TITLE 16. ECONOMIC REGULATION

PART 2. PUBLIC UTILITY COMMISSION OF TEXAS

CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS

SUBCHAPTER S. WHOLESALE MARKETS

16 TAC §25.502

The Public Utility Commission of Texas (commission) proposes amendments to §25.502, relating to pricing safeguards in markets operated by the Electric Reliability Council of Texas (ERCOT). The proposed amendments adjust the notice requirements and complaint timeline applicable to suspension of operation of generation resources, give the ERCOT discretion to decline to enter into a Reliability Must-Run (RMR) service agreement based on an analysis that may consider the economic value of lost load, require ERCOT governing-board approval of RMR and Must-Run Alternative (MRA) service agreements, and require refund of payments for capital expenditures related to RMR or MRA service agreements in certain circumstances. This is a competition rule subject to judicial review as specified by Public Utility Regulatory Act §39.001(e). Project Number 46369 is assigned to this proceeding.

Julia Harvey, Director of Wholesale Market Policy, Competitive Markets Division, has determined that for each year of the first five-year period the proposed amendments are in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the amendments.

Ms. Harvey has determined that for each year of the first five years the proposed amendments are in effect, the public benefit anticipated as a result of enforcing the amendments will be a reduction in costs associated with supporting the reliability of the ERCOT system. This benefit will be derived from ERCOT's improved ability to avoid uneconomic and unnecessary RMR service agreements. The proposed amendments will enhance ERCOT's ability to evaluate the need for RMR service and provide greater oversight of RMR service agreements by (1) lengthening the RMR evaluation timeline, enabling ERCOT to evaluate less costly alternatives to RMR service prior to entering an RMR service agreement; (2) allowing ERCOT to assess the economic value of the incremental reliability provided by RMR or MRA service and to decline to enter into a service agreement based on this analysis; and (3) requiring ERCOT governing-board approval of decisions pertaining to RMR or MRA service when ERCOT's analysis shows there is a reliability need. Additionally, the required refund of payments for capital expenditures relating to RMR or MRA service will reduce costs and will ensure that the public does not inappropriately subsidize capital upgrades made to resources if those resources continue commercial operation after the termination of the RMR or MRA service agreement with ERCOT.

There will be no adverse economic effect on small businesses or micro-businesses as a result of enforcing these amendments. Therefore, no regulatory flexibility analysis is required. There is no anticipated economic cost to persons who are required to comply with the amendments as proposed.

Ms. Harvey has also determined that for each year of the first five years the proposed amendments are in effect, there should be no effect on a local economy, and therefore no local employment impact statement is required under §2001.022 of the Administrative Procedure Act, Texas Gov't Code Ann. §2001.022 (West 2016).

The commission staff will conduct a public hearing on this rulemaking if requested in accordance with §2001.029 of the Administrative Procedure Act, Texas Gov't Code Ann. §2001.029 (West 2016). The hearing will be held at the William B. Travis Building, 1701 North Congress Avenue, Austin, Texas 78701. The request for a public hearing must be received within 30 days after publication in the Texas Register.

Initial comments on the proposed amendment may be submitted to the Filing Clerk, Public Utility Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin, Texas 78711-3326, within 30 days after publication. Sixteen copies of comments on the proposed amendments are required to be filed by §22.71(c) of this title. Reply comments may be submitted within 45 days after publication. Comments should be organized in a manner consistent with the organization of the proposed rule. All comments should refer to Project Number 46369.

This amendment is proposed under section 14.002 of the Public Utility Regulatory Act, Texas Util. Code Ann. §14.002 (West 2016) (PURA), which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; and specifically, PURA §39.151, which authorizes the commission to adopt rules relating to reliability of the ERCOT transmission network.

Cross reference to statutes: Public Utility Regulatory Act §14.002 and §39.151.

§25.502.Pricing Safeguards in Markets Operated by the Electric Reliability Council of Texas.

(a) - (b) (No change.)

(c) Definitions. The following terms, when used in this section, shall have the following meanings, unless the context indicates otherwise.

(1) - (3) (No change).

(4) Must-run alternative (MRA) service--a service that ERCOT may procure as an alternative to reliability must-run service.

(5) [(4)] Noncompetitive constraint--A transmission element on which prices to relieve congestion are not moderated by the normal forces of competition between multiple, unaffiliated resources.

