By Madla S.B. No. 1481
77R8962 AJA-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to regulation of alcoholic beverage manufacturers,
1-3 wholesalers, and retailers.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 6.03(k), Alcoholic Beverage Code, is
1-6 amended to read as follows:
1-7 (k) A requirement under this code that 51 percent or more of
1-8 the stock of a corporation be owned by a person or persons who were
1-9 citizens of this state for a one-year period preceding the date of
1-10 the filing of an application for a license or permit does not apply
1-11 to a corporation organized under the laws of this state that
1-12 applies for a license or permit under Chapters 25-34, Chapter 44,
1-13 Chapters 48-51, Chapters 69-72, or Chapter 74 [of this code] if:
1-14 (1) all of the officers and a majority of directors of
1-15 the applicant corporation have resided within the state for a
1-16 one-year period preceding the date of the application and each
1-17 officer or director possesses the qualifications required of other
1-18 applicants for permits and licenses;
1-19 (2) [the applicant corporation and the applicant's
1-20 shareholders have no direct or indirect ownership or other
1-21 prohibited relationship with others engaged in the alcoholic
1-22 beverage industry at different levels as provided by Chapter 102 of
1-23 this code and other provisions of this code;]
1-24 [(3)] the applicant corporation is not precluded by
2-1 law, rule, charter, or corporate bylaw from disclosing the
2-2 applicant's shareholders to the commission; and
2-3 (3) [(4)] the applicant corporation maintains its
2-4 books and records relating to its alcoholic beverage operations in
2-5 the state at its registered office or at a location in the state
2-6 approved in writing by the commission.
2-7 SECTION 2. Section 11.091(b), Alcoholic Beverage Code, is
2-8 amended to read as follows:
2-9 (b) The commission shall promptly notify each wholesaler [,
2-10 as that term is ordinarily used and understood in Section 102.01,]
2-11 who regularly supplies retailers in the geographic area that the
2-12 holder's retail permit has expired or has been suspended.
2-13 SECTION 3. Section 11.45, Alcoholic Beverage Code, is amended
2-14 to read as follows:
2-15 Sec. 11.45. "APPLICANT" DEFINED. The word "applicant," as
2-16 used in Section [Sections] 11.46 [through 11.48 of this code], also
2-17 includes, as of the date of the application, each member of a
2-18 partnership or association and, with respect to a corporation, each
2-19 officer and the owner or owners of a majority of the corporate
2-20 stock. [This section shall not be construed as prohibiting
2-21 anything permitted by Section 22.06, 24.05, or 102.05 of this
2-22 code.]
2-23 SECTION 4. Sections 11.61(a) and (b), Alcoholic Beverage
2-24 Code, are amended to read as follows:
2-25 (a) As used in Subsection (b) [of this section], the word
2-26 "permittee" also includes each member of a partnership or
2-27 association and, with respect to a corporation, each officer and
3-1 the owner or owners of a majority of the corporate stock. [This
3-2 section shall not be construed as prohibiting anything permitted
3-3 under Section 22.06, 24.05, or 102.05 of this code.]
