1. (a) A brewer's licensee whose annual production of malt beverages at all premises wholly or partly owned, directly or indirectly, by the license holder or an affiliate or subsidiary of the license holder, does not exceed 225,000 barrels may sell malt beverages produced on the brewer's premises under the license to ultimate consumers on the brewer's premises:

   1. (1) for responsible consumption on the brewer's premises; or
   2. (2) subject to Subsection (a-1), for off-premises consumption.
2. (a-1) Sales to a consumer on the brewer's premises for off-premises consumption are limited to 288 fluid ounces of malt beverages per calendar day.
3. (b) The total sales of malt beverages to ultimate consumers under this section at the same premises may not exceed 5,000 barrels annually.

4. (c) Subject to Subsections (b), (d), and (e), the holder of a brewer's license may sell malt beverages produced on the brewer's premises under the license to ultimate consumers on the brewer's premises for responsible consumption on the brewer's premises even if the annual production limit prescribed by Subsection (a) is exceeded if:

   1. (1) the license holder:

      1. (A) was legally operating a manufacturing facility with on-premise sales under Subsection (a) on February 1, 2017; or
      2. (B) purchased an ownership interest in, or was purchased by the holder of, a permit or license issued under Chapter 12, 13, 62, or 63; and
   2. (2) the license holder has annual production that does not exceed 175,000 barrels at the brewer's premises.

5. (d) For purposes of Subsection (c)(1)(B), a license holder may not sell to a permit or license holder whose annual production exceeds the limit prescribed by Subsection (a) an ownership interest:

   1. (1) of more than 25 percent in the permitted location; or
   2. (2) that provides the purchaser with the ability to control the operations at the permitted location.

6. (e) A holder of a brewer's license who under Subsection (c) sells malt beverages produced on the brewer's premises under the license to ultimate consumers on the brewer's premises for responsible consumption on the brewer's premises:

   1. (1) shall file a territorial agreement with the commission under Subchapters C and D, Chapter 102;
   2. (2) must purchase any malt beverages the license holder sells on the brewer's premises from the holder of a license issued under Chapter 64 or 66; and
   3. (3) with respect to those purchases, must comply with the requirements of this code governing dealings between a distributor and a member of the retail tier, including Sections 61.73 and 102.31.

7. (e-1) The commission:

   1. (1) may require the holder of a brewer's license who sells malt beverages to ultimate consumers under this section to report to the commission each month, in the manner prescribed by the commission, the total amounts of malt beverages sold by the license holder under this section during the preceding month for:

      1. (A) responsible consumption on the brewer's premises; and
      2. (B) off-premises consumption, as authorized by Subsection (a);
   2. (2) by rule shall adopt a simple form for a report required under Subdivision (1); and
   3. (3) shall maintain reports received under this subsection for public review.
8. (f) The commission by rule or order shall annually adjust the production limit prescribed by Subsection (c)(2) in an amount that is equal to the percentage of the state's population growth for the previous year as determined by the state demographer under Chapter 468, Government Code.

9. (g) The commission may impose an administrative penalty against a license holder who violates Subsection (a-1) or fails to comply with a requirement established by the commission under Subsection (e-1). The commission shall adopt rules establishing:

   1. (1) the amount of an administrative penalty under this subsection; and
   2. (2) the procedures for imposing an administrative penalty under this subsection.

Added by Acts 2013, 83rd Leg., R.S., Ch. 535 (S.B. 518), Sec. 3, eff. June 14, 2013.

Acts 2017, 85th Leg., R.S., Ch. 1129 (H.B. 3287), Sec. 4, eff. June 15, 2017.

Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 217, eff. September 1, 2021.

Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 218(a), eff. September 1, 2019.

Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 218(b), eff. September 1, 2021.