TABC is Emerging from COVID with “AIMS”

In March 2020, because of COVID, the sizable hospitality sector of the Texas economy (hotels, restaurants, and bars), especially restaurants and bars, encountered unanticipated restrictions on operations and patrons. Like most state agencies, the Texas Alcoholic Beverage Commission (TABC) became closed to the public and had to enable staff to work remotely. Remarkably, the Licensing Division of TABC was positioned to cope with the impact of COVID.

Created by the 44th Legislature in 1935 as the ‘Texas Liquor Control Board,’ it retained that title until 1970 when the 61st Legislature redesignated it as the ‘Texas Alcoholic Beverage Commission’ (TABC, herein, the Agency). The Agency’s mission is to protect public health and safety through consistent, fair, and timely administration and enforcement of the Alcoholic Beverage Code. To fulfill this mission, the Agency regulates all aspects of the alcoholic beverage industry, including the manufacture, wholesale distribution, and retail sales of alcoholic beverages (beer, ale, wine, and distilled spirits). There are more than 50,000 licensed locations in Texas, and the Agency’s Business & Revenue Operations Divisions annually collect more than $300 million in taxes and fees, which aids the state’s financing of public schools, local governments, and human services.

The Agency’s Licensing Division (Licensing) investigates and processes the applications for licenses and permits that are required for the manufacture, wholesale distribution, and retail sale of alcoholic beverages. Before COVID, Licensing required delivery of completed paper applications for licenses and permits on its authorized forms, which staff reviewed to ensure that each applicant met the qualifications to hold a license or permit. Licensing was first entirely paper-driven, requiring the physical handling and warehousing of files, and later relied on staff to digitize information from paper into a proprietary database.

Because district offices closed to the public during COVID, Licensing allowed applicants to email PDFs of applications or send paper originals by overnight mail to Agency Headquarters in Austin (HQ). Licensing staff at HQ had the monumental task of receiving the emailed PDFs and digitizing the paper applications, then assigning them to Licensing staff working remotely for review. COVID clearly highlighted the fact that information technology for all the Agency’s divisions was archaic. However, the Agency already had goals in its Strategic Plan for Fiscal Years 2019-2023 to modernize and transition to a secure online system, aptly named the “Alcohol Information Management System” (AIMS).

AIMS is a cloud-based online system that, in the future, will allow all of the Agency’s Divisions to maintain complete, accurate, and secure information. Licensing intends for AIMS to completely replace paper processing with the online filing of new applications, renewals, and changes to existing licenses and permits.

Licensing halted the filing of all new applications for a period of six months prior to launching AIMS in September of 2021, but even then, parts of the program were still not functional, and not all Licensing data had been migrated to AIMS. Moreover, there was neither a well-trained customer support staff available nor an online Help Desk. Nevertheless, applicants used AIMS to file new and renewal applications, and the Agency was able to issue new and renewed licenses and permits to a recovering hospitality sector. Licensing staff continues to work remotely, and, to its credit, the Agency is making slow but steady progress with correcting the glitches in programming and errors in Licensing data. This past December, the Agency finally announced a phone number to call for help with using AIMS.

Today, businesses in the hospitality sector face the same choice as before regarding obtaining a license or permit: either attempt to make an application on their own, use an unregulated licensing service, or engage a law firm to make an application as their representative. Except now, the Agency wants all applications filed using AIMS, and the reality is that AIMS is not “user-friendly.” The key to understanding how to use AIMS and respond to the issues that continue to arise is having had the experience of obtaining licenses and permits before AIMS when Licensing was still processing paper applications. HN

Joel D. Rich is Managing Member of Joel Rich Law, PLLC. He can be reached at joel@joelrichlaw.com.