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  S.B. No. 904
 
AN ACT
relating to the continuation and functions of the Texas Alcoholic
Beverage Commission; providing penalties.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Section 1.04, Alcoholic Beverage Code, is
amended by adding Subdivision (25) to read as follows:
             (25)  "Executive management" includes the
administrator, the assistant administrator, individuals who report
directly to the administrator, and the head of each division of the
commission.
       SECTION 2.  Subsection (b), Section 5.01, Alcoholic Beverage
Code, is amended to read as follows:
       (b)  The Texas Alcoholic Beverage Commission is subject to
Chapter 325, Government Code (Texas Sunset Act). Unless continued
in existence as provided by that chapter, the commission is
abolished and Subchapter A, Chapter 5, [of this code] expires
September 1, 2019 [2007. In the review of the commission by the
Sunset Advisory Commission, as required by this section, the sunset
commission shall limit its review to the appropriateness of
recommendations made by the sunset commission to the 79th
Legislature. In the Sunset Advisory Commission's report to the
80th Legislature, the sunset commission may include any
recommendations it considers appropriate].
       SECTION 3.  Subsection (c), Section 5.02, Alcoholic Beverage
Code, is amended to read as follows:
       (c)  Appointments to the commission shall be made without
regard to the race, color, disability [handicap], sex, religion,
age, or national origin of the appointees.
       SECTION 4.  Subchapter A, Chapter 5, Alcoholic Beverage
Code, is amended by adding Section 5.022 to read as follows:
       Sec. 5.022.  TRAINING. (a)  A person who is appointed to and
qualifies for office as a member of the commission may not vote,
deliberate, or be counted as a member in attendance at a meeting of
the commission until the person completes a training program that
complies with this section.
       (b)  The training program must provide the person with
information regarding:
             (1)  the legislation that created the commission and
the commission's programs, functions, rules, and budget;
             (2)  the results of the most recent formal audit of the
commission;
             (3)  the requirements of laws relating to open
meetings, public information, administrative procedure, and
conflicts of interest; and
             (4)  any applicable ethics policies adopted by the
commission or the Texas Ethics Commission.
       (c)  A person appointed to the commission is entitled to
reimbursement, as provided by the General Appropriations Act, for
the travel expenses incurred in attending the training program
regardless of whether the attendance at the program occurs before
or after the person qualifies for office.
       SECTION 5.  Section 5.04, Alcoholic Beverage Code, is
amended to read as follows:
       Sec. 5.04.  PRESIDING OFFICER [CHAIRMAN].  The governor
shall designate a [one] member of the commission as the presiding
officer of the commission to serve in that capacity at the pleasure
of the governor [chairman].
       SECTION 6.  Subsections (c) through (f), Section 5.05,
Alcoholic Beverage Code, are amended to read as follows:
       (c)  A person may not be [serve as] a member of the commission
or act as the general counsel to the commission if the person is
required to register as a lobbyist under Chapter 305, Government
Code, because of the person's activities for compensation on behalf
of a profession related to the operation of the commission.
       (d)  A person may not be a member of the commission and may
not be a commission employee employed in a "bona fide executive,
administrative, or professional capacity," as that phrase is used
for purposes of establishing an exemption to the overtime
provisions of the federal Fair Labor Standards Act of 1938 (29
U.S.C. Section 201 et seq.), if:
             (1)  the person is an [An] officer, employee, or paid
consultant of a Texas trade association in the field of alcoholic
beverages; or
             (2)  the person's [beverage manufacture, distribution,
service, or sales may not be a member or employee of the commission.
       [(e)A person who is the] spouse is [of] an officer,
manager, or paid consultant of a Texas trade association in the
field of alcoholic beverages [beverage manufacture, distribution,
or sales may not be a member or employee of the commission].
