The commission must require distributor-license applicants or holders to prove they have the required territory agreement, licenses, inventory, storage, and distribution capacity, and it must refuse approval or renewal if those requirements are not met.
Sec. 102.54. ADDITIONAL REQUIREMENTS FOR APPLICANTS FOR DISTRIBUTOR'S LICENSE. (a) In addition to any other requirements necessary for issuance or renewal of a distributor's license, the commission shall require an applicant for a license or a holder of a license to show that the applicant or holder: (1) has entered into or will acquire a written agreement designating an assigned territory from a brewer in accordance with this subchapter and Subchapter D; (2) has received or has applied for and will maintain all licenses or permits required to engage in business in the assigned territory as a holder of a distributor's license, including any state or federal licenses or permits; (3) has ordered, received, and stored or has committed to order, receive, and store a sufficient amount of malt beverages that the distributor is authorized to sell to ensure that the distributor can supply the reasonable needs of all retailers in the assigned territory; (4) has received and stored or has committed to receive and store malt beverages received from a brewer in a manner complying with a product quality control standard established by the brewer or the commission; and (5) has or will have the ability to sell, deliver, and promote each brand of malt beverage sold by the distributor to all retailers in the assigned territory: (A) in a manner that complies with the product quality control standards of the brewer or of the commission; and (B) on a continuing and recurring basis in response to reasonable market demand for a brand of malt beverage by the retailer or the retailer's customers in the assigned territory. (b) In determining whether an applicant for or holder of a distributor's license meets the requirement of Subsection (a)(5), the commission may require the applicant or holder to show that the applicant or holder has or will have: (1) storage facilities of a sufficient size to store each brand of malt beverage in an amount equal to the demand for the product from all retailers in the holder's or applicant's assigned territory; (2) an inventory or a commitment to acquire an inventory of each brand of malt beverage in an amount equal to the demand for the brand from all retailers in the holder's or applicant's assigned territory; (3) a sufficient number of employees to provide the holder or applicant with the ability: (A) to sell, deliver on a reasonably prompt basis, and promote each brand of malt beverage to all retailers in the holder's or applicant's assigned territory; and (B) to prepare and submit in a timely manner any fee or tax payments or reports required by any authorized governmental regulatory authority, including the Bureau of Alcohol, Tobacco, and Firearms and the commission; and (4) a sufficient number of delivery vehicles and rolling stock to provide the holder or the applicant with the capability of transporting, selling, delivering, or promoting each brand of malt beverage to all retailers in the assigned territory. (c) The commission or administrator shall refuse to approve an application for a distributor's license or shall refuse to renew a distributor's license if the commission or administrator finds the holder or applicant has failed to comply with any of the requirements of Subsection (a) or (b). (d) In this section: (1) "Distributor" means a person who holds a license issued under Chapter 64 or 65. (2) "Brewer" means a person who holds a license issued under Chapter 62, 63, or 74. (3) "Retailer" means a person who holds a permit or license issued under Chapters 25 through 34, Chapter 48, Chapters 69 through 72, or Chapter 74. Added by Acts 1995, 74th Leg., ch. 152, Sec. 2, eff. May 19, 1995. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 750 (S.B. 515), Sec. 6, eff. June 14, 2013. Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 304(a), eff. December 31, 2020. Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 304(b), eff. September 1, 2021. Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 305, eff. September 1, 2021.