Relating to authorized activities of a brewer's or nonresident brewer's license holder; authorizing a fee increase.
ModeratePlan for compliance
Medium Cost
Effective:2025-06-20
Enforcing Agencies
Texas Alcoholic Beverage Commission (TABC)
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: June 20, 2025
Compliance Deadline:June 20, 2025 for PASS verification and Alternating Brewery Proprietorship (ABP) bonding requirements.
Agency Rulemaking: The Texas Alcoholic Beverage Commission (TABC) is statutorily required to adopt rules "as soon as practicable" after the effective date to establish the new, higher fee schedule. We are currently in a "regulatory gray zone" where the license structure has changed, but the new fees are not yet published.
Immediate Action Plan
Audit Licenses: Identify all active Nonresident Brewer’s Licenses held by your entity. Select one as the "Primary" for consolidation and prepare to let others lapse or be merged.
Verify PASS Status: Before June 20, ensure you have a paper trail establishing you are the Primary American Source of Supply for every SKU shipped to Texas.
Update Logistics: Instruct your 3PLs and shipping teams to utilize the Primary License number for all Texas-bound freight effective June 20.
Monitor Texas Register: Assign counsel to watch for TABC's proposed fee schedule rulemaking to assess the financial impact and submit comments if the increase is excessive.
Operational Changes Required
Contracts
Distribution Agreements: You must amend Representations and Warranties to explicitly affirm your status as the Primary American Source of Supply (PASS) for every brand sold. This triggers Chapter 102 franchise protections; ensure termination clauses align with this elevated liability.
Contract Brewing/ABP Agreements: Agreements must explicitly require the maintenance of a brewer's license *specifically at the location* where production occurs. You cannot rely on a "corporate" license for a contract facility.
Hiring/Training
Logistics & Compliance Staff: Retrain shipping departments immediately. Shipments from *all* out-of-state facilities must now reference the single, primary Texas Nonresident Brewer’s License number. Stop using facility-specific license numbers once consolidation is approved.
Reporting & Record-Keeping
PASS Documentation: You must generate and retain internal documentation proving you are the manufacturer, owner of the commodity, or the *exclusive agent* of the manufacturer. TABC will require this to verify your right to sell to distributors.
ABP Filings: For alternating proprietorships, you must maintain concurrent files of the TTB Brewer's Notice/Bond and the specific TABC bond required under Sec. 62.14.
Fees & Costs
Fee Restructuring: While you will save money by dropping multiple site-specific licenses, the base fee for the Nonresident Brewer’s License will increase.
Budget Impact: Budget for a potential spike in the renewal fee for your primary license in Q3/Q4 2025. The law mandates the fee be "sufficient to cover administrative costs," which signals a significant hike is coming to balance the agency's revenue.
Strategic Ambiguities & Considerations
The "Revenue Neutral" Fee Calculation: The statute requires TABC to raise fees to cover costs, but does not specify the formula. It is unclear if the fee increase will strictly offset the loss of multi-location license revenue or if TABC will use this rulemaking to implement a broader administrative fee hike.
"Exclusive Agent" Verification: The law allows an "exclusive agent" to qualify as the PASS, but does not define the evidentiary standard. Until TABC issues guidance, it is unclear what specific legal documents (e.g., agency agreements, power of attorney) will satisfy a TABC audit.
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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.
The bill author has informed the committee that there is a need to modernize the regulations for brewers and nonresident brewers in Texas to assist their ability to contract with one another for manufacturing services and to share facilities under an alternating brewery proprietorship. C.S.H.B. 4463 seeks to address this issue and enhance compliance, transparency, and flexibility in the alcoholic beverage industry by providing for brewers and nonresident brewers to engage in joint production activities and authorizing nonresident brewers to transport malt beverages into Texas from multiple out-of-state locations without needing a separate license for each site.
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 rulemaking authority is expressly granted to the Texas Alcoholic Beverage Commission in SECTION 5 of this bill.
ANALYSIS
C.S.H.B. 4463 amends the Alcoholic Beverage Code to include a nonresident brewer's license holder as a license holder with whom a brewer's or nonresident brewer's license holder is authorized to contract to provide manufacturing services or for the use of the license holder's manufacturing facilities under an alternating brewery proprietorship. The bill specifies that the license that each entity that is a party to an alternating brewery proprietorship or contract brewing arrangement is required to hold at the location where brewing services are conducted under the arrangement is a brewer's license in Texas at that location.
