Commission Meeting Minutes for November 17, 2015 · AGENDA REGULAR COMMISSION MEETING 10:00 a.m....

COMMISSION MEETING November 17, 2015

Texas Alcoholic Beverage Commission 5806 Mesa Drive

Austin, Texas 78731

José Cuevas, Jr., Presiding Officer Midland

Steven M. Weinberg, MD, JD, Member Colleyville

Ida Clement Steen, Member San Antonio

TABLE OF CONTENTS

TITLE PAGE

Agenda -TABC Commission Meeting - November 17, 2015 .......................... 1

Minutes - TABC Commission Meeting - September 22, 2015 ......................... 3

Attachment 1: Commission Report: Executive Director and Agency Activities, Budget Issues, Staff Achievements, Legislative Activities

Attachment 2: FY 2016-2017 Year-End Performance Measurements Attachment 3: Adopt Amendments to Rule §31.1, Separation of

Duties Between Commission and Executive Director Attachment 4: Adopt Amendments to Rule §31.3, Petition for the

Adoption of a Rule Attachment 5: Adopt Repeal of Rule §41.26, Railway Cars - Tax

Returns Attachment 6: Adopt Repeal of Rule §41.47, Airline Beverage

Permits Attachment 7: Recruitment and Hiring Report Attachment 8: Training Briefing

Certification of Minutes .................................................................................. 26

AGENDA

REGULAR COMMISSION MEETING

10:00 a.m. – November 17, 2015

5806 Mesa Drive Austin, TX 78731

Agenda

Tuesday, November 17, 2015 10:00 a.

1. Call to Order José Cuevas, Jr.

2. TABC’s 80th Anniversary Proclamation José Cuevas, Jr. Robert Allen

3. TABC’s 80th Anniversary Around the State Update Chris Porter

4. Promotional Recognitions – Chief Financial Officer Vanessa Ed Swedberg Mayo, Austin Headquarters; Lieutenant Joe Cavazos, Robert Saenz Region 3, Houston Regional Office; Antoine Collins, Region 3, Jo Ann Joseph Houston Licensing Supervisor; José Pineda, Licensing Gene Bowman Supervisor, Austin Headquarters; Thomas Johnson, Region 1, Audit Supervisor

5. Reception Honoring TABC’s 80th Anniversary and Employee José Cuevas, Jr Promotions – Chief Financial Officer Vanessa Mayo, Lieutenant Joe Cavazos, Licensing Supervisor Antoine Collins, Licensing Supervisor José Pineda and Audit Supervisor Thomas Johnson

6. Approval of Commission Meeting Minutes of José Cuevas, Jr. September 22, 2015

7. Commission Report: Executive Director and Agency Sherry Cook Activities, Budget Issues, Staff Achievements, Legislative Activities

8. FY 2016-2017 Year-End Performance Measurements Ed Swedberg

9. Recruitment and Hiring Report Loretta Doty

10. Training Briefing Albert Rodriguez

José Cuevas, Jr.

Presiding Officer-Midland

Steven M. Weinberg, MD, JD Member-Colleyville

Ida Clement Steen Member-San Antonio

Sherry Cook Executive Director

11. Executive Session to Consult with Legal Counsel Regarding José Cuevas, Jr. Pending and Anticipated Litigation Against the Agency and to Deliberate on the Appointment, Employment, Evaluation, and Duties of the Positions of Executive Director and General Counsel (Govt. Code §551.071, §551.074, and Texas Alcoholic Beverage Code §5.11)

12. Action on Items Discussed in Executive Session José Cuevas, Jr.

13. Adopt Amendments to Rule §31.1, Separation of Duties Martin Wilson Between Commission and Executive Director

14. Adopt Amendments to Rule §31.3, Petition for the Adoption of Martin Wilson a Rule

15. Adopt Repeal of Rule §41.26, Railway Cars – Tax Returns Martin Wilson

16. Adopt Repeal of Rule §41.47, Airline Beverage Permits Martin Wilson

17. Public Comments José Cuevas, Jr.

18. Next Meeting Date: Tuesday, January 26, 2016 José Cuevas, Jr.

19. Adjournment José Cuevas, Jr.

Note: Items may not necessarily be considered in the order they appear on the agenda. Executive session for advice of Counsel (pursuant to §551.071 of the Government Code) may be called regarding any agenda item. Action may be taken on any agenda item.

NOTICE OF ASSISTANCE AT PUBLIC MEETINGS

Persons with disabilities who plan to attend this meeting and who may need auxiliary aids or services (such as interpreters for persons who are deaf, hearing impaired readers, large print, or Braille) are requested to contact Gloria Darden Reed at (512) 206-3221 (voice) (512) 206-3259 (fax). Relay Texas at 1-800-735-2989 (TTY/TDD), at least three (3) days prior to the meeting so that appropriate arrangements can be made.

MINUTES

10:00 a.m. – November 17, 2015

5806 Mesa Drive Austin, TX 78731

COMMISSION ME

ETING MINUTES November 17, 2015

The Commissioners of the Texas Alcoholic Beverage Commission (TABC) met in Regular Session on Tuesday, November 17, 2015 at the Texas AlcoholicBeverage Commission, 5806 Mesa Drive, Suite 185, Austin, Texas. COMMISSIONERS PRESENT: José Cuevas, Jr.

Steven Weinberg, MD, JD

STAFF PRESENT: Sherry Cook, Executive Director

Josh Alexander, District Supervisor, Austin Audit Office Donny Betts, Assistant Supervisor, Houston Regional

Supervisor Gene Bowman, Director, Audit & Investigations Administration David Brandon, Director, Project Manager, Information

Resources Division Mindy Carroll, Director, Education & Prevention Dustin Carter, Analyst, Ports of Entry Cathleen Cavazos, Lieutenant, Austin District Region Joe Cavazos, Lieutenant, Houston District Office Amanda Collins, Arlington Regional Supervisor Antoine Collins, Licensing Supervisor, Houston Regional

Office Fletcher DaBera, Agent Marc Decatur, Major, North Texas Region Luann Dickerson, Executive Assistant, Executive Division Loretta Doty, Director, Human Resources Division Jeff Farmer, Sergeant

Tiffany Forister, Budget Analyst, Business Services Division Diana Figueroa, Executive Assistant, Executive Division Segbe Golanyon, Assistant Supervisor, Arlington Regional

Office Thomas Graham, Director, Tax & Marketing Practices Bruce Harlan, Training Specialist, Training Division Toni Hale, Program Specialist, Education & Prevention Amy Harrison, Director, Licensing Division Emily Helm, General Counsel, Legal Division Gary Henderson, Project Manager Officer, Information

Resources Division Roy Hale, Planner/Statisician Jonathan Hoxe, Agent Joe Iagnemmo, Web Administrator, Information Resources

Division Stacy Jackson, Assistant Supervisor, San Antonio Regional

Audit Office Ricardo Jauregui, Major, San Antonio Enforcement Division Jonathan Jergins, Agent Tom Johnson, Regional Supervisor Dexter Jones, Assistant Chief, Audit & Investigations Division Shaun Jordan, Regional Manager, Austin District Office JoAnn Joseph, Assistant Director, Licensing Division Judith Kennison, Deputy General Counsel Victor Kuykendoll, Major, Arlington District Office Marilyn Lindsay, Accountant, Business Services Division Andrea Maceyra, Supervisor, Tax & Marketing Practices Vanessa Mayo, Assistant Director, Business Services Division Mark Menn, Major, Lubbock Enforcement District Office Mariann H. Morelock, Director, Governmental Relations Renee Moser, Accountant, Business Services Division Harry Nanos, Captain, Austin District Office Earl Pearson, Assistant Chief, Enforcement Division Andy Pena, Director, Office of Professional Responsibility Nicole Phillips, Audit Supervisor, Houston Regional Office Jose Pineda, Licensing Supervisor Chris Porter, Public Information Officer Yvette Price, Licensing Supervisor, San Antonio Regional

Office Jessica Ramirez, Payroll Officer, Business Services Division Gloria Darden Reed, Executive Assistant, Executive Division Anastacia Rodriguez, Specialist, Human Resources Division Audrey Rosales, Purchaser, Business Services Division Julie Ross, Licensing Supervisor Robert Saenz, Chief of Field Operations Karen Smithwick, Director, Ports of Entry Division

Ron Swenson, Captain, SIU/FCU Todd Talley, Management Analyst, Enforcement Division Dewayne Thompson, Agent, Special Investigations Unit Jay Webster, Director, Information Resources Division David Wickersham, Auditor, Arlington Regional Office Twila Williams, Administrative Assistant, Houston Regional

Office Martin Wilson, Assistant General Counsel, Legal Division

GUESTS PRESENT:

Vic Brooks, Vice President, Republic National Distributing Company

Dina Cavazos Stephanie Chiarello, Executive Director, Senator Kirk Watson

Office Cara Collier, Vineyards Marketing Representative Danita Collins Gary Cutler, Sheriff, Hayes County Maria Carouna Diaz Rick Donley, President, The Beer Alliance of Texas Alcoholic

Beverage Commission Shelby Eskew Kyle Frazier, Texas Wine and Grape Growers Association Steve Greinert, Consultant, Wholesale Beer Distributors of

Texas Alcoholic Beverage Commission Cheri Huddleston, Legislative Consultant, Glazer’s Chelsy Hutchinson, Consultant, Republic National Distributing

Company Jill Johnson, CEO, Good For You Wine Brokerage & Portfolio

Management Brian Lemons, Texans Standing Tall Lance Lively, Executive Director, Texas Package Stores

Association Steve McCraw, Executive Director/Colonel, Texas Department

of Public Safety Georgia Marks, Texas Standing Tall Jesus Moreno Yolanda Moreno Jessica Pineda Andrew Perkel, Executive Vice President, Retail Solutions Terry Pickering, Sheriff, Bastrop County Mark Rabe, Attorney, Roberts, Markel, Weinberg, Butler,

Haley PC Brandi Reeder, Assistant Commander, Texas Parks and

Wildlife Department Fisher Reynolds, Analyst, Legislative Budget Board Tyler Rudd, Legal Consultant, California Wine Institute

Tom Spilman, Executive Vice President, Wholesale Beer Distributors of Texas

Jimmy Toscano Rosa Toscano Randy Yarbrough, Wholesale Beer Distributors of Texas

CALL TO ORDER

The meeting of the Texas Alcoholic Beverage Commission was called to order at 10:18 a.m. by Presiding Officer José Cuevas. Commissioner Ida Clement Steen was unable to attend the Commission meeting due to a prior scheduled commitment. Presiding Officer José Cuevas opened the meeting with a personal “thank you” to invited guests, friends, agency personnel and program participants. He stated that it is an honor to be part of the Texas Alcoholic Beverage Commission’s 80th year anniversary celebration. TABC’S 80TH ANNIVERSARY PROCLAMATION Presiding Officer Cuevas called upon Deputy Chief of Staff Robert Allen to come forward to give TABC’s 80th Anniversary Proclamation on behalf of Governor Greg Abbott. Deputy Chief Allen thanked Presiding Officer Cuevas and the Commission for inviting him to attend the meeting in celebration of the Agency’s 80th anniversary and read the proclamation as signed by Governor Greg Abbott.

