BILL ANALYSIS

C.S.H.B. 3716

By: Smith

Licensing & Administrative Procedures

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Interested parties have raised concerns regarding the current inconsistencies in the regulation of the relationship between alcoholic beverage manufacturers, wholesalers, and distributors and retailers, including the provision of promotional items to retailers and the authority of a manufacturer, wholesaler, or distributor to assist a retailer in making improvements to the retailer's building. C.S.H.B. 3716 seeks to address these inconsistencies and to revise current laws regulating the relationship between alcoholic beverage manufacturers, wholesalers, and distributors and retailers.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 3716 amends the Alcoholic Beverage Code to authorize a member of the manufacturing, wholesaler, or distributor tier, other than a local distributor who holds a local distributor's permit, to sell to a retailer promotional items that bear an alcoholic beverage manufacturer's logo, brand, or product name, that are designed to promote a specific product or brand, and that are designed for use by the consumer, either on or off the retailer's premises. The bill prohibits these promotional items from being sold for less than the item manufacturer's regularly published wholesale price. The bill authorizes the member to give or sell to a retailer interior signs that have the primary purpose of advertising a brand or product or the price of a brand or product, except that such a sign is prohibited from bearing the name, logo, or trademark of a specific retailer. The bill requires payment for an item sold under the bill's provisions to be in cash, paid on or before delivery.

C.S.H.B. 3716 prohibits a manufacturer, wholesaler, or distributor of alcoholic beverages from painting, improving, or remodeling a retailer's building or any part of a retailer's building, inside or out, or financing any improvements to a retailer's building.

EFFECTIVE DATE

September 1, 2013.

COMPARISON OF ORIGINAL AND SUBSTITUTE

While C.S.H.B. 3716 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.

INTRODUCED	HOUSE COMMITTEE SUBSTITUTE
SECTION 1. Subchapter A, Chapter 108, Alcoholic Beverage Code, is amended by adding Section 108.035 to read as follows: Sec. 108.035. CERTAIN PROMOTIONAL ITEMS PROVIDED TO RETAILER BY MANUFACTURER, WHOLESALER, OR DISTRIBUTOR. (a) Notwithstanding any other provision of this code, a manufacturer, wholesaler, or distributor of alcoholic beverages may: (1) sell to a retailer promotional items that bear an alcoholic beverage manufacturer's logo, brand, or product name and are designed: (A) to promote a specific product or brand; and (B) for use by the consumer, either on or off the retailer's premises; and (2) give or sell to a retailer interior signs that have the primary purpose of advertising a brand or product or the price of a brand or product, provided that a sign provided to a retailer under this section may not bear the name, logo, or trademark of a specific retailer. (b) Promotional items sold under Subsection (a)(1) may not be sold for less than the item manufacturer's regularly published wholesale price. Payment for an item sold under this section must be in cash, paid on or before delivery. (c) A manufacturer, wholesaler, or distributor of alcoholic beverages may not paint, improve, or remodel a retailer's building or any part of a retailer's building, inside or out, or finance any improvements to a retailer's building.	SECTION 1. Subchapter A, Chapter 108, Alcoholic Beverage Code, is amended by adding Section 108.036 to read as follows: Sec. 108.036. CERTAIN PROMOTIONAL ITEMS PROVIDED TO RETAILER BY MANUFACTURER, WHOLESALER, OR DISTRIBUTOR. (a) Notwithstanding any other provision of this code, a member of the manufacturing, wholesaler, or distributor tier, other than a local distributor who holds a permit issued under Chapter 23, may: (1) sell to a retailer promotional items that bear an alcoholic beverage manufacturer's logo, brand, or product name and are designed: (A) to promote a specific product or brand; and (B) for use by the consumer, either on or off the retailer's premises; and (2) give or sell to a retailer interior signs that have the primary purpose of advertising a brand or product or the price of a brand or product, provided that a sign provided to a retailer under this section may not bear the name, logo, or trademark of a specific retailer. (b) Promotional items sold under Subsection (a)(1) may not be sold for less than the item manufacturer's regularly published wholesale price. Payment for an item sold under this section must be in cash, paid on or before delivery. (c) A manufacturer, wholesaler, or distributor of alcoholic beverages may not paint, improve, or remodel a retailer's building or any part of a retailer's building, inside or out, or finance any improvements to a retailer's building.
SECTION 2. This Act takes effect September 1, 2013.	SECTION 2. Same as introduced version.