The Sunset of the Texas Alcoholic Beverage Commission (TABC) left some local permits expiring on September 1 without a clear answer on how local governments could charge for two permits. House Bill 3897, by Chairwoman Senfronia Thompson, clarifies the maximum fee local governments may levy now and after September 1, 2021.

Sections 11.38 and 61.36 of the Alcoholic Beverage Code (Code) authorize cities and counties to levy a fee for each license/permit issued by TABC for premises within the city/county.

• The fee cannot exceed one-half of the statutory fee provided in the Code as of August 31, 2021.
• Effective September 1, 2021, all TABC fees will be established in rule and a new license/permit structure will be in place. Cities/Counties may not charge based on the fees set by rule.

TABC’s new license/permit structure will include 37 licenses and permits, almost all of which can be tied back to an old statutory fee that exists on August 31, 2021. As a result, local governments can levy a local fee of up to 50% of the statutory fee that exists on August 31, 2021 for those licenses/permits.

However, there are two new two-year licenses that will become effective in statute on September 1, 2021 that cannot be tied back to a statutory fee that existed on August 31, 2021:

• Brewer’s License
• Brewer’s Self-Distribution License.

Other permits changed names (like a Wine and Beer Retailer’s Permit to the Wine and Malt Beverage Retailer’s Permit) with TABC viewing the changes as simply a change in name rather than the creation of new permits because authorizations for these permits do not change.

Applying Section 1.09 of the Code, these permits can be tied back to a statutory permit and statutory fee that existed on August 31, 2021; thus, local governments could still levy up to 50% of the statutory fee for those permits.

Thanks to House Bill 3897, cities/counties can continue to charge up to 50% of the fee set by rule for Brewer’s License and Brewer’s Self-Distribution License.