By: Armbrister S.B. No. 1236
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the sale of beer within assigned territories.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Subsection (b), Section 102.51, Alcoholic
1-4 Beverage Code, is amended to read as follows:
1-5 (b) Each holder of a general, local, or branch distributor's
1-6 license shall enter into a written agreement with each manufacturer
1-7 from which the distributor purchases beer for distribution and sale
1-8 in this state setting forth the sales territory within which each
1-9 brand of beer purchased by that distributor may be distributed and
1-10 sold. No holder of a general, local, or branch distributor's
1-11 license shall make any sales of any brand of beer outside the sales
1-12 territory specified in the written agreement. No such agreement
1-13 shall interfere with the rights of retailers to purchase beer as
1-14 provided in Section 102.53. A manufacturer may <agree to> not
1-15 assign all or any part of the same sales territory to more than one
1-16 distributor. A copy of the agreement and any amendments to it
1-17 shall be filed with the administrator.
1-18 SECTION 2. Subchapter C, Chapter 102, Alcoholic Beverage
1-19 Code, is amended by adding Sections 102.54 and 102.55 to read as
1-20 follows:
1-21 Sec. 102.54. ADDITIONAL REQUIREMENTS FOR APPLICANTS FOR
1-22 DISTRIBUTOR'S LICENSE. (a) In addition to any other requirements
1-23 necessary for issuance or renewal of a distributor's license, the
1-24 commission or administrator shall require an applicant for a
2-1 license or a holder of a license to show that the applicant or
2-2 holder:
2-3 (1) has entered into or will acquire a written
2-4 agreement designating an assigned territory from a manufacturer in
2-5 accordance with this subchapter and Subchapter D;
2-6 (2) has received or has applied for and will maintain
2-7 all licenses or permits required to engage in business in the
2-8 assigned territory as a holder of a distributor's license,
2-9 including any state or federal licenses or permits;
2-10 (3) has ordered, received, and stored or has committed
2-11 to order, receive, and store a sufficient amount of beer that the
2-12 distributor is authorized to sell to ensure that the distributor
2-13 can supply the reasonable needs of all retailers in the assigned
2-14 territory;
2-15 (4) has received and stored or has committed to
2-16 receive and store beer received from a manufacturer in a manner
2-17 complying with a product quality control standard established by
2-18 the manufacturer or the commission; and
2-19 (5) has or will have the ability to sell, deliver, and
2-20 promote each brand of beer sold by the distributor to all retailers
2-21 in the assigned territory:
2-22 (A) in a manner that complies with the product
2-23 quality control standards of the manufacturer or of the commission;
2-24 and
2-25 (B) on a continuing and recurring basis in
2-26 response to reasonable market demand for a brand of beer by the
2-27 retailer or the retailer's customers in the assigned territory.
3-1 (b) In determining whether an applicant for or holder of a
3-2 distributor's license meets the requirement of Subsection (a)(5),
3-3 the commission or administrator may require the applicant or holder
3-4 to show that the applicant or holder has or will have:
3-5 (1) storage facilities of a sufficient size to store
3-6 each brand of beer in an amount equal to the demand for the product
3-7 from all retailers in the holder's or applicant's assigned
3-8 territory;
3-9 (2) an inventory or a commitment to acquire an
3-10 inventory of each brand of beer in an amount equal to the demand
3-11 for the brand from all retailers in the holder's or applicant's
3-12 assigned territory;
3-13 (3) a sufficient number of employees to provide the
3-14 holder or applicant with the ability:
3-15 (A) to sell, deliver on a reasonably prompt
3-16 basis, and promote each brand of beer to all retailers in the
3-17 holder's or applicant's assigned territory; and
3-18 (B) to prepare and submit in a timely manner any
3-19 fee or tax payments or reports required by any authorized
3-20 governmental regulatory authority, including the Bureau of Alcohol,
3-21 Tobacco, and Firearms and the commission; and
3-22 (4) a sufficient number of delivery vehicles and
3-23 rolling stock to provide the holder or the applicant with the
3-24 capability of transporting, selling, delivering, or promoting each
3-25 brand of beer to all retailers in the assigned territory.
