By Jones of Lubbock H.B. No. 2998
75R8895 E
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of alcoholic beverages and imposing a
1-3 limit on the number of package store permits that may be issued in
1-4 a county.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Chapter 22, Alcoholic Beverage Code, is amended
1-7 by designating Sections 22.01-22.16 as Subchapter A and adding a
1-8 heading to read as follows:
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 SECTION 2. Section 22.05, Alcoholic Beverage Code, is
1-11 amended to read as follows:
1-12 Sec. 22.05. PACKAGE STORE SPECIAL PERMIT [CONSOLIDATION OF
1-13 PERMITS]. (a) If a person lawfully has an interest in more than
1-14 five package store permits on August 31, 1997, this section shall
1-15 govern the grandfathering of all package store permits in which
1-16 such person has an interest.
1-17 (b) Any package store permittee electing to receive the
1-18 protection of this section must file with the commission a written
1-19 notification on or before December 31, 1997, that such permit
1-20 qualifies for protection under this section. If the commission
1-21 determines that the permit qualifies, the commission shall issue a
1-22 new permit to replace the existing package store permit upon
1-23 payment by the permittee of a $500 fee. The new permit shall be
1-24 called a "package store special permit." A package store special
2-1 permit shall, for all purposes of this code except for this section
2-2 and Section 22.04, be considered a package store permit and shall
2-3 be subject to cancellation, suspension, or other disciplinary
2-4 action and all applicable provisions of the code and commission
2-5 rules as they relate to package stores. Section 11.38 shall not be
2-6 applicable to the fee called for in this subsection.
2-7 (c) If a package store permittee fails to notify the
2-8 commission on or before December 31, 1997, that it seeks to be
2-9 grandfathered, or if the commission determines that the permittee
2-10 is not eligible for grandfather protection under this section, such
2-11 permittee shall not be issued a package store special permit and
2-12 must comply with Section 22.04.
2-13 (d) The commission shall renew a package store special
2-14 permit on proper application if the applicant is otherwise
2-15 qualified.
2-16 (e) A person holding a package store special permit may sell
2-17 or transfer all or part of their package store business to a person
2-18 otherwise qualified to hold a package store permit. The commission
2-19 shall issue a new package store special permit to replace an
2-20 existing package store special permit if such issuance is necessary
2-21 to effectuate such a sale or transfer. If the transfer of interest
2-22 occurs by operation of law, such as through death, guardianship,
2-23 receivership, or bankruptcy, it shall be reported to the commission
2-24 within 180 days of the date of the occurrence. Any sale or
2-25 transfer under this section, including a transfer by operation of
2-26 law, shall not be included in determining the limitation on numbers
2-27 of permits under Section 22.50 of this code.
3-1 (f) A person holding a package store special permit may
3-2 transfer the permit to another location only in the same county.
3-3 (g) A person who has an interest in a package store special
3-4 permit may never have an interest in more package store special
3-5 permits than were issued to such person pursuant to notification
3-6 filed on or before December 31, 1997, and issued to that person by
3-7 the commission in accordance with this section or which were
3-8 acquired by that person as the result of a sale or transfer under
3-9 this section. If at any time the total number of package store
3-10 special permits held by a person drops below the original number of
3-11 package store special permits issued to that person or originally
3-12 acquired by that person as the result of a sale or transfer, the
3-13 lower number shall become the new maximum number of package store
3-14 special permits that the person may hold.
3-15 (h) A person who has an interest in a package store special
3-16 permit may not also have an interest in a package store permit.
3-17 [If one person or two or more persons related within the first
3-18 degree of consanguinity have a majority of the ownership in two or
3-19 more legal entities holding package store permits, they may
3-20 consolidate the package store businesses into a single legal
3-21 entity. That single legal entity may then be issued permits for
3-22 all the package stores, notwithstanding any other provision of this
3-23 code. After the consolidation, none of the permits may be
3-24 transferred to another county.]
3-25 SECTION 3. Chapter 22, Alcoholic Beverage Code, is amended
3-26 by adding Subchapter B to read as follows:
3-27 SUBCHAPTER B. LIMITATION ON NUMBER OF PERMITS
4-1 Sec. 22.50. PACKAGE STORE PERMITS LIMITED. (a) For
4-2 purposes of this subchapter, the term "permit" means "package store
4-3 permit."
4-4 (b) Except as provided in the subchapter, the maximum number
4-5 of permits the commission may issue in a single county is limited
4-6 as follows:
4-7 (1) in a county with a population of 100,000 or less,
4-8 10 permits; or
4-9 (2) in a county with a population of greater than
4-10 100,000, one permit for each 10,000 inhabitants or fraction
4-11 thereof.
4-12 (c) For purposes of this section, the population of a county
4-13 shall be determined by the latest federal census.
4-14 (d) This section shall not prevent the commission from
4-15 renewing the permit of any person holding a permit on the effective
4-16 date of this subchapter provided the permit is otherwise eligible
4-17 for renewal.
