By Keel                                                H.B. No. 124
         76R30 PAM-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the promotion of Texas agricultural products and the
 1-3     sale of wine; creating a farm winery permit; imposing a tax on the
 1-4     sale of wine; providing penalties.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Section 11.34(a), Alcoholic Beverage Code, is
 1-7     amended to read as follows:
 1-8           (a)  An applicant for a wholesaler's, class B wholesaler's,
 1-9     distiller's and rectifier's, brewer's, farm winery, or winery
1-10     permit may consolidate in a single application the [his]
1-11     application for that permit and the [his] application for:
1-12                 (1)  private storage;
1-13                 (2)  storage in a public bonded warehouse;
1-14                 (3)  a private carrier's permit; and
1-15                 (4)  any other permit the applicant [he] is qualified
1-16     to receive.
1-17           SECTION 2.  Section 11.39(a), Alcoholic Beverage Code, is
1-18     amended to read as follows:
1-19           (a)  Every applicant for a pharmacist's medicinal, brewer's,
1-20     distiller's and rectifier's, mixed beverage, private club
1-21     registration, winery, farm winery, wholesaler's, class B
1-22     wholesaler's, wine bottler's, or package store permit shall give
1-23     notice of the application by publication at the applicant's [his]
1-24     own expense in two consecutive issues of a newspaper of general
 2-1     circulation published in the municipality [city or town] in which
 2-2     the applicant's [his] place of business is located.  If no
 2-3     newspaper  is published in the municipality [city or town], the
 2-4     notice shall be published in a newspaper of general circulation
 2-5     published in the county where the applicant's business is located.
 2-6     If no newspaper is published in the county, the notice shall be
 2-7     published in a qualified newspaper published in the closest
 2-8     neighboring county and circulated in the county of the applicant's
 2-9     residence.
2-10           SECTION 3.  Section 16.01(a), Alcoholic Beverage Code, is
2-11     amended to read as follows:
2-12           (a)  The holder of a winery permit may:
2-13                 (1)  manufacture, bottle, label, and package wine
2-14     containing not more than 24 percent alcohol by volume;
2-15                 (2)  manufacture and purchase [import] grape brandy for
2-16     fortifying purposes only and to be used only on the holder's [his]
2-17     licensed premises;
2-18                 (3)  sell wine in this state to holders of wholesaler's
2-19     permits, winery permits, farm winery permits, and wine bottler's
2-20     permits;
2-21                 (4)  sell wine to ultimate consumers in unbroken
2-22     packages for off-premises consumption in an amount not to exceed
2-23     25,000 gallons annually;
2-24                 (5)  sell the wine outside this state to qualified
2-25     persons;
2-26                 (6)  blend wines; and
2-27                 (7)  dispense free wine for consumption on the winery
 3-1     premises.
 3-2           SECTION 4.  Chapter 16, Alcoholic Beverage Code, is amended
 3-3     by adding Section 16.08 to read as follows:
 3-4           Sec. 16.08.  WINE FESTIVALS.  (a)  At an event that is
 3-5     approved by the commission and organized to celebrate and promote
 3-6     the wine industry in this state, the holder of a winery permit may:
 3-7                 (1)  if the event is held in whole or in part on the
 3-8     winery premises, sell wine to consumers for consumption on or off
 3-9     the holder's premises and dispense wine without charge for
3-10     consumption on or off the holder's premises; and
3-11                 (2)  if the event is held at a location other than the
3-12     winery premises, deliver wine manufactured by the holder to the
3-13     location of the event for the purpose of participating in the event
3-14     by dispensing wine to individuals attending the event if no charge
3-15     of any kind is made for the wine or the delivery of the wine
3-16     dispensed or for attendance at the event.
3-17           (b)  The holder of a winery permit may sell wine to the
3-18     holder of a temporary permit issued under Chapter 27, 30, or 33 for
3-19     an event that is approved by the commission and organized to
3-20     celebrate and promote the wine industry in this state.
