By Eiland                                             H.B. No. 1620
         77R41 AJA-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to liability insurance for certain persons licensed or
 1-3     permitted under the Alcoholic Beverage Code.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Subchapter A, Chapter 11, Alcoholic Beverage Code,
 1-6     is amended by adding Section 11.13 to read as follows:
 1-7           Sec. 11.13.  LIABILITY INSURANCE. (a)  A person may not hold
 1-8     a permit allowing the person to sell alcoholic beverages for
 1-9     on-premises consumption, including a permit that is held in
1-10     conjunction with a food and beverage certificate, unless the person
1-11     maintains a liability insurance policy:
1-12                 (1)  issued by an insurance company authorized to write
1-13     liability insurance in this state; and
1-14                 (2)  that will pay, on the person's behalf, amounts the
1-15     person becomes obligated to pay as damages arising out of the
1-16     operation of the permitted premises.
1-17           (b)  The minimum amounts of insurance coverage required under
1-18     this section are:
1-19                 (1)  $100,000 for each person to whom damages covered
1-20     by the policy are owed; and
1-21                 (2)  $300,000 for each single occurrence giving rise to
1-22     damages covered by the policy.
1-23           (c)  The commission shall adopt rules relating to:
1-24                 (1)  standards for the commission's approval of the
 2-1     form of an insurance policy required under this section;
 2-2                 (2)  the method for filing proof of insurance and
 2-3     obtaining the commission's approval under this section; and
 2-4                 (3)  verification by the commission of a permit
 2-5     holder's continued maintenance of the required insurance coverage.
 2-6           SECTION 2. Subchapter A, Chapter 61, Alcoholic Beverage Code,
 2-7     is amended by adding Section 61.15 to read as follows:
 2-8           Sec. 61.15.  LIABILITY INSURANCE. (a)  A person may not hold
 2-9     a license allowing the person to sell alcoholic beverages for
2-10     on-premises consumption, including a license that is held in
2-11     conjunction with a food and beverage certificate, unless the person
2-12     maintains a liability insurance policy:
2-13                 (1)  issued by an insurance company authorized to write
2-14     liability insurance in this state; and
2-15                 (2)  that will pay, on the person's behalf, amounts the
2-16     person becomes obligated to pay as damages arising out of the
2-17     operation of the licensed premises.
2-18           (b)  The minimum amounts of insurance coverage required under
2-19     this section are:
2-20                 (1)  $100,000 for each person to whom damages covered
2-21     by the policy are owed; and
2-22                 (2)  $300,000 for each single occurrence giving rise to
2-23     damages covered by the policy.
2-24           (c)  The commission shall adopt rules relating to:
2-25                 (1)  standards for the commission's approval of the
2-26     form of an insurance policy required under this section;
2-27                 (2)  the method for filing proof of insurance and
 3-1     obtaining the commission's approval under this section; and
 3-2                 (3)  verification by the commission of a license
 3-3     holder's continued maintenance of the required insurance coverage.
 3-4           SECTION 3. (a)  This Act takes effect September 1, 2001.  The
 3-5     change in law made by this Act applies to a person who applies for
 3-6     a permit or license for the sale of alcoholic beverages for
 3-7     on-premises consumption, including a permit or license that is held
 3-8     in conjunction with a food and beverage certificate, on or after
 3-9     January 1, 2002, and to a person who, on January 1, 2002, holds a
3-10     permit or license for the sale of alcoholic beverages for
3-11     on-premises consumption, including a permit or license that is held
3-12     in conjunction with a food and beverage certificate, regardless of
3-13     when the permit or license was issued.
3-14           (b)  The Alcoholic Beverage Commission shall adopt all rules
3-15     necessary to implement the changes made by this Act not later than
3-16     December 31, 2001.