       (e)  In [(f)For the purposes of] this section, "Texas trade
association" means [a Texas trade association is] a [nonprofit,]
cooperative[,] and voluntarily joined statewide association of
businesses or professional competitors in this state [persons]
designed to assist its members and its industry or profession in
dealing with mutual business or professional problems and in
promoting their common interest.
       SECTION 7.  Section 5.051, Alcoholic Beverage Code, is
amended to read as follows:
       Sec. 5.051.  GROUNDS FOR REMOVAL FROM COMMISSION.  (a)  It is
a ground for removal from the commission that [if] a member:
             (1)  does not have at the time of taking office
[appointment] the qualifications required by Section 5.02 [of this
code];
             (2)  does not maintain during [the] service on the
commission the qualifications required by Section 5.02 [of this
code for appointment to the commission];
             (3)  is ineligible for membership under [violates a
prohibition established by] Section 5.05 [of this code];
             (4)  cannot, [is unable] because of illness or
disability, [to] discharge the member's duties for a substantial
part [portion] of the member's term [for which the member was
appointed]; or
             (5)  is absent from more than half [one-half] of the
regularly scheduled commission meetings that the member is eligible
to attend during a [each] calendar year without an excuse
approved[, except when the absence is excused] by a majority vote of
the commission.
       (b)  The validity of an action of the commission is not
affected by the fact that it was taken when a ground for removal of a
[member of the] commission member exists [existed].
       (c)  If the administrator has knowledge that a potential
ground for removal exists, the administrator shall notify the
presiding officer [chairman] of the commission of the potential
ground. The presiding officer [chairman of the commission] shall
then notify the governor and the attorney general that a potential
ground for removal exists. If the potential ground for removal
involves the presiding officer, the administrator shall notify the
next highest ranking officer of the commission, who shall then
notify the governor and the attorney general that a potential
ground for removal exists.
       SECTION 8.  Section 5.12, Alcoholic Beverage Code, is
amended to read as follows:
       Sec. 5.12.  [CONCURRENT] DUTIES OF ADMINISTRATOR.  The
commission shall specify the duties and powers of the administrator
by printed rules and regulations entered in its minutes and shall
develop and implement policies that clearly separate the
policy-making [define the respective] responsibilities of the
commission and the management responsibilities of the
administrator[, the assistant administrator,] and the staff of the
commission. The commission or administrator may develop a
procedure under which the commission or administrator, or the
designee of either, may negotiate the repayment of debts owed the
commission, including fees and delinquent taxes. When this code
imposes concurrent powers or duties on the commission and the
administrator, the commission shall designate those powers and
duties which it delegates to the administrator. An order,
decision, or judgment rendered and entered by the administrator in
a matter in which the administrator has been authorized to act is
not subject to change, review, or revision by the commission. A
concurrent power or duty which has not been specifically delegated
to the administrator by the commission's order is retained by the
commission, and an order, decision, or judgment rendered and
entered by the commission in a matter in which the commission has
retained authority is not subject to change, review, or revision by
the administrator.
       SECTION 9.  Section 5.31, Alcoholic Beverage Code, is
amended to read as follows:
       Sec. 5.31.  GENERAL POWERS AND DUTIES.  (a)  The commission
may exercise all powers, duties, and functions conferred by this
code, and all powers incidental, necessary, or convenient to the
administration of this code. It shall inspect, supervise, and
regulate every phase of the business of manufacturing, importing,
exporting, transporting, storing, selling, advertising, labeling,
and distributing alcoholic beverages, and the possession of
alcoholic beverages for the purpose of sale or otherwise. It may
prescribe and publish rules necessary to carry out the provisions
of this code.
       (b)  The commission shall:
             (1)  protect the public safety by deterring and
detecting violations of this code;
             (2)  promote legal and responsible alcohol
consumption;
             (3)  ensure fair competition within the alcoholic
beverage industry;
             (4)  ensure consistent, predictable, and timely
enforcement of this code;
             (5)  ensure a consistent, predictable, and timely
licensing and permitting process;
             (6)  promote and foster voluntary compliance with this
code; and
             (7)  communicate the requirements of this code clearly
and consistently.
