HBA-TYH C.S.H.B. 124 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 124 By: Keel Licensing & Administrative Procedures 4/30/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE In 1995, the Texas wine industry, consisting of 26 wineries, produced one million gallons of wine and $101.9 million. The largest producers in that group typically sell most of their wine through wholesale distributors, while 15 of the smaller wineries who each produce less than 10,000 gallons per year usually do not market through wholesalers. A large portion of their wine is sold at the Grapefest wine festival in Grapevine, Texas. C.S.H.B. 124 allows wineries to hold wine festivals and sell and dispense wine at a wine festival. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 16, Alcoholic Beverage Code, by adding Section 16.08, as follows: Sec. 16.08. WINE FESTIVALS. Authorizes a winery permit holder, at an event that is approved by the commission, organized to celebrate and promote the wine industry, and held in whole or in part on the premises of the permit holder, to sell wine to consumers for consumption on or off the holder's premises and to dispense wine without charge for consumption on or off the holder's premises. Authorizes a winery permit holder to sell wine to appropriate temporary permit holders. Prohibits the holder of a winery permit from holding more than four events each year. SECTION 2. Amends Sections 251.14(b) and (e), Alcoholic Beverage Code, to include the legal sale of wine on the premises of a holder of a winery or farm winery permit among the issues required on the ballot in a local option election. SECTION 3. Effective date: September 1, 1999. SECTION 4. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original bill by changing the caption from "relating to the promotion of Texas agricultural products and the sale of wine; creating a farm winery permit; imposing a tax on the sale of wine; providing penalties" to "relating to the promotion of Texas agricultural products and the sale of wine." The substitute modifies the original bill by deleting all sections of the original bill, except for SECTIONS 4, 29, 30 (effective date), and 32 (emergency clause), which are redesignated by the substitute as SECTIONS 1, 2, 3, and 4, respectively. The deleted sections of the original bill created a farm winery permit, imposed a tax on the sale of wine, and provides penalties for not pay the tax on the sale of wine. The substitute modifies the original bill in SECTION 1 (proposed Section 16.08, Alcoholic Beverage Code), by removing the provision in the original bill that authorizes a winery permit holder, if the event is held at a location other than the winery premises, to deliver and dispense wine to individuals attending the event if no charge of any kind is made for the wine, for the delivery of the wine dispensed, or for attendance at the event. The substitute also modifies the original bill in SECTION 1 by adding a provision that prohibits the holder of a winery permit from holding more than four events each year. Makes conforming changes.