1-1     By:  Goolsby (Senate Sponsor - Carona)                H.B. No. 2878
 1-2           (In the Senate - Received from the House May 11, 2001;
 1-3     May 11, 2001, read first time and referred to Committee on Business
 1-4     and Commerce; May 11, 2001, reported favorably by the following
 1-5     vote:  Yeas 5, Nays 0; May 11, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to requirements for a private club registration permit
 1-9     under the Alcoholic Beverage Code.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Sections 32.03(b) and (d), Alcoholic Beverage
1-12     Code, are amended to read as follows:
1-13           (b)  The club must be an association of persons, whether
1-14     unincorporated or incorporated under the laws of this state, for
1-15     the promotion of some common object.  A club that was originally
1-16     formed as an association of persons may incorporate under the laws
1-17     of this state as approved by the administrator. The commission
1-18     shall issue a replacement permit to the corporate entity on the
1-19     payment of a $100 service fee.
1-20           (d)  No application for membership may be approved until the
1-21     application has been filed with the chairman of the membership
1-22     committee or board and approved by the chairman.  The committee or
1-23     board may authorize the chairman or a designated agent to issue
1-24     preliminary memberships without the approval of the committee or
1-25     board for a period not exceeding seven [three] days on the request
1-26     of an applicant for membership.  A preliminary member has all of
1-27     the privileges of membership in the club.  If the committee or
1-28     board does not approve the application before the expiration of the
1-29     preliminary membership, the club shall pay to the state the fee
1-30     required of temporary members under Section 32.09 of this code.
1-31     The club shall remit the fees and record and report preliminary
1-32     memberships as the commission or the administrator prescribes.
1-33           SECTION 2.  Chapter 32, Alcoholic Beverage Code, is amended
1-34     by adding Section 32.031 to read as follows:
1-35           Sec. 32.031.  PRIVATE CLUB LOCATED IN A RESTAURANT. (a)  In
1-36     this section, "restaurant club" means a private club that:
1-37                 (1)  has as its premises an undivided portion of the
1-38     premises of a public restaurant; and
1-39                 (2)  is a holder of a food and beverage certificate.
1-40           (b)  A restaurant club may contract with another entity to
1-41     manage the club if the entity:
1-42                 (1)  is authorized to do business in this state; and
1-43                 (2)  complies with the same requirements applicable to
1-44     private club registration permit applicants.
1-45           (c)  An entity contracted to manage a restaurant club under
1-46     Subsection (b) may:
1-47                 (1)  establish and staff a membership committee as
1-48     provided by Section 32.03(c);
1-49                 (2)  purchase and manage the alcoholic beverage
1-50     inventory of the club members;
1-51                 (3)  establish the price of services provided to the
1-52     club members; and
1-53                 (4)  produce club records as required by statute or by
1-54     commission rule.
1-55           (d)  The bylaws of a restaurant club may establish a
1-56     procedure for:
1-57                 (1)  waiving annual meetings;
1-58                 (2)  calling special meetings; and
1-59                 (3)  appointing officers by a management entity.
1-60           (e)  If a restaurant club membership committee is established
1-61     under Subsection (c)(1), the committee must be unique to the club
1-62     and shall meet on or about the premises of the club.  Proof of the
1-63     meeting may be established by resolution or other documentation as
1-64     prescribed by the administrator.  The documentation must be dated
 2-1     and personally signed at the meeting by the committee members who
 2-2     attend the meeting.  Upon proof of the validity of the
 2-3     documentation, the documentation is conclusive proof of action by
 2-4     the committee or board in compliance with the seven-day period
 2-5     referenced in Section 32.03(d).
 2-6           (f)  A group of 10 or more individuals who are residents of
 2-7     this state and at least 21 years of age may form a committee to be
 2-8     designated as the charter members and as the members of the liquor
 2-9     pool of a restaurant club.  The committee may sponsor an
2-10     application for a private club registration permit as a nonprofit
2-11     corporation.  The committee must include all original officers of
2-12     the club.  A restaurant club formed under this section may not
2-13     serve alcoholic beverages to members until the club has met the
2-14     membership requirements in Section 32.03(e).
2-15           SECTION 3.  Section 32.06(b), Alcoholic Beverage Code, is
2-16     amended to read as follows:
2-17           (b)  If an alcoholic beverages replacement account is used:
2-18                 (1)  each service check may [shall] have printed on it
2-19     the percentage of the service charge that is to be deposited in the
2-20     alcoholic beverages replacement account;
2-21                 (2)  no money other than the designated percentage of
2-22     service charges may be deposited in the replacement account;
2-23                 (3)  the replacement of alcoholic beverages may be paid
2-24     for only from money in the replacement account;
2-25                 (4)  the club's governing body may transfer from the
2-26     replacement account to the club's general operating account any
2-27     portion of the replacement account that the governing body
2-28     determines is in excess of the amount that will be needed to
2-29     purchase replacement alcoholic beverages, but it may make only one
2-30     transfer in a calendar month; and
2-31                 (5)  the club shall maintain a monthly record of the
2-32     total amount of alcoholic beverage service charges collected, the
2-33     amount deposited in the replacement account, the amount used to
2-34     purchase alcoholic beverages, and the amount transferred to the
2-35     club's general operating account.
2-36           SECTION 4.  Section 32.13, Alcoholic Beverage Code, is
2-37     amended to read as follows:
2-38           Sec. 32.13.  Inspection of Books and Records. (a)  The
2-39     records required to be maintained by a permittee under this chapter
2-40     may be maintained in an electronic storage format.  If a record is
2-41     maintained in an electronic format, the permittee must be able to
2-42     reformat the record into a legible hard copy at the request of the
2-43     commission.
2-44           (b)  All books and records pertaining to the operation of any
2-45     permittee club, including a current listing, correct to the last
2-46     day of the preceding month, of all members of the club who have
2-47     liquor stored on the club premises under either the locker or pool
2-48     system, shall be made available to the commission or its authorized
2-49     representatives on request.  A permittee may produce an electronic
2-50     copy of the permittee's records to satisfy a request for inspection
2-51     under this section.
2-52           (c)  The commission shall provide a management entity written
2-53     notice of a request for inspection of documents under this chapter
2-54     on or before the seventh day before the date of the inspection.  A
2-55     management entity is not required to provide a listing of members
2-56     that is correct to the last day of the preceding month until the
2-57     20th day of the month in which the request is made.
2-58           SECTION 5.  This Act takes effect September 1, 2001.
2-59                                  * * * * *