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  H.B. No. 3307
 
 
 
 
AN ACT
  relating to the manufacture of malt beverages, including under
  alternating brewery proprietorship and contract brewing
  arrangements.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1.04, Alcoholic Beverage Code, is
  amended by adding Subdivisions (26) and (27) to read as follows:
               (26)  "Alternating brewery proprietorship" means an
  arrangement in which two or more parties take turns using the
  physical premises of a brewery as permitted under this code and
  federal law.
               (27)  "Contract brewing arrangement" means an
  arrangement in which two breweries, each of which has a separate
  facility, contract for one brewery to manufacture malt beverages on
  behalf of the other brewery due to the limited capacity or other
  reasonable business necessity of one party to the arrangement.
         SECTION 2.  Section 12.01(a), Alcoholic Beverage Code, is
  amended to read as follows:
         (a)  The holder of a brewer's permit may:
               (1)  manufacture, bottle, package, and label malt
  liquor;
               (2)  import ale and malt liquor acquired from a holder
  of a nonresident brewer's permit;
               (3)  sell the ale and malt liquor only to wholesale
  permit holders in this state or to qualified persons outside the
  state;
               (4)  dispense ale and malt liquor for consumption on
  the premises; [and]
               (5)  conduct samplings of ale or malt liquor, including
  tastings, at a retailer's premises; and
               (6)  enter into an alternating brewery proprietorship
  or contract brewing arrangement as provided by Section 12.06.
         SECTION 3.  Section 12.06, Alcoholic Beverage Code, is
  amended  by amending Subsections (a), (b), and (c) and adding
  Subsections (e) and (f) to read as follows:
         (a)  The holder of [An entity or successor to an entity that
  on May 1, 2005, held] a brewer's or nonresident brewer's permit [or
  whose brand was legally sold in this state] may contract with the
  holder of a brewer's permit:
               (1)  to provide brewing services; or
               (2)  for the use of the permit holder's brewing
  facilities under an alternating brewery proprietorship if each
  party to the proprietorship:
                     (A)  has filed the appropriate Brewer's Notice and
  Brewer's Bond, as required by the Alcohol and Tobacco Tax and Trade
  Bureau of the United States Department of the Treasury; and
                     (B)  if applicable, has posted with the commission
  a bond in an amount determined by the commission under Subsection
  (e) or (f) [or to provide brewing services].
         (b)  An entity [or successor to an entity that on May 1, 2005,
  held a brewer's or nonresident brewer's permit or whose brand was
  legally sold in this state] is not required to own its brewing
  facilities if the entity operates under an alternating brewery
  proprietorship as provided by Subsection (a).
         (c)  Each entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement must hold a permit
  at the location where brewing services are conducted under the
  arrangement [More than one brewer's permit may be issued for a
  single premises if the permit holder for the premises has
  contracted with an entity or successor to an entity that on May 1,
  2005, held a brewer's or nonresident brewer's permit or whose brand
  was legally sold in this state for the use of the permit holder's
  brewing facilities or to provide brewing services].
         (e)  Subject to Subsection (f), the commission by rule may
  require an entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement to post with the
  commission a bond in an amount determined by the commission not to
  exceed $200,000.
         (f)  An entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement must post with the
  commission a bond in an amount determined by the commission of not
  less than $30,000 if the entity does not own a fee interest in a
  brewing facility.
         SECTION 4.  Section 13.04, Alcoholic Beverage Code, is
  amended  by amending Subsections (a), (b), and (c) and adding
  Subsections (e) and (f) to read as follows:
         (a)  The holder of [An entity or successor to an entity that
  on May 1, 2005, held] a brewer's or nonresident brewer's permit [or
  whose brand was legally sold in this state] may contract with the
  holder of a nonresident brewer's permit:
               (1)  to provide brewing services; or
               (2)  for the use of the permit holder's brewing
  facilities under an alternating brewery proprietorship if each
  party to the proprietorship:
                     (A)  has filed the appropriate Brewer's Notice and
  Brewer's Bond as required by the Alcohol and Tobacco Tax and Trade
  Bureau of the United States Department of the Treasury; and
                     (B)  if applicable, has posted with the commission
  a bond in an amount determined by the commission under Subsection
  (e) or (f) [or to provide brewing services].
         (b)  An entity [or successor to an entity that on May 1, 2005,
  held a brewer's or nonresident brewer's permit or whose brand was
  legally sold in this state] is not required to own its brewing
  facilities if the entity operates under an alternating brewery
  proprietorship as provided by Subsection (a).
         (c)  Each entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement must hold a permit
  at the location where brewing services are conducted under the
  arrangement [More than one nonresident brewer's permit may be
  issued for a single premises if the permit holder for the premises
  has contracted with an entity or successor to an entity that on May
  1, 2005, held a brewer's or nonresident brewer's permit or whose
  brand was legally sold in this state for the use of the permit
  holder's brewing facilities or to provide brewing services].
         (e)  Subject to Subsection (f), the commission by rule may
  require an entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement to post with the
  commission a bond in an amount determined by the commission not to
  exceed $200,000.
         (f)  An entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement must post with the
  commission a bond in an amount determined by the commission of not
  less than $30,000 if the entity does not own a fee interest in a
  brewing facility.
