What is a Texas Alcohol Beverage Performance or Conduct (TABC) Bonds?
Various bonds required by the TABC that govern tax payments, business conduct, and performance for those operating in the alcoholic beverage industry.
Businesses engaged in the sale, manufacture, distribution and warehousing of alcoholic beverages in the state of Texas may be subject to various bond requirements. The surety bonds are governed by the Texas Alcoholic Beverage Commission (TABC) and include; Conduct Bonds, Performance Bonds, and Fee Interest Bonds for Contract/Alternating Resident and Non-Resident Brewers and Manufacturers. In addition to TABC Bonds, certain permittees may also need to furnish Mixed Beverage Bonds to the Texas Comptroller.
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Why is a Texas Alcohol Beverage Bonds Required?
Conduct Bonds
A Conduct Bond is a permit surety bond required to guarantee professional conduct. The bonded principal shall comply with state laws relating to alcoholic beverages, and commission rules as defined by the Texas Alcoholic Beverage Commission (TABC). Bonds are typically required for the following types of permits and licenses; mixed beverage permits, private club permits, beer retailer’s license, wine and beer retailer’s permit, and package store permits.
The bond amount is $5,000 or $10,000, depending on the businesses proximity to a public school. In the event that third party damages result from non-compliance by the bonded principal, a claim may be filed against the bond. The bonded principal agrees to indemnify the surety company for any losses paid. The surety can cancel the bond with 30 days written notice provided to the TABC.
Conduct bonds are required for the following permit types: Mixed Beverage Permit (MB) Private Club Registration Permit (N) Private Club for Beer and Wine Permit (NB) Private Club Exemption Certificate Permit (NE) Wine and Beer Retailer's Permit-Excursion Boat (V) Wine and Beer Retailer's Permit-Railway Car (Y) Wine and Beer Retailer's Permit (BG) Retail Dealer's On Premise License (BE), Package Store Permit (P) Wine Only Package Store Permit (Q) and Wine & Beer Retailer's Off Premise Permit (BQ).
Performance Bonds
Performance Bonds are required by Texas permit holders to ensure conduct in accordance with requirements defined by the Texas Alcoholic Beverage Commission (TABC). These bonds are required by wine and beer retailers in certain counties and under certain conditions as specified by the TABC.
Fee Interest Bonds for Contract/Alternating Resident and Non-Resident Brewers and Manufacturers
A Texas Fee Interest Bond guarantees professional business conduct as defined by the Texas Alcoholic Beverage Commission (TABC). In the event that the principal violates TABC rules and regulations, a claim can be made for damages incurred by a third party.
The Fee Interest surety bond amount (penalty) is $30,000 and the bond is required by those who hold a brewer’s permit, non-resident brewer’s permit, manufacturer’s license, or non-resident manufacturer’s license.
Additional Texas Alcohol Beverage Bonds Resources & Links
Texas Alcoholic Beverage Commission Bond Requirements
Texas Alcoholic Beverage Commission License and Permit Descriptions
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