Amend SB 2225 (senate committee report) by striking all below the enacting clause and substituting the following:

SECTION 1.  Section 1.04, Alcoholic Beverage Code, is amended by amending Subdivision (3) and adding Subdivision (32) to read as follows:

(3)  "Distilled spirits" means alcohol, spirits of wine, whiskey, rum, brandy, gin, or any liquor produced in whole or in part by the process of distillation, including all dilutions or mixtures of them[, and includes spirit coolers that may have an alcoholic content as low as four percent alcohol by volume and that contain plain, sparkling, or carbonated water and may also contain one or more natural or artificial blending or flavoring ingredients].

SECTION 2.  Subchapter B, Chapter 5, Alcoholic Beverage Code, is amended by adding Section 5.62 to read as follows:

SECTION 3.  Section 14.01, Alcoholic Beverage Code, is amended to read as follows:

Sec. 14.01.  AUTHORIZED ACTIVITIES. (a) The holder of a distiller's and rectifier's permit may:

(1)  manufacture distilled spirits;

(2)  rectify, purify, and refine distilled spirits and wines;

(3)  mix wines, distilled spirits, or other liquors;

(4)  bottle, label, and package the permit holder's finished products;

(5)  sell the finished products in this state to holders of wholesaler's permits and to qualified persons outside the state;

(6)  purchase distilled spirits, to be used only for manufacturing or rectification purposes, from holders of nonresident seller's permits or distiller's and rectifier's permits;

(7)  dispense free distilled spirits for consumption on the permitted premises under Section 14.04 or at a temporary event under Section 14.09;

(8)  sell bulk alcohol produced by the permit holder for purposes described by Section 38.01; [and]

(9)  sell distilled spirits to ultimate consumers under Section 14.04 or 14.05;

(13)  dispense free ready-to-drink spirit beverages for consumption on the permitted premises in the same manner as distilled spirits under Section 14.04 or at a temporary event under Section 14.09.

(b)  The privileges granted to a distiller and rectifier are confined strictly to distilled spirits, ready-to-drink spirit beverages, and wines manufactured and rectified under the distiller's and rectifier's [his] permit.

SECTION 4.  Section 14.07, Alcoholic Beverage Code, is amended by adding Subsection (h) to read as follows:

SECTION 5.  Section 14.071, Alcoholic Beverage Code, is amended by adding Subsection (e) to read as follows:

SECTION 6.  Section 24.01(a), Alcoholic Beverage Code, is amended to read as follows:

(a)  The holder of a wine only package store permit may:

(1)  purchase wine and vinous liquors in this state from the holder of a winery, wholesaler's, or class B wholesaler's permit;

(2)  purchase malt beverages and ready-to-drink spirit beverages from the holder of a general or branch distributor's license; and

(3)  sell those beverages to consumers at retail on or from the licensed premises in unbroken original containers of not less than six ounces for off-premises consumption only and not for the purpose of resale.

SECTION 7.  Section 25.01, Alcoholic Beverage Code, is amended to read as follows:

Sec. 25.01.  AUTHORIZED ACTIVITIES. The holder of a wine and malt beverage retailer's permit may sell:

(1)  for consumption on or off the premises where sold, but not for resale, wine and malt beverages containing alcohol in excess of one-half of one percent by volume and not more than 17 percent by volume; [and]

(2)  for consumption on the premises, the following beverages containing alcohol in excess of one-half of one percent by volume and not more than 24 percent by volume:

(A)  traditional port or sherry;

(B)  dessert-flavored wine; or

(C)  rice wine; and

(3)  for consumption on or off the premises where sold, but not for resale, ready-to-drink spirit beverages.

SECTION 8.  Section 26.01(a), Alcoholic Beverage Code, is amended to read as follows:

(a)  The holder of a wine and malt beverage retailer's off-premise permit may sell for off-premises consumption only, in unbroken original containers, but not for resale:

(1)  [,] wine and malt beverages containing alcohol in excess of one-half of one percent by volume but not more than 17 percent by volume; and

(2)  ready-to-drink spirit beverages.

SECTION 9.  Sections 37.01(a) and (d), Alcoholic Beverage Code, are amended to read as follows:

(a)  The holder of a nonresident seller's permit may:

(1)  solicit and take orders for liquor from permittees authorized to import liquor into this state; [and]

(2)  ship liquor into this state, or cause it to be shipped into this state, in consummation of sales made to permittees authorized to import liquor into the state; and

(3)  ship ready-to-drink spirit beverages into this state, or cause them to be shipped into this state, in consummation of sales made to holders of a general or branch distributor's permit authorized to import those beverages into this state.

