HBA-AMW, CCH H.B. 2878 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 2878 By: Goolsby Licensing & Administrative Procedures 7/26/2001 Enrolled BACKGROUND AND PURPOSE 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. Prior to the 77th Legislature, the restaurant club was not statutorily authorized and questions were often raised as to whether the restaurant club functioned as an independent entity or operated to benefit the restaurant. House Bill 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 It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 2878 amends the Alcoholic Beverage Code to authorize a restaurant club (club) originally formed as an association to incorporate 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 modifies provisions regarding preliminary memberships to clubs. The bill authorizes a club to contract with another entity to manage the club if the entity is authorized to do business in Texas and complies with the same requirements applicable to the private club registration permit applicants. The bill authorizes an entity to establish and staff a membership committee, to purchase and manage the club's alcoholic beverage inventory for club members, to establish the price of services provided to club members, and to 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 residents of this state and are at least 21 years of age to form a committee to be designated as the members of the liquor pool and as the charter members of a club. The bill authorizes the committee to sponsor an application for a private club registration permit as a nonprofit corporation. The bill provides that the committee must include all original officers of the club and prohibits a club from serving alcoholic beverages to members until the club has met the membership requirements. The bill authorizes, rather than requires, each service check from an alcoholic beverage replacement account (account) to have printed on it the percentage of the service charge that is to be deposited in the account. The bill sets forth provisions related to the maintenance of an account and to records required to be maintained by a private club registration permitee. 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 Vetoed.