By: Hancock	S.B. No. 2225
	(In the Senate - Filed March 11, 2025; March 25, 2025, read
	first time and referred to Committee on State Affairs;
	April 22, 2025, reported favorably by the following vote:  Yeas 9,
	Nays 1; April 22, 2025, sent to printer.)
Click here to see the committee vote

	A BILL TO BE ENTITLED
	AN ACT
	relating to the creation of a spirit cooler certificate;
	authorizing a fee.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 1.04, Alcoholic Beverage Code, is
	amended by amending Subdivisions (3) and (5) and adding Subdivision
	(32) to read as follows:
	(3)  "Distilled spirits" means alcohol, spirits of
	wine, whiskey, rum, brandy, gin, or any liquor produced in whole or
	in part by the process of distillation, including all dilutions or
	mixtures of them, and includes spirit coolers [that may have an
	alcoholic content as low as four percent alcohol by volume and that
	contain plain, sparkling, or carbonated water and may also contain
	one or more natural or artificial blending or flavoring
	ingredients].
	(5)  "Liquor" means any alcoholic beverage, other than
	a malt beverage, containing alcohol in excess of five percent by
	volume, unless otherwise indicated, and any spirit coolers. Proof
	that an alcoholic beverage is alcohol, spirits of wine, whiskey,
	liquor, wine, brandy, gin, rum, tequila, mescal, habanero, or
	barreteago, is prima facie evidence that it is liquor.
	(32)  "Spirit cooler" means an alcoholic beverage that:
	(A)  consists of:
	(i)  alcohol, spirits of wine, whiskey, rum,
	brandy, gin, or any liquor produced wholly or partly by the process
	of distillation; and
	(ii)  plain, sparkling, or carbonated water,
	or juices, and may also contain one or more natural or artificial
	blending or flavoring ingredients; and
	(B)  has an alcoholic content of less than 17
	percent by volume.
	SECTION 2.  Subtitle A, Title 3, Alcoholic Beverage Code, is
	amended by adding Chapter 39 to read as follows:
	CHAPTER 39. SPIRIT COOLER CERTIFICATE
	Sec. 39.01.  ELIGIBLE PERMIT AND LICENSE HOLDER. A spirit
	cooler certificate may be issued to the holder of a wine only
	package store permit, wine and malt beverage retailer's permit,
	wine and malt beverage retailer's off-premise permit, or retail
	dealer's off-premise license whose premises are located in an area
	where the sale of alcoholic beverages is legal as provided by a
	ballot issue approved by the voters under Section 501.035(b)(5),
	(6), or (7), Election Code.
	Sec. 39.02.  AUTHORIZED ACTIVITIES. The holder of a spirit
	cooler certificate may:
	(1)  purchase spirit coolers from the holder of a
	wholesaler's permit or general class B wholesaler's permit;
	(2)  if the certificate holder is a wine only package
	store permittee, wine and malt beverage retailer's off-premise
	permittee, or retail dealer's off-premise licensee, sell spirit
	coolers at retail for consumption off the premises where sold but
	not for resale; and
	(3)  if the certificate holder is a wine and malt
	beverage retailer's permittee, sell spirit coolers at retail for
	consumption on or off the premises where sold but not for resale.
	Sec. 39.03.  FEE. The fee for a spirit cooler certificate
	shall be set at a level sufficient to recover the cost of issuing
	the certificate and administering this chapter.
	Sec. 39.04.  HOURS OF SALE. The holder of a spirit cooler
	certificate issued under this chapter may remain open and sell
	spirit coolers as provided under this chapter on any day and during
	the same hours as those prescribed for the sale of malt beverages
	under Section 105.05.
	SECTION 3.  Section 102.31(a), Alcoholic Beverage Code, is
	amended to read as follows:
	(a)  This section applies to:
	(1)  the sale of malt beverages or malt beverage
	containers or the original packages in which malt beverages are
	received, packaged, or contained by a distributor's licensee to a
	retail dealer's on-premise or off-premise licensee, a wine and malt
	beverage retailer's permittee, or a wine and malt beverage
	retailer's off-premise permittee; [and]
	(2)  the sale of malt beverages by a local distributor's
	permittee, or by any licensee authorized to sell those beverages
	for resale, to a mixed beverage permittee; and
	(3)  the sale of spirit coolers by a wholesaler's or
	general class B wholesaler's permittee to a wine only package store
	permittee, wine and malt beverage retailer's permittee, wine and
	malt beverage retailer's off-premise permittee, or retail dealer's
	off-premise licensee.
