HBA-NRS H.B. 892 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 892 By: Swinford Licensing & Administrative Procedures 7/20/2001 Enrolled BACKGROUND AND PURPOSE The growth of the Texas wine industry has had a positive impact on the Texas economy. California produces many times the amount of wine Texas produces, but consumes only a fraction more than Texas consumes. Texas is a significant consumer of wine, but demand is not being supplied by Texas wineries. House Bill 892 allows Texas wineries increased access to the Texas market and provides consumers with better access to Texas wines by establishing the Texas Wine Marketing Assistance Program and modifying provisions relating to the sale of wine in Texas. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of agriculture in SECTION 1.01 (Sections 110.002 and 110.052, Alcoholic Beverage Code), to the advisory committee in SECTION 1.01 (Section 110.003, Alcoholic Beverage Code), and to the Texas Alcoholic Beverage Commission in SECTION 1.01 (Section 110.052, Alcoholic Beverage Code) of this bill. ANALYSIS House Bill 892 amends the Alcoholic Beverage Code to establish the Texas Wine Marketing Assistance Program (program) in the Department of Agriculture (department) to assist the Texas wine industry in promoting and marketing Texas wines and educating the public about the Texas wine industry. The bill requires the commissioner of agriculture (commissioner), in consultation with the advisory committee (committee) appointed to assist the commissioner in establishing and implementing the program, to adopt rules to implement the program (Sec. 110.002). The bill sets forth the composition of the committee. The bill provides that members of the committee serve without compensation or reimbursement of expenses, serve two year terms, select a presiding officer, and adopt rules governing the operation of the committee (Sec. 110.003). The bill requires the program to organize a network of package stores to participate in a program promoting wines produced in this state, to deliver wine to consumers under provisions relating to the sale and shipment of wine through the program, to operate a toll-free telephone number, to develop a wine industry marketing plan, to educate the public about wines produced in the state, and to promote wineries and wines in this state and package stores participating in the program (Sec. 110.051). The bill sets forth requirements for the participation of package stores within the program (Sec. 110.052). The bill sets forth provisions for the sale and shipment of wine through the program, whether the person who purchases wine is physically present or not physically present at the winery, and the return of a wine order. The bill authorizes a package store to charge a purchaser a handling fee of not more than $3.50 for each order of wine that the purchaser picks up at the package store (Sec. 110.053). The bill authorizes a package store that participates in the program to ship wine to a person who resides in a dry area if the delivery is made by the holder of a carrier permit and the package is clearly labeled as requiring the signature of a person 21 years of age or older for delivery (110.054). The bill requires the Texas Alcoholic Beverage Commission (TABC) by rule to adopt a standard invoice for shipping wine from a winery to a package store and from a package store to a purchaser (Sec. 110.055). On or before October 1 of each fiscal year of the biennium ending August 31, 2003, the bill requires TABC to transfer from funds appropriated to TABC $250,000 to the department to implement the program. The bill authorizes funds recovered for transfer by imposing a surcharge on license and permits, other than an Agent's Permit or an Agent's Beer License, issued or renewed by TABC on or after September 1, 2001, and before August 31, 2003. The transfer of funds expires on August 31, 2003 (SECTION 1.02). The bill modifies provisions relating to the location of a winery's premises. If the winery premises are in a dry area, the bill authorizes the holder of a winery permit to sell wine in this state to ultimate consumers in unbroken packages for consumption off winery premises in an amount not to exceed 25,000 gallons annually. The bill removes provisions relating to when the holder of a winery permit is authorized to sell wine in this state to ultimate consumers for consumption off winery premises (Sec. 16.05). The bill authorizes the holder of a winery permit to sell wine to consumers and dispense wine without charge for consumption on or off the holder's premises at a wine festival that is approved by TABC, organized to celebrate and promote this state's wine industry, and held in whole or in part on the premises of the permit holder. The bill prohibits a winery permit holder from holding more than four such wine festivals each year. The bill authorizes the holder of a winery permit to sell wine to the holder of a temporary or special wine and beer retailer's permit, a daily temporary mixed beverage permit, or a specified private club permit for such an event (Sec. 16.08). The bill authorizes a person who purchases wine while at a winery located in this state to ship or cause to be shipped the wine to the person's residence if the winery verifies that the person purchasing the wine is 21 years of age or older. The bill provides that the person must be present when the wine is delivered to the person's residence (Sec. 107.12). The bill provides that a petition for a local option election related to the legal sale of wine on the premises of the holder of a winery permit must have the actual signatures, residence addresses, and voter registration certificate numbers of a number of qualified voters of the political subdivision equal to 25 percent of the registered voters in the subdivision who voted in the most recent general election (Sec. 251.11). The bill requires the preparation of a ballot permitting a vote for or against the legal sale of wine on the premises of a holder of a winery permit in areas where any type or classification of alcoholic beverages is prohibited and the issue submitted pertains to legalization of the sale of one or more of the prohibited types or classifications. The bill requires the preparation of a ballot permitting a vote for or against the legal sale of wine on the premises of a holder of a winery permit in areas where the sale of all alcoholic beverages including or excluding mixed beverages has been legalized. The bill requires that a ballot be prepared to permit voting for or against the legal sale of wine on the premises of a holder of a winery permit in any prohibitory election in areas where the sale of beverages containing alcohol not in excess of 17 percent by volume has been legalized and those of higher alcoholic content are prohibited (Sec. 251.14). EFFECTIVE DATE September 1, 2001.