(a) In addition to the activities authorized by Section 12.01 , the holder of a brewer's permit whose annual production of ale, together with the annual production of beer by the holder of a manufacturer's license at all premises wholly or partly owned, directly or indirectly, by the permit holder or an affiliate or subsidiary of the permit holder, does not exceed a total of 225,000 barrels may sell ale produced on the brewer's premises under the permit to ultimate consumers on the brewer's premises:
(1) for responsible consumption on the brewer's premises; or
(2) subject to Subsection (a-1), for off-premises consumption.
(a-1) Sales to a consumer on the brewer's premises for off-premises consumption are limited to 288 fluid ounces of beer and ale combined per calendar day.
(b) The total combined sales of ale to ultimate consumers under this section, together with the sales of beer to ultimate consumers by the holder of a manufacturer's license under Section 62.122 at the same premises, may not exceed 5,000 barrels annually.
(c) Subject to Subsections (b), (d), and (e), the holder of a brewer's permit may sell ale produced on the brewer's premises under the permit to ultimate consumers on the brewer's premises for responsible consumption on the brewer's premises even if the annual production limit prescribed by Subsection (a) is exceeded if:
(1) the permit holder:
(A) was legally operating a manufacturing facility with on-premise sales under Subsection (a) on February 1, 2017; or
(B) purchased an ownership interest in, or was purchased by the holder of, a permit or license issued under Chapter 12, 13, 62, or 63; and
(2) the permit holder has annual production that does not exceed 175,000 barrels at the brewer's premises.
(d) For purposes of Subsection (c)(1)(B), a permit holder may not sell to a permit or license holder whose annual production exceeds the limit prescribed by Subsection (a) an ownership interest:
(1) of more than 25 percent in the permitted location; or
(2) that provides the purchaser with the ability to control the operations at the permitted location.
(e) A holder of a brewer's permit who under Subsection (c) sells ale produced on the brewer's premises under the permit to ultimate consumers on the brewer's premises for responsible consumption on the brewer's premises:
(1) shall file a territorial agreement with the commission under Subchapters C and D, Chapter 102; 1
(2) must purchase any ale the permit holder sells on the brewer's premises from the holder of a permit issued under Chapter 19, 20, or 21; and
(3) with respect to those purchases, must comply with the requirements of this code governing dealings between a distributor or wholesaler and a member of the retail tier, including Section 102.31 .
(e-1) The commission:
(1) may require the holder of a brewer's permit who sells ale to ultimate consumers under this section to report to the commission each month, in the manner prescribed by the commission, the total amounts of ale sold by the permit holder under this section during the preceding month for:
(A) responsible consumption on the brewer's premises; and
(B) off-premises consumption, as authorized by Subsection (a);
(2) by rule shall adopt a simple form for a report required under Subdivision (1); and
(3) shall maintain reports received under this subsection for public review.
(f) The commission by rule or order shall annually adjust the production limit prescribed by Subsection (c)(2) in an amount that is equal to the percentage of the state's population growth for the previous year as determined by the state demographer under Chapter 468, Government Code.
(g) The commission may impose an administrative penalty against a permit holder who violates Subsection (a-1) or fails to comply with a requirement established by the commission under Subsection (e-1). The commission shall adopt rules establishing:
(1) the amount of an administrative penalty under this subsection; and
(2) the procedures for imposing an administrative penalty under this subsection.
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