1-1 By: Armbrister S.B. No. 1236
1-2 (In the Senate - Filed March 10, 1995; March 16, 1995, read
1-3 first time and referred to Committee on State Affairs;
1-4 March 29, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 12, Nays 0; March 29, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1236 By: Armbrister
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the sale of beer within assigned territories.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Subsection (b), Section 102.51, Alcoholic
1-13 Beverage Code, is amended to read as follows:
1-14 (b) Each holder of a general, local, or branch distributor's
1-15 license shall enter into a written agreement with each manufacturer
1-16 from which the distributor purchases beer for distribution and sale
1-17 in this state setting forth the sales territory within which each
1-18 brand of beer purchased by that distributor may be distributed and
1-19 sold. No holder of a general, local, or branch distributor's
1-20 license shall make any sales of any brand of beer outside the sales
1-21 territory specified in the written agreement. No such agreement
1-22 shall interfere with the rights of retailers to purchase beer as
1-23 provided in Section 102.53. A manufacturer may <agree to> not
1-24 assign all or any part of the same sales territory to more than one
1-25 distributor. A copy of the agreement and any amendments to it
1-26 shall be filed with the administrator.
1-27 SECTION 2. Subchapter C, Chapter 102, Alcoholic Beverage
1-28 Code, is amended by adding Sections 102.54 and 102.55 to read as
1-29 follows:
1-30 Sec. 102.54. ADDITIONAL REQUIREMENTS FOR APPLICANTS FOR
1-31 DISTRIBUTOR'S LICENSE. (a) In addition to any other requirements
1-32 necessary for issuance or renewal of a distributor's license, the
1-33 commission or administrator shall require an applicant for a
1-34 license or a holder of a license to show that the applicant or
1-35 holder:
1-36 (1) has entered into or will acquire a written
1-37 agreement designating an assigned territory from a manufacturer in
1-38 accordance with this subchapter and Subchapter D;
1-39 (2) has received or has applied for and will maintain
1-40 all licenses or permits required to engage in business in the
1-41 assigned territory as a holder of a distributor's license,
1-42 including any state or federal licenses or permits;
1-43 (3) has ordered, received, and stored or has committed
1-44 to order, receive, and store a sufficient amount of beer that the
1-45 distributor is authorized to sell to ensure that the distributor
1-46 can supply the reasonable needs of all retailers in the assigned
1-47 territory;
1-48 (4) has received and stored or has committed to
1-49 receive and store beer received from a manufacturer in a manner
1-50 complying with a product quality control standard established by
1-51 the manufacturer or the commission; and
1-52 (5) has or will have the ability to sell, deliver, and
1-53 promote each brand of beer sold by the distributor to all retailers
1-54 in the assigned territory:
1-55 (A) in a manner that complies with the product
1-56 quality control standards of the manufacturer or of the commission;
1-57 and
1-58 (B) on a continuing and recurring basis in
1-59 response to reasonable market demand for a brand of beer by the
1-60 retailer or the retailer's customers in the assigned territory.
1-61 (b) In determining whether an applicant for or holder of a
1-62 distributor's license meets the requirement of Subsection (a)(5),
1-63 the commission or administrator may require the applicant or holder
1-64 to show that the applicant or holder has or will have:
1-65 (1) storage facilities of a sufficient size to store
1-66 each brand of beer in an amount equal to the demand for the product
1-67 from all retailers in the holder's or applicant's assigned
1-68 territory;
2-1 (2) an inventory or a commitment to acquire an
2-2 inventory of each brand of beer in an amount equal to the demand
2-3 for the brand from all retailers in the holder's or applicant's
2-4 assigned territory;
2-5 (3) a sufficient number of employees to provide the
2-6 holder or applicant with the ability:
2-7 (A) to sell, deliver on a reasonably prompt
2-8 basis, and promote each brand of beer to all retailers in the
2-9 holder's or applicant's assigned territory; and
2-10 (B) to prepare and submit in a timely manner any
2-11 fee or tax payments or reports required by any authorized
2-12 governmental regulatory authority, including the Bureau of Alcohol,
2-13 Tobacco, and Firearms and the commission; and
2-14 (4) a sufficient number of delivery vehicles and
2-15 rolling stock to provide the holder or the applicant with the
2-16 capability of transporting, selling, delivering, or promoting each
2-17 brand of beer to all retailers in the assigned territory.
2-18 (c) The commission or administrator shall refuse to approve
2-19 an application for a distributor's license or shall refuse to renew
2-20 a distributor's license if the commission or administrator finds
2-21 the holder or applicant has failed to comply with any of the
2-22 requirements of Subsection (a) or (b).
2-23 (d) In this section:
2-24 (1) "Distributor" means a person who holds a license
2-25 issued under Chapter 64 or 65.
2-26 (2) "Manufacturer" means a person who holds a license
2-27 issued under Chapter 62 or 63.
2-28 (3) "Retailer" means a person who holds a permit or
2-29 license issued under Chapter 25 through 34, 48, 69 through 72, or
2-30 74.
2-31 Sec. 102.55. TERRITORIAL ASSIGNMENTS; DEFINITIONS. (a) In
2-32 this subchapter and Subchapter D, and as the terms relate to an
2-33 agreement between a manufacturer and a distributor describing the
2-34 sales territory in which a distributor may sell the beer of a
2-35 manufacturer:
2-36 (1) "Brand" means any word, name, group of letters,
2-37 symbol, or trademark or a combination of any word, name, group of
2-38 letters, symbol, or trademark that is adopted and used by a
2-39 manufacturer on a label or on packaging to identify a specific beer
2-40 or malt beverage and to distinguish the beer or malt beverage
2-41 product from the label or packaging of another beer or malt
2-42 beverage produced or marketed by any manufacturer. The term does
2-43 not include the name of the manufacturer unless the name of the
2-44 manufacturer is included in the name of the brand.
2-45 (2) "Brand extension" means a brand that incorporates
2-46 a brand name or brand logo, or a substantial part of an existing
2-47 brand name or brand logo, of the same manufacturer.
2-48 (b) A brand extension is not a new or different brand.
2-49 (c) A manufacturer shall assign a brand extension to the
2-50 distributor to whom the brand was originally assigned, if the
2-51 distributor elects to distribute and sell the brand extension.
2-52 SECTION 3. (a) A territorial agreement in effect on March
2-53 22, 1995, between a manufacturer and a distributor in which a
2-54 manufacturer has not assigned all or part of a territory to more
2-55 than one distributor is considered to be an enforceable agreement
2-56 requiring a manufacturer to not assign any part of the assigned
2-57 territory to more than one distributor.
2-58 (b) A territorial agreement in effect on March 22, 1995, in
2-59 which a manufacturer has previously assigned all or part of the
2-60 same sales territory to more than one distributor is not affected
2-61 by the amendment to Section 102.51, Alcoholic Beverage Code,
2-62 enacted by Section 1 of this Act. A territorial agreement in
2-63 effect on March 22, 1995, in which a manufacturer has previously
2-64 assigned all or part of the same sales territory to more than one
2-65 distributor is governed by Section 102.51, Alcoholic Beverage Code,
2-66 as it existed immediately before the effective date of this Act,
2-67 and the former law is continued in effect for that purpose.
2-68 SECTION 4. The importance of this legislation and the
2-69 crowded condition of the calendars in both houses create an
2-70 emergency and an imperative public necessity that the
3-1 constitutional rule requiring bills to be read on three several
3-2 days in each house be suspended, and this rule is hereby suspended,
3-3 and that this Act take effect and be in force from and after its
3-4 passage, and it is so enacted.
3-5 * * * * *