Deputy Chief Allen stated that the proclamation is a few simple words that embody what the Agency does on a daily basis. He offered his appreciation in learning of the

valued work done at the agency in conversations with Ms. Cook and Mr. Swedberg, whether it is issuing licenses or those on the front lines cracking down on violations of the code. Deputy Chief Allen also stated that there is work performed by the Agency that is not known to the public that provides safety for the citizens of the State of Texas. He congratulated TABC on its 80th anniversary with more years to come.

Commissioner Steve Weinberg, Deputy Chief Robert Allen

Presiding Officer José Cuevas, Executive Director Sherry Cook Deputy Executive Director Ed Swedberg

TABC’S ANNIVERSARY AROUND THE STATE UPDATE Presiding Officer Cuevas called up the next agenda item, TABC’s Anniversary around the State Update, to be presented by Public Information Officer, Chris Porter. Public Information Officer Porter highlighted 80th Anniversary events held in the various regions of the state. He thanked the event coordinators and agency employees from each region in securing the venues and hosting with refreshments and service. PIO Porter commented that in addition to TABC’s Commissioners attendance at the events, many legislative members from their respective state district area offices attended the anniversary events as well. He offered appreciation to invited state, county and local dignitaries attending today’s meeting.

Senator Sylvia Garcia Asst. Chief Earl Pearson, Houston Regional Office Representative John Frullo, Executive Director Sherry Cook, Deputy Executive Director Ed Swedberg Lubbock Regional Office

Presiding Officer Cuevas and Commissioner Weinberg gave kudos to PIO Porter for a job “well done” in organizing the events in the regions. Executive Director Cook commented that the picture of the cake in the PIO Porter’s slide presentation is the reason for the giant cake in the HQ lobby. She echoed the remarks thanking everyone for being at the today’s meeting not just for the 80th anniversary which is pretty exciting to be part of an Agency that is rich in history, but also the changes that have occurred in the 80 years that lend to the opportunity to promote some well deserving employees which are the future for the Agency. Executive Director Cook extended a welcome to the employees’ families, friends, local enforcement and industry partnerships that were present. Presiding Officer Cuevas concurred with Executive Director Cook’s comments and stated that Texas is a big state and it takes all of the community and friends working together to keep the criminal elements and illegal businesses out. He added that as a top priority, it is important to focus all our attention and efforts to keep Texas safe. Presiding Officer Cuevas commented that the Agency has come a long way during his tenure. He stated that he is very proud of the professional team that has been developed. He pointed out that the black and white photographs in PIO Porter’s slide presentation are no longer the way the Agency conducts business. He stated that technology has become a powerful tool and it takes all that is within us to make sure that the Agency stays ahead of the curve to continue to be successful. PROMOTIONAL RECOGNITIONS – CHIEF FINANCIAL OFFICER VANESSA MAYO, AUSTIN HEADQUARTERS; LIEUTENANT JOE CAVAZOS, REGION 3, HOUSTON REGIONAL OFFICE; ANTOINE COLLINS, REGION 3, HOUSTON LICENSING SUPERVISOR; JOSÈ PINEDA, LICENSING SUPERVISOR, AUSTIN HEADQUARTERS, THOMAS JOHNSON, REGION 1, AUDIT SUPERVISOR Presiding Officer Cuevas called for agenda item #4 – Promotional Recognitions to be presented. Presiding Officer Cuevas commented that every step of everyone’s career it is important to have support from the husband/wife, girlfriend/boyfriend, and sisters/brothers – family members to support these individuals as they move up their career ladder. He added as one moves up it is important to learn new skills and a new way of managing the new skills. He stated that he is very proud to announce the promotions and that some day they will be asked to mentor other individuals. Deputy Executive Ed Swedberg, Chief Robert Saenz, Assistant Director Jo Ann Joseph, and Director Gene Bowman came forward to introduce and to read biographical information on the honorees:

Antoine Collins, José Pineda, Vanessa Mayo, Joe Cavazos

Thomas Johnson RECEPTION HONORING TABC’S 80TH ANNIVERSARY AND EMPLOYEE PROMOTIONS – CHIEF FINANCIAL OFFICER VANESSA MAYO, LIEUTENANT JOE CAVAZOS, LICENSING SUPERVISOR ANTOINE COLLINS, LICENSING SUPERVISOR JOSÉ PINEDA, AUDIT SUPERVISOR THOMAS JOHNSON Before recessing to the lobby for the reception, Presiding Officer Cuevas thanked the honorees for the work that they do for the Agency. He thanked the families of the honorees for their attendance at today’s meeting and support.

APPROVAL OF COMMISSION MINUTES OF SEPTEMBER 22, 2015 Presiding Officer Cuevas called for approval of the Commission meeting minutes of September 22, 2015. Commissioner Weinberg so moved to approve the minutes as written. Presiding Officer Cuevas seconded. The motion carried. EXECUTIVE DIRECTOR’S REPORT: EXECUTIVE DIRECTOR AND AGENCY ACTIVITIES, BUDGET ISSUES, STAFF ACHIEVEMENTS, LEGISLATIVE ACTIVITIES Presiding Officer Cuevas called upon Executive Director Sherry Cook to present the Executive Director’s Report: Administrator and Agency Activities, Budget Issues and Staff Achievements, and Legislative Activities. After welcoming the Commissioners back to Austin for another Commission meeting and to celebrate the Commission’s 80th birthday. Executive Director Cook offered a glimpse of some little known facts about the Commission in its 80 years of service:

Enforcement OperationsStill Seizures - July 1939 (36)

Still Seizures 1936-1941

1936….. 171 Stills Seized1937….. 732 Stills Seized1938…..731 Stills Seized1939…..521 Stills Seized1940….. 422 Stills Seized1941….. 378 Still Seized

• Moonshining was so predominate in East Texas in the late 1930’s and early 1940’s, that the area from the Red River to the Gulf Coast was known as the Bootleg Belt. TLCB reported the data to the members of the Commission using a map and each dot represents the approximate location of the still seizure. These locations were selected due to the hills, fresh supply of spring water, cooperating officials and proximity to major cities.

• By Feb. 12, 1942 TLCB would seize its 3,000th still. • By March 1942, sugar was rationed for WWII efforts which in turn had a great

impact on stills.

TABC Military SupportHonoring All Who Serve

In Oct. 1942, Still Seizure maps in the TLCB Review would be replaced with a Service Flag. Each star on the flag represents an employee or son of an employee who was serving during World War II.

Flag: Stars represent 40 men who left the employ of the TLCB to enter the armed

services and two sons of employees.

The war would impact the alcoholic beverage industry as well. In Nov. 1942, the Corpus Christi office received a request for a permit to transport alcohol in a wagon drawn by two horses due to gas rationing. Executive Director Cook’s next slide focused on more little known facts:

• July 28, 1936 – Ports of Entry was established with Rule and Regulation No. 55

• First Field Employee Academy would be held in 1940 and continue until the second World War

• May 24, 1982, technology would allow for the first Licensing Information Processing System

• 2009 – Licensing Re-engineering would result in over 100,000 paper files being electronically imaged and changing how licenses and permit are processed

• In 1968 the first known flyer were produced to prevent underage drinking – today an Education and Prevention Division creates printed materials, produces videos and creates social media campaigns

• Aug. 1, 1987, a label approval fee was set at $25 during the 70th Legislative Session

Executive Director Cook commented that the Commission has come a long way in 80 years, but what has remained consistent is the dedication to the mission of TABC; and that is keeping Texas communities safe. She stated that she would like to publically thank those for their prior service, in addition to employees currently serving the people of Texas who make TABC an awesome place to work. Finally, she hopes that when it is time for the next generation, the Commission’s legacy will be a strong Agency committed to the mission to serve the people of Texas and to protect the public health and safety, through consistent, fair and timely administration of the Alcoholic Beverage Code. Executive Director Cook announced that the new code books are available and free for distribution to the industry. She gave “kudos” to Director Mariann Morelock and other staff members that helped with re-indexing and revising the book. She stated that the changes in the code book should make it more user-friendly and requested that if there are items identified that are not in the index, make a note of those items and get them to Director Morelock. She will track them over the next couple of years and make the necessary changes. Code books are available in the far end hallway for pickup. In other Agency business, Executive Director Cook spoke on the State Employee Charitable Campaign which initially kicked off in September and ends in October. She stated that SECC is the only statutorily authorized workplace campaign for state agencies and higher education employees. This year’s campaign was chaired by Diana Figueroa. She and her committee raised through silent auditions, bake sales, taquito/hot dog sales over $25,000 surpassing last year’s contribution by over $6,018. Executive Director Cook offered special thanks and her personal gratitude to Diana Figueroa and her committee for their hard work and going the extra mile for a successful campaign.

ACCOMPLISHMENTS• IRD completed and closed the following projects in

September: – LP ID Stamp Control System Implementation; – Staffing Master Software Implementation; – Field Reorganization System Updates, including coding changes,

coding block updates, software modifications, and report updates;

– Installation of New HQ Security System, including cameras, intercoms, access card devices, and alarms;

– IRD Architecture & Roadmap Project; – ACH Standardization Project; – Licensing Topic Files Project; – Neubus Label Imaging Project; and – Mobile Desktop Scanner Deployment.

As outlined above, the Division of Information Resources completed 9 significant priority projects. Commissioner Weinberg quizzed Executive Director Cook if license renewal applications are available online. Jay Webster, Director, Information Resources Division responded in the affirmative. He commented that all renewals are online and original licenses will be the next priority project. Commissioner Weinberg inquired on a timeline for the beginning of the project. Director Webster responded that his division is currently working with a vendor and the project should begin in about 12 to 18 months. He commented that working with original applications should be a little easier. Presiding Officer Cuevas stated that IRD is doing a good job in modernizing the licensing process.

ACCOMPLISHMENTS• Investigations conducted by the agency’s Special

Investigations and Financial Crimes Unit led to the “cancelled for cause” of seven permits during the month of October. Organized criminal activity, Gambling, and drug-related activity were the principal causes for action.

• In October 2015, POE’s land and sea ports reported revenues $61,333 higher than the amount collected during the same month the previous year. For the fourth month in a row, every Land Port District enjoyed a net increase in revenue.

