PART 3. TEXAS ALCOHOLIC BEVERAGE COMMISSION
CHAPTER 45. MARKETING PRACTICES
SUBCHAPTER E. MISCELLANEOUS
The Texas Alcoholic Beverage Commission (commission) proposes the repeal of §45.121, relating to credit law violations by retailers, wholesalers and distributors and proposes new §45.121, which will replace the repealed section.
Section 102.32 of the Texas Alcoholic Beverage Code (Code) provides that no wholesaler may sell and no retailer may purchase liquor except for cash or on terms requiring payment on or before the 25th of the month for purchases made between the 1st and the 15th of the month and on or before the 10th day of the following month for purchases made between the 16th and the last day of the month. The section requires records of deliveries and purchases. The section requires a wholesale dealer to immediately report to the commission when a retailer becomes delinquent on an account, and prohibits sales of any liquor to a retailer who is delinquent until the account is paid in full and cleared from the commission's records. An account becomes delinquent under subsection (d) of the statute if it is not paid as required by subsection (c). A wholesale dealer who violates the section commits an offense under the Code.
Existing §45.121 is being repealed because it is no longer necessary after the adoption of proposed new §45.121.
The proposed new section reorganizes the content of the existing rule and updates the text of the rule to a plain language standard and equalizes the duties of sellers and retailers for avoiding credit law violations.
New subsection (a) states the purpose of the new rule section.
New subsection (b) provides definitions used in the new rule.
New subsection (c) contains the requirements for invoices. It does not contain substantive revisions, but it does provide that records may be maintained electronically or in an internet based inventory system, reflecting updated business practices.
New subsection (d) provides that it is a violation of the rule to make a delinquent payment. It also provides that a retailer whose permit is cancelled, expires, is suspended or placed in suspense while on the delinquent list may be disqualified from receiving a new license or permit until the delinquency is satisfied. This new provision is intended to discourage retailers from abusing credit restrictions by imposing adverse consequences in future licensing decisions based on past abusive practices.
New subsection (e) provides a requirement that violations and payment be reported by sellers, and makes a failure to report a violation. The existing rule provides no violation for a seller who fails to report.
New subsection (f) prohibits sellers from selling or delivering liquor to any retailer location for a retailer that appears on the delinquent list. It makes a sale a violation of the section. The existing rule provides no violation for a seller who sells to a retailer on the delinquent list.
New subsection (g) prohibits a retailer from purchasing or accepting the delivery of liquor while on the delinquent list. It makes a purchase a violation of the section. The existing rule provides no violation for a retailer who purchases or accepts delivery of liquor while on the delinquent list.
New subsection (h) provides an exception to a retailer who has a good faith dispute regarding whether a violation of the section occurred.
New subsection (i) provides a penalty for repeat violations of the section for both retailers and sellers.
New subsection (j) relates to the publication of the delinquent list by the commission. The time requirements are provided by §102.32 of the Code. The remainder of the subsection provides the public with where to find the list and when it is published and updated.
Charlie Kerr, Chief Financial Officer, has determined that for the first five years that the proposed new rule is in effect there will be no fiscal impact on units of state or local government as a result of enforcing and administering the section as proposed.
Mr. Kerr has determined that for the first five years that the proposed new rule is in effect there will be a fiscal impact on small and micro-businesses and individuals who fail to comply with the sections. There will be no fiscal impact on small and micro-business and individuals who comply with the sections.
Sherry Cook, Assistant Administrator, has determined that for each of the first five years that new §45.121, is in effect the public will benefit from the adoption of the proposed clarifications made, equalization of responsibilities of sellers and retailers, and the conformance of the rule to the intent of the statute to prevent credit violations between the wholesaler and retailer tiers.
Comments on the proposed repeal and new rule may be addressed to Joan Carol Bates, Deputy General Counsel, Texas Alcoholic Beverage Commission, P.O. Box 13127, Austin, Texas 78711. Comments will be accepted for 30 days following publication of the repeal and proposed new rule in the Texas Register.
(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Alcoholic Beverage Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)
The repeal of the existing rule and adoption of the new rule are authorized by §5.31 and §102.32 of the Alcoholic Beverage Code (Code). Section 5.31 gives the commission authority to prescribe and publish rules necessary to carry out the provisions of the Code. Section 102.32 provides the specific authority to adopt these rules to give effect to the section.
Cross Reference: Sections 5.31 and 102.32 of the Alcoholic Beverage Code are affected by the repeal of the existing rule and the proposed new rule.
§45.121.Delinquent List.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 15, 2009.
TRD-200900205
Alan Steen
Administrator
Texas Alcoholic Beverage Commission
Earliest possible date of adoption: March 1, 2009
For further information, please call: (512) 206-3204
The repeal of the existing rule and adoption of the new rule are authorized by §5.31 and §102.32 of the Alcoholic Beverage Code (Code). Section 5.31 gives the commission authority to prescribe and publish rules necessary to carry out the provisions of the Code. Section 102.32 provides the specific authority to adopt these rules to give effect to the section.
Cross Reference: Sections 5.31 and 102.32 of the Alcoholic Beverage Code are affected by the repeal of the existing rule and the proposed new rule.
§45.121.Credit Restrictions and Delinquent List for Liquor.
(a) Purpose. This rule implements §§102.32, 11.61(b)(2) and 11.66 of the Texas Alcoholic Beverage Code (Code).