3-4 (b) The commission or administrator may suspend for not more
3-5 than 60 days or cancel an original or renewal permit if it is
3-6 found, after notice and hearing, that any of the following is true:
3-7 (1) the permittee has been finally convicted of a
3-8 violation of this code;
3-9 (2) the permittee violated a provision of this code or
3-10 a rule of the commission;
3-11 (3) the permittee was finally convicted of a felony
3-12 while holding an original or renewal permit;
3-13 (4) the permittee made a false or misleading statement
3-14 in connection with his original or renewal application, either in
3-15 the formal application itself or in any other written instrument
3-16 relating to the application submitted to the commission, its
3-17 officers, or employees;
3-18 (5) the permittee is indebted to the state for taxes,
3-19 fees, or payment of penalties imposed by this code, by a rule of
3-20 the commission, or by Chapter 183, Tax Code;
3-21 (6) the permittee is not of good moral character or
3-22 his reputation for being a peaceable and law-abiding citizen in the
3-23 community where he resides is bad;
3-24 (7) the place or manner in which the permittee
3-25 conducts his business warrants the cancellation or suspension of
3-26 the permit based on the general welfare, health, peace, morals, and
3-27 safety of the people and on the public sense of decency;
4-1 (8) the permittee is not maintaining an acceptable
4-2 bond;
4-3 (9) the permittee maintains a noisy, lewd, disorderly,
4-4 or unsanitary establishment or has supplied impure or otherwise
4-5 deleterious beverages;
4-6 (10) the permittee is insolvent or mentally or
4-7 physically unable to carry on the management of his establishment;
4-8 (11) the permittee is in the habit of using alcoholic
4-9 beverages to excess;
4-10 (12) the permittee knowingly misrepresented to a
4-11 customer or the public any liquor sold by him;
4-12 (13) the permittee was intoxicated on the licensed
4-13 premises;
4-14 (14) the permittee sold or delivered an alcoholic
4-15 beverage to an intoxicated person;
4-16 (15) the permittee possessed on the licensed premises
4-17 an alcoholic beverage that he was not authorized by his permit to
4-18 purchase and sell;
4-19 (16) a package store or wine only package store
4-20 permittee transported or shipped liquor, or caused it to be
4-21 transported or shipped, into a dry state or a dry area within this
4-22 state;
4-23 (17) [the permittee is residentially domiciled with a
4-24 person who has a financial interest in an establishment engaged in
4-25 the business of selling beer at retail, other than a mixed beverage
4-26 establishment, except as authorized by Section 22.06, 24.05, or
4-27 102.05 of this code;]
5-1 [(18)] the permittee is residentially domiciled with a
5-2 person whose permit or license was cancelled for cause within the
5-3 12-month period preceding his own application;
5-4 (18) [(19)] the permittee is not a citizen of the
5-5 United States or has not been a citizen of Texas for a period of
5-6 one year immediately preceding the filing of his application,
5-7 unless he was issued an original or renewal permit on or before
5-8 September 1, 1948, and has been a United States citizen at some
5-9 time;
5-10 (19) [(20)] the permittee permitted a person to open a
5-11 container of alcoholic beverage or possess an open container of
5-12 alcoholic beverage on the licensed premises unless a mixed beverage
5-13 permit has been issued for the premises; or
5-14 (20) [(21)] the permittee failed to promptly report to
5-15 the commission a breach of the peace occurring on the permittee's
5-16 licensed premises.
5-17 SECTION 5. Section 22.14(d), Alcoholic Beverage Code, is
5-18 amended to read as follows:
5-19 (d) Subsections (a), (b), and (c) shall not apply to a
5-20 package store that qualifies for exemption under Section 11.50 [or
5-21 to a package store in a hotel that qualifies for exemption under
5-22 Section 102.05].
5-23 SECTION 6. Section 61.031(b), Alcoholic Beverage Code, is
5-24 amended to read as follows:
5-25 (b) The commission shall promptly notify each wholesaler [,
5-26 as that term is ordinarily used and understood in Section 102.01,]
5-27 who regularly supplies retailers in the geographic area that the
6-1 holder's retail license has expired or has been suspended.