Executive Director Cook briefed the Commissioners on the continued work conducted by the Special Investigations Unit (SIU) to take down bad actors and removing criminals engaging in organized criminal activity. She reported that for the 4th month, the Ports of Entry bridge locations continue to gain in revenue. Along with the report on accomplishments, Executive Director Cook reported on Texas Alcoholic Beverage Commission’s awards recognition:

• TABC was recognized as the “Agency of the Year” by the National Liquor Law Enforcement Association (NLLEA). The award was based on the achievements of the Agency’s Special Investigations Unit;

• TABC was awarded by OJJDP and UDETC for the 2015 Enforcing Underage Drinking Laws (EUDL) Success Story. The award was granted in recognition of the Agency moving to a more data driven approach and making changes within their system, which allows enforcement efforts to better meet the needs of the state. The focus changed from what “has always been” to “what works today” has been critical in making Texas an innovative leader in enforcement of the alcoholic beverage regulation. The Agency will continue to look for ways to meet changes, challenges and demands. NOTE: Recent organization changes that include the addition of SIU, MIU, and FCU units designed to target the complicated investigations have eased the budgetary constraints and resources from the Agency’s mission;

• Agent Greg Lewis was nominated for MADDs “Commitment to Youth Award” for his work with the Greater Austin Underage Drinking Prevention Council, his continued involvement with education of minors and his participation in MADD’s semi-annual DWI roundtable. The award was presented on November 10, 2015.

• The Bryan/College Station Enforcement Office was selected by the undercover operations and minor stings conducted by that office’s agents and their contribution to the reduction of DWI rates in the Bryan/College area.

Executive Director Cook advised the Commissioners of the Agency’s Special Response Team’s involvement with the Bastrop fires. She stated that the SRT special trained team is ready to respond in times when their assistance is required by local law enforcement to manage an event or in a catastrophic event such as the Bastrop fires. TABC deployed 19 agents to respond and assist for a week with the fires that burned over 4500 acres and 38 homes during the Hidden Pines fire in October. Commissioner Weinberg asked that a letter to be sent to each SRT member who responded to the Bastrop fires. Executive Director Sherry Cook’s presentation focused on Trends, primarily Enforcement Administrative Cases and Minor Stings. She briefed the Commissioners on TABC’s minor stings and undercover operations with a strategy focusing on to keep alcoholic beverages out of the hands of minors.

Earlier in her presentation, Executive Director Cook spoke on Agency accomplishments; however she purposely chose to discuss the Field Operations “Back to School” series of minor stings at this time. These series of minor stings took place in September in all regions of the state. She stated that the businesses were informed both in person and in the media that the stings were going to occur, yet 80 businesses failed the test.

Chief Robert Saenz spoke on the minors that volunteer to be part of the minor sting operations. He stated that the underage minors are under supervision at all times during the operation. Positive trends are occurring in state licensed businesses. Executive Director Cook reports that the number of licensed businesses operating in the State of Texas grew by 1.2 percent in FY 2015, just falling short of the 1.7 percent growth rate expected. She explained that all sectors of the industry experienced some growth with most of the actual statewide growth being attributed to an increase in the number of off-premise retailers. Commissioner Weinberg inquired as to the increased growth of Texas compared to the growth in Licensed Businesses. Executive Director Sherry Cook will include in Administrator’s report. Executive Director Cook’s discussion centered at Trends – Growth from a regional prospective. She noted a surprising development in the growth that occurred in the North Texas, Arlington region, at a much lower rate than in most of the remainder of the state. She stated that over the past decade, the Arlington region with its local option elections had lead the state in industry growth, however Houston has now taken over. She commented that in the South Texas, San Antonio region, a net loss in licensed businesses was recorded. Executive Director Cook stated the drop in oil with workers being laid off will be monitored on the effect of future growth in the state. During the past decade wholesale sales volume and the gross excise taxes due on such sales have generally trended upwards. As exhibited in Executive Director

"Back to School" Minor Stings September 10 - 12, 2015

Region Attempts Buys Refusals Compliance Rate

Lubbock 66 4 62 93.9%

Arlington 242 32 210 86.8%

Houston 306 15 291 95.1%

Austin 116 9 107 92.2%

San Antonio 206 20 186 90.3%

Statewide 936 80 856 91.5%

Cook’s presentation, gallons of alcoholic beverages sold took a slight dip, however revenue continued to climb. She stated that this trend supports what we have been saying that beer sales are declining, however the craft industry continues to grow with products being produced with a higher alcohol content which is taxed at a higher tax rate. Executive Director Cook’s noted that during the past two fiscal years, aggregate wholesale alcohol sales, as measured in gallons, diverged from the long-term upward trend for both wholesale sales and excise tax revenues – falling by a nominal amount. She stated that the cause of the aggregate decline was falling beer sales, which off-set the gains in wholesale sales volume experienced by all other categories of alcoholic beverages. With the higher tax rates imposed on these other types of alcoholic beverages products, the excise tax revenue loss caused by declining beer sales was surpassed by the revenue gains accrued from increased sales of distilled spirits, wines, and malt liquor and increased total excise tax revenues in both of the fiscal years during which wholesale beer sales fell. Executive Director Cook discussed the number of complaint investigations conducted and completed. She stated that complaints by TABC employees have steadily declined over the past five fiscal years. This area of measurement will be carefully monitored as more and more businesses come into compliance. She attributes the focus on the licensee/permittee’s behavior as opposed to the individual being seen in these numbers and certainly supports visibility and a presence inside licensed locations in having an impact. In concluding the presentation, Executive Director Cook reported that the October 2015 vacancies report that was in the last Administrator’s report that listed 31 vacancies. She stated that those positions are in various stages of being filled. She concluded her report, wishing everyone a Safe and Happy Thanksgiving. Administrator Cook’s report is supported by a PowerPoint presentation (Attachment 1 ) FY 2016-2017 YEAR-END PERFORMANCE MEASUREMENTS Presiding Officer Cuevas called upon Deputy Executive Director Ed Swedberg to present the next agenda item entitled “FY 2016-2017 Year-End Performance Measurements.” Deputy Executive Director Swedberg briefed the Commissioners on some of the past trends of performance measures, more importantly, what are the future targets and what is the prognosis of the Agency meeting those targets. As a refresher for the Commissioners, he spoke on the purpose of performance measures:

1) Legislative appropriated resources used as requested from the Legislative Budget Board (LBB) are tied very closely to the strategic plan and statewide goals;

2) Agency uses the performance measures on a regular basis to determine if the headquarters priorities and directions provided to the field are being followed. it is a very strong tool used to determine what is going on in the field;

3) Trends looks at the performance measures far enough in advance to identify some potential problems in regard to Agency trends so that corrective measures can be implemented either in policy, resources, technology, training and process improvement. Performance measure is a broad subject but a very important tool.

Deputy Executive Director Swedberg’s report highlighted:

• Performance Measure Definitions Deputy Executive Director Swedberg stated that there are 49 total measures, however there are only 12 key measures that are in the appropriations bill and identified by 4 appropriations strategy – Enforcement, Compliance Monitoring, Licensing and Ports of Entry (Not listed in the appropriation strategies under indirect administration are: Central Administration, Information Resources & Support Services does not have any performance measures assigned)

Four TABC Strategies (with PM Reporting Units)

a) Enforcement (Enforcement Agents + SIU) b) Licensing (Field & HQ License & Permit Specialists) c) Compliance Monitoring (Field Auditors + MIU +FCU +Excise Tax

Auditors Examiners) d) Ports of Entry (Tax Compliance Officers)

• Other Measures of Interest Deputy Executive Director Swedberg commented that there are other key measures of interest that could be discussed and elevated at some point to the level of key measure. He added that in the upcoming strategic planning process, there could be an opportunity to review other measures of interest and make potential recommended changes by working with the Legislative Budget Board (LBB).

Four Measure Types a) Outcome (Were we Effective?) – Percentage of things done b) Output (Were We Productive?) – Product that can be measured c) Efficiency (How much did we Spend for each Result?) – Average cost of

each audit, inspection or container stamped d) Input or Explanatory (Other Stuff) – Number of thing outside of agency’s

control, ex., number of applications received

• Two Measure Types a) Key – Important b) Non Key – Not as important

Commissioner Weinberg quizzed Deputy Executive Director Swedberg on who determines the key and non-key performance measures. Deputy Executive Director Swedberg responded that the determination is between the Legislature and the Legislative Budget Board (LBB). He stated that recommendations can be made during the strategic planning process. Executive Director Cook commented that the key performance measurements can be difficult to change because of historical baselines. She stated that baseline is used to measure the effectiveness of the agency. Deputy Executive Director Swedberg added that in the General Appropriations Act that deals within TABC’s appropriation language, there is a section that specifically addresses the performance measured targets and they are tied directly to all of the Agency’s goals. He added that those keys are the only ones listed.

TABC Key Measure Targets & Results ˗ Enforcement and Licensing a) Focus on fewer, but higher quality inspections b) New key measure: Total SIU costs/Number of investigations opened c) Did great last fiscal year d) Challenging trend over the past few months e) Fewer issuances in odd years, leads to higher average cost due to fixed expenses

Commissioner Weinberg inquired on the percentage of inspections, did it include Enforcement agents as well as Auditors for the September and October reporting periods. Deputy Executive Director Swedberg responded that the inspections was only Enforcement agents. Chief Robert Saenz commented that the Enforcement Division is on track to meet the inspections for the year. He stated that spreading out the inspections to ensure a more quality operation has proven to be successful in detecting violations. Presiding Officer Cuevas agreed that spreading out the inspections has improved the quality over quantity efforts is more effective and provides protection for the citizens. Deputy Executive Director Swedberg stated that the appropriations’ process is important to the Legislature because that is how the Agency is staffed according to the number of inspections completed. He added that quantity is a factor of how many of inspections done, however quality is a factor of how well the agents are trained, equipment, tactics and processes in place will factor into the quality inspection. Deputy Executive Director Swedberg stated that a new key performance measure has been added during the last legislative session, the Average Cost of Multi-Agency Operations targeting organized crime and trafficking statewide. He stated that in the previous legislature there were two non-key performance measures that consisted of the number of investigations closed and the number of joint operations in the border region. Now the legislature is interested in how efficient is the SIU unit. Since this is a new performance measure, Deputy Executive Swedberg stated it may take time to understand the workings of this key performance measure.

