BILL ANALYSIS H.B. 2451 By: Brimer 4-4-95 Committee Report (Unamended) BACKGROUND Current law prohibits any person from owning an interest in more than 5 package stores. There is an exception to the law which allows package stores owned by members of the same family to consolidate their businesses even if the consolidated business has more than 5 locations. This loophole has been used by several package stores in the state to grow substantially beyond the 5 locations limit. Also, there is currently no limit on the number of package stores that may be issued permits in any particular county. As a result, there is an extremely high saturation of package stores in some counties, most notably Dallas County and Harris County. Such over saturation has caused concerns from neighborhoods and others where high concentrations of liquor stores are evident. PURPOSE H.B. 2451 would raise the fee for a package store permit from $300 to $500, and prohibit a person from lawfully having an interest in more than five (5) package stores. Would also create a "package store special permit". H.B. 2451 would also place a limit on the number of package store permits that may be issued in a single county. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 22, Alcoholic Beverage Code. Adds before Section 22.01, "Subchapter A: General Provisions." SECTION 2. Amends Section 22.02, Alcoholic Beverage Code. Raises the annual state fee for a package store permit from $300 to $500. SECTION 3. Amends Section 22.05, Alcoholic Beverage Code. This section governs a person who lawfully has an interest in more than five (5) package stores. Requires a person seeking protection under this section to file written notice with the commission before December 31, 1995. Requires the commission to issue a new permit to replace existing permits upon payment of a $500 fee. New permit to be called "package store special permit". If a permittee fails to notify the commission in time, a permittee may not be issued and an applicant must comply with previous provisions. Allows a person to sell or transfer to a qualified person, and requires the commission to issue a package store special permit. Should the transfer occur by law through various factors, the commission shall not include the permit in the determination of the limitations of permits in a county. Allows for the transfer of a permit only in the same county. A person with an interest in a package store may not have an interest in more permits than were filed for on or before December 31, 1995. And should the total number of permits held by a person drop below the original number of permits issued, the lower number becomes the new maximum number of permits a person may hold. Prohibits a person from having an interest in a package store and a package store special permit. SECTION 4. Amends Alcoholic Beverage Code by adding after Section 22.12: SUBCHAPTER B: LIMITATION ON NUMBER OF PERMITS. Sec.22.50. Limits the number of package store permits which may be issued in a county. The cap for a county with a population of 30,000 or less is three (3) permits. In county's with a population greater than 30,000, the cap is one (1) permit per 10,000 in population. Does not prevent the sell or transfer of the business to another person. Sec.22.51 Requires that on 09/01/95, and annually thereafter, the commission shall publish a list showing the number of permits authorized in each county and the total number of permits actually issued for each county. Sec.22.52 Provides that when the actual number of permits is less than the authorized number, new permits shall be issued on the basis of an annual lottery held by the commission, with the advice and guidance of the Texas Lottery Commission. A lottery applicant is required to pay a non-refundable fee of $1,000 for each permit applied for. A person may file more than one application for any available permit. Makes provisions should an applicant win the permit lottery and is later deemed ineligible to hold the permit. Section 11.38 which allows cities and counties to collect additional local fees is not applicable to the lottery application fee. Sec. 22.55 If a wet area becomes dry, all package store permits in the area become dormant, however it makes provisions to allow the permit to remain in effect for up to 5 years. Dormant permits may be transferred within the county to a location which is wet for package stores and shall become effective when it is determined that the premises complies with the code. Dormant permits may be renewed without a specific premises location, and the renewal fee is $1,000. Sec. 22.56 Makes the holder of a package store permit subject to the payment terms of Sec. 102.32, Alcoholic Beverage Code. SECTION 5. Emergency Clause. SUMMARY OF COMMITTEE ACTION HB 2451 was heard in a Public Hearing on March 29, 1995. The Chair recognized the following person to testify in favor of the bill: Mr. Fred Niemann, Jr., Texas Package Stores Assn., Inc.; HB 2451 was left pending in committee. HB 2451 was heard in a Formal Meeting on April 4, 1995. Representative Kubiak moved that the full committee adopt HB 2451, and that it be reported favorably to the full House with the recommendation that it do pass and be printed. The motion prevailed by the following vote: AYES: (9), NAYS: (0), ABSENT: (0). Representative Kubiak moved that HB 2451 be sent to the Local and Consent Calendar, by the vote which HB 2451 had been favorably approved. There was no objection.