(a) This rule applies to conduct surety bonds, performance
bonds, excise tax bonds, and bonds for alternating brewery proprietorships
and contract brewing arrangements ("bonds").
(b) Submission of Bond with Application.
(1) When required by the Alcoholic Beverage Code to
submit a bond, an applicant for an original or renewal license or
permit shall submit with its license or permit application the required
bond or alternative form of surety, as authorized under this section.
(2) Failure to submit the necessary bond or alternative
form of surety in proper form will result in denial of the application.
(c) A bond required under the Alcoholic Beverage Code
must be executed only on forms prescribed by the TABC with the licensee
or permittee as principal, a qualified surety company doing business
in this state as surety, and the state as payee.
(d) All bonds shall be payable in Travis County.
(e) A license or permit holder shall obtain, submit,
and maintain a separate bond for each license or permit it holds.
(f) A licensee or permittee required to furnish a bond
under this section may furnish, in lieu of all or part of the amount
of the bond required, one or more certificates of deposit or savings
accounts assigned to the state or one or more letters of credit. If
an assignment of a certificate of deposit, savings account, or letter
of credit is furnished in lieu of a bond, the executive director or
their designee shall keep it in the agency's possession. Interest
earned on a certificate of deposit or savings account is not subject
to the assignment and remains the property of the owner of the certificate
of deposit or savings account.
(g) A certificate of deposit or savings account furnished
in lieu of a bond by a licensee or permittee must be assigned to the
state, in a manner approved by the executive director or their designee,
to secure payment to the state.
(h) A letter of credit furnished in lieu of a bond
by a licensee or permittee must be on a form approved by the executive
director or their designee and contain any conditions required by
the executive director to secure payment to the state.
(i) Qualifications of Surety Company.
(1) A surety company, to qualify to provide bonds under
this subchapter, must be licensed by this state and in "good standing"
with the State Board of Insurance, Comptroller of Public Accounts,
Secretary of State, and any other regulatory agencies with jurisdiction
over its affairs.
(2) In addition to the requirements of Alcoholic Beverage
Code §§11.11 and 61.13, a bank or credit union must have
a physical facility in this state to accept cash deposits, make cash
advances to customers and carry out day-to-day operations within this
state.
(j) Each bond required by this subchapter must cover
the permit or license period and must be maintained until it is released
or forfeited or, if it is a bond required by §33.45(b), until
it is terminated by the surety pursuant to Alcoholic Beverage Code §11.71.
(k) Release of Surety.
(1) Upon expiration of the license or permit, its voluntary
cancellation, or upon the applicant's subsequent approval for exemption
from the surety requirement, the licensee or permittee may request
the release and return of the security supporting their license or
permit.
(2) The release of the surety will not be unreasonably
withheld; however, the surety company, bank, or credit union is not
released from its obligation until it receives written notice of the
release from the commission.
(3) The executive director may not release a surety
bond until the surety company has paid and discharged in full all
of its liabilities on the bond to the state as of the date of cancellation.
(l) General Provisions regarding Bond Forfeiture.
(1) When a permit or license is revoked, the commission
shall notify the permittee or licensee in writing of its intent to
seek forfeiture of the bond.
(2) Upon entry of a final order against the permittee
or licensee or upon waiver of hearing by the permittee or licensee,
the commission shall notify the surety company to remit to the state
the full amount of the surety required within ten days after notification.
(m) For purposes of this subchapter, an order issued
pursuant to an agreement of the parties in which the permittee or
licensee waives its right to a hearing is a final adjudication of
the violation that is the subject of the agreement and order.
(n) Violations of the Code or commission rules by the
legal entity in the name of which a bond or other surety is held or
by any of its officers, directors, or partners are counted toward
and may result in cancelation, forfeiture, or exemption from the requirement
to post a bond or other surety.
(o) In a joint venture, regardless of the type of legal
entity formed, prior violations by any participant in the joint venture
will disqualify the joint venture from exemption from the requirement
to post a bond or other surety.
(p) Neither the bondholder nor any officer, director,
or partner of a bondholding entity may be granted a new license or
permit until a forfeited bond or other surety is paid.
(q) The commission may seek forfeiture of a bond due
to cancellation of the license or permit for any reason, including
cancellation for multiple violations of Alcoholic Beverage Code §§102.31
and 102.32.
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