[00:00:01]
FIRST AGENDA IS CALLED TO ORDER.
[1. Opening Items]
THE TIME IS 10:34 ON TUESDAY, SEPTEMBER 24TH, 2024.WE HAVE A QUORUM, AND I GUESS THE FIRST DAY OF FALL WAS A COUPLE DAYS AGO, AND I KNOW WE'RE ALL JUST REALLY EXCITED ABOUT HOW COOL IT IS OUTSIDE, BUT CHANGE IS COMING, I PROMISE.
THAT'S WHAT THEY THAT'S WHAT THEY SAY.
ON SEPTEMBER 19TH, I HAD THE OPPORTUNITY TO JOIN SEVERAL OF OUR PERSONNEL ON THE BORDER, AND I VISITED OUR BORDER OPERATIONS IN LAREDO, TEXAS, AND I WOULD SAY THAT IT WAS AN EXTRAORDINARY EXPERIENCE, AS IT ALWAYS IS.
NOT COINCIDENTALLY, CHIEF SWENSON WAS TESTIFYING IN THE CAPITOL ON OUR BORDER SECURITY AND OUR BORDER OPERATIONS AT THE SAME TIME, AND I WAS SO IMPRESSED WITH THE COMMITMENT OF OUR REVENUE COMPLIANCE OFFICERS.
CHIEF RAINEY, PEOPLE OPERATE IN HARSH CONDITIONS.
IN FACT, IT WAS 102 DEGREES WHEN I WAS THERE, AND OUR COMMS TEAM, I FILMED A PSA STANDING IN A SUIT IN 102 DEGREES, AND YET ALL OF OUR AGENTS WERE THERE, FULLY SUITED UP.
SO, CHIEF OUR PERSONNEL, THEY THEY ARE SUCH A AND THEY'RE SUCH A HUGE ASSET BECAUSE PART OF THEIR JOB IS TO MAKE SURE THAT THE ALCOHOL AND TOBACCO THAT COMES INTO THE UNITED STATES, THAT COMES INTO THE STATE OF TEXAS IS COMPLIANT AND THEY HAVE WHAT I CALL A PHENOMENON CALLED DETERRENCE BY PRESENCE.
SOME OF THE CRIMES THAT THEY'VE, IN COOPERATION WITH OUR STATE PARTNERS AT THE DEPARTMENT OF PUBLIC SAFETY, PARKS AND WILDLIFE, WE'VE BEEN ABLE TO STOP SOME SOME VERY BAD ACTORS FROM BRINGING BAD THINGS INTO THIS COUNTRY.
WE HAVE APPROXIMATELY 100 REVENUE COMPLIANCE OFFICERS AT EVERY PORT OF ENTRY IN THE STATE OF TEXAS, AND THEY DO AN INCREDIBLE JOB, AND I'M JUST SO DELIGHTED AND SO PROUD OF THEM, AND I THINK YOU ALL SHOULD BE TOO.
I'D ALSO LIKE TO SAY THAT I HAD AN OPPORTUNITY TO SPEND QUITE A BIT OF TIME WITH OUR FEDERAL PARTNERS, CUSTOMS AND BORDER PROTECTION, AND I JUST WANT TO SAY FOR THE RECORD, THAT, YOU KNOW, THE RHETORIC THAT THEY'RE NOT DOING THEIR JOB IS WRONG.
THE COMPLAINTS AGAINST THE BORDER PATROL, THEY'RE JUST THEY'RE WRONG, AND WHEN I SEE THE PROFESSIONALISM OF OUR FEDERAL PARTNERS WHO WORK DAY TO DAY WITH US ON THE BORDER, I'M REMINDED THAT THEY ARE PROFESSIONALS.
THEY ARE LAW ENFORCEMENT OFFICERS.
THEY ARE FEDERAL POLICE OFFICERS AND THEY'RE DOING THEIR BEST TO TRY TO PROTECT OUR COUNTRY, AND THE COMMENT THEY SAID IS THAT, YOU KNOW, AND I DON'T WANT TO GET POLITICAL, BUT THEY JUST SAID, WE WANT TO DO OUR JOB IF THEY WOULD JUST LET US DO OUR JOB.
SO I JUST WANT TO GIVE A SHOUT OUT TO OUR FEDERAL LAW ENFORCEMENT PARTNERS ON THE BORDER FOR THE GOOD WORK THAT THEY'RE DOING AND FOR THE INCREDIBLY COOPERATIVE ATTITUDE THEY HAVE TOWARD US, AND I JUST HOPE THAT I HOPE THAT OUR FRIENDS IN WASHINGTON WILL COME UP WITH A POLICY THAT WILL ALLOW US TO CONTINUE TO POLICE OUR BORDER IN THE PROPER WAY, AND THAT'S INTENDED FOR BOTH SIDES OF THE AISLE.
I THINK WE KNOW WE CAN ALL DO A BETTER JOB IN THAT REGARD.
I'D ALSO LIKE TO SAY THAT THE FOCUS ON THE BORDER HAS BEEN TO DETER ORGANIZED CRIME.
WE DON'T I DON'T THINK WE REALIZE HOW MUCH THEY ARE THE ENEMY, AND THEY ARE AN ENEMY TO HUMANITY.
OUR PEOPLE ON THE BORDER ARE DOING THEIR BEST TO ENSURE THAT THEY DON'T INFILTRATE TABC LICENSED AGENCIES, WHICH, AS YOU KNOW, THEY ARE PRONE TO DO.
THEY ARE WILLING TO DO; THEY WANT TO DO THAT.
THEY WANT TO EXPLOIT LICENSED ESTABLISHMENTS FOR ILLEGAL ACTIVITY THAT DAMAGE THE INDUSTRY THAT WE REGULATE, AND I THINK PEOPLE DON'T REALIZE THAT PART OF OUR JOB IS TO PROTECT THE HONEST MEN AND WOMEN IN THIS STATE THAT RUN HONEST BUSINESSES
[00:05:03]
BY KEEPING ORGANIZED CRIME, WHICH IS A, WHICH IS A MISSION THAT WAS ESTABLISHED WHEN THIS AGENCY WAS CREATED.IF YOU GO BACK AND LOOK AT THE CODE IN 1935, WHEN THIS AGENCY WAS CREATED, ONE OF OUR PRIMARY MISSIONS WAS TO KEEP ORGANIZED CRIME OUT OF THE ALCOHOL INDUSTRY.
SO IF I HARP ABOUT IT, THAT'S PART OF OUR HISTORY, LADIES AND GENTLEMEN, AND I AM ABSOLUTELY PROUD OF THE WORK THAT OUR ENFORCEMENT PEOPLE DO, OUR AUDIT PEOPLE, OUR COMPLIANCE PEOPLE TO THWART THAT EFFORT, AND IT IS A NEVER ENDING EFFORT, AND SO I'M JUST I WAS JUST HAPPY TO BE THERE.
I INTEND TO GO DOWN TO THE RIO GRANDE VALLEY AND SEE OUR OPERATIONS THERE AS WELL.
WHERE ARE YOU, CHIEF? THANK YOU, SIR, FOR ALL THE WORK YOUR PEOPLE DO DOWN THERE.
IT'S AMAZING, AND WE'RE SO INDEBTED TO THEM.
SO I ENCOURAGE EVERYONE TO KEEP THEM IN YOUR THOUGHTS AND PRAYERS.
IT'S A DANGEROUS PLACE AT TIMES, SO THANK YOU ALL.
WITH THAT, I'LL TURN IT OVER TO OUR FEDERAL COMMISSIONERS WHO HAVE ANY OPENING COMMENTS.
ANYBODY? I DON'T KNOW IF YOU CAN SEE ME OR IF I.
OKAY. ARE WE GOOD? EL PASO, SAN ANTONIO.
YES, SIR, AND DITTO ON EVERYTHING YOU SAID.
ALRIGHTY. WELL, LET'S MOVE TO OUR NEXT ITEM.
PLEASE JOIN ME IN RECITING THE PLEDGE OF ALLEGIANCE.
THE NEXT ITEM IS APPROVAL OF COMMISSION MEETING MINUTES OF JULY 23RD, 2024.
I SO MOVE. IS THERE A SECOND? SECOND. THANK YOU SIR.
VOTES HAVE BEEN. OH, WELL, WE WILL NOW VOTE.
NEXT AGENDA ITEM WILL BE AN AIMS UPDATE.
[2. Reports]
DEPUTY DIRECTOR SANCHEZ, WELCOME.MY NAME IS LAURI SANCHEZ, DEPUTY DIRECTOR OF IT, AND I'LL BE PRESENTING OUR AIMS UPDATE.
SO SINCE AIMS WENT LIVE THROUGH SEPTEMBER 11TH OF THIS YEAR, WE'VE HAD APPROXIMATELY 45,000 ORIGINAL APPLICATIONS SUBMITTED, 87,000 RENEWAL APPLICATIONS. 80,000 PRODUCT REGISTRATIONS AND 28,000 ACCOUNT BUSINESS TRANSACTIONS, AND AS A REMINDER, THOSE ACCOUNT BUSINESS TRANSACTIONS ARE FOR THINGS LIKE CHANGE OF TRADE NAME, CHANGE OF LOCATION, AND OTHER SELF-SERVICE TRANSACTIONS TO CONTINUE TO SHOW THE ONGOING USE OF AIMS. THERE'S BEEN APPROXIMATELY 2.3 MILLION LOGINS INTO THE SYSTEM SINCE IT WENT LIVE.
WE'RE CONTINUING TO WORK ON PHASE TWO SCOPE OF AIMS. SINCE MARCH, NO NEW FUNCTIONALITY HAS BEEN IMPLEMENTED, BUT WE CONTINUE TO WORK ON THE EXPUNGEMENT MODULE, WHICH WILL ALLOW USERS TO EXPUNGE DATA REQUIRED BY LEGAL ORDER AND OPEN RECORDS REQUEST FUNCTIONALITY, WHICH ALLOWS USERS TO EXTRACT INFORMATION FROM AIMS TO FILL OPEN RECORDS REQUESTS.
