BILL ANALYSIS

H.B. 4054

By: Goldman

Licensing & Administrative Procedures

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Current law prohibits certain excessive discounts of alcoholic beverage sales to on-premise or off-premise permittees. However, the term "excessive discount" is not defined and is arbitrary and inherently subjective. Accordingly, alcoholic beverage businesses could face regulatory action based on a standard that has no concrete meaning. For example, retailers frequently have to put items in their stores on closeout prices to eliminate the inventory, and this could be considered by some to be an "excessive discount." H.B. 4054 seeks to address this issue by removing these excessive discount prohibitions. Additionally, the bill clarifies the provision of certain transportation by a manufacturer to a retailer or retailer's agent, servant, or employee is not considered a prohibited inducement unless the manufacturer prohibits the sale of a competitor's products.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

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

H.B. 4054 amends the Alcoholic Beverage Code to remove the prohibition against the following persons allowing an excessive discount to a mixed beverage permittee or to a retailer:

·         with respect to a mixed beverage permittee, a person who has an interest in the business of a distiller-rectifier, wholesaler, class B wholesaler, winery, or local distributor's permittee, or the person's agent, servant, or employee; and

·         with respect to a retailer, a person who owns or has an interest in the business of a distiller, rectifier, wholesaler, class B wholesaler, or winery, or the person's agent, servant, or employee.

H.B. 4054 establishes that, for purposes of the prohibition against a person who owns or has an interest in the business of a distiller, rectifier, wholesaler, class B wholesaler, or winery or the person's agent, servant, or employee offering an inducement to a retailer or to a retailer's agent, servant, or employee, transportation provided by a manufacturer to a retailer or retailer's agent, servant, or employee to attend an educational program at the manufacturer's facility is not considered an inducement unless the manufacturer prohibits a retailer or retailer's agent, servant, or employee who accepts the transportation from selling a product of a competitor of the manufacturer.

H.B. 4054 repeals Section 102.07(c), Alcoholic Beverage Code, which prohibits a person who owns or has an interest in the business of a package store or wine only package store or the person's agent, servant, or employee from allowing an excessive discount on liquor.

EFFECTIVE DATE

September 1, 2023.