House Bill 2101 (Rep. Frullo)
Food and Beverage Certificate Legislation
TRA is supporting amendments to the Texas Alcohol Beverage Code to address inconsistencies relating to food and beverage certificates and rising alcohol prices.
The Texas Alcohol Code currently allows a restaurant with a mixed beverage permit to obtain a food and beverage certificate if the restaurant does not have mixed beverage sales greater than 50% of its gross receipts.
A food and beverage certificate is important and vital in many jurisdictions where local option elections have been held allowing mixed beverages to be sold in restaurants. Since 2000, there have been 278 local option elections allowing for mixed beverage service in restaurants with 199 elections successfully passing. This has created a significant positive economic impact for previously dry jurisdictions where many restaurants now operate and provide communities a more diverse choice of restaurants.
Currently, a food and beverage certificate requires mixed beverage sales less than 50% of gross receipts, hours of food operation during all hours of alcohol service, and multiple entrée items available during food service. These requirements allow the establishment to operate as a restaurant and provide mixed beverage service in those areas where local option elections have passed.
With the sharp rise in alcohol prices and customers’ willingness to pay more for premium brand alcohol and craft beers, the total amount of gross receipts for alcohol in many establishments is nearing the 50% threshold. Restaurants with a food and beverage certificate that surpass the 50% threshold may lose their food and beverage certificate, their mixed beverage permit, and their ability to sell mixed beverages. This will cause a significant negative economic impact on businesses and communities that enjoy having restaurants that serve mixed beverages.
HB 2101 will do the following:
- Increase the alcohol sales threshold to 60% of total sales on the premises and require food establishments to maintain full hours of food operation and serve multiple entrees.
- Adopt uniform language on alcohol vs. non-alcohol sales calculation across all kinds of alcohol permits. Calculation will be done by TABC and will include all alcohol and non-alcohol sales on the premises where alcohol is sold or can be delivered.
- Inclusion of due process language to allow a permittee to submit additional information if a food and beverage certificate is not renewed. Allows TABC to deny renewal of a food and beverage certificate at any time if permittee is in violation.
- Prohibit sexually oriented businesses (SOBs) from obtaining a food and beverage certificate.
- Continue to allow concessionaires in public entertainment venues, sports stadiums, and convention to operate without meeting food and beverage certificate requirements.
- Proposed changes do not affect the 1,000 feet rule relating to bars near public schools.
House Bill 2101 was filed on February 20, 2017 by Representative John Frullo.
May 3, 2017 passed the Texas House of Representatives.