(d)  The holder of a nonresident seller's permit or an agent or employee of the permit holder may provide samples or tastings of the kinds of distilled spirits and ready-to-drink spirit beverages the permit holder is authorized to produce in the manner authorized by Section 14.07 for the holder of a distiller's and rectifier's permit or the agent or employee of the holder of a distiller's and rectifier's permit. Distilled spirits and ready-to-drink spirit beverages may legally be transported by the holder of a nonresident seller's permit or the permit holder's agent or employee to a retailer's premises for the purpose of providing a sample or a tasting under this subsection. The cost of the distilled spirits and ready-to-drink spirit beverages provided for a sampling or tasting under this subsection is the responsibility of the holder of the nonresident seller's permit providing the sampling or tasting.

SECTION 10.  Section 37.011(a), Alcoholic Beverage Code, is amended to read as follows:

(a)  The holder of a nonresident seller's permit who owns a distillery outside of the state or whose affiliate owns a distillery outside of the state and holds a distiller's and rectifier's permit may enter into an agreement with the holder of a distiller's and rectifier's permit that allows the nonresident seller to engage in the following activities on the distiller's and rectifier's permitted premises:

(1)  manufacture distilled spirits or ready-to-drink spirit beverages;

(2)  rectify, purify, and refine distilled spirits, ready-to-drink spirit beverages, and wines;

(3)  mix wines, distilled spirits, or other liquors;

(4)  bottle, label, and package the nonresident seller's finished products; [and]

(5)  except as provided by Subdivision (6), sell the finished products in this state to holders of distiller's and rectifier's permits and holders of wholesaler's permits and to authorized wholesalers and manufacturers outside the state; and

(6)  sell finished ready-to-drink spirit beverages in this state to holders of distiller's and rectifier's permits, holders of general and branch distributor's licenses, and authorized wholesalers and manufacturers outside the state.

SECTION 11.  Section 37.03, Alcoholic Beverage Code, is amended to read as follows:

Sec. 37.03.  PERMIT REQUIRED. A nonresident seller's permit is required of any distillery, winery, importer, broker, or person who sells liquor or ready-to-drink spirit beverages to permittees authorized to import liquor or ready-to-drink spirit beverages into this state, regardless of whether the sale is consummated inside or outside the state.

SECTION 12.  Section 37.07, Alcoholic Beverage Code, is amended to read as follows:

Sec. 37.07.  PROHIBITED ACTIVITIES. No holder of a nonresident seller's permit, nor any officer, director, agent, or employee of the holder, nor any affiliate of the holder, regardless of whether the affiliation is corporate or by management, direction, or control, may do any of the following:

(1)  hold or have an interest in the permit, business, assets, or corporate stock of a person authorized to import liquor into this state for the purpose of resale unless the interest was acquired on or before January 1, 1941, or unless the permittee is a Texas corporation holding a manufacturer's license and a brewer's permit issued before April 1, 1971;

(2)  fail to make or file a report with the commission as required by a rule of the commission;

(3)  sell liquor or ready-to-drink spirit beverages for resale inside this state that fail [fails] to meet the standards of quality, purity, and identity prescribed by the commission;

(4)  advertise any liquor or ready-to-drink spirit beverages contrary to the laws of this state or to the rules of the commission, or sell liquor or ready-to-drink spirit beverages for resale in this state in violation of advertising or labeling rules of the commission;

(5)  sell liquor or ready-to-drink spirit beverages for resale inside this state or cause them [it] to be brought into the state in a size of container prohibited by this code or by rule of the commission;

(6)  solicit or take orders for liquor or ready-to-drink spirit beverages from a person not authorized to import liquor into this state for the purpose of resale;

(7)  induce, persuade, or influence, or attempt to induce, persuade, or influence, a person to violate this code or a rule of the commission, or conspire with a person to violate this code or a rule of the commission; or

(8)  exercise a privilege granted by a nonresident seller's permit while an order or suspension against the permit is in effect.

SECTION 13.  Section 37.08, Alcoholic Beverage Code, is amended to read as follows:

Sec. 37.08.  CANCELLATION OR SUSPENSION: NOTICE TO IMPORTERS. When a nonresident seller's permit is cancelled or suspended, the commission shall immediately notify in writing all permittees authorized to import liquor or ready-to-drink spirit beverages into the state.

SECTION 14.  Section 37.09, Alcoholic Beverage Code, is amended to read as follows:

Sec. 37.09.  RESTRICTION ON IMPORTATION. No person who holds a permit authorizing the importation of liquor or ready-to-drink spirit beverages, nor his agent or employee, may purchase or order liquor or ready-to-drink spirit beverages for importation from any person other than a nonresident seller's permittee. An importer may not purchase or order liquor or ready-to-drink spirit beverages from a nonresident seller's permittee whose permit is under suspension after the importer has received notice of the suspension.

