By Wilson H.B. No. 3700
77R15049 MCK-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of alcoholic beverages.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 6.03(k), Alcoholic Beverage Code, is
1-5 amended to read as follows:
1-6 (k) A requirement under this code that 51 percent or more of
1-7 the stock of a corporation be owned by a person or persons who were
1-8 citizens of this state for a one-year period preceding the date of
1-9 the filing of an application for a license or permit does not apply
1-10 to a corporation organized under the laws of this state that
1-11 applies for a license or permit under Chapters 25-34, [Chapter 44,]
1-12 Chapters 48-51, Chapters 69-72, or Chapter 74 of this code if:
1-13 (1) all of the officers and a majority of directors of
1-14 the applicant corporation have resided within the state for a
1-15 one-year period preceding the date of the application and each
1-16 officer or director possesses the qualifications required of other
1-17 applicants for permits and licenses;
1-18 (2) the applicant corporation and the applicant's
1-19 shareholders have no direct or indirect ownership or other
1-20 prohibited relationship with others engaged in the alcoholic
1-21 beverage industry at different levels as provided by Chapter 102 of
1-22 this code and other provisions of this code;
1-23 (3) the applicant corporation is not precluded by law,
1-24 rule, charter, or corporate bylaw from disclosing the applicant's
2-1 shareholders to the commission; and
2-2 (4) the applicant corporation maintains its books and
2-3 records relating to its alcoholic beverage operations in the state
2-4 at its registered office or at a location in the state approved in
2-5 writing by the commission.
2-6 SECTION 2. Section 23.01(b), Alcoholic Beverage Code, is
2-7 amended to read as follows:
2-8 (b) A local distributor's permittee may purchase liquor only
2-9 from a wholesaler's or[,] general class B wholesaler's[, or local
2-10 class B wholesaler's] permittee and may purchase only the types of
2-11 liquor the particular wholesaler is authorized by his permit to
2-12 sell.
2-13 SECTION 3. Section 28.01, Alcoholic Beverage Code, is
2-14 amended by amending Subsection (c) to read as follows:
2-15 (c) The holder of a mixed beverage permit may also:
2-16 (1) purchase wine, beer, ale, and malt liquor
2-17 containing alcohol of not more than 21 percent by volume in
2-18 containers of any legal size from any permittee or licensee
2-19 authorized to sell those beverages for resale; [and]
2-20 (2) sell the wine, beer, ale, and malt liquor for
2-21 consumption on the licensed premises; and
2-22 (3) transport alcoholic beverages from the place of
2-23 purchase to the licensed premises as provided by this code.
2-24 SECTION 4. Section 28.02, Alcoholic Beverage Code, is
2-25 amended to read as follows:
2-26 Sec. 28.02. FEE. (a) The annual state fee for an original
2-27 mixed beverage permit is $3,020 [$3,000].
3-1 (b) The annual state fee for the first renewal of a mixed
3-2 beverage permit is $2,270 [$2,250].
3-3 (c) The annual state fee for the second renewal of a mixed
3-4 beverage permit is $1,520 [$1,500].
3-5 (d) The annual state fee for the third and each subsequent
3-6 renewal of a mixed beverage permit is $770 [$750].
3-7 SECTION 5. Sections 28.07(b) and (c), Alcoholic Beverage
3-8 Code, are amended to read as follows:
3-9 (b) If a holder of a mixed beverage permit is in a county
3-10 where there are no local distributors, the holder [he] may purchase
3-11 alcoholic beverages in the nearest county where local distributors
3-12 are located and may transport them to the holder's [his] premises
3-13 [provided that he is also a holder of a beverage cartage permit].
3-14 The transporter may acquire the alcoholic beverages only on the
3-15 written order of the holder of the mixed beverage permit. The
3-16 alcoholic beverages must be accompanied by a written statement
3-17 furnished and signed by the local distributor showing the name and
3-18 address of the consignee and consignor, the origin and destination
3-19 of the shipment, and any other information required by the
3-20 commission or administrator. The person in charge of the alcoholic
3-21 beverages while they are being transported shall exhibit the
3-22 written statement to any representative of the commission or any
3-23 peace officer on demand, and the statement shall be accepted by the
3-24 representative or officer as prima facie evidence of the lawful
3-25 right to transport the alcoholic beverages.