˗ Compliance Monitoring and Ports of Entry a) Gradual year-to-year improvement b) Result of heavy investigative focus c) Great start to the new Fiscal year d) Large jump in number of containers stamped

Other Measures of Interest Targets & Results a) Continuing to optimize Enforcement Priority Inspections b) Gradual year-to-year improvement c) Due to Auditors taking over all Non-PS Inspections d) POE Cost Per Stamped item continues to decrease e) Due to more efficient Seaport Model Analysis of Licensing “Average Number of Days to Approve an Original

Application” Recent Results

Problem: For the same 6 month window in 2015 compared to 2014, the average number of days to approve an original application has increased by nearly 9 days (just over 26%)

TABC’s key performance measure of “Average Number of Days to Approve an Original Application” is highly correlated with the Original Application Backlog. Input: For the same 6 month window, the total number of Original

Applications received by the Licensing Division in 2015 was 10,191 an increase of 237 from 9954 received in 2014, or just over a 2% gain. But for the first 5 months of that window, from May through September, there were 913 more Original Applications received in 2015 versus 2014, a gain of over 11%. Productivity: Original Applications saw an increase in approvals in 2015 compared to 2014. For the same 6 month window in 2014 compared to 2015, the number of renewals approved was higher in 2014; Originals approved were higher in 2015; Supplementals approved were about the same for both years. In 2015, even with increased productivity associated with processing Original applications, the input of a larger number of Originals over the summer, coupled with other factors, caused the Original backlog to increase beginning in late summer. Since that time, the Licensing Division has focused on processing Original applications and seems to have reversed the Original backlog trend, but with a negative impact to the backlog of Renewals and Supplementals.

Backlog: The “Oldest Application to Date” is a measure of the backlog for each of the 3 application types; The size of the Original Application backlog directly impacts the average number of days it takes to approve an Original Application So What Caused the Backlog to Grow and Put Us in the Ditch in the First Place? A Significant Increase in Original Applications Received in Early Summer 2015

and A Drop in the Number of Applications in July (Below Both 2014 & 2015 Averages Deputy Executive Director Swedberg ended his report with anticipated steps:

• Confirm TABC proposed performance measure targets for FY16/17 with LBB; • Implement Licensing Division plan to reverse recent increase in average

number of days to approve original license or permit; • Continue to track all TABC performance measures and take actions to address

any negative trends Deputy Executive Director Ed Swedberg’s report is supported by a PowerPoint presentation. (Attachment 2)

Agenda items grouped together for discussion

Presiding Officer Cuevas read agenda items 13 & 14 for the Commissioners consideration Assistant General Counsel Martin Wilson briefed the Commissioners on the amendments for adoption. ADOPT AMENDMENTS TO RULE §31.1, SEPARATION OF DUTIES BETWEEN COMMISSION AND EXECUTIVE DIRECTOR These amendments delegate to the Executive Director the authority to execute all contracts, including those with a value exceeding $1 million. The Executive Director cannot delegate to anyone else the authority to execute contracts valued at more than $1 million. Legislation provided that the governing body of an agency would have to approve contracts exceeding $1 million and they would have to be signed by the Presiding Officer, unless the governing body delegated that authority to the Executive Director of the Agency. (Attachment 3) ADOPT AMENDMENTS TO RULE §31.3, PETITION FOR THE ADOPTION OF A RULE These amendments conform to our rule on petitions for rulemaking with a legislative change requiring the petitioner to be a resident of the state.

Assistant General Counsel Wilson stated that no written comments were received. He stated that no one attended the Public Hearing and therefore no oral comments were received. He stated that he has not been contacted informally to discuss the proposals. (Attachment 4) Commissioner Weinberg moved to adopt the amendments to Rules 31.1 and 31.3 as recommended by staff. Presiding Officer Cuevas seconded the motion. All in favor say “Aye”; all opposed say “No”. The motion passes as recommended.

Agenda items grouped together for discussion Presiding Officer Cuevas read agenda items 15 – 16 for the Commissioners consideration Assistant General Counsel Martin Wilson briefed the Commissioners on the amendments for adoption. ADOPT REPEAL OF RULE §41.26, RAILWAY CARS – TAX RETURNS This repeals the rule requiring railways to file monthly reports on beer and wine sold in Texas, accompanied by the excise tax due, in light of the legislative change eliminating the excise tax for railways. ADOPT REPEAL OF RULE §41.27, AIRLINE BEVERAGE PERMITS This repeals the rule requiring airlines to file monthly excise tax reports and payments, in light of the legislative change eliminating the excise tax for airlines. (Attachment 5) Commissioner Weinberg moved to adopt the amendments to Rules 41.26 and 41.47 as recommended by staff. Presiding Officer Cuevas seconded the motion. All in favor say “Aye”; all opposed say “No”. The motion passes as recommended. EXECUTIVE SESSION TO CONSULT WITH LEGAL COUNSEL REGARDING PENDING AND ANTICIPATED LITIGATION AGAINST THE AGENCY AND TO DELIBERATE ON THE APPOINTMENT, EMPLOYMENT, EVALUATION, DUTIES OF THE POSITIONS OF EXECUTIVE DIRECTOR AND GENERAL COUNSEL (Govt. Code §551.071, §551.074 AND TEXAS ALCOHOLIC BEVERAGE CODE §5.11) Presiding Officer Cuevas announced the regular open session of the Texas Alcoholic Beverage Commission will be recessed at this time, 12:39 p.m., November 17, 2015 and an executive session will be held to consult with Legal Counsel regarding pending and anticipated litigation against the Agency and to deliberate on the appointment, employment, evaluation and duties of the positions of Executive Director and General Counsel (Government Code §551.071, §551.074 and Texas Alcoholic Beverage Code §5.11).

ACTION ON ITEMS DISCUSSED IN EXECUTIVE SESSION The Texas Alcoholic Beverage Commission has concluded its Executive session and is now in open regular session. The date is November 17, 2015 and the time is 1:45 p.m. No final action, decision or vote was made in Executive session RECRUITMENT AND HIRING REPORT Presiding Officer Cuevas called for the next agenda item, Recruitment and Hiring Report. Director Loretta Doty came forward to address the Commission. Director Loretta Doty welcomed the Commissioners and stated that her report would focus on Human Resources Recruitment and Hiring information for September 1, 2014 through August 31, 2015. Director Doty began the report with recruitment facts and figures. She stated that on September 1, 2013, the Human Resources Division went live with NeoGov, an on-line applicant tracking system. Using NeoGov, Director Doty stated that HR has received over 7257 on-line applications, posted and advertised 149 positions. In comparing last year’s totals, Director Doty commented that HR received 1800 applicants more than in Fiscal Year 2014. She stated HR averaged about 38 days to fill vacancies from the date of requisition when it made it to HR to the date of offer. On application sources, Director Doty commented that it is wise to have a foundation of good recruitment because it makes good hiring. She referred to the slide presentation illustrating the recruiter activity to be the best application source. She credited TABC Recruiter Keon Flowers who participates in Job Fairs, attends community organization activities to promote TABC as an Employer of Choice, posting paid on-line job advertising and recruitment posters. Other potential application sources to attract employees include TABC Website/Work-In-Texas, in which applicants have the opportunity to view job announcements through the Agency website and can be notified when a job is available according to their skill level. The Work-In-Texas statutorily requires TABC to post job positions through the Workforce Texas Commission website. She commented that State Employee Referrals was another application source which can be TABC employee or other state employee agencies. Applicant diversity according to Director Doty’s chart is concentrated where a majority of the popularity is located. For example, she stated that a large number of jobs advertising Tax Compliance Officer increased the number of Hispanics applying for positions. She stated that the category “Other/Unknown” is noted on the chart because it is not mandatory for applicants to declare their ethnicity. Director Doty noted that there was a slight increase in female applicants in the category applicants by gender. Director Doty stated that TABC is doing a good job in the category TABC Workforce by ethnicity and gender. She commented that the overall comparison has a slight increase of Hispanic workforce ethnicity and a decrease in the female gender.

Commissioner Weinberg quizzed Director Doty about the hiring of females in the Enforcement area. Director Doty answered in the affirmative. She noted in the hires/terminations by ethnicity, TABC hired about 86 employees. Director Doty reported that there is no disparity in this category, the number may include retirees, terminations for disciplinary action or volunteer terminations. The hires/termination by gender shows that the Agency hires more females and more females terminate at a higher rate. According to Director Doty’s report, the workforce analysis exceeded representation in both Black and Hispanic in the official Administrator Equal Employer Office (EEO) category. She stated the Official/Administrator category includes the Director II and above, General Counsel exceeded in the professional positions that requires a degree or long-term experience in that field. She added that the African Americans were underutilized in the service and maintenance category (new category that includes the former paraprofessional category). Other underutilized categories include technician, skilled craft categories, as well as females in the professional category. Director Doty ended the report with good news for workforce analysis report stats. She stated that by statue TABC has to report to EEO the minority representation, Hispanics and African Americans. She reports TABC at its highest level is diverse in both gender and ethnicity. Presiding Officer Cuevas and Commissioner Weinberg commended Director Doty on her presentation.

Director Loretta Doty’s report is supported by a PowerPoint presentation. (Attachment 6 ) TRAINING BRIEFING Presiding Officer Cuevas called for the next presentation, “Training Briefing”. Lieutenant Bruce Harlan to come forward to present the agenda item for Director Albert Rodriguez who had a prior commitment. Lieutenant Harlan began his report defining the scope of responsibility in the Training Division. He stated that the Training Division is to develop and administer employee education programs and to enhance employee performance. He added that with the support of the executive staff, the Division is constantly evolving the strategies to stay abreast with every facet of the Agency. Lieutenant Harlan briefed the Commissioners with the personnel in the Training Division and the areas of responsibility consisting of: • Academy Training Lieutenant Harlan stated that the Academy Training is dedicated to provide training to TABC Agent Trainees and Auditors. Prior to 2012, agent trainees attended the academy for 120 hours and currently the hours have increased to 562 with emphasis

on scenario based training such as: human trafficking, undercover operations, financial crimes, critical incidents, non-violent intervention and the firearms program. Lieutenant Harlan commented that the Agency has high expectations for its trainees and monitor them constantly to ensure that they are sticking to those high expectations. Auditor training academy is held to make sure that all auditors within their first year of employment receive consistent training on the expectations. Prior to 2012, auditors attended the academy between 60 to 80 hours and currently the hours have increased to 160 hours. He stated that during the first 2 weeks of the Auditor’s Academy, the topics are common to the licensing personnel to include marketing investigations, code and rules, corporate structures, protests and excise taxes. • In-Service Training In-Service training and curriculum are set by Training Committees for Commissioned and Non-Commissioned personnel. • Specialized Training Lieutenant Harlan reported that In-Service and Specialized Training overlap to in certain instances. He stated that supervisor and basic instructor along with computer courses are shared courses for commissioned and non-commissioned personnel. Commissioned Specialized Training include: firearms, rifle instruction, critical incident, arrest and control tactics, inspection protocol, scenario based training Non-Commissioned Specialized Training include: application software, accountability, workplace diversity, customer service Lieutenant Harlan added that personnel not employed at TABC are invited from outside agencies to take various course when open seating is available, for example – Basic Instructor, Customer Service and Time Management • Online/LMS Program Presiding Officer Cuevas asked Lieutenant Harlan what is LMS. Lieutenant Harlan stated that LMS is Learning Management System. He stated that LMS provides online courses and policies to the field remotely. Through LMS training curriculum, Lieutenant Harlan commented that the Agency has benefited in cost savings with courses such as online Defensive Driving and the Enforcement manual was created for the new agent school to supplement in-class training. He added that the Training Division has 66 online classes available with an additional 34 policy courses and 3 curriculums containing 30 courses, totaling 130 online courses available in the LMS program. Lieutenant Bruce Harlan’s report is supported by a PowerPoint presentation. (Attachment 7)

PUBLIC COMMENTS Presiding Officer Cuevas opened the floor for additional comments before the Commission. No one came forward to address the Commission. NEXT MEETING DATE: Tuesday, January 26, 2016 ADJOURN Presiding Officer Cuevas called for a motion to adjourn. Commissioner Weinberg made a motion. Presiding Officer Cuevas seconded. Presiding Officer Cuevas stated that the motion was made and seconded. Presiding Officer Cuevas announced that the meeting was adjourned at 2:08 p.m.