FOR EACH CHALLENGE A REALIZED RISK, WE FOCUS ON THE HIGH IMPACT AND HIGH PROBABILITY ITEMS. THIS APPROACH HAS ALLOWED AIMS TO CONTINUOUSLY BE DEVELOPED BY CONSTANTLY EVALUATING RISK, EVALUATING IMPACT ON STAFF AND INDUSTRY, AND CONSIDERING BUDGET LIMITATIONS.
SO CURRENT KEY CHALLENGES FOR PHASE TWO ARE THE DESIGN REQUIREMENTS AND EXPECTATIONS, AND THERE'S OPPORTUNITIES FROM BOTH THE VENDOR AND TABC TO IMPROVE ON THIS POINT AND DEVELOPMENT QUALITY AND VENDOR QUALITY ASSURANCE TESTING ARE ALSO THE OTHER CHALLENGES WE'RE FACING.
WE'VE TAKEN SOME ACTIONS TO ADDRESS THESE CHALLENGES.
[00:10:02]
THE VENDOR HAS CONDUCTED SHADOW SESSIONS WITH END USERS TO UNDERSTAND THE DEFECTS FIRSTHAND.THE EXECUTIVE TEAM IS CONDUCTING MEETINGS WITH THE VENDOR TO DISCUSS THESE CHALLENGES, AND THE VENDOR HAS REVISED THEIR QA PLAN, WHICH IS INCLUDED IN THE PROJECT MANAGEMENT PLAN, WHICH WAS EXECUTED AS PART OF THE MOST RECENT CONTRACT AMENDMENT.
WE'VE CREATED AN ALL INCLUSIVE.
THIS IS AN INTERNAL TO TABC COUNCIL AND THEY REVIEW, PRIORITIZE AND MAKE DECISIONS ON ALL IT, EXCUSE ME ON ALL IT PROJECTS SCOPE INCLUDING AIMS. THEY REVIEW RISK AND POTENTIAL CHANGE REQUESTS AND THEY HAVE PRIORITIZED AND CONTINUE TO PRIORITIZE AIMS. PHASE THREE SCOPE.
WE HAVE COMPLETED OUR CONTRACT AMENDMENT AND UPDATES TO OUR PROJECT MANAGEMENT PLAN.
THESE UPDATES PROVIDE A CLEAR UNDERSTANDING AND EXPECTATION WITH OUR VENDOR, AND WE WILL CONTINUE TO WORK ON REVISING VENDOR MANAGEMENT THROUGH PROJECT RETROSPECTIVES, AND LASTLY, WE'RE REVISING OUR COMMUNICATION PLAN.
SO WE CONTINUE TO WORK WITH OUR BUSINESS UNITS TO UNDERSTAND THE GAPS IN FUNCTIONALITY THAT ARE NECESSARY TO IMPROVE PROCESS PERFORMANCE, AND AS A REMINDER, TABC HAS CONTRACTED WITH THE THIRD PARTY VENDOR TO CONDUCT INDEPENDENT VERIFICATION AND VALIDATION OR WHAT IS KNOWN AS IV&V, AND THEY WILL PROVIDE A THIRD PARTY, IMPARTIAL ASSESSMENT OF THE PROCESS AND THE PRODUCT USING INDUSTRY STANDARDS AND BEST PRACTICES.
FROM PHASE THREE SCOPE, WE HAVE IMPLEMENTED COMPLIANCE REPORTING ADDITIONAL LICENSE AND PERMITS.
SO THIS IS AN ENHANCEMENT FOR COMPLIANCE REPORTING TO ALLOW FOR TEN LICENSE AND PERMIT SUBORDINATE COMBINATIONS TO COMPLETE AND SUBMIT COMPLIANCE REPORTS IN AIMS. CURRENTLY, WE'RE WORKING ON ENHANCEMENTS TO THE PAYMENT PROCESSING MODULE, WHICH INCLUDE THINGS LIKE AUTOMATING THE MANUAL PAPER CHECK PROCESS OF MONEY MATCHING, AND ADDITIONAL MODIFICATIONS TO THE CREDIT ENTRY FUNCTIONALITY TO INCLUDE THINGS LIKE EDIT AND DELETE CAPABILITIES, AND THEN LASTLY, WE HAVE A NEW ITEM FROM THE DEPARTMENT OF INFORMATION RESOURCES. SO DIR HAS COMMUNICATED THAT THE TEXAS.GOV PAYMENT PROVIDER IS CHANGING, AND IN ORDER FOR TABC TO CONTINUE TO ACCEPT ELECTRONIC PAYMENTS, WE MUST ALSO TRANSITION TO THEIR NEW PROVIDER.
THE FOLLOWING PHASE THREE ITEMS ARE PLANNED TO BE IMPLEMENTED THIS BIENNIUM.
RETAIL LICENSEES WILL BE NOTIFIED OF THE RESPECTIVE VIOLATIONS THROUGH AIMS. THEN ORDER MANAGEMENT, WHICH ALLOWS THE ABILITY TO INTAKE ORDERS FOR PRIVATE CLUB MEMBERSHIP CARDS FOR PRIVATE CLUB LICENSEES, AND THEN LASTLY THE CITY AND COUNTY DATA UPDATE. SO THIS IS AN ENHANCEMENT TO THE SYSTEM.
THE REMAINING ITEMS YOU SEE PRIMARILY FOCUS ON INTERNAL STAFF FUNCTIONALITY, WHICH WILL INADVERTENTLY CREATE EFFICIENCIES FOR INDUSTRY, AND THOSE ITEMS ARE THE AUDIT CASE WORKSHEETS, EXCISE TAX RECONCILIATION, AUTOMATED REFUND WORKFLOW, BOND GROUPING MANAGEMENT, RECORD RETENTION, AUTOMATED MANAGEMENT REVIEW AND CASE MANAGEMENT REFINEMENT.
SO THEY WORK EVERY DAY TO KEEP CRITICAL TOOLS FUNCTIONING FOR AGENCY PROCESSES AND BUSINESS PROCESSES, AND I WANT TO JUST SAY THANK YOU, AND I APPRECIATE ALL OF THEIR HARD WORK WITH ALL OF THE WORK THAT WE HAVE TO DO, AND TO KIND OF HIGHLIGHT SOME OF THE OTHER THINGS THAT THE IT TEAM IS CURRENTLY WORKING ON.
IN ADDITION TO THEIR DAILY OPERATION ACTIVITIES AND OTHER STRATEGIC AND MAINTENANCE PROJECTS.
I'VE JUST KIND OF HIGHLIGHTED A FEW OF THE TECHNOLOGY PROJECTS THAT WE'RE WORKING ON.
SO THE FIRST ONE IS THE ENTERPRISE DATA SOLUTION.
THIS IS PART OF OUR OVERALL TECHNOLOGY TRANSFORMATION.
[00:15:01]
THE PURPOSE OF THE EDITORS IS TO CREATE A MODERN DATA WAREHOUSE SOLUTION FOR FORWARD THINKING BUSINESS ANALYTICS, TO ENHANCE THE AGENCY'S ABILITY TO LICENSE AND REGULATE THE ALCOHOLIC BEVERAGE INDUSTRY.WE HAVE SHAREPOINT ONLINE, WHICH WILL INCREASE THE EFFICIENCIES THROUGH MODERNIZED TECHNOLOGY, AND IT HELPS TEAM MEMBERS COLLABORATE AND IMPROVE TRANSPARENCY ACROSS THE AGENCY. IMPLEMENTATION OF THIS FUNCTIONALITY ALLOWS THE AGENCY TO APPLY AUTOMATED RETENTION POLICIES ON DOCUMENTATIONS.
THEN WE HAVE THE SELLER SERVER MODERNIZATION.
WE HAVE THE NEW TEXAS GOV PAYMENT PROVIDER.
SO AS I JUST MENTIONED A FEW MINUTES AGO, THE DIR IS TRANSITIONING TO A NEW TEXAS.GOV PAYMENT PROVIDER, WHICH REQUIRES TABC TO ALSO TRANSITION IN ORDER TO CONTINUE TO ACCEPT ELECTRONIC PAYMENTS.
SO THIS WILL REQUIRE SOME THIRD PARTY VENDOR CONFIGURATION UPDATES FOR SOME OTHER APPLICATIONS.
THAT'S NOT SPECIFICALLY AIMS. THEN WE HAVE OUR PC REFRESH.
DUE TO SOME LEASE EXPIRATIONS, THE AGENCY HAS TAKEN THE OPPORTUNITY TO TRANSITION TO NEW RUGGED DEVICES FOR THE ENFORCEMENT TEAM AS WELL AS NEW DEVICES FOR THE COMMUNICATIONS TEAM, AND THEN LASTLY, WE HAVE THE MOBILE DEVICE REFRESH.
SO DUE TO DEGRADATION OF EQUIPMENT, THE AGENCY IS UPGRADING TO MOBILE.
IT'S UPGRADING ITS MOBILE DEVICES AND TRANSITIONING TO RUGGED DEVICES FOR THE ENFORCEMENT TEAM.
THAT'S ALL I HAVE TODAY, SO I'M HAPPY TO ANSWER ANY QUESTIONS.
NO QUESTIONS, BUT JUST A COMMENT.
I MEAN, THIS IS A MASSIVE, MULTIYEAR UNDERTAKING THAT WE'RE DOING, AND I KNOW IT'S HARD.
THANK YOU. NEXT AGENDA ITEM WILL BE FISCAL YEAR END CFO SWAN. AS YOU'RE COMING UP, THOUGH, THERE WAS I WAS REMISS IN THAT I NEGLECTED TO RECOGNIZE A A LONG-TIME MEMBER OF OUR TEAM WHO IS NO LONGER WITH US.
WHEN I CAME ON BOARD A FEW YEARS AGO I BELIEVE ED WAS A PUBLIC SERVANT OF THE HIGHEST ORDER.
HE WAS A RETIRED AIR FORCE COLONEL.
HE WAS A CERTIFIED PEACE OFFICER, AND CONSEQUENTLY, HIS ENTIRE LIFE WAS DEDICATED TO SERVING HIS COUNTRY AND HIS STATE, AND SO WE WISH YOU WELL.
ALL RIGHT. FOR THE RECORD, CONRAD SWAN, CFO, AND I'M HAPPY TO HAVE THIS OPPORTUNITY TO TALK ABOUT THE DEDICATION THAT OUR BSD STAFF HAS TO SPEAK ABOUT WHAT THEY ACCOMPLISHED AT THE END OF YEAR.
