S.B. No. 1137
relating to the development of the wine industry and other
businesses related to agriculture or tourism in this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 12, Agriculture Code, is amended by
adding Section 12.039 to read as follows:
Sec. 12.039. CERTAIN WINE PRODUCED OR BOTTLED IN THIS STATE.
(a) The Texas Wine Marketing Research Institute or other qualified
entity shall, as funding is available, conduct an annual study
relating to the quantities and varieties of grapes and other fruit
grown in this state that are used for wine making.
(b) Not later than October 15 of the study year, the Texas
Wine Marketing Research Institute or other qualified entity shall
submit a report to the commissioner. The report must:
(A) the quantities and varieties of grapes and
other fruit grown in this state that are available on September 30
of the study year for use in wine making;
(B) the needs of wineries in this state for those
grapes and other fruit to meet the wineries' projected production
estimates for the following calendar year; and
(C) recommendations regarding the varieties of
grapes and other fruit grown in this state for which a reduction in
the percentage by volume of Texas grapes used should be granted
under Subsection (d); or
(2) state that funding was not available to complete
the study required by this section.
(c) If a statement is provided in accordance with Subsection
(b)(2), the reporting entity shall include in the report:
(1) any information that has been routinely collected
or developed by the reporting entity and that might be useful in
determining the quantities and varieties of grapes and other fruit
grown in this state that are available for use in wine making the
following calendar year; and
(2) recommendations regarding the varieties of grapes
and other fruit grown in this state for which a reduction in the
percentage by volume of Texas grapes used should be granted under
(d) The commissioner shall review the report and, if the
commissioner determines that the quantity of a variety of grapes or
other fruit grown in this state is insufficient for the wineries in
this state to produce their projected production estimates during
the following calendar year, the commissioner may reduce the
percentage by volume of fermented juice of grapes or other fruit
grown in this state that wine containing that particular variety of
grape or other fruit must contain under Section 16.011, Alcoholic
Beverage Code. The percentage established under this subsection
must ensure that the use of that variety of grape or other fruit
grown in this state is maximized while allowing for the acquisition
of grapes or other fruit grown outside of this state in a quantity
sufficient to meet the needs of wineries in this state.
(e) The commissioner shall submit the commissioner's
determination to the Texas Alcoholic Beverage Commission in writing
and publish the commissioner's determination in the Texas Register
and on the department's Internet website not later than December 31
of the study year.
(f) A percentage requirement established under Subsection
(d) applies to wine bottled under Section 16.011, Alcoholic
Beverage Code, during the calendar year following the study year.
(g) If a winery in this state finds that the determination
made by the commissioner under Subsection (d) does not reduce the
percentage requirement with respect to a particular variety of
grape or other fruit to a level sufficient for the winery to meet
the winery's planned production for the relevant year, the winery
may submit documentation or other information to the commissioner
substantiating that the winery has not been able to acquire those
grapes or other fruit grown in this state in an amount sufficient to
meet the winery's production needs. If the commissioner determines
that there is not a sufficient quantity of that variety of grapes or
other fruit grown in this state to meet the needs of that winery,
the commissioner may reduce the percentage requirement for wine
bottled during the remainder of the calendar year that contains
that variety of fruit.
(h) The commissioner may:
(1) establish a voluntary registry for vineyards and
other fruit growers in this state to assist in the determination of
the availability of grapes and other fruit grown in this state and
facilitate communication between the wineries and fruit growers in
this state regarding the availability of and need for grapes and
other fruit for wine making; and
(2) assess a fee to cover the cost of administering the
(i) Information gathered through a registry established
under Subsection (h) shall be posted on the department's Internet
website and may be made available in any other format agreed on by
the commissioner and a requestor who pays the appropriate fee for
reproducing the record.
(j) The vineyard and fruit growers registry fund is an
account in the general revenue fund. Fees collected under
Subsection (h) shall be deposited to the credit of that account.
Money in the account may be appropriated only to the department and
may be used only to cover administrative and personnel costs of the
department associated with administering a registry established
under Subsection (h).
