Craft Beer Bill Summaries (as passed by the Senate Committee on Business and Commerce):
Committee Substitute to Senate Bill (CSSB) 515 raises a brewpub’s annual production limit to 10,000 barrels and allows for a limited self-distribution permit. The restrictions are in the amount that a brewpub may self-distribute to holders of retail licenses and permits to 2500 barrels per year per license or 1000 barrels per brewpub location. A brewpub operator would have no limit on how much beer they are allowed to sell (of their 10,000 barrels) through a beer distributor.
CSSB 516 and CSSB 517 are substantially similar but 516 addresses ale (regulated by chapter 12 of the code) while 517 addresses beer (regulated by chapter 62 of the code). Both bills raise the cap for craft brewers to 125,000 barrels per year and they both create a new self-distribution permit for craft brewers up to a total of 40,000 barrels (including both beer and ale). Both bills also create a new permit of out-of-state craft brewers to self-distribute equal to in-state craft brewers.
CSSB 518 allows for craft brewers whose annual production does not exceed 225,000 barrel of beer and ale per year to sell beer and ale directly to consumers for on-premise responsible consumption up to 5000 barrels per year. (NOTE: OTT has advocated for sales to consumer for off-premise consumption but this provision was vociferously opposed by both distributor groups as well as the retail association.)
CSSB 639 codifies a TABC regulation relating to “reach-back” pricing and restricts a brewer from selling their territorial brand rights, but clarifies that brewers are allowed to enter into contractual agreements that could be construed as governing ordinary business transactions, including agreements concerning allowances, rebates, refunds, services, capacity, advertising funds, promotional funds, or sports marketing funds. CSSB 639 also includes language to mutually tie these five bills together (CSSBs 515-518 and 639). (NOTE: OTT understands that at least a few craft brewers are not pleased with the limitation on selling their brand territorial distribution rights.)