	SECTION 4.  Section 102.32, Alcoholic Beverage Code, is
	amended by adding Subsection (a-1) to read as follows:
	(a-1)  This section does not apply to the sale of a spirit
	cooler by a wholesale dealer to a retailer.
	SECTION 5.  Chapter 102, Alcoholic Beverage Code, is amended
	by adding Subchapters E and F to read as follows:
	SUBCHAPTER E. TERRITORIAL LIMITS ON SALE OF SPIRIT COOLERS
	Sec. 102.101.  DEFINITIONS. In this subchapter:
	(1)  "Brand" means any word, name, group of letters,
	symbol, or trademark or a combination of any word, name, group of
	letters, symbol, or trademark adopted and used by a manufacturer or
	nonresident seller's permittee on a label or on packaging to
	identify a specific spirit cooler and distinguish the spirit cooler
	from the label or packaging of another spirit cooler produced or
	marketed by any manufacturer or nonresident seller's permittee.
	The term does not include the name of the manufacturer or
	nonresident seller's permittee unless that name is included in the
	name of the brand.
	(2)  "Brand extension" means a brand that incorporates
	a brand name or brand logo, or a substantial part of an existing
	brand name or brand logo, of the same manufacturer or nonresident
	seller's permittee.
	(3)  "Manufacturer" means a person licensed under
	Chapter 14 or 16.
	(4)  "Retailer" means a person who holds a certificate
	issued under Chapter 39.
	(5)  "Wholesaler" means a person licensed under Chapter
	19 or 20.
	Sec. 102.102.  SETTING TERRITORIAL LIMITS. (a) Each
	manufacturer or nonresident seller's permittee shall designate
	territorial limits in this state within which the brands of spirit
	coolers the manufacturer or nonresident seller's permittee
	manufactures may be sold by a wholesaler.
	(b)  Each wholesaler shall enter into a written agreement
	with each manufacturer or nonresident seller's permittee from which
	the wholesaler purchases spirit coolers for distribution and sale
	in this state. The contract shall set forth the sales territory
	within which the wholesaler may distribute and sell each brand of
	spirit coolers. A wholesaler may not sell any brand of spirit
	coolers outside of the sales territory specified in the contract.
	The contract does not interfere with the rights of a retailer to
	purchase spirit coolers as provided by Section 102.104.
	(c)  A manufacturer or nonresident seller's permittee may
	not assign all or any part of the same sales territory to more than
	one wholesaler.
	(d)  A copy of a contract entered into under Subsection (b)
	shall be filed with the administrator.
	Sec. 102.103.  RIGHTS OF WHOLESALERS. Nothing in Section
	102.102 limits or alters a wholesaler's right to sell spirit
	coolers to any other wholesaler, except that a wholesaler who
	purchases spirit coolers from another wholesaler may distribute and
	sell the spirit coolers only in the sales territory designated by
	contract for the wholesaler making the purchase.
	Sec. 102.104.  RIGHTS OF RETAILERS. Nothing in Section
	102.102 or 102.103 limits or alters a retailer's right to purchase
	spirit coolers on the permitted premises of any wholesaler in this
	state and transport those spirit coolers to the retailer's
	permitted or licensed premises, except that the retailer may sell
	the spirit coolers only within a territory for which the
	manufacturer or nonresident seller's permittee of the brand has
	designated that the spirit coolers may be sold by a wholesaler.
	Sec. 102.105.  TERRITORIAL ASSIGNMENTS. (a) A brand
	extension is not a new or different brand.
	(b)  A manufacturer or nonresident seller shall assign a
	brand extension to a wholesaler to whom the brand was originally
	assigned if the wholesaler elects to distribute and sell the brand
	extension.
