The Alcoholic Beverage Commission adopts a new rule, §35.1, governing transportation of alcoholic beverages by certain permittees. The rule is adopted with changes to the proposed text as originally published in the June 11, 1999, issue of the Texas Register (24TexReg 4330).

This rule is adopted to replace a previous rule governing the same subject matter. The rule is primarily adopted to effect nonsubstantive changes in the text of the rule so as to express the terms of the rule with brevity and clarity. With that end in view, paragraph (a) of the rule was drafted so as to refer to the relevant provisions of the Alcoholic Beverage Code. Paragraph (b) of the rule is designed to state the terms of permissible transportation of alcoholic beverages without unnecessary repetition of unambiguous statutory provisions. Paragraph (c) of the rule is stated in outline form rather than in narrative as was done in the old rule. The terms of paragraph (f) of the previous rule were eliminated from this rule as being duplicative and, therefore, necessary. The commissioners concluded that these changes serve to make the rule easier to understand and apply, both by members of the commission staff and members of the alcoholic beverage industry.

The new rule effects three substantive changes from the terms of the old rule. First, the old rule governed transportation of "liquor." The statutory provisions addressed by this rule allow the relevant permittees to transport "alcoholic beverages." The terms of the adopted rule reflect the correct statutory scope of permissible transportation. Second, the previous rule required permittees to keep records of transported product for two years. The adopted rule requires that records be maintained for four years. This change causes the rule to reflect records retention requirements imposed by §206.01(a) of the Alcoholic Beverage Code. Finally, the terms of the new rule were extended to transportation of alcoholic beverages by local distributor permittees so as to provide uniformity of regulation for similar activities conducted by different classes of permit holders.

The text of the rule as adopted adds a reference to §23.04 of the Alcoholic Beverage Code to paragraphs (a) and (b) of the rule. The change includes local distributor permittees within the scope of the rule. Similarly, the last sentence of paragraph (e) was added to the rule because additional statutory restrictions are placed on transportation of alcoholic beverages by local distributor permittees than are placed on package stores or wine only package stores. These changes to the text were made in response to comments made by the Harris County Beer Wholesalers Association and the Wholesale Beer Distributors of Texas. No other comments were received and no commenter announced support for or opposition to the adoption of this rule.

The new rule is adopted under the authority of Alcoholic Beverage Code, §5.31, which provides the Alcoholic Beverage Commission with the authority to prescribe and publish rules necessary to carry out the provisions of the Alcoholic Beverage Code.

Cross Reference: Alcoholic Beverage Code, §§22.08, 23.04 and 24.04, are affected by this rule.

§35.1.Transportation of Alcoholic Beverages by Package Stores and Wine Only Package Stores.

(a)

This rule relates to transportation of alcoholic beverages shipped under the authority of §§22.08, 23.04 or 24.04 of the Alcoholic Beverage Code.

(b)

Shipments of alcoholic beverages made under the authority of §§22.08, 23.04 or 24.04 of the Alcoholic Beverage Code may only be made by holders of a carrier's permit or a local cartage permit.

(c)

Package store and wine only package store permittees making shipments of alcoholic beverages governed by this rule shall prepare an invoice in duplicate. The invoice shall show:

(1)

the date of the shipment;

(2)

the quantity, container size and brands of alcoholic beverages shipped; and

(3)

the store name and address of the origination and destination point of the shipment.

(d)

The original of the invoice mandated by this rule shall be maintained at the originating store for four years after the date of shipment. The copy of the invoice shall accompany the shipment and shall be maintained at the receiving store for four years after the date of shipment.

(e)

Shipments of alcoholic beverages governed by this rule may not be transported outside the county in which the shipment originated, and must be transported by the most direct practical route from point of origination to point of destination. Shipments made by local distributor permittees under the authority of §23.04 of the Alcoholic Beverage Code are subject to the restrictions expressed in §102.56(d) of the code.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 27, 1999.