Attachment 1

Commission Report: Executive Director and Agency Activities,

Budget Issues, Staff Achievements, Legislative Activities

TABC Commission Meeting November 17, 2015Executive Director

Sherry Cook

HAPPY BIRTHDAY TABC

CommissionersJosé Cuevas, ChairmanSteve Weinberg, CommissionerIda Steen, Commissioner

Enforcement Operations

Still Seizures ‐ July 1939 (36)

Still Seizures 1936‐1941

1936….. 171 Stills Seized1937….. 732 Stills Seized1938…..731 Stills Seized1939…..521 Stills Seized1940….. 422 Stills Seized1941….. 378 Still Seized

TABC Military SupportHonoring All Who Serve

In Oct. 1942, Still Seizure maps in the TLCB Review would be replaced with a Service Flag.

Each star on the flag represents an employee or son of an employee who was serving during World War II.

Flag: Stars represent 40 men who left the employ of the TLCB to enter the armed services and two sons of employees.

SECCThe State Employee Charitable Campaign is the only statutorily authorized workplace campaign for state agency and higher education employees throughout Texas. In 2014, the SECC marked its 21st year by raising more than $9,031 million for charitable organizations throughout the state,

nation and world.

HEADQUARTERS$6057.00*

REGION 1$1,762.00

REGION 2$5,306.00

REGION 3 $2,356.00

REGION 4$3,448.00

REGION 5 $6,891.00

TABC 2015 State Employee Charitable Campaign ResultsTotal Raised: $25,820

*Includes $1709 raised via fundraisers at HQ

HQ SECC Forms $4615.00

Region 1$2412.00

Region 2$5556.00

Region 3$490.00

Region 4$1599.00

Region 5 $5130.00

TABC 2014 State Employee Charitable Campaign ResultsTotal Raised $19,802

• HQ SECC Committee• Diana Figueroa‐Chair• Ruby Gonzalez, Education/Seller Training ‐Co‐Chair• Jeff Richards, Licensing• Keon Flowers, HR• Robert Scruggs, BSD• Anna Castillo, Enforcement• Marie Figueroa, IRD• Sarah Fricke, Austin Region Licensing• Shanquetta Lewis, Legal• Staycie Vasquez, Training• Michael Watson, IRD backup• Monica Ross, HR backup• Jesse Valdez, IRD backup/Emcee• Brittany Bankhead, Licensing backup

REGION SECC CommitteeAnna Contreras, El Paso POEElane Lewis, Arlington AuditGena Cannon, Arlington LicensingDora Jones, Houston EnforcementDoris Board, Waco EnforcementNorma Martinez, Progreso POEJohn Graham, Corpus Christi EnforcementDoricela Howell, San Antonio EnforcementNancy Pineda, McAllen Enforcement

ACCOMPLISHMENTS

• IRD completed and closed the following projects inSeptember:– LP ID Stamp Control System Implementation;– Staffing Master Software Implementation;– Field Reorganization System Updates, including coding changes,

coding block updates, software modifications, and reportupdates;

– Installation of New HQ Security System, including cameras,intercoms, access card devices, and alarms;

– IRD Architecture & Roadmap Project;– ACH Standardization Project;– Licensing Topic Files Project;– Neubus Label Imaging Project; and– Mobile Desktop Scanner Deployment.

ACCOMPLISHMENTS• Investigations conducted by the agency’s Special

Investigations and Financial Crimes Unit led to the“cancelled for cause” of seven permits during themonth of October. Organized criminal activity,Gambling, and drug‐related activity were the principalcauses for action.

• In October 2015, POE’s land and sea ports reportedrevenues $61,333 higher than the amount collectedduring the same month the previous year. For thefourth month in a row, every Land Port District enjoyeda net increase in revenue.

Awards/Recognition• The TABC was recognized as the “Agency of the Year” by the National

Liquor Law Enforcement Association (NLLEA). The award was based onthe achievements of the agency’s Special Investigations Unit.

• TABC was awarded by OJJDP and UDETC for the 2015 EnforcingUnderage Drinking Laws (EUDL) Success Story.

• Agent Greg Lewis was nominated for MADDs “Commitment to YouthAward” for his work with the Greater Austin Underage DrinkingPrevention Council, his continued involvement with education ofminors, and his participation in MADD’s semi‐annual DWI roundtable.

• The Bryan/College Station Enforcement Office was selected by theBrazos Valley MADD Chapter for its “Heroes of the Highway Award” forthe undercover operations and minor stings conducted by that office’sagents and their contribution to the reduction of DWI rates in theBryan/College area.

BASTROP FIRESSRT AGENTS

Sgt. Johnson, OliverSgt. Winter, JasonAgent Alfaro, JorgeAgent Altum, JohnAgent Burgess, TiffanyAgent Dabera, FletcherAgent Deans, MichaelAgent Dearden, GregAgent Franco, JoeAgent Harris, JonathanAgent Lashbrook, JeffAgent Lewis, GregAgent Magee, BoydAgent Medellin, GabrielAgent Meissner, ShawnAgent Moore, RussellAgent Nieto, AlexAgent Leo Sandoval Agent Shepherd, Ben

TRENDS

Minor Sting4,640 - 40%

Other6,999 - 60%

Enforcement Administrative CasesFY 2011 - FY 2015

Total = 11,639

6,5287,014

8,8499,539

10,000

12,000

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Minor Stings

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

40%36% 37% 39%

*FY 2016 percentage calculated based on September - October 2015 results.

Percentage of Enforcement Administrative Cases Coming from Minor Stings

6,5287,014

10,000

12,000

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Minor Sting Volume & Compliance Rates

Minor Stings Compliance Rate

ACCOMPLISHMENT• Field Operations completed a “Back to School”series of minor stings in September in all regionsof the state:

– 915 attempted buys

– 80 businesses failed the test,

– for a statewide compliance rate of 91.3 percent."Back to School" Minor Stings

September 10 - 12, 2015 Region Attempts Buys Refusals Compliance

Lubbock 66 4 62 93.9%

Arlington 242 32 210 86.8%

Houston 306 15 291 95.1%

Austin 116 9 107 92.2%

San Antonio 206 20 186 90.3%

Statewide 936 80 856 91.5%

TRENDS48,855 49,459

10,000

20,000

30,000

40,000

50,000

60,000

FY 2014 FY 2015

Licensed In‐State Businesses

97(0.4%) 61

(10.3%

441(1.9%)

5(1.6%)

604(1.2%)

FY 2015 Growth by Sector

TRENDS

124(2.6%)

131(1.0%)

251(1.8%)

121(1.6%)

‐23(‐0.2%)

604(1.2%)

‐100

Lubbock Arlington Houston Austin San Antonio Statewide

FY 2015 Growth/Decline by Region

TRENDS

639.0643.4

697.0 696.4 695.5$179.4 $182.9$192.4 $195.9 $193.1

$199.9$205.6 $208.8 $212.9 $216.3

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Million Dollars

Million Gallons

Gallons of Alcoholic Beverages Sold & Gross Excise Tax RevenueFY 2006 ‐ FY 2015

Gallons Sold Gross Excise Tax Revenue

TRENDS

3,680,957(11.6%)

8,199,187(16.0%)

‐20,153,469(‐3.7%)

6,784,681(10.1%)

‐1,488,644(‐0.2%)

‐25,000,000

‐20,000,000

‐15,000,000

‐10,000,000

‐5,000,000

5,000,000

10,000,000

Distilled Spirits Wine Beer Malt Liquor All Wholesale Sales

Change in Gallons Sold by Beverage ClassFrom End of FY 2013 to End of FY 2015

Type of Alcoholic Beverage Tax RateDistilled Spirits $ 2.40/gallonWine containing alcohol not more than 14% by volume $ 0.204/gallonWine containing alcohol over 14%, but not more than 24% by volume $ 0.408/gallonSparkling Wine $ 0.516/gallonMalt Liquor containing alcohol in excess of 4% by weight $ 0.198/gallonBeer containing not more than 4% alcohol by weight $0.194/gallon

TRENDS

$8,837,296(11.6%)

$1,237,721(9.2%)

‐$3,900,665(‐3.7%)

$1,343,366(10.1%)

$7,517,718(3.6%)

‐$6,000,000

‐$4,000,000

‐$2,000,000

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

Distilled Spirits Wine Beer Malt Liquor Total ‐ All Classes

Change in Gross Excise Tax Revenue by Beverage ClassFrom End of FY 2013 to End of FY 2015

TRENDS0

10,000

12,000

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

11,639

10,192

8,682 8,1767,492

Complaint Investigations Closed

11,208

10,156

8,7698,106

3,007 2,7932,176 2,172 2,209

1,881 1,547 1,420 1,257 1,3010

10,000

12,000

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Complaints and Selected Sources of Complaints

All Complaints Rec'd

Government PartnerComplaints

Self-Initiated (Internal)Complaints

Attachment 2

FY 2016-2017 Year-End Performance Measurements

Performance Measures

Ed Swedberg

November 17, 2015

Contents• Performance Measure Definitions

• TABC Key Measures– Enforcement and Licensing

– Compliance Monitoring and Ports of Entry

• Other Measures of Interest

• TABC Key Measure Targets & Results– Enforcement and Licensing

– Compliance Monitoring and Ports of Entry

• Other Measures of Interest Targets & Results

• Next Steps

Performance Measure Definitions

• Four TABC Strategies (with PM Reporting Units):– Enforcement (Enforcement Agents + SIU)– Licensing (Field and HQ License and Permit Specialists)– Compliance Monitoring (Field Auditors + MIU + FCU + Excise Tax