I WON'T DO TOO MUCH BRAGGING ON THEM, BUT JUST A BULLET OR TWO ON EACH.
GOOD. SO OUR PROCUREMENT TEAM, THESE ARE OUR BUYERS.
THEY ACTUALLY SET UP 237 RENEWAL REQUISITIONS RIGHT THERE IN JULY AND AUGUST.
AT THE END OF THE YEAR, THAT'S ABOUT $3.1 MILLION OF KEEPING THE LIGHTS ON FOR SPENDING OF OUR AGENCY, AND THOSE TOTALS THAT THEY WERE WORKING ON RIGHT THERE AT JULY AND AUGUST DON'T EVEN INCLUDE THE END OF YEAR ACTIVITY THAT THEY HAVE TO DO TO SORT OF PUT THIS AGENCY WHERE IT NEEDS TO BE TO FINISH OUT A YEAR. SO JOB WELL DONE IN THAT SHOP.
OUR FISCAL SERVICES SHOP, THESE ARE OUR ACCOUNTANTS, OUR BOOKKEEPERS.
THEY STARTED THE ITERATIVE PROCESS OF BUILDING OUR ANNUAL FINANCIAL REPORT.
IT FEELS LIKE IT GOES ON FOREVER, BUT IT TRULY IS ITERATIVE IN THAT WAY.
THEY STARTED IN AUGUST AND IT DOESN'T GET SUBMITTED UNTIL THE END OF SEPTEMBER.
SO IT'S A TWO MONTH LONG PROCESS FOR THEM.
WE'RE WELL ON OUR WAY TO SUBMITTING THAT.
[00:20:07]
SO ALL OF THAT HARD WORK FOR OUR FISCAL SERVICES TEAM, SORT OF GETTING THE TREASURY, THE CPA FUNDS CLEARED AND THEN THEIR FINAL DISPOSITION, THEY WERE UP TO THAT AT THE END OF THE YEAR, AND THEN MY PROPERTY MANAGEMENT GROUP TALKING ABOUT BIG EFFORTS, THE FISCAL OR THE ANNUAL PHYSICAL INVENTORY THAT DID GET COMPLETED THERE AT THE END OF THE YEAR, THANKS TO THAT TEAM, AND THEN FINALLY, MY BUDGET TEAM, THEY'VE CREATED AN INITIAL INTERNAL OPERATING BUDGET.WE'RE STILL GOING THROUGH VETTING THAT BUDGET, BUT WE'LL HAVE THAT COMPLETED AND PROBABLY WILL BE PRESENTED TO YOU HERE IN THE NEAR FUTURE FOR 2025, AND THEN WHAT I'LL BE SPEAKING TO HERE SOON IN MY NEXT PRESENTATION IS WE DID GET THE LAR SUBMITTED IN AND ON TIME AT THE END OF AUGUST THERE, AND THAT WILL GIVE YOU A NICE PEEK AT WHAT WE WERE DOING THERE AT THE END OF THE YEAR.
I'M HAPPY TO TAKE ANY QUESTIONS AND BRAG A LITTLE MORE IF YOU GOT THEM.
CHAIRMAN, COMMISSIONERS, THEY REALLY WORK HARD, ESPECIALLY AT THE END OF THE FISCAL YEAR FOR US, AND THAT ON TOP OF SUBMITTING AN LAR AND MAKING SURE ALL OUR NUMBERS ADD UP THE RIGHT WAY, WE JUST GOT A REALLY GOOD TEAM OVER THERE UNDER CONRAD.
SO I JUST WANT TO SAY THANK YOU.
ALL RIGHT. STILL ME, CONRAD SWAN, CFO.
WANTED TO DEFINITELY GIVE YOU GUYS AN UPDATE ON HOW THE LAR FINISHED.
CHAIRMAN LILLY, LAST TIME I PRESENTED, I THINK IN JULY, I USED THE WORD DRAFT AND ESTIMATED A LOT.
I WASN'T SURE IF COMMISSIONER ATKINS OR COMMISSIONER MARINO WERE GOING TO KICK ME OUT OF THE CHAIR FOR USING DRAFT AND ESTIMATE AS MANY TIMES AS I DID, BUT AT THIS STAGE, WE KNOW EXACTLY WHAT OUR NUMBERS ARE AND WANTED TO CIRCLE BACK TO GIVE YOU AN IDEA OF WHERE THINGS LANDED, AND SO THIS PAGE IS A NICE AT A GLANCE JUST TO SPEAK TO WHERE OUR NUMBERS ARE FINALIZED.
WHAT I WOULD POINT OUT ON THAT FIRST ROW IS WHEREAS BEFORE WE WERE SHOWING YOU WHAT WE THOUGHT WE WOULD RECEIVE FROM THE LBB AS OUR BASE FOR GR, NOW WE'RE SHOWING YOU OUR ENTIRE ASK WITH GR, FED FUNDS AND APPROPRIATED RECEIPTS.
THAT'S PRETTY CLOSE TO THE NUMBER THAT WE WERE SHOWING YOU BEFORE.
THE LUCK PART OF IT, WELL ACTUALLY THE PART THAT WE DIDN'T ANTICIPATE WAS THE LBB DID A UPDATED EVALUATION OF HOW MUCH THIS AGENCY NEEDED FOR ITS 5%.
NOW THAT NEXT SECTION THAT YOU SEE THAT BLOCK FOR EXCEPTIONAL ITEMS REQUEST.
WE WARNED YOU THAT WE MIGHT TOY AROUND WITH SOME NEW TITLES, THAT THE NUMBERS MAY CHANGE.
WE TWEAKED THOSE NUMBERS JUST A LITTLE BIT, BUT IN LARGE PART IT'S ALL OF THE TITLES THAT YOU SEE.
WE DEFINITELY WORKED ON THOSE.
WE TALKED ABOUT HOW WE MAY REARRANGE THE PRIORITY OF THOSE EXCEPTIONAL ASKS.
WE ACTUALLY LIKE THE ORDER THAT WE HAD THEM IN.
SO ON YOUR ITEM NUMBER FOUR, WHICH IS NOW TITLED INTEGRATE AND SUPPORT TECHNOLOGY SOLUTIONS, WE ADDED $1 MILLION TO THAT, AND THAT WAS DIVIDED OUT $500,000 IN EACH YEAR, AND THAT WAS FOR SOME ADDITIONAL PROFESSIONAL FEES AND SERVICES.
CONTRACT WORKERS THAT WE SAW WERE GOING TO BE NECESSARY FOR US.
SO THAT TOTAL IS NOW 3 MILLION, WHEREAS LAST TIME IT WAS AROUND TWO, AND THEN THAT LAST ONE, WHICH IS NOW TITLED TECHNOLOGY LICENSING AND SUPPORT, WE ADDED ABOUT $250,000 TO THAT.
WE REALIZED THAT WE HAVE SOME LEGACY SYSTEMS THAT WE'RE KEEPING INTO 26 AND 27, AND THE COST OF THOSE LEGACY SYSTEMS ARE GROWING JUST A BIT, AND WE CAN'T FUND THOSE.
SO WE WANTED TO PUT THAT UNFUNDED COST IN OUR EXCEPTIONAL ITEM AT ABOUT $250,000 AND SO WITH THE SMALL CHANGE TO OUR BASE FIGURE THERE AND THAT EXTRA MILLION POINT THREE THAT WE ADDED, WE HAVE A BIENNIAL BUDGET OF $125.9 MILLION WITH 629 FTES.
[00:25:05]
YOU THAT'S ABOUT 300 FTES, AND YOU CAN SEE AS WELL 11.9 FOR LICENSING $15 MILLION FOR COMPLIANCE.SO THOSE NUMBERS ARE THERE FOR YOU TO SEE.
I WOULD POINT OUT JUST ONE THING.
WE INCLUDED OUR EXCEPTIONAL ITEMS SPENDING IN THOSE NUMBERS.
SO YOU'RE STILL SEEING US BREAKING OUT 125.9.
WE AREN'T GUARANTEED TO BE APPROPRIATED 125.9, BUT WE CAN ANTICIPATE WE'LL GET OUR BASE REQUEST, WHICH WAS THAT, $112 MILLION. SO WE'RE SHOWING YOU THE 13 MILLION AND SORT OF WHERE IT WOULD LAND WITHIN OUR STRATEGIES.
SO WE'RE SEEKING FOR THAT TO BE REMOVED, AND THEN JUST AS A REMINDER, WE ARE ASKING FOR A BRAND NEW RIDER, WHICH IS REALLY JUST FOR TRANSPARENCY SAKE, TO SPEAK ABOUT HOW WE ARE ASSIGNING YEARS OF EXPERIENCE FOR OUR CPOS, WHETHER IT BE THEIR FEDERAL, LOCAL, STATE EXPERIENCE, WE WANT OUR RIDER TO SORT OF SPEAK TO THAT.
WE'RE GOING TO BE USING THAT EXPERIENCE IN ASSIGNING THEM TO THEIR PAY SCALE IN ARTICLE NINE, AND FINALLY, AS DEPUTY DIRECTOR SANCHEZ MENTIONED, WE ARE SEEKING A RIDER.
WE SAW IN HER PRESENTATION SOME OF THOSE CHALLENGES, SOME OF THE THINGS THAT WE'RE TRYING TO DO IN THE CONTRACTING, WHICH HAS PUT US, I THINK WE CAN SAY, PREDICTABLY, A LITTLE BIT BEHIND THE SCHEDULE OF SPENDING, ALL OF OUR APPROPRIATIONS.
SO WE ARE ASKING FOR THAT FINAL BULLET, A RIDER THAT WILL LET US UV FORWARD, ANY FUNDING THAT WE HAVE AT THE END OF THIS BIENNIUM IN OUR IT TRANSFORMATION CAPITAL PROJECT, ONLY TAKING THAT INTO 26, AND SO, JUST AS A REMINDER, THOSE ARE OUR TWO SORT OF NEW RIDERS THAT WE'RE SEEKING.
HAS THERE BEEN ANY FEEDBACK ON OR ANY DISCUSSIONS WHERE YOU CAN KIND OF GARNER IF WE'RE GOING TO BE SUCCESSFUL IN THAT REGARD? YES, CERTAINLY.