6-2 SECTION 7. Section 61.71, Alcoholic Beverage Code, is amended
6-3 to read as follows:
6-4 Sec. 61.71. GROUNDS FOR CANCELLATION OR SUSPENSION: RETAIL
6-5 DEALER. (a) The commission or administrator may suspend for not
6-6 more than 60 days or cancel an original or renewal retail dealer's
6-7 on- or off-premise license if it is found, after notice and
6-8 hearing, that the licensee:
6-9 (1) violated a provision of this code or a rule of the
6-10 commission during the existence of the license sought to be
6-11 cancelled or suspended or during the immediately preceding license
6-12 period;
6-13 (2) was finally convicted for violating a penal
6-14 provision of this code;
6-15 (3) was finally convicted of a felony while holding an
6-16 original or renewal license;
6-17 (4) made a false statement or a misrepresentation in
6-18 his original application or a renewal application;
6-19 (5) with criminal negligence sold, served, or
6-20 delivered an alcoholic beverage to a minor;
6-21 (6) sold, served, or delivered an alcoholic beverage
6-22 to an intoxicated person;
6-23 (7) sold, served, or delivered an alcoholic beverage
6-24 at a time when its sale is prohibited;
6-25 (8) entered or offered to enter an agreement,
6-26 condition, or system which would constitute the sale or possession
6-27 of alcoholic beverages on consignment;
7-1 (9) possessed on the licensed premises, or on adjacent
7-2 premises directly or indirectly under his control, an alcoholic
7-3 beverage not authorized to be sold on the licensed premises, or
7-4 permitted an agent, servant, or employee to do so [, except as
7-5 permitted by Section 22.06, 24.05, or 102.05 of this code];
7-6 (10) does not have at his licensed premises running
7-7 water, if it is available, and separate toilets for both sexes
7-8 which are properly identified;
7-9 (11) permitted a person on the licensed premises to
7-10 engage in conduct which is lewd, immoral, or offensive to public
7-11 decency;
7-12 (12) employed a person under 18 years of age to sell,
7-13 handle, or dispense beer, or to assist in doing so, in an
7-14 establishment where beer is sold for on-premises consumption;
7-15 (13) conspired with a person to violate Section
7-16 101.41-101.43, 101.68, [102.11-102.15,] 104.04, 108.01, or
7-17 108.04-108.06 [of this code], or a rule promulgated under Section
7-18 5.40 [of this code], or accepted a benefit from an act prohibited
7-19 by any of these sections or rules;
7-20 (14) refused to permit or interfered with an
7-21 inspection of the licensed premises by an authorized representative
7-22 of the commission or a peace officer;
7-23 (15) permitted the use or display of his license in
7-24 the conduct of a business for the benefit of a person not
7-25 authorized by law to have an interest in the license;
7-26 (16) maintained blinds or barriers at his place of
7-27 business in violation of this code;
8-1 (17) conducted his business in a place or manner which
8-2 warrants the cancellation or suspension of the license based on the
8-3 general welfare, health, peace, morals, safety, and sense of
8-4 decency of the people;
8-5 (18) consumed an alcoholic beverage or permitted one
8-6 to be consumed on the licensed premises at a time when the
8-7 consumption of alcoholic beverages is prohibited by this code;
8-8 (19) purchased beer for the purpose of resale from a
8-9 person other than the holder of a manufacturer's or distributor's
8-10 license;
8-11 (20) acquired an alcoholic beverage for the purpose of
8-12 resale from another retail dealer of alcoholic beverages;
8-13 (21) [owned an interest of any kind in the business or
8-14 premises of the holder of a distributor's license;]
8-15 [(22)] purchased, sold, offered for sale, distributed,
8-16 or delivered an alcoholic beverage, or consumed an alcoholic
8-17 beverage or permitted one to be consumed on the licensed premises
8-18 while his license was under suspension;
8-19 (22) [(23)] purchased, possessed, stored, sold, or
8-20 offered for sale beer in or from an original package bearing a
8-21 brand or trade name of a manufacturer other than the brand or trade
8-22 name shown on the container;
8-23 (23) [(24)] habitually uses alcoholic beverages to
8-24 excess, is mentally incompetent, or is physically unable to manage
8-25 his establishment;
8-26 (24) [(25)] imported beer into this state except as
8-27 authorized by Section 107.07 [of this code];
9-1 (25) [(26) occupied premises in which the holder of a
9-2 manufacturer's or distributor's license had an interest of any
9-3 kind;]
9-4 [(27)] knowingly permitted a person who had an
9-5 interest in a permit or license which was cancelled for cause to
9-6 sell, handle, or assist in selling or handling alcoholic beverages
9-7 on the licensed premises within one year after the cancellation;
9-8 [(28) was financially interested in a place of
9-9 business engaged in the selling of distilled spirits or permitted a
9-10 person having an interest in that type of business to have a
9-11 financial interest in the business authorized by his license,
9-12 except as permitted by Section 22.06, 24.05, or 102.05 of this
9-13 code;]
9-14 [(29) is residentially domiciled with or related to a
9-15 person engaged in selling distilled spirits, except as permitted by
9-16 Section 22.06, 24.05, or 102.05 of this code, so that there is a
9-17 community of interests which the commission or administrator finds
9-18 contrary to the purposes of this code;]
9-19 [(30) is residentially domiciled with or related to a
9-20 person whose license has been cancelled within the preceding 12
9-21 months so that there is a community of interests which the
9-22 commission or administrator finds contrary to the purposes of this
9-23 code;] or
9-24 (26) [(31)] failed to promptly report to the
9-25 commission a breach of the peace occurring on the licensee's
9-26 licensed premises.