Accounts Examiners)– Ports of Entry (Tax Compliance Officers)

• Four Measure Types:– Outcome (Were we Effective?)– Output (Were we Productive?)– Efficiency (How much did we Spend for each Result?)– Input or Explanatory (Other Stuff)

• Two Measure Levels:– Key– Not Key

TABC Key Measures(ENF & LIC)

Strategy Type Code Measure

Enforcement Outcome 01K Percentage of licensed establishments inspected annually

Output 01K Number of inspections conducted by enforcement agents

Efficiency 01K Average cost per inspection

Efficiency 03K Average cost of multi‐agency operations targeting organized crime & trafficking statewide

Licensing Outcome 01K Average number of days for original license/permit approval

Output 02K Number of licenses/permits issued

Efficiency 01K Average cost per license/permit processed

TABC Key Measures(COMP & POE)

ComplianceMonitoring

Outcome 01K Percent of audits & analyses where licensee/permittee was found to be in full compliance

Output 03K Number of audits & other analyses conducted by auditors

Efficiency 01K Average cost per audit/analysis

Ports of Entry Output 01K Number of alcoholic beverage containers stamped

Output 02K Number of cigarette packages stamped

Other Measures of Interest

Enforcement Outcome 05 Percentage of priority retail locations inspected by enforcement

Output 02 Number of inspections of “at risk” licensed retailers conducted by enforcement

Input/Explanatory

06 Number of priority retail locations

Compliance Monitoring

Outcome 04 Percent of inspections by auditors where licensee/permittee was in full compliance

Output 04 Number of inspections conducted by field auditors

Ports of Entry Efficiency 01 Average cost per alcoholic beverage container stamped/disallowed

Efficiency 02 Average cost per cigarette package stamped/disallowed

TABC Key Measure Targets & Results(ENF & LIC)

Strategy Measure ActualFY13

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

ENF Percentage of licensed establishments inspected annually

86.08% 78.36% 80.00% 76.47% 82.00% 24.02%

Number of inspections conducted by enforcement agents

74,305 88,033 75,200 81,149 81,144 13,395

Average cost per inspection

$258.45 $254.14 $298.34 $300.43 $331.30 TBD

Average cost of multi‐agency operations targeting organized crime& trafficking statewide

NEW NEW NEW NEW $2400.73 TBD

LIC Average number of days for original license/permit approval

43.42 35.45 42.00 36.99 39.00 44.20

Number of licenses/permits issued

60,988 74,282 61,396 61,665 74,782 11,413

Average cost per license/permit processed

$55.36 $46.95 $69.40 $59.20 $52.66 TBD

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

86.08% 78.36% 80.00% 76.47% 82.00% 24.02%

74,305 88,033 75,200 81,149 81,144 13,395

$258.45 $254.14 $298.34 $300.43 $331.30 TBD

43.42 35.45 42.00 36.99 39.00 44.20

60,988 74,282 61,396 61,665 74,782 11,413

$55.36 $46.95 $69.40 $59.20 $52.66 TBD

Focused on Fewer, But

Higher Quality Inspections

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

86.08% 78.36% 80.00% 76.47% 82.00% 24.02%

74,305 88,033 75,200 81,149 81,144 13,395

$258.45 $254.14 $298.34 $300.43 $331.30 TBD

43.42 35.45 42.00 36.99 39.00 44.20

60,988 74,282 61,396 61,665 74,782 11,413

$55.36 $46.95 $69.40 $59.20 $52.66 TBD

New Key Measure:

Total SIU Costs / Number of

Investigations Opened

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

86.08% 78.36% 80.00% 76.47% 82.00% 24.02%

74,305 88,033 75,200 81,149 81,144 13,395

$258.45 $254.14 $298.34 $300.43 $331.30 TBD

43.42 35.45 42.00 36.99 39.00 44.20

60,988 74,282 61,396 61,665 74,782 11,413

$55.36 $46.95 $69.40 $59.20 $52.66 TBD

Did Great Last Fiscal Year

Challenging Trend Over the Past Few

Months

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

86.08% 78.36% 80.00% 76.47% 82.00% 24.02%

74,305 88,033 75,200 81,149 81,144 13,395

$258.45 $254.14 $298.34 $300.43 $331.30 TBD

43.42 35.45 42.00 36.99 39.00 44.20

60,988 74,282 61,396 61,665 74,782 11,413

$55.36 $46.95 $69.40 $59.20 $52.66 TBD

Fewer Issuances in Odd Years, Leads to Higher Average Cost

Due to Fixed Expenses

TABC Key Measure Targets & Results(COMP & POE)

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

COMP Percent of audits & analyses where licensee/permittee was found to be in full compliance

78.06% 80.29% 80.00% 81.31% 80.00% 83.08%

Number of audits & other analyses conducted by auditors

1641 1492 1450 1466 1585 390

Average cost per audit/analysis

$298.82 $339.60 $378.94 $324.23 $435.26 TBD

POE Number of alcoholic beverage containers stamped

1,103,155 1,180,205 1,541,293 1,409,168 1,306,735 194,645

Number of cigarette packages stamped

421,770 410,764 673,300 413,107 418,169 60,483

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

78.06% 80.29% 80.00% 81.31% 80.00% 83.08%

1641 1492 1450 1466 1585 390

$298.82 $339.60 $378.94 $324.23 $435.26 TBD

1,103,155 1,180,205 1,541,293 1,409,168 1,306,735 194,645

421,770 410,764 673,300 413,107 418,169 60,483

Gradual Year‐to‐Year Improvement – Result of Heavy Investigative

Focus?

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

78.06% 80.29% 80.00% 81.31% 80.00% 83.08%

1641 1492 1450 1466 1585 390

$298.82 $339.60 $378.94 $324.23 $435.26 TBD

1,103,155 1,180,205 1,541,293 1,409,168 1,306,735 194,645

421,770 410,764 673,300 413,107 418,169 60,483

Great Start to the New Fiscal

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

78.06% 80.29% 80.00% 81.31% 80.00% 83.08%

1641 1492 1450 1466 1585 390

$298.82 $339.60 $378.94 $324.23 $435.26 TBD

1,103,155 1,180,205 1,541,293 1,409,168 1,306,735 194,645

421,770 410,764 673,300 413,107 418,169 60,483

Large Jump in Number of Containers Stamped

Other Measures of Interest Targets & Results

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

ENF Percentage of priority retail locations inspected by enforcement

95.25% 91.67% 95.00% 90.69% 93.11% TBD

Number of inspections of “at risk” licensed retailers conducted by enforcement

21,824 45,354 22,350 39,326 40,000 3784

Number of priority retail locations

4315 7010 4470 6960 7000 TBD

COMP Percent of inspections by auditors where licensee/permittee was in full compliance

95.87% 96.16% 95.50% 96.45% 96.00% 94.90%

Number of inspections conducted by field auditors

25,146 24,175 23,200 24,752 23,200 4197

POE Average cost per alcoholic beverage container or cigarette package stamped/disallowed

$3.14 $3.07 $2.55 $2.81 $3.26 TBD

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

95.25% 91.67% 95.00% 90.69% 93.11% TBD

21,824 45,354 22,350 39,326 40,000 3784

4315 7010 4470 6960 7000 TBD

95.87% 96.16% 95.50% 96.45% 96.00% 94.90%

25,146 24,175 23,200 24,752 23,200 4197

$3.14 $3.07 $2.55 $2.81 $3.26 TBD

Continuing to Optimize

Enforcement Priority Inspections

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

95.25% 91.67% 95.00% 90.69% 93.11% TBD

21,824 45,354 22,350 39,326 40,000 3784

4315 7010 4470 6960 7000 TBD

95.87% 96.16% 95.50% 96.45% 96.00% 94.90%

25,146 24,175 23,200 24,752 23,200 4197

$3.14 $3.07 $2.55 $2.81 $3.26 TBD

Gradual Year‐to‐Year Improvement – Due to Auditors Taking Over all Non‐PS Inspections?

ActualFY14

TargetFY15

ActualFY15

ProposedTargetFY16

ActualYTDFY16

95.25% 91.67% 95.00% 90.69% 93.11% TBD

21,824 45,354 22,350 39,326 40,000 3784

4315 7010 4470 6960 7000 TBD

95.87% 96.16% 95.50% 96.45% 96.00% 94.90%

25,146 24,175 23,200 24,752 23,200 4197

$3.14 $3.07 $2.55 $2.81 $3.26 TBD

POE Cost Per Stamped Item Continues to

Decrease – Due to More Efficient Seaport Model?

Next Steps• Confirm TABC proposed performance measure targets for

FY16/17 with LBB

• Implement Licensing Division plan to reverse recent increasein average number of days to approve original license orpermit

• Continue to track all TABC performance measures and takeactions to address any negative trends

Attachment 3

Adopt Amendments to Rule §31.1, Separation of Duties Between

Commission and Executive Director

November 17, 2015 Commission Meeting Tentative Agenda Item 13: Adopt Amendments to Rule §31.1, Separation of Duties Between Commission and Executive Director

The Texas Alcoholic Beverage C01runission adopts amendments to §31 .1, relating to Separation of Duties Between Commission and Administrator, without changes to the proposed text as

published in the October 9, 2015, issue of the Texas Register (40 TexReg 7002).

Section 31.1 implements Alcoholic Beverage Code §5.12 and §5.34(b) by specifying which duties and authorities the commission retains and which duties and authorities it delegates to the administrator. The amendments change references to "administrator" in the title and throughout

the section to "executive director". Alcoholic Beverage Code §5 .11 (b) provides that the administrator is also known as the executive director.

Government Code §2261.254 was added by section 18 of Senate Bill No. 20, 34th Regular

Session of the Texas Legislature. Government Code §2261.254 provides that a contract for the purchase of goods or services that has a value exceeding $1 million must be approved by the

governing body of the agency and signed by the presiding officer of the governing body, unless

the governing body delegates the approval and signature authority to the executive director of the agency.

The amendments add new paragraph (c)(l 1) to this section delegating the authority to the executive director to execute all contracts on behalf of the agency, including contracts for the purchase of goods or services that have a value exceeding $1 million. The authority regarding

contracts for the purchase of goods or services that have a value exceeding $1 million cannot then be delegated by the executive director to anyone else.

Section 31.1 was also reviewed under Government Code §2001.039, which requires each state

agency to periodically review and consider for readoption each of its rules . The commission has determined that the need for the section continues to exist but that it should be amended.

