Texas § AL.14.10 - OPERATING AGREEMENTS BETWEEN PERMIT HOLDERS

§ AL.14.10. OPERATING AGREEMENTS BETWEEN PERMIT HOLDERS

OPERATING AGREEMENTS BETWEEN PERMIT HOLDERS. (a) The holder of a distiller's and rectifier's permit may enter into an agreement with another holder of a distiller's and rectifier's permit that allows the distiller's and rectifier's permit holder to engage in the following activities on the permitted premises of the other distiller's and rectifier's permit holder: (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 authorized wholesalers and manufacturers outside the state; (6) sell, through an affiliate who is the holder of a nonresident seller's permit, the finished products in this state to holders of wholesaler's permits and to authorized wholesalers and manufacturers outside the state; (7) 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; and (8) sell bulk alcohol produced by the permit holder for purposes described by Section 38.01 . (b) The agreement is subject to approval by the commission and must describe with specificity the nature, duration, and extent of the activities authorized by the agreement. (c) The holder of a distiller's and rectifier's permit may enter into an agreement authorized by Section 37.011 with the holder of a nonresident seller's permit. (d) The holder of a distiller's and rectifier's permit on whose premises another distiller's and rectifier's permit holder contracts under this section to manufacture, bottle, package, or label alcoholic beverages may not: (1) consider or treat the alcoholic beverages manufactured, bottled, packaged, or labeled under the agreement as being owned by the permit holder; or (2) sell those alcoholic beverages on the permit holder's premises. (e) The commission shall adopt rules regulating the shared use of the permitted premises under this section to ensure administrative accountability of each permit holder and a strict separation between the businesses and operations of the permit holders. Added by Acts 2023, 88th Leg., R.S., Ch. 10 (S.B. 60 ), Sec. 1, eff. September 1, 2023.