section;

(2) the application is incomplete; or

(3) the applicant is currently delinquent in the payment of any tax or fee collected by the comptroller.

(j) [~~(i)~~] Administrative hearing. If the comptroller determines that an applicant is not eligible for certification, the applicant will be notified, in writing, that the application has been denied. The notice will state the reasons for the denial. The applicant may, within 15 days of the date of the notice of denial, make a written request for an oral hearing to contest the denial. If the applicant does not request a hearing within 15 days of the date of the notice of denial, the hearing is waived and the denial is final. The hearing will be governed by the provisions of §§1.1-1.42 of this title (relating to Practice and Procedure).

(k) [~~(j)~~] Certification revocation or suspension. The comptroller may, after notice and opportunity for a hearing, revoke or suspend a vendor's certification upon finding that the seller training classes provided by a vendor fail to comply with the comptroller's standards and requirements for seller training programs described in subsections (c), (d), and (e) of this section, or the vendor becomes delinquent in the payment of any tax or fee collected by the comptroller. If the comptroller determines that certification should be suspended or revoked, the comptroller will notify the vendor, in writing, that the certification will be suspended or revoked and will state the reasons for the action. The vendor may, within 15 days of the date of the notice of suspension or revocation, make a written request for an oral hearing to contest the action. If the vendor does not request a hearing within 15 days of the date of the notice of suspension or revocation, the hearing is waived and the suspension or revocation becomes effective.

(l) [~~(k)~~] Certification reinstatement. The comptroller may reinstate the vendor's certification after receiving proof that the vendor has satisfied all the comptroller's standards and requirements for seller training as provided under subsections (c), (d), and (e) of this section, and the vendor is current in the payment of any tax or fee obligation due the comptroller.

(m) [~~(l)~~] Notice of classes scheduled. Vendors must provide the comptroller's office written notification of the date, time, and location of scheduled training classes at least five business days prior to the date training classes will be conducted.

(n) [~~(m)~~] Vendor reporting requirements.

(1) By the 15th day of the month, each certified vendor must report data for each training class completed during the previous month. The data must include:

(A) a class roster with the name, driver's license number, and date of birth of each participant;

(B) the total number of classes conducted for the month;

(D) the total number of participants that successfully completed the class.

(2) The reports must be mailed to the Texas Comptroller of Public Accounts, 111 East 17th Street, Austin, Texas 78774-0100.

(o) [~~(n)~~] Class cancellations. Vendors must notify the comptroller's office [~~by telephone~~] of any training class cancellations prior to the actual training session date [~~by calling 1-800-531-5441, extension 65946 or the local number in Austin (512) 936-5946~~].

(p) [~~(o)~~] Class monitoring. Training classes may be monitored unannounced by the comptroller or a comptroller's representative to evaluate the curriculum presentation and the classroom environment.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 27, 2023.

TRD-202304981

Jenny Burleson

Director, Tax Policy

Comptroller of Public Accounts

Earliest possible date of adoption: February 11, 2024

For further information, please call: (512) 475-2220

34 TAC §3.1204

The Comptroller of Public Accounts proposes amendments to §3.1204, concerning administrative remedies for violations of Health and Safety Code, Chapter 161, Subchapter H or K. The comptroller proposes amendments to implement the portions of Senate Bill 248, 87th Legislature, 2021, that relate to violations and to provide guidance on the process for a permit suspension or revocation that conforms with applicable laws and current agency practice.

The comptroller proposes amending the name of this section to remove the reference to Subchapter K as this section addresses only Subchapter H violations.

The comptroller adds titles to statutory references and makes minor grammatical revisions throughout the section.

The comptroller amends subsection (a) to add definitions of cigar, cigarette, e-cigarette, e-cigarette retailer, and tobacco products from Health and Safety Code, §161.081 and Tax Code, §154.001 and §155.001. The comptroller amends the existing definitions of place of business and permit holder by replacing the statutory references with definitions, based on similar terms from Tax Code, §154.001, Tax Code, §155.001 and Health and Safety Code §161.001 with the actual statutory definitions. The comptroller amends the definition of retailer to include the concepts in Health and Safety Code, §147.001(3) and §161.081(4) and Tax Code, §154.001(17) and §155.001(14). The comptroller alphabetizes and renumbers the definitions accordingly.

The comptroller adds, as subsection (b), a non-exclusive list of violations that result in disciplinary action. The comptroller reletters subsequent subsections.

The comptroller amends the title and content of relettered subsection (c) to clarify that a violation is reported to the comptroller and that the list of people that may report a violation is non-exclusive.

The comptroller amends relettered subsection (d) to implement Senate Bill 248 which repealed the violation provisions in Tax Code, Chapters 154 (Cigarette Tax) and 155 (Cigars and Tobacco Product Tax) and added the updated violation provisions to Health and Safety Code, Chapter 161. The updated provisions extend the look-back violation period from 12 months to 24 months and increase the amount of the fine for each violation that occurs within a specific timeframe.

The comptroller amends relettered subsection (e) to memorialize agency practice regarding the comptroller's notification to a permit holder of a violation of Health and Safety Code, Subchapter H. The comptroller amends the subsection to reflect that the comptroller no longer sends a written notice of a violation by certified mail. The comptroller also amends the subsection to require a permit holder to respond to the written notice of violation within 20 calendar days, rather than 15 calendar days, consistent with current agency practice.

The comptroller amends relettered subsection (f) to provide information on a permit holder's procedures for requesting a hearing. The comptroller also amends the subsection to remove information related to a permit holder's failure to respond to the violation notice which is now in new subsection (g).

The comptroller deletes original subsection (f) as the information is obsolete.

The comptroller removes original subsection (g) regarding the burden of proof in an administrative hearing in its entirety. The burden of proof is addressed in §1.21 of this title (Practice and Procedures).

The amendments are proposed under Health and Safety Code, §161.0901 (Disciplinary Action Against Cigarette, E-Cigarette, and Tobacco Product Retailers), and Tax Code, §111.002, (Rulemaking Authority), which provides the comptroller with the authority to prescribe, adopt, and enforce procedural and due process rules relating to the administration and enforcement of the provisions of regulation of the tobacco statutes.

The amendments implement Government Code, Chapter 2001 (Administrative Procedures Act); Health and Safety Code, Chapter 161, Subchapter H (Distribution of Cigarettes, E-Cigarettes, Or Tobacco Products); and conforms this section to the relevant portions of 34 TAC §§1.1-1.35 (relating to Rules of Practice and Procedure).

§3.1204.Administrative Remedies for Violations of Health and Safety Code, Chapter 161, Subchapter H [~~or K~~].

(a) Definitions. The following words and terms, when used in this section shall have the following meanings, unless the context clearly indicates otherwise.

(1) Cigar--A roll of fermented tobacco that is wrapped in tobacco and the main stream of smoke from which produces an alkaline reaction to litmus paper.

(2) Cigarette--A roll for smoking:

(A) that is made of tobacco or tobacco mixed with another ingredient and wrapped or covered with a material other than tobacco; and

(B) that is not a cigar.

(A) The term "e-cigarette" includes:

(i) a device described by this paragraph 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) a component, part, or accessory for the device, regardless of whether the component, part, or accessory is sold separately from the device.

(B) The term "e-cigarette" does not include a prescription medical device unrelated to the cessation of smoking.

(4) Interstate warehouse--A person in this state who receives untaxed cigarettes, e-cigarettes, tobacco products from a manufacturer, bonded agent, distributor, or importer and stores the tobacco products exclusively for an interstate warehouse transaction.

(5) Interstate warehouse transaction--The sale or delivery of cigarettes, e-cigarettes and 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.

~~[(1) Place of business--Has the meaning assigned by Tax Code, §154.001 and §155.001.]~~

(6) [~~(2)~~] Permit holder--A bonded agent, interstate warehouse, distributor, wholesaler, manufacturer, importer, export warehouse, or retailer who obtains a permit under Health & Safety Code, Chapter 147, Subchapter B (Permits), or Tax Code, §154.101 (Permits) or §155.041 (Permits). [~~Has the meaning assigned by Tax Code, §154.001 or §155.001.~~]

(7) Place of business--

(A) a commercial business location where cigarettes, e-cigarettes or tobacco products are sold;

(B) a commercial business location where cigarettes, e-cigarettes or tobacco products are kept for sale or consumption or otherwise stored;

(D) a vending machine from which cigarettes or tobacco products are sold.