       SECTION 10.  Subchapter B, Chapter 5, Alcoholic Beverage
Code, is amended by adding Sections 5.361 and 5.362 to read as
follows:
       Sec. 5.361.  ENFORCEMENT. (a)  The commission shall develop
a risk-based approach to conducting its enforcement activities that
focuses on:
             (1)  detecting serious violations that impact public
safety;
             (2)  monitoring entities that have a history of
complaints and violations of this code; and
             (3)  any other factors the commission considers
important.
       (b)  The commission shall develop benchmarks and goals to
track key enforcement activities and the results of those
activities. For each type of enforcement activity, the commission
shall track the number of violations detected by the enforcement
activity, the amount of time spent on the enforcement activity, and
any other information the commission considers necessary. The
commission shall use the information collected under this
subsection and other information to compare the enforcement
performance of each region and to determine the most effective
enforcement activities.
       (c)  The commission shall track, on a statewide and regional
basis, the type of violations detected, the disposition of the
violations, and the entities that committed the most serious
violations.
       (d)  The commission shall compile detailed statistics and
analyze trends related to its enforcement activities. The
commission shall:
             (1)  summarize the statistics and trends for executive
management on a monthly basis and for the members of the commission
on a quarterly basis; and
             (2)  make summary information available to the public,
including by posting the information on the commission's Internet
website. 
       Sec. 5.362.  SCHEDULE OF SANCTIONS. (a)  The commission by
rule shall adopt a schedule of sanctions that may be imposed on a
license or permit holder for violations of this code or rules
adopted under this code. In adopting the schedule of sanctions, the
commission shall ensure that the severity of the sanction imposed
is appropriate to the type of violation that is the basis for
disciplinary action.
       (b)  For each violation for which a license or permit may be
suspended, the schedule of sanctions must include the number of
days a permit or license would be suspended and the corresponding
civil penalty under Section 11.64.
       (c)  In determining the appropriate sanction for a violation
under the schedule, the commission or administrator shall consider:
             (1)  the type of license or permit held by the person
who committed the violation;
             (2)  the type of violation;
             (3)  any aggravating or ameliorating circumstances
concerning the violation; and
             (4)  the license or permit holder's previous violations
of this code.
       (d)  The schedule must:
             (1)  allow deviations from the schedule for clearly
established mitigating circumstances, including circumstances
listed in Section 11.64(c), or aggravating circumstances; and
             (2)  include a list of the most common violations by
members of the manufacturing, wholesaling, and retailing tiers of
the alcoholic beverage industry and the sanctions assessed for
those violations.
       (e)  The commission shall develop policies to guide
commission staff in determining the circumstances when it is
appropriate to deviate from the schedule of sanctions. The
policies must identify the circumstances when approval is required
in order to deviate from the schedule.
       (f)  The commission shall make the schedule of sanctions
available to the public, including by posting the schedule on the
commission's Internet website.
       SECTION 11.  Section 5.38, Alcoholic Beverage Code, is
amended to read as follows:
       Sec. 5.38.  QUALITY AND PURITY OF BEVERAGES.  (a)  The
commission shall require by rule that any alcoholic beverage sold
in this state conform in all respects to its advertised quality.
       (b)  The commission shall promulgate and enforce rules
governing the labeling and advertising of all alcoholic beverages
sold in the state, and shall adopt and enforce a standard of
quality, purity, and identity of all alcoholic beverages. The
commission shall promulgate and enforce necessary rules to
safeguard the public health and to insure sanitary conditions in
the manufacturing, refining, blending, mixing, purifying,
bottling, rebottling, and sale of alcoholic beverages.