SECTION 2. Title 3, Agriculture Code, is amended by adding
Chapter 50B to read as follows:
CHAPTER 50B. TEXAS WINE INDUSTRY
Sec. 50B.001. FINDINGS AND PURPOSE. The legislature finds
(1) it is in the public interest to encourage the
orderly growth and development of sustainable labor-intensive,
value-added agricultural industries such as the wine grape growing
and wine making industries;
(2) the production and distribution of wine and
wine-related products constitute an important industry of this
state that stimulates tourism and provides substantial and
necessary revenues for the state and employment for the state's
residents and provides an important food that benefits the public
health and welfare; and
(3) it is vital to the continued economic well-being
and general welfare of the citizens of this state that the state's
wine grapes and wine be properly promoted by:
(A) enabling the wine industry in this state to
help itself in establishing orderly, fair, sound, efficient, and
unhampered marketing of wine grapes and the wines they produce; and
(B) working to stabilize the wine industry in the
state by increasing markets for wine grapes and wine within the
state and the nation and internationally.
Sec. 50B.002. WINE INDUSTRY DEVELOPMENT; ADVISORY
COMMITTEE. The commissioner may appoint a wine industry
development advisory committee to develop a long-term vision and
marketable identity for the wine industry in the state that take
into consideration future industry development, funding, research,
educational programming, risk management, and marketing.
Sec. 50B.003. WINE INDUSTRY DEVELOPMENT FUND. (a) The
wine industry development fund is an account in the general revenue
fund and consists of funds deposited to the account under this
(b) Money in the account may be appropriated only to the
department and may be used only for the purpose of:
(1) providing funding to public or private entities to
conduct surveys, research, and other projects related to:
(A) developing the Texas wine industry;
(B) developing viticulture and enology-related
(C) eliminating and eradicating Pierce's
disease, the glassy-winged sharpshooter, and other diseases and
pests that negatively impact the production of grapes and wine in
the United States; and
(D) developing technologies or practices that
could benefit the production of grapes and wine; and
(2) any administrative costs the department incurs in
fulfilling the purposes described by Subdivision (1).
(c) The account is exempt from the application of Section
403.095, Government Code.
(d) The department may accept grants, gifts, or gratuities
from any source, including a governmental entity, a private or
public corporation, or any other person, that are made for the
purpose of furthering the Texas wine industry. Any funds received
under this subsection shall be deposited in the wine industry
SECTION 3. Section 16.011, Alcoholic Beverage Code, is
amended to read as follows:
Sec. 16.011. PREMISES IN DRY AREA. A winery permit may be
issued for premises in an area in which the sale of wine has not been
authorized by a local option election. A holder of a permit under
this section may engage in any activity authorized under Section
16.01 except that the permit holder may sell or dispense wine under
that section only if the wine is:
(1) bottled [
manufactured] in this state; and
(2) at least 75 percent by volume fermented juice of
grapes or other fruit grown in this state or a lesser percentage
established by the commissioner of agriculture under Section
12.039, Agriculture Code.
SECTION 4. Chapter 16, Alcoholic Beverage Code, is amended
by adding Section 16.05 to read as follows:
Sec. 16.05. OPERATING AGREEMENTS BETWEEN PERMIT HOLDERS.
(a) The holder of a winery permit may engage in any activity
authorized by that permit on the permitted premises of another
winery permit holder under an agreement between the permit holders
that is approved by the commission and that describes with
specificity the nature, duration, and extent of the activities
authorized by the agreement.
(b) The commission shall adopt rules regulating the shared
use of winery premises under this section to ensure administrative
accountability of each permit holder and a strict separation
between the businesses and operations of the permit holders.
SECTION 5. Subsection (c), Section 45.03, Alcoholic
Beverage Code, is amended to read as follows:
(c) Except as provided by this subsection, a [ A] storage
permit may not be issued for a location outside the county in which
the permittee's business is located. Subject to Section 45.04, the
holder of a winery permit may obtain a storage permit for a location
inside or outside the county in which the permit holder's business
SECTION 6. Subchapter A, Chapter 108, Alcoholic Beverage
Code, is amended by adding Section 108.09 to read as follows:
Sec. 108.09. CERTAIN ADVERTISING BY WINERY.
(a) Notwithstanding Section 102.07 or any other provision of this
code, a winery may include information in the winery's advertising that
informs the public of where the winery's products may be purchased.
(b) A winery may not give compensation to or receive
compensation from a permitted member of the wholesale or retail
tier for advertising described by Subsection (a).
