Y BILL ANALYSIS
C.S.H.B. 1419
By: Yarbrough (Cain)
State Affairs
5-12-95
Senate Committee Report (Substituted)
BACKGROUND
Mixed beverage and private club permits are used by both bars and
restaurants in order to sell or serve liquor. Although both serve
liquor, it is considered the primary product in a bar setting and
an ancillary product in a restaurant. Regulation suitable for one
type of operation is not necessarily suitable to the other. The
attempt to regulate the two types of establishment under the same
regulatory framework has caused some difficulty for both the
legislature and the Texas Alcoholic Beverage Commission.
PURPOSE
As proposed, C.S.H.B. 1419 creates the food and beverage
certificate for establishments that sell alcoholic beverages, but
whose primary sales are food; sets forth regulations for the
issuance and cancellation of a certificate.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is granted
to the Texas Alcoholic Beverage Commission under SECTION 1 (Section
25.13(b), Alcoholic Beverage Code), under SECTION 2 (Section
28.18(b), Alcoholic Beverage Code), under SECTION 3 (Section
32.23(b), Alcoholic Beverage Code), and under SECTION 4 (Section
69.16(b), Alcoholic Beverage Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 25, Alcoholic Beverage Code, by adding
Section 25.13, as follows:
Sec. 25.13. FOOD AND BEVERAGE CERTIFICATE. (a) Authorizes a
holder of a wine and beer retailer's permit (retailer's
permit) to be issued a food and beverage certificate
(certificate) by the Texas Alcoholic Beverage Commission
(commission) if foodservice is the primary business being
operated on the premises by the permittee.
(b) Requires an applicant or holder of a certificate to have
foodservice facilities for the preparation and service of
multiple entrees. Requires the commission to adopt rules to
assure that the holder of a certificate maintains
foodservice as the primary business on the premises for
which a certificate has been issued.
(c) Requires the fee for a certificate to be set to recover
the cost of issuing the certificate and administering this
section.
(d) Provides that a certificate expires on the expiration of
the primary retailer's permit. Authorizes a certificate to
be canceled if the holder is not operating primarily as a
foodservice establishment. Requires it to be presumed that
a permittee is not operating as a foodservice establishment
if alcohol sales are in excess of 75 percent of the gross
receipts of the premises. Authorizes the commission to
impose a fine up to $5,000 on the certificate holder not
operating as a foodservice establishment and to cancel the
permittee's retailer's permit if the permittee knowingly
does so.
(e) Applies the statutory provisions and rules applying to
a retailer's permit holder as of August 25, 1995, to a
certificate holder also. Prohibits the application of a
provision or rule applying to a retailer's permit holder
after August 25, 1995, from applying to the certificate
holder, unless there are specific references to a
certificate holder.
SECTION 2. Amends Chapter 28, Alcoholic Beverage Code, by adding
Section 28.18, as follows:
Sec. 28.18. FOOD AND BEVERAGE CERTIFICATE. (a) Authorizes a
holder of a mixed beverage permit to be issued a certificate
by the commission if the gross receipts of mixed beverages
sold by the holder are 75 percent or less of the total gross
receipts.
(b) Requires an applicant or holder of a certificate to have
foodservice facilities for the preparation and service of
multiple entrees. Requires the commission to adopt rules to
assure that the holder of a certificate maintains
foodservice as the primary business on the premises for
which a certificate has been issued.
(c) Requires the fee for a certificate to be set to recover
the cost of issuing the certificate and administering this
section.
(d) Requires the commission to request certification by the
comptroller to determine whether the holder is in compliance
with Subsection (a) on receipt of an application for renewal
of a mixed beverage permit by a certificate holder.
Requires the comptroller to compare the permittee's gross
receipts tax reports with the sales tax reports in
determining compliance with Subsection (a). Prohibits the
commission from renewing the certificate if the holder is
not in compliance.
(e) Provides that a certificate expires on the expiration of
the primary mixed beverage permit. Prohibits the holder of
a mixed beverage permit who is denied renewal of a
certificate from applying for a new certificate until one
year after the comptroller's determination.
(f) Applies the statutory provisions and rules applying to
a mixed beverage permit holder as of August 25, 1995, to a
certificate holder also. Prohibits the application of a
provision or rule applying to a mixed beverage permit holder
after August 25, 1995, from applying to the certificate
holder, unless there are specific references to a
certificate holder.
(f) Applies the provisions of this code that apply to a
holder of a mixed beverage permit to a certificate holder
also, except Section 11.11.
SECTION 3. Amends Chapter 32, Alcoholic Beverage Code, by adding
Section 32.23, as follows:
Sec. 32.23. FOOD AND BEVERAGE CERTIFICATE. (a) Authorizes a
holder of a private club registration permit (club permit) to
be issued a certificate by the commission if the gross
receipts of mixed beverages sold by the holder are 75 percent
or less of the total gross receipts.
(b) Requires an applicant or holder of a certificate to have
foodservice facilities for the preparation and service of
multiple entrees. Requires the commission to adopt rules to
assure that the holder of a certificate maintains
foodservice as the primary business on the premises for
which a certificate has been issued.