3-26 (c) The commission or administrator shall refuse to approve
3-27 an application for a distributor's license or shall refuse to renew
4-1 a distributor's license if the commission or administrator finds
4-2 the holder or applicant has failed to comply with any of the
4-3 requirements of Subsection (a) or (b).
4-4 (d) In this section:
4-5 (1) "Distributor" means a person who holds a license
4-6 issued under Chapter 64 or 65.
4-7 (2) "Manufacturer" means a person who holds a license
4-8 issued under Chapter 62 or 63.
4-9 (3) "Retailer" means a person who holds a permit or
4-10 license issued under Chapter 25 through 34, 48, 69 through 72, or
4-11 74.
4-12 Sec. 102.55. TERRITORIAL ASSIGNMENTS; DEFINITIONS. (a) In
4-13 this subchapter and Subchapter D, and as the terms relate to an
4-14 agreement between a manufacturer and a distributor describing the
4-15 sales territory in which a distributor may sell the beer of a
4-16 manufacturer:
4-17 (1) "Brand" means any word, name, group of letters,
4-18 symbol, or trademark or a combination of any word, name, group of
4-19 letters, symbol, or trademark that is adopted and used by a
4-20 manufacturer on a label or on packaging to identify a specific beer
4-21 or malt beverage and to distinguish the beer or malt beverage
4-22 product from the label or packaging of another beer or malt
4-23 beverage produced or marketed by any manufacturer. The term does
4-24 not include the name of the manufacturer unless the name of the
4-25 manufacturer is included in the name of the brand.
4-26 (2) "Brand extension" means a brand that incorporates
4-27 a brand name or brand logo, or a substantial part of an existing
5-1 brand name or brand logo, of the same manufacturer.
5-2 (b) A brand extension is not a new or different brand.
5-3 (c) A manufacturer shall assign a brand extension to the
5-4 distributor to whom the brand was originally assigned, if the
5-5 distributor elects to distribute and sell the brand extension.
5-6 SECTION 3. (a) A territorial agreement in effect on March
5-7 22, 1995, between a manufacturer and a distributor in which a
5-8 manufacturer has not assigned all or part of a territory to more
5-9 than one distributor is considered to be an enforceable agreement
5-10 requiring a manufacturer to not assign any part of the assigned
5-11 territory to more than one distributor.
5-12 (b) A territorial agreement in effect on March 22, 1995, in
5-13 which a manufacturer has previously assigned all or part of the
5-14 same sales territory to more than one distributor is not affected
5-15 by the amendment to Section 102.51, Alcoholic Beverage Code,
5-16 enacted by Section 1 of this Act. A territorial agreement in
5-17 effect on March 22, 1995, in which a manufacturer has previously
5-18 assigned all or part of the same sales territory to more than one
5-19 distributor is governed by Section 102.51, Alcoholic Beverage Code,
5-20 as it existed immediately before the effective date of this Act,
5-21 and the former law is continued in effect for that purpose.
5-22 SECTION 4. The importance of this legislation and the
5-23 crowded condition of the calendars in both houses create an
5-24 emergency and an imperative public necessity that the
5-25 constitutional rule requiring bills to be read on three several
5-26 days in each house be suspended, and this rule is hereby suspended,
5-27 and that this Act take effect and be in force from and after its
6-1 passage, and it is so enacted.
6-2 COMMITTEE AMENDMENT NO. 1
6-3 Amend S.B. No. 1236 as follows:
6-4 In SECTION 3 of the bill, STRIKE the date "March 22, 1995"
6-5 wherever it appears and insert, in lieu thereof, the date "April
6-6 11, 1995".
6-7 Kubiak