| (a) This section applies only to conduct surety bonds
required by Alcoholic Beverage Code §§11.11 and 61.13.
(b) A conduct surety bond, assignment of certificate
of deposit, savings account, or letter of credit must cover the minimum
time required for the applicant to qualify for exemption from the
surety requirement imposed by Alcoholic Beverage Code §§11.11
and 61.13.
(c) A permittee or licensee who is required to file
a conduct surety bond may furnish instead of all or part of the required
bond amount:
(1) one or more certificates of deposit assigned to
the state issued by a federally insured bank or by a credit union
authorized to do business in this state; or
(2) one or more letters of credit issued by a federally
insured bank or credit union authorized to do business in this state.
(d) Pursuant to Alcoholic Beverage Code §11.11(e),
a license or permit holder is exempt from the requirement to post
a conduct surety bond if, at the time the commission receives the
second renewal application for the license or permit, the holder of
the license or permit:
(1) has not had any license or permit revoked within
the preceding five years;
(2) is not the subject of a pending revocation or cancelation
proceeding; and
(3) has continuously operated on the licensed or permitted
premises for at least three years before the date the holder applied
for renewal of the license or permit.
(e) Forfeiture of a Conduct Surety Bond.
(1) When a license or permit is cancelled, or upon
a final adjudication that the licensee or permittee has committed
three violations of the Alcoholic Beverage Code prior to the exemption
date, the commission shall notify the licensee or permittee, in writing,
of its intent to seek forfeiture of the bond or alternative form of
surety.
(2) The licensee or permittee may, within 30 days of
the notice specified in paragraph (1) of this subsection, request
a hearing on the question of whether the criteria established by Alcoholic
Beverage Code §§11.11 and 61.13 and by this section for
forfeiture of the bond or alternative form of surety have been satisfied.
The hearing shall be conducted in accordance with Chapter 2001 of
the Government Code.
(3) Evidence that an agent or servant of the licensee
or permittee has been adjudicated guilty of, or granted deferred adjudication
for, an offense under the Alcoholic Beverage Code, because of conduct
occurring during the performance of their duties for the licensee
or permittee, shall constitute evidence of an adjudication that the
licensee or permittee has violated a provision of the Alcoholic Beverage
Code. This paragraph only applies to violations which were not attributable
to the licensee or permittee because of the operations of Alcoholic
Beverage Code §106.14.
(4) Upon entry of final order against the licensee
or permittee in the hearing described in paragraph (2) of this subsection,
or upon waiver of said hearing by the licensee or permittee, the commission
shall notify the surety company, bank, or credit union to remit to
the state the amount of surety required within ten days after notification.
(5) The commission may institute action to recover
the amount of the surety in its own name, for the benefit of the state,
as set forth in Alcoholic Beverage Code §11.70.
(6) Counting Violations for Conduct Surety Bond Forfeiture
Purposes.
(A) Except as provided by subsection (B) of this section,
the commission may seek forfeiture of a conduct surety bond upon the
third violation during the effective period of the bond, including
warnings, of any statute or rule under the commission's jurisdiction.
(B) For violations of Alcoholic Beverage Code §§102.31
and 102.32, the first six incidents may not be counted as violations
supporting bond forfeiture. The seventh and subsequent violations
will be counted as violations supporting bond forfeiture.
(C) Violations in which the license or permit holder
has qualified for the legal protections of Alcoholic Beverage Code §106.14
(related to Actions of Employee) will be considered for forfeiture
purposes according to §§11.11(b)(2) and 61.13(b)(2) of the
Code.
(7) The commission will not seek forfeiture of a surety
bond due solely to violations of Alcoholic Beverage Code §§102.31
and 102.32, but may seek forfeiture based upon violations of §§102.31
and/or 102.32 in combination with at least one other violation of
the Code or commission rules.
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