	SUBCHAPTER F. SPIRIT COOLER INDUSTRY FAIR DEALING LAW
	Sec. 102.131.  DEFINITIONS. In this subchapter:
	(1)  "Agreement" means a contract, agreement, or
	arrangement, whether expressed or implied, whether oral or written,
	for a definite or indefinite period between a manufacturer or
	nonresident seller's permittee and a wholesaler under which the
	wholesaler has the right to purchase, resell, and distribute any
	brand of spirit cooler offered by the manufacturer or nonresident
	seller's permittee.
	(2)  "Brand" has the meaning assigned by Section
	102.101.
	(3)  "Brand extension" has the meaning assigned by
	Section 102.101.
	(4)  "Good cause" means the failure by any party to an
	agreement, without reasonable excuse or justification, to comply
	substantially with an essential, reasonable, and commercially
	acceptable requirement imposed by the other party under the terms
	of the agreement.
	(5)  "Manufacturer" has the meaning assigned by Section
	102.101.
	(6)  "Retailer" has the meaning assigned by Section
	102.101.
	(7)  "Territory" or "sales territory" means the
	geographic territory of distribution and sale responsibility
	designated by an agreement between a manufacturer or nonresident
	seller's permittee and a wholesaler, as provided in Section
	102.102, for any brand of spirit cooler offered by the manufacturer
	or nonresident seller's permittee.
	(8)  "Wholesaler" has the meaning assigned by Section
	102.101.
	Sec. 102.132.  PURPOSE. (a) This subchapter is enacted
	pursuant to authority of the state under the provisions of the
	Twenty-first Amendment to the United States Constitution to promote
	the public's interest in the fair, efficient, and competitive
	distribution of liquor within this state by requiring manufacturers
	or nonresident seller's permittees and wholesalers to conduct their
	business relations so as to assure that:
	(1)  the wholesaler is free to manage its business
	enterprise, including having the right to independently establish
	its selling prices; and
	(2)  the public, retailers, and manufacturers or
	nonresident seller's permittees are served by wholesalers who will
	devote their reasonable efforts and resources to the sales and
	distribution of all the manufacturer's or nonresident seller's
	permittee's products that the wholesaler has the right to sell and
	distribute and maintain satisfactory sales levels in the sales
	territory assigned the wholesaler.
	(b)  This subchapter governs all relations between
	manufacturers or nonresident seller's permittees and their
	wholesalers, including any renewals or amendments to agreements
	between them, to the full extent consistent with the constitutions
	and laws of this state and the United States.
	Sec. 102.133.  WAIVER PROHIBITED. The provisions of this
	subchapter may not be waived, voided, or nullified by agreement.
	Sec. 102.134.  TERMINATION AND NOTICE OF CANCELLATION. (a)
	Except as provided by Subsection (c) and as otherwise specifically
	agreed upon by the parties to an agreement, a manufacturer,
	nonresident seller's permittee, or wholesaler may not cancel, fail
	to renew, or otherwise terminate an agreement unless the
	manufacturer, nonresident seller's permittee, or wholesaler
	provides prior notice in accordance with Subsection (b) to the
	other party to the agreement.
	(b)  The notice provided under Subsection (a) must be in
	writing and received by the affected party not later than the 90th
	day before the date on which the agreement will be canceled, not
	renewed, or otherwise terminated. The notice must contain:
	(1)  a statement of the party's intention to cancel, not
	renew, or otherwise terminate the agreement;
	(2)  a statement of reasons for the cancellation,
	nonrenewal, or termination; and
	(3)  the date on which the cancellation, nonrenewal, or
	termination takes effect.
	(c)  A manufacturer, nonresident seller's permittee, or
	wholesaler may cancel, fail to renew, or otherwise terminate an
	agreement without providing prior notice to the other party to the
	agreement for the following reasons:
	(1)  the other party is insolvent, files for
	bankruptcy, or is dissolved or liquidated;
	(2)  the other party assigns for the benefit of
	creditors or otherwise disposes of substantially all of the assets
	of the party's business;
	(3)  the party's ability to continue in business is
	materially and adversely affected because:
	(A)  the party is convicted of or pleads guilty or
	no contest to a charge of violating a law or regulation; or
	(B)  the party's permit is revoked or suspended
	for a period of 30 or more days; or
	(4)  the party fails to pay an amount owed to the other
	party when due, on demand for the payment, in accordance with the
	agreement.