3-21           SECTION 5.  Subtitle A, Title 3, Alcoholic Beverage Code, is
3-22     amended by adding Chapter 17 to read as follows:
3-23                       CHAPTER 17.  FARM WINERY PERMIT
3-24           Sec. 17.01.  AUTHORIZED ACTIVITIES.  (a)  The holder of a
3-25     farm winery permit may:
3-26                 (1)  manufacture, bottle, label, and package wine
3-27     containing not more than 24 percent alcohol by volume;
 4-1                 (2)  manufacture and purchase grape brandy for
 4-2     fortifying purposes only and to be used only on the holder's
 4-3     licensed premises;
 4-4                 (3)  purchase and import wine only from the holders of
 4-5     nonresident seller's permits or their agents who are holders of
 4-6     manufacturer's agent's permits;
 4-7                 (4)  purchase wine in this state from holders of
 4-8     wholesaler's permits, winery permits, farm winery permits, or wine
 4-9     bottler's permits;
4-10                 (5)  bottle, rebottle, label, package, and sell wine to
4-11     permit holders in this state authorized to purchase and sell wine;
4-12                 (6)  sell wine in this state to holders of wholesaler's
4-13     permits, winery permits, farm winery permits, and wine bottler's
4-14     permits;
4-15                 (7)  sell wine to ultimate consumers in unbroken
4-16     packages for off-premises consumption in an amount not to exceed
4-17     25,000 gallons annually;
4-18                 (8)  sell wine outside this state to qualified persons;
4-19                 (9)  blend wines;
4-20                 (10)  dispense free wine for consumption on the winery
4-21     premises;
4-22                 (11)  sell wine manufactured and bottled on the winery
4-23     premises to ultimate consumers for consumption on the winery
4-24     premises; and
4-25                 (12)  sell wine manufactured and bottled under a permit
4-26     held by the holder for another premises to ultimate consumers for
4-27     consumption on the winery premises.
 5-1           (b)  The holder of a farm winery permit may manufacture and
 5-2     label wine for an adult in an amount not to exceed 50 gallons
 5-3     annually for the personal use of the adult.  Any amount of wine
 5-4     produced under this subsection is included in the annual total
 5-5     amount that may be sold by the holder under Subsection (a)(7).  An
 5-6     adult for whom wine is manufactured and labeled under this
 5-7     subsection is not required to hold a license or permit issued under
 5-8     this code.
 5-9           (c)  The holder of a farm winery permit may conduct wine
5-10     samplings, including wine tastings, at a retailer's premises.  An
5-11     employee of the holder may open, touch, or pour wine, make a
5-12     presentation, or answer questions at a wine sampling.  A wine
5-13     sampling may not be held in a location where a wine sampling is
5-14     otherwise prohibited by law.
5-15           (d)  The holder of a farm winery permit may dispense wine for
5-16     consumption on the premises of the winery under Section 17.07.
5-17           Sec. 17.02.  FEE.  The annual state fee for a farm winery
5-18     permit is $300.
5-19           Sec. 17.03.  IMPORTATION FOR BLENDING.  The holder of a farm
5-20     winery permit may, for blending purposes only, import wines or
5-21     grape brandy.  The wine or grape brandy may be purchased only from
5-22     the holders of nonresident seller's permits.  The state tax on
5-23     wines imported for blending purposes does not accrue until the wine
5-24     has been used for blending purposes and the resultant product
5-25     placed in containers for sale.
5-26           Sec. 17.04.  FEDERAL PERMIT REQUIRED.  A farm winery permit
5-27     may be granted only on presentation of a winemaker's and blender's
 6-1     basic permit of the federal alcohol tax unit.
 6-2           Sec. 17.05.  LOCATION OF PREMISES.  (a)  A farm winery permit
 6-3     may be issued for premises in a dry area, but, except as provided
 6-4     by Subsection (b), the permit holder may not sell wine in a dry
 6-5     area.
 6-6           (b)  If the premises are in a dry area, the permit holder
 6-7     may:
 6-8                 (1)  sell wine in this state to permit holders
 6-9     authorized to sell wine to the ultimate consumer in unbroken
6-10     packages for off-premises consumption in an amount not to exceed
6-11     25,000 gallons annually;
6-12                 (2)  sell wine in this state to holders of wholesaler's
6-13     permits, winery permits, and wine bottler's permits; and
6-14                 (3)  bottle, rebottle, label, package, and sell wine in
6-15     this state to permit holders authorized to purchase and sell wine.
6-16           Sec. 17.06.  ORGANIZED WINE TASTING COMPETITION.  (a)  For
6-17     the purpose of participating in an organized wine tasting, wine
6-18     evaluation, wine competition, or literary review, the holder of a
6-19     farm winery permit may deliver wine produced and manufactured by
6-20     the holder to locations that are not licensed under this code for
6-21     the purpose of submitting the wine to an evaluation at an organized
6-22     wine tasting competition attended primarily by unlicensed persons
6-23     or by a wine reviewer whose reviews are published if:
6-24                 (1)  no charge of any kind is made for the wine,
6-25     delivery, or attendance at the event; and
6-26                 (2)  the commission consents in writing to the
6-27     delivery.
 7-1           (b)  In connection with events authorized by Subsection (a),
 7-2     the holder of the farm winery permit may dispense wine to
 7-3     individuals attending the event and discuss with them the
 7-4     manufacture and characteristics of the wine.
 7-5           Sec. 17.07.  WINE SAMPLING.  (a)  The holder of a farm winery
 7-6     permit may conduct wine samplings, including wine tastings, on the
 7-7     permitted premises.  The holder of the permit may collect a fee for
 7-8     the wine sampling.
 7-9           (b)  A sampling event authorized by this section may not be
7-10     advertised except by on-site communication or by direct mail.
