(a) This rule relates to §§25.13, 28.18, 32.23 and 69.16 of the Texas Alcoholic Beverage Code.
(b) The following words and terms, when used in this section, shall have the following meaning unless the context clearly indicates otherwise:
  (1) Entrée--course of a meal that may include an appetizer, small plate, main dish, dessert or other similar food item.
  (2) Food service--the cooking, preparing, or assembling of food on the location available for consumption at the location. Commercially pre-packaged items purchased off of the location which require no cooking or assembly do not constitute food service under this section.
  (3) Food service facilities--a designated permanent portion of the licensed location where food is stored and prepared for consumption at the location.
  (4) Location--the designated physical address of a premises, but also including all areas at that address where the license or permit holder may sell, serve or deliver alcoholic beverages for immediate consumption at the address, regardless of whether some of those areas are occupied by other businesses, as long as those businesses are contiguous.
  (5) Premises--the designated area at a location that is licensed by the commission for the sale, service, or delivery of alcoholic beverages.
  (6) Restaurant--a business that:
    (A) operates its own permanent food service facility with commercial cooking equipment on its premises; and
    (B) prepares and offers to sell multiple entrees for consumption on or off the premises.
(c) An applicant is qualified for a food and beverage certificate if the following conditions, in addition to other requirements, are satisfied:
  (1) multiple entrees are available to customers; and
  (2) permanent food service facilities are maintained at the location; and
  (3) either:
    (A) the receipts from the sale of alcoholic beverages by the license or permit holder at the location are 60 percent or less of the total receipts from the location; or
    (B) the facility meets the definition of Restaurant under subsection (b)(6) of this section.
(d) The hours of operation for sale and service of food and of alcoholic beverages are the same except that food may be sold or served before or after the legal hours for sale of alcoholic beverages.
(e) If the applicant is a hotel that maintains separate area restaurants, lounges or bars, food service facilities must exist for each of the designated licensed premises.
(f) An applicant for an original food and beverage certificate shall furnish the following, as well as any other information requested by the commission to ensure compliance:
  (1) the menu or, if no menu is available, a listing of the food and beverage items;
  (2) hours of operation of food service and hours of operation for sale or service of alcoholic beverages;
  (3) if qualifying under subsection (c)(3)(A) of this section, sales data (including complimentary drinks, as recorded pursuant to subsection (k)(3) of this section) or, if not available, a projection of sales. The sales data or projection of sales should include sufficient breakdown of revenues of food, alcoholic beverages, and all other sales categories at the location (e.g., tickets, merchandise, retail goods);
  (4) if qualifying under subsection (c)(3)(B) of this section, a list of commercial cooking equipment used in food service; and
  (5) copies of floor plans of the location indicating the licensed premises and permanent areas devoted primarily to food service.
(g) Applicants for renewal of food and beverage certificates shall submit sales data described in subsection (k) of this section. The commission may request additional information or documentation to indicate that the licensed location has permanent food service facilities for the preparation and service of multiple entrees.
(h) The commission may review the operation at the location to determine that food service with food service facilities for the preparation and service of multiple entrees is maintained. In doing so the commission may review such items as required in the original or renewal application as well as advertising, promotional items, changes in operations or hours, changes in floor plans, prominence of food items on the menu as compared to alcoholic beverages, name of the business at the location, number of transactions with food components, copies of city or county permits or certificates relating to the type of business operation, and any other item deemed necessary or applicable.
(i) Failure to provide documentation requested or accurately maintain required records is prima facie evidence of non-compliance.
(j) In verifying that food service is being maintained at the location, the commission may examine all books, papers, records, documents, supplies and equipment of the certificate holder.
(k) The following recordkeeping requirements apply to certificate holders:
  (1) records must be maintained to reflect separate totals for alcoholic beverage sales or service, food sales, and all other sales categories at the location that, when combined, make up the location's total sales;
  (2) purchase invoices must be maintained to reflect the total purchases of alcoholic beverages, food and all other purchase categories at the location;
  (3) complimentary alcoholic beverages must be recorded and included in the total alcoholic beverage sales as if they were sold and clearly marked as being complimentary; and
  (4) all records must be maintained for four years and made available to authorized representatives of the commission upon request.
(l) In considering alcoholic beverage sales, the dollar value of complimentary drinks shall be added to total sales or service of alcoholic beverages in determining the percentage of alcoholic beverage sales or service from the licensed premises.
(m) In determining the permanent food service facilities requirement for businesses qualifying under subsection (c)(3)(A) of this section, the gross receipts of all business entities sharing the location will be considered. For audit purposes, it shall be the responsibility of the food and beverage certificate holder to provide financial and accounting records related to food, alcohol, and other major sales categories of all business entities sharing the location. For audit purposes, if such information that is provided is deemed insufficient to determine if a license or permit holder qualifies for issuance of a food and beverage certificate at the location, the computation and determination of the percentage of alcohol sales or service fees to total gross receipts at the licensed location may be based upon any available records of information.

Source Note: The provisions of this §33.5 adopted to be effective August 31, 1995, 20 TexReg 6321; amended to be effective December 8, 2016, 41 TexReg 9504; amended to be effective December 18, 2017, 42 TexReg 7121; amended to be effective December 31, 2020, 45 TexReg 8770; amended to be effective September 1, 2021, 46 TexReg 5178; amended to be effective January 1, 2022, 46 TexReg 8242