4-18 (e) This section shall not prevent a package store owner
4-19 from selling or transferring all or part of their business to
4-20 another person. The commission shall issue an original permit as a
4-21 successor to replace an existing package store permit if such
4-22 issuance is necessary to effectuate the sale or transfer of a
4-23 package store from one person to another person who is qualified to
4-24 hold the permit. If the transfer of interest occurs by operation
4-25 of law, such as through death, guardianship, receivership, divorce,
4-26 or bankruptcy, it shall be reported to the commission within 180
4-27 days of the date of the occurrence. Any sale or transfer under
5-1 this section, including a transfer by operation of law, shall not
5-2 be included in determining the limitation on numbers of permits
5-3 under this section.
5-4 (f) A permit may be transferred from one location in a
5-5 county to another location in the same county. No permit may be
5-6 transferred to a premises located outside the county in which the
5-7 permit was originally issued.
5-8 Sec. 22.51. DETERMINATION OF ALLOCATION. On September 1,
5-9 1997, and annually thereafter the commission shall publish a
5-10 listing of all counties showing the number of permits each county
5-11 is authorized to have under Section 22.50 (the "authorized number
5-12 of permits"), and a listing showing the actual number of permits
5-13 issued for all premises located in the county ("the actual number
5-14 of permits"). For a county that is entirely dry with regard to the
5-15 sale of liquor for off-premise consumption, the authorized number
5-16 of permits shall be listed as zero.
5-17 Sec. 22.52. LOTTERY FOR NEW PERMITS. During periods in
5-18 which the actual number of permits in a county is less than the
5-19 authorized number of permits, new permits shall be issued to
5-20 otherwise qualified applicants on the basis of annual lottery
5-21 drawings held by the commission. The lottery shall be held by the
5-22 commission with the advice and guidance of the Texas Lottery
5-23 Commission. To participate in a lottery drawing an applicant must
5-24 pay a nonrefundable lottery application fee of $1,000 for each
5-25 permit applied for. A person may file more than one lottery
5-26 application for any available permit. If an applicant is selected
5-27 by the lottery and is determined to be ineligible for issuance of
6-1 the permit, a new lottery drawing shall be held in which all
6-2 nonselected applicants for the permit shall automatically be
6-3 entered and in which additional lottery applications may be
6-4 accepted. Section 11.38 of this code authorizing cities and
6-5 counties to collect local fees shall not be applicable to a lottery
6-6 application fee.
6-7 Sec. 22.53. PROVISIONS TO ENSURE ADEQUATE COMPETITION.
6-8 (a) Upon finding by the county commissioners of a county and by
6-9 the Texas Alcoholic Beverage Commission that there is insufficient
6-10 market competition in that county, additional permits may be
6-11 authorized by the commission for that county, and the number of new
6-12 permits so authorized shall be determined by the commission. Any
6-13 new permits authorized by this subsection shall be issued by
6-14 lottery in accordance with Section 22.52.
6-15 (b) A person who has an ownership interest in 20 percent or
6-16 more of the total permits issued in a county shall not be eligible
6-17 to receive a new permit in that county under Section 22.52.
6-18 Sec. 22.54. EFFECT OF CHANGE IN LOCAL OPTION STATUS. (a)
6-19 If an area that is wet with regard to the sale of liquor for
6-20 off-premise consumption is voted dry for such sales in a local
6-21 option election, all permits shall automatically become dormant
6-22 on the effective date of such change of status. Dormant permits
6-23 may be renewed for no more than five consecutive years. A dormant
6-24 permit may be transferred within the same county to a location that
6-25 is wet for purposes of the sale of liquor for off-premise
6-26 consumption, and in such event, the holder of the dormant permit
6-27 may apply to the commission for active status, and such permit
7-1 shall become active upon determination by the commission that the
7-2 premises covered by the permit meet all requirements of this code.
7-3 A dormant permit may be renewed without a specific premises
7-4 location or with a premises location that is located in a dry area.
7-5 The fee for renewal of a dormant permit is $1,000.
7-6 (b) If an area that is dry with regard to the sale of liquor
7-7 for off-premises consumption is voted wet for such sales in a local
7-8 option election, the holder of a dormant permit may apply to the
7-9 commission for active status, and such permit shall become active
7-10 upon determination by the commission that the premises covered by
7-11 the permit meet all requirements of this code. A dormant permit
7-12 shall be treated as an issued permit for purposes of calculating
7-13 the actual number of permits issued in a county under Section
7-14 22.51.
7-15 Sec. 22.55. PURCHASE AND SALE RESTRICTIONS. No wholesale
7-16 dealer may sell and no retailer, including the holder of a package
7-17 store special permit, may purchase liquor except for cash or on
7-18 terms requiring payment by the retailer in accordance with Section
7-19 102.32(c).
7-20 SECTION 4. The importance of this legislation and the
7-21 crowded condition of the calendars in both houses create an
7-22 emergency and an imperative public necessity that the
7-23 constitutional rule requiring bills to be read on three several
7-24 days in each house be suspended, and this rule is hereby suspended,
7-25 and that this Act take effect and be in force from and after its
7-26 passage, and it is so enacted.