By: Carona S.B. No. 950

(In the Senate - Filed February 28, 2013; March 12, 2013, read first time and referred to Committee on Business and Commerce; April 15, 2013, reported adversely, with favorable Committee Substitute by the following vote: Yeas 9, Nays 0; April 15, 2013, sent to printer.)

COMMITTEE SUBSTITUTE FOR S.B. No. 950 By: Carona

A BILL TO BE ENTITLED

AN ACT

relating to requiring certain alcoholic beverage permittees to be the primary American source of supply for certain alcoholic beverages.

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

SECTION 1. Section 37.10, Alcoholic Beverage Code, is amended to read as follows:

Sec. 37.10. RESTRICTION AS TO SOURCE OF SUPPLY. (a) No holder of a nonresident seller's permit may solicit, accept, or fill an order for distilled spirits or wine from a holder of any type of wholesaler's or winery permit unless the nonresident seller is the primary American source of supply for the brand of distilled spirits or wine that is ordered.

(b) In this section, "primary American source of supply" means the distiller, the producer, the owner of the commodity at the time it becomes a marketable product, the bottler, or the exclusive agent of any of those. To be the "primary American source of supply" the nonresident seller must be the first source, that is, the manufacturer or the source closest to the manufacturer, in the channel of commerce from whom the product can be secured by Texas [American] wholesalers and Texas wineries. A product may have only one primary American source of supply to Texas.

SECTION 2. Subsections (a) and (d), Section 101.671, Alcoholic Beverage Code, are amended to read as follows:

(a) Before an authorized permittee may ship distilled spirits or wine into the state or sell distilled spirits or wine within the state, the permittee must register the distilled spirits or wine with the commission and provide proof that the permittee is the primary American source of supply for purposes of Section 37.10. The registration application must include a certificate of label approval issued by the United States Alcohol and Tobacco Tax and Trade Bureau for the product.

(d) The commission by rule may [shall] establish procedures for accepting:

(1) federal certificates of label approval for registration under this section; and

(2) proof, such as a letter of authorization, that a permittee is the primary American source of supply for purposes of Section 37.10.

SECTION 3. This Act takes effect September 1, 2013.

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