89th Texas Legislative Review and its impact on the Beer, Wine & Spirits industry in Texas.
Howdy, humans and AI masters!
The regular session of the 89th Legislature has wrapped. Texas is abuzz with rumors on whether Governor Abbott will veto lawmakers approved ban of THC products championed by Lieutenant Governor “Won’t Someone Please Think of the Children?!” Patrick.
We’re reminded of these prophetic words from Chris Rock’s seminal 1996 stand-up special, Bring the Pain – “Legalize, man…Why? People want to get high. You could get rid of all illegal drugs in the world…People will just think of news ways to get high!”
Will he, or won’t he veto? It’s Texas (not Florida, but, still), so who knows.
If only there were a way to regulate these products, like, ya know, alcoholic beverages, which brings us back to the matter at hand - our review of the 89th Legislative session applicable to alcoholic beverage regulation.
On that note, we encourage you to grab an alcoholic beverage of your choice, pour one out for the homies, and join us on our review.*
How Old Are You, McLovin? Old Enough.
SB 650 (effective 9/1/27, effectively)
Effective September 1, 2027, TABC permittees and licensees must scan an ID for the purpose of verifying a purchaser’s age for any retail sale of alcoholic beverages for off-premises consumption. The following types of permits, licenses, facilities, and sales are exempt from this new law: distiller’s and rectifier’s permit, winery permit, brewer’s license, brewpub license, mixed beverage permit, food and beverage certificate operating a restaurant on the premises, a restaurant, a public entertainment facility property during a sporting event, concert, festival, or other similar temporary event at the facility, the holder of or individual contracted with or employed by the holder of a wine-only package store permit, local cartage permit, or consumer delivery permit during delivery of alcoholic beverages to an ultimate consumer, and retail sales of manufacturer-sealed alcoholic beverages picked at an outdoor area of a retailer’s premises for purposes of off-premises consumption. By our count, the exemption list effectively leaves wine and malt beverage off-premises permits, malt beverage retail dealer’s off-premises licenses, wine-only package store permits, and package store permits—the off-premises sellers—subject to this law effective in 2027.
Brewery Bros, Unite.
HB 4463 (effective 9/1/25)
Authorizes brewer’s licensees to contract with the holder of a nonresident brewer’s licensee for contract brewing and AP arrangements so long as the nonresident brewer also holds a brewer’s license in Texas at the location where brewing services are conducted. In a big change for multi-location nonresident brewer’s licensees, the bill allows them to ship into Texas from any location without needing to hold a nonresident brewer’s license at every shipping point. Finally, the bill imposes a primary source requirement on nonresident brewer’s licensees. This sounds like it opens the door to mere importers holding nonresident brewer’s licenses, saving the actual foreign manufacturers from the hassle of holding a license in Texas, BUT the lege did not repeal the law requiring brewers and nonresident brewers to attest they “will be engaged in the business of brewing and packaging malt beverages … within three years of the issuance of the original license.” Stay tuned.
I Read The Payment Terms & Conditions. My Eyes Are Now Legally Blind.
SB 1355 (effective 9/1/25)
By way of background on existing credit law in Texas, wholesalers may extend credit to retailers on purchases of distilled spirits and wine provided retailers pay wholesalers by a certain date each month depending on the purchase date. Wholesalers must report delinquent retailers to TABC, and delinquent retailers go on TABC’s delinquent list, which means no sales or deliveries to said retailer until delinquencies are resolved. This bill plays a reverse Uno card on wholesalers by applying certain aspects of credit law to wholesalers' purchases from distillers, including a requirement for distillers to report delinquent wholesalers to TABC and authorization for TABC to take disciplinary action against delinquent wholesalers (rules to be adopted). BUT, it’s not exactly like the credit law applicable to retailers. The bill provides it’s a violation for wholesalers to fail to pay distillers “in accordance with the agreed terms of a contract or written agreement” between the parties and after receiving demand for payment from distillers. *record scratch* What’s that now? Seems to us this puts TABC in a position of playing judge and jury on contract terms. Distiller: “It says this.” Wholesaler: “No, it doesn’t mean that.” Distiller: “We sent you a demand letter.” Wholesaler: “Not one that was in accordance with our agreement.” Maybe the to-be adopted rules will help flesh out how this will work in practice.
