88R20668 SCP-D
By: King of Hemphill, Cook H.B. No. 3656
Substitute the following for H.B. No. 3656:
By: Harless C.S.H.B. No. 3656
A BILL TO BE ENTITLED
AN ACT
relating to operating agreements between holders of a distiller's
and rectifier's permit and certain alcoholic beverage permit
holders.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 14, Alcoholic Beverage Code, is amended
by adding Section 14.10 to read as follows:
Sec. 14.10. OPERATING AGREEMENTS BETWEEN PERMIT HOLDERS.
(a) The holder of a distiller's and rectifier's permit may enter
into an agreement with another holder of a distiller's and
rectifier's permit that allows the distiller's and rectifier's
permit holder to engage in the following activities on the
permitted premises of the other distiller's and rectifier's permit
holder:
(1) manufacture distilled spirits;
(2) rectify, purify, and refine distilled spirits and
wines;
(3) mix wines, distilled spirits, or other liquors;
(4) bottle, label, and package the permit holder's
finished products;
(5) sell the finished products in this state to
holders of wholesaler's permits and to authorized wholesalers and
manufacturers outside the state;
(6) sell, through an affiliate who is the holder of a
nonresident seller's permit, the finished products in this state to
holders of wholesaler's permits and to authorized wholesalers and
manufacturers outside the state;
(7) purchase distilled spirits, to be used only for
manufacturing or rectification purposes, from holders of
nonresident seller's permits or distiller's and rectifier's
permits; and
(8) sell bulk alcohol produced by the permit holder
for purposes described by Section 38.01.
(b) The agreement is subject to approval by the commission
and must describe with specificity the nature, duration, and extent
of the activities authorized by the agreement.
(c) The holder of a distiller's and rectifier's permit may
enter into an agreement authorized by Section 37.011 with the
holder of a nonresident seller's permit.
(d) The holder of a distiller's and rectifier's permit on
whose premises another distiller's and rectifier's permit holder
contracts under this section to manufacture, bottle, package, or
label alcoholic beverages may not:
(1) consider or treat the alcoholic beverages
manufactured, bottled, packaged, or labeled under the agreement as
being owned by the permit holder; or
(2) sell those alcoholic beverages on the permit
holder's premises.
(e) The commission shall adopt rules regulating the shared
use of the permitted 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 2. Chapter 37, Alcoholic Beverage Code, is amended
by adding Section 37.011 to read as follows:
Sec. 37.011. OPERATING AGREEMENT WITH IN-STATE DISTILLERY.
(a) The holder of a nonresident seller's permit who owns a
distillery outside of the state or whose affiliate owns a
distillery outside of the state and holds a distiller's and
rectifier's permit may enter into an agreement with the holder of a
distiller's and rectifier's permit that allows the nonresident
seller to engage in the following activities on the distiller's and
rectifier's permitted premises:
(1) manufacture distilled spirits;
(2) rectify, purify, and refine distilled spirits and
wines;
(3) mix wines, distilled spirits, or other liquors;
(4) bottle, label, and package the nonresident
seller's finished products; and
(5) sell the finished products in this state to
holders of distiller's and rectifier's permits and holders of
wholesaler's permits and to authorized wholesalers and
manufacturers outside the state.
(b) The agreement is subject to approval by the commission
and must describe with specificity the nature, duration, and extent
of the activities authorized by the agreement.
(c) The holder of a distiller's and rectifier's permit on
whose premises the holder of a nonresident seller's permit
contracts under this section to manufacture, bottle, package, or
label alcoholic beverages may not:
(1) consider or treat the alcoholic beverages
manufactured, bottled, packaged, or labeled under the agreement as
being owned by the distiller's and rectifier's permit holder; or
(2) sell those alcoholic beverages on the distiller's
and rectifier's permit holder's premises.
(d) The commission shall adopt rules regulating the shared
use of the permitted 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 3. This Act takes effect September 1, 2023.