SECTION 7. Subsection (a), Section 391.091, Transportation
Code, as amended by Chapters 713 and 743, Acts of the 78th
Legislature, Regular Session, 2003, is reenacted and amended to
read as follows:
(a) The department [ commission] shall contract with an
individual, firm, group, or association in this state to erect and
maintain specific information logo signs and[ ,] major shopping area
guide signs[ , and major agricultural interest signs] at appropriate
locations along an eligible highway.
SECTION 8. Subsection (a), Section 391.098, Transportation
Code, is amended to read as follows:
(a) The commission shall authorize the director to grant
variances, on a case-by-case basis, to the eligibility, location,
or placement of specific logo signs[ , major agricultural interest
signs,] and major shopping area guide signs, including the highways
along which a sign may be located. The commission may adopt rules
prescribing conditions or guidelines the director should or must
consider when determining whether to grant a variance.
SECTION 9. Subchapter D, Chapter 391, Transportation Code,
is amended by adding Section 391.099 to read as follows:
Sec. 391.099. TOURIST-ORIENTED DIRECTIONAL SIGN PROGRAM.
(a) In this section:
(1) "Eligible facility" means a winery or a business
related to agriculture or tourism, including a farm, ranch, or
other tourist activity, that:
(A) derives a major portion of its income or
visitors during the normal business season from highway users not
residing in the area of the facility;
(B) complies with state and federal laws relating
(i) provision of public accommodation
without regard to race, religion, color, age, sex, or national
(ii) licensing and approval of service
(C) is located within the mile limitations
established under the Texas Manual on Uniform Traffic Control
Devices and the Manual on Uniform Traffic Control Devices issued by
the United States Department of Transportation, Federal Highway
(2) "Eligible highway" means a highway that:
(A) has noncontrolled access; and
(B) is outside the corporate limits of a
municipality with a population of 5,000 or more.
(3) "Tourist-oriented directional sign" means a sign
that identifies a particular winery or business related to
agriculture or tourism, including a farm, ranch, or other tourist
activity, and identifies the type or nature of the winery or
business by use of an icon, symbol, or other identifying device.
(4) "Trailblazing" means placing multiple signs along
a route or routes directing the public to a specific location.
(b) The commission shall administer the tourist-oriented
directional sign program created under this section to erect and
maintain tourist-oriented directional signs on eligible highways.
(c) Except as provided by Subsection (f), the commission
(1) regulate the content, composition, design,
placement, erection, and maintenance of tourist-oriented
directional signs and supports on eligible highway rights-of-way;
(2) adopt rules necessary to administer and enforce
(d) The commission shall enter into one or more contracts
with an individual, firm, group, or association in this state to
erect and maintain tourist-oriented directional signs at locations
along eligible highways.
(e) A contract under this section shall provide for:
(1) the assessment of fees to be paid to a contractor
by an eligible facility; and
(2) remittance to the department of the greater of:
(A) 10 percent of the fees collected by the
(B) an amount sufficient to recover the
department's costs of administering the program.
(f) The commission may not adopt rules under this section
(1) violate the Texas Manual on Uniform Traffic
Control Devices or the Manual on Uniform Traffic Control Devices
issued by the United States Department of Transportation, Federal
Highway Administration; or
(2) prohibit an eligible facility from receiving a
tourist-oriented directional sign based on trailblazing off of the
state highway system.
(g) The department shall:
(1) before the 31st day after the date the eligible
facility submits an application under this section, notify the
(A) the application has been received; and
(B) the application is complete or that
additional information is required to complete the application; and
(2) approve or disapprove the application:
(A) before the 61st day after the date the
eligible facility submits the application if no additional
information is required under Subdivision (1); or
(B) before the 31st day after the date the
eligible facility submits all of the additional information
required under Subdivision (1).
(h) Notwithstanding any other law, an eligible facility may
erect a directional sign required by the commission to receive a
tourist-oriented directional sign.
SECTION 10. The following laws are repealed:
(1) Subsection (c), Section 16.08, Alcoholic Beverage
(2) Section 391.097, Transportation Code.
SECTION 11. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2005.
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1137 passed the Senate on
April 18, 2005, by the following vote: Yeas 29, Nays 0; and that
the Senate concurred in House amendments on May 26, 2005, by the
following vote: Yeas 31, Nays 0.
Secretary of the Senate
I hereby certify that S.B. No. 1137 passed the House, with
amendments, on May 19, 2005, by the following vote: Yeas 136,
Nays 3, two present not voting.
Chief Clerk of the House