10-Year-Old Wine?! Wine Doesn’t Last 10 hours At Our House.
SB 1184 (effective 9/1/25)
A wine collection seller may sell authorized wine to a permitted restaurant provided the wine is in its original manufacturer-sealed container and not less than 10 (was 20) years old prior to sale. Cool.
A Nonresident Seller’s Permittee Cannot Hold a Winery Permit Unless…
SB 1378 (effective 9/1/25)
This bill allows the holder of a nonresident’s permit to have an interest in a Texas winery permit but only a winery permit issued on or before May 1, 2020, at a winery in a town with a population of 130,000 to 150,000 located in at least 3 counties, one of which has a population of over 2m and less than 3m. Whew! The holder of said nonresident seller’s permit who holds a winery permit or whose affiliate holds a winery permit cannot sell wine to the holder of the winery permit.
We Have Clearance, Clarence. (But Surely Don’t Cross County Lines!)
HB 4285 (effective 9/1/25)
The holder of a passenger transportation permit for an airline can now store alcoholic beverages at any airport regularly served by the permittee (previously approved) OR at a location within 5 miles of any airport regularly served by the permittee in the same county as the airport (new). Roger, Roger.
Ricky Bobby Approves
HB 1577 (effective 9/1/25)
This bill allows a mixed beverage permittee at Texas Motor Speedway to temporarily sell distilled spirits (new) in addition to wine and malt beverages (previously approved) in certain areas of the facility not otherwise covered by a permit during NASCAR and IndyCar races (previously approved) and other events at the facility (new) with certain limitations. Why? Because the local option election in this area of Texas doesn’t otherwise allow for such sales. Thank you, eight-pound, six-ounce, newborn infant Jesus, with your Dale Earnhardt, Jr. onesie for this local option exemption blessing. Speaking of…
Local Option Elections Good For Thee But Not For Me
HB 4449 (effective 9/1/25)
This bill automatically changes the local option (wet/dry status) for areas annexed by the city of Canyon to match the city’s local option status. By our count, this bill makes for the 6th statutory exception to changing the local option of an area without holding a local option election. Given the crazy hodge podge of wet, dry, and damp areas in counties, cities, and justice precincts in Texas and various statutory exceptions to the same, how about we hit reset by making the whole state wet and then let letting those areas that want to vote for damp or dry?
Loophole Closed (we think)!
SB 1008 (effective 9/1/25)
Texas law authorizes cities and counties to collect a local fee from most TABC permittees and licensees. In 2023, Sec. 437.01235 in the Health and Safety Code was established to restrict a city or county with a public health district that charges a fee for issuance or renewal of a health or food permit from also collecting a local fee from TABC permittees and licensees in the same city or county. We believe the intent of the bill was to restrict all cities and counties from collecting an additional fee from TABC permittees and licensees if also collecting a fee for issuance or renewal of a food or health permit. But, the “with a public health district” caveat caused mass confusion amongst the alcoholic beverage industry, cities, and counties. Questions abounded! Am I in a city or county with a public health district? What’s a public health district? And, huh? Well, this bill cleans up Health and Safety Code Sec. 437.01235…at least we’re pretty sure it does. The bill amends Sec. 437.01235 to provide a county, city, or public health district, including an authorized agent, employee, or department thereof, may not collect a local fee authorized by the Tex. Alc. Bev. Code if the premises is “a food service establishment, retail food store, mobile food unit, roadside food vendor, or temporary food service establishment” that has already paid a fee to operate to any county, city, or public health district. Okay then. Cities and counties are not authorized to collect local fees related to TABC temporary permits, so of course, mobile food units, roadside food vendors, and temporary food service establishments should be excluded (sigh). But, this weirdness aside, our take is if you sell food or alcoholic beverages and pay a fee to a city or county to operate, said city or county will be restricted from collecting an additional fee just because you also hold a TABC permit or license effective September 1, 2025.