PART 3. TEXAS ALCOHOLIC BEVERAGE COMMISSION
CHAPTER 31. ADMINISTRATION
The Texas Alcoholic Beverage Commission adopts amended 16 TAC §31.1, Separation of Duties Between Commission and Executive Director, with changes to the proposed text as published in the April 10, 2020, issue of the Texas Register (45 TexReg 2396). The rule will be republished.
In its 2018-2019 review of the Alcoholic Beverage Commission, the Sunset Advisory Commission adopted management action Recommendation 1.7, which directed the agency to update its rule describing the separation of duties between the commission and executive director. Although Recommendation 1.7 was to update the rule by December 31, 2020, to specify the commission's role in protests and enforcement actions, the Sunset Advisory Commission also adopted Recommendation 5.7 to require the commission to take final enforcement and disciplinary action on all contested cases. Recommendation 5.7 is reflected in section 13 of House Bill 1545, 86th Texas Legislature (Regular Session, 2019), which added Alcoholic Beverage Code §5.363, effective September 1, 2019. Alcoholic Beverage Code §5.363 provides that the commission shall make the final decision in any disciplinary action in a contested case that has had an administrative hearing. It further requires the commission to adopt by rule a specific threshold for the types of disciplinary and enforcement actions that are delegated to the administrator.
The amendments to §31.1 specify that the commission retains the duty to render the final decision in a disciplinary action that has had an administrative hearing. The amendments also clarify that the executive director has the authority to render, or delegate to agency staff, only those agency decisions or orders in matters over which the executive director has final decision-making authority.
The rule is further amended to provide as a threshold that the commission delegates to the administrator all disciplinary and enforcement actions with a final penalty of less than ten million dollars, unless the chair or one or more commission members requests a commission vote on an matter recommended by the executive director for commission consideration. Conversely, the commission retains the authority to make final decisions on disciplinary and enforcement actions carrying a penalty of ten million dollars or more, and on any other matter recommended by the executive director upon request of the chair of the commission or at least two commission members. The executive director may recommend any matter to the commission for its consideration and action, regardless of the final penalty amount. This will enable the commission to choose to act upon matters that have policy implications, are novel or may set new settlement precedent, are controversial, or in other circumstances under which the commission wishes to exercise its decision-making authority. Because the commission must make the final decision on disciplinary actions that have had an administrative hearing, these thresholds apply to disciplinary matters that have not had an administrative hearing but have been resolved by settlement agreement instead.
The rule is also amended to provide that the executive director has the power to hire and fire the general counsel, and that the general counsel will report directly to the executive director. This change to internal agency protocol is reflective of the executive director's responsibility for day-to-day management of agency employees and departments. The rule is amended to specify that the general counsel advises the commissioners as their legal counsel, with all duties to the client, legal privileges, and ethical requirements generally applicable to the attorney-client relationship. This rule language is intended, in part, to confirm that the general counsel's legal advice can be direct or indirect and to individual commissioners, to any combination of them, or to the entire commission as a body, subject to the constraints of the Texas Open Meetings Act (Tex. Gov't Code Ch. 551).
No comments were received.
The rule amendments are authorized by Alcoholic Beverage Code §5.12, which requires the Texas Alcoholic Beverage Commission to adopt rules to clearly separate the policy-making authority of the commissioners from the management responsibilities of the executive director; by §5.34(b) of the Code, which requires the commission to develop and implement policies that clearly define the respective responsibilities of the commission and staff; and by Alcoholic Beverage Code §5.363, which requires the commission to make the final decision in any disciplinary action in a contested case that has had an administrative hearing, and requires the commission to adopt by rule a specific threshold for the types of disciplinary and enforcement actions that are delegated to the administrator.
§31.1.Separation of Duties Between Commission and Executive Director.
(a) This rule implements §5.12 of the Alcoholic Beverage Code (Code), which requires the Texas Alcoholic Beverage Commission (commission) to adopt rules to clearly separate the policy-making authority of the commissioners from the management responsibilities of the executive director, and §5.34(b) of the Code, which requires the commission to develop and implement policies that clearly define the respective responsibilities of the commission and staff.
(b) The commission retains the duty and authority to:
(1) Establish agency policies and goals to carry out the duties and authority granted to the commission under the Code;
(2) Provide leadership and direction to ensure agency laws, rules, policies and goals are implemented in a responsible, effective and cost efficient manner;
(3) Ensure accountability and transparency within the agency and to the Governor, the Legislature, the public, and persons regulated;
(4) Appoint and remove the executive director;
(5) Adopt agency rules to implement statutory duties and agency policies;
(6) Employ or appoint and terminate or remove an internal auditor, adopt an audit plan, approve audit findings and ensure agency compliance with audit requirements;
(7) Exercise any authority and carry out any duty of the commission not delegated to the executive director;
(8) Render the final decision in any contested disciplinary action that has had an administrative hearing;
(9) Approve or decline the settlement of any disciplinary action that carries a civil penalty of ten million dollars ($10,000,000) or more; and
(10) Approve or decline the settlement of any disciplinary action that the executive director recommends and that is accepted for consideration by:
(A) the presiding officer of the commission; or
(B) at least two commission members.
(c) The commission delegates the following duties and authority to the executive director (under Alcoholic Beverage Code §5.11(b), also referred to as the administrator in the Alcoholic Beverage Code and the commission's rules):
(1) Plan and implement an effective an efficient operational and organizational structure;
(2) Act as the agency liaison and resource to the executive and legislative branch;
(3) Prepare and submit the agency budget and appropriations requests;
(4) Employ and terminate the general counsel, who shall report directly to the executive director;
(5) Employ or appoint an executive management team with the skills, knowledge and commitment necessary to achieve the goals and implement the policies adopted by the commission;
(6) Assign and delegate to each member of the executive management team and the general counsel the responsibility and authority necessary to effectively administer all agency operations, duties and functions, implement policy, and manage staff and resources, including the authority to further delegate and assign the essential duties and responsibilities of the agency to ensure the highest and best use of agency staff and resources;
(7) Develop, monitor and report measures or expectations for the administrative, regulatory and enforcement functions of the agency to ensure that the agency goals are accomplished and policies followed;
(8) Develop and implement comprehensive and agency-wide internal policies and procedures necessary to carry out each essential function, duty, policy or goal of the agency;
(9) Ensure that all agency staff has access to, knowledge of and responsibility for consistently following policies adopted by the commission and agency-wide internal policies and procedures;
(10) Administer the oath of office or commission to agency staff and agents;
(11) Render, or delegate to agency staff, the agency decision or order in any matter over which the agency has final decision-making authority unless otherwise retained by the commission in subsection (b) of this section; and
(12) Execute contracts, specifically including but not limited to approving and signing contracts for the purchase of goods or services that have a value exceeding $1 million. Notwithstanding paragraph (5) of this subsection, the authority to approve and sign contracts for the purchase of goods or services that have a value exceeding $1 million shall not be delegated by the executive director to staff.
(13) Nothing in this section shall be construed to limit the general counsel's duty to advise the commissioners directly as their legal counsel, with all duties to the client, legal privileges, and ethical requirements generally applicable to the attorney-client relationship.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 20, 2020.
TRD-202001998
Shana Horton
Rules Attorney
Texas Alcoholic Beverage Commission
Effective date: June 9, 2020
Proposal publication date: April 10, 2020
For further information, please call: (512) 206-3451
SUBCHAPTER C. RECORDS AND REPORTS BY LICENSEES AND PERMITTEES
The Texas Alcoholic Beverage Commission adopts amended 16 TAC §41.54, relating to Destructions, with nonsubstantive changes (addition of numbering under subsection l) to the text as published in the April 10, 2020, issue of the Texas Register (45 TexReg 2398). The rule will be republished.
Senate Bill 1210, 86th Texas Legislature (Regular Session, 2019) added Alcoholic Beverage Code §109.09, effective September 1, 2019. Section 109.09 directs the commission to provide rule requirements governing the removal, destruction, and disposal by a retailer of uninsured ale, malt liquor, or beer that is determined to be unfit for public consumption as a result of a natural disaster. The rules must include provisions requiring verification by a retailer from whose inventory a beverage is removed that the beverage has been removed, destroyed, and disposed of in the manner required by the commission.
The amendments to rule §41.54 establish requirements for destruction of damaged, uninsured inventory following an event designated as a disaster by the state, as well as verification by affidavit and related recordkeeping requirements, and make conforming changes.
No comments were received.
The rule amendment is authorized by Alcoholic Beverage Code §109.09, which directs the commission to provide rule requirements governing the removal, destruction, and disposal by a retailer of uninsured ale, malt liquor, or beer that is determined to be unfit for public consumption as a result of a natural disaster, including provisions requiring verification by a retailer from whose inventory a beverage is removed that the beverage has been removed, destroyed, and disposed of in the manner required by the commission.
§41.54.Destructions.
(a) Each permittee subject to the provisions of Alcoholic Beverage Code §§201.03, 201.04, or 201.42, and each licensee subject to the provisions of Alcoholic Beverage Code §203.01, shall be entitled to receive a tax exemption or a tax credit for alcoholic beverages destroyed in accordance with subsections (c) - (g) of this section.
(b) Each permittee or licensee eligible to destroy alcoholic beverages following a natural disaster pursuant to Alcoholic Beverage Code §109.09, shall be entitled to receive a tax exemption or a tax credit for alcoholic beverages destroyed in accordance with subsections (i) - (l) of this section.
(c) To be claimed as a destruction for purposes of receiving a tax exemption or a tax credit, the alcoholic beverages must be destroyed in such a manner that the product is rendered unrecoverable or unfit for human consumption.
(d) Prior to the destruction of alcoholic beverages for which a tax exemption or tax credit is claimed, the permittee or licensee must comply with the requirements of this subsection.
(1) At least three full working days prior to the destruction, the permittee or licensee must notify the nearest authorized representative of the commission of the intent to destroy the alcoholic beverages. This notification must be made in writing on an Application for Destruction of Alcoholic Beverages and contain a complete listing by brand, quantity, container size, and package size of the alcoholic beverages to be destroyed. This requirement for a complete listing may be satisfied by attaching a computerized listing that provides all the required documentation to the Application for Destruction of Alcoholic Beverages.
(2) The permittee or licensee must receive written approval from the nearest authorized representative of the commission to conduct the destruction.
(e) To support a claim for a tax exemption or tax credit for a destruction, the permittee or licensee must retain the documentation referenced in this subsection and make it available to an authorized representative of the commission upon request.
(1) A signed copy of the Application for Destruction of Alcoholic Beverages indicating that it was approved shall be provided to the permittee or licensee by the nearest authorized representative of the commission when the destruction is approved.
(2) If the alcoholic beverages were destroyed at a location which charges a fee for this service, the permittee or licensee shall retain a copy of the receipt for payment of this fee.
(3) An employee of the permittee or licensee who witnessed the destruction of the alcoholic beverages must execute an affidavit of destruction. The affidavit shall include the date of destruction, the destruction location, and a description of how the alcoholic beverages were destroyed. A separate affidavit must be prepared for distilled spirits and wine, for ale and malt liquor and for beer.
(f) The approved Application for Destruction of Alcoholic Beverages (including any attachments) shall be submitted with the monthly excise tax report filed with the commission upon which the exemption for the destruction is claimed. If the permittee or licensee is unable to claim the destruction as an exemption on a tax report, it may submit a letter to the Commission requesting issuance of an authorized tax credit.
(g) A copy of the approved Application for Destruction of Alcoholic Beverages (including any attachments) should be retained in the permittee's or licensee's files and made available upon request for inspection by an authorized representative of the commission.
(h) The commission may require that the alcoholic beverages designated for destruction be physically inspected and inventoried by a representative of the commission prior to the scheduled destruction and/or that the actual destruction be witnessed by an authorized representative of the commission.
(i) All uninsured malt beverages subject to destruction under §109.09 must be destroyed in such a manner that the product is rendered unrecoverable.
(j) An employee of the permittee or licensee who witnessed the destruction of the malt beverages must execute an affidavit of destruction. The affidavit shall include the date of destruction, the destruction location, and a description of how the alcoholic beverages were destroyed.
(k) Not later than 30 days following the destruction of malt beverages under this section, the permittee or licensee shall submit to the commission the affidavit required under subsection (i) with a completed and signed commission Notification of Destruction of Uninsured Product after a Natural Disaster form.
(l) The permittee or licensee must retain the following documentation and make it available to the commission upon request:
(1) A copy of the receipt for the cost of destruction, if the malt beverages were destroyed at a location that charged a fee for the service;
(2) A copy of the completed and signed Notification of Destruction of Uninsured Product after a Natural Disaster; and
(3) A copy of all destruction affidavits executed by the person who witnessed the destruction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 20, 2020.
TRD-202001997
Shana Horton
Rules Attorney
Texas Alcoholic Beverage Commission
Effective date: June 9, 2020
Proposal publication date: April 10, 2020
For further information, please call: (512) 206-3451
SUBCHAPTER A. GENERAL AND ADMINISTRATIVE PROVISIONS
The Texas Alcoholic Beverage Commission adopts amended 16 TAC §50.1 without changes to the proposed text as published in the April 10, 2020, issue of the Texas Register (45 TexReg 2399). The rule will not be republished.
This is a conforming change to ensure consistency in Chapter 50 with the addition of new provisions related to alcohol delivery drivers.
Senate Bill 1450, 86th Texas Legislature (Regular Session, 2019) added Alcoholic Beverage Code Chapter 57, Consumer Delivery Permit, effective September 1, 2019. Section 57.09(a)(1) directs the commission to adopt by rule and administer an alcohol delivery training program for the purpose of training and certifying delivery drivers contracting with or employed by the holder of mixed beverage permit or a consumer delivery permit. At its January 28, 2020, meeting, the commission voted to propose new rule §50.32, providing that the commission will offer delivery driver training, and that persons who successfully complete the training will be awarded a certificate lasting two years, along with other provisions related to the alcohol delivery driver.
Currently, rule §50.1 states that Chapter 50 implements statutes related to training of sellers and servers of alcohol. In light of new rule §50.32, providing that the commission will offer alcohol delivery driver training, the amendment to rule §50.1 states that Chapter 50 also relates to training for alcohol delivery drivers. Concurrent with this rule amendment, the commission is updating the title of Chapter 50 to "Alcoholic Beverage Seller Server and Delivery Driver Training."
No comments were received.
The amendment is authorized by Alcoholic Beverage Code §5.31, which provides the commission with general authority to adopt rules necessary to carry out the provisions of the Code.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 20, 2020.
TRD-202001999
Shana Horton
Rules Attorney
Texas Alcoholic Beverage Commission
Effective date: June 9, 2020
Proposal publication date: April 10, 2020
For further information, please call: (512) 206-3451
CHAPTER 309. RACETRACK LICENSES AND OPERATIONS
SUBCHAPTER C. HORSE RACETRACKS
DIVISION 1. RACETRACKS
The Texas Racing Commission ("the Commission") adopts amendments to 16 TAC §309.206, Rails, without changes to the text as proposed in the February 7, 2020, issue of the Texas Register (45 TexReg 829), which will not be republished. The amendments change the maximum rail height at horse tracks from 42 inches to 50 inches while leaving the minimum height at 38 inches.
REASONED JUSTIFICATION
The reasoned justification for these amendments is increased safety by allowing horse racetracks to install higher rails.
PUBLIC COMMENTS
No comments were submitted in response to the proposed amendments.
STATUTORY AUTHORITY
The amendments are adopted under Tex. Occ. Code §2023.001, which authorizes the Commission to regulate all aspects of horse racing in the state; §2023.002, which authorizes the commission to regulate each person and thing related to the operation of a race meeting; and §2023.004, which authorizes the Commission to adopt rules to administer the Act.
No other statute, code, or article is affected by the amendments.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 21, 2020.
TRD-202002016
Chuck Trout
Executive Director
Texas Racing Commission
Effective date: June 10, 2020
Proposal publication date: February 7, 2020
For further information, please call: (512) 833-6699
SUBCHAPTER A. LICENSING PROVISIONS
DIVISION 1. OCCUPATIONAL LICENSES
The Texas Racing Commission ("the Commission") adopts amendments to 16 TAC §311.1, Occupational Licenses, without changes to the text as proposed in the February 7, 2020, issue of the Texas Register (45 TexReg 830), which will not be republished. This section includes provisions common to all occupational license types. The amendments delete language relating to training facility licenses, which are not occupational licenses. The duration and expiration of a training facility license is properly addressed in 16 TAC §313.501, Training Facility License, which states that a training facility license expires one year after the last day of the month in which it was issued.
REASONED JUSTIFICATION
The reasoned justification for these amendments is clarity and organization of rules relating to training facility licenses.
PUBLIC COMMENTS
No comments were submitted in response to the proposed amendments.
STATUTORY AUTHORITY
The amendments are adopted under Tex. Occ. Code §2023.004, which authorizes the Commission to adopt rules to administer the Act.
No other statute, code, or article is affected by the amendments.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 21, 2020.
TRD-202002017
Chuck Trout
Executive Director
Texas Racing Commission
Effective date: June 10, 2020
Proposal publication date: February 7, 2020
For further information, please call: (512) 833-6699
SUBCHAPTER D. RUNNING OF THE RACE
DIVISION 1. JOCKEYS
The Texas Racing Commission ("the Commission") adopts amendments to 16 TAC §313.409, Jockey Mount Fees, without changes to the text as proposed in the February 7, 2020, issue of the Texas Register (45 TexReg 831). The rule will not be republished. This section establishes default mount fees for jockeys in the absence of a written agreement between the jockey and the trainer or owner. The amendments increase certain mount fees by $5-10, as requested by the Jockeys Guild with the agreement of the Texas Horsemen's Partnership, which represents trainers and owners of racehorses in Texas.
REASONED JUSTIFICATION
The reasoned justification for these amendments is an increase in default mount fees for Texas jockeys, for the first time since 2012, from levels that currently lag behind most other racing jurisdictions.
PUBLIC COMMENTS
No comments were submitted in response to the proposed amendments.
STATUTORY AUTHORITY
The amendments are adopted under Tex. Occ. Code § 2023.001, which authorizes the Commission to regulate all aspects of horse racing in Texas.
No other statute, code, or article is affected by the amendments.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 21, 2020.
TRD-202002014
Chuck Trout
Executive Director
Texas Racing Commission
Effective date: June 10, 2020
Proposal publication date: February 7, 2020
For further information, please call: (512) 833-6699