TITLE 16. ECONOMIC REGULATION

PART 3. TEXAS ALCOHOLIC BEVERAGE COMMISSION

CHAPTER 35. ENFORCEMENT

SUBCHAPTER A. TRANSPORTATION OF LIQUOR

16 TAC §35.1

The Texas Alcoholic Beverage Commission proposes amendments to §35.1, Transportation of Alcoholic Beverages by Package Stores and Wine Only Package Stores.

Rule §35.1 addresses transportation of alcoholic beverages shipped under the authority of Alcoholic Beverage Code §22.08 (transfer of alcoholic beverages by the owner of more than one package store between the owner's stores in the same county), §23.04 (transfer of alcoholic beverages by holders of local distributor's permits to places in the same city or county where the sale of alcoholic beverages is legal), or §24.04 (transfer of alcoholic beverages by the holder of a wine only package store permit from a designated place of storage to the permit holder's other stores in the same county).

The proposed amendments to rule §35.1 would clarify that the section only applies to transportation to permitted or licensed locations. The proposed amendments also require that the invoice must indicate the price of items that are sold, and must be signed by the recipient to acknowledge receipt of the alcoholic beverages.

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 the proposed 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 is no fiscal impact on state government.

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

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission.

The proposed amendments require neither an increase nor a decrease in fees paid to the agency.

The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

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 applicability of the rule and its requirements will be clarified.

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, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written 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 Thursday, January 4, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

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, §22.08, which authorizes the commission to prescribe rules on this subject related to package stores, and §24.04, which authorizes the commission to prescribe rules on this subject related to wine only package stores.

The proposed amendments affect Alcoholic Beverage Code §§5.31, 22.08, 23.04, and 24.04, and Government Code §2001.039.

§35.1.Transportation of Alcoholic Beverages by Package Stores and Wine Only Package Stores.

(a) This rule relates to transportation of alcoholic beverages shipped under the authority of §§22.08, 23.04 or 24.04 of the Alcoholic Beverage Code.

(b) Transportation of shipments [Shipments ] of alcoholic beverages made under the authority of §§22.08, 23.04 or 24.04 of the Alcoholic Beverage Code may only be made by holders of a carrier's permit or a local cartage permit.

(c) Package store and wine only package store permittees transporting [making] shipments of alcoholic beverages governed by this rule to a permitted location shall prepare an invoice in duplicate. The invoice shall show:

(1) the date of the shipment;

(2) the quantity, container size and brands of alcoholic beverages shipped, and if sold, a price extension for each line item listed on the invoice; and

(3) the store name and address of the origination and destination point of the shipment.

(d) The purchaser must sign the invoice acknowledging the receipt of the alcoholic beverages.

(e) [(d)] The original of the invoice mandated by this rule shall be maintained at the originating store for four years after the date of shipment. The copy of the invoice shall accompany the shipment and shall be maintained at the receiving store for four years after the date of shipment.

(f) [(e)] Shipments of alcoholic beverages governed by this rule may not be transported outside the county in which the shipment originated, and must be transported by the most direct practical route from point of origination to point of destination. Shipments made by local distributor permittees under the authority of §23.04 of the Alcoholic Beverage Code are subject to the restrictions expressed in §102.56(d) of the code.

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 November 28, 2017.

TRD-201704846

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: January 14, 2018

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


CHAPTER 45. MARKETING PRACTICES

SUBCHAPTER D. ADVERTISING AND PROMOTION--ALL BEVERAGES

16 TAC §45.106

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

House Bill No. 3003 85th Regular Session of the Texas Legislature amended Alcoholic Beverage Code §108.061 to include brewers, along with manufacturers and nonresident manufacturers, as those members of the manufacturing tier who may offer prizes to consumers as part of a promotional sweepstakes. It also clarified that the prize to be awarded in a sweepstakes under Alcoholic Beverage Code §108.061 may include food, beverages, entertainment, recreation, gifts, or attendance at a private event at a permitted or licensed premises. Pursuant to the House Bill No. 3003 amendments, if a private event awarded under Alcoholic Beverage Code §108.061 is held at a retailer's premises, the licensee or permittee awarding the prize must pay the retailer fair market value for the use of the premises and the retailer must retain control of the sale and service of alcoholic beverages at the private event. The amendments also allow a sweepstakes under Alcoholic Beverage Code §108.061 to be conducted at a permitted or licensed premises, and the prizes to be awarded at such a premises where the sweepstakes was conducted.

The proposed amendments to §45.106 would conform the rule to Alcoholic Beverage Code §108.061 as amended. No changes are proposed to the rule other than those necessary to accomplish this. The proposed changes only affect holders of manufacturer's licenses, nonresident manufacturer's licenses, and brewer's permits.

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 the proposed 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 is no fiscal impact on state government.

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

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission.

The proposed amendments require neither an increase nor a decrease in fees paid to the agency.

The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation in order to be consistent with the requirements of House Bill No. 3003. The proposed amendments increase the number of individuals subject to portions of the rule's applicability, in response to and to be consistent with House Bill No. 3003.

The proposed amendments have no direct effect on the state's economy, either positively or adversely.

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 applicability of the rule will conform to the Alcoholic Beverage Code.

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, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written 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 Thursday, January 4, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

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 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. If a prize is a private event or other prize awarded in accordance with Alcoholic Beverage Code §108.061(d) then subsections (k) - (q) of this section apply.

(c) Except as otherwise provided in this subsection, members [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. Holders of a distributor's license may not offer a prize to a consumer if the offer is part of a promotional sweepstakes activity. Pursuant to Alcoholic Beverage Code §108.061(d), only manufacturers, nonresident manufacturers, or brewers may offer a prize, including food, beverages, entertainment, recreation, gifts or attendance at a private event at a permitted or licensed retailer's premises.

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

(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.]

(f) [(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.]

(g) [(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.

(h) [(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.

(i) [(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.

(j) [(l)] Except as authorized by Alcoholic Beverage Code §108.061(d)-(f), any [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.

(k) Except as authorized by Alcoholic Beverage Code §108.061(d)-(f), alcohol may not be awarded as a prize.

(l) Except as authorized by Alcoholic Beverage Code §108.061(d)-(f), a sweepstakes sponsored by a member of an upper tier may not be retailer specific and prizes may not be awarded at a retailer's premises.

(m) A manufacturer, nonresident manufacturer, or brewer may conduct a private event at a retailer's premises or award other prizes at a retailer's premises only in accordance with the requirements of this section and Alcoholic Beverage Code §108.061(d)-(f).

(n) A prize awarded pursuant to Alcoholic Beverage Code §108.061(d)-(f) may include food, beverages, entertainment, recreation, gifts, or attendance at a private event for the winners of the sweepstakes and other guests of the sponsor of the event.

(o) The name or location of the premises where a private event described by subsection (n) of this section is held or prizes are awarded may not be mentioned in any advertising related to the sweepstakes.

(p) A sweepstakes authorized by Alcoholic Beverage Code §108.061(d)-(f) may be conducted at a permitted or licensed premises and the prize may be awarded to the winners at the permitted or licensed premises at which the sweepstakes is conducted.

(q) If a licensee or permittee conducts a private event authorized by Alcoholic Beverage Code §108.061(d)-(f) at a retailer's premises:

(1) the licensee or permittee shall pay the retailer the fair market value for the use of the premises;

(2) the retailer must retain control of the sale and service of alcoholic beverages at the private event;

(3) product served at the private event must be served by the retailer; and

(4) the upper-tier sponsor authorized in subsection (m) of this section may purchase product for attendees from the retailer.

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 November 28, 2017.

TRD-201704848

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: January 14, 2018

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