(b) Definitions.
(1) Alcoholic beverage--As used in this section includes only liquor, as that term is defined in §1.04 of the Code.
(2) Delinquent payment--A financial transaction or instrument that fails to provide payment in full or is returned to the Seller as unpaid for any reason.
(3) Retailer--A package store permittee, wine only package store permittee, private club permittee, private club exemption certificate permittee, mixed beverage permittee, or other retailer, and their agents, servants and employees.
(4) Seller--A wholesaler, class B wholesaler, winery, wine bottler, or local distributor and their agents, servants and employees.
(c) Invoices. A delivery of alcoholic beverages by a Seller, to a Retailer, must be accompanied by an invoice of sale showing the name and permit number of the Seller and the Retailer, a full description of the alcoholic beverages, the price and terms of sale, and the place and date of delivery.
(1) The Seller's copy of the invoice must be signed by the Retailer to verify receipt of alcoholic beverages and accuracy of invoice.
(2) The Seller and Retailer must retain invoices in compliance with the requirements of §206.01 of the Code.
(3) Invoices may be created, signed and retained in an electronic or internet based inventory system, and may be retained on or off the licensed premise.
(d) Delinquent Payment Violation. A Retailer who makes a delinquent payment to a Seller for the delivery of alcoholic beverages violates this section unless an exception applies.
(1) A Retailer who violates this section must pay a delinquent amount, and a Seller may accept payment, only in cash or cash equivalent financial transaction or instrument.
(2) A Retailer whose permit or license is cancelled for cause, voluntarily cancelled, expires, suspended or placed in suspension while on the delinquent list may be disqualified from applying for or being issued an original or renewal permit or license. For purposes of this rule, the Retailer includes all persons who were owners, officers, directors, equity interest holders and shareholders of the Retailer at the time the delinquency occurred.
(e) Reporting Violation and Payment; Failure to Report.
(1) A report of a violation or payment must be made by completing all information required on the form provided by the commission for this purpose. Reporting forms may be obtained on the commission's public web site at http://www.tabc.state.tx.us.
(2) Sellers are required to report each violation to the commission electronically to credit.law@tabc.state.tx.us, or by submitting the appropriate forms in writing by fax or by mail to the number or address listed on the form.
(3) Sellers are required to report a Notice of Payment when a Retailer makes payment in full for a previously reported violation. The report may be filed electronically to credit.law@tabc.state.tx.us, or by submitting the appropriate forms in writing or by fax or mail to the number or address listed on the form.
(4) All reports of violations or payment under this subsection must be made to the commission within two business days from the date the violation is discovered by the Seller.
(5) A Seller who fails to report a violation or a payment as required by this subsection is in violation of this section.
(f) Prohibited Sales and Delivery.
(1) Sellers are prohibited from selling or delivering alcoholic beverages to any licensed location of a Retailer who appears on the commission's Delinquent List from the date the violation appears on the Delinquency List until the Release Date on the Delinquent List, or the Retailer no longer appears on the Delinquent List.
(2) A sale or delivery of alcoholic beverages prohibited by this section is a violation of this section.
(g) Prohibited Purchase or Acceptance.
(1) A Retailer who appears on the commission's Delinquency List is prohibited from purchasing or accepting delivery of alcoholic beverages from any source to any of Retailer's licensed locations from the date the violation appears on the Delinquency List until the Release Date on the Delinquent List or until the Retailer no longer appears on the Delinquent List.
(2) A prohibited purchase or acceptance of a delivery of alcoholic beverages is a violation of this section.
(h) Exception. A Retailer who wishes to dispute a violation of this section or inclusion on the commission's Delinquent List, based on a good faith dispute between the Retailer and the Seller may file a detailed written statement with the commission and the Seller explaining the basis of the dispute. The Retailer must immediately notify the commission of the resolution of a dispute under this subsection.
(i) Penalty for Violation. An action to cancel or suspend a permit or license may be initiated under §11.61(b)(2) of the Code for repeat violations of this section.
(j) Delinquent List.
(1) The Delinquent List is published bi-monthly on the commission's public web site at http://www.tabc.state.tx.us. An interested person may receive the Delinquent List by electronic mail each date the Delinquent List is published by registering for this service online.
(2) The Delinquent list will be published the 5th day of each month for purchases made from the 1st to the 15th day of the preceding month, for which payment was not made on or before the 25th day of that month. The Delinquent list will be published the 20th day of the month for purchases made between the 16th and the last day of the preceding month for which payment was not made on or before the 10th day of the month.
(3) The Delinquent List is effective at 12:01 A.M. on the date of publication.
(4) The Delinquent List is updated continuously to reflect Notice of Payments received, each day the commission is open during normal business hours. The Release Date is the date the commission enters the Notice of Payment onto the Delinquent List.
(k) Calculation of Time. A due date under this section or §102.32(c) of the Code that would otherwise fall on a Saturday, Sunday or a state or federal holiday, will be the next regular business day. A payment sent by U.S. postal service or other mail delivery service is deemed made on the date postmarked or proof of date delivered to the mail delivery service. A payment hand delivered to an individual authorized to accept payment on behalf of the Seller is deemed made when the authorized individual takes possession of the payment.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 15, 2009.
TRD-200900206
Alan Steen
Administrator
Texas Alcoholic Beverage Commission
Earliest possible date of adoption: March 1, 2009
For further information, please call: (512) 206-3204