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S.B. No. 877
AN ACT
relating to the direct shipment of wine to consumers; providing a
criminal penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 16, Alcoholic Beverage Code, is amended
by adding Section 16.09 to read as follows:
Sec. 16.09. DIRECT SHIPMENT TO CONSUMERS. (a) The holder
of a winery permit may ship wine to the ultimate consumer, including
ultimate consumers located in dry areas. Delivery must be by the
holder of a carrier permit.
(b) All wine shipped to an ultimate consumer by the holder
of a winery permit must be in a package that is clearly and
conspicuously labeled showing that:
(1) the package contains wine; and
(2) the package may be delivered only to a person
described in Subsection (c).
(c) Wine shipped by the holder of a winery permit may not be
delivered to any person other than:
(1) the person who purchased the wine;
(2) a recipient designated in advance by such
purchaser; or
(3) a person at the delivery address who is age 21 or
over.
(d) Wine may be delivered only to a person who is age 21 or
over after the person accepting the package:
(1) presents valid proof of identity and age; and
(2) personally signs a receipt acknowledging delivery
of the package.
(e) The holder of a winery permit may not:
(1) sell or ship wine to a minor;
(2) deliver wine to a consumer using a carrier that
does not hold a carrier's permit under this code; or
(3) deliver more than three gallons of wine within any
30-day period to the same consumer in this state.
SECTION 2. Subtitle A, Title 3, Alcoholic Beverage Code, is
amended by adding Chapter 54 to read as follows:
CHAPTER 54. OUT-OF-STATE WINERY DIRECT SHIPPER'S PERMIT
Sec. 54.01. AUTHORIZED ACTIVITIES. The holder of an
out-of-state winery direct shipper's permit may sell and deliver
wine that is produced or bottled by the permittee to an ultimate
consumer located in the State of Texas. Delivery must be by the
holder of a carrier permit.
Sec. 54.02. PROHIBITED ACTIVITIES. The holder of an
out-of-state winery direct shipper's permit may not:
(1) sell or ship wine to a minor;
(2) deliver wine to a consumer using a carrier that
does not hold a carrier's permit under this code;
(3) deliver more than three gallons of wine within any
30-day period to the same consumer in this state; or
(4) sell to ultimate consumers more than 35,000
gallons of wine annually.
Sec. 54.03. QUALIFICATIONS FOR PERMIT. An out-of-state
winery direct shipper's permit may only be issued to a person who:
(1) does not hold a winery permit in the State of
Texas;
(2) operates a winery located in the United States and
holds all state and federal permits necessary to operate the
winery, including the federal winemaker's and blender's basic
permit;
(3) holds a Texas sales tax permit;
(4) expressly submits to personal jurisdiction in
Texas state and federal courts and expressly submits to venue in
Travis County, Texas, as proper venue for any proceedings that may
be initiated by or against the commission; and
(5) does not directly or indirectly have any financial
interest in a Texas wholesaler or retailer as those terms are used
in Section 102.01.
Sec. 54.04. PERMIT FEE. The annual state fee for an
out-of-state winery direct shipper's permit is $75.
Sec. 54.05. IDENTIFICATION REQUIREMENTS. (a) All wine
sold or shipped by the holder of an out-of-state winery direct
shipper's permit must be in a package that is clearly and
conspicuously labeled showing that:
(1) the package contains wine; and
(2) the package may only be delivered to a person
described in Subsection (b).
(b) Wine sold or shipped by a holder of an out-of-state
winery direct shipper's permit may not be delivered to any person
other than:
(1) the person who purchased the wine;
(2) a recipient designated in advance by such
purchaser; or
(3) a person at the delivery address who is age 21 or
over.
(c) Wine may be delivered only to a person who is age 21 or
over after the person accepting the package:
(1) presents valid proof of identity and age; and
(2) personally signs a receipt acknowledging delivery
of the package.
Sec. 54.06. REPORTS AND RECORDKEEPING. (a) The holder of
an out-of-state winery direct shipper's permit shall maintain
records of all sales and deliveries made under the permit.
(b) The holder of an out-of-state winery direct shipper's
permit shall maintain complete sales and delivery records for all
sales and deliveries made under the permit for at least five years
from the date of sale. These records shall be made available upon
request for inspection by the commission or any other appropriate
state agency.