9-27 (b) [Subdivisions (9), (28), (29), and (30) of Subsection
10-1 (a) of this section do not apply to a licensee whose business is
10-2 located in a hotel in which an establishment authorized to sell
10-3 distilled spirits in unbroken packages is also located if the
10-4 licensed premises of the businesses do not coincide or overlap.]
10-5 [(c)] The grounds listed in Subsection (a) [of this
10-6 section], except the ground contained in Subdivision (2), also
10-7 apply to each member of a partnership or association and, as to a
10-8 corporation, to the president, manager, and owner of the majority
10-9 of the corporate stock. [This subsection shall not be construed as
10-10 prohibiting anything permitted by Section 22.06, 24.05, or 102.05
10-11 of this code.]
10-12 (c) [(d)] The grounds set forth in Subsections (a)
10-13 [Subdivisions] (1), (4)-(14), (16), (18), (19), and (22) [(21),
10-14 (23), and (26), of Subsection (a) of this section,] also apply to
10-15 an agent, servant, or employee of the licensee.
10-16 (d) [(e)] The commission or administrator without a hearing
10-17 may for investigative purposes summarily suspend a retail dealer's
10-18 on-premise license for not more than seven days if the commission
10-19 or administrator finds that a shooting, stabbing, or murder has
10-20 occurred on the licensed premises which is likely to result in a
10-21 subsequent act of violence. Notice of the order suspending the
10-22 license shall be given to the licensee personally within 24 hours
10-23 of the time the violent act occurs. If the licensee cannot be
10-24 located, notice shall be provided by posting a copy of the order on
10-25 the front door of the licensed premises.
10-26 (e) [(f)] Except as provided by Subsection (f) [(g)], the
10-27 commission or administrator shall cancel an original or renewal
11-1 dealer's on-premises or off-premises license if it is found, after
11-2 notice and hearing, that the licensee knowingly allowed a person to
11-3 possess a firearm in a building on the licensed premises. This
11-4 subsection does not apply to a person:
11-5 (1) who holds a security officer commission issued by
11-6 the Texas Board of Private Investigators and Private Security
11-7 Agencies, if:
11-8 (A) the person is engaged in the performance of
11-9 the person's duties as a security officer;
11-10 (B) the person is wearing a distinctive uniform;
11-11 and
11-12 (C) the weapon is in plain view;
11-13 (2) who is a peace officer;
11-14 (3) who is a licensee or an employee of a licensee if
11-15 the person is supervising the operation of the premises; or
11-16 (4) who possesses a concealed handgun of the same
11-17 category the person is licensed to carry under Subchapter H,
11-18 Chapter 411, Government Code, unless the person is on the premises
11-19 of a business described by Section 46.035(b)(1), Penal Code.