3-26 (c) If the [a mixed beverage permittee holds a beverage
3-27 cartage permit and his] premises of the holder of a mixed beverage
4-1 permit are located in a regional airport governed by a board,
4-2 commission, or authority composed of members from two or more
4-3 counties, and there is no local distributor at the airport, the
4-4 holder [mixed beverage permittee] may purchase alcoholic beverages
4-5 from any local distributor in a trade area served by the airport
4-6 and transport them to the holder's [his] licensed premises. The
4-7 transportation of the beverages must be in accordance with
4-8 Subsection (b) of this section.
4-9 SECTION 6. Chapter 28, Alcoholic Beverage Code, is amended
4-10 by adding Section 28.19 to read as follows:
4-11 Sec. 28.19. APPLICABILITY OF CHAPTER TO HOLDER OF FOOD AND
4-12 BEVERAGE CERTIFICATE. This chapter applies to the holder of a
4-13 mixed beverage permit who also holds a food and beverage
4-14 certificate issued under Section 28.18.
4-15 SECTION 7. Section 32.01(a), Alcoholic Beverage Code, is
4-16 amended to read as follows:
4-17 (a) A private club registration permit authorizes alcoholic
4-18 beverages belonging to members of the club to be:
4-19 (1) stored, possessed, and mixed on the club premises;
4-20 [and]
4-21 (2) served for on-premises consumption only to members
4-22 of the club and their families and guests, by the drink or in
4-23 sealed, unsealed, or broken containers of any legal size; and
4-24 (3) transported from the place of purchase to the
4-25 licensed premises as provided by this code.
4-26 SECTION 8. Sections 32.02(b), (d), and (f), Alcoholic
4-27 Beverage Code, are amended to read as follows:
5-1 (b) The annual state fee shall be computed at the election
5-2 of the permittee by using one of the following methods:
5-3 (1) A fee based on the highest number of members in
5-4 good standing during the year for which the permit fee is paid
5-5 according to the following rates:
5-6 0 to 250 members - $770 [$750]
5-7 251 to 450 members - $1,370 [$1,350]
5-8 451 to 650 members - $1,970 [$1,950]
5-9 651 to 850 members - $2,570 [$2,550]
5-10 851 to 1,000 members - $3,020 [$3,000]
5-11 Over 1,000 members - $20 annually plus $3 per member; or
5-12 (2) Except as provided by Subsection (d) of this
5-13 section, a fee for an original private club registration permit of
5-14 $3,520 [$3,500], with a fee for the first renewal of a private club
5-15 registration permit of $2,770 [$2,750], and a fee for the second
5-16 and each subsequent renewal of a private club registration permit
5-17 of $2,020 [$2,000].
5-18 (d) A permit holder who has elected to restrict the holder's
5-19 authorized activities under the permit as provided by Section
5-20 32.01(b) of this code shall pay an original permit fee of $1,520
5-21 [$1,500] and an annual renewal fee of $1,520 [$1,500].
5-22 (f) For a permittee who holds a valid permit on the
5-23 effective date of this subsection and who elects to pay a permit
5-24 fee as provided by Subsection (b)(2) of this section, the fee for
5-25 renewal of that permit is:
5-26 (1) $2,770 [$2,750] for the first annual renewal since
5-27 the original permit was issued; and
6-1 (2) $2,020 [$2,000] for a renewal subsequent to the
6-2 first annual renewal.
6-3 SECTION 9. Section 32.08, Alcoholic Beverage Code, is
6-4 amended to read as follows:
6-5 Sec. 32.08. PURCHASE AND TRANSPORTATION OF ALCOHOLIC
6-6 BEVERAGES. (a) All distilled spirits served [sold] by a club
6-7 holding a private club registration permit must be purchased in
6-8 this state from a holder of a local distributor's permit.
6-9 (b) If the club holding the permit is in an area where there
6-10 are no local distributors, alcoholic beverages may be purchased in
6-11 any area where local distributors are located and may be
6-12 transported to the club premises [if the club also holds a beverage
6-13 cartage permit]. The transporter may acquire the alcoholic
6-14 beverages only on the written order of an officer or manager of the
6-15 club holding the permit. The alcoholic beverages must be
6-16 accompanied by a written statement furnished and signed by the
6-17 local distributor showing the name and address of the consignee and
6-18 consignor, the origin and destination of the shipment, and any
6-19 other information required by the commission or administrator. The
6-20 person in charge of the alcoholic beverages while they are being
6-21 transported shall exhibit the written statement to any
6-22 representative of the commission or any peace officer on demand,
6-23 and the statement shall be accepted by the representative or
6-24 officer as prima facie evidence of the lawful right to transport
6-25 the alcoholic beverages.