I THINK THE INITIAL RETURNS ARE THEY SEE THIS AS A GOOD IDEA.
THEY UNDERSTAND THAT IT PROJECTS HAVE THIS COST ELEMENT TO IT OR HAVE A SCHEDULING ELEMENT TO IT, WHERE WHEN YOU HAVE, AS COMMISSIONER ATKINS SAID, A BIG UNDERTAKING, A BIG IT PROJECT, THAT IT'S HARD TO PREDICT THOSE THINGS, AND I THINK THE INITIAL RETURNS THAT WE'VE HAD IS THEY'RE ON THE SAME PAGE WITH US.
YEAH, IT'S WE'RE NOT THE ONLY ONES IN THAT BOAT.
SO WE'RE NOT ASKING FOR MORE MONEY.
WE'RE JUST ASKING TO MOVE FORWARD WHAT THEY GAVE US ALREADY, BUT SO FAR THE FEEDBACK HAS BEEN THAT SEEMS TO BE HAPPENING IN MULTIPLE PLACES, AND IT'S THE FEEDBACK HAS BEEN GOOD FOR US.
WE WANTED TO SHOW YOU THE AMOUNT OF REVENUE WE ESTIMATED IN OUR LAR, AND THEN WE WANTED TO PUT THAT TO THE SIDE TO SHOW WHAT DOES OUR RIDER 7 SAY THAT WE WOULD POTENTIALLY COLLECT THAT COUNTS TOWARDS OUR APPROPRIATION AND SHOW YOU, YOU KNOW, WHAT IT LOOKS LIKE IF WE WERE TO GET ALL OF OUR EXCEPTIONAL ITEMS. THE ONE CAVEAT I WOULD SAY, IN CASE YOU WERE COMPARING THIS NUMBER, THE NUMBERS HERE TO SOME OF THOSE PRIOR SLIDES IS THIS TIME WE'RE SHOWING YOU OUR GENERAL REVENUE ONLY.
SO EVENTUALLY THAT GREEN BAR CHART AND THAT PURPLE BAR CHART HAVE EXCLUDED SOME NUMBERS THAT WERE IN THOSE PRIOR SLIDES TO SHOW YOU FED FUNDS AND APPROPRIATED RECEIPTS AND THINGS OF THAT NATURE, BUT YOUR LAR THAT BLUE COLUMN WE ARE ESTIMATING ABOUT $776 MILLION IN REVENUE.
THAT INCLUDES YOUR TAXES AS WELL AS YOUR LICENSING REVENUE, BUT ONCE YOU GET RID OF EXCISE TAXES AND YOU START COUNTING THE REVENUE THAT IS IN YOUR RIDER 7. WE THINK WE'RE COLLECTING SOMEWHERE AROUND $222 MILLION.
SO OUR SPENDING THAT WE'RE SEEKING FROM BASE GR ONLY OF 111.
IF YOU PUT THAT $13 MILLION OF EXCEPTIONAL ITEMS BACK ONTO OUR GR BASE, WE WOULD BE AT ABOUT $124.9 MILLION, AND AGAIN, THAT APPEARS TO BE AFFORDABLE WITHIN OUR ESTIMATE FOR GR OF 222.9 MILLION.
[00:30:03]
SO WE WANTED YOU TO HAVE THAT LOOK.THE I GUESS THE ORANGE VERSUS THE GREEN.
SO THE REVENUE TOWARD APPROPRIATION FURTHER EXPLAIN WHAT THAT IS.
OKAY. SO WHEN WE'RE APPROPRIATED OUR APPROPRIATIONS FOR THIS AGENCY, WE HAVE A RIDER IN OUR BILL PATTERN THAT SAYS THIS AGENCY MUST COLLECT REVENUES TO SUPPORT THAT APPROPRIATION.
RIGHT. OKAY, AND WE KNOW THAT WHERE THOSE REVENUES, THEY HAVE A SPECIFIC CODE.
SO WE KNOW EXACTLY WHERE THOSE REVENUES ARE GOING TO BE DERIVED FROM AND MY REVENUE ANALYST, THEY PROJECTED, I THINK WE USED A 3% GROWTH RATE ON EXISTING REVENUES ACTUALS IN THE BIENNIUM OF 2022 AND 2023, AND WE PROJECTED ABOUT A 3% GROWTH IN ALL OF THOSE LITTLE REVENUE BUCKETS, AND WHEN WE PROJECT THOSE THINGS IN THE RIDER, THE RIDER SPECIFICALLY REFERENCES THE TYPES OF FUNDS THAT COUNT TOWARD IT.
WHEN WE AGGREGATE ALL OF THOSE UP WITH THE 3%, OUR BELIEF IS IT'S A SAFE BET THAT WE'LL HAVE 222.9 COLLECTED, AND WE KNOW THAT OUR APPROPRIATION OF 111 FITS WITHIN THAT.
SO IF WE DIDN'T, IF WE HAD MORE APPROPRIATED TO US THAN WE COULD COLLECT.
THAT RIDER DIRECTS THE COMPTROLLER TO REDUCE OUR APPROPRIATION, AND SO OKAY, SO THE DELTA, WHICH IS APPROXIMATELY 111 MILLION, RIGHT BETWEEN THE REVENUE TOWARD APPROPRIATION AND THE BASE REQUEST.
WHERE DOES WHERE DOES THAT MONEY GO? OKAY. SO WHEN THE COMPTROLLER IS CERTIFYING THE BILL, THIS REVENUE THAT'S COLLECTED ABOVE WHAT WE'VE SOUGHT AFTER OR WHAT HAS BEEN APPROPRIATED TO US GOES INTO CERTIFYING THE BILL, AND SO AS WE COLLECT IT, WE'RE ACTUALLY SENDING THIS TO THE COMPTROLLER, AND SO THE CONTROLLER IS THAT ARE THOSE PROCEEDS DIRECTED TOWARD ANYTHING IN PARTICULAR, OR IS THAT JUST GOES IN THE GENERAL BUDGET FOR THE STATE? WE DON'T KNOW THE SPECIFIC THINGS.
IT'S IN THE GENERAL BUDGET OF THE STATE.
OKAY. SO IF WE WERE A PRIVATE COMPANY, YOU COULD ALMOST VIEW THAT AS PROFIT.
I KNOW WE DON'T WANT TO TOUCH THAT ONE.
ALL RIGHT. SORRY, I DIDN'T MEAN TO SAY THAT.
OKAY. I'LL GET A PHONE CALL ON THAT ONE.
YEAH. CHAIRMAN, LET'S JUST SAY WE'RE EFFICIENT.
ALL RIGHT. NO, I MEAN, THANK YOU.
ONE OF THE THINGS WE TALKED ABOUT IN THE PAST IS I SAID IF WE WERE A PRIVATE COMPANY.
I LIKE THE QUALIFYING STATEMENT.
WE DON'T KNOW WHEN WE'RE GOING TO HAVE A $13 MILLION EXCEPTIONAL SERIES OF ITEMS. I GET IT. NO, WE NEED TO HAVE A CUSHION BECAUSE AND WE ALSO DON'T KNOW IF WE'RE GOING TO GO INTO ANOTHER COVID SITUATION OR WE'RE GOING TO GO THROUGH A MAJOR RECESSION.
RIGHT. WHICH IS WHY I THINK KEEPING BECAUSE WE NEVER WANT TO BE IN A POSITION WHERE THE CONTROLLER HAS TO CUT US BECAUSE WE'RE NOT ADEQUATELY SUPPORTING THE AGENCY INTERNALLY.
NOW I'M QUITE HOW MANY MAYBE YOU ALL KNOW THIS.
HOW MANY STATE AGENCIES ARE SELF-FUNDING? I'M NOT SURE. ARE WE THE ONLY ONE? WE'RE NOT THE ONLY ONE. WE'RE NOT THE ONLY ONE.
GOT IT. WE CAN GET THAT FOR YOU.
THANK YOU. THEY CALL THAT I THINK THEY CALL THEM ALRCS OR SOMETHING LIKE THAT.
APPROPRIATIONS LIMITED TO REVENUE COLLECTED.
SO THERE ARE OTHER AGENCIES THAT HAVE ALRCS.
COMMON, NOT TO BE ABLE TO USE THOSE EXCESS FUNDS FOR WHATEVER PURPOSES THE AGENCY DEEMS APPROPRIATE.
RIGHT. YEAH, I MEAN, THAT MAKES SENSE, BUT OKAY, WE'LL SEE WHAT WE CAN DO TO FIND OUT.
I'M JUST CURIOUS, AND THAT'S THE END OF MY PRESENTATION.
SO IF THERE ARE ANY OTHER QUESTIONS, I'M HAPPY TO TAKE THEM NOW.
COMMISSIONERS, ANY QUESTIONS OR COMMENTS? I HAVE A COUPLE OF COMMENTS OR JUST QUESTIONS ACTUALLY FOR CONRAD.
SO IT'S GOOD TO SEE WHERE WE ARE.
TWO QUESTIONS I HAD FOR CLARIFICATION.
ONE ON THE ON THE ENFORCEMENT LINE ITEM THAT WE HAVE.
[00:35:06]
I WAS WONDERING JUST FROM A DETAILED PERSPECTIVE, I KNOW THIS AGENCY HAS TAKEN ON THE RESPONSIBILITY OF REALLY LEANING INTO THE HUMAN TRAFFICKING SPACE, AND SO IS IS THAT BUDGET OR IS THAT NUMBER FOR HUMAN TRAFFICKING THAT WE ALSO NEED FOR OUR EXPANDED, EXPANDED ENFORCEMENT? IS THAT IN THAT ENFORCEMENT OR IS THAT IN ANOTHER LINE ITEM ENTIRELY IN THAT ENFORCEMENT LINE ITEM? YES AND ONE OF THE THINGS YOU'LL HEAR ON OCCASION IS WE TALK ABOUT BUDGETS BY PROGRAM, AND SO YOU BROUGHT UP SOME PROGRAMS LIKE HUMAN TRAFFICKING AND BORDER SECURITY. THOSE PROGRAMS ARE RIGHT THERE IN THE ENFORCEMENT, AND SO YOU'LL FREQUENTLY HEAR US TALKING ABOUT ARTICLE NINE AND HOW THERE IS 1.2 IN ARTICLE NINE FOR THIS AND 5.7 FOR THAT.YES. OKAY, PERFECT BECAUSE THAT WAS GOING TO BE MY SECOND CLARIFICATION WHEN WE TALKED TO THE LINE ITEM OF PORTS OF ENTRY, KNOWING THE RESOURCES THAT'S NEEDED FOR THAT, AND ECHOING THE COMMENTS THAT THE CHAIRMAN SAID EARLIER TODAY.
