Amends TCA Title 57, Chapter 3.

This bill authorizes a manufacturer of alcoholic beverages to enter into an alternating proprietorship agreement with one or more manufacturers. An "alternating proprietorship agreement" is an agreement between two or more licensed manufacturers to share all or a portion of a bonded or general premises, or both. <br /> <br /> Under this bill, a licensed manufacturer may enter into an alternating proprietorship agreement with one or more manufacturers, subject to the following:<br /> <br /> (1) Parties to an alternating proprietorship agreement may alternate the use of a bonded or general premises, or both, or part of a bonded or general premises, or both, for the purpose of manufacturing alcoholic beverages, including high alcohol content beer;<br /> <br /> (2) A manufacturer that is a party to an alternating proprietorship agreement must maintain a room or separate area of the general premises that is exclusively occupied by that manufacturer and is not alternated with another manufacturer;<br /> <br /> (3) Each manufacturer that is a party to an alternating proprietorship agreement must individually receive approval of the agreement from the tobacco tax and trade bureau and the commission prior to commencing operations at the general premises;<br /> <br /> (4) A manufacturer seeking approval for an alternating proprietorship agreement must submit to the commission:<br /> <br /> (A) A description of the areas, equipment, resources, rooms, or buildings, or combination of areas, equipment, resources, rooms, or buildings, that will alternate between manufacturers;<br /> <br /> (B) Diagrams of the parts of the general premises that will and will not be alternated;<br /> <br /> (C) A copy of the written alternating proprietorship agreement between manufacturers; and<br /> <br /> (D) An acknowledgement from each manufacturer that they will maintain adequate records that track the alternating premises; and<br /> <br /> (5) Only the manufacturer participating in an alternating proprietorship agreement that is the property owner or primary lessee of the general premises may exercise retail rights and privileges under this bill. If there are two or more manufacturers that are property owners or are primary lessees, only one manufacturer may exercise the retail rights and privileges under this bill.<br /> <br /> ON MARCH 7, 2022, THE SENATE SUBSTITUTED HOUSE BILL 2238 FOR SENATE BILL 2197, ADOPTED AMENDMENT #1, AND PASSED HOUSE BILL 2238, AS AMENDED.<br /> <br /> AMENDMENT #1 adds that manufacturers that are parties to an alternating proprietorship agreement must not be owned by the same individual, entity, or by substantially similar ownership. For purposes of this amendment, "substantially similar ownership" includes, but is not limited to:<br /> <br /> (1) An individual who owns more than a 40 percent interest in two or more of the manufacturers that are parties to the agreement;<br /> <br /> (2) An individual who owns a manufacturer that is party to the agreement whose spouse is the owner of another manufacturer party to the agreement; or<br /> <br /> (3) A manufacturer that is party to the agreement that is owned by a trust that is for the benefit of an owner of another manufacturer that is party to the agreement, or the owner's spouse or children. <br />