Court Opinion

ID: 4133791
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:42:14.136484+00
Date Added: 2024-06-11T14:37:40.193333
License: Public Domain

”   .   -

                           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 Commis-
            sion'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 activi-
            ties 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).

                                       -4278-
Honorable 0. N. Humphreys, Jr., Page 2          (M-877)

difficulties which the Commission faces with respect to en-
forcing 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 con-
tainers have been clearly stamped and labeled for export with-
out 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 trans-
fer from brewery to ship, and until the beer reaches its des-
tination 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

                            -4279-
Honorable 0. N. Humphreys, Jr., Page 3         (M-877)

    camply , without fraud or evasion, with all re-
    quirements 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 re-
     venue tax

       "(1) for supplies . . . of (A) vessels
       . . . operated by the United States,
        (5) vessels of the United States em-
       ployed in the fisheries or whaling
       business, or actually engaged in for-
       eign trade or trade between the Atlan-
       tic 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 re-
     moved 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."

                            -4280-
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 ex-
       port 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 de-
        posit in a foreign-trade zone, in addi-
        tion 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 accord-
    ance with the applicable provisions of Sub-
    part M."

     "Subpart M" to which the last above quoted section makes
reference, provides, in part:

                          -4281-
Honorable 0. N. Humphreys, Jr., Page 5         (M-877)

     "5252.241.   Shipment for export, or for use
     on vessels

     "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 ex-
     port to a contiguous foreign territory
     it shall be consigned to the foreign con-
     signee 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 ex-
clusion 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 (1956). Cf. McGoldrich v. Gulf Oil
Corp., 309 U.S. 414, 60 S. Ct. 664 (1940) in which the court
discussed similar federal bonding procedlres for oil.

     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'

                            -4282-
Honorable 0. N. Humphreys, Jr., Page 6                (M-877)

chandlerage under United States Customs Bond assuming that the
vendors in question operate in strict compliance with applic-
able procedures set up by the Federal Government as described
above.

                             II.

     Under the assumption above stated, no legal distinction
would exist based upon whether or not the vendor in question
held a license or permit issued by the Texas Alcoholic Bever-
age Commission, since the Commission would have no jurisdic-
tion 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 jurisdic-
     tion 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

                           -4283-
,.   -

         Honorable 0. N. Humphreys, Jr., Page 7   (M-877)

         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

                                    -4284-