11-20 (f) [(g)] The commission may adopt a rule allowing:
11-21 (1) a gun or firearm show on the premises of a license
11-22 holder, if the premises is owned or leased by a governmental entity
11-23 or a nonprofit civic, religious, charitable, fraternal, or
11-24 veterans' organization;
11-25 (2) the holder of a license for the sale of alcoholic
11-26 beverages for off-premises consumption to also hold a federal
11-27 firearms license; or
12-1 (3) the ceremonial display of firearms on the premises
12-2 of the license holder.
12-3 SECTION 8. Section 61.74(a), Alcoholic Beverage Code, is
12-4 amended to read as follows:
12-5 (a) The commission or administrator may suspend for not more
12-6 than 60 days or cancel an original or renewal general, local, or
12-7 branch distributor's license if it is found, after notice and
12-8 hearing, that the licensee:
12-9 (1) violated a provision of this code or a rule of the
12-10 commission during the existence of the license sought to be
12-11 cancelled or suspended or during the immediately preceding license
12-12 period;
12-13 (2) was finally convicted for violating a penal
12-14 provision of this code;
12-15 (3) was finally convicted of a felony while holding an
12-16 original or renewal license;
12-17 (4) violated Section 101.41-101.43, 101.68,
12-18 [102.11-102.15,] 104.04, 108.01, or 108.04-108.06 [of this code],
12-19 or a rule or regulation promulgated under Section 5.40 [of this
12-20 code];
12-21 (5) failed to comply with a requirement of the
12-22 commission relating to the keeping of records or making of reports;
12-23 (6) failed to pay any tax due the state on any beer he
12-24 sold, stored, or transported;
12-25 (7) refused to permit or interfered with an inspection
12-26 of his licensed premises, vehicles, books, or records by an
12-27 authorized representative of the commission;
13-1 (8) consummated a sale of beer outside the county or
13-2 counties in which he was authorized to sell beer by his license;
13-3 (9) purchased, sold, offered for sale, distributed, or
13-4 delivered beer while his license was under suspension;
13-5 (10) permitted the use of his license in the operation
13-6 of a business conducted for the benefit of a person not authorized
13-7 by law to have an interest in the business;
13-8 (11) made a false or misleading representation or
13-9 statement in his original application or a renewal application;
13-10 (12) habitually uses alcoholic beverages to excess, is
13-11 mentally incompetent, or is physically unable to manage his
13-12 establishment;
13-13 (13) misrepresented any beer sold by him to a retailer
13-14 or to the public;
13-15 (14) with criminal negligence sold or delivered beer
13-16 to a minor; or
13-17 (15) purchased, possessed, stored, sold, or offered
13-18 for sale beer in an original package bearing a brand or trade name
13-19 of a manufacturer other than the brand or trade name of the
13-20 manufacturer shown on the container.
13-21 SECTION 9. Section 64.01(b), Alcoholic Beverage Code, is
13-22 amended to read as follows:
13-23 (b) All sales made under the authority of this section
13-24 except sales to general, local, or branch distributor's licensees
13-25 must be made in accordance with Section [Sections] 61.73 [and
13-26 102.31 of this code].
13-27 SECTION 10. Section 64.03, Alcoholic Beverage Code, is
14-1 amended to read as follows:
14-2 Sec. 64.03. SALE OF BEER TO PRIVATE CLUBS. The holder of a
14-3 general distributor's license may sell and deliver beer to private
14-4 clubs located in wet areas without having to secure a prior order.
14-5 All sales made under the authority of this section must be made in
14-6 accordance with Section [Sections] 61.73 [and 102.31 of this code].
14-7 SECTION 11. Section 64.08(b), Alcoholic Beverage Code, is
14-8 amended to read as follows:
14-9 (b) The beer must be sold in containers of not less than
14-10 one-half barrel. [The sale is subject to the requirements of
14-11 Section 102.31 of this code.] The seller shall keep records of
14-12 shipments and sales of beer in a manner prescribed by the
14-13 commission or administrator.