       (c)  The commission may test the contents of any alcoholic
beverage manufactured or sold in the state to protect the public
health and safety and to ensure that the product:
             (1)  is accurately represented to the public; and
             (2)  complies with state law and commission rules.
       SECTION 12.  Section 5.53, Alcoholic Beverage Code, is
amended to read as follows:
       Sec. 5.53.  PUBLIC INTEREST INFORMATION AND COMPLAINTS.  (a)  
The commission shall adopt rules that clearly define the agency's
complaint process from the time the complaint is received until it
is resolved.
       (b)  The commission shall make [prepare] information [of
public interest] describing its [the functions of the commission
and the commission's] procedures for complaint investigation and
resolution [by which complaints are filed with and resolved by the
commission. The commission shall make the information] available
to the public and appropriate state agencies, including by posting
the information on the commission's Internet website.
       (c)  The commission, by rule, shall adopt a standardized form
for filing complaints against a licensed or permitted entity. The
commission shall make the complaint form available to the public,
including by posting the complaint form on the commission's
Internet website.
       (d) [(b)]  The commission by rule shall establish methods by
which consumers and service recipients are notified of the name,
mailing address, and telephone number of the commission for the
purpose of directing a complaint to the commission. The commission
may require that the notification be provided on a sign prominently
displayed in the place of business of each individual or entity
regulated under this code.
       SECTION 13.  Section 5.54, Alcoholic Beverage Code, is
amended by amending Subsection (a) and adding Subsections (a-1) and
(c) to read as follows:
       (a)  The commission shall maintain a system to promptly and
efficiently act on complaints [keep an information file about each
complaint] filed with the commission. The commission shall assign
priorities to complaint investigations based on risk so that the
commission handles the most serious complaints first.
       (a-1)  The [that the] commission shall maintain information
about parties to the complaint, the subject matter of the
complaint, a summary of the results of the review or investigation
of the complaint, and its disposition [has authority to resolve].
       (c)  The commission shall:
             (1)  compile:
                   (A)  detailed statistics and analyze trends on
complaint information, including:
                         (i)  the nature of the complaints;
                         (ii)  their disposition; and
                         (iii)  the length of time to resolve
complaints; and
                   (B)  complaint information on a statewide and a
regional basis;
             (2)  report the information on a monthly basis to
executive management and on a quarterly basis to members of the
commission; and
             (3)  make general information about the nature and
disposition of complaints available to the public, including by
posting the information on the commission's Internet website.
       SECTION 14.  Section 5.55, Alcoholic Beverage Code, is
amended to read as follows:
       Sec. 5.55.  [AGREEMENTS FOR] ELECTRONIC PROCESSING OF
LICENSES OR PERMITS.  (a)  The commission shall expedite the
processing of original and renewal applications for licenses and
permits by using electronic means, including the Internet.
       (b)  The commission or administrator may enter into an
agreement with another agency of this state to provide for the
issuance of original or renewal licenses or permits through the use
of electronic means, including use of the Internet, to facilitate
the licensing process.
       (c)  A reasonable service fee may be charged to applicants
who choose to use electronic or Internet service to apply for
original licenses or permits or to renew licenses or permits,
subject to other laws limiting or defining those fees; provided,
that no service fee may be charged by the commission or by another
agency to those applicants who choose not to utilize the electronic
or Internet method to apply for an original or a renewal license or
permit.
       SECTION 15.  Subchapter B, Chapter 5, Alcoholic Beverage
Code, is amended by adding Sections 5.57 through 5.61 to read as
follows:
       Sec. 5.57.  MARKETING PRACTICES REGULATORY DECISIONS.
(a)  The commission shall develop a formal process for making
policy decisions regarding marketing practices regulations and for
communicating those decisions to agency staff and the alcoholic
beverage industry.
       (b)  The commission shall gather input from a diverse group
of representatives of the alcoholic beverage industry regarding
regulatory issues and interpretations of this code and commission
rules.