SECTION 15.  Sections 37.10(a) and (b), Alcoholic Beverage Code, are amended to read as follows:

(a)  No holder of a nonresident seller's permit may solicit, accept, or fill an order for distilled spirits, ready-to-drink spirit beverages, or wine from a holder of any type of wholesaler's, distributor's, or winery permit unless the nonresident seller is the primary American source of supply for the brand of distilled spirits, ready-to-drink spirit beverages, or wine that is ordered.

(b)  In this section, "primary American source of supply" means the distiller, the producer, the owner of the commodity at the time it becomes a marketable product, the bottler, or the exclusive agent of any of those. To be the "primary American source of supply" the nonresident seller must be the first source, that is, the manufacturer or the source closest to the manufacturer, in the channel of commerce from whom the product can be secured by Texas wholesalers, Texas distributors, and Texas wineries. Except as provided by Subsection (c), a product may have only one primary American source of supply to Texas.

SECTION 16.  Section 37.13, Alcoholic Beverage Code, is amended to read as follows:

Sec. 37.13.  SOLICITATION FROM HOLDER OF MIXED BEVERAGE OR PRIVATE CLUB PERMIT. A holder of a nonresident seller's permit may not solicit business directly or indirectly from a holder of a mixed beverage permit or a private club registration permit unless the nonresident seller's permit holder [he] is accompanied by the holder of a wholesaler's permit or the wholesaler's agent or, for the solicitation of business in relation to a ready-to-drink spirit beverage, the holder of a general or branch distributor's license or the distributor's agent.

SECTION 17.  Section 37.14, Alcoholic Beverage Code, is amended to read as follows:

Sec. 37.14.  MONTHLY REPORTS. The commission shall promulgate rules requiring holders of nonresident seller's permits to file monthly reports of liquor and ready-to-drink spirit beverages sold to persons within this state. The reports shall be supported by copies of invoices.  The commission shall prescribe and furnish forms for this purpose.

SECTION 18.  Section 64.01(a), Alcoholic Beverage Code, is amended to read as follows:

(a)  The holder of a general distributor's license may:

(1)  receive malt beverages in unbroken original packages from brewers and brewpubs and from general or branch distributors;

(2)  distribute or sell malt beverages in the unbroken original packages in which they are received to general or branch distributors, to local distributor permittees, to permittees or licensees authorized to sell to ultimate consumers, to private club registration permittees, to authorized outlets located on any installation of the national military establishment, or to qualified persons for shipment and consumption outside the state; [and]

(3)  serve free malt beverages and ready-to-drink spirit beverages for consumption on the licensed premises;

(5)  distribute or sell ready-to-drink spirit beverages in unbroken original packages in which they are received to general or branch distributors, to permittees or licensees authorized to sell to ultimate consumers, or to qualified persons for shipment and consumption outside this state.

SECTION 19.  Section 64.04(a), Alcoholic Beverage Code, is amended to read as follows:

(a)  Each holder of a general or branch distributor's license shall make and keep a daily record of every receipt of malt beverages and ready-to-drink spirit beverages and of every sale of malt beverages and ready-to-drink spirit beverages, including the name of each purchaser.  Each transaction shall be recorded on the day it occurs. The licensee shall make and keep any other records that the commission or administrator requires.

SECTION 20.  Sections 64.07(a) and (b), Alcoholic Beverage Code, are amended to read as follows:

(a)  Any number of general and branch distributors may use the same delivery vehicles, premises, location, or place of business as licensed premises if the malt beverages and ready-to-drink spirit beverages owned and stored by each of the distributors are segregated.

(b)  If delivery vehicles are shared by any number of distributors who also hold any class of wholesaler's permits, liquor, [or] malt beverages, or ready-to-drink spirit beverages may be transported.

SECTION 21.  Chapter 64, Alcoholic Beverage Code, is amended by adding Section 64.091 to read as follows:

SECTION 22.  Section 64.10, Alcoholic Beverage Code, is amended by adding Subsection (e) to read as follows:

SECTION 23.  Chapter 66, Alcoholic Beverage Code, is amended by adding Section 66.12 to read as follows:

SECTION 24.  Section 71.01, Alcoholic Beverage Code, is amended to read as follows:

Sec. 71.01.  AUTHORIZED ACTIVITIES. The holder of a retail dealer's off-premise license may sell malt beverages and ready-to-drink spirit beverages in lawful containers to consumers, but not for resale and not to be opened or consumed on or near the premises where sold.

SECTION 25.  Section 101.46(a), Alcoholic Beverage Code, is amended to read as follows:

(a)  Except as provided by Subsections (b) and[,] (c), [and (d),] no person may import, sell, or possess with intent to sell any liquor in a container with a capacity of less than 20 milliliters. A container of liquor offered for sale that has a capacity of less than six fluid ounces must substantially conform to the labeling requirements of the Bureau of Alcohol, Tobacco, and Firearms for larger containers in which liquor is sold. Holders of distiller's or rectifier's permits wishing to sell liquor bottled in containers of less than six fluid ounces to wholesalers must sell such containers of liquor to wholesalers in units of unbroken, sealed cases. Wholesalers shall sell liquor bottled in containers of less than six fluid ounces to package stores in units of unbroken, sealed cases.