SO THAT IS ALSO ROLLED UP INTO ENFORCEMENT.
SO THANK YOU. LET ME CLARIFY THAT, COMMISSIONER.
RIGHT. IT'S ACTUALLY GOT ITS OWN STRATEGY AS THE PORT OF ENTRY STRATEGY.
THE NEXT AGENDA ITEM WILL BE PREPARING FOR THE 89TH TEXAS LEGISLATURE.
DIRECTOR, STAPLES AND DIRECTOR MORALES.
GOOD MORNING, MR. CHAIRMAN AND COMMISSIONERS.
SO TODAY WE HAVE AN UPDATE FOR YOU ON WHAT THE AGENCY'S ROLE IS IN THE PROCESS, WHAT WE'RE WORKING ON NOW AND WHAT TO EXPECT NEXT YEAR, BUT FIRST, I WANT TO FORMALLY INTRODUCE YOU TO TONY MIRELES, WHO IN MAY THIS YEAR JOINED MY TEAM AT TABC AS TABC NEW DIRECTOR OF GOVERNMENT RELATIONS. BEFORE COMING TO THE AGENCY, TONY WORKED FOR SEVEN YEARS IN THE TEXAS HOUSE OF REPRESENTATIVES, WHERE HE WAS THE CHIEF OF STAFF FOR HOUSE MEMBER FOR THE LAST FIVE YEARS, AND NOW IN HIS ROLE AS GOVERNMENT RELATIONS DIRECTOR AT TABC.
TONY IS PRIMARILY RESPONSIBLE FOR MANAGING THE AGENCY'S RELATIONSHIPS AND COMMUNICATIONS WITH GOVERNMENT OFFICIALS AND THEIR STAFF, AND HE'S CHARGED WITH COORDINATING TABC PARTICIPATION IN LEGISLATIVE SESSIONS, WHICH HE'LL TELL YOU MORE ABOUT SHORTLY.
SO WE'RE EXCITED TO HAVE TONY ON THE TEAM AND THINK HE'S GOING TO HAVE A GREAT IMPACT, AND BEFORE I TURN THE MIC TO TONY, I WANT TO GIVE YOU GUYS A BRIEF REFRESHER ON WHAT THE AGENCY'S ROLE IS IN THE LEGISLATIVE PROCESS, AND THAT IS PRIMARILY TO BE A RESOURCE FOR THE LEGISLATURE AND OUR REGULATED INDUSTRY.
THAT MEANS WE EDUCATE THEM ABOUT TABC'S MISSION AND OPERATIONS.
THE AGENCY NEEDS TO PERFORM ITS DUTIES.
WE PROVIDE FEEDBACK WHEN ASKED HOW TO MAKE OUR STAKEHOLDERS POLICY GOALS WORK WITHIN THE TEXAS ALCOHOLIC BEVERAGE CODE, AND WE OFFER FEEDBACK ABOUT TABC'S ABILITY TO IMPLEMENT POLICY PROPOSALS THAT ARE FLOATING AROUND THE CAPITOL.
HOWEVER, AS A STATE AGENCY, WE MUST BE VERY CAREFUL NOT TO ADVOCATE FOR OR AGAINST ANY POLICY PROPOSAL OR DO ANYTHING THAT COULD BE CONSIDERED LOBBYING, BECAUSE NOT ONLY DOES STATE LAW PROHIBIT AGENCIES FROM ENGAGING IN THIS KIND OF ACTIVITY, BUT AT THE END OF THE DAY, AS A REGULATOR, TABC MUST HAVE THE PUBLIC'S TRUST TO FAITHFULLY AND FAIRLY ENFORCE THE LAWS ADOPTED BY THE LEGISLATURE, BUT WITH THAT IN MIND, THE TABC TEAM IS PERFECTLY PREPARED TO BE A HELPFUL RESOURCE TO OUR INDUSTRY STAKEHOLDERS AND TO LEGISLATORS THROUGHOUT THE SESSION.
NEXT SLIDE, AND WITH THAT, I WILL TURN IT OVER TO TONY.
FOR THE RECORD, I'M ANTONIO MORALES.
I AM THE DIRECTOR OF GOVERNMENT RELATIONS FOR TABC.
[00:40:09]
OUR LAR INCLUDES FIVE EXCEPTIONAL ITEMS, FOR A TOTAL OF 13.5 MILLION FOR 2026 AND 2027.SINCE THEN, TABC'S GR TEAM HAS ORGANIZED MEETINGS AT THE CAPITOL TO DISCUSS THE AGENCY'S APPROPRIATIONS REQUESTS AND ANSWER QUESTIONS FROM KEY STAFF IN THE HOUSE AND IN THE SENATE. TABC REMAINS TRANSPARENT WITH THE LEGISLATURE TO MAINTAIN POSITIVE RELATIONSHIPS WITH ELECTED OFFICIALS AND THEIR STAFF.
LATER THIS WEEK, TABC EXECUTIVE DIRECTOR THOMAS GRAHAM WILL PRESENT THE AGENCY'S LAR IN A JOINT HEARING OF REPRESENTATIVES FROM THE OFFICE OF THE GOVERNOR, THE LEGISLATIVE BUDGET BOARD AND OTHER LEGISLATIVE STAFF.
TABC LEADERSHIP HAS BEEN PROACTIVE IN MEETING WITH HOUSE APPROPRIATIONS AND SENATE FINANCE COMMITTEE STAFF TO MAKE SURE THEY'RE PROPERLY INFORMED ABOUT TABC OPERATIONS AND BUDGET NEEDS.
MOVING AHEAD THE NEXT MONTH. TABC WILL TESTIFY BEFORE THE HOUSE LICENSING AND ADMINISTRATIVE PROCEDURES COMMITTEE ON OCTOBER 16TH AND THE SENATE STATE AFFAIRS COMMITTEE ON OCTOBER 17TH TO PROVIDE AGENCY UPDATES AND DISCUSS THE AGENCY'S IMPLEMENTATION OF LAWS ADOPTED LAST SESSION, AND TO ANSWER QUESTIONS ABOUT THE COMMITTEE'S INTERIM CHARGES.
LATER THAT MONTH, LEGISLATORS WILL BEGIN TO FILE BILLS FOR THE 89TH LEGISLATIVE SESSION.
NEXT SLIDE PLEASE. THE FIRST DAY OF SESSION IS JANUARY 14TH.
HOUSE MEMBERS WILL BE ASSIGNED TO THE COMMITTEES AND BUDGET COMMITTEES WILL BEGIN THEIR HEARINGS.
MARCH 14TH IS A 60 DAY MARK OF SESSION, WHICH MEANS IT WILL BE THE BILL FILING DEADLINE IN APRIL.
BUDGET BILLS WILL GO TO THE FULL HOUSE AND SENATE FOR DEBATE CHANGES AND APPROVAL IN MAY.
WE WILL BEGIN TO SEE THE DEADLINES FOR THE HOUSE AND SENATE TO CONSIDER AND REPORT BILLS.
THE 140TH DAY IS THE LAST DAY OF SESSION FOR THE 89TH REGULAR SESSION IN SEPTEMBER OF 2025.
WE WILL TRACK ALL BILLS FILED THAT COULD IMPACT TABC PROVIDE TESTIMONY TO COMMITTEES.
WE'RE ASKING FOR OR WHEN WE'RE ASKED TO DO SO, AND OVERALL BE A RESOURCE TO LAWMAKERS.
TEXAS ALCOHOLIC BEVERAGE INDUSTRY.
TABC IS ACTIVELY MONITORING POTENTIAL LEGISLATION BASED ON RECENT INTERIM CHARGES IN THE SENATE.
THERE IS LOOKING FOR CURRENT REGULATORY STRUCTURE OF THE DELTA EIGHT AND NINE INDUSTRIES.
ALSO INCLUDED ARE BEVERAGES WITH THC.
THE SENATE IS LOOKING AT CURRENT LAWS AND REGULATIONS OF NONALCOHOLIC THC BEVERAGES.
CURRENTLY, THERE ARE NOT ANY ALCOHOLIC BEVERAGES ON THE MARKET.
TONY, LET ME INTERRUPT YOU THERE.
RIGHT. SO AT WHAT POINT DO WE PROVIDE THE INPUT TO THE LEGISLATURE FROM A FROM AN EXPERTISE PERSPECTIVE, NOT FROM A LAWMAKER PERSPECTIVE, WHERE IN THE WHERE IN THE PROCESS WOULD WE GET INVOLVED? CHAIRMAN. WE'VE BEEN ASKED TO SPEAK.
AT THIS POINT, THERE ARE NO PRODUCTS YET THAT WE'RE AWARE OF THAT HAVE PRODUCT APPROVAL FROM THE STATE OF TEXAS AND THE FEDERAL GOVERNMENT THAT HAVE THE THC AND ALCOHOL MIXED.
OKAY. THERE ARE PLENTY OF BEVERAGES OUT THERE THAT DO HAVE THESE DELTA PRODUCTS IN THEM.
[00:45:08]
OUR INVOLVEMENT AS IT STANDS NOW, UNLESS SOMEONE STARTS PUTTING ALCOHOL IN THOSE BEVERAGES, IS WE WORRY ABOUT THE PUBLIC SAFETY STANDPOINT FROM AN ON PREMISE LOCATION STANDPOINT.SO IF AN ON PREMISE LOCATION IS SELLING DELTA PRODUCTS AND THEY'RE SELLING ALCOHOLIC BEVERAGES, AND WE HAVE SOMEBODY THAT'S INTOXICATED ON THAT LICENSED PREMISE, THAT'S WHERE OUR REGULATION PIECE COMES INTO PLAY BECAUSE WE HAVE TO WORRY ABOUT ARE THEY INTOXICATED AT A LICENSED LOCATION? OKAY. THANKS, TONY.