       (c)  The commission shall make a reasonable attempt to meet
with alcoholic beverage industry representatives from:
             (1)  the manufacturing, distribution, and retail tiers
of the industry; and
             (2)  the liquor, beer, and wine segments of the
industry.
       (d)  In making policy decisions regarding marketing
practices regulations, the commission shall:
             (1)  take into consideration recommendations of the
industry representatives consulted under this section;
             (2)  document its policy decisions by:
                   (A)  using a precedents manual; or
                   (B)  drafting formal advisories; and
             (3)  make those documents available to regional staff
and industry members through its Internet website, electronic mail,
or commission publications.
       Sec. 5.58.  INTERNAL AFFAIRS. (a)  The administrator shall
establish an office of internal affairs to ensure fair and
impartial investigations of alleged employee misconduct.
       (b)  The administrator shall appoint and directly oversee
the head of the office of internal affairs.
       (c)  The office of internal affairs has original
departmental jurisdiction over complaints involving commission
personnel.
       (d)  The office of internal affairs staff shall coordinate
and be the central reporting point for all employee investigations.
The staff may initiate investigations of complaints; however, the
staff must obtain the approval of the appropriate division director
or higher-level executive management to investigate an employee
when no complaint has been made.
       (e)  At least once each month, the head of the office of
internal affairs shall report to the administrator information
about the nature and status of each complaint investigated by the
office of internal affairs. 
       (f)  The head of the office of internal affairs shall submit
a quarterly report to the members of the commission. The report
must contain a summary of information relating to investigations
conducted under this section, including an analysis of the number,
type, and outcome of investigations, trends in the investigations,
and recommendations to avoid future complaints.
       (g)  The commission shall inform the public about how to file
a complaint against an employee of the commission and the steps the
agency takes to address complaints against employees.
       Sec. 5.59.  USE OF TECHNOLOGY. The commission shall
implement a policy requiring the commission to use appropriate
technological solutions to improve the commission's ability to
perform its functions. The policy must ensure that the public is
able to interact with the commission on the Internet.
       Sec. 5.60. ALTERNATIVE RULEMAKING AND DISPUTE RESOLUTION
PROCEDURES.  (a)  The commission shall develop and implement a
policy to encourage the use of:
             (1)  negotiated rulemaking procedures under Chapter
2008, Government Code, for the adoption of commission rules; and
             (2)  appropriate alternative dispute resolution
procedures under Chapter 2009, Government Code, to assist in the
resolution of internal and external disputes under the commission's
jurisdiction.
       (b)  The commission's procedures relating to alternative
dispute resolution must conform, to the extent possible, to any
model guidelines issued by the State Office of Administrative
Hearings for the use of alternative dispute resolution by state
agencies.
       (c)  The commission shall designate a trained person to:
             (1)  coordinate the implementation of the policy
adopted under Subsection (a);
             (2)  serve as a resource for any training needed to
implement the procedures for negotiated rulemaking or alternative
dispute resolution; and
             (3)  collect data concerning the effectiveness of those
procedures, as implemented by the commission.
       Sec. 5.61.  REPORT TO LEGISLATURE ON CERTAIN ENFORCEMENT
EFFORTS. (a)  Not later than October 31 of each even-numbered
year, the commission shall report to the legislature on the
commission's enforcement efforts concerning alcohol sales and
consumption during prohibited hours.
       (b)  The report must specify the number of individuals or
establishments found to be:
             (1)  engaging in an activity for which a permit or
license is required by this code without the required permit or
license;
             (2)  selling, serving, or offering for sale an
alcoholic beverage during prohibited hours in violation of Chapter
105 or Section 11.61(b)(23), 32.17(a)(7), or 61.71(a)(7);
             (3)  consuming or permitting consumption of an
alcoholic beverage on a permitted or licensed premises during
prohibited hours in violation of Chapter 105 or Section
11.61(b)(22), 32.17(a)(7), or 61.71(a)(18); or
             (4)  violating Section 11.61(b)(2), 32.17(a)(2),
32.17(a)(3), 61.71(a)(14), or 101.04 by:
                   (A)  refusing to allow entry to a permitted or
licensed premises by an inspector, investigator, or law enforcement
official;
                   (B)  refusing to furnish information to an
inspector, investigator, or law enforcement official; or
                   (C)  interfering with or refusing to permit an
inspection or investigation being conducted by an inspector,
investigator, or law enforcement official.
       (c)  The commission shall report the information required by
Subsection (b) on a statewide basis and for each region and major
metropolitan area.
       SECTION 16.  Subchapter A, Chapter 11, Alcoholic Beverage
Code, is amended by adding Section 11.042 to read as follows:
       Sec. 11.042.  HEALTH RISKS WARNING SIGN.  (a)  The commission
by rule shall require the holder of a permit authorizing the sale of
alcoholic beverages for on-premises consumption to display a
warning sign on the door to each restroom on the permitted premises
that informs the public of the risks of drinking alcohol during
pregnancy.
       (b)  The commission's rules shall specify the language of the
warning and the size and graphic design of the sign, including font
size and type.
       SECTION 17.  Subsection (a), Section 11.64, Alcoholic
Beverage Code, is amended to read as follows:
       (a)  When the commission or administrator is authorized to
suspend a permit or license under this code, the commission or
administrator shall give the permittee or licensee the opportunity
to pay a civil penalty rather than have the permit or license
suspended, unless the basis for the suspension is a violation of
Section 11.61(b)(14), 22.12, 28.11, 32.17(a)(2), 32.17(a)(3),
61.71(a)(5), 61.71(a)(6), 61.74(a)(14), 69.13, 71.09, 101.04,
101.63, 106.03, 106.06, or 106.15, the sale or offer for sale of an
alcoholic beverage during hours prohibited by Chapter 105,
consumption or the permitting of consumption of an alcoholic
beverage on the person's licensed or permitted premises during
hours prohibited by Chapter 105 or Section 32.17(a)(7), or an
offense relating to prostitution or gambling, in which case the
commission or administrator shall determine whether the permittee
or licensee may have the opportunity to pay a civil penalty rather
than have the permit or license suspended. The commission shall
adopt rules addressing when suspension may be imposed pursuant to
this section without the opportunity to pay a civil penalty. In
adopting rules under this subsection, the commission shall consider
the type of license or permit held, the type of violation, any
aggravating or ameliorating circumstances concerning the
violation, and any past violations of this code by the permittee or
licensee. In cases in which a civil penalty is assessed, the
commission or administrator shall determine the amount of the
penalty.  The amount of the civil penalty may not be less than $150
or more than $25,000 for each day the permit or license was to have
been suspended. If the licensee or permittee does not pay the
penalty before the sixth day after the commission or administrator
notifies him of the amount, the commission or administrator shall
impose the suspension.
       SECTION 18.  Subchapter A, Chapter 61, Alcoholic Beverage
Code, is amended by adding Section 61.111 to read as follows:
       Sec. 61.111.  HEALTH RISKS WARNING SIGN. (a)  The commission
by rule shall require the holder of a license authorizing the sale
of beer for on-premises consumption to display a warning sign on the
door to each restroom on the licensed premises that informs the
public of the risks of drinking alcohol during pregnancy.
       (b)  The commission's rules shall specify the language of the
warning and the size and graphic design of the sign, including font
size and type.
       SECTION 19.  Section 101.04, Alcoholic Beverage Code, is
amended to read as follows:
       Sec. 101.04.  CONSENT TO INSPECTION; PENALTY. (a) By
accepting a license or permit, the holder consents to [that] the
commission, an authorized representative of the commission, or a
peace officer entering [may enter] the licensed premises at any
time to conduct an investigation or inspect the premises for the
purpose of performing any duty imposed by this code.