(6) Reliability must-run (RMR) service--a service provided by a generation resource to meet a reliability need resulting from the planned suspension of operation of that generation resource for a period of greater than 180 calendar days.

(7) [(5)] Resource--a generation resource, or a load capable of complying with ERCOT instructions to reduce or increase the need for electrical energy or to provide an ancillary service (i.e., a "load acting as a resource").

(8) [(6)] Resource entity-- an entity that owns or controls a resource.

(9) Suspension date--the date specified by a generation entity in a notice to ERCOT as the date on which it intends to suspend operation of a generation resource for a period of greater than 180 calendar days.

(d) (No change.)

(e) RMR [Reliability-must-run] resources. Except for the occurrence of a forced outage, a generation entity shall submit to [notify] ERCOT in writing a notice of suspension of operation no later than 150 [90] calendar days prior to the suspension date. The generation entity shall include with its notice a budget of eligible costs, in accordance with applicable protocols, to provide RMR service. ERCOT shall issue a final determination of the need for RMR service within 60 calendar days of ERCOT's receipt of the notice. If ERCOT determines that the generation resource is not needed for RMR service, the generation entity may suspend operation of the generation resource before the suspension date, subject to ERCOT approval. [the date on which it intends to cease or suspend operation of a generation resource for a period of greater than 180 calendar days] Unless ERCOT has determined that a generation entity's generation resource is not required for ERCOT reliability, the generation entity shall not terminate its registration of the generation resource with ERCOT unless it has transferred the generation resource to a generation entity that has a current resource-entity [resource entity] agreement with ERCOT and the transferee registers that generation resource with ERCOT at the time of the transfer.

(1) Complaint with the commission. If, by the suspension date, ERCOT has not notified the generation entity that the continued operation of the generation resource is not required for reliability or has not entered into an RMR service agreement with the generation entity for the generation resource [after 90 calendar days following ERCOT's receipt of the generation entity's notice, either ERCOT has not informed the generation entity that the generation resource is not needed for ERCOT reliability or both parties have not signed a reliability-must-run (RMR) agreement for the generation resource], then the generation entity may file a complaint with the commission against ERCOT, under [pursuant to] §22.251 of this title (relating to Review of Electric Reliability Council of Texas (ERCOT) conduct).

(A) (No change.)

(B) As required by [Pursuant to] §22.251(d) of this title, absent a showing of good cause to the commission to justify a later deadline, the generation entity's deadline to file the complaint is 35 calendar days after the suspension date [90th calendar day following ERCOT's receipt of the notice].

(C) (No change.)

(D) In its complaint, the generation entity may request interim relief under [pursuant to] §22.125 of this title (relating to Interim Relief), an expedited procedural schedule, and identify any special circumstances pertaining to the generation resource at issue.

(E) As required by [Pursuant to] §22.251(f) of this title, ERCOT shall file a response to the generation entity's complaint and shall include as part of the response all existing, non-privileged documents that support ERCOT's position on the issues identified by the generation entity as required by [pursuant to] §22.251(d)(1)(C) of this title.

(F) (No change.)

(G) Any compensation ordered by the commission shall be effective the first calendar [91st calendar] day after the suspension date [ERCOT's receipt of the notice]. If there is a pre-existing RMR service agreement concerning the generation resource, the compensation ordered by the commission shall not become effective until the termination of the pre-existing agreement, unless the commission finds that the pre-existing RMR service agreement is not in the public interest.

(H) If the generation entity does not file a complaint with the commission, the generation entity shall be deemed to have accepted ERCOT's most recent offer as of the suspension date [115th calendar day after ERCOT's receipt of the notice].

(2) Out-of-merit-order dispatch. The generation entity shall maintain the generation resource so that it is available for out-of-merit-order dispatch instruction by ERCOT until:

(A) (No change.)

(B) any RMR service agreement takes effect;

(C) - (D) (No change.)

(3) RMR exit strategy. Unless otherwise ordered by the commission, the implementation of an RMR exit strategy in conformance with the [pursuant to] ERCOT Protocols is not affected by the filing of a complaint under [pursuant to] this subsection.

(4) Evaluation of RMR and MRA service. ERCOT may decline to enter into an RMR or MRA service agreement based on an evaluation that considers the costs and benefits of the RMR or MRA service, subject to the requirements of paragraph (5) of this subsection. ERCOT may incorporate the economic value of lost load into its evaluation.