(8) [~~(3)~~] Retailer--A person who engages in the practice of selling cigarettes, e-cigarettes, or tobacco products to consumers and includes a person who sells e-cigarettes through a marketplace and the owner of a cigarette or tobacco product vending machine. [~~Has the meaning assigned by Tax Code, §154.001 or §155.001.~~]

(9) Tobacco product--A tobacco product is:

(A) a cigar;

(B) smoking tobacco, including granulated, plug-cut, crimp-cut, ready-rubbed, and any form of tobacco substitute for smoking in a pipe or as a cigarette;

(D) snuff or other preparations of pulverized tobacco; or

(E) an article or product that is made of tobacco or a tobacco substitute and that is not a cigarette or an e-cigarette.

(b) Violations. Violations of Health and Safety Code, Chapter 161, Subchapter H (Distribution of Cigarettes, E-Cigarettes, or Tobacco Products) include, but are not limited to:

(1) the sale of cigarettes, e-cigarettes or tobacco products to persons younger than 21 years of age, as provided in Health and Safety Code, §161.082;

(2) failure to display a warning sign as prescribed by Health and Safety Code, §161.084;

(3) failure to notify employees of state law as required by Health and Safety Code §161.085;

(4) offering cigarettes, e-cigarettes, or tobacco products for sale in a manner that permits a customer direct access to the cigarettes, e-cigarettes, or tobacco products in violation of Health and Safety Code, §161.086;

(5) installing or maintaining a vending machine containing cigarettes, e-cigarettes, or tobacco products in violation of Health and Safety Code, §161.086;

(6) distributing a free sample of a cigarette, e-cigarette, or tobacco product, or a coupon or other item that the recipient may use to receive a free cigarette, e-cigarette, or tobacco product, in violation of Health and Safety Code, §161.087;

(7) distributing to a person younger than 21 years of age a coupon or other item that the recipient may use to receive a discounted cigarette, e-cigarette, or tobacco product in violation of Health and Safety Code, §161.087; and

(8) markets, advertises, sells, or causes to be sold a prohibited e-cigarette product in violation of Health and Safety Code, §161.0876 and §3.1208 of this title (concerning Prohibited E-Cigarette Products).

(c) [~~(b)~~] Report of violation [~~Notice of violations~~]. The comptroller may receive a report [~~receives notice~~] of a violation of Health and Safety Code, Chapter 161, Subchapter H [~~or K~~] from any person, including:

(1) the Enforcement or Criminal Investigations Divisions of the comptroller's office;

(2) local law enforcement;

(3) a municipal court or a justice of the peace court; or

(4) a complaint reported by a caller on the tobacco hotline.

(d) [~~(c)~~] Disciplinary actions. [~~The comptroller after receiving notice of violation may take the following actions:~~]

(1) 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. [if during the preceding 12 months at the place of business for which a permit is issued, the permit holder has not been found to have violated Health and Safety Code, Chapter 161, Subchapter H or K, the comptroller may require the permit holder to pay a fine in an amount not to exceed $500 per violation;]

(2) The penalties for a violation of Health and Safety Code, Subchapter H are: [if during the preceding 12 months at a place of business for which a permit is issued, the permit holder has been found to have violated Health and Safety Code, Chapter 161, Subchapter H or K, the comptroller may require the permit holder to pay a fine in an amount not to exceed $750 per violation;]

(A) for the first violation at a place of business during the 24-month period preceding the violation, a fine in an amount not to exceed $1,000;

(B) for the second violation at a place of business during the 24-month period preceding the most recent violation, a fine in an amount not to exceed $2,000;

(i) a fine in an amount not to exceed $3,000; and

(ii) suspension, for not more than five days, of the permit for that place of business issued under Health and Safety Code, Chapter 147, or Tax Code, Chapters 154 or 155, as applicable; and

(D) except as provided by paragraph (4) of this subsection, for the fourth or subsequent violation at a place of business during the 24-month period preceding the most recent violation, revocation of the permit issued under Health and Safety Code, Chapter 147, or Tax Code, Chapters 154 or 155, as applicable. If the permit holder does not hold a permit for that place of business under Health and Safety Code, Chapter 147, or Tax Code, Chapters 154 or 155, the revocation of the sales and use tax permit issued under Tax Code §151.201 (Sales Tax Permits).

