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A BILL TO BE ENTITLED
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AN ACT
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relating to liability insurance or other proof of financial |
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responsibility for persons holding certain alcoholic beverage |
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permits; adding a provision that is subject to a criminal penalty; |
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authorizing a fee. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 11, Alcoholic Beverage |
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Code, is amended by adding Sections 11.14 and 11.15 to read as |
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follows: |
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Sec. 11.14. LIABILITY INSURANCE REQUIREMENT. (a) This |
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section does not apply to the holder of a food and beverage |
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certificate. |
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(b) Except as provided by Section 11.15, a person may not |
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hold a permit allowing the person to sell alcoholic beverages for |
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on-premises consumption unless the person establishes financial |
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responsibility by maintaining a liability insurance policy: |
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(1) issued by an insurance company authorized to write |
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liability insurance in this state or an eligible surplus lines |
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insurer; and |
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(2) that, subject to Subsection (e), will pay, on |
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behalf of the permit holder or a person who sells or serves |
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alcoholic beverages under the authority of the permit holder's |
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permit, amounts the permit holder or person becomes obligated to |
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pay as damages arising out of the sale or service of alcoholic |
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beverages. |
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(c) The commission shall adopt rules relating to: |
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(1) subject to Subsection (d), the minimum amounts of |
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insurance coverage that are required under this section, which must |
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be at least: |
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(A) $500,000 for each occurrence; and |
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(B) $1 million for any annual aggregate limit; |
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(2) the method for filing proof of insurance and |
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obtaining the commission's approval under this section; and |
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(3) verification by the commission of a permit |
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holder's continued maintenance of the required insurance coverage. |
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(d) The minimum amounts of insurance coverage required |
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under this section for a permit holder that is a governmental unit, |
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as defined by Section 101.001, Civil Practice and Remedies Code, |
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are the amounts of the liability limits applicable to the |
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governmental unit under Section 101.023, Civil Practice and |
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Remedies Code. A governmental unit subject to this section may |
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satisfy the insurance requirements of this section through a |
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self-insurance fund or program established under Section 2259.031, |
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Government Code, or Chapter 791, Government Code. |
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(e) A person may not recover from the proceeds of an |
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insurance policy held by the permit holder for purposes of this |
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section damages arising out of the sale or service of an alcoholic |
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beverage to the person if, at the time of the sale or service, the |
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person was obviously intoxicated or a minor. |
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Sec. 11.15. BOND IN LIEU OF INSURANCE. (a) A person may |
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establish financial responsibility for purposes of Section 11.14 |
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without maintaining an insurance policy by filing with the |
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commission a bond: |
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(1) with at least two individual sureties, each of |
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whom owns real property in this state that is not exempt from |
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execution under the constitution or laws of this state; |
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(2) conditioned for payment in the amounts and under |
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the same circumstances as required under a liability insurance |
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policy sufficient to meet the requirements of Section 11.14; |
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(3) that is not cancelable before the sixth day after |
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the date the commission receives written notice of the |
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cancellation; |
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(4) accompanied by a fee prescribed by the commission; |
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and |
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(5) approved by the commission. |
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(b) The real property required by Subsection (a)(1) must be |
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described in the bond approved by a judge of a court of record. The |
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assessor-collector of the county in which the property is located |
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must certify the property as free of any tax lien. The sureties in |
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combination must have equity in the property in an amount equal to |
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at least twice the amount of the bond. |
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(c) The bond is a lien in favor of the state on the real |
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property described in the bond. The lien exists in favor of a |
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person who holds a final judgment against the person who filed the |
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bond. |
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(d) On the filing of a bond, the commission shall issue to |
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the person who filed the bond a certificate of compliance with this |
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section. |
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(e) The commission shall file notice of the bond in the |
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office of the county clerk of the county in which the real property |
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is located. The notice must include a description of the property |
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described in the bond. The county clerk or the county clerk's |
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deputy, on receipt of the notice, shall acknowledge the notice and |
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record it in the lien records. The recording of the notice is |
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notice in accordance with statutes governing the recordation of a |
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lien on real property. |
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(f) If a judgment rendered against the person who files a |
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bond under this section is not satisfied before the 61st day after |
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the date the judgment becomes final, the judgment creditor, for the |
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judgment creditor's own use and benefit and at the judgment |
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creditor's expense, may bring an action in the name of the state |
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against the sureties on the bond, including an action to foreclose a |
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lien on the real property of a surety. The foreclosure action must |
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be brought in the same manner as, and is subject to the law |
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applicable to, an action to foreclose a mortgage on real property. |
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(g) Cancellation of a bond filed under this section does not |
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prevent recovery for a right or cause of action arising before the |
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date of the cancellation. |
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SECTION 2. (a) The changes in law made by this Act apply to |
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a person who applies for a permit for the sale of alcoholic |
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beverages for on-premises consumption on or after January 1, 2016, |
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and to a person who, on January 1, 2016, holds a permit for the sale |
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of alcoholic beverages for on-premises consumption regardless of |
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when the permit or license was issued. |
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(b) The Texas Alcoholic Beverage Commission shall adopt all |
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rules necessary to implement the changes made by this Act not later |
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than December 31, 2015. |
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SECTION 3. This Act takes effect September 1, 2015. |