2021 Texas Legislative Session Review

Howdy, campers! The 87th Legislature has wrapped (well, regular session, anyway). While this session did not include the same Texas-sized changes to our beloved Alcoholic Beverage Code as last, there are still many bills worth noting and many of the regulatory changes enacted as a result of Sunset last session become effective September 1st.

Let’s dig in. Please procure an alcoholic beverage of your choice and join us in some collective responsible consumption while we review* the highlights…

HB 1024 (effective now) – Cocktails To-Go! (Wait, Wasn’t This Already A Thing?!)

It was. The Code was revised effective September 2019 to allow Mixed Beverage permits (MB) to deliver alcoholic beverages with restrictions. Restrictions included requirement that MBs hold a subordinate Food and Beverage Certificate (FB), no prepared cocktails, and no curbside delivery or pickup. Then 2020 hit, which launched a series of expanded to-go privileges via emergency executive authority that seemed to shift every Friday afternoon. FB qualification requirements were eased, then qualified MBs (sans FB) and MB-FBs could deliver and allow pickup and curbside, then prepared cocktails (not just sealed stocking stuffer spirit bottles) were allowed.

HB 1024 takes the 2019 law, adds some good parts from the 2020 expansions, and mixes it all up as a tasty 2021 cocktail to-go for the drinking masses. Check out pickup and delivery details and requirements in this handy dandy industry notice released by TABC. Of note, private club permittees can get in on the action now.  Private clubs and MBs must hold an FB for to-go privileges. Orders of alcoholic beverages to-go must include food prepared on the premises. And, prepared cocktails in tamper proof containers are allowed.

Now, how to keep a frozen marg from becoming a marg on the rocks on the drive home in this heat?

HB 1927 (effective 9/1/21) – Badges? We Ain’t Got No Badges. We Don’t Need No Badges.

Permitless carry is NOT allowed on the premises of a business that has a TABC Wine and Beer Retailer’s Permit (BG), Mixed Beverage Permit (MB), Private Club Registration Permit (N), Beer Retailer Dealer’s On-Premise License (BE), or Brewpub License (BP, not sure why this subordinate license was included since it can only be held by an MB and BG, but whatev) IF the business derives 51 percent or more of its income from the sale or service of alcoholic beverages for on-premises consumption, which, for our home contestants, means the business would need to post a red weapons sign, unless it holds a subordinate Food and Beverage Certificate, in which case it would post a blue sign even if it derives 51%+ income from alcohol.

We’re receiving a lot of inquiries on this sh!@ show bill. Will I need to post (yet) another sign? What does this mean with regards to current required red/blue weapons signs? Or Penal Code Sec. 30.06 or 30.07 trespass signs?

We’re staying tuned for guidance from TABC or the Governor’s office and will advise on receipt.

HB 1518 (effective 9/1/21) – Expanded Hours of Authorized Sales

What’s Next, Package Stores Open On Sundays?!?

Wine Only Package Store (Q), Wine and Beer Retailer’s (BG), Wine and Beer Retailer’s Off-Premise (BQ), Beer Retailer Dealer’s On-Premise License (BE), and Beer Retailer Dealer’s Off-Premise (BF) permittees and licenses may sell malt beverages and wine for off-premises consumption starting at 10am on Sunday starting on 9/1. The current Sunday commencement time for these permits and licenses is noon, which many a Texan has sadly remembered or realized while standing in the beer aisle in a failed attempt to pick up beer for an early Sunday sports ball watch party.

Malt beverages and wine sold for on-premises consumption starting at 10am on Sunday must be with food, just like MBs.

What’s Next, No Last Call?!?

A “hotel bar” may sell or offer for sale alcoholic beverages at any time to a registered guest of the hotel. 2:00 a.m. cutoff be damned. “Hotel bar” means an establishment that is located in a hotel and holds a permit or license providing for the on-premises consumption of alcoholic beverages. For all you innovative restaurant/bar folks out there contemplating ways of establishing a hotel bar on your premises to enable 24/7 drinkin’, note that “hotel” is defined in Code Sec. 1.04(8) and includes requirements of at least 10 adequately furnished completely separate rooms (or at least 5 rooms if a qualified historic structure) and a regular dining room frequented daily by customers.

SB 911 (effective 1/1/2022) – When Is A Restaurant Not A Restaurant? When It’s A Bar With A Kitchen.