THESE HAVE ALL BEEN TOPICS OF DISCUSSION AT THE CAPITOL AND AMONG THE INDUSTRY.
TABC HAS NOT BEEN GIVEN A SPECIFIC PROPOSAL TO WEIGH IN ON, AND TABC IS NOT AWARE OF ANY CURRENT PROPOSALS TO OFFICIALLY GET INVOLVED IN THIS PROCESS DISPLAYED ON THIS SLIDE.
OUR LEGISLATIVE OFFICES WITH KEY CONTACTS THAT WE ARE MOST OFTEN INTERACTING WITH.
HOWEVER, WE RESPOND TO ALL MEETING REQUESTS THAT WE RECEIVE.
THIS CONCLUDES OUR PRESENTATION AND WE ARE HAPPY TO ANSWER ANY QUESTIONS.
I DO HAVE A QUESTION IN RESPONSE TO THOMAS'S COMMENT THAT WE'RE SURE NO ENTITY IS SELLING HEMP, CBD, DELTA OR WHATEVER. I GUESS THERE'S SO MANY DIFFERENT KIND OF STRAINS OR VARIANTS WITH A MIX OF ALCOHOL.
IS THERE ANY WAY THAT WE CAN CONFIRM THAT? I MEAN, I KNOW WE'RE THEY'RE NOT TELLING US HOW DO WE GO OUT AND ASK AND FIGURE OUT WHAT DO THEY EXIST? ARE THEY I THINK THEY DO EXIST, BUT I DON'T KNOW.
I MEAN, I DON'T KNOW EITHER, BUT IS THERE A WAY, AS THE AGENCY WHERE WE CAN KIND OF CAST A BROAD NET AND DO AN INFORMATION REQUEST TO FIGURE OUT IF PEOPLE ARE SEEING THESE STOCKED ON THE SHELVES? BECAUSE I'M BEING TOLD, NOT PERSONALLY, BUT THROUGH SOME PARTIES THAT I'VE BEEN TO WITH SOME FRIENDS THAT THESE THESE DRINKS DO EXIST, AND I'M FIELDING THESE QUESTIONS AND I'M LIKE, NO, I DON'T THINK THAT'S DOABLE HERE IN TEXAS, BUT APPARENTLY IT IS.
SO TO BE ABLE TO SELL AN ALCOHOLIC BEVERAGE IN THE STATE, THEY NEED TO THE PRODUCERS HAVE TO GO TO THE FEDERAL GOVERNMENT FIRST AND TELL THEM WHAT THEIR FORMULA IS, AND THEN RECEIVE WHAT'S CALLED A COLA CERTIFICATE OF LABEL APPROVAL FROM THE FEDS.
OKAY, AND SO THE TTB TAKES THOSE IN.
THEY ASK WHAT THEIR FORMULAS ARE.
WHAT IS TTB? TAX AND TRADE BUREAU.
OKAY, AND SO THEY'RE THE ONES WHO REGULATE THAT PIECE OF IT AT THAT LEVEL.
SO WHEN IT COMES TO FORMULAS AND HANDING OUT PRODUCT REGISTRATION COLAS AND THINGS LIKE THAT, SO THEY YOU HAVE TO GO TO THEM FIRST, GIVE THEM A COPY OF YOUR FORMULA AND GET REGISTRATION FOR YOUR PRODUCT AND SO THEY MAY ASK YOU FOR A SAMPLE OF YOUR PRODUCT TO TEST.
RIGHT, THEY'RE GOING TO THEY WANT TO, WELL, THEY WANT TO KNOW YOUR RECIPE ESSENTIALLY, BUT DO I GUESS THE OTHER COULD DO PRODUCTS EXIST IN THE UNITED STATES THAT HAVE BOTH ALCOHOL AND THC, NOT THAT ARE REGISTERED AT THE FEDERAL LEVEL.
OKAY. WHICH AND ALSO NOT THAT HAVE BEEN REGISTERED WITH THE STATE OF TEXAS.
SO IF THEY'RE ON SHELVES, IT'S NOT WITH ANY REGULATORY OVERSIGHT.
RIGHT. THE ONES THAT ARE ON THE SHELVES THAT WE KNOW OF, THAT ARE OUT THERE AND AGAIN, THAT WE KNOW OF JUST HAVE IN TEXAS DELTA PRODUCTS OR CBD IN THEM.
SO LET'S ASSUME THAT THE LEGISLATURE SAYS, OKAY, DELTA CAN STAY.
WE HAVE THESE PRODUCTS THAT CARRY THAT IN THEM.
SO WHO'S GOING TO REGULATE THOSE.
THAT'S GOING TO BE UP TO THE LEGISLATURE.
RIGHT NOW WE HAVE NO PIECE IN THAT REGULATION UNTIL THEY INTRODUCE ALCOHOL INTO THOSE BEVERAGES.
SO I THINK WE'LL WATCH THE SESSION AND SEE WHICH DIRECTION.
YOU SEE THAT THERE'S A GAP THERE.
DSHS DELTA EIGHT AND NINE PRODUCTS.
YES. THEY HAVE TO GET A RETAIL PERMIT FROM THE STATE FOR THE CBD PRODUCTS.
I SEE NOW; I UNDERSTAND YOUR COMMENT EARLIER BETTER.
[00:50:08]
BUT IT'S NOT SOMETHING WE ARE AWARE OF AT THE MOMENT.RIGHT. WE'VE SEEN ANYTHING ON THE AGENDA THAT YOU KNOW OF AT THIS POINT REGARDING UNLICENSED BARS, BYOB.
THERE HAVE BEEN BILLS FILED IN PRIOR LEGISLATIVE SESSIONS, AS WE'VE HAD DISCUSSIONS ABOUT, AND I ASSUME THOSE WILL SOME OF THOSE WILL BE FILED AGAIN, MAYBE IN DIFFERENT FORMS, BUT WE HAVEN'T SEEN ANY.
OR AT LEAST I HAVEN'T SEEN ANY PROPOSALS FOR WHAT THAT MAY LOOK LIKE IN THE COMING SESSION.
WE CAN CHECK IN WITH SOME OF THE OFFICES THAT FILED THOSE.
IT IS A SUBJECT THAT COMES UP ALL THE TIME, RIGHT, AS IT RELATES TO US AS AN AGENCY.
WHEN IS THE HEARING ON THE DELTA EIGHT, DELTA NINE IN THE CAPITOL? SO I BELIEVE THAT HEARING ALREADY OCCURRED, AND TABC WASN'T INVITED ON THAT ITEM, BUT ON OCTOBER EITHER 16TH OR 17TH WE WILL BE PROVIDING TESTIMONY AT THE SENATE STATE AFFAIRS COMMITTEE'S REQUEST ABOUT THC PRODUCTS.
SO IT'S TRUE THC OR HEMP DERIVED PRODUCTS? I DON'T KNOW. I MEAN, I THINK THEY'RE ALL THC, BUT IF THERE'S A FORMULA THAT THE GOVERNMENT JUST A CHEMICAL CHAIN, RIGHT.
IT'S A NUANCE OF, IT'S SOMEHOW TIED BACK TO THE HEMP GROWING, ANYWAY.
WE DON'T THAT'S BEEN PART OF THE DIFFICULTY IN IDENTIFYING.
ON OCTOBER 16TH OR 17TH, THEY JUST CHANGED THE DATE.
WE ALL CALL IT BEER, RIGHT? RIGHT, IT'S ALL BEER NOW.
COMMISSIONERS, DO YOU HAVE ANY OTHER QUESTIONS SO FAR? NO. THANK YOU. WE ALL FEEL SO ENLIGHTENED NOW, DON'T WE? ALL RIGHT. THANK YOU.
THANK YOU. GENTLEMEN. OKAY, GUYS. THANKS.
OKAY, NEXT AGENDA ITEM IS PUBLIC COMMENT.
GENERAL COUNSEL PERSON, DO WE HAVE ANYONE? NO, SIR. WE DO NOT.
[4. Rules]
TAC31.1 RELATING TO THE SEPARATION OF DUTIES BETWEEN COMMISSION AND EXECUTIVE DIRECTOR, SPECIAL COUNSEL, DIAMOND.GOOD MORNING, MR. CHAIR. WELCOME, SIR.
THANK YOU SIR. GOOD MORNING COMMISSIONERS.
FOR THE RECORD, MY NAME IS MATT DIAMOND, TABC, SPECIAL COUNSEL.
AS YOU'RE AWARE, THIS SECTION REQUIRES AGENCIES TO REVIEW ADOPTED RULES WITHIN FOUR YEARS OF THEIR EFFECTIVE DATE, AND EVERY FOUR YEARS THEREAFTER TO DETERMINE IF THE REASONS FOR INITIALLY ADOPTING THE RULES CONTINUE TO EXIST DURING THIS REVIEW.
SHOULD THE COMMISSION APPROVE? STAFF WILL POST THE REVIEW FOR PUBLIC COMMENT AND CONSIDER ANY WRITTEN COMMENTS RECEIVED BY 5:00 PM ON NOVEMBER 10TH, 2024 AS A PART OF THIS REVIEW PROCESS, AND THAT CONCLUDES MY PRESENTATION ON THIS AGENDA ITEM.
I'M HAPPY TO ANSWER YOUR QUESTIONS.
OTHERWISE, THE MATTER IS RIGHT FOR YOUR DECISION.
QUESTIONS OR COMMENTS? ALL RIGHT. I MOVE TO APPROVE PUBLICATION OF RULE REVIEW RULE 16 TAC 31.1 RELATING TO THE SEPARATION OF DUTIES BETWEEN COMMISSION AND EXECUTIVE DIRECTOR.
IS THERE A SECOND? SECOND. MR. MACK, THANK YOU SIR.
WE HAVE A SECOND. WE'LL NOW VOTE.
ALL HAVE VOTED. MOTION IS APPROVED.
[00:55:03]
16 TAC 45.1 TO 45.51 RELATING TO THE MARKETING PRACTICES, GENERAL PROVISIONS, ENFORCEMENT, AND SPECIFIC REQUIREMENTS FOR DISTILLED SPIRITS, MALT BEVERAGES, WINE.THANK YOU, MR. CHAIRMAN. IT'S A MOUTHFUL.
