SRC-MWN H.B. 2878 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 2878
By: Goolsby (Carona)
Business & Commerce
5/11/2001
Engrossed


DIGEST AND PURPOSE 

Private clubs located in public restaurants (restaurant clubs) are common
throughout Texas and are important to the culture of some Texas businesses.
Most Texas communities realize that restaurant clubs raise real estate
values, create jobs, and require little supervision. Controversies arise,
however, because restaurant clubs must cooperate with restaurant
management, yet must exist as an independent entity to legally operate.
Because the restaurant club is not statutorily authorized, questions are
often raised as to whether the restaurant club functions as an independent
entity or is operated to benefit the restaurant. H.B. 2878 authorizes a
restaurant club to function as an independent corporation and to contract
with the management of a restaurant to conduct its operations. 

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

H.B. 2878 amends the Alcoholic Beverage Code to provide that a restaurant
club must be a nonprofit corporation and that a restaurant club originally
formed as an association must incorporate before June 1, 2002 with the
approval of the administrator of the Texas Alcoholic Beverage Commission
(TABC).  

The bill requires TABC to issue a replacement permit to the corporate
entity for a $100 fee. The bill sets forth provisions regarding preliminary
memberships to restaurant clubs. The bill authorizes a restaurant club to
contract with another entity to manage the club if the entity is authorized
to conduct business in Texas and complies with requirements applicable to
the applicants of a private club registration permit. The bill authorizes
the entity to establish and staff a membership committee to purchase and
manage the club's alcoholic beverage inventory for club members, establish
the price of services provided to club members, and produce club records as
required by statute or TABC rule.  

The bill sets forth provisions related to the meetings of a club and the
documentation of the meetings. The bill authorizes a group of at least 10
individuals who are at least 21 years of age to form a committee to be
designated as the charter members of a club. The bill provides that the
committee includes all original officers of the club and authorizes the
committee to apply for and receive a private club registration permit. The
bill prohibits the restaurant club from serving alcoholic beverages to
members until the club has met the membership requirements. The bill
provides that the charter members of a club or all members of a pool system
of storage participate equally in the original purchase of all alcoholic
beverages. The bill authorizes the charter members of a club to be
compensated for the original alcoholic beverage purchase from future
receipts generated from alcoholic beverage service provided to members of
the club. The bill sets forth provisions related to the maintenance of an
alcoholic beverages replacement account.  

The bill requires TABC to provide a management entity written notice of a
request for inspection of documents on or before the seventh day before the
date of the inspection. A management entity is not required to provide a
listing of members that is correct to the last day of the preceding month
until the  20th day of the month in which the request is made. 

Effective date: September 1, 2001.