HB4449

Regular Session

Relating to the sale of alcoholic beverages in areas annexed by certain municipalities.

ModeratePlan for compliance

Low Cost

Effective:2025-09-01

Enforcing Agencies

Texas Alcoholic Beverage Commission (TABC)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025
Compliance Deadline: N/A (Voluntary Licensure). Businesses may submit original TABC applications starting September 1, 2025.
Agency Rulemaking: No formal rulemaking required, but TABC internal mapping updates will lag. Expect a 30–60 day "gray zone" post-effective date where local field agents may rely on outdated precinct maps, requiring manual legal intervention during the application process.

Immediate Action Plan

Verify Jurisdiction: Contact the City Secretary to obtain the certified annexation ordinance for your location.
Audit Leases: Confirm your lease permits alcohol sales; initiate amendments if "dry" restrictions are currently in force.
Prepare TABC Packet: Draft TABC P-11 (Pre-Qualification) and specific license applications (BG, BQ, RM) in August for a September 1 submission.
Secure Insurance: Request quotes for Liquor Liability coverage to bind effective upon licensure issuance.

Operational Changes Required

Contracts

Commercial Leases: Review "Permitted Use" clauses immediately. If your lease explicitly prohibits alcohol sales based on previous "dry" status, the law does not override this private contract; you must negotiate a lease amendment.
Franchise Agreements: Franchisees must review Master Agreements. If the franchisor requires alcohol sales where legally permitted, you are now contractually obligated to obtain licensure.

Hiring/Training

TABC Certification: Staff in newly licensed premises must obtain TABC Seller/Server certification prior to the first shift.
Management Protocols: Establish age-verification workflows and "safe harbor" compliance policies prior to stocking inventory.

Reporting & Record-Keeping

Proof of Annexation: You must obtain a certified copy of the City Ordinance that annexed your specific parcel. This is now a critical document for your TABC application to prove the statute applies to your location.
Survey Data: Ensure current land surveys clearly delineate the premise is wholly within municipal boundaries.

Fees & Costs

Licensure Fees: Budget for standard TABC original application fees and potential Conduct/Performance Bonds based on tax history.
Insurance: Immediate procurement of Liquor Liability Insurance (recommended $1M/$2M aggregate) is required; General Liability policies will not cover alcohol-related incidents.

Strategic Ambiguities & Considerations

TABC Data Lag: The TABC's digital "Wet/Dry Map" is rarely updated in real-time. There is a high probability that initial applications will be flagged for rejection by automated systems or field agents viewing outdated precinct data.

Strategy: Do not accept a verbal rejection. Explicitly cite HB4449, Section 251.728(b) in your application cover letter to force a manual legal review by TABC Austin headquarters.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsAlcoholic Beverage Regulation City Government City Government--annexation Canyon, City of

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

H.B. 4449

By: Smithee

Licensing & Administrative Procedures

Committee Report (Unamended)

BACKGROUND AND PURPOSE

In Texas, local option elections allow communities to decide whether to permit or ban alcohol sales, and current law establishes that such a decision made by the voters remains in place until another election changes it. The bill author has informed the committee that this creates obstacles when cities annex new areas. The bill author has further informed the committee of an example of this in the City of Canyon, whose voters approved local options in 2014 for the legal sale of beer and wine for off-premises consumption and the legal sale of mixed beverages in restaurants by food and beverage certificate holders; however, newly annexed areas follow stricter county rules that only allow off-premises beer and wine sales, limiting alcohol service options for businesses in annexed areas, making it harder for new restaurants to open, and hindering economic growth in those parts of the city. H.B. 4449 seeks to address this issue by establishing that an area annexed to a municipality that is wholly located in a county containing portions of U.S. Highways 60 and 87 and that has a population of more than 12,000 assumes the wet or dry status of that municipality.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 4449 amends the Alcoholic Beverage Code to establish that an area annexed to a municipality that is wholly located in a county containing a portion of U.S. Highways 60 and 87 and that has a population of more than 12,000 assumes the wet or dry status of that municipality.

H.B. 4449 excepts the bill's provisions from statutory provisions establishing that an authorized voting unit that has exercised or may exercise the right of local option retains the status adopted, whether absolute prohibition or legalization of the sale of alcoholic beverages of one or more of the various types and alcoholic contents on which an issue may be submitted under the terms of local option elections on the sale of alcoholic beverages, until that status is changed by a subsequent local option election in the same authorized voting unit.

H.B. 4449 applies to an area annexed by a municipality before, on, or after the bill's effective date.

EFFECTIVE DATE

September 1, 2025.

House Authors

Rep. John SmitheeRepublican · Primary Author

Senate Sponsor

Sen. Kevin SparksRepublican · Primary Sponsor

Bill Text(with markup)

H.B. No. 4449

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the sale of alcoholic beverages in areas annexed by
	certain municipalities.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 251.72, Alcoholic Beverage Code, is
	amended to read as follows:
	Sec. 251.72. CHANGE OF STATUS. Except as provided in
	Sections 251.725, 251.726, 251.727, 251.728, 251.73, and 251.80, an
	authorized voting unit that has exercised or may exercise the right
	of local option retains the status adopted, whether absolute
	prohibition or legalization of the sale of alcoholic beverages of
	one or more of the various types and alcoholic contents on which an
	issue may be submitted under the terms of Section 501.035, Election
	Code, until that status is changed by a subsequent local option
	election in the same authorized voting unit.
	SECTION 2. Subchapter D, Chapter 251, Alcoholic Beverage
	Code, is amended by adding Section 251.728 to read as follows:
	Sec. 251.728. CHANGE OF STATUS FOR TERRITORY ANNEXED OR
	OWNED BY MUNICIPALITIES IN CERTAIN COUNTIES. (a) This section
	applies only to a municipality that:
	(1) is wholly located in a county containing a portion
	of U.S. Highways 60 and 87; and
	(2) has a population of more than 12,000.
	(b) Notwithstanding any other law, an area annexed to a
	municipality to which this section applies assumes the wet or dry
	status of that municipality.
	SECTION 3. The change in law made by this Act applies to an
	area annexed by a municipality before, on, or after the effective
	date of this Act.
	SECTION 4. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


April 21, 2025

TO:	Honorable Dade Phelan, Chair, House Committee on Licensing & Administrative Procedures

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB4449 by Smithee (Relating to the sale of alcoholic beverages in areas annexed by certain municipalities.), As Introduced

No fiscal implication to the State is anticipated.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.

Source Agencies:

458 Alcoholic Beverage Commission

LBB Staff:

JMc, TUf, BC, CWi

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Frequently Asked Questions

Common questions about HB4449

What does Texas HB4449 do?

HB4449 fundamentally alters the "wet/dry" status of territories annexed by the City of Canyon (and similarly bracketed municipalities). Effective September 1, 2025, any area annexed by the city—regardless of when the annexation occurred—automatically assumes the wet/dry status of the municipality, overriding restrictive county or precinct "dry" status. This creates immediate commercial licensure opportunities for retailers and hospitality groups currently located in "dry" pockets of the city.

Who authored HB4449?

HB4449 was authored by Texas Representative John Smithee during the Regular Session.

When was HB4449 signed into law?

HB4449 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce HB4449?

HB4449 is enforced by Texas Alcoholic Beverage Commission (TABC).

How urgent is compliance with HB4449?

The compliance urgency for HB4449 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB4449?

The cost impact of HB4449 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does HB4449 address?

HB4449 addresses topics including alcoholic beverage regulation, city government, city government--annexation and canyon, city of.

Legislative data provided by LegiScanLast updated: November 25, 2025

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