” . - 

E ENEECAL 

Honorable 0. N. Humphreys, Jr. 

Administrator 

Texas Alcoholic Beverage Commission 

P.O. Box 13127, Capitol Station 

Austin, Texas 78711 Opinion No. M-877 

Re: Whether vendors selling beer 

from ships' chandlerage under 

United StatesCustoms Bond 

are subject to provisions of 

Dear Mr. Humphreys: the Texas Liquor Control Act. 

Your request for an opinion on the captioned subject 

presents three questions. 

The first question presented inquires as to your Commission's authority, if any, to enforce pertinent provisions of 

the Texas Liquor Control Act against a vendor selling beer 

from ships' chandlerage* under United States Customs Bond 

when such vendor holds no license or permit issued by the 

Texas Alcoholic Beverage Commission. 

The second question presented inquires as to the Board's 

authority, if any, to enforce pertinent provisions of the 

Texas Liquor Control Act against a vendor selling beer from 

ships' chandlerage under United States Customs Bond when such 

vendor holds a valid license or permit issued by the Texas 

Alcoholic Beverage Commission. 

The third question presented assumes that the vendors in 

the first and second questions are subject to regulation under 

the Texas Liquor Control Act, and inquires as to whether the 

Commission may strictly regulate or even prohibit the activities of such vendors because of the substantial practical 

*"Ship Chandler - A Dealer in supplies and equipment for 

ships." Webster's Third New International Dictionary (Unabridged 

Ed. 1969). 

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Honorable 0. N. Humphreys, Jr., Page 2 (M-877) 

difficulties which the Commission faces with respect to enforcing state liquor laws as they may pertain to the sales 

in question. 

Your request presents only limited facts and it is not 

accompanied by a copy of the regulations and procedures of 

the United States Bureau of Customs under which the specific 

vendors in question purport to operate. For the purpose of 

this opinion, we will assume that all of the beer in question 

has been brewed and placed in containers in a brewery operated 

under internal revenue supervision and bond; that the containers have been clearly stamped and labeled for export without payment of federal taxes at the brewery; that they have 

been transported into the State of Texas by a carrier bonded 

to and under the supervision of appropriate agencies of the 

Federal government; and that once the beer reaches the state 

it is continuously held in facilities which are bonded to and 

under the supervision of federal authorities until placed 

aboard ship (for transportation to destinations in foreign 

countries, Hawaii, Alaska, or the possessions of the United 

States; or for the use as ships' supplies). A comprehensive 

statutory and administrative regulatory scheme is provided 

for this purpose by federal law, and at all steps in the transfer from brewery to ship, and until the beer reaches its destination at a foreign port, if so consigned, the beer in 

question would under the federal regulatory scheme, be subject 

to close supervision by federal agents. 

Pertinent statutory provisions, are in part, as follows: 

"26 U.S.C. 55092. Definition of brewer 

"Every person who brews or produces beer for 

sale shall be deemed a brewer." 

"26 U.S.C. 85401. Qualifying documents 

II . . . 

"(b) Bonds. - Every brewer . . . shall execute 

a bond to the United States . . . conditioned 

. . . that he shall in all respects faithfully 

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Honorable 0. N. Humphreys, Jr., Page 3 (M-877) 

camp ly , without fraud or evasion, with all requirements of law relating to the production 

and sale of any beer . . ." 

"19 U.S.C. 91309. Supplies for certain vessels 

and aircraft - Exemption from customs duties 

and internal revenue tax. 

'(a) Articles . . . may be withdrawn . . . 

from any brewery . . . free of internal revenue tax 

"(1) for supplies . . . of (A) vessels 

. . . operated by the United States, 

(5) vessels of the United States employed in the fisheries or whaling 

business, or actually engaged in foreign trade or trade between the Atlantic and Pacific ports of the United 

States or between the United States 

and any of its possessions, or between 

Hawaii and any other part of the United 

States or between Alaska and any other 

part of the United States . . . 

" (2) for supplies . . . of (A) vessels 

of war of any foreign nation, or (B) 

foreign vessels engaged in foreign trade 

or trade between the United States and 

any of its possessions, or between Hawaii 

and any other part of the United States 

or between Alaska and any other part of 

the United States, where such trade by 

foreign vessels is permitted . . ." 

"26 U.S.C. 55053. Exemptions 

"(a) Removals for export. - Beer may be removed from the brewery without payment of tax, 

for export, in such containers and under such 

regulations, and on the giving of such notices, 

entries, and bonds and other security, as the 

Secretary or his delegate may prescribe." 

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Honorable 0. N. Humphreys, Jr., Page 4 (M-877) 

Complementary to the statutory provisions above quoted, 

extensive administrative regulations have been adopted. See 

Section 245.1 through Section 245.257, Title 26, Chapter 1, 

Code of Federal Regulations; and Section 252.141 through 

252.1504, Title 26, Chapter 1, Code of Federal Regulations. 