(c) Requires the fee for a certificate to be set to recover
the cost of issuing the certificate and administering this
section.
(d) Requires the commission to request certification by the
comptroller to determine whether the holder is in compliance
with Subsection (a) on receipt of an application for renewal
of a mixed beverage permit by a certificate holder.
Requires the comptroller to compare the permittee's gross
receipts tax reports with the sales tax reports in
determining compliance with Subsection (a). Prohibits the
commission from renewing the certificate if the holder is
not in compliance.
(e) Provides that a certificate expires on the expiration of
the primary club permit. Prohibits the holder of a club
permit who is denied renewal of a certificate from applying
for a new certificate until one year after the comptroller's
determination.
(f) Applies the statutory provisions and rules applying to
a club permit holder as of August 25, 1995, to a certificate
holder also. Prohibits the application of a provision or
rule applying to a club permit holder after August 25, 1995,
from applying to the certificate holder, unless there are
specific references to a certificate holder.
SECTION 4. Amends Chapter 69, Alcoholic Beverage Code, by adding
Section 69.16, as follows:
Sec. 69.16. FOOD AND BEVERAGE CERTIFICATE. (a) Authorizes a
retail dealer's on-premise license (dealer's license) to be
issued a certificate by the commission if foodservice is the
primary business being operated on the premises by the
permittee.
(b) Requires an applicant or holder of a certificate to have
foodservice facilities for the preparation and service of
multiple entrees. Requires the commission to adopt rules to
assure that the holder of a certificate maintains
foodservice as the primary business on the premises for
which a certificate has been issued.
(c) Requires the fee for a certificate to be set to recover
the cost of issuing the certificate and administering this
section.
(d) Provides that a certificate expires on the expiration of
the primary retailer's permit. Authorizes a certificate to
be canceled if the holder is not operating primarily as a
foodservice establishment. Requires it to be presumed that
a permittee is not operating as a foodservice establishment
if alcohol sales are in excess of 75 percent of the gross
receipts of the premises. Authorizes the commission to
impose a fine up to $5,000 on the certificate holder not
operating as a foodservice establishment and to cancel the
permittee's retailer's permit if the permittee knowingly
does so.
(e) Applies the statutory provisions and rules applying to
a retailer's permit holder as of August 25, 1995, to a
certificate holder also. Prohibits the application of a
provision or rule applying to a retailer's permit holder
after August 25, 1995, from applying to the certificate
holder, unless there are specific references to a
certificate holder.
SECTION 5. Amends Chapter 11B, Alcoholic Beverage Code, by adding
Section 11.392, as follows:
Sec. 11.392. NOTICE OF PRIVATE CLUB APPLICATION OR RENEWAL.
(a) Requires the commission to give notice of an application
for a permit or renewal of a permit issued under Chapter 32 or
33 to the state senator, the state representative, the
municipal governing body, the commissioners court of the
district or county in which the premises are located, and the
chief of police of the municipality, if the premises are
located in an incorporated area, and the sheriff of the county
in which the premises are located.
(b) Requires the applicant for a club permit renewal to
publish notice of the renewal application in a newspaper in
accordance with Sections 11.39(a) and (b).
(c) Sets forth time limits for the notices provided under
this section.
(d) Provides that this section does not apply to a fraternal
or veterans organization applying for a permit or a renewal
of a permit.
SECTION 6. Amends Section 11.61(d), Alcoholic Beverage Code, to
delete a provision authorizing the commission or its administrator
to summarily suspend without a hearing a club permit.
SECTION 7. Amends Chapter 11C, Alcoholic Beverage Code, by adding
Sections 11.612 and 11.613, as follows:
Sec. 11.612. CANCELLATION OF PRIVATE CLUB PERMIT. (a)
Authorizes the commission or administrator to cancel a permit
issued under Chapter 32 or 33 and to refuse to issue a new
alcoholic beverage permit for the same premises for one year
after the cancellation if certain circumstances exist.
(b) Provides that this section does not apply to a permit
issued to a fraternal or veterans organization.
Sec. 11.613. SUMMARY SUSPENSION OF PRIVATE CLUB PERMIT.
Authorizes the commission or administrator without a hearing
to summarily suspend a permit issued under Chapter 32 or 33
for investigative purposes for up to seven days if a shooting,
stabbing, or murder has occurred on the licensed premises that
is likely to result in a subsequent act of violence. Sets
forth requirements for delivering notice of the order
suspending the permit.
SECTION 8. Amends Section 109.57, Alcoholic Beverage Code, by
adding Subsection (e), as follows:
(e) Authorizes a municipality located in a county that has a
population of 1.2 million or more and that is adjacent to a
county with a population of more than 250,000 or a
municipality located in a county with a population of 250,000
or more and that is adjacent to a county with a population of
1.2 million or more to regulate the location of an
establishment issued a permit under certain circumstances.
SECTION 9. Emergency clause.
Effective date: 90 days after adjournment.