I APPRECIATE THAT. STAFF HAS CONCLUDED THE REVIEW OF CHAPTER 45 SUBCHAPTERS A THROUGH E, WHICH WAS PROPOSED AT THE JULY 23RD, 2024 COMMISSION MEETING.
THE REVIEW WAS CONDUCTED PURSUANT TO TEXAS GOVERNMENT CODE 2,001.039.
EVERY FOUR YEARS THEREAFTER TO DETERMINE IF THEY ARE STILL NECESSARY.
THIS PROPOSED REVIEW WAS PUBLISHED IN THE AUGUST 2ND, 2024 ISSUE OF THE TEXAS REGISTER.
TABC DID NOT RECEIVE ANY COMMENTS REGARDING THIS REVIEW.
AT THE CONCLUSION OF THIS REVIEW, TABC STAFF FOUND THAT THE REASONS FOR ADOPTING CHAPTER 45 SUBCHAPTERS A THROUGH E CONTINUE TO EXIST, AND STAFF RECOMMENDS RE ADOPTION OF THESE RULES.
STAFF DID IDENTIFY PROVISIONS IN THE RULE REVIEW THAT MAY WARRANT FURTHER AMENDMENT, BUT ANY AMENDMENTS TO THESE RULES WOULD BE PROPOSED PURSUANT TO TEXAS ADMINISTRATIVE PROCEDURE ACT IN THE TEXAS GOVERNMENT CODE, AND THIS CONCLUDES MY PRESENTATION ON THIS AGENDA ITEM.
OTHERWISE, THE MATTER IS RIPE FOR YOUR DECISION.
QUESTIONS, LADIES AND GENTLEMEN.
I MOVE TO APPROVE REVIEW AND READOPTION OF CHAPTER 45 SUBCHAPTERS A THROUGH E RELATING TO MARKETING PRACTICES, GENERAL PROVISIONS, ENFORCEMENT, AND SPECIFIC REQUIREMENTS FOR DISTILLED DISTILLED SPIRITS, MALT BEVERAGES, AND WINE AS RECOMMENDED BY STAFF.
IS THERE A SECOND? SECOND. THANK YOU, COMMISSIONER ATKINS.
WE HAVE A SECOND. WE'LL NOW VOTE.
ALL RIGHT. THE MOTION IS APPROVED.
THANK YOU, MR. CHAIRMAN. GOOD MORNING, COMMISSIONERS, AND I DID NOT CALL YOU MATT DAMON THIS TIME.
ALL RIGHT, SENIOR COUNSEL CHERRY, PLEASE COME FORWARD IF YOU ARE WITH US.
TAC 41.12, RELATING TO COMPLIANCE REPORTING BY LICENSE AND PERMIT HOLDERS.
ALL RIGHT. GOOD MORNING. CHAIRMAN.
COMMISSIONERS. FOR THE RECORD, I'M MATTHEW CHERRY, TABC SENIOR COUNSEL.
THE PROPOSED AMENDMENTS THAT WE HAVE IN THIS DRAFT, THEY INCREASE THE AMOUNT OF TIME LICENSEES AND PERMITS ARE ALLOTTED TO COMPLETE AND SUBMIT THEIR COMPLIANCE REPORTS, AS WELL, AS IT DOES PROVIDE SOME ADDITIONAL RELIEF TO PERMIT HOLDERS WHO FAIL TO REPORT A FAIL TO SUBMIT A REPORT ON TIME.
THIS TIME, I'LL TAKE ANY QUESTIONS.
OKAY. QUESTIONS? ALL RIGHT. I MOVED TO APPROVE PUBLICATION OF PROPOSED AMENDMENTS TO RULE 16, TAC 41.12 RELATING TO COMPLIANCE REPORTING BY LICENSE AND PERMIT HOLDERS.
IS THERE A SECOND? SECOND. COMMISSIONER MARINO, THANK YOU.
ALL HAVE VOTED. THE MOTION IS APPROVED.
THE NEXT AGENDA ITEM IS CONSIDERATION AND POTENTIAL ACTION ON PUBLICATION AND PROPOSED AMENDMENT TO RULE 16 TAC 45.2 RELATING TO DEFINITIONS AND PROPOSED NEW RULES 45.28 AND 45.29 RELATING TO STANDARDS OF FILL FOR DISTILLED SPIRITS AND WINES.
SO THIS AGENDA ITEM, IT COVERS PROPOSED CHANGES TO CHAPTER 45, AND LIKE YOU JUST SAID, 45.2 RELATES TO DEFINITIONS, AND THEN WE PROPOSED A NEW 45.28 AND NEW 45.29, WHICH COVERS THE CONTAINER SIZES AND THE STANDARDS OF FILL FOR WINE AND DISTILLED SPIRITS.
THE PROPOSED AMENDMENT TO 45.2.
IT JUST UPDATES THE DEFINITION OF A DISTILLED SPIRIT.
[01:00:01]
THAT WAY, THE DEFINITION IN THE RULE ALIGNS DIRECTLY WITH THE DEFINITION IN THE CODE, AND THEN THE PROPOSED NEW 45.28 AND 45.29 FOR THE CONTAINER SIZES AND STANDARDS OF FILL. WHAT WE'VE DONE HERE IS MAKE IT CLEAR THAT WHAT'S AUTHORIZED FOR ALL THE CONTAINER SIZES ARE THOSE CONTAINER SIZES THAT ARE SPECIFICALLY AUTHORIZED IN THE ALCOHOLIC BEVERAGE CODE, AS WELL AS THE CONTAINER SIZES THAT ARE AUTHORIZED BY THE FEDERAL AGENCY AT TTB.THESE CHANGES ENSURE THAT OUR DEFINITION OF DISTILLED SPIRITS AGAIN, THAT IT ALIGNS WITH THE CODE, AND THAT ALL CONTAINER SIZES THAT ARE ELIGIBLE FOR A CERTIFICATE OF LABEL APPROVAL FROM TTB ARE CLEARLY AUTHORIZED IN THE STATE OF TEXAS.
HAVE WE EVER HAD A SITUATION WHERE TTB RECOMMENDED A LABEL THAT WE DID NOT APPROVE, OR IS IT FAIRLY MUCH IN LOCKSTEP? WE'VE HAD SITUATIONS IN THE PAST MANY YEARS BACK WHERE TTB HAD APPROVED SOMETHING THAT WE COULDN'T NECESSARILY APPROVE BECAUSE OF OUR STATUTE, BUT IT'S GENERALLY WHEN THAT HAPPENS, IT'S MAINLY BECAUSE WE HAVE SOME REQUIREMENTS IN TERMS OF WE NEED TO HAVE IT EXPLICITLY SAY WHERE IT WAS PRODUCED, OR MAYBE IT SHOULD NOT SAY THIS PRODUCT WAS MADE FOR THIS SPECIFIC RETAILER.
SO THAT'S REALLY WHEN WE KIND OF GET INTO KIND OF SOME OF THOSE VIOLATIONS.
THAT MIGHT BE A SCENARIO WHERE WE WOULD DENY SOMETHING THAT THE FEDERAL GOVERNMENT HAS APPROVED, BUT THAT'S JUST BECAUSE WE CAN GO A STEP FURTHER AS WE NEED TO, TO DISPROVE SOMETHING IF IT RUNS AFOUL OF OUR LAWS, BUT GENERALLY WHAT THEY APPROVE, WE GENERALLY AGREE.
ANY QUESTIONS, LADIES AND GENTLEMEN.
I MOVE TO APPROVE PUBLICATION OF PROPOSED AMENDMENTS TO RULE 16, TAC 45.2 RELATING TO DEFINITIONS PROPOSED NEW RULES 45.28 AND TWO NINE RELATING TO THE STANDARDS FOR FILL FOR DISTILLED SPIRITS AND WINE.
IS THERE A SECOND? SECOND. COMMISSIONER MACK.
THANK YOU SIR. WE WILL NOW VOTE.
ALL HAVE VOTED. THE MOTION CARRIES.
NEXT AGENDA ITEM IS CONSIDERATION OF POTENTIAL ACTION ON PUBLICATION OF PROPOSED NEW SUBCHAPTER G, AS IN GOLF, RELATING TO THE OPERATION OF OPERATING AGREEMENT BETWEEN PERMIT AND LICENSE HOLDERS AND THE NEW RULE 16 TO 41.65 RELATING TO CONTRACT DISTILLING ARRANGEMENTS AND DISTILLERY ALTERNATING PROPRIETORSHIPS.
ALL RIGHT. YES. SO THIS NEXT AGENDA ITEM, LIKE YOU JUST SAID, COVERS A PROPOSED AMENDMENT TO ADD A NEW SUBCHAPTER TO CHAPTER 45 WOULD BE SUBCHAPTER G, WHICH RELATES TO OPERATING AGREEMENTS BETWEEN PERMIT LICENSE HOLDERS, AND THEN WITHIN THAT NEW SUBCHAPTER, WE'RE PROPOSING A NEW RULE, 41.65, WHICH RELATES TO CONTRACT DISTILLING ARRANGEMENTS AND DISTILLERY ALTERNATING PROPRIETORSHIPS.
YOU'LL GENERALLY JUST HEAR THIS REFERRED TO AS CONTRACT DISTILLING.
THAT'S KIND OF THE COLLOQUIAL TERM THAT YOU'LL HEAR WITHIN THE INDUSTRY.
THE PROPOSED RULE'S NECESSARY TO IMPLEMENT LEGISLATION AUTHORIZING HOLDERS OF A DISTILLERS AND RECTIFIERS PERMIT, AND A HOLDER OF A NONRESIDENT SELLER'S PERMIT TO ENTER INTO OPERATING AGREEMENTS FOR THE UNDERLYING ACTIVITIES RELATED TO THE PRODUCTION OF DISTILLED SPIRITS.
THE PROPOSED RULE PROVIDES A FRAMEWORK FOR PERMITTEES WHO ENGAGE IN CONTRACT DISTILLING ARRANGEMENTS AND DISTILLERY ALTERNATING PROPRIETORSHIPS, AS CURRENTLY AUTHORIZED IN SECTIONS 14.10 AND SECTION 37.011 OF THE ALCOHOLIC BEVERAGE CODE.