TRD-9904502

Doyne Bailey

Administrator

Texas Alcoholic Beverage Commission

Effective date: August 16, 1999

Proposal publication date: June 11, 1999

For further information, please call: (512) 206-3204

The Alcoholic Beverage Commission adopts a new §35.2 relating to the importation of liquor into this state. The rule is adopted without changes to the proposed text as published in the June 11, 1999, issue of the Texas Register (24 TexReg 4331).

This rule is adopted to replace previous rules §35.2 and §35.4 governing the same subject matter. The adopted rule does not effect substantive changes to the rules as they previously existed. Rather, the new rule condenses and simplifies the language expressing the requirements of the rule. The commission concluded that the elimination of unnecessary regulatory language makes the commission's rules more accessible to members of the commission staff and the alcoholic beverage industry, and is conducive to more consistent implementation and compliance with the rule.

No comments were received regarding adoption of this rule.

This rule is adopted under Alcoholic Beverage Code, §5.31, which gives the commission authority to prescribe and publish rules necessary to carry out the provisions of the Alcoholic Beverage Code.

Cross Reference: Alcoholic Beverage Code, §§41.01(a) and 42.01(a), are affected by this rule.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 27, 1999.

TRD-9904504

Doyne Bailey

Administrator

Texas Alcoholic Beverage Commission

Effective date: August 16, 1999

Proposal publication date: June 11, 1999

For further information, please call: (512) 206-3204

The Alcoholic Beverage Commission adopts a new §35.31 with changes to the text as originally published in the June 11, 1999, issue of the Texas Register (24 TexReg 4333-4334).

This rule relates to the administrative liability of retail licensees and permittees for certain criminal violations committed in the course of operating their alcoholic beverage business or on the premises of licensed or permitted establishments. The rule is adopted to replace a prior rule governing the same subject matter.

The provisions of the Alcoholic Beverage Code cited in paragraph (a) of the rule mandates that the commission may cancel, suspend, decline to renew or grant a license or permit if the licensee or permittee operates the business in a place or manner that is injurious to the public welfare, health, peace, morals, safety and sense of decency. This rule interprets those provisions by adopting the view that commission of certain types of criminal offenses on licensed premises, or in the course of operating an alcoholic beverage business, constitutes operation of that business in a place or manner injurious to the public welfare interests protected by the above referenced statutes.

Paragraph (b) of the rule describes the elements of proof necessary to connect a violation of criminal law with the operation of an alcoholic beverage business as addressed by the relevant statutory provisions. The commissioners concluded that with regard to criminal violations an alcoholic beverage business could be operated in two ways contrary to the public welfare. First, the holder of the license or permit could commit criminal violations in the course of running the licensed or permitted business. This part of the commission's conclusion is reflected in paragraph (b)(1) of the rule. Second, an alcoholic beverage business can pose a threat to the public welfare by the commission of criminal offenses by unlicenced persons on the licensed premises. The commissioners concluded that a licensee or permittee who did not take reasonable steps to prevent foreseeable criminal conduct on the licensed premises presents a threat to the public welfare. The obligation to take such reasonable steps is created by paragraph (b)(2) and (3) of the rule.

One commenter pointed out that the terms of paragraph (b)(3) as originally posed would obligate a licensee or permittee to take steps to prevent offenses even if those offenses were not reasonably foreseeable. The commission agreed with this observation and paragraph (b)(3) was revised accordingly.

Paragraph (c) includes those Penal Code offenses that the commission concluded are most capable of commission in connection with the operation of an alcoholic beverage business.

Paragraph (d) reflects the commissioners' recognition that alcoholic beverage establishments can threaten the public welfare through conduct that is otherwise lawful. Such cases present such a diverse and varied body of factual situations as to make the drafting of a rule governing all such situations impossible. Accordingly, the commissioners concluded that industry members required to comply with the Alcoholic Beverage Code would be well served by being informed that this rule is not the exclusive grounds of violation of the cited code provisions.