       (b)  A person commits an offense if the person refuses to
allow the commission, an authorized representative of the
commission, or a peace officer to enter a licensed or permitted
premises as required by Subsection (a).  An offense under this
section is a Class A misdemeanor.
       SECTION 20.  Section 101.67, Alcoholic Beverage Code, is
amended by amending Subsections (a) and (d) and adding Subsection
(e) to read as follows:
       (a)  No person may ship or cause to be shipped into the state,
import into the state, manufacture and offer for sale in the state,
or distribute, sell, or store in the state any beer, ale, or malt
liquor unless:
             (1)  a sample of the beverage or a sample of the same
type and quality of beverage has been first submitted to an
independent, reputable laboratory or the commission for analysis to
verify the alcohol content of the beverage [and been found by the
commission or its representative to comply with all rules and
regulations of the commission relating to quality, purity, and
standards of measure]; and
             (2)  the label of the beverage has been first submitted
to the commission or its representative and found to comply with all
provisions of this code relating to the labeling of the particular
type of beverage.
       (d)  If the commission determines that the product analysis
provided by the independent laboratory or the sample, and the
label, required by Subsection (a) [of this section] comply with the
provisions of this code and the rules of the commission, the
commission shall issue a certificate of approval upon receipt of a
fee in an [the] amount that is sufficient to cover the cost of
administering this section [of $25]. A copy of the certificate
shall be kept on file in the office of the commission.
       (e)  The commission by rule shall establish the procedures
for accepting analysis of beer, ale, or malt liquor by an
independent laboratory under Subsection (a)(1).
       SECTION 21.  Subchapter D, Chapter 101, Alcoholic Beverage
Code, is amended by adding Section 101.671 to read as follows:
       Sec. 101.671.  PRIOR APPROVAL OF DISTILLED SPIRITS AND WINE.  
(a)  Before an authorized permittee may ship distilled spirits or
wine into the state or sell distilled spirits or wine within the
state, the permittee must register the distilled spirits or wine
with the commission.  The registration application must include a
certificate of label approval issued by the United States Alcohol
and Tobacco Tax and Trade Bureau for the product.
       (b)  On registration of a certificate of label approval
issued by the United States Alcohol and Tobacco Tax and Trade
Bureau, the commission shall approve the product under this section
and issue a letter to that effect to the permittee.  The commission
may not require additional approval for the product unless there is
a change to the label or product that requires reissuance of the
federal certificate of label approval.  The commission shall accept
the certificate of label approval as constituting full compliance
with any applicable standards adopted under Section 5.38 regarding
quality, purity, and identity of distilled spirits or wine.
       (c)  The commission may not register a product unless the
application is accompanied by a fee set by the commission in an
amount that is sufficient to cover the cost of administering this
section.  A copy of the registration shall be kept on file in the
office of the commission.
       (d)  The commission by rule shall establish procedures for
accepting federal certificates of label approval for registration
under this section.
       SECTION 22.  Subsection (d), Section 102.32, Alcoholic
Beverage Code, is amended to read as follows:
       (d)  Each delivery of liquor shall be accompanied by an
invoice giving the date of purchase. If a retailer becomes
delinquent in the payment of an account for liquor, the wholesale
dealer immediately shall report that fact in writing, including by
electronic mail or facsimile transmission, to the commission or
administrator. A [No] wholesale dealer may not sell any liquor to a
retailer who is delinquent until the delinquent account is paid in
full and cleared from the records of the commission. An account
becomes delinquent if it is not paid when it is required to be paid
under Subsection (c) [of this section].
       SECTION 23.  Section 105.06, Alcoholic Beverage Code, is
amended by adding Subsection (a-1) to read as follows:
       (a-1)  For the purposes of this section, a licensed or
permitted premises is a public place.