7-11           (c)  A person other than the holder of a permit or the
7-12     holder's agent or employee may not dispense or participate in the
7-13     dispensing of wine under this section.
7-14           (d)  A person authorized to dispense wine under this section:
7-15                 (1)  may serve a person more than one sample; and
7-16                 (2)  may not serve a sample to a minor or to an
7-17     obviously intoxicated person.
7-18           (e)  A person who receives a sample may not remove the sample
7-19     from the permitted premises.
7-20           (f)  For the purposes of this code and any other law of this
7-21     state or a political subdivision of this state, the holder of a
7-22     permit, during the sampling of wine under this section, is:
7-23                 (1)  not the holder of a permit authorizing the sale of
7-24     alcoholic beverages for on-premises consumption; and
7-25                 (2)  not considered to have received any revenue from
7-26     the on-premises  sale of alcoholic beverages.
7-27           Sec. 17.08.  WINE FESTIVALS.  (a)  At an event that is
 8-1     approved by the commission and organized to celebrate and promote
 8-2     the wine industry in this state, the holder of a farm winery permit
 8-3     may:
 8-4                 (1)  if the event is held in whole or in part on the
 8-5     farm winery premises, sell wine to consumers for consumption on or
 8-6     off the holder's premises and dispense wine without charge for
 8-7     consumption on or off the holder's premises; and
 8-8                 (2)  if the event is held at a location other than the
 8-9     farm winery premises, deliver wine manufactured by the holder to
8-10     the location of the event for the purpose of participating in the
8-11     event by dispensing wine to individuals attending the event if no
8-12     charge of any kind is made for the wine or the delivery of the wine
8-13     dispensed or for attendance at the event.
8-14           (b)  The holder of a farm winery permit may sell wine to the
8-15     holder of a temporary permit issued under Chapter 27, 30, or 33 for
8-16     an event that is approved by the commission and organized to
8-17     celebrate and promote the wine industry in this state.
8-18           SECTION 6.  Section 18.01, Alcoholic Beverage Code, is
8-19     amended to read as follows:
8-20           Sec. 18.01.  AUTHORIZED ACTIVITIES.  The holder of a wine
8-21     bottler's permit may:
8-22                 (1)  purchase and import wine only from the holders of
8-23     nonresident seller's permits or their agents who are holders of
8-24     manufacturer's agent's permits;
8-25                 (2)  purchase wine in this state from holders of
8-26     wholesaler's, winery, farm winery, or wine bottler's permits;
8-27                 (3)  bottle, rebottle, label, package, and sell wine to
 9-1     permit holders in this state authorized to purchase and sell wine;
 9-2     and
 9-3                 (4)  sell wine to qualified persons outside the state.
 9-4           SECTION 7.  Section 19.01, Alcoholic Beverage Code, is
 9-5     amended to read as follows:
 9-6           Sec. 19.01.  AUTHORIZED ACTIVITIES.  The holder of a
 9-7     wholesaler's permit may:
 9-8                 (1)  purchase and import liquor from distillers,
 9-9     brewers, wineries, farm wineries, wine bottlers, rectifiers, and
9-10     manufacturers who are holders of nonresident seller's permits or
9-11     from their agents who hold manufacturer's agents permits;
9-12                 (2)  purchase liquor from other wholesalers in the
9-13     state;
9-14                 (3)  sell liquor in the original containers in which it
9-15     is received to retailers and wholesalers in this state authorized
9-16     to sell the liquor; and
9-17                 (4)  sell liquor to qualified persons outside the
9-18     state.
9-19           SECTION 8.  Section 20.01, Alcoholic Beverage Code, is
9-20     amended to read as follows:
9-21           Sec. 20.01.  AUTHORIZED ACTIVITIES.  The holder of a general
9-22     class B wholesaler's permit may:
9-23                 (1)  purchase and import malt and vinous liquors from
9-24     brewers, wineries, farm wineries, rectifiers, and wine
9-25     manufacturers and wine bottlers who are the holders of nonresident
9-26     seller's permits or their agents who are holders of manufacturer's
9-27     agent permits;
 10-1                (2)  purchase malt and vinous liquors from holders of
 10-2    brewer's permits or other wholesalers in the state;
 10-3                (3)  sell the malt and vinous liquors in the original
 10-4    containers in which they are received to retailers and wholesalers
 10-5    authorized to sell them in this state, including holders of local
 10-6    distributor's permits, mixed beverage permits, and daily temporary
 10-7    mixed beverage permits; and
 10-8                (4)  sell the malt and vinous liquors to qualified
 10-9    persons outside the state.