Other than the comment noted above, no other comment was received concerning this rule. No commenter announced in favor or opposition to adoption of the rule.

This rule is adopted under Alcoholic Beverage Code, §5.31, which provides the Alcoholic Beverage Commission with the authority to prescribe and publish rules necessary to carry out the provisions of the Alcoholic Beverage Code.

Cross Reference: Alcoholic Beverage Code, §§11.46(a)(8), 11.61(b)(7), 61.42(a)(3) and 61.71(a)(17), are affected by this rule.

§35.31.Offenses Against the General Welfare.

(a)

This rule relates to §§11.46(a)(8), 11.61(b)(7), 61.42(a)(3) and 61.71(a)(17) of the Alcoholic Beverage Code.

(b)

A licensee or permittee violates the provisions of the Alcoholic Beverage Code cited in paragraph (a) of this rule if any of the offenses listed in paragraph (c) of this rule are committed:

(1)

by the licensee or permittee in the course of conducting his/her alcoholic beverage business; or

(2)

by any person on the licensee or permittee's licensed premises; and

(3)

the licensee or permittee knew or, in the exercise of reasonable care, should have known of the offense or the likelihood of its occurrence and failed to take reasonable steps to prevent the offense.

(c)

The offenses that are the subject of this rule are as follows:

(1)

any preparatory offense described in Chapter 15 of the Texas Penal Code;

(2)

any homicide offense described in Chapter 19 of the Texas Penal Code;

(3)

any sexual offense described in Chapter 21 of the Texas Penal Code;

(4)

any assaultive offense described in Chapter 22 of the Texas Penal Code;

(5)

any arson, criminal mischief or property damage or destruction offense described in Chapter 28 of the Texas Penal Code;

(6)

any theft offense described in Chapter 31 of the Texas Penal Code;

(7)

any fraud offense described in Chapter 32 of the Texas Penal Code;

(8)

any money laundering offense described in Chapter 34 of the Texas Penal Code;

(9)

any bribery offense described in Chapter 36 of the Texas Penal Code;

(10)

any obstruction offense described in Chapter 38 of the Texas Penal Code;

(11)

any disorderly conduct or related offenses described in Chapter 42 of the Texas Penal Code;

(12)

any public indecency offense described in Chapter 43 of the Texas Penal Code;

(13)

any weapons offense described in Chapter 46 of the Texas Penal Code;

(14)

any gambling offense described in Chapter 47 of the Texas Penal Code;

(15)

any narcotics related offense described in Chapters 481 and 483 of the Texas Health and Safety Code;

(16)

any law, regulation or ordinance of the federal government or of the county or municipality in which the licensed premises is located, violation of which is detrimental to the general welfare, health, peace and safety of the people.

(d)

This rule does not constitute the exclusive means by which §§11.46(a)(8), 11.61(b)(7), 61.42(a)(3) and 61.71(a)(17) may be violated.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 27, 1999.

TRD-9904509

Doyne Bailey

Administrator

Texas Alcoholic Beverage Commission

Effective date: August 16, 1999

Proposal publication date: June 11, 1999

For further information, please call: (512) 206-3204

Subchapter D. Advertising and Promotion -- All Beverages

The new section is adopted under the Texas Motor Vehicle Commission Code, §3.06, which provides the Board with authority to adopt rules as necessary and convenient to effectuate the provisions of the Act and to govern practice and procedure before the agency.

Motor Vehicle Commission Code, §§1.03, 3.08, and 4.01 and Transportation Code, §§503.038, 503.093 and 503.095 are affected by the new section.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 28, 1999.

TRD-9904526

Brett Bray

Director, Motor Vehicle Board

Texas Motor Vehicle Board

Effective date: August 17, 1999

Proposal publication date: June 4, 1999

For further information, please call: (512) 416-4899