SECTION 26.  Section 101.66, Alcoholic Beverage Code, is amended to read as follows:

Sec. 101.66.  BEVERAGES OF CERTAIN ALCOHOL CONTENT PROHIBITED. A person may not manufacture, sell, barter, or exchange a beverage that contains more than one-half of one percent alcohol by volume and not more than five percent alcohol by volume, except malt beverages, wine coolers, and ready-to-drink spirit beverages [coolers].

SECTION 27.  Section 101.671, Alcoholic Beverage Code, is amended by adding Subsection (g) to read as follows:

SECTION 28.  Section 102.31(a), Alcoholic Beverage Code, is amended to read as follows:

(a)  This section applies to:

(1)  the sale of malt beverages or malt beverage containers or the original packages in which malt beverages are received, packaged, or contained by a distributor's licensee to a retail dealer's on-premise or off-premise licensee, a wine and malt beverage retailer's permittee, or a wine and malt beverage retailer's off-premise permittee; [and]

(2)  the sale of malt beverages by a local distributor's permittee, or by any licensee authorized to sell those beverages for resale, to a mixed beverage permittee; and

(3)  the sale of ready-to-drink spirit beverages by a distributor's licensee to the holder of a wine only package store permit, wine and malt beverage retailer's permit, wine and malt beverage retailer's off-premise permit, or retail dealer's off-premise license.

SECTION 29.  Subchapter C, Chapter 102, Alcoholic Beverage Code, is amended by adding Section 102.501 to read as follows:

SECTION 30.  Subchapter D, Chapter 102, Alcoholic Beverage Code, is amended by adding Section 102.715 to read as follows:

SECTION 31.  Section 105.051, Alcoholic Beverage Code, is amended to read as follows:

Sec. 105.051.  SALE OF CERTAIN ALCOHOLIC [MALT] BEVERAGES BY DISTRIBUTOR'S LICENSEE. The holder of a general or branch distributor's license may sell, offer for sale, or deliver malt beverages and ready-to-drink spirit beverages 24 hours a day Monday through Saturday and between midnight and 1 a.m. and between noon and midnight on Sunday.

SECTION 32.  Chapter 105, Alcoholic Beverage Code, is amended by adding Section 105.052 to read as follows:

SECTION 33.  Section 105.081, Alcoholic Beverage Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a)  The holder of a distiller's and rectifier's permit may sell and offer for sale distilled spirits and ready-to-drink spirit beverages for on-premises consumption and a person may consume distilled spirits and ready-to-drink spirit beverages on the permitted premises during the same hours mixed beverages may be sold and offered for sale by a mixed beverage permit holder under Section 105.03(b).

SECTION 34.  Section 107.10, Alcoholic Beverage Code, is amended to read as follows:

Sec. 107.10.  TRANSPORTATION OF WINE COOLERS [OR SPIRIT COOLERS]. [(a)] A holder of a wholesaler's or general class B wholesaler's permit may transport and sell wine coolers without a prior order if the holder complies with the provisions of this code and rules of the commission applicable to the transportation and sale of malt beverages by a holder of a distributor's license.

[(b)     A holder of a wholesaler's permit may transport and sell spirit coolers without a prior order if the holder complies with the provisions of this code and rules of the commission applicable to the transportation and sale of malt beverages by a holder of a distributor's license.]

SECTION 35.  Section 201.02, Alcoholic Beverage Code, is amended to read as follows:

Sec. 201.02.  "FIRST SALE" DEFINED.  In this subchapter, "first sale":

(1)  as applied to liquor imported into this state by the holder of a wholesaler's permit authorizing importation, means the first actual sale by the permittee to the holder of any other permit authorizing the retail sale of the beverage or to the holder of a local distributor's permit; and

(2)  as applied to all other liquor, means the first sale, possession, distribution, or use in this state, except that the term does not include the first sale by:

(A)  the holder of a winery permit to another holder of a winery permit or the holder of a wholesaler's permit; [or]

(B)  the holder of a distiller's and rectifier's permit to the holder of a wholesaler's permit; or

(C)  the holder of a distiller's and rectifier's permit or nonresident seller's permit to the holder of a general or branch distributor's license.

SECTION 36.  Section 101.46(d), Alcoholic Beverage Code, is repealed.

SECTION 37.  As soon as practicable after the effective date of this Act, the Texas Alcoholic Beverage Commission shall adopt rules necessary to implement the changes in law made by this Act.

SECTION 38.  This Act takes effect September 1, 2025.