Section 252.143, Title 26, Chapter 1, Code of Federal 

Regulations provides, in part: 

II . . . [Ejach keg, barrel, case, crate, or 

other package containing beer to be removed 

without payment of tax under the provisions 

of this subpart shall be marked as specified 

below: 

" (a) 'Export - Without Payment of Tax' - 

where the beer is to be removed for export from the United States, or for 

shipment to the Armed Services for export; 

" (b) 'Use on Vessels (or Aircraft) - 

Without Payment of Tax' - where the beer 

is to be removed for use as supplies on 

vessels or aircraft; and 

"(cl Where the beer is removed for deposit in a foreign-trade zone, in addition to and immediately following the 

markings prescribed in paragraph (a) of 

this section, the words 'via F.T.Z. No.' 

followed by the number of the zone . . ." 

Section 252.144, Title 26, Chapter 1, Code of Federal 

Regulations, provides further: 

"The consignment, shipment, and delivery of 

beer removed from a brewery without payment 

of tax under this subpart shall be in accordance with the applicable provisions of Subpart M." 

"Subpart M" to which the last above quoted section makes 

reference, provides, in part: 

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Honorable 0. N. Humphreys, Jr., Page 5 (M-877) 

"5252.241. 

on vessels 

Shipment for export, or for use 

"All liquors . . . intended for export or 

liquors intended for use as supplies on 

vessels shall be consigned to the director 

of customs at the port of exportation or 

port of lading for supplies on vessels, 

except that when the shipment is for export to a contiguous foreign territory 

it shall be consigned to the foreign consignee at destination in care of the director 

of customs at the port of export." 

Federal officials are responsible for, and have control 

over beer shipped under the aforesaid provisions to the exclusion of state regulation and controi. Texas Liquor Control 

Board v. Ammex Warehouse Company, 384 S.W.Zd 768 (Tex.Civ.App. 

1964, error ref. n.r.e.) cert.den. 86 S.Ct. 547 (1965): -- 

., 377 U.S. 324, 12 I ;.Ed.2d 

Department of Alcoholic Beverage 

Control v. Ammex~Warehouse, 378s. 124 12 L.Ed.2d 743, 

84 S.Ct. 1657 (1963); National Distiller; Products Corp. v. 

City and County of San Francisco, 297 P.2d 61 (Cal.App. 1956) 

cert.den. 352 U.S. 928 (1 956). Cf. McGoldrich v. Gulf Oil 

(1940) in which the court 

discussed similar federal bonding procedlres for oil. 

Corp., 309 U.S. 414, 60 S.Ct. 664 

Under the theory that the beer here inquired about is 

at all times under United States bond and will not be sold 

or distributed in or returned to this State, it would be 

held not subject to state regulation or control under the 

cited cases. 

Turning now to your specific inquiries, we advise you 

as follows: 

The Texas Alcoholic Beverage Commission has no authority 

to enforce provisions of the Texas Liquor Control Act against 

vendors who sell beer or other alcoholic beverages from ships' 

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Honorable 0. N. Humphreys, Jr., Page 6 (M-877) 

chandlerage under United States Customs Bond assuming that the 

with applicas described 

vendors in question operate in strict compliance 

able procedures set up by the Federal Government 

above. 

II. 

Under the assumption above stated, no legal 

would exist based upon whether or not the vendor 

distinction 

in question 

held a license or permit issued by the Texas Alcoholic Beverage Commission, since the Commission would have no jurisdiction or authority over the above described activities; and a 

vendor by qualifying for intra state dealings in alcoholic 

beverages under the Texas Liquor Control Act does not thereby 

subject his activities under the United States Custom bonding 

procedure described above to supervision or control by the 

Texas Alcoholic Beverage Commission, other than insofar as the 

Commission may require him to keep his activities strictly 

segregated from his internal state operations. 

III. 

Your third question is answered in the negative in 

accordance with our answers to the first and second questions. 

SUMMARY 

Assuming that the applicable federal statutes 

and administrative regulations herein discussed 

are strictly complied with, the Texas Alcoholic 

Beverage Commission has no authority or jurisdiction to regulate sales of beer by vendors who 

sell such beer from ship's chandlerage under 

United States Customs Bond. 

YqLi very tru&y, 

y General of Texas 

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Honorable 0. N. Humphreys, Jr., Page 7 

Prepared by Larry J. Craddock 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Kerns Taylor, Chairman 

W. E. Allen, Co-Chairman 

Ben Harrison 

Scott Garrison 

Sam Jones 

Jay Floyd 

MEADE F. GRIFFIN 

Staff Legal Assistant 

ALFRED WALKER 

Executive Assistant 

NOLA WHITE 

First Assistant Attorney General 

(M-877) 

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