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.