SRC-CTC H.B. 1794 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 1794
77R5950 AJA-FBy: Wise (Cain)
Business & Commerce
5/7/2001
Engrossed


DIGEST AND PURPOSE 

Currently, all charter members of a private club must participate equally
in the initial purchase of all alcoholic beverages if the club uses the
pooling system to stock its alcoholic beverages. The 
price of alcohol is high and there may be difficulty in organizing a
private club simply because of the cost of the original purchase of
alcoholic beverages.  H.B.1794  provides that the original purchase of
alcoholic beverages may be done through a loan directly to the club from a
third party and authorizes a club that uses a pooling system to maintain
several accounts to keep track of funds to minimize club costs and maximize
efficiency in its operation. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 32.06, Alcoholic Beverage Code, as follows:

(a) Authorizes the original purchase to be funded by a cash contribution
from each member or from a loan to the club by a third person guaranteed by
all the members.  Authorizes a person who provides a loan to the club under
this section to be related or unrelated to the club. Authorizes a loan for
the original purchase to be repaid from the alcoholic beverages replacement
account (replacement account).   

(b) Authorizes the club's governing body, if a replacement account is used,
to transfer from the replacement account to the club's general operating
account (operating account) any portion of the account that the governing
body determines is in excess of the replacement amount needed to repay a
loan for the original purchase of alcoholic beverages.  Makes a conforming
change. 

(c) Authorizes a private club to combine the club's replacement account,
operating account, and any other account into a single master account if
certain conditions are met.  Authorizes the club, if the club contracts
with a third party to provide management or other services for the club, to
permit the club's master account to be combined with the master account of
other clubs to which the third party provides similar services if certain
conditions are met. 

SECTION Effective date: September 1, 2001.