BILL ANALYSIS

S.B. 1932

By: Creighton

Licensing & Administrative Procedures

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Wine is often manufactured and intended to be matured in the bottle for several years. However, some wine is intended to mature for several decades before it reaches its prime. This wine may be purchased for a private collection, only providing for an opportunity for rare, collectable, or unique wine to be sold to restaurants if a manufacturer reserves a portion of their production for long periods of time. This is often not an economically viable strategy for manufacturers, and most restaurants in Texas rarely have wine more than 20 years old. Texas has a vast private wine collecting community, but this wine is often sold in other states with laws favorable to the collectable wine market. S.B. 1932 proposes to keep collectable wine in the Texas market by authorizing a wine collection seller to sell wine to an appropriately permitted restaurant if the wine is manufactured not less than 20 years before the sale date. The bill provides for the maintenance of records related to the transaction.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the Texas Alcoholic Beverage Commission in SECTION 2 of this bill.

ANALYSIS

S.B. 1932 amends the Alcoholic Beverage Code to authorize a wine collection seller to sell to a permitted restaurant wine that is lawfully owned or possessed by the wine collection seller, in an original container sealed by the manufacturer, and manufactured not less than 20 years before the date the wine collection seller sells the wine to a permitted restaurant. The bill defines the following terms:

· "permitted restaurant" as a restaurant that holds a food and beverage certificate and a mixed beverage permit, a wine and malt beverage retailer's permit, or a private club registration permit; and

· "wine collection seller" as a person who is at least 21 years of age, does not hold a license or permit under the Alcoholic Beverage Code, and is, as follows:

o an administrator, executor, receiver, or other fiduciary who receives and sells wine in execution of the person's fiduciary capacity;

o a creditor who receives or takes possession of wine as security for, or in payment of, debt, in whole or in part;

o a public officer or court official who levies on wine under order or process of any court or magistrate to sell the wine in satisfaction of the order or process; or

o any other person who does not hold or have an interest in a permit or a license or in the business of a permit or license holder under the Alcoholic Beverage Code and is not engaged in the business of selling alcoholic beverages.

The bill authorizes a permitted restaurant to purchase wine from a wine collection seller and sell that wine to an ultimate consumer for on-premises consumption in accordance with the permit held by the restaurant.

S.B. 1932 requires a permitted restaurant that purchases wine from a wine collection seller to maintain a record of each purchase until the second anniversary of the date the restaurant sells the wine to an ultimate consumer. The record must include at a minimum the name, address, and phone number of the wine collection seller who sold the wine to the permitted restaurant, a description of the wine and the date of purchase, details of the transaction between the wine collection seller and the permitted restaurant, including the brand name and quantity of containers purchased by the permitted restaurant, and any documents that support the provenance of the wine. The bill requires a permitted restaurant to make such a wine purchase record available upon request to the ultimate consumer who purchases the wine, authorizes the ultimate consumer to request the records either before or after the sale, and authorizes the restaurant to redact from the record the price the restaurant paid for the wine.

S.B. 1932 requires the Texas Alcoholic Beverage Commission (TABC) to assess an administrative penalty in the amount of $500 against a permitted restaurant for each violation of the bill's provisions. The bill establishes that sales of wine by a wine collection seller to a permitted restaurant under the bill's provisions are exempt from taxes imposed on liquor under applicable state law. The bill requires TABC to adopt rules necessary to implement the bill's provisions as soon as practicable after the bill's effective date.

EFFECTIVE DATE

September 1, 2023.