10-10          SECTION 9.  Section 21.01, Alcoholic Beverage Code, is
10-11    amended to read as follows:
10-12          Sec. 21.01.  AUTHORIZED ACTIVITIES.  The holder of a local
10-13    class B wholesaler's permit may:
10-14                (1)  purchase and import malt and vinous liquors from
10-15    brewers, wineries, farm wineries, rectifiers, and wine
10-16    manufacturers and bottlers who are holders of nonresident seller's
10-17    permits and from their agents who are holders of manufacturer's
10-18    agent permits;
10-19                (2)  purchase malt and vinous liquors from holders of
10-20    brewer's permits and from other wholesalers in the state; and
10-21                (3)  sell the malt and vinous liquors, in the original
10-22    containers in which the holder [he] receives them, to general and
10-23    local class B wholesaler's permittees and, in the holder's [his]
10-24    county of residence, to local distributor's permittees and
10-25    retailers, including mixed beverage permittees and daily temporary
10-26    mixed beverage permittees.
10-27          SECTION 10.  Section 22.01, Alcoholic Beverage Code, is
 11-1    amended to read as follows:
 11-2          Sec. 22.01.  AUTHORIZED ACTIVITIES.  The holder of a package
 11-3    store permit may:
 11-4                (1)  purchase liquor in this state from the holder of a
 11-5    winery, farm winery, wholesaler's, class B wholesaler's, or wine
 11-6    bottler's permit;
 11-7                (2)  sell liquor in unbroken original containers on or
 11-8    from the holder's [his] licensed premises at retail to consumers
 11-9    for off-premises consumption only and not for the purpose of
11-10    resale, except that if the holder [permittee] is a hotel, the
11-11    holder [permittee] may deliver unbroken packages of liquor to bona
11-12    fide  guests of the hotel in their rooms for consumption in their
11-13    rooms;
11-14                (3)  sell malt and vinous liquors in original
11-15    containers of not less than six ounces; and
11-16                (4)  sell liquor to holders of airline beverage permits
11-17    as provided in Section 34.05 of this code.
11-18          SECTION 11.  Section 24.01, Alcoholic Beverage Code, is
11-19    amended to read as follows:
11-20          Sec. 24.01.  AUTHORIZED ACTIVITIES.  The holder of a wine
11-21    only package store permit may:
11-22                (1)  purchase ale, wine, and vinous liquors in this
11-23    state from the holder of a winery, farm winery, wine bottler's,
11-24    wholesaler's or class B wholesaler's permit; and
11-25                (2)  sell those beverages to consumers at retail on or
11-26    from the licensed premises in unbroken original containers of not
11-27    less than six ounces for off-premises consumption only and not for
 12-1    the purpose of resale.
 12-2          SECTION 12.  Section 41.05, Alcoholic Beverage Code, is
 12-3    amended to read as follows:
 12-4          Sec. 41.05.  TRANSPORTATION OF WINE OUT OF STATE.  At the
 12-5    request of a holder of a winery or farm winery permit, a common
 12-6    carrier that does not hold a carrier permit may transport wine from
 12-7    the premises of the holder of the winery or farm winery permit or
 12-8    from another location where the holder of a winery or farm winery
 12-9    permit may legally store wine to a destination out of this state,
12-10    if the common carrier may otherwise legally transport wine and the
12-11    holder of the winery or farm winery permit furnishes to the
12-12    commission any documentation required by the commission concerning
12-13    the transportation and the receipt of the wine at the destination
12-14    out of this state.
12-15          SECTION 13.  Section 42.01(a), Alcoholic Beverage Code, is
12-16    amended to read as follows:
12-17          (a)  The holder of a private carrier permit who is also a
12-18    holder of a brewer's, distiller's and rectifier's, winery, farm
12-19    winery, wholesaler's, class B wholesaler's, or wine bottler's
12-20    permit may  transport liquor from the place of purchase to the
12-21    holder's [his] place of business and from the place of sale or
12-22    distribution to the purchaser  in vehicles owned or leased in good
12-23    faith by the holder if the transportation is for a lawful purpose.
12-24          SECTION 14.  Section 42.04(d), Alcoholic Beverage Code, is
12-25    amended to read as follows:
12-26          (d)  A holder of a winery or farm winery permit is exempt
12-27    from the requirements of this section for the transportation of its
 13-1    wine.
 13-2          SECTION 15.  Section 45.03(a), Alcoholic Beverage Code, is
 13-3    amended to read as follows:
 13-4          (a)  A storage permit may be issued to a holder of a
 13-5    brewer's, distiller's and rectifier's, winery, farm winery,
 13-6    wholesaler's, class B wholesaler's, or wine bottler's permit.
 13-7          SECTION 16.  Section 45.04, Alcoholic Beverage Code, is
 13-8    amended to read as follows:
 13-9          Sec. 45.04.  WINERY STORAGE PERMIT.  A holder of a winery or
13-10    farm winery permit whose winery is located in a county all or part
13-11    of which is in a dry area may obtain a storage permit to store the
13-12    winery's product in a dry area of that county if:
13-13                (1)  the holder of the winery or farm winery permit
13-14    obtains a permit for each place of storage; and
13-15                (2)  the product to be stored is owned by the holder of
13-16    the winery or farm winery permit and remains in the possession of
13-17    the holder.