	Sec. 102.135.  CANCELLATION. A manufacturer, nonresident
	seller's permittee, or wholesaler selling spirit coolers may not
	cancel, fail to renew, or otherwise terminate an agreement under
	this subchapter unless:
	(1)  the manufacturer, nonresident seller's permittee,
	or wholesaler has good cause for the cancellation, failure to
	renew, or termination; and
	(2)  if required to provide prior notice under Section
	102.134:
	(A)  the manufacturer or nonresident seller's
	permittee has provided the notice; and
	(B)  the other party has not eliminated the
	reasons specified in the notice as the reasons for cancellation,
	nonrenewal, or termination on or before the 90th day after the
	receipt of the notice.
	Sec. 102.136.  PROHIBITED CONDUCT. (a) A manufacturer or
	nonresident seller's permittee may not:
	(1)  induce or coerce, or attempt to induce or coerce, a
	wholesaler to engage in any illegal act or course of conduct;
	(2)  require a wholesaler to assent to any unreasonable
	requirement, condition, understanding, or term of an agreement
	prohibiting a wholesaler from selling the product of another
	manufacturer or nonresident seller's permittee;
	(3)  fix or maintain the price at which a wholesaler may
	resell spirit coolers;
	(4)  fail to provide each wholesaler of its brands a
	written contract embodying the manufacturer's or nonresident
	seller's permittee's agreement with the wholesaler;
	(5)  require a wholesaler to accept delivery of any
	spirit coolers or any other item or commodity that is not ordered by
	the wholesaler;
	(6)  adjust the price at which the manufacturer or
	nonresident seller's permittee sells spirit coolers to a wholesaler
	based on the price at which a wholesaler resells spirit coolers to a
	retailer, but a manufacturer or nonresident seller's permittee may
	set its own price if the price adjustment is based on factors other
	than a wholesaler's increase in the price it charges to a retailer
	and the adjustment is not intended to otherwise coerce illegal
	behavior under this section; or
	(7)  accept payment in exchange for an agreement
	providing for territorial rights.
	(b)  Nothing in this section shall interfere with the rights
	of a manufacturer, nonresident seller's permittee, or wholesaler to
	enter into contractual agreements that could be construed as
	governing ordinary business transactions, including agreements
	concerning allowances, rebates, refunds, services, capacity,
	advertising funds, promotional funds, or sports marketing funds.
	Sec. 102.137.  TRANSFER OF BUSINESS ASSETS OR STOCK. (a) A
	manufacturer or nonresident seller's permittee may not
	unreasonably withhold or delay its approval of any assignment,
	sale, or transfer of a wholesaler's stock or all or any portion of a
	wholesaler's assets, a wholesaler's voting stock, the voting stock
	of any parent corporation, or the beneficial ownership or control
	of any other entity owning or controlling the wholesaler, including
	the wholesaler's rights and obligations under the terms of an
	agreement whenever the person to be substituted meets reasonable
	standards imposed on the wholesaler and all other wholesalers of
	that manufacturer or nonresident seller's permittee of the same
	general class, taking into account the size and location of the
	sales territory and market to be served.
	(b)  On the death of one of the partners of a partnership
	operating the business of a wholesaler, a manufacturer or
	nonresident seller's permittee may not deny the surviving partner
	of the partnership the right to become a successor-in-interest to
	the agreement between the manufacturer or nonresident seller's
	permittee and the partnership provided the surviving partner has
	been active in the management of the partnership or is otherwise
	capable of carrying on the business of the partnership.
	(c)  Notwithstanding Subsection (a), on the death of an owner
	of a wholesaler, a manufacturer or nonresident seller's permittee
	may not deny approval for a transfer of ownership to a surviving
	spouse or adult child of the owner. A subsequent transfer of
	ownership by the surviving spouse or adult child is subject to
	Subsection (a).