(3) A permit holder whose permit has been revoked under paragraph (2)(D) of this subsection 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. [if during the preceding 12 months at a place of business for which a permit is issued, the permit holder has been found to have violated Health and Safety Code, Chapter 161, Subchapter H or K at least twice, the comptroller may require the permit holder to pay a fine in an amount not to exceed $1,000 per violation or suspend the permit for that place of business for not more than three days; or]

(4) The comptroller may suspend a permit, but may not revoke the permit, under paragraph (2)(D) of this subsection if the comptroller finds: [if during the preceding 12 months the permit holder has been found to have violated Health and Safety Code, §161.082(b), on four or more previous and separate occasions at the same place of business for which a permit is issued, the comptroller may revoke the permit.]

(A) the permit holder has not violated this subchapter more than seven times at the place of business for which the permit is issued in the 48-month period preceding the violation in question; [~~The revocation of the retailer's permit shall be governed by the provisions in Tax Code, §154.114 and §155.059.~~]

(B) the permit holder requires its employees to attend a comptroller-approved seller training program; [A retailer whose permit has been revoked under paragraph (4) of this subsection may not apply for a retailer's permit for the same place of business before the expiration of six months after the effective date of the revocation.]

(D) the permit holder has not directly or indirectly encouraged the employees to violate the law.

(e) [~~(d)~~] Written notice of violation. When the comptroller receives a report of a violation by a permit holder, the [~~The~~] comptroller may [~~will~~] send a written notice of violation [~~by certified mail~~] to the permit holder informing the permit holder that a violation has been reported and that the comptroller proposes taking disciplinary action against the permit holder. [~~occurred. If the comptroller so offers, the permit holder may have the option to waive the right to a hearing and pay a lesser administrative fine or agree to a lesser administrative remedy.~~]

(1) The written notice of violation will identify the disciplinary action that the comptroller proposes to take.

(2) The written notice of violation will provide the permit holder an opportunity to request a hearing on or before the 20th day after the date on the written notice of violation and will inform the permit holder that failure to request a hearing on or before that date will result in the waiver of the right to a hearing and the imposition of the proposed penalty.

(f) [~~(e)~~] Administrative hearings. If the permit holder responds [~~does not respond~~] to the written notice of violation and requests a hearing on or before the 20th day after the date on the written notice of violation, the comptroller will grant an administrative hearing. A hearing request is considered submitted by the date-stamp affixed by the agency mail room. [~~within 15 calendar days, an order finding that a violation has occurred may be entered and the maximum penalty may be imposed. If the permit holder requests a hearing, a hearing will be set.~~] The hearing shall be governed by §1.21 [~~Chapter 1, Subchapter A, Division 1~~] of this title (relating to Cigarette, E-Cigarette, Cigar, and Tobacco Tax Hearings [~~Practice and Procedures~~]).

[(f) An oral administrative hearing will be held at the office of the Comptroller of Public Accounts in Austin, Texas. The recourse for a permit holder who does not agree with the administrative decision will be governed by the provisions of Tax Code, Chapter 111; Government Code, Chapter 2001; and Chapter 1, Subchapter A, Division 1 of this title.]

(g) Waiver of hearing. If the permit holder does not respond to the written notice of violation on or before the 20th day after the date on the written notice of violation, the permit holder's right to an administrative hearing is waived. An untimely request for an administrative hearing will not be granted.

~~[(g) The burden of proof in an administrative hearing pursuant to this rule is by a preponderance of the evidence, unless otherwise provided by statute.]~~