This bill sets out to help the restaurant industry by defining “restaurant” in the Code and enabling TABC to issue a subordinate food and beverage certificate (FB) to an on-premises consumption permittee that qualifies as a restaurant OR whose alcoholic beverage sales do not exceed 60% total receipts at its location, which is part of the current qualification standard for an FB.

Restaurant is defined as a business that operates its own permanent food service facility with commercial cooking equipment on its premises and prepares and offers to sell multiple entrees for consumption on or off the premises.

Why all the hubbub, bub? In 2020, restaurants were allowed to open with restrictions under Governor’s emergency orders. Problem was, the Gov’s office included a 51% cap on alcohol sales to qualify as a restaurant. This standard did not mesh with the 60% alcohol cap to qualify for an FB and holding an FB was effectively what qualified many a business as a restaurant. So, many restaurants that held FBs but sold more than 51% alcohol were left out to dry, which, like many things in 2020, was unfair, unfortunate, and, well, sucked.

So, you get what we have here with SB 911.

Here’s the deal though…say we operate a bar and grill, Cool Hands, that typically sells 70% alcoholic beverages and 30% food (all egg dishes). Under the new restaurant definition, Cool Hands would qualify as a restaurant since it has an on-site kitchen and offers multiple entrees (egg salad, pickled egg salad, curry egg salad). As such, Cool Hands would qualify for an FB even though it doesn’t qualify for an FB under current regs because it sells more than 60% alcohol. Does this mean Cool Hands can obtain an MB-FB in areas of Texas where maintaining an FB is required to qualify for an MB? Does this override local zoning regulations? We expect rules further clarifying restaurant qualification from the Commission.

What We’ve Got Here Is Failure To Communicate.

SB 911 also addresses regulations and relations between restaurants and third-party food delivery companies by prohibiting the latter from deceptive advertising, shifting liability to restaurants, or operating without registration with the Texas Secretary. It also defines third-party food delivery services, requires a written agreement between the parties, and creates a cause of action against services for violations.

HB2698 (effective 9/1/21) – Peek A-Booze!

Did you know it was against the law to install blinds or barriers in the door or paint the windows of a retail premises at or above a point 54” above the ground? Well, if you didn’t, no worries. It doesn’t matter anymore. The loosely enforced blinds and barriers restriction has been repealed (effective 9/1).

SB 1226 (effective 9/1/21) – I Learned It By Watching You!

Authorizes brewpubs to conduct sampling and tastings at retailer’s premises.

HB 1755 (effective 9/1/21) – Give Me A Bottle of Anything…And A Glazed Doughnut…TO GO!

The current wine doggie bag statute authorizes a consumer to take a partially consumed container of wine that was ordered with a meal off an MB’s premises. Effective 9/1, the container can be opened or unopened.

HB 1957 (effective 9/1/21) – Texas Wine Labeling. What’s In A Name?

A wine labeled with a Texas AVA, county, or vineyard must be made entirely from Texas fruit. Applies to wine made from fruit harvested after Jan. 1, 2022.

MISC. – In the interest of time and subjective selection, we invite you to check out the remaining bills affecting the Alcoholic Beverage Code at your leisure, which include additional exceptions to changing the local option of specific areas sans election and additional enforcement tools available to the Commission in its efforts to fight human trafficking.

TABC 2021 CH-CH-CH-CH-CHANGES – New fees! New application forms and processing! Consolidated permits and licenses! Many of the changes made by the 86th Legislature in 2019 go into effect September 1st. Check out an overview here. Sign up for Industry Briefs and Industry Notifications from TABC here. And, of course, buzz us with questions or concerns in the meanwhile.

*Disclaimer* This MFH 87th Legislature bill review is a 10,000’ overview of some of the new alcoholic beverage laws that made it through the Lege and is intended to be received as light educational and, dare we say (we do dare!), entertainment purposes. It’s certainly not intended as an end all be all thorough legal review of these new laws, meaning future attempts at “well, you said this [favorable interpretation that may not be correct] in your email…” or, worse, to the Commission, “MFH said I could do [this thing that may be illegal and is not what we said] in an email…” will be met with howls of derisive laughter and not so mild cursing in your general direction. Any questions, concerns, comments – give us a shout or email.

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