C.S.H.B. 4463 includes the following among the authorized activities of a nonresident brewer's license holder:
·causing to be transported malt beverages into Texas only to holders of brewer's or distributor's licenses;
·transporting or causing to be transported malt beverages into Texas from any of the license holder's locations outside of Texas under the license and without being required to hold a separate nonresident brewer's license for each location outside of Texas; and
·entering into a contract with the holder of a brewer's license under provisions relating to use of manufacturing facilities and engaging in any activity authorized under those provisions.
C.S.H.B. 4463 prohibits a holder of a nonresident brewer's license from soliciting, accepting, or filling an order for malt beverages from a holder of a brewer's or distributor's license unless the nonresident brewer is the primary American source of supply for the brand of malt beverages that is ordered. The bill establishes that a nonresident brewer that is the primary American source of supply for a malt beverage is considered the brewer of the malt beverage for purposes of the Malt Beverage Industry Fair Dealing Law and statutory provisions relating to territorial limits on the sale of malt beverages. The bill defines "primary American source of supply" as the brewer, the producer, the owner of the commodity at the time it becomes a marketable product, the bottler, or the exclusive agent of any of those and establishes the following:
·to be the "primary American source of supply" the nonresident brewer must be the first source, that is, the manufacturer or the source closest to the manufacturer, in the channel of commerce from whom the product can be secured by Texas distributors or brewers; and
·a product may have only one primary American source of supply to Texas.
The bill requires the Texas Alcoholic Beverage Commission (TABC) to adopt rules to implement the bill's provisions as soon as practicable after the bill's effective date, including rules to adjust, including by increasing, fees assessed by TABC on applicants for an original or renewal certificate, permit, or license issued by TABC as necessary to ensure the amount of such fees is sufficient to cover the costs incurred by TABC in administering the Alcoholic Beverage Code as required under statutory provisions relating to the powers and duties of TABC.
C.S.H.B. 4463 repeals Section 63.05, Alcoholic Beverage Code, which relates to the authority of a brewer's or nonresident's license holder to contract with a nonresident's brewer's license to provide brewing services or for the use of the license holder's brewing facilities under an alternating brewery proprietorship.
EFFECTIVE DATE
September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 4463 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
The substitute includes a provision absent from the introduced establishing that a nonresident brewer that is the primary American source of supply for a malt beverage is considered the brewer of the malt beverage for purposes of the Malt Beverage Industry Fair Dealing Law and statutory provisions relating to territorial limits on the sale of malt beverages.
Both the introduced and the substitute require TABC to adopt rules to implement the bill's provisions. However, the substitute includes a specification absent from the introduced that the rules include rules to adjust fees assessed by TABC on applicants for an original or renewal certificate, permit, or license issued by TABC as necessary to ensure the amount of such fees is sufficient to cover the costs incurred by TABC in administering the Alcoholic Beverage Code.
Honorable Dade Phelan, Chair, House Committee on Licensing & Administrative Procedures
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4463 by VanDeaver (Relating to authorized activities of a brewer's or nonresident brewer's license holder.), As Introduced
No significant fiscal implication to the State is anticipated.
The bill would allow nonresident brewer's licensees to transport, or cause to be transported, malt beverages into Texas from any of the licensee's locations outside of Texas under the license. The bill would condense the number of licenses required to operate a brewery outside of the state so that licensees would not be required to hold a separate license for each location outside of Texas.
No significant fiscal impact to the Texas Alcoholic Beverage Commission is anticipated.
According to the Comptroller of Public Accounts, the fiscal impact to revenue cannot be determined because the number of nonresident brewers who would condense to a single license is unknown.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
304 Comptroller of Public Accounts, 458 Alcoholic Beverage Commission
LBB Staff:
JMc, TUf, CSh, AF
Related Legislation
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HB4463 fundamentally restructures nonresident brewer licensing by allowing multi-facility consolidation under a single license while mandating a commensurate fee increase to offset administrative costs. This Act also strictly codifies "Primary American Source of Supply" (PASS) status, directly impacting distribution rights and franchise law liability for all brewers shipping into Texas. Implementation Timeline Effective Date: June 20, 2025 Compliance Deadline: June 20, 2025 for PASS verification and Alternating Brewery Proprietorship (ABP) bonding requirements.
Q
Who authored HB4463?
HB4463 was authored by Texas Representative Gary Vandeaver during the Regular Session.
Q
When was HB4463 signed into law?
HB4463 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB4463?
HB4463 is enforced by Texas Alcoholic Beverage Commission (TABC).
Q
How urgent is compliance with HB4463?
The compliance urgency for HB4463 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB4463?
The cost impact of HB4463 is estimated as "medium". This may vary based on industry and implementation requirements.