No comments were received.

The amendments are adopted pursuant to Alcoholic Beverage Code §5.31 , which grants authority to prescribe rules necessary to carry out the provisions of the Code, and Government

Code §2261.254(d), which allows a governing body to delegate to the executive director the

authority to approve and sign contracts for the purchase of goods or services that have a value exceeding $1 million.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Text of rule as amended:

§31.1 Separation of Duties Between Commission and Executive Director.

(a) This rule implements §5 .12 of the Alcoholic Beverage Code (Code), which requires the Texas Alcoholic Beverage Commission ( commission) to adopt rules to clearly separate the policy-making authority of the commissioners from the management responsibilities of the executive director, and §5 .34(b) of the Code, which requires the commission to develop and implement policies that clearly define the respective responsibilities of the commission and staff.

(b) The commission retains the duty and authority to: (1) Establish agency policies and goals to carry out the duties and authority granted to

the commission under the Code; (2) Provide leadership and direction to ensure agency laws, rules, policies and goals

are implemented in a responsible, effective and cost efficient manner; (3) Ensure accountability and transparency within the agency and to the Governor,

the Legislature, the public, and persons regulated; ( 4) Appoint and remove the executive director; (5) Adopt agency rules to implement statutory duties and agency policies; (6) Employ or appoint and terminate or remove an internal auditor, adopt an audit

plan, approve audit findings and ensure agency compliance with audit requirements; (7) Exercise any authority and carry out any duty of the commission not delegated to

the executive director; and (8) Employ and tenninate the general counsel, who shall report directly to the

comm1ss10n. (c) The commission delegates the following duties and authority to the executive director

(under Alcoholic Beverage Code §5 .1 l(b) , also referred to as the administrator in the Alcoholic Beverage Code and the commission's rules) :

(1) Plan and implement an effective and efficient operational and organizational structure;

(2) Act as the agency liaison and resource to the executive and legislative branch; (3) Prepare and submit the agency budget and appropriations requests; (4) Employ or appoint an executive management team with the skills, knowledge and

commitment necessary to achieve the goals and implement the policies adopted by the comm1ss10n;

(5) Assign and delegate to each member of the executive management team and the general counsel the responsibility and authority necessary to effectively administer all agency operations, duties and functions , implement policy, and manage staff and resources, including the authority to further delegate and assign the essential duties and responsibilities of the agency to ensure the highest and best use of agency staff and resources;

(6) Develop, monitor and report measures or expectations for the administrative, regulatory and enforcement functions of the agency to ensure that the agency goals are accomplished and policies followed;

(7) Develop and implement comprehensive and agency-wide internal policies and procedures necessary to carry out each essential function, duty, policy or goal of the agency;

(8) Ensure that all agency staff has access to, knowledge of and responsibility for consistently following policies adopted by the commission and agency-wide internal policies and procedures;

(9) Administer the oath of office or commission to agency staff and agents; (10) Render, or delegate to agency staff, the agency decision or order in any matter

over which the agency has final decision-making authority7 ; and (11) Execute contracts, specifically including but not limited to approving and signing

contracts for the purchase of goods or services that have a value exceeding $1 million. Notwithstanding paragraph (5), the authority to approve and sign contracts for the purchase of goods or services that have a value exceeding $1 million shall not be delegated by the executive director to staff.

Text of rule showing changes to version being amended:

§31.1 Separation of Duties Between Commission and Executive Director Administrator.

(a) This rule implements §5.12 of the Alcoholic Beverage Code (Code), which requires the Texas Alcoholic Beverage Commission ( commission) to adopt rules to clearly separate the policy-making authority of the commissioners from the management responsibilities of the executive director administrator, and §5.34(b) of the Code, which requires the commission to develop and implement policies that clearly define the respective responsibilities of the commission and staff.

(b) The commission retains the duty and authority to : (1) Establish agency policies and goals to carry out the duties and authority granted to

the commission under the Code; (2) Provide leadership and direction to ensure agency laws, rnles, policies and goals

are implemented in a responsible, effective and cost efficient manner; (3) Ensure accountability and transparency within the agency and to the Governor,

the Legislature, the public, and persons regulated; (4) Appoint and remove the executive director administrator; (5) Adopt agency rnles to implement statutory duties and agency policies; (6) Employ or appoint and terminate or remove an internal auditor, adopt an audit

plan, approve audit findings and ensure agency compliance with audit requirements; (7) Exercise any authority and carry out any duty of the commission not delegated to

the executive director administrutor; and (8) Employ and terminate the general counsel, who shall report directly to the

comm1ss10n. (c) The commission delegates the following duties and authority to the executive director

(under Alcoholic Beverage Code §5.11 (b), also referred to as tho administrator in the Alcoholio Beverage Code and the commission's rules) :

(1) Plan and implement an effective and fill efficient operational and organizational strncture;

(2) Act as the agency liaison and resource to the executive and legislative branch; (3) Prepare and submit the agency budget and appropriations requests; (4) Employ or appoint an executive management team with the skills, knowledge and

commitment necessary to achieve the goals and implement the policies adopted by the comm1ss10n;

(5) Assign and delegate to each member of the executive management team and the general counsel the responsibility and authority necessary to effectively administer all agency

operations, duties and functions, implement policy, and manage staff and resources, including the authority to further delegate and assign the essential duties and responsibilities of the agency to ensure the highest and best use of agency staff and resources;

(6) Develop, monitor and report measures or expectations for the administrative, regulatory and enforcement functions of the agency to ensure that the agency goals are accomplished and policies followed;

(7) Develop and implement comprehensive and agency-wide internal policies and procedures necessary to carry out each essential function, duty, policy or goal of the agency;

(8) Ensure that all agency staff has access to, knowledge of and responsibility for consistently following policies adopted by the commission and agency-wide internal policies and procedures;

(9) Administer the oath of office or commission to agency staff and agents; (10) Render, or delegate to agency staff, the agency decision or order in any matter

over which the agency has final decision-making authority;- ; and ( 11) Execute contracts, specifically including but not limited to approving and signing

contracts for the purchase of goods or services that have a value exceeding S 1 million . lotwithstanding paragraph (5), the authority to approve and sign contracts for the purchase of

goods or services that have a value exceeding SI million shall not be delegated by the executive director to staff.

Attachment 4

Adopt Amendments to Rule §31.3, Petition for the Adoption of a Rule

November 17, 2015 Commission Meeting Tentative Agenda Item 14: Adopt Amendments to Rule §31.3, Petition for the Adoption of a Rule

The Texas Alcoholic Beverage Commission adopts amendments to §31 .3, relating to Petition for

the Adoption of a Rule, without changes to the proposed text published in the October 9, 2015,

issue of the Texas Register (40 TexReg 7004).

Government Code §2001.021 allows an interested person to file a petition requesting that a state agency adopt a rule. Section 31.3 provides procedures for such a petition. House Bill No. 763 , 841

h Regular Session of the Texas Legislature added subsection (d) to Government Code §2001.021, defining who is an "interested person" and thus who is qualified to file such a

petition. The amendments to §31.3 incorporate the statutory definition of "interested person".

In addition, the amendments change references to the "Administrator" throughout the section to the "Executive Director", consistent with Alcoholic Beverage Code §5.11 (b ).

The amendments are adopted pursuant to Alcoholic Beverage Code §5 .31 , which grants

authority to prescribe rules necessary to carry out the provisions of the Code, and Government

Code §2001.021(b), which requires a state agency to prescribe by rule the procedure for

submission, consideration and disposition of a petition for rulemaking.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid

exercise of the agency's legal authority.

Text of rule as amended:

§31.3 Petition for the Adoption of a Rule.

(a) Purpose. This section implements Government Code §2001.021 and provides procedures for any interested person (petitioner) to request the Alcoholic Beverage Commission ( commission) to adopt a rule. The petitioner must be:

(1) a resident of this state; (2) a business entity located in this state; (3) a governmental subdivision located in this state; or ( 4) a public or private organization located in this state that is not a state agency.

(b) Content of Petition. (1) The petition must be in writing. No form is required but all information must be

provided, or a reason why required information cannot be provided given. (2) The petition must contain the following:

(A) petitioner's name, address, organization or affiliation, if any, and the name of the person or entity on whose behalf the petition is filed, if different from the person submitting the petition;

(B) a plain and brief statement about why a rule or change in an existing rule is needed, required, or desirable, including the public good to be served and any effect on those who would be required to comply with the rule;

(C) an estimate of the fiscal impact on state and local government as a result of enforcing or administering the proposed rule, an estimate of the economic impact on persons required to comply with the proposed rule, whether there may be an effect on local employment, and the facts , assumptions and methodology used to prepare estimates and impacts required by this subparagraph;

(D) a statement on the commission's authority to adopt the proposed rule; (E) the proposed text of a new rule, or proposed changes to an existing rule;

and (F) a list of individuals, organizations or affiliations that may be interested or

affected by the proposed rule, if known. (c) Submission. A petition is submitted on the date it is received by the Executive Director.

The petition must be addressed to the Executive Director, Texas Alcoholic Beverage Commission, and mailed to P.O. Box 13127, Austin, Texas 78711-3127, or hand delivered to the Executive Director at commission headquarters in Austin, Texas.

(d) Review. The Executive Director will review the petition for compliance with the requirements of this section. If all requirements of this section are met, the Executive Director will bring the petition to the commission, except as provided otherwise in this section.

(e) Decision to Deny or Accept. The commission will deny a petition for rulemaking, or accept, in whole or in part, a petition for rulemaking within 60 days from the date the petition is submitted. If the commission neither denies nor accepts the petition within 60 days from the date it is submitted, agency staff will initiate the rulemaking process under Chapter 2001, Subchapter B, of the Government Code. In such case, agency staff may redraft the proposed text to confonn to style and format requirements for the agency's rules.

(1) The Executive Director will notify the petitioner in writing if the petition is denied and state the reason or reasons for the denial.

(2) The commission will refer an accepted petition to agency staff to initiate the rulemaking process under Chapter 2001, Subchapter B, of the Government Code. Agency staff may redraft the proposed text to conform to style, format and policy decisions of the agency.

(f) Repetitive petitions. The Executive Director may refuse to bring a petition for rulemaking to the commission if, within the preceding year, the commission has considered a previously submitted petition for the same rule.

Text of rule showing changes to version being amended:

§31.3 Petition for the Adoption of a Rule.

(a) Purpose. This section ~mplements Government Code 92001.021 and provides procedures for any interested person (petitioner) to request the Alcoholic Beverage Commission ( commission) to adopt a rule. ffhe petitioner must be:

ill a resident of this state; m a business entity located in this state; ill a governmental subdivision located in this state: or (±1 a public or private organization located in this state that is not a state agency.