(5) Approval of RMR and MRA service agreements. All RMR and MRA service agreements shall be subject to approval by the ERCOT governing board. If ERCOT identifies a reliability need for RMR or MRA service but declines to enter into an RMR or MRA service agreement, ERCOT's decision to decline to enter into an agreement shall be subject to approval by the ERCOT governing board. In its request for governing-board approval, ERCOT shall present information that justifies the RMR or MRA service agreement or its decision not to enter into such an agreement.

(6) Refund of payments for capital expenditures. A resource entity that owns or controls a resource providing RMR or MRA service shall refund payments for capital expenditures made by ERCOT in connection with the RMR or MRA service agreement if the resource participates in the energy or ancillary service markets at any time following the termination of the agreement. ERCOT may require less than the entire original amount of capital expenditures to be refunded to reflect the depreciation of capital over time.

(7) Implementation. ERCOT, through its stakeholder process, shall establish protocols and procedures to implement this subsection.

(f) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 30, 2017.

TRD-201701359

Adriana Gonzales

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: May 14, 2017

For further information, please call: (512) 936-7223


PART 3. TEXAS ALCOHOLIC BEVERAGE COMMISSION

CHAPTER 45. MARKETING PRACTICES

SUBCHAPTER C. STANDARDS OF IDENTITY FOR MALT BEVERAGES

16 TAC §45.78

The Texas Alcoholic Beverage Commission proposes amendments to §45.78, relating to Name and Address.

Section 45.78 addresses the name and address that must be displayed on labels of malt beverages. The current rules derive from and have the same requirements as the rules of the U.S. Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau.

Subsection (a) applies to domestic malt beverages. Generally, the name of the bottler and the place where the beverage was bottled must be shown. Currently, the bottler's principal place of business may be shown in lieu of the actual place of bottling, if bottling actually occurs at that location. The proposed amendment also requires that if the principal place of business will be stated instead of the actual place of bottling, a permit or license issued by the commission must be held at the principal place of business. This is consistent with the requirement that actual bottling of a malt beverage that is sold in Texas must be at a facility that holds a Texas permit or license. The new language is also consistent with the Texas contract brewing requirement that a permit must be held by both parties to the arrangement.

Subsection (b) applies to foreign malt beverages. Currently the rule, consistent with federal policy, requires that the name and address of the importer must be shown on the label and the name and address of the foreign manufacturer may be shown. Texas Alcoholic Beverage Code §101.41(b) requires that every beer label must have the name and address of the manufacturer. The current practice in Texas is that all malt beverage labels include the name and address of the manufacturer. The proposed amendment conforms this subsection to the Code and to current practice by requiring that the label show the name and address of the foreign manufacturer (who must hold a Texas permit or license).

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There should be no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses and small businesses or persons regulated by the commission. There is no anticipated negative impact on local employment.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the rule will conform to the Alcoholic Beverage Code and will treat all malt beverage labels the same in regards to the name and address that is required.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, or by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, April 21, 2017, at 1:30 p.m. in the commission meeting room at the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31, which grants authority to prescribe rules necessary to carry out the provisions of the Code.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §101.41, and Government Code §2001.039.

§45.78.Name and Address.

(a) Domestic malt beverages. On labels of containers of domestic malt beverages [there shall be stated], the name of the bottler and the place where bottled must be stated. The bottler's principal place of business may be shown in lieu of the actual place where bottled if the address shown is a location where bottling actually takes place and a license or permit issued by the commission is held at that location. If such malt beverages are bottled for a person other than the actual bottler there may be stated in addition to the name and address of the bottler (but not in lieu thereof), the name and address of such person immediately preceded by the words "bottled for," "distributed by," or some other similar appropriate phrase.

(b) Foreign [Imported] malt beverages. On labels of containers of foreign [imported] malt beverages the name and principal place of business of the foreign manufacturer, bottler or shipper must [there shall] be stated. In addition there may, but need not, be stated the words "imported by," or a similar appropriate phrase, and immediately thereafter the name of the licensee or permittee who is the importer, together with the principal place of business of such licensee or permittee. [In addition there may, but need not, be stated the name and principal place of business of the foreign manufacturer, bottler, or shipper.]

(c) Post office address. The "place" stated shall be the post office address, except that the street address may be omitted. No additional places or addresses shall be stated for the same person, unless:

(1) such person is actively engaged in the conduct of an additional bona fide and actual malt beverage business at such additional place or address; and

(2) the label also contains, in direct conjunction therewith, appropriate descriptive material indicating the function occurring at such additional place or address in connection with the particular malt beverage.