13-18          SECTION 17.  Section 46.03(b), Alcoholic Beverage Code, is
13-19    amended to read as follows:
13-20          (b)  A bonded warehouse permit may be issued to a public
13-21    bonded warehouse described by Subsection (a)(1) of this section
13-22    that is located in a dry area only for the storage of the wine of
13-23    the holder of a winery or farm winery permit who holds a permit
13-24    authorizing its storage in a public bonded warehouse.
13-25          SECTION 18.  Section 102.03(a), Alcoholic Beverage Code, is
13-26    amended to read as follows:
13-27          (a)  This section applies to the holder of a brewer's,
 14-1    distiller's and rectifier's, winery, farm winery, wholesaler's,
 14-2    class B wholesaler's, or wine bottler's permit.
 14-3          SECTION 19.  Section 102.04(a), Alcoholic Beverage Code, is
 14-4    amended to read as follows:
 14-5          (a)  This section applies to any person who has an interest
 14-6    in the business of a distiller-rectifier, brewer, wholesaler, class
 14-7    B wholesaler, winery, farm winery, wine bottler, or local
 14-8    distributor's permittee.  This section also applies to the agent,
 14-9    servant, or employee of a person who has an interest in one of
14-10    those businesses.
14-11          SECTION 20.  Sections 102.07(a), (d), and (f), Alcoholic
14-12    Beverage Code, are amended to read as follows:
14-13          (a)  Except as provided in Subsections (b) and (d) of this
14-14    section, no person who owns or has an interest in the business of a
14-15    distiller, brewer, rectifier, wholesaler, class B wholesaler,
14-16    winery, farm winery, or wine bottler, nor the agent, servant, or
14-17    employee of such a person, may:
14-18                (1)  own or have a direct or indirect interest in the
14-19    business, premises, equipment, or fixtures of a retailer;
14-20                (2)  furnish, give, or lend any money, service, or
14-21    thing of value to a retailer;
14-22                (3)  guarantee a financial obligation of a retailer;
14-23                (4)  make or offer to enter an agreement, condition, or
14-24    system which will in effect amount to the shipment and delivery of
14-25    alcoholic beverages on consignment;
14-26                (5)  furnish, give, rent, lend, or sell to a retail
14-27    dealer any equipment, fixtures, or supplies to be used in selling
 15-1    or dispensing alcoholic beverages, except that alcoholic beverages
 15-2    may be packaged in combination with other items if the package is
 15-3    designed to be delivered intact to the ultimate consumer and the
 15-4    additional items have no value or benefit to the retailer other
 15-5    than that of having the potential of attracting purchases and
 15-6    promoting sales;
 15-7                (6)  pay or make an allowance to a retailer for a
 15-8    special advertising or distribution service;
 15-9                (7)  allow an excessive discount to a retailer; or
15-10                (8)  offer a prize, premium, gift, or similar
15-11    inducement to a retailer or to the agent, servant, or employee of a
15-12    retailer.
15-13          (d)  A permittee covered under Subsection (a)  of this
15-14    section may offer prizes, premiums, or gifts to a consumer if the
15-15    offer is national in scope and legally offered and conducted in 30
15-16    states or more.  The use of rebates or coupons redeemable by the
15-17    public for the purchase of alcoholic beverages is prohibited.  The
15-18    holder of a winery or farm winery permit may furnish to a retailer
15-19    without cost recipes, recipe books, book matches, cocktail napkins,
15-20    or other  advertising items showing the name of the winery
15-21    furnishing the items or the brand name of the product advertised if
15-22    the individual cost of the items does not exceed $1.
15-23          (f)  Notwithstanding Subsection (a)  of this section, Section
15-24    108.05 of this code, or any other provision of this code, a holder
15-25    of a brewer's permit, nonresident brewer's permit, distiller's and
15-26    rectifier's permit, winery permit, farm winery permit, nonresident
15-27    seller's permit, manufacturer's license, or nonresident
 16-1    manufacturer's license may, in order to promote the brand name of
 16-2    the permittee's or licensee's products, contract with a person
 16-3    licensed under the Texas Racing Act (Article 179e, Vernon's Texas
 16-4    Civil Statutes) for on-site advertising signs, for advertising in
 16-5    programs, and to supplement purses for races even though the
 16-6    licensees under that Act or the owners or operators of the racing
 16-7    facilities also hold a mixed beverage permit or other permit or
 16-8    license under this code.  In addition, a permittee or licensee
 16-9    described by this subsection may contract for off-site advertising
16-10    promoting specific races.  A part of the cost of an advertisement
16-11    or promotion authorized by this section may not be charged to or
16-12    paid, directly or indirectly, by the holder of a wholesale permit,
16-13    general class B wholesaler's permit, local class B wholesaler's
16-14    permit, local distributor's permit, general distributor's license,
16-15    or local distributor's license, except through the price paid by
16-16    that holder for products purchased from the holder's supplier.
