TITLE 16. ECONOMIC REGULATION

PART 3. TEXAS ALCOHOLIC BEVERAGE COMMISSION

CHAPTER 45. MARKETING PRACTICES

SUBCHAPTER C. STANDARDS OF IDENTITY FOR MALT BEVERAGES

16 TAC §45.85

The Texas Alcoholic Beverage Commission proposes amendments to §45.85, relating to Approval of Labels.

Section 45.85 addresses applications for approval of malt beverage labels.

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

The commission proposes to amend subsection (b) to include holders of brewpub licenses among those permit and license holders who can apply for approval of malt beverage labels. This change reflects a recent amendment to Alcoholic Beverage Code §101.67(b).

The commission proposes to delete current subsection (e), which establishes a $25 application fee for each size requested on the application, and to amend subsection (c) to incorporate those provisions relating to the application fee.

The commission proposes to amend subsection (d) to specify that a sample of the beverage or a product analysis conducted by an independent laboratory must be submitted with an application for a label revision if the analysis on file with the commission is older than five years. This reflects current practice, which is that a sample or independent analysis is not required if one has been submitted for the same product within the past five years.

The commission proposes to add a new subsection (e) addressing permissible label revisions.

Creation of this new category of label approval applications will permit the agency to implement new internal procedures for these types of revisions. By removing them from the queue of general label approval applications, they may subject to faster review. In turn, this should allow the reduced queue of general label approval applications to also be processed more quickly.

Paragraphs (1) - (9) of proposed new subsection (e) describe the types of label approvals that are classified as permissible. By indicating on the application form that the application is for one of these types of permissible revisions (or by using a separate application form), the application will be identified as eligible for the expedited review process.

The commission proposes to amend subsection (f) to state additional statutory references.

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 it will allow for faster processing of malt beverage label applications.

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 Wednesday, December 14, 2016, 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, 5.38, 101.41 and 101.67, and Government Code §2001.039.

§45.85.Approval of Labels.

(a) No beer, ale or malt liquor may be shipped into the state, imported into the state, manufactured and offered for sale in the state, or distributed, sold or stored in the state until a sample of the beverage has been analyzed and the label approved by the commission.

(b) An applicant for label approval under this section must hold a brewer's or non-resident brewer's permit, [or] a manufacturer's or non-resident manufacturer's license, or a brewpub license issued by the commission.

(c) An applicant must submit to the commission an application on the form prescribed by the commission and a $25 [the] application fee for each size requested on the application. The application must be accompanied by:

(1) a legible copy of the certificate of label approval issued by the United States Department of the Treasury; and

(2) an actual label that is affixed to the product as shipped, sold, or marketed, or an exact color copy of the label.

(d) A sample of the beverage must be submitted to the commission for analysis to verify alcohol content. A product analysis provided by an independent laboratory may be submitted in lieu of the actual sample. If an application is for a label revision, a sample of the beverage must be submitted to the commission for analysis to verify alcohol content if the analysis on file is older than 5 years. A product analysis provided by an independent laboratory may be submitted in lieu of the actual sample if the analysis on file is older than 5 years.

(e) Permissible Label Revisions. An application for label approval is a permissible revision or amendment if it includes only the changes described in paragraphs (1) - (9). All mandatory label information must be legible and appear on a contrasting background. Any changes made under this section must not violate this subchapter or the Alcoholic Beverage Code, and must conform to the general requirements specified by this subchapter. Any changes in spelling must not change the meaning of the previously approved label.

(1) Add or delete any non-mandatory label information, including text, illustrations, graphics, and ingredients.

(2) Reposition any label information, including text, illustrations, and graphics.

(3) Change the color of the background or text, the shape, or the proportionate size of labels.

(4) Change the type size or font or make appropriate changes to the spelling (including punctuation marks and abbreviations) of words.

(5) Change to the type of container or net contents statement.

(6) Add, delete, or change optional information referencing awards, medals or a rating or recognition provided by an organization as long as the rating or recognition reflects simply the opinion of the organization and does not make a specific substantive claim about the product or its competitors.

(7) Add, delete, or change holiday or seasonal-themed graphics, artwork, or salutations.

(8) Add, delete, or change promotional sponsorship-themed graphics, logos, artwork, dates, event locations or other sponsorship-related information.

(9) Add, delete or change references to a year or date.

[(e) The application fee for label approval of beer, ale, or malt liquor is $25 for each size requested on the application.]

(f) This section implements Alcoholic Beverage Code §101.41 and §101.67, pursuant to the requirements of Alcoholic Beverage Code §5.38 and the authority of Alcoholic Beverage Code §5.31. [§101.67(e).]

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 18, 2016.

TRD-201605987

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: January 1, 2017

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