       SECTION 24.  Chapter 105, Alcoholic Beverage Code, is
amended by adding Section 105.10 to read as follows:
       Sec. 105.10.  PENALTY.  (a)  A person commits an offense if
the person, in violation of this chapter or Section 32.17(a)(7):
             (1)  sells or offers for sale an alcoholic beverage
during prohibited hours; or
             (2)  consumes or permits the consumption of an
alcoholic beverage on the person's licensed or permitted premises
during prohibited hours.
       (b)  An offense under this section is a Class A misdemeanor.
       SECTION 25.  Section 49.02, Penal Code, is amended by adding
Subsection (a-1) to read as follows:
       (a-1)  For the purposes of this section, a premises licensed
or permitted under the Alcoholic Beverage Code is a public place.
       SECTION 26.  Section 37.11, Alcoholic Beverage Code, is
repealed.
       SECTION 27.  (a)  Not later than March 1, 2008, the Texas
Alcoholic Beverage Commission shall adopt the rules and policies
necessary to implement Sections 5.361, 5.362, 11.042, 61.111, and
101.671, Alcoholic Beverage Code, as added by this Act, and
Sections 5.53, 5.54, and 101.67, Alcoholic Beverage Code, as
amended by this Act.
       (b)  Not later than March 1, 2008, the Texas Alcoholic
Beverage Commission shall adopt the rules and policies necessary to
implement Sections 5.57, 5.58, 5.59, and 5.60, Alcoholic Beverage
Code, as added by this Act, and Section 5.12, Alcoholic Beverage
Code, as amended by this Act.
       SECTION 28.  The change in law made by Section 5.022,
Alcoholic Beverage Code, as added by this Act, and Sections 5.05 and
5.051, Alcoholic Beverage Code, as amended by this Act, regarding
the prohibitions on, qualifications of, and training for members of
the Texas Alcoholic Beverage Commission does not affect the
entitlement of a member serving on the commission immediately
before September 1, 2007, to continue to serve and function as a
member of the commission for the remainder of the member's term.
The change in law described by this section applies only to a member
appointed on or after September 1, 2007.
       SECTION 29.  The change in law made by this Act related to
the filing or investigation of a complaint under Chapter 5,
Alcoholic Beverage Code, as amended by this Act, applies only to a
complaint filed with the Texas Alcoholic Beverage Commission on or
after the effective date of this Act. A complaint filed before the
effective date of this Act is governed by the law as it existed
immediately before that date, and the former law is continued in
effect for that purpose.
       SECTION 30.  Section 11.64, Alcoholic Beverage Code, as
amended by this Act, applies only to conduct that is a basis for
suspension of a license or permit that occurs on or after the
effective date of this Act.  Conduct that occurs before the
effective date of this Act is governed by the law in effect
immediately before that date, and that law is continued in effect
for that purpose.
       SECTION 31.  (a) Sections 101.04 and 105.06, Alcoholic
Beverage Code, and Section 49.02, Penal Code, as amended by this
Act, and Section 105.10, Alcoholic Beverage Code, as added by this
Act, apply only to an offense committed on or after the effective
date of this Act. For the purposes of this section, an offense is
committed before the effective date of this Act if any element of
the offense occurs before that date.
       (b)  An offense committed before the effective date of this
Act is covered by the law in effect immediately before the effective
date of this Act, and that law is continued in effect for that
purpose.
       SECTION 32.  This Act takes effect September 1, 2007.
____________________________________________________________
President of the Senate             Speaker of the House
       I hereby certify that S.B. No. 904 passed the Senate on
March 28, 2007, by the following vote:  Yeas 30, Nays 0.
______________________________ 
   Secretary of the Senate
       I hereby certify that S.B. No. 904 passed the House on
April 30, 2007, by the following vote:  Yeas 144, Nays 0, two
present not voting.
______________________________ 
   Chief Clerk of the House
Approved:
______________________________ 
______________________________ 
            Date
______________________________ 
______________________________ 
          Governor