16-17          SECTION 21.  Section 102.16(a), Alcoholic Beverage Code, is
16-18    amended to read as follows:
16-19          (a)  A brewer, distiller and rectifier, winery or farm winery
16-20    permittee, or alcoholic beverage manufacturer, or the agent,
16-21    servant, or employee of any of them, commits an offense if the
16-22    permittee [he] orally or in writing enters or offers to enter into
16-23    an agreement  or other arrangement with a wholesaler or other
16-24    person in the state:
16-25                (1)  by which a person is required or influenced, or
16-26    that is intended to require or influence a person, to purchase,
16-27    otherwise obtain, produce, or require a certain volume or quota of
 17-1    business, more or less, of one or more types or brands of alcoholic
 17-2    beverages, either in a certain area, in a certain period of time,
 17-3    or on fulfillment of any condition; or
 17-4                (2)  to require or influence a person, or attempt to
 17-5    require or influence a person, to sell an alcoholic beverage in a
 17-6    manner contrary to law or in a manner calculated to induce a
 17-7    violation of the law.
 17-8          SECTION 22.  Section 102.17, Alcoholic Beverage Code, is
 17-9    amended to read as follows:
17-10          Sec. 102.17.  CONTRACT FOR SALE OF LIQUOR.  A brewer,
17-11    distiller and rectifier, winery or farm winery permittee,
17-12    manufacturer, or nonresident seller of liquor and the holder of a
17-13    wholesaler's permit may enter into a contract for the sale and
17-14    purchase of a specified quantity of liquor to be delivered over an
17-15    agreed period of time, but only if the contract is first submitted
17-16    to the commission or administrator and found by the commission or
17-17    administrator not to be calculated to induce a violation of this
17-18    code.
17-19          SECTION 23.  Section 102.19, Alcoholic Beverage Code, is
17-20    amended to read as follows:
17-21          Sec. 102.19.  PROMOTIONAL GIFT WINE.  A holder of a winery or
17-22    farm winery permit may give one or more unopened bottles of
17-23    Texas-made wine produced or bottled by the winery to a person 21
17-24    years of age or older on the premises of a convention center or
17-25    civic center that holds a mixed beverage permit if no charge is
17-26    made by the winery or by the mixed beverage permittee for the wine.
17-27    A recipient of a bottle of wine under this section must take the
 18-1    unopened gift bottle off the premises of the mixed beverage
 18-2    permittee.
 18-3          SECTION 24.  Section 102.32(a)(1), Alcoholic Beverage Code,
 18-4    is amended to read as follows:
 18-5                (1)  "Wholesale dealer" means a wholesaler, class B
 18-6    wholesaler, winery, farm winery, wine bottler, or local
 18-7    distributor's permittee.
 18-8          SECTION 25.  Section 109.33(f), Alcoholic Beverage Code, is
 18-9    amended to read as follows:
18-10          (f)  Subsection (a)(2) does not apply to the holder of:
18-11                (1)  a retail on-premises consumption permit or license
18-12    if less than 50 percent of the gross receipts for the premises is
18-13    from the sale or service of alcoholic beverages;
18-14                (2)  a retail off-premises consumption permit or
18-15    license if less than 50 percent of the gross receipts for the
18-16    premises, excluding the sale of items subject to the motor fuels
18-17    tax, is from the sale or service of alcoholic beverages; or
18-18                (3)  a wholesaler's, distributor's, brewer's,
18-19    distiller's and rectifier's, winery, farm winery, wine bottler's or
18-20    manufacturer's permit or license, or any other license or permit
18-21    held by a wholesaler or manufacturer as those words are ordinarily
18-22    used and understood in Chapter 102.
18-23          SECTION 26.  Sections 204.01(d), (f), and (i), Alcoholic
18-24    Beverage Code, are amended to read as follows:
18-25          (d)  The holder of a wholesaler's or class B wholesaler's,
18-26    winery, farm winery, or wine bottler's permit, or the holder of a
18-27    distributor's license may furnish, in lieu of all or part of the
 19-1    amount of the bond required:
 19-2                (1)  one or more certificates of deposit or savings
 19-3    assigned to the state, issued by one or more banks or savings
 19-4    institutions authorized to do business in this state; or
 19-5                (2)  one or more letters of credit issued by one or
 19-6    more banks or savings institutions authorized to do business in
 19-7    this state.
 19-8          (f)  The holder of a wholesaler's or class B wholesaler's
 19-9    permit, the holder of a winery permit, farm winery permit, or wine
19-10    bottler's permit, or the holder of a distributor's license is not
19-11    required to furnish a bond if for the preceding 36 months the
19-12    permittee or licensee has paid all taxes and fees required by this
19-13    code on or before the due date.
19-14          (i)  A permittee or licensee who qualifies for an exemption
19-15    under Subsection (f) of this section is also exempt from the
19-16    bonding requirement for any other wholesaler's permit, class B
19-17    wholesaler's permit, winery permit, farm winery permit, wine
19-18    bottler's permit, or distributor's license currently held by or
19-19    subsequently issued to the same permittee or licensee for use at
19-20    licensed premises different from and additional to those covered by
19-21    the permit or license under which the permittee or licensee
19-22    qualified for exemption.  However, if a permittee or licensee fails
19-23    to pay a tax or fee imposed by this code on or before the due date
19-24    and the permittee or licensee holds multiple permits or licenses,
19-25    the requirement for a bond or tax security shall be imposed or
19-26    reimposed under Subsection (g) of this section only on the permit
19-27    or license covering the licensed premises for which the tax or fee
 20-1    and any applicable penalty were not timely paid.
 20-2          SECTION 27.  Section 204.06, Alcoholic Beverage Code, is
 20-3    amended to read as follows:
 20-4          Sec. 204.06.  COMPREHENSIVE WINERY BOND.  A person who holds
 20-5    more than one of the following permits [both a winery permit and a
 20-6    wine bottler's permit] may execute a single bond in an amount
 20-7    determined by the commission instead of multiple bonds to secure
 20-8    the performance of different activities by the holder:  a winery
 20-9    permit, a wine bottler's permit, or a farm winery permit.
20-10          SECTION 28.  Title 5, Alcoholic Beverage Code, is amended by
20-11    adding Chapter 207 to read as follows:
20-12                          CHAPTER 207.  WINE TAX
20-13          Sec. 207.01.  TAX ON WINE.  (a)  A tax is imposed on each
20-14    gallon of wine sold for resale in this state.
20-15          (b)  The rate of the tax is five cents for each gallon of
20-16    wine sold for resale.
20-17          Sec. 207.02.  DUTY TO PAY TAX; DUE DATE.  (a)  The holder of
20-18    a permit who is authorized to sell wine for resale shall pay the
20-19    tax on wine imposed under this chapter.
20-20          (b)  The tax is due and payable to the commission on the 15th
20-21    day of the month after the month the wine is sold.
20-22          Sec. 207.03.  COMMISSION TO COLLECT TAX.  (a)  The commission
20-23    shall collect the tax under this chapter.
20-24          (b)  The wine tax account is a separate account in the
20-25    general revenue fund.  The commission shall deposit to the credit
20-26    of the wine tax account all revenue from the tax under this
20-27    chapter.
 21-1          Sec. 207.04.  STATEMENTS.  (a)  The commission may require
 21-2    holders of permits authorized to sell wine for resale to provide
 21-3    information as to sales to enable the commission to collect the
 21-4    full amount of wine tax due.  No permit holder may fail or refuse
 21-5    to furnish the information.
 21-6          (b)  The commission may seize or withhold from sale the
 21-7    permit holder's wine for failure or refusal to supply the
 21-8    information required under Subsection (a) or to permit the
 21-9    commission to make an investigation of pertinent records.
21-10          Sec. 207.05.  PAYMENT OF TAXES.  The tax on wine shall be
21-11    paid by a remittance payable to the state and forwarded with any
21-12    required sworn statements of taxes due to the commission on or
21-13    before the due date.
21-14          Sec. 207.06.  EVIDENCE IN SUIT.  In a suit brought to enforce
21-15    the collection of tax due on wine sold for resale in this state, a
21-16    certificate by the commission showing the delinquency is prima
21-17    facie evidence of:
21-18                (1)  the levy of the tax or the delinquency of the
21-19    stated amount of tax and penalty; and
21-20                (2)  compliance by the commission with the provisions
21-21    of this chapter in relation to the computation and levy of the tax.
21-22          Sec. 207.07.  SUMMARY SUSPENSION.  (a)  The commission may
21-23    summarily suspend, without a hearing, the permit of a holder  who
21-24    fails to file a report or return or to make a tax payment required
21-25    by this chapter.  Chapter 2001, Government Code, does not apply to
21-26    the commission in the enforcement and administration of this
21-27    section.
 22-1          (b)  A suspension under this section takes effect on the
 22-2    third day after the date the notice of suspension is given.  The
 22-3    notice shall be given to the permit holder or the permit holder's
 22-4    agent or employee by registered or certified mail if not given in
 22-5    person.
 22-6          (c)  The commission shall terminate a suspension made under
 22-7    this section when the permit holder files all required returns and
 22-8    makes all required tax payments that are due.
 22-9          Sec. 207.08.  USE OF REVENUE.  (a)  The revenue collected
22-10    from the taxes imposed by this chapter may be appropriated only to
22-11    the Department of Agriculture and used only for the promotion of
22-12    research and marketing in this state of wines wherever produced,
22-13    including wines made from Texas agricultural products or wines
22-14    blended in this state and predominantly made from Texas
22-15    agricultural products.
22-16          (b)  Unless the advisory council appointed under Section
22-17    207.09 advises otherwise:
22-18                (1)  70 percent of the revenue shall be spent for
22-19    viticulture and enology research; and
22-20                (2)  30 percent of the revenue shall be spent for
22-21    marketing and promotion, including educating consumers about wine.
22-22          Sec. 207.09.  ADVISORY COUNCIL.  (a)  The commissioner of the
22-23    Department of Agriculture shall appoint an advisory council to
22-24    advise the commissioner and the Department of Agriculture on the
22-25    use of the funds collected under this chapter for the purposes
22-26    described by Section 207.08.
22-27          (b)  In making appointments under this section, the
 23-1    commissioner shall appoint:
 23-2                (1)  members to represent the general public, holders
 23-3    of permits authorized to sell wine, owners of vineyards, owners of
 23-4    small wineries, owners of large wineries, and each geographic
 23-5    region of the state in which a vineyard or winery is located; and
 23-6                (2)  nonvoting members to represent the commission,
 23-7    Texas A&M University, The University of Texas, and Texas Tech
 23-8    University.
 23-9          (c)  The commission by rule shall define the terms "small
23-10    wineries" and "large wineries" as used in Subsection (b)(1) based
23-11    on the volume of production of wine.
23-12          (d)  The duties of a nonvoting member are in addition to any
23-13    other duties the person has as an employee or officer of the
23-14    commission or an institution of higher education.
23-15          SECTION 29.  Sections 251.14(b) and (e), Alcoholic Beverage
23-16    Code, are amended to read as follows:
23-17          (b)  In areas where any type or classification of alcoholic
23-18    beverages is prohibited and the issue submitted pertains to
23-19    legalization of the sale of one or more of the prohibited types or
23-20    classifications, the ballot shall be prepared to permit voting for
23-21    or against one of the following issues:
23-22                (1)  "The legal sale of beer for off-premise
23-23    consumption only."
23-24                (2)  "The legal sale of beer."
23-25                (3)  "The legal sale of beer and wine for off-premise
23-26    consumption only."
23-27                (4)  "The legal sale of beer and wine."
 24-1                (5)  "The legal sale of all alcoholic beverages for
 24-2    off-premise consumption only."
 24-3                (6)  "The legal sale of all alcoholic beverages except
 24-4    mixed beverages."
 24-5                (7)  "The legal sale of all alcoholic beverages
 24-6    including mixed beverages."
 24-7                (8)  "The legal sale of mixed beverages."
 24-8                (9)  "The legal sale of wine on the premises of a
 24-9    holder of a winery permit or farm winery permit."
24-10          (e)  In areas where the sale of beverages containing alcohol
24-11    not in excess of 14 percent by volume has been legalized, and those
24-12    of higher alcoholic content are prohibited, the ballot shall be
24-13    prepared to permit voting for or against one of the following
24-14    issues in any prohibitory election:
24-15                (1)  "The legal sale of beer for off-premise
24-16    consumption only."
24-17                (2)  "The legal sale of beer."
24-18                (3)  "The legal sale of beer and wine for off-premise
24-19    consumption only."
24-20                (4)  "The legal sale of beer and wine."
24-21                (5)  "The legal sale of wine on the premises of a
24-22    holder of a winery permit or farm winery permit."
24-23          SECTION 30.  This Act takes effect September 1, 1999.
24-24          SECTION 31.  (a)  A holder of a winery permit and wine
24-25    bottler's permit may convert the permits to a farm winery permit
24-26    subject to the provisions of Chapter 17, Alcoholic Beverage Code,
24-27    as added by this Act, as if the permits had been originally issued
 25-1    under that chapter if the holder notifies the commission in writing
 25-2    on or before the expiration of the winery and wine bottler's
 25-3    permits that the holder intends to operate under Chapter 17,
 25-4    Alcoholic Beverage Code, as added by this Act.
 25-5          (b)  The Alcoholic Beverage Commission shall treat an
 25-6    application for an original or renewal winery permit and wine
 25-7    bottler's permit from the same applicant that is pending on
 25-8    September 1, 1999, as an original or renewal application for a farm
 25-9    winery permit if the applicant notifies the commission in writing
25-10    on or before September 1, 1999, that the applicant intends to
25-11    operate under Chapter 17, Alcoholic Beverage Code, as added by this
25-12    Act.  An application is sufficient if the application was
25-13    sufficient according to the law that governed the application at
25-14    the time the application was made, or if the application is
25-15    sufficient under the Alcoholic Beverage Code after amendment by
25-16    this Act.
25-17          SECTION 32.  The importance of this legislation and the
25-18    crowded condition of the calendars in both houses create an
25-19    emergency and an imperative public necessity that the
25-20    constitutional rule requiring bills to be read on three several
25-21    days in each house be suspended, and this rule is hereby suspended.