(d) Notwithstanding the above, the commission may refuse an application for label approval if they believe there is any information, included or excluded, on the label that causes consumers to be confused or misled.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 29, 2017.

TRD-201701348

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: May 14, 2017

For further information, please call: (512) 206-3489


SUBCHAPTER D. ADVERTISING AND PROMOTION--ALL BEVERAGES

16 TAC §45.106

The Texas Alcoholic Beverage Commission proposes amendments to §45.106, relating to Sweepstakes and Games of Chance.

Section 45.106 sets forth the conditions under which upper tier members may offer promotional sweepstakes as allowed by Alcoholic Beverage Code §108.061.

The proposed amendment to subsection (d) clarifies that a holder of a promotional permit may contract with members of the manufacturing tier, and not just holders of manufacturer's permits, to sponsor sweepstakes on their behalf.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There should be no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses and small businesses or persons regulated by the commission. There is no anticipated negative impact on local employment.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the rule will clarify when sweepstakes may be conducted by permittees and licensees.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, or by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, April 21, 2017, at 1:30 p.m. in the commission meeting room at the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31, which grants authority to prescribe rules necessary to carry out the provisions of the Code, and §108.061, which recognizes the authority to adopt rules regarding sweepstakes promotions.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §108.061, and Government Code §2001.039.

§45.106.Sweepstakes and Games of Chance.

(a) This rule relates to §102.07 and §108.061 of the Alcoholic Beverage Code.

(b) For purposes of the above referenced provisions of the Alcoholic Beverage Code, sweepstakes shall include prizes that are awarded to consumers on the basis of random chance or on the basis of some knowledge or skill demonstrated by the sweepstakes participant, as determined by a judge or judges selected by the sponsor for that purpose.

(c) Members of the manufacturer and wholesaler tier (except holders of a distributor's license) may offer a prize to a consumer if the offer is part of a promotional sweepstakes activity.

(d) A promotional permit holder contracted by a member of the manufacturing tier [the holder of a manufacturer's permit] may sponsor a sweepstakes on behalf of the manufacturing tier member [manufacturer].

(e) A person affiliated with the alcoholic beverage industry may not receive a prize from a sweepstakes promotion.

(f) Alcohol may not be awarded as a prize.

(g) A person must be 21 years of age or older to enter a sweepstakes promotion.

(h) An upper tier sponsored sweepstakes entry or contest may not be retailer specific and prizes may not be awarded on a retailer's premise.

(i) Entry codes or entry forms on or in the caps, corks, labels, case cartons, or other materials packaged with, within, or printed on any packages of alcoholic beverages may be used as an entry mechanism provided:

(1) such mechanisms do not grant a consumer's right to claim winnings; and

(2) there is at the point of sale or on product packaging conspicuously displayed alternate means of entry available to the consumers.

(j) All sweepstakes entries are prohibited from requiring a purchase of an alcoholic beverage or the validation of any kind which requires a purchase of any alcoholic beverages.

(k) Except as specifically authorized by this section, and the Alcoholic Beverage Code, §102.07 and §108.061, it shall be unlawful for any person to sell or distribute any alcoholic beverage in a container bearing any label, crown, or covering upon which there is printed or marked any word, letter, figure, symbol or character representative of or suggesting any game of chance, or to use or display any advertising so printed or marked.

(l) Any sweepstakes promotion that includes prizes that are to be awarded on the basis of some knowledge or skill demonstrated by the sweepstakes participant may not be held or conducted on the licensed premises of a retailer or private club. Sweepstakes sponsors may, with the retailer's permission, place sweepstakes entry forms on retail premises.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 29, 2017.

TRD-201701349

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: May 14, 2017

For further information, please call: (512) 206-3489


16 TAC §45.112

The Texas Alcoholic Beverage Commission proposes amendments to §45.112, relating to Use of Brand Names and Insignia by Industry.

Section 45.112 sets forth restrictions, consistent with Alcoholic Beverage Code §102.07 and §108.03, for advertising of alcoholic beverages on caps, regalia or uniforms worn by: employees of upper tier members; and participants in games or sporting events when the participant is sponsored by an upper tier member. It also addresses restrictions on: brand insignia used on business cards and stationery of upper tier members; and advertising of alcoholic beverages on the equipment, service or delivery vehicles of upper tier members. Finally, it addresses restrictions on upper tier members providing to retailers menu cards, folders or sheets advertising malt beverages.

