TWGGA Legislative Update, June 2023

Legislative Session Overview

The House and Senate both adjourned Sine Die, which means (for those who do not remember their high school Latin) indefinitely, late afternoon of May 29. However, the Governor called a Special Session at 9:00 p.m. just a few hours after both the House and Senate adjourned, so the interim was very short-lived.

The Special Session was short-lived as well. The House passed both bills the Governor declared on the call—a property tax relief bill and increased penalties for human trafficking—on May 30. The House then determined that the Senate bills that were passed, also in record time, were not germane to the Governor’s call and refused to refer the bills to committee. Once this parliamentary procedure was accomplished, the Speaker gaveled the House out and Sine Die was once again declared, leaving the Senate to deal with the House bills as they were passed in the House.

The prediction is that the Senate will not pass the bills as they come over from the House, and with the House no longer in session, the Senate will Sine Die as well, and we can start this all over again whenever the Governor sees fit to call them back.

Wash, rinse, and repeat. This particular sitcom can be rerun any number of times until someone, anyone, decides to initiate a compromise. When that occurs is anyone’s guess, but most of these members will have to go home, earn a living, spend time with their families, attend to summer plans, etc., at some point. The Lt. Governor has recently proclaimed that what the Governor and Speaker are attempting to pass is something he will never agree with. Because it is often proclaimed that there is only one vote in the Senate that matters, the situation does not appear to be ending anytime soon.

As a point of reference, there is approximately $40 billion unspent in the state treasury, including what is maintained in the “rainy day” fund. Those are your tax dollars the government can’t seem to decide what to do with. They seem to agree they want to give some of it back to taxpayers—just not sure how to go about it. Stay tuned . . .

Wine Industry Updates 

The Texas wine industry had a very active session—both intentionally and unintentionally. There were several bills filed on behalf of the industry, bills filed to damage the industry, and some that were adjusted so that they did not impact the industry.

TWGGA worked with members to develop an agenda seeking to make improvements to the industry overall. The issues of interest to our members were:

• allowing beer sales,
• registering off-site wine storage,
• expanding festival privileges to public or private events,
• removing the 35k cap,
• reporting drift damage without an investigation, and
• seeking funding for grape research within Texas Tech University, the University of Texas, and Texas A&M University.

TWGGA had success on one issue even before the legislative session even began. Working with TABC, TWGGA was able to address the expansion of the festival privileges through a rule-making process. Wineries should now be able to use their festival privileges for both public and private events.

Allowing beer sales at wineries proved to be quite complicated. Initially the plan was for wineries to be allowed to purchase beer from craft breweries and brewpubs for sale on premise only. Over the summer TWGGA worked with the Texas Craft Brewers Guild to draft something that they could support. One of the additions they sought was the ability to sell Texas wine as well. Once this drafting was finalized, TWGGA began to visit with a variety of members seeking their support and willingness to file the bill. During this time at the beginning of the session, Lt. Governor Patrick made a statement regarding alcohol legislation that any potential alcohol legislation that reached the Senate floor would have to be “agreed-upon” legislation. Both the Package Stores and the Beer Wholesalers did not agree with our legislation (even though it can be argued it had nothing to do with them). At the time, we were working with Senator Tan Parker to be our Senate author. Because the package stores were opposed to wineries buying directly from craft brewers, his suggestion was for wineries to purchase craft beer (or any beer) from package stores. They were opposed to that option as well.

At that point Senator Parker withdrew his interest in assisting us with our legislation. We approached several other senators (Springer, Flores, Hughes). All expressed some level of interest, but with the Lt. Governor’s stipulation and the package stores unwilling to compromise, no one was willing to file in the senate. The House proved equally problematic; the new Chairman of the House Licensing Committee (LAP) expressed a similar view on agreed-upon legislation as that expressed by the Lt. Governor. While we were able to get several of our bills filed in the House, the Chairman’s agreed-upon requirement meant that few alcohol bills passed out of that committee. Of the House members we approached to carry our beer sales bill, Chairman Burns worked the hardest and had several meetings with the Texas Package Stores Association to try to work out a compromise, all to no avail. In the end he was willing to file but knew that it would have no chance for success. We saw little to gain with that meaningless gesture. He agreed on assisting us during the interim to seek a compromise.

The off-site storage bill was filed and heard in committee. TWGGA testified in favor, and while no one testified against the bill, several groups (Texas Package Stores, Liquor Distributors, Beer Wholesalers) registered against the bill during the hearing. It was left pending and died during the final weeks of the session.

The bill to remove the unnecessary cap on wine sales direct to consumer was also heard in committee. TWGGA testified in favor of the bill, but the same industry groups (Texas Package Stores, Liquor Distributors, Beer Wholesalers) were against. It also died in committee during the final weeks of the session.

TWGGA approached several House and Senate members about carrying the drift reporting legislation. All declined to assist. In addition, the AG department was against this suggestion as well.

TWGGA’s efforts to garner funds for grape research, while unsuccessful, did perhaps provide a roadmap on how we might achieve this during the next legislative session. After working extensively with educators from each of the universities that were interested in the proposal, we approached Senator Perry about carrying the “rider” in the Senate Finance Committee. He agreed and filed a rider that appropriated $30 million to the three universities. Senator Flores, who is also a member of Senate Finance, agreed to sign on and support the measure as well. In the House, Rep. Martinez and Rep. Tepper (both sit on House Appropriations) filed the rider. The key to this effort was to remain in the process until the bill was considered in the conference committee. We were able to accomplish that in the House, but unfortunately, in the Senate, our rider got caught up in an effort by the Lt. Governor to “persuade” the higher education institutions to make several structural changes (alter tenure, certain hiring practices, etc.), otherwise he would cut much of their exceptional funding items (that is where our rider was), and that is what happened. We were never able to get our funding back into consideration. It was just never a high enough priority with those on the Senate side of the conference committee.

A TWGGA success was killing legislation proposed by the Texas Package Stores Association that would “define” a winery. This bill would not only have defined a winery in a very limited fashion, but also would have restricted or removed several privileges wineries currently enjoy. This bill died in committee at the end of the legislative session.

TWGGA also worked with a bill in the House focused on a new definition of “Made in Texas.” After TWGGA’s extensive efforts to define a Texas wine in the past, we did not want anything to alter that effort. The bill’s author was willing to work with TWGGA to secure our current definition and exclude wine from the final version of the legislation. TWGGA also worked with and supported Chairman Burns and Senator Perry’s legislation guaranteeing the “right to farm.” Chairman Burns also passed updated pesticide registration that TWGGA worked to support.

Finally, there was “language” passed that could have a negative impact on wineries. Although this was not a standalone bill, the language was included in the House version of the appropriations bill. This language was added without a hearing—no stakeholder meetings or witnesses were called. The Appropriations Vice Chair, Rep. Mary Gonzalez from El Paso, added the language in at the last minute without letting anyone in the industry know about it. Although we were able to alter the language slightly, it remained in the final bill. This language requests TABC to conduct a study of privileges granted to winery permits issued under Chapter 16 of the Alcoholic Beverage Code. We are in the process of working with leadership at TABC to better understand the scope of the study. They are required to submit a report to the legislature for consideration as potential legislation next session.

—TWGGA Legislative Advocate Kyle Frazier