(b) Content of Petition. (1) The petition must be in writing. No form is required but all information must be

provided, or a reason why required information cannot be provided given. (2) The petition must contain the following:

(A) petitioner's name, address, organization or affiliation, if any, and the name of the person or entity on whose behalf the petition is filed, if different from the person submitting the petition;

(B) a plain and brief statement about why a rule or change in an existing rule is needed, required, or desirable, including the public good to be served and any effect on those who would be required to comply with the rule;

(C) an estimate of the fiscal impact on state and local government as a result of enforcing or administering the proposed rule, an estimate of the economic impact on persons required to comply with the proposed rule, whether there may be an effect on local employment, and the facts , assumptions and methodology used to prepare estimates and impacts required by this subparagraph;

(D) a statement on the commission's authority to adopt the proposed rule; (E) the proposed text of a new rule, or proposed changes to an existing rule;

and (F) a list of individuals, organizations or affiliations that may be interested or

affected by the proposed rule, if known. (c) Submission. A petition is submitted on the date it is received by the Executive Director

Administrator. The petition must be addressed to the Executive Director Administrator, Texas Alcoholic Beverage Commission, and mailed to P.O. Box 13127, Austin, Texas 78711-3127, or hand delivered to the Executive Director Administrator at commission headquarters in Austin, Texas.

(d) Review. The Executive Director Administrator will review the petition for compliance with the requirements of this section. If all requirements of this section are met, the Executive )Director Administrator will bring the petition to the commission, except as provided otherwise in this section.

(e) Decision to Deny or Accept. The commission will deny a petition for rulemaking, or accept, in whole or in part, a petition for rulemaking within 60 days from the date the petition is submitted. If the commission neither denies nor accepts the petition within 60 days from the date it is submitted, agency staff will initiate the rulemaking process under Chapter 2001 , Subchapter B, of the Government Code. In such case, agency staff may redraft the proposed text to conform to style and format requirements for the agency' s rules.

( 1) The Executive Director Administrator will notify the petitioner in writing if the petition is denied and state the reason or reasons for the denial.

(2) The commission will refer an accepted petition to agency staff to initiate the rulemaking process under Chapter 2001, Subchapter B, of the Government Code. Agency staff may redraft the proposed text to confonn to style, format and policy decisions of the agency.

(f) Repetitive petitions. The Executive Director Administrator may refuse to bring a petition for rulemaking to the commission if, within the preceding year, the commission has considered a previously submitted petition for the same rule.

Attachment 5

Adopt Repeal of Rule §41.26, Railway Cars – Tax Returns

November 17, 2015 Commission Meeting Tentative Agenda Item 15: Adopt Repeal of Rule §41.26, Railway Cars -Tax Returns

The Texas Alcoholic Beverage Commission adopts the repeal of §41.26, relating to Railway

Cars - Tax Returns, without changes to the proposed repeal as published in the October 9, 2015, issue of the Texas Register (40 TexReg 7005).

Section 41.26 requires the operator of railway buffet, club or dining cars to file excise tax reports on wine and beer sold in Texas, and pay the tax due, each month. House Bill No. 1905, 841

Regular Session of the Texas Legislature amended Alcoholic Beverage Code §48.04 to remove

the obligation to pay such excise taxes . The repeal of §41 .26 conforms the rule to the Code.

The repeal is adopted pursuant to Alcoholic Beverage Code §5.31, which grants authority to prescribe rules necessary to carry out the provisions of the Code.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid

exercise of the agency's legal authority.

§41.26 Railway Cars Tax Returns.

Each operator of raihvay buffet, club or dining cars in TeJrns shall 1,vithin 20 days after the close of each calendar month file 1.vith the commission at Austin, Texas, a sworn report of the amount of wine and beer sold in Texas during such period for which the state excise tax upon such \Vine

and beer is due, and shall attach thereto payment of the full amount due.

Attachment 6

Adopt Repeal of Rule §41.47, Airline Beverage Permits

November 17, 2015 Commission Meeting Tentative Agenda Item 16: Adopt Repeal of Rule §41.47, Airline Beverage Permits

The Texas Alcoholic Beverage Commission adopts the repeal of §41.47, relating to Airline

Beverage Permits, without changes to the proposed repeal as published in the October 9, 2015,

issue of the Texas Register ( 40 TexReg 7005).

Section 41.47 requires the holder of an airline beverage permit to file excise tax reports on alcoholic beverages served in Texas, and pay the tax due, each month. House Bill No. 1905, 84th

Regular Session of the Texas Legislature amended Alcoholic Beverage Code §34.04 to remove

the obligation to pay such excise taxes. The repeal of §41.4 7 conforms the rule to the Code.

The repeal is adopted pursuant to Alcoholic Beverage Code §5.31 , which grants authority to

prescribe rules necessary to carry out the provisions of the Code.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

§41.47 ,A1irline BeYerage Permits.

(a) Monthly Report of Individual Services and Excise Tax Due. ( 1) Each holder of an airline beverage permit shall make a monthly report (Monthly

Report of Individual Services and Excise Tax Due) to the commission on fonns prescribed by the administrator.

(2) Said report shall be made and filed by said permittee with the commission at its offices at Austin, Te1rns, on or before the 15th day of the month following the calendar month for 1Nhich the report is made. The total payment due for the month shall accompany each report and payment shall be made in the form of a cashier's check, certified check, or postal money orders made payable to the State Treasurer of Texas. The report shall show the following:

(A) The month for ',Nhich the report is made, the permittee's name and address, and the permit number.

(B) Total of daily individual services, monthly total of services and service fee due for month.

(C) Total number of distilled spirits miniatures served daily and monthly totals of these services 1.vhich are subject to excise taxes.

(D) Daily totals of 1Nine gallons on 1.vhich excise tax is due for all classifications of alcoholic beverages (excepting distilled spirits miniatures) and monthly totals of these gallons which are subject to excise taxes. '

(E) The resulting excise tax due for month computed on subparagraphs (C) and (D) of this paragraph. ·

(F) The total payment due for month. (b) Refunds. The holder of an airline beverage permit may apply to the commission for a

refund of the excise tax on any liquor on v,rhich the state tax has been paid upon proper proof that

the liquor 1tvas sold or disposed of outside the boundaries of the State of Texas. The claim shall contain the following:

(1) Two affidavits (duplicate originals) containing the follov,ing information for purchases from suppliers within this state:

(A) Total number of containers parchased during the month by seller, type of beverage and size of container.

· (B) Total gallonage of all such purchases. (C) Total excise taxes upon all such purchases. (D) A statement outlining that all such purchases 1.vill be shipped out of Texas

unless sold or served by the permittee in Texas and that if such purchases are sold or served in Texas the applicable Texas excise taxes 1.vill be reported and paid on or before the 15th day of the next succeeding month.

(2) Submit 1.vith each claim a single copy of the seller's invoice covering any alcoholic beverages described in the affidavits.

(3) Any claim to be considered by the commission must be filed by the airline beverage permittee not later than 120 days after the date of the earliest purchase date on the etaffir.

(4) Each claim S'dbmitted must include only purchases for one calendar month. (c) Oaths. Each report required by this section shall be signed and sv,rom to by the pennittee

or his duly m:1thorized representative before a notary p,1blic, or other officer authorized to administer oaths.

(d) Copies. An exact copy of each report required by this section shall be retained in the files of the permittee and shall be kept by the permittee for a period of at least two years, subject to inspection of the commission or its authorized representative at all reasonable office hours.

(e) Violations. It shall be a violation of this section to fail or refuse to make any record or report herein required, or for any person to make or cause to be made any false or incorrect entry or entries on any record or report herein provided for. It shall further be in violation of this section to fail to make any entry or entries on any record or report provided by this section at the time or in the place or manner herein required.

Attachment 7

Recruitment and Hiring Report

Posted and advertised 149 Positions

33 Internal positions

22 Temporary positions

Received 7257 online applications

1800 more than Fiscal Year 2014

Recruiter Activity TABC Website/Work‐In‐Texas

State Employee Referral

351502

Female

Unknown

White Black Hispanic Other Male Female

Hispanic

Female

White Black Hispanic Asian/PacificIslander

Terminations

Male Female

Terminations

• Exceeded minority statewide availability

– Official/Administrator

– Professional

• Underutilized minority statewide availability

– Administrative Support

– Service and Maintenance

– Protective Services

– Technicians

• Exceeded female statewide availability

– Official/Administrator

– Administrative Support

– Professional

– Service and Maintenance

• Underutilized female statewide availability

– Protective Services

– Technician

Attachment 8

Training Briefing

1 Director

1 Team Lead

1 Administrative Assistant

4 Training Specialists

Training Division

Academy Training

In‐Service Specialized Online/LMS

Academy Training

Pre 2012 – app. 120 hoursPresent ‐ app. 562 hours

Scenario based Human Trafficking

Undercover operationsFinancial Crimes Critical Incidents

Non‐Violent InterventionFirearms Program

Auditor

Pre 2012 60 hours2015 160 hours

Marketing InvestigationsCode and Rules

Corporate StructuresProtests

Excise Taxes

In‐Service

Commissioned

13,000 contact hours

18,397 contact hours

Non‐Commissioned

FY 14 FY 15

3,534 contact hours

SpecializedCourses

Commissioned

13,170

Contact Hours

14,550

Contact Hours

Non‐Commissioned

Contact Hours

Online/LMS

Policy

Commissioned

26 Policy Updates

Non‐Commissioned

8 Policy Updates

Agency Wide Courses

1,204 Courses Taken2,408 Contact Hours

1,940 Courses Taken3,380 Contact Hours

Training Division

Academy Training

In‐Service Specialized Online/LMS

Professionalism Customer ServicePublic Safety

CERTIFICATION

10:00 a.m. – November 17, 2015

5806 Mesa Drive Austin, Texas 78731

P.O. Box 13127 Austin, Texas 78711-3127 (512) 206-3333 www.tabc.state.tx.us

An Equal Opportunity Employer

________________________________

STATE OF TEXAS COUNTY OF TRAVIS This certifies that the attached is a true copy of the proceedings of the Texas Alcoholic Beverage Commission meeting held on November 17, 2015. _ Sherry Cook

Executive Director Sworn and subscribed before me this the 7th day of January 2016.

__________________________________ Gloria Darden Reed

Notary in and for Travis County

Commission Meeting Minutes for November 17, 2015 · AGENDA REGULAR COMMISSION MEETING 10:00 a.m....

Documents

Transcript of Commission Meeting Minutes for November 17, 2015 · AGENDA REGULAR COMMISSION MEETING 10:00 a.m....

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