By: Eltife, et al. S.B. No. 518

(In the Senate - Filed February 12, 2013; February 20, 2013, read first time and referred to Committee on Business and Commerce; March 18, 2013, reported adversely, with favorable Committee Substitute by the following vote: Yeas 8, Nays 0; March 18, 2013, sent to printer.)

COMMITTEE SUBSTITUTE FOR S.B. No. 518 By: Eltife

A BILL TO BE ENTITLED

AN ACT

relating to the authority of certain brewers and manufacturers to sell beer and ale to ultimate consumers.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The legislature finds that:

(1) the state is authorized under the Twenty-first Amendment of the United States Constitution to promote the public's interest in the fair, efficient, and competitive marketing of beer and ale in this state;

(2) the United States Supreme Court in Granholm v. Heald, 544 U.S. 460 (2005), has recognized that the three-tier system of regulating the alcoholic beverage industry is unquestionably legitimate;

(3) in Granholm, the United States Supreme Court further recognized that while the states are entitled to regulate the production and sale of liquor within their borders, the right is nonetheless subject to the provisions of the Constitution of the United States, including the Interstate Commerce Clause, and laws regulating the alcoholic beverage industry may not discriminate against out-of-state participants or give undue deference to local participants and may not ignore other provisions of the constitution, including the Supremacy Clause, Commerce Clause, and the Privileges and Immunities Clause with its nondiscriminatory principles;

(4) the state is authorized to promote, market, and educate consumers about the emerging small brewing industry;

(5) it is in the state's interest to encourage entrepreneurial and small business development opportunities in the state that will lead to new capital investment in the state, create new jobs in the state, and expand the state and local tax base; and

(6) it is the public policy of the state to exercise the police power of the state to protect the welfare, health, peace, temperance, and safety of the people of Texas.

SECTION 2. Chapter 12, Alcoholic Beverage Code, is amended by adding Section 12.052 to read as follows:

Sec. 12.052. SALES BY CERTAIN BREWERS TO CONSUMERS. (a) In addition to the activities authorized by Section 12.01, the holder of a brewer's permit whose annual production of ale together with the annual production of beer by the holder of a manufacturer's license at the same premises does not exceed a total of 225,000 barrels may sell ale produced on the brewer's premises under the permit to ultimate consumers on the brewer's premises for responsible consumption on the brewer's premises.

(b) The total combined sales of ale to ultimate consumers under this section, together with the sales of beer to ultimate consumers by the holder of a manufacturer's license under Section 62.122 at the same premises, may not exceed 5,000 barrels annually.

SECTION 3. Chapter 62, Alcoholic Beverage Code, is amended by adding Section 62.122 to read as follows:

Sec. 62.122. SALES BY CERTAIN MANUFACTURERS TO CONSUMERS. (a) A manufacturer's licensee whose annual production of beer together with the annual production of ale by the holder of a brewer's permit at the same premises does not exceed 225,000 barrels may sell beer produced on the manufacturer's premises under the license to ultimate consumers on the manufacturer's premises for responsible consumption on the manufacturer's premises.

(b) The total combined sales of beer to ultimate consumers under this section, together with the sales of ale to ultimate consumers by the holder of a brewer's permit under Section 12.052 at the same premises, may not exceed 5,000 barrels annually.

SECTION 4. Chapter 105, Alcoholic Beverage Code, is amended by adding Section 105.081 to read as follows:

Sec. 105.081. HOURS OF SALE AND CONSUMPTION: BREWER OR MANUFACTURER. (a) The holder of a brewer's permit may sell, offer for sale, and deliver ale or malt liquor and a person may consume ale or malt liquor on the brewer's premises:

(1) between 8 a.m. and midnight on any day except Sunday; and

(2) between 10 a.m. and midnight on Sunday.

(b) The holder of a manufacturer's license may sell, offer for sale, and deliver beer and a person may consume beer on the manufacturer's premises:

(1) between 8 a.m. and midnight on any day except Sunday; and

(2) between 10 a.m. and midnight on Sunday.

SECTION 5. This Act takes effect September 1, 2013.

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