14-14 SECTION 12. Section 65.01(b), Alcoholic Beverage Code, is
14-15 amended to read as follows:
14-16 (b) All sales made under the authority of this section
14-17 except sales to general, local, or branch distributor's licensees
14-18 must be made in accordance with Section [Sections] 61.73 [and
14-19 102.31 of this code].
14-20 SECTION 13. Section 65.03, Alcoholic Beverage Code, is
14-21 amended to read as follows:
14-22 Sec. 65.03. SALE OF BEER TO PRIVATE CLUBS. The holder of a
14-23 local distributor's license may sell and deliver beer to private
14-24 clubs located in wet areas without having to secure a prior order.
14-25 All sales made under the authority of this section must be made in
14-26 accordance with Section [Sections] 61.73 [and 102.31 of this code].
14-27 SECTION 14. Section 66.07, Alcoholic Beverage Code, is
15-1 amended to read as follows:
15-2 Sec. 66.07. SALE OF BEER TO PRIVATE CLUBS. The holder of a
15-3 branch distributor's license may sell and deliver beer to private
15-4 clubs located in wet areas without having to secure a prior order.
15-5 All sales made under the authority of this section must be made in
15-6 accordance with Section [Sections] 61.73 [and 102.31 of this code].
15-7 SECTION 15. Section 73.011(a), Alcoholic Beverage Code, is
15-8 amended to read as follows:
15-9 (a) A holder of an agent's beer license who is an employee
15-10 or agent of a manufacturer's licensee or a nonresident
15-11 manufacturer's licensee may not represent that the holder is the
15-12 agent of or is acting on behalf of a licensed distributor. An
15-13 agent may not engage in conduct that is prohibited by [Section
15-14 102.75 of this code or other provisions of] this code.
15-15 SECTION 16. Section 108.04, Alcoholic Beverage Code, is
15-16 amended to read as follows:
15-17 Sec. 108.04. ACTS OF PROMOTIONAL OR COURTESY NATURE:
15-18 ADMINISTRATIVE DISCRETION. The commission may promulgate rules
15-19 which shall set definite limitations consistent with the general
15-20 provisions of this code, relaxing the restrictions of Section
15-21 [Sections 102.07, 102.14, 102.15, and] 108.06, with respect to:
15-22 (1) the sale or gift of novelties advertising the
15-23 product of a manufacturer or distributor;
15-24 (2) the making of gifts to civic, religious, or
15-25 charitable organizations;
15-26 (3) the cleaning and maintenance of coil connections
15-27 for dispensing draught beer;
16-1 (4) the lending of equipment for special occasions;
16-2 and
16-3 (5) acts of a purely courtesy nature.
16-4 SECTION 17. Section 109.33(f), Alcoholic Beverage Code, is
16-5 amended to read as follows:
16-6 (f) Subsection (a)(2) does not apply to the holder of:
16-7 (1) a retail on-premises consumption permit or license
16-8 if less than 50 percent of the gross receipts for the premises is
16-9 from the sale or service of alcoholic beverages;
16-10 (2) a retail off-premises consumption permit or
16-11 license if less than 50 percent of the gross receipts for the
16-12 premises, excluding the sale of items subject to the motor fuels
16-13 tax, is from the sale or service of alcoholic beverages; or
16-14 (3) a wholesaler's, distributor's, brewer's,
16-15 distiller's and rectifier's, winery, wine bottler's or
16-16 manufacturer's permit or license, or any other license or permit
16-17 held by a wholesaler or manufacturer [as those words are ordinarily
16-18 used and understood in Chapter 102].
16-19 SECTION 18. Sections 6.03(i), 11.47, 11.48, 19.03, 22.06,
16-20 24.05, 61.44, 64.07(c), and 74.01(d), and Chapter 102, Alcoholic
16-21 Beverage Code, are repealed.
16-22 SECTION 19. This Act takes effect September 1, 2001.