	Sec. 102.138.  REASONABLE COMPENSATION. (a) A manufacturer
	or nonresident seller's permittee who, without good cause, cancels,
	fails to renew, or otherwise terminates an agreement or unlawfully
	denies approval of or unreasonably withholds consent to an
	assignment, transfer, or sale of a wholesaler's business assets or
	voting stock or other equity securities shall pay the wholesaler
	with whom it has an agreement the fair market value of the
	wholesaler's business with relation to the affected brand. In
	determining fair market value, consideration shall be given to all
	elements of value, including goodwill and going concern value.
	(b)  If the manufacturer or nonresident seller's permittee
	and wholesaler are unable to mutually agree on whether or not good
	cause exists for cancellation under Section 102.134 or on the
	reasonable compensation to be paid for the value of the
	wholesaler's business as provided by Subsection (a), the matter
	may, at the option of either the wholesaler or the manufacturer or
	nonresident seller's permittee, be submitted to three arbitrators,
	one of whom shall be named in writing by each party and the third of
	whom shall be chosen by the two arbitrators selected by the parties.
	If the arbitrators selected fail to choose a third arbitrator on or
	before the 10th day after the date the arbitrators were selected, a
	judge of a district court in the county in which the wholesaler's
	principal place of business is located shall select the third
	arbitrator. Arbitration shall be conducted in accordance with
	Chapter 171, Civil Practice and Remedies Code. Arbitration costs
	shall be paid one-half by the wholesaler and one-half by the
	manufacturer or nonresident seller's permittee. The award of the
	arbitrators is binding on the parties unless appealed not later
	than the 10th day after the date of the award. All proceedings on
	appeal shall be in accordance with and governed by Chapter 171,
	Civil Practice and Remedies Code.
	Sec. 102.139.  RIGHT OF FREE ASSOCIATION. A manufacturer or
	nonresident seller's permittee or wholesaler may not restrict or
	inhibit, directly or indirectly, the right of free association
	among manufacturers, nonresident sellers, or wholesalers for any
	lawful purpose.
	Sec. 102.140.  JUDICIAL REMEDIES. (a) If a manufacturer or
	nonresident seller's permittee or wholesaler who is a party to an
	agreement fails to comply with this subchapter or engages in
	conduct prohibited under this subchapter, or if a manufacturer or
	nonresident seller's permittee and wholesaler are not able to
	mutually agree on reasonable compensation under Section 102.138 and
	the matter will not be submitted to arbitration, the aggrieved
	manufacturer, nonresident seller's permittee, or wholesaler may
	maintain a civil action in an appropriate court in the county in
	which the wholesaler's principal place of business is located.
	(b)  In any action under Subsection (a), the court may grant
	such relief the court determines necessary or appropriate
	considering the purposes of this subchapter.
	(c)  The prevailing party in an action under Subsection (a)
	is entitled to actual damages, including the value of the
	wholesaler's business, as specified in Section 102.138, reasonable
	attorney's fees, and court costs.
	Sec. 102.141.  STATUTE OF LIMITATIONS. A person must bring a
	cause of action arising under this subchapter not later than the
	fourth anniversary of the date the cause of action accrues. If a
	termination related to a change in ownership of the brand occurs,
	the cause of action accrues when either the new brand owner or the
	transferring or selling brand owner provides notice of termination
	to the wholesaler.
	Sec. 102.142.  APPLICABILITY. (a)  This subchapter applies
	to an agreement entered into before, on, or after September 1, 2025.
	(b)  This subchapter does not apply to an agreement
	concerning malt beverages to which Subchapter C applies by
	operation of Section 102.81.
	SECTION 6.  Section 105.01(a), Alcoholic Beverage Code, is
	amended to read as follows:
	(a)  Except as provided in Sections 39.04, 105.02, 105.03,
	105.04, 105.08, and 105.091, no person may sell, offer for sale, or
	deliver any liquor:
	(1)  on New Year's Day, Thanksgiving Day, or Christmas
	Day;
	(2)  on Sunday; or
	(3)  before 10 a.m. or after 9 p.m. on any other day.
	SECTION 7.  This Act takes effect September 1, 2025.
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