THE PROPOSED RULE ALSO DEFINES THE TWO TYPES OF OPERATING AGREEMENTS FOR THE PRODUCTION OF DISTILLED SPIRITS, AND IT PROVIDES A DEFINITION OF THE TERM AFFILIATE AS IT'S USED SPECIFICALLY IN SECTION 14.10, SUBSECTION A6 AND 37.011, SUBSECTION A OF THE ALCOHOLIC BEVERAGE CODE.
IT ALSO CLARIFIES THE TYPES OF ACTIVITIES THAT AUTHORIZE THE SALE OF DISTILLED SPIRITS TO CONSUMERS DIRECTLY ON THE PREMISES OF A DISTILLERS PERMIT HOLDER, AND LASTLY, THE PROPOSED RULE PROVIDES AN EXCEPTION TO THE CURRENT REGISTRATION REQUIREMENT, WHICH WILL ALLOW THESE PRODUCTS THAT ARE PRODUCED UNDER THE ARRANGEMENTS TO BE REMOVED FROM THE PREMISES SO THEY CAN BE SUBMITTED TO THE FEDERAL GOVERNMENT IN CASE THEY NEED A SUBMISSION TO GET FORMULA APPROVAL, AND THEN FURTHER ON TO GET A CERTIFICATE OF LABEL APPROVAL, WHICH IS A PREREQUISITE FOR TABC PRODUCT REGISTRATION.
STAFF DID PRESENT THE PROPOSED RULE AT A STAKEHOLDER MEETING ON AUGUST 8TH, AND WE CONSIDERED THE COMMENTS RECEIVED FROM STAKEHOLDERS IN DRAFTING THIS PROPOSAL, AND RIGHT NOW I'LL TAKE ANY QUESTIONS.
DEFINE ALTERNATING PROPRIETORSHIP.
SO GENERALLY THE WAY YOU WANT TO THINK ABOUT IT IS CONTRACT DISTILLING WOULD BE I'M A DISTILLER.
YOU'RE A DISTILLER FOR SOME REASON.
MAYBE ONE OF MY PRODUCTS IS DOING GREAT.
SO I ESSENTIALLY HIRE YOU AS A SECOND DISTILLER TO PRODUCE THAT PRODUCT ON MY BEHALF.
[01:05:04]
OKAY, AND THE OTHER ARRANGEMENT, WHICH IS CALLED AN ALTERNATING PROPRIETORSHIP, YOU ESSENTIALLY YOU HAVE TWO PROPRIETORS OF A BUSINESS THAT ARE ALTERNATING OR SHARING SPACE.SO INSTEAD OF ME AS DISTILLER ONE YOU DISTILLER TWO ME HIRING YOU TO PRODUCE THE PRODUCT ON MY BEHALF, I WOULD ACTUALLY ENTER INTO AN ARRANGEMENT TO GO ONTO YOUR PREMISES AND USE YOUR FACILITY TO PRODUCE MY PRODUCT.
SO AGAIN, ALTERNATING PROPRIETORSHIPS, TWO PEOPLE THAT ARE SHARING THAT SPACE IS THAT COMMON? YES. NOW, OUTSIDE OF TEXAS, IT'S COMMON, BUT CURRENTLY IN TEXAS IT'S NOT AS COMMON BECAUSE THIS IS SOMETHING THAT THE LEGISLATURE JUST RECENTLY AUTHORIZED THE LAST SESSION.
IT'S MORE COMMON CURRENTLY UNDER THE CONTEXT OF MALT BEVERAGES THAT'S BEEN ALLOWED UNDER TEXAS LAW FOR I WANT TO SAY IT WAS AUTHORIZED PROBABLY LIKE 3 OR 4 SESSIONS AGO.
SO I GUESS THE IDEA HERE IS THAT THIS ALLOWS SMALLER BUSINESSES TO BECOME EFFICIENT SO THAT THEY CAN HAVE SOME ABILITY TO SCALE AND NOT BE CRUSHED BY. ABSOLUTELY.
CHAIRMAN, WE WERE REALLY GLAD TO SEE THIS PASS LAST SESSION.
SO AGAIN, WE WERE REALLY GLAD TO SEE THIS PASSED LAST SESSION AFTER YOU CAME ON BOARD, WE PUT THIS IN OUR LAR IN TERMS OF IMPEDIMENTS AND SAID, WE KNOW THAT THE WINE INDUSTRY CAN DO THIS.
WE KNOW THE MALT BEVERAGE INDUSTRY CAN DO THIS.
WE KNOW DISTILLERIES OUTSIDE THE STATE CAN DO THIS.
PLEASE CHANGE THE LAW SO THAT THESE GUYS, THE DISTILLERIES CAN DO IT, AND WHILE THAT DIDN'T BECOME A PART OF SUNSET, THE INDUSTRY DID PUSH FOR IT OVER THE LAST TWO SESSIONS.
SO IT WAS GREAT FOR THE TEXAS MARKETPLACE.
SEE, THAT'S AN EXAMPLE OF WHERE THAT'S PUBLIC PRIVATE PARTNERSHIP WORKING.
RIGHT. THAT IS AN EXAMPLE WHERE WE'RE NOT PUTTING THE STRONG ARM OF GOVERNMENT TO IMPEDE COMMERCE.
WE'RE ACTUALLY ASSISTING COMMERCE AND WE'RE ASSISTING INDUSTRY.
SO I JUST I WANT TO MAKE THAT KNOWN AND FOR PUBLIC RECORD.
YOU SAID THAT THERE WERE COMMENTS ON THIS PARTICULAR RULE? YES. SO AFTER SOME DISCUSSION WITH STAKEHOLDERS, WE HAD A DEFINITION FOR THE CONTRACT DISTILLING ARRANGEMENT THAT HAD A KIND OF A REQUIREMENT TO HAVE AN ADDITIONAL PREMISES, WHICH IS SOMETHING THAT IS REQUIRED UNDER THE ALCOHOLIC BEVERAGE CODE FOR MALT BEVERAGES, AND WHEN WE WERE SETTING UP THE FRAMEWORK FOR THIS RULE, SINCE THE CODE ALREADY HAS A FRAMEWORK FOR THESE TYPES OF ARRANGEMENTS FOR MALT BEVERAGES, WE TRIED TO USE WHAT WE COULD.
LET'S TRY TO USE WHAT'S ALREADY BUILT IN.
PEOPLE ARE USED TO THE EXTENT THAT WE CAN.
EVERYBODY'S ON BOARD WITH OUR-- YES. OKAY. YEAH, AND I WILL SAY, TOO, AS WELL, GOING BACK TO YOUR COMMENT A MOMENT AGO, BUT WE ARE WORKING WITH OUR INDUSTRY PARTNERS OUT THERE ON THIS RULE.
EXCELLENT, HIS RECALL IS JUST, YOU'RE GOOD MAN.
THANK YOU. MR. CHERRY. I SUPPOSE WE HAVE TO VOTE ON THIS NOW, RIGHT? THAT WOULD BE MY PREFERENCE.
I MOVE TO APPROVE PUBLICATION AND PROPOSE NEW SUBCHAPTER G RELATING TO THE OPERATING AGREEMENTS BETWEEN THE PERMIT AND LICENSE HOLDERS AND NEW RULE 16, TAC 41.65 RELATED TO CONTRACT DISTILLING ARRANGEMENTS AND DISTILLERY ALTERNATING PROPRIETORSHIPS. IS THERE A SECOND? SECOND. THANK YOU, COMMISSIONER ATKINS.
ALL HAVE VOTED. THE MOTION CARRIES.
BEFORE WE GO INTO EXECUTIVE SESSION, I WANT TO SORT OF MAKE IT A HABIT OF WELCOMING.
TO THE EXTENT THAT I KNOW YOU'RE HERE.
THANK YOU, SIR, FOR COMING, AND ANY OF OUR OTHER INDUSTRY PARTNERS THAT ARE HERE.
I'LL DO A BETTER JOB NEXT COMMISSION MEETING, KNOWING WHO YOU ARE AND BEING HERE.
ALL RIGHT, SO THE NEXT ITEM IS EXECUTIVE SESSION.
[5. Executive Session]
THE COMMISSION WILL NOW GO INTO EXECUTIVE SESSION UNDER GOVERNMENT CODE 551.074 AND 071 AND 089.[01:10:06]
REGULAR OPEN SESSION.TEXAS ALCOHOLIC BEVERAGE COMMISSION WILL BE IN RECESS.
THANK YOU ALL FOR COMING BACK.
GENERALLY WHEN WE COME OUT OF EXECUTIVE SESSION, NO ONE'S HERE.
THE TEXAS ALCOHOLIC BEVERAGE COMMISSION HAS CONCLUDED ITS EXECUTIVE SESSION.
IT'S NOW IN REGULAR OPEN SESSION.
THE DATE IS TUESDAY, SEPTEMBER 24TH, 2024, AND IT IS 11:58 A.M..
[6. Closing Items]
NEXT, POTENTIAL ACTION ON ITEMS DISCUSSED IN EXECUTIVE SESSION, OF WHICH THERE WERE NONE.THERE ARE NO ACTIONS TO BE TAKEN AND THE FINAL IS THE ANNOUNCEMENT OF THE NEXT MEETING DATE.
THE NEXT MEETING IS PLANNED FOR THURSDAY, NOVEMBER 14TH, 2024, AND . THAT'S RIGHT FOLKS, YOU HEARD IT RIGHT THURSDAY, WHICH I DON'T THINK WE'VE EVER HAD A THURSDAY MEETING, HAVE WE? IT'S BEEN A WHILE FOR MY TIME.
THAT WOULD BE REALLY EMBARRASSING.
YOU KNOW, WE'VE HAD SEVERAL SINCE YOUR TIME AS A MEMBER.
ALL RIGHT. SO ARE THERE ANY ISSUES WITH THAT DATE, COMMISSIONERS? NOPE. ALL RIGHT.
ALL RIGHT. THE NEXT COMMISSION MEETING IS SCHEDULED ON THURSDAY, NOVEMBER 14TH, 2024.
NEXT ADJOURNMENT TIME IS 12 NOON.
WE'LL SEE YOU ALL NEXT TIME, FOLKS.
* This transcript was compiled from uncorrected Closed Captioning.