The proposed amendments to subsections (b) and (c) clarify that the restrictions on caps, regalia and uniforms apply to all members of the upper tier.

New subsection (f) is proposed in order to clarify that the Alcoholic Beverage Code does not allow members of the manufacturing or wholesale tiers to fund any advertising on vehicles owned or operated by holders of local distributor's permits because those permits can only be issued to holders of package store permits. Funding advertising on such vehicles would provide a benefit to a retailer that is not allowed under Alcoholic Beverage Code §102.07(a)(2) or §108.05.

Proposed new subsection (h) clarifies that upper tier members may provide to retailers, as advertising specialties under §45.117 of this title, menu cards, folders or sheets that advertise wine or distilled spirits, subject to certain restrictions.

The term "administrator" is changed to "executive director" throughout the section.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There should be no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses and small businesses or persons regulated by the commission. There is no anticipated negative impact on local employment.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the rule will provide clarity on how certain activities may be conducted by permittees and licensees.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, or by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, April 21, 2017, at 1:30 p.m. in the commission meeting room at the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31, which grants authority to prescribe rules necessary to carry out the provisions of the Code, and §108.03, which requires the commission to adopt rules regarding certain promotional activities.

The proposed amendments affect Alcoholic Beverage Code §§5.31, 102.07, 108.03, and 108.05, and Government Code §2001.039.

§45.112.Use of Brand Names and Insignia by Industry.

(a) This section is promulgated pursuant to Alcoholic Beverage Code, §102.07 and §108.03.

(b) Advertising of an alcoholic beverage on caps, regalia or uniforms worn by an employee of a manufacturer, brewer, distributor, wholesaler, non-resident seller, distiller or winery, shall be limited to:

(1) the name and address of the manufacturer, brewer, distributor, wholesaler, non-resident seller, distiller or winery; and

(2) the brand names, logos and slogans that appear on the container labels approved by the executive director [administrator] for such alcoholic beverage.

(c) Advertising of an alcoholic beverage on caps, regalia or uniforms worn by a participant in any game, sport, athletic contest or revue, when the participant is sponsored by a manufacturer, brewer, distributor, wholesaler, non-resident seller, distiller or winery, shall be limited to:

(1) the name and address of the manufacturer, brewer, distributor, wholesaler, non-resident seller, distiller or winery; and

(2) the brand names, logos and slogans that appear on the container labels approved by the executive director [administrator] for such alcoholic beverage.

(d) Business cards and stationery bearing brand insignia may be used by licensees and permittees who are not retail licensees and permittees. Such business cards and stationery may contain:

(1) the name and address of the user;

(2) the name and address of the firm represented;

(3) the brand insignia of any alcoholic beverage which the firm represents or the user is licensed to sell; and

(4) any other logo, slogan or trademark that appears on the approved label for such alcoholic beverage, or which slogan or trademark has otherwise been approved by the executive director [administrator].

(e) Advertising of alcoholic beverages on the equipment, service or delivery vehicles of a member of the manufacturing or wholesale tiers shall be limited to the brand names or logos of the alcoholic beverages sold or represented by the manufacturer, local distributor or wholesaler, firm names and addresses of the manufacturer, local distributor or wholesaler, and such slogans as have been approved by the executive director [administrator].

(f) Members of the manufacturing or wholesale tiers shall not directly or indirectly fund any advertising on the equipment, service or delivery vehicles of the holder of a local distributor's permit.

(g) [(f)] Menu cards, folders or sheets advertising beer, ale or malt liquor may be furnished to a holder of a retail license or permit by an upper-tier member, if such menu cards, folders or sheets, at the time of their delivery to the retailer, do not list any food or drink item offered for sale by the retailer. The holder of the retail license or permit shall bear all costs of listing any such food or drink item on the menu cards, folders or sheets.

(h) Menu cards, folders or sheets advertising wine or distilled spirits may be furnished, as an advertising specialty, to a holder of a retail license or permit by an upper-tier member. Printing costs of such menu cards, folders or sheets may not exceed the advertising specialty limitations set forth in §45.117(c). The holder of the retail license or permit shall bear all costs of listing any food item on the menu cards, folders or sheets unless the food item is mentioned as part of a recommended food and drink pairing.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 29, 2017.

TRD-201701350

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: May 14, 2017

For further information, please call: (512) 206-3489