6-26 (c) If the [a private club registration permittee holds a
6-27 beverage cartage permit and his] premises of the holder of a
7-1 private club registration permit are located in a regional airport
7-2 governed by a board, commission, or authority composed of members
7-3 from two or more counties, and there is no local distributor at the
7-4 airport, the holder of a private club registration permit
7-5 [permittee] may purchase alcoholic beverages from any local
7-6 distributor in a trade area served by the airport and transport
7-7 them to the holder's [his] licensed premises. The transportation
7-8 of the beverages must be in accordance with Subsection (b) of this
7-9 section.
7-10 SECTION 10. Chapter 32, Alcoholic Beverage Code, is amended
7-11 by adding Section 32.25 to read as follows:
7-12 Sec. 32.25. APPLICABILITY OF CHAPTER TO HOLDER OF FOOD AND
7-13 BEVERAGE CERTIFICATE. This chapter applies to the holder of a
7-14 private club registration permit who also holds a food and beverage
7-15 certificate issued under Section 32.23.
7-16 SECTION 11. Section 38.01, Alcoholic Beverage Code, is
7-17 amended to read as follows:
7-18 Sec. 38.01. Authorized Activities. (a) The holder of an
7-19 industrial permit may import, transport, and use alcohol or
7-20 denatured alcohol for the manufacture and sale of any of the
7-21 following products:
7-22 (1) denatured alcohol;
7-23 (2) patent, proprietary, medicinal, pharmaceutical,
7-24 antiseptic, and toilet preparations;
7-25 (3) flavoring extracts, syrups, condiments, and food
7-26 products; and
7-27 (4) scientific, chemical, mechanical, and industrial
8-1 products, or products used for scientific, chemical, mechanical,
8-2 industrial, or medicinal purposes.
8-3 (b) The holder of an industrial permit also may:
8-4 (1) manufacture, rectify, and refine industrial
8-5 alcohol, which term as used in this chapter means an alcohol that
8-6 is produced for industrial purposes only and is not fit for human
8-7 consumption;
8-8 (2) denature alcohol produced under the permit;
8-9 (3) sell denatured or industrial alcohol produced
8-10 under the permit to holders of industrial permits and to qualified
8-11 persons outside the state; and
8-12 (4) blend industrial alcohol produced under the permit
8-13 with petroleum distillates and sell or use the resulting product as
8-14 a motor fuel.
8-15 SECTION 12. Section 38.03(b), Alcoholic Beverage Code, is
8-16 amended to read as follows:
8-17 (b) No person may sell, possess, or divert any of the
8-18 products enumerated in [Subdivisions (1) through (4) of] Section
8-19 38.01 of this code for beverage purposes or under circumstances
8-20 from which he might reasonably deduce that the intention of the
8-21 purchaser is to use those products for beverage purposes.
8-22 SECTION 13. Sections 47.03-47.07, Alcoholic Beverage Code,
8-23 are redesignated as Sections 38.07-38.11, Alcoholic Beverage Code,
8-24 and amended to read as follows:
8-25 Sec. 38.07 [47.03]. Transportation. (a) An [A local]
8-26 industrial [alcohol manufacturer's] permittee may transport the
8-27 alcohol produced under the [local industrial alcohol
9-1 manufacturer's] permit by railway tank car, barge, or motor truck
9-2 if the tank car, barge, or motor truck is owned by the permittee
9-3 [him] or leased in good faith.
9-4 (b) The permittee must comply with all applicable state and
9-5 federal laws regulating transportation.
9-6 (c) The permittee may not transport alcohol under the
9-7 authority of this section unless all of the necessary documents
9-8 required by Section 107.01 are prepared[, at the time the
9-9 transportation occurs, the tank car, barge, or motor truck is fully
9-10 described in a sworn statement on file with the commission].
9-11 (d) The permittee may transport the alcohol to a wet area by
9-12 crossing a dry area if that route is necessary or convenient.
9-13 Sec. 38.08 [47.04]. Storage Facility. (a) An [A local]
9-14 industrial [alcohol manufacturer's] permit applicant or permittee
9-15 may request in the permit application or in writing after the
9-16 permit is issued that the commission or administrator authorize the
9-17 permittee to store alcohol at a storage facility under the
9-18 permittee's control that is located off the licensed premises if
9-19 the applicant is in the business of manufacturing the industrial
9-20 alcohol. The permittee shall supply any information regarding the
9-21 storage that the commission or administrator requires.
9-22 (b) A request under this section may include a request that
9-23 the permittee be permitted to transport the alcohol to the storage
9-24 facility by pipeline or other means.
9-25 (c) If the request is granted, the commission or
9-26 administrator may attach any conditions regarding the use of the
9-27 facility or transportation of alcohol to the facility that the
10-1 commission or administrator considers proper.
10-2 (d) A storage facility authorized under this section is
10-3 treated as a part of the licensed premises for the purpose of the
10-4 permittee's consent to inspection under Section 101.04 of this
10-5 code.
10-6 Sec. 38.09 [47.05]. Plant Plan Requirements. If the plant
10-7 plans submitted by the applicant establish to the satisfaction of
10-8 the commission that the plant is not capable of producing alcohol
10-9 for beverage purposes and if no change in the plant is made without
10-10 commission approval, the permit for which application is made shall
10-11 be considered to be an industrial permit as that term is used in
10-12 Section 109.53 of this code. Plant plans may only be submitted for
10-13 those applicants applying for privileges under Section 38.01(b).
10-14 Sec. 38.10 [47.06]. Exemption for State Institutions. A
10-15 state institution is exempt from these provisions of the code when
10-16 manufacturing industrial alcohol for scientific or laboratory use.
10-17 Sec. 38.11 [47.07]. Local Option Status of Area. Whether an
10-18 area is wet or dry under the local option laws does not affect the
10-19 eligibility of an applicant to hold a permit under this chapter.
10-20 SECTION 14. Section 102.07(f), Alcoholic Beverage Code, is
10-21 amended to read as follows:
10-22 (f) Notwithstanding Subsection (a) of this section, Section
10-23 108.05 of this code, or any other provision of this code, a holder
10-24 of a brewer's permit, nonresident brewer's permit, distiller's and
10-25 rectifier's permit, winery permit, nonresident seller's permit,
10-26 manufacturer's license, or nonresident manufacturer's license may,
10-27 in order to promote the brand name of the permittee's or licensee's
11-1 products, contract with a person licensed under the Texas Racing
11-2 Act (Article 179e, Vernon's Texas Civil Statutes) for on-site
11-3 advertising signs, for advertising in programs, and to supplement
11-4 purses for races even though the licensees under that Act or the
11-5 owners or operators of the racing facilities also hold a mixed
11-6 beverage permit or other permit or license under this code. In
11-7 addition, a permittee or licensee described by this subsection may
11-8 contract for off-site advertising promoting specific races. A part
11-9 of the cost of an advertisement or promotion authorized by this
11-10 section may not be charged to or paid, directly or indirectly, by
11-11 the holder of a wholesale permit, general class B wholesaler's
11-12 permit, [local class B wholesaler's permit,] local distributor's
11-13 permit, general distributor's license, or local distributor's
11-14 license, except through the price paid by that holder for products
11-15 purchased from the holder's supplier.
11-16 SECTION 15. Section 103.09(b), Alcoholic Beverage Code, is
11-17 amended to read as follows:
11-18 (b) On notification that liquor has been seized, the
11-19 commission shall promptly notify a holder of a wholesaler's permit
11-20 or[,] a general class B wholesaler's permit[, or a local class B
11-21 wholesaler's permit] who handles the brand of liquor seized and who
11-22 operates in the county in which it was seized. If the liquor was
11-23 seized in a dry area, the commission shall notify the wholesaler
11-24 who handles the brand seized who operates nearest the area. The
11-25 commission and the wholesaler shall jointly determine whether the
11-26 liquor is in a salable condition.
11-27 SECTION 16. Section 107.09, Alcoholic Beverage Code, is
12-1 amended to read as follows:
12-2 Sec. 107.09. SINGLE INVOICE AUTHORIZED. If the holder of a
12-3 general, local, or branch distributor's license also holds a
12-4 wholesaler's or [,] general class B wholesaler's[, or local class B
12-5 wholesaler's] permit, a written statement or invoice required as
12-6 evidence of the sale of beer or liquor may be on the same business
12-7 form that is designed to reflect the sale of both liquor and beer,
12-8 if all information required by this code to be shown on a statement
12-9 or invoice is reflected on the form and all other records required
12-10 by this code are maintained.
12-11 SECTION 17. Section 107.10(a), Alcoholic Beverage Code, is
12-12 amended to read as follows:
12-13 (a) A holder of a wholesaler's or[,] general class B
12-14 wholesaler's[, or local class B wholesaler's] permit may transport
12-15 and sell wine coolers without a prior order if the holder complies
12-16 with the provisions of this code and rules of the commission
12-17 applicable to the transportation and sale of beer by a holder of a
12-18 distributor's license.
12-19 SECTION 18. Section 108.08(b), Alcoholic Beverage Code, is
12-20 amended to read as follows:
12-21 (b) A part of the cost of advertising revenue paid by a
12-22 manufacturer to an entity under this section may not be charged to
12-23 or paid, directly or indirectly, by the holder of a wholesaler's
12-24 permit, general class B wholesaler's permit, [local class B
12-25 wholesaler's permit,] local distributor's permit, general
12-26 distributor's license, or local distributor's license, except
12-27 through the price paid by that holder for products purchased from
13-1 the holders' supplier.
13-2 SECTION 19. Section 109.05(a), Alcoholic Beverage Code, is
13-3 amended to read as follows:
13-4 (a) When the commission is notified under this subchapter of
13-5 the acquisition of liquor or its containers or original packages,
13-6 it shall immediately notify the holder or holders of wholesaler's
13-7 or[,] class B wholesaler's[, or local class B wholesaler's] permits
13-8 who handle and regularly sell the brand or brands of liquor
13-9 involved and who operate in the area where the liquor is located,
13-10 or who operate in the nearest wet area if the liquor is in a dry
13-11 area. The commission shall also notify the nonresident seller's
13-12 permittees who handle the brand or brands of liquor involved, or
13-13 the manufacturer's agent's permittees who represent those
13-14 nonresident seller's permittees.
13-15 SECTION 20. Section 109.531, Alcoholic Beverage Code, is
13-16 amended to read as follows:
13-17 Sec. 109.531. ADDITIONAL REQUIREMENTS FOR APPLICATION OR
13-18 RENEWAL OF PERMIT OR LICENSE BY OUT-OF-STATE RESIDENTS. In
13-19 addition to any other requirement for a license or permit under
13-20 this code, a person who has not been a citizen of this state for a
13-21 period of one year preceding the date the person filed an
13-22 application for a permit or license under Chapters 25-34, [44,]
13-23 48-51, 69-72, or Chapter 74 of this code shall:
13-24 (1) designate an agent, who is a citizen of this
13-25 state, to represent the person in matters before the commission and
13-26 to be responsible for the proper conduct of any activity of the
13-27 licensee or permittee; and
14-1 (2) submit to a criminal history background check.
14-2 SECTION 21. Section 201.41, Alcoholic Beverage Code, is
14-3 amended to read as follows:
14-4 Sec. 201.41. FIRST SALE. In this subchapter, "first sale"
14-5 means:
14-6 (1) the first actual sale of ale or malt liquor by the
14-7 holder of a wholesaler's or[,] general class B wholesaler's[, or
14-8 local class B wholesaler's] permit to:
14-9 (A) a permittee authorized to sell to ultimate
14-10 consumers;
14-11 (B) a local distributor permittee; or
14-12 (C) a private club registration permittee; or
14-13 (2) the importation of ale or malt liquor under
14-14 Section 107.07 of this code.
14-15 SECTION 22. Section 251.79, Alcoholic Beverage Code, is
14-16 amended to read as follows:
14-17 Sec. 251.79. AREAS IN WHICH CERTAIN PERMITS AND LICENSES MAY
14-18 BE ISSUED. Notwithstanding any other provision of this code, a
14-19 wholesaler's permit, general class B wholesaler's permit, [local
14-20 class B wholesaler's permit,] or general, local or branch
14-21 distributor's license may be issued and licensed premises
14-22 maintained in any area where the sale of any alcoholic beverage is
14-23 legal. A person issued a permit or license under this section may
14-24 exercise all rights and privileges of other permittees and
14-25 licensees of the same class.
14-26 SECTION 23. Chapters 21, 44, and 49 and Sections 47.01 and
14-27 47.02, Alcoholic Beverage Code, are repealed.
15-1 SECTION 24. A person who holds a local class B wholesaler's
15-2 permit on the effective date of this Act may convert that permit to
15-3 a general class B wholesaler's permit on payment of the appropriate
15-4 fee and in accordance with procedures for the conversion adopted by
15-5 the Texas Alcoholic Beverage Commission.
15-6 SECTION 25. A permit that was issued under Chapter 47,
15-7 Alcoholic Beverage Code, and in effect immediately before this Act
15-8 took effect is governed by Chapter 38, Alcoholic Beverage Code, as
15-9 amended by this Act.
15-10 SECTION 26. This Act takes effect September 1, 2001.