By Yarbrough                                          H.B. No. 2026
         77R5227 MCK-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the abolishment of local class B wholesaler's permits
 1-3     to sell wine and malt liquor.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 23.01(b), Alcoholic Beverage Code, is
 1-6     amended to read as follows:
 1-7           (b)  A local distributor's permittee may purchase liquor only
 1-8     from a wholesaler's or[,] general class B wholesaler's[, or local
 1-9     class B wholesaler's] permittee and may purchase only the types of
1-10     liquor the particular wholesaler is authorized by his permit to
1-11     sell.
1-12           SECTION 2.  Section 102.07(f), Alcoholic Beverage Code, is
1-13     amended to read as follows:
1-14           (f)  Notwithstanding Subsection (a) of this section, Section
1-15     108.05 of this code, or any other provision of this code, a holder
1-16     of a brewer's permit, nonresident brewer's permit, distiller's and
1-17     rectifier's permit, winery permit, nonresident seller's permit,
1-18     manufacturer's license, or nonresident manufacturer's license may,
1-19     in order to promote the brand name of the permittee's or licensee's
1-20     products, contract with a person licensed under the Texas Racing
1-21     Act (Article 179e, Vernon's Texas Civil Statutes) for on-site
1-22     advertising signs, for advertising in programs, and to supplement
1-23     purses for races even though the licensees under that Act or the
1-24     owners or operators of the racing facilities also hold a mixed
 2-1     beverage permit or other permit or license under this code.  In
 2-2     addition, a permittee or licensee described by this subsection may
 2-3     contract for off-site advertising promoting specific races.  A part
 2-4     of the cost of an advertisement or promotion authorized by this
 2-5     section may not be charged to or paid, directly or indirectly, by
 2-6     the holder of a wholesale permit, general class B wholesaler's
 2-7     permit, [local class B wholesaler's permit,] local distributor's
 2-8     permit, general distributor's license, or local distributor's
 2-9     license, except through the price paid by that holder for products
2-10     purchased from the holder's supplier.
2-11           SECTION 3.  Section 103.09(b), Alcoholic Beverage Code, is
2-12     amended to read as follows:
2-13           (b)  On notification that liquor has been seized, the
2-14     commission shall promptly notify a holder of a wholesaler's permit
2-15     or[,] a general class B wholesaler's permit[, or a local class B
2-16     wholesaler's permit] who handles the brand of liquor seized and who
2-17     operates in the county in which it was seized.  If the liquor was
2-18     seized in a dry area, the commission shall notify the wholesaler
2-19     who handles the brand seized who operates nearest the area.  The
2-20     commission and the wholesaler shall jointly determine whether the
2-21     liquor is in a salable condition.
2-22           SECTION 4.  Section 107.09, Alcoholic Beverage Code, is
2-23     amended to read as follows:
2-24           Sec. 107.09.  SINGLE INVOICE AUTHORIZED.  If the holder of a
2-25     general, local, or branch distributor's license also holds a
2-26     wholesaler's or [,] general class B wholesaler's[, or local class B
2-27     wholesaler's] permit, a written statement or invoice required as
 3-1     evidence of the sale of beer or liquor may be on the same business
 3-2     form that is designed to reflect the sale of both liquor and beer,
 3-3     if all information required by this code to be shown on a statement
 3-4     or invoice is reflected on the form and all other records required
 3-5     by this code are maintained.
 3-6           SECTION 5.  Section 107.10(a), Alcoholic Beverage Code, is
 3-7     amended to read as follows:
 3-8           (a)  A holder of a wholesaler's or[,] general class B
 3-9     wholesaler's[, or local class B wholesaler's] permit may transport
3-10     and sell wine coolers without a prior order if the holder complies
3-11     with the provisions of this code and rules of the commission
3-12     applicable to the transportation and sale of beer by a holder of a
3-13     distributor's license.
3-14           SECTION 6.  Section 108.08(b), Alcoholic Beverage Code, is
3-15     amended to read as follows:
3-16           (b)  A part of the cost of advertising revenue paid by a
3-17     manufacturer to an entity under this section may not be charged to
3-18     or paid, directly or indirectly, by the holder of a wholesaler's
3-19     permit, general class B wholesaler's permit, [local class B
3-20     wholesaler's permit,] local distributor's permit, general
3-21     distributor's license, or local distributor's license, except
3-22     through the price paid by that holder for products purchased from
3-23     the holders' supplier.
3-24           SECTION 7.  Section 109.05(a), Alcoholic Beverage Code, is
3-25     amended to read as follows:
3-26           (a)  When the commission is notified under this subchapter of
3-27     the acquisition of liquor or its containers or original packages,
 4-1     it shall immediately notify the holder or holders of wholesaler's
 4-2     or[,] class B wholesaler's[, or local class B wholesaler's] permits
 4-3     who handle and regularly sell the brand or brands of liquor
 4-4     involved and who operate in the area where the liquor is located,
 4-5     or who operate in the nearest wet area if the liquor is in a dry
 4-6     area.  The commission shall also notify the nonresident seller's
 4-7     permittees who handle the brand or brands of liquor involved, or
 4-8     the manufacturer's agent's permittees who represent those
 4-9     nonresident seller's permittees.
4-10           SECTION 8.  Section 201.41, Alcoholic Beverage Code, is
4-11     amended to read as follows:
4-12           Sec. 201.41.  FIRST SALE.  In this subchapter, "first sale"
4-13     means:
4-14                 (1)  the first actual sale of ale or malt liquor by the
4-15     holder of a wholesaler's or[,] general class B wholesaler's[, or
4-16     local class B wholesaler's] permit to:
4-17                       (A)  a permittee authorized to sell to ultimate
4-18     consumers;
4-19                       (B)  a local distributor permittee; or
4-20                       (C)  a private club registration permittee; or
4-21                 (2)  the importation of ale or malt liquor under
4-22     Section 107.07 of this code.
4-23           SECTION 9.  Section 251.79, Alcoholic Beverage Code, is
4-24     amended to read as follows:
4-25           Sec. 251.79.  AREAS IN WHICH CERTAIN PERMITS AND LICENSES MAY
4-26     BE ISSUED.  Notwithstanding any other provision of this code, a
4-27     wholesaler's permit, general class B wholesaler's permit, [local
 5-1     class B wholesaler's permit,] or general, local or branch
 5-2     distributor's license may be issued and licensed premises
 5-3     maintained in any area where the sale of any alcoholic beverage is
 5-4     legal.  A person issued a permit or license under this section may
 5-5     exercise all rights and privileges of other permittees and
 5-6     licensees of the same class.
 5-7           SECTION 10.  Chapter 21, Alcoholic Beverage Code, is
 5-8     repealed.
 5-9           SECTION 11.  A person who holds a local class B wholesaler's
5-10     permit on the effective date of this Act may convert that permit to
5-11     a general class B wholesaler's permit on payment of the appropriate
5-12     fee and in accordance with procedures for the conversion adopted by
5-13     the Texas Alcoholic Beverage Commission.
5-14           SECTION 12.  This Act takes effect September 1, 2001.