(c) The commission shall establish rules requiring the
holder of an out-of-state winery direct shipper's permit to
periodically file reports providing the commission with such
information as the commission may determine is needed to more
efficiently and effectively enforce the state laws applicable to
the permit holder.
Sec. 54.07. LIABILITY FOR AND PAYMENT OF TAXES. (a) Sales
made by the holder of an out-of-state winery direct shipper's
permit shall be deemed to have been made in the State of Texas for
delivery in the State of Texas.
(b) The holder of an out-of-state winery direct shipper's
permit shall be responsible for paying the following state taxes
related to sales and deliveries made under this chapter:
(1) excise taxes on the wine sold, payable at the same
rate and in the same manner as if the permittee were a Texas winery
located in Texas; and
(2) state sales and use taxes all payable at the same
rate and in the same manner as if the permittee were a Texas winery
located in Texas.
(c) An ultimate consumer who purchases wine from the holder
of an out-of-state winery direct shipper's permit under this
chapter shall be considered to be purchasing the wine from a Texas
permittee and shall not be charged the administrative fee for
personal imports set forth in Section 107.07.
Sec. 54.08. RESALE PROHIBITED. A consumer purchasing wine
from the holder of an out-of-state winery direct shipper's permit
may not resell the wine, and any such wine that is resold is an
illicit beverage as defined in Section 1.04(4).
Sec. 54.09. DELIVERY AREAS. Wine shipped under this
chapter may be delivered to persons located in a dry area.
Sec. 54.10. WINE LABEL APPROVAL NOT REQUIRED. If the holder
of an out-of-state winery direct shipper's permit has satisfied all
federal label approval requirements for a particular brand of wine,
then no further label approval shall be required by the commission.
Sec. 54.11. RULES. The commission shall adopt rules and
forms necessary to implement this chapter.
Sec. 54.12. PENALTY FOR SHIPPING WITHOUT A PERMIT. Any
person who does not hold an out-of-state winery direct shipper's
permit who sells and ships alcohol from outside of Texas to an
ultimate consumer in Texas commits on first offense a Class B
misdemeanor, on second offense a Class A misdemeanor, and on third
offense a state jail felony.
SECTION 3. Subsection (f), Section 107.07, Alcoholic
Beverage Code, is amended to read as follows:
(f) Except as provided by Chapter 54, any [Any] person in
the business of selling alcoholic beverages in another state or
country who ships or causes to be shipped any alcoholic beverage
directly to any Texas resident under this section is in violation of
this code.
SECTION 4. Section 110.052, Alcoholic Beverage Code, is
amended to read as follows:
Sec. 110.052. PARTICIPATION OF PACKAGE STORES. (a)
Participation [Except as provided by this section, participation]
in the program by a package store is voluntary.
(b) [If, after the program has been operating for at least
12 months, the commissioner determines after a hearing that package
stores in the state are not participating in the program on a
reasonably distributed geographic basis, the commissioner may
request that the commission require all package stores in the state
to participate in the program. On receiving the commissioner's
request, the commission shall hold a hearing and may adopt rules as
necessary to implement this subsection.
[(c)] The commissioner by rule may establish standards that
a package store that participates in the program must meet.
SECTION 5. Subsection (a), Section 110.053, Alcoholic
Beverage Code, is amended to read as follows:
(a) A person who purchases wine from a winery in this state
may ship the wine in accordance with:
(1) Section 16.09 [107.12, if the person is physically
present at the winery]; or
(2) this section[, if the person is not physically
present at the winery].
SECTION 6. This Act applies only to sales and shipments
occurring on or after the effective date of this Act. Sales or
shipments occurring before the effective date of this Act are
governed by the law in effect immediately before that date, and that
law is continued in effect for that purpose.
SECTION 7. (a) Except as provided by Subsection (b) of
this section, this Act takes effect immediately if it receives a
vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2005.
(b) If this Act takes immediate effect, the requirement for
a permit and the penalty imposed for shipping without a permit under
Chapter 54, Alcoholic Beverage Code, as added by this Act, take
effect on the date 90 days after the date of immediate effect,
otherwise the requirement for a permit and the penalty imposed for
shipping without a permit under Chapter 54, Alcoholic Beverage
Code, as added by this Act, take effect January 1, 2006.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 877 passed the Senate on
March 29, 2005, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 877 passed the House on
April 27, 2005, by the following vote: Yeas 147, Nays 0, two
present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor