SB2225 - Relating to the manufacture, distribution, sale, and taxation of ready-to-drink spirit beverages.

      By: Hancock S.B. No. 2225     A BILL TO BE ENTITLED   AN ACT   relating to the manufacture, distribution, sale, and taxation of   ready-to-drink spirit beverages.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 1.04, Alcoholic Beverage Code, is   amended by amending Subdivision (3) and adding Subdivision (32) to   read as follows:                (3)  "Distilled spirits" means alcohol, spirits of   wine, whiskey, rum, brandy, gin, or any liquor produced in whole or   in part by the process of distillation, including all dilutions or   mixtures of them[ , and includes spirit coolers that may have an   alcoholic content as low as four percent alcohol by volume and that   contain plain, sparkling, or carbonated water and may also contain   one or more natural or artificial blending or flavoring   ingredients ].                 (32)     "Ready-to-drink spirit beverage" means a   beverage that:                       (A)  consists of:                             (i)  a distilled spirit; and                             (ii)     a nonalcoholic beverage and other   blending or flavoring component or ingredient;                       (B)     has an alcoholic content of not more than 10   percent by volume; and                       (C)     is contained in a sealed container that does   not exceed 3.75 liters.          SECTION 2.  Subchapter B, Chapter 5, Alcoholic Beverage   Code, is amended by adding Section 5.62 to read as follows:           Sec.   5.62.     RULES REGARDING READY-TO-DRINK SPIRIT BEVERAGE.   The commission shall adopt rules related to the manufacture,   distribution, sale, and regulation of ready-to-drink spirit   beverages, including rules:                 (1)     authorizing the holder of a distiller's and   rectifier's permit to manufacture, store, dispense, sample,   transport, and sell those beverages as provided by this code;                 (2)     authorizing the holder of a nonresident seller's   permit to manufacture and sell those beverages to general and   branch distributors as provided by this code;                 (3)     authorizing persons authorized to sell malt   beverages at retail to purchase ready-to-drink spirit beverages   from general and branch distributors and sell those beverages to   consumers in this state;                 (4)     clarifying the applicability of Section 102.31 to   the sales of those beverages;                 (5)     clarifying the applicability of Section 101.671 to   those beverages; and                 (6)     clarifying that, for state tax purposes,   ready-to-drink spirit beverages are classified as spirit   beverages.          SECTION 3.  Section 14.01, Alcoholic Beverage Code, is   amended to read as follows:          Sec. 14.01.  AUTHORIZED ACTIVITIES. (a) The holder of a   distiller's and rectifier's permit may:                (1)  manufacture distilled spirits;                (2)  rectify, purify, and refine distilled spirits and   wines;                (3)  mix wines, distilled spirits, or other liquors;                (4)  bottle, label, and package the permit holder's   finished products;                (5)  sell the finished products in this state to   holders of wholesaler's permits and to qualified persons outside   the state;                (6)  purchase distilled spirits, to be used only for   manufacturing or rectification purposes, from holders of   nonresident seller's permits or distiller's and rectifier's   permits;                (7)  dispense free distilled spirits for consumption on   the permitted premises under Section 14.04 or at a temporary event   under Section 14.09;                (8)  sell bulk alcohol produced by the permit holder   for purposes described by Section 38.01; [ and ]                (9)  sell distilled spirits to ultimate consumers under   Section 14.04 or 14.05 ;                 (10)  manufacture ready-to-drink spirit beverages;                 (11)     sell the finished ready-to-drink spirit   beverages to holders of general and branch distributor's licenses   and qualified persons outside this state;                 (12)     sell ready-to-drink spirit beverages to ultimate   consumers in the same manner as distilled spirits under Section   14.04 or 14.05; and                 (13)     dispense free ready-to-drink spirit beverages   for consumption on the permitted premises in the same manner as   distilled spirits under Section 14.04 or at a temporary event under   Section 14.09 .          (b)  The privileges granted to a distiller and rectifier are   confined strictly to distilled spirits , ready-to-drink spirit   beverages, and wines manufactured and rectified under the   distiller's and rectifier's [ his ] permit.          SECTION 4.  Section 14.07, Alcoholic Beverage Code, is   amended by adding Subsection (h) to read as follows:           (h)     The holder of a distiller's and rectifier's permit or   the agent or employee of the holder of a distiller's and rectifier's   permit may conduct a sampling of a ready-to-drink spirit beverage   in the same manner as provided under this section for the sampling   of distilled spirits.          SECTION 5.  Section 14.071, Alcoholic Beverage Code, is   amended by adding Subsection (e) to read as follows:           (e)     The holder of a distiller's and rectifier's permit may   transport ready-to-drink spirit beverages in the same manner as   provided under this section for the transportation of liquor.          SECTION 6.  Section 24.01(a), Alcoholic Beverage Code, is   amended to read as follows:          (a)  The holder of a wine only package store permit may:                (1)  purchase wine and vinous liquors in this state   from the holder of a winery, wholesaler's, or class B wholesaler's   permit;                (2)  purchase malt beverages and ready-to-drink spirit   beverages from the holder of a general or branch distributor's   license; and                (3)  sell those beverages to consumers at retail on or   from the licensed premises in unbroken original containers of not   less than six ounces for off-premises consumption only and not for   the purpose of resale.          SECTION 7.  Section 25.01, Alcoholic Beverage Code, is   amended to read as follows:          Sec. 25.01.  AUTHORIZED ACTIVITIES. The holder of a wine and   malt beverage retailer's permit may sell:                (1)  for consumption on or off the premises where sold,   but not for resale, wine and malt beverages containing alcohol in   excess of one-half of one percent by volume and not more than 17   percent by volume; [ and ]                (2)  for consumption on the premises, the following   beverages containing alcohol in excess of one-half of one percent   by volume and not more than 24 percent by volume:                      (A)  traditional port or sherry;                      (B)  dessert-flavored wine; or                      (C)  rice wine ; and                 (3)     for consumption on or off the premises where sold,   but not for resale, ready-to-drink spirit beverages .          SECTION 8.  Section 26.01(a), Alcoholic Beverage Code, is   amended to read as follows:          (a)  The holder of a wine and malt beverage retailer's   off-premise permit may sell for off-premises consumption only, in   unbroken original containers, but not for resale :                 (1)   [ , ] wine and malt beverages containing alcohol in   excess of one-half of one percent by volume but not more than 17   percent by volume ; and                 (2)  ready-to-drink spirit beverages .          SECTION 9.  Sections 37.01(a) and (d), Alcoholic Beverage   Code, are amended to read as follows:          (a)  The holder of a nonresident seller's permit may:                (1)  solicit and take orders for liquor from permittees   authorized to import liquor into this state; [ and ]                (2)  ship liquor into this state, or cause it to be   shipped into this state, in consummation of sales made to   permittees authorized to import liquor into the state ; and                 (3)     ship ready-to-drink spirit beverages into this   state, or cause them to be shipped into this state, in consummation   of sales made to holders of a general or branch distributor's permit   authorized to import those beverages into this state .          (d)  The holder of a nonresident seller's permit or an agent   or employee of the permit holder may provide samples or tastings of   the kinds of distilled spirits and ready-to-drink spirit beverages   the permit holder is authorized to produce in the manner authorized   by Section 14.07 for the holder of a distiller's and rectifier's   permit or the agent or employee of the holder of a distiller's and   rectifier's permit. Distilled spirits and ready-to-drink spirit   beverages may legally be transported by the holder of a nonresident   seller's permit or the permit holder's agent or employee to a   retailer's premises for the purpose of providing a sample or a   tasting under this subsection. The cost of the distilled spirits   and ready-to-drink spirit beverages provided for a sampling or   tasting under this subsection is the responsibility of the holder   of the nonresident seller's permit providing the sampling or   tasting.          SECTION 10.  Section 37.011(a), Alcoholic Beverage Code, is   amended to read as follows:          (a)  The holder of a nonresident seller's permit who owns a   distillery outside of the state or whose affiliate owns a   distillery outside of the state and holds a distiller's and   rectifier's permit may enter into an agreement with the holder of a   distiller's and rectifier's permit that allows the nonresident   seller to [Text truncated for display. 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