By Wilson                                             H.B. No. 1524
         77R5229 MCK-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the regulation of industrial alcohol.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 38.01, Alcoholic Beverage Code, is
 1-5     amended to read as follows:
 1-6           Sec. 38.01.  Authorized Activities.  (a)  The holder of an
 1-7     industrial permit may import, transport, and use alcohol or
 1-8     denatured alcohol for the manufacture and sale of any of the
 1-9     following products:
1-10                 (1)  denatured alcohol;
1-11                 (2)  patent, proprietary, medicinal, pharmaceutical,
1-12     antiseptic, and toilet preparations;
1-13                 (3)  flavoring extracts, syrups, condiments, and food
1-14     products; and
1-15                 (4)  scientific, chemical, mechanical, and industrial
1-16     products, or products used for scientific, chemical, mechanical,
1-17     industrial, or medicinal purposes.
1-18           (b)  The holder of an industrial permit also may:
1-19                 (1)  manufacture, rectify, and refine industrial
1-20     alcohol, which term as used in this chapter means an alcohol that
1-21     is produced for industrial purposes only and is not fit for human
1-22     consumption;
1-23                 (2)  denature alcohol produced under the permit;
1-24                 (3)  sell denatured or industrial alcohol produced
 2-1     under the permit to holders of industrial permits and to qualified
 2-2     persons outside the state; and
 2-3                 (4)  blend industrial alcohol produced under the permit
 2-4     with petroleum distillates and sell or use the resulting product as
 2-5     a motor fuel.
 2-6           SECTION 2.  Section 38.03(b), Alcoholic Beverage Code, is
 2-7     amended to read as follows:
 2-8           (b)  No person may sell, possess, or divert any of the
 2-9     products enumerated in [Subdivisions (1) through (4) of] Section
2-10     38.01 of this code for beverage purposes or under circumstances
2-11     from which he might reasonably deduce that the intention of the
2-12     purchaser is to use those products for beverage purposes.
2-13           SECTION 3.  Sections 47.03-47.07, Alcoholic Beverage Code,
2-14     are redesignated as Sections 38.07-38.11, Alcoholic Beverage Code,
2-15     and amended to read as follows:
2-16           Sec. 38.07 [47.03].  Transportation.  (a)  An [A local]
2-17     industrial [alcohol manufacturer's] permittee may transport the
2-18     alcohol produced under the [local industrial alcohol
2-19     manufacturer's] permit by railway tank car, barge, or motor truck
2-20     if the tank car, barge, or motor truck is owned by the permittee
2-21     [him] or leased in good faith.
2-22           (b)  The permittee must comply with all applicable state and
2-23     federal laws regulating transportation.
2-24           (c)  The permittee may not transport alcohol under the
2-25     authority of this section unless all of the necessary documents
2-26     required by Section 107.01 are prepared[, at the time the
2-27     transportation occurs, the tank car, barge, or motor truck is fully
 3-1     described in a sworn statement on file with the commission].
 3-2           (d)  The permittee may transport the alcohol to a wet area by
 3-3     crossing a dry area if that route is necessary or convenient.
 3-4           Sec. 38.08 [47.04].  Storage Facility.  (a)  An [A local]
 3-5     industrial [alcohol manufacturer's] permit applicant or permittee
 3-6     may request in the permit application or in writing after the
 3-7     permit is issued that the commission or administrator authorize the
 3-8     permittee to store alcohol at a storage facility under the
 3-9     permittee's control that is located off the licensed premises if
3-10     the applicant is in the business of manufacturing the industrial
3-11     alcohol.  The permittee shall supply any information regarding the
3-12     storage that the commission or administrator requires.
3-13           (b)  A request under this section may include a request that
3-14     the permittee be permitted to transport the alcohol to the storage
3-15     facility by pipeline or other means.
3-16           (c)  If the request is granted, the commission or
3-17     administrator may attach any conditions regarding the use of the
3-18     facility or transportation of alcohol to the facility that the
3-19     commission or administrator considers proper.
3-20           (d)  A storage facility authorized under this section is
3-21     treated as a part of the licensed premises for the purpose of the
3-22     permittee's consent to inspection under Section 101.04 of this
3-23     code.
3-24           Sec. 38.09 [47.05].  Plant Plan Requirements.  If the plant
3-25     plans submitted by the applicant establish to the satisfaction of
3-26     the commission that the plant is not capable of producing alcohol
3-27     for beverage purposes and if no change in the plant is made without
 4-1     commission approval, the permit for which application is made shall
 4-2     be considered to be an industrial permit as that term is used in
 4-3     Section 109.53 of this code.  Plant plans may only be submitted for
 4-4     those applicants applying for privileges under Section 38.01(b).
 4-5           Sec. 38.10 [47.06].  Exemption for State Institutions.  A
 4-6     state institution is exempt from these provisions of the code when
 4-7     manufacturing industrial alcohol for scientific or laboratory use. 
 4-8           Sec. 38.11 [47.07].  Local Option Status of Area.  Whether an
 4-9     area is wet or dry under the local option laws does not affect the
4-10     eligibility of an applicant to hold a permit under this chapter.
4-11           SECTION 4.  Sections 47.01 and 47.02, Alcoholic Beverage
4-12     Code, are repealed.
4-13           SECTION 5.  A permit that was issued under Chapter 47,
4-14     Alcoholic Beverage Code, and in effect immediately before this Act
4-15     took effect is governed by Chapter 38, Alcoholic Beverage Code, as
4-16     amended by this Act.
4-17           SECTION 6.  This Act takes effect September 1, 2001.