         SECTION 5.   Section 61.41(d), Alcoholic Beverage Code, is
  amended to read as follows:
         (d)  Notwithstanding Subsection (a) and Sections 11.49 and
  109.53,  more than one manufacturer's or nonresident
  manufacturer's license may be issued for a single premises if the
  license holder for the premises has contracted with an entity under
  an alternating brewery proprietorship or contract brewing
  arrangement [or successor to an entity that on May 1, 2005, held a
  manufacturer's or nonresident manufacturer's license or whose brand
  was legally sold in this state for the use of the license holder's
  premises for manufacturing purposes or to provide manufacturing
  services].
         SECTION 6.  Section 62.01(a), Alcoholic Beverage Code, is
  amended to read as follows:
         (a)  The holder of a manufacturer's license may:
               (1)  manufacture or brew beer and distribute and sell
  it in this state to the holders of general, local, and branch
  distributor's licenses and to qualified persons outside the state;
               (2)  dispense beer for consumption on the premises;
               (3)  bottle and can beer and pack it into containers for
  resale in this state, regardless of whether the beer is
  manufactured or brewed in this state or in another state and
  imported into Texas; [and]
               (4)  conduct samplings of beer, including tastings, at
  a retailer's premises; and
               (5)  enter into an alternating brewery proprietorship
  or contract brewing arrangement as provided by Section 62.14.
         SECTION 7.  Section 62.14, Alcoholic Beverage Code, is
  amended by amending Subsections (a) and (b) and adding Subsections
  (b-1), (d), and (e) to read as follows:
         (a)  The holder of [An entity or successor to an entity that
  on May 1, 2005, held] a manufacturer's or nonresident
  manufacturer's license [or whose brand was legally sold in this
  state] may contract with the holder of a manufacturer's license:
               (1)  to provide manufacturing services; or
               (2)  for the use of the license holder's manufacturing
  facilities under an alternating brewery proprietorship if each
  party to the proprietorship:
                     (A)  has filed the appropriate Brewer's Notice and
  Brewer's Bond as required by the Alcohol and Tobacco Tax and Trade
  Bureau of the United States Department of the Treasury; and
                     (B)  if applicable, has posted with the commission
  a bond in an amount determined by the commission under Subsection
  (d) or (e) [or to provide manufacturing services].
         (b)  An entity [or successor to an entity that on May 1, 2005,
  held a manufacturer's or nonresident manufacturer's license or
  whose brand was legally sold in this state] is not required to own
  its manufacturing facilities if the entity operates under an
  alternating brewery proprietorship as provided by Subsection (a).
         (b-1)  Each entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement must hold a license
  at the location where manufacturing services are conducted under
  the arrangement.
         (d)  Subject to Subsection (e), the commission by rule may
  require an entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement to post with the
  commission a bond in an amount determined by the commission not to
  exceed $200,000.
         (e)  An entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement must post with the
  commission a bond in an amount determined by the commission of not
  less than $30,000 if the entity does not own a fee interest in a
  manufacturing facility.
         SECTION 8.  Section 63.05, Alcoholic Beverage Code, is
  amended by amending Subsections (a) and (b) and adding Subsections
  (b-1), (d), and (e) to read as follows:
         (a)  The holder of [An entity or successor to an entity that
  on May 1, 2005, held] a manufacturer's or nonresident
  manufacturer's license [or whose brand was legally sold in this
  state] may contract with the holder of a nonresident manufacturer's
  license:
               (1)  to provide manufacturing services; or
               (2)  for the use of the license holder's manufacturing
  facilities under an alternating brewery proprietorship if each
  party to the proprietorship:
                     (A)  has filed the appropriate Brewer's Notice and
  Brewer's Bond as required by the Alcohol and Tobacco Tax and Trade
  Bureau of the United States Department of the Treasury; and
                     (B)  if applicable, has posted with the commission
  a bond in an amount determined by the commission under Subsection
  (d) or (e) [or to provide manufacturing services].
         (b)  An entity [or successor to an entity that on May 1, 2005,
  held a manufacturer's or nonresident manufacturer's license or
  whose brand was legally sold in this state] is not required to own
  its manufacturing facilities if the entity operates under an
  alternating brewery proprietorship as provided by Subsection (a).
         (b-1)  Each entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement must hold a license
  at the location where manufacturing services are conducted under
  the arrangement.
         (d)  Subject to Subsection (e), the commission by rule may
  require an entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement to post with the
  commission a bond in an amount determined by the commission not to
  exceed $200,000.
         (e)  An entity that is a party to an alternating brewery
  proprietorship or contract brewing arrangement must post with the
  commission a bond in an amount determined by the commission of not
  less than $30,000 if the entity does not own a fee interest in a
  manufacturing facility.
         SECTION 9.  Subchapter A, Chapter 102, Alcoholic Beverage
  Code, is amended by adding Section 102.22 to read as follows:
         Sec. 102.22.  VERIFICATION OF USE OF FACILITIES. (a) A
  person who holds a permit issued under Chapter 12 or 13 or a license
  issued under Chapter 62 or 63 shall verify to the commission on an
  annual basis that a brewing or manufacturing facility owned or
  controlled by the permit or license holder is not used to produce
  malt beverages primarily for a specific retailer or the retailer's
  affiliates.
         (b)  The commission shall adopt a form for the verification
  required under this section.
         SECTION 10.  This Act takes effect September 1, 2013.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 3307 was passed by the House on May 2,
  2013, by the following vote:  Yeas 147, Nays 0, 2 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 3307 was passed by the Senate on May
  20, 2013, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor