Knowledgebase-State Law Regarding the Regulation of the Sale of Alcoholic Beverages by the City


Information Product

Title:State Law Regarding the Regulation of the Sale of Alcoholic Beverages by the City
Summary:MTAS was asked for the state law regarding the regulation of the sale of alcoholic beverages by the city, and in what respects a city's beer ordinance needs updating.
Original Author:Hemsley, Sid
Co-Author:
Product Create Date:09/06/91
Last Reviewed on::06/20/2017
Subject:Alcoholic beverages; Alcoholic beverages--Laws and regulations; Beer; Beer--Laws and regulations; Municipal ordinances
Type:Legal Opinion
Legal Opinion:

Reference Documents:

Text of Document: September 6, 1991

You asked for the state law regarding the regulation of the sale of alcoholic beverages by the city, and in what respects your beer ordinance needs updating.

Tennessee Code Annotated, title 57 basically divides the sale of alcoholic beverages into two categories: those containing an alcoholic content of more than five percent by weight, and those containing an alcoholic content of less than five per cent by weight [generally beer]. [See Tennessee Code annotated, sections 57-2-101, 57-3-101(1), 57-4-102]. Below is the law in a nutshell on the authority of municipalities to regulate both categories of alcoholic beverages.

More than Five Per Cent By Weight.

Tennessee Code Annotated, section 57-1-201 provides that:

The entire provisions, definitions and terms of chapter 3, parts 1, 2 and 4 of this title [Title 57], section 57-3-304 and the authority contained therein are hereby transferred and shall be vested under the jurisdiction of the alcoholic beverage commission...

The provisions, definitions and terms of title 57 cited above relate to the sale of alcoholic beverages containing more than five percent alcohol by weight. In other words, the ABC has the jurisdiction to regulate the sale of such beverages, including malt liquor if it contains more than five percent alcohol by weight. The authority of municipalities to regulate the sale of such beverages is extremely limited. Generally, about all a municipality can regulate is the location of their sale and the issuance of a certificate of good moral character to an applicant for a license for their sale, which itself is not even binding on the ABC. The license itself is issued by the ABC.

But we must back up a step. Tennessee Code Annotated, chapter 3 is the local option law governing the package sales of alcoholic beverages containing an alcoholic content of more than five per cent. Although that chapter is one over which the ABC has jurisdiction, it also makes the package sale of such alcoholic beverages subject to approval by local referendum. Once the municipality approves the sale of packaged liquor by referendum, it has very little authority over its sale, but without the referendum, the sale of packaged liquor is illegal. The latest copy of the city's Municipal Code that I have is dated 1979. Title 2, chapter 1 of that code prohibits the sale of alcoholic beverages with an alcoholic content of over five per cent by weight; therefore, unless there has been a referendum permitting their sale since 1979, their sale within the city, with the exceptions noted below, is illegal.

Now let us jump two steps forward. Tennessee Code Annotated, title 57, chapter 4 governs the consumption of alcoholic beverages on premises. The ABC also has the jurisdiction to enforce the provisions of that chapter. [See Tennessee Code Annotated, section 57-4-201]. That chapter permits a municipality to adopt "liquor by the drink" by a referendum, if it has already adopted packaged liquor sales. [Tennessee Code Annotated, section 57-4-101]. However, that chapter also permits liquor-by-the-drink in a number of establishments, including certain clubs, without a local referendum. [See Tennessee Code Annotated, sections 57-4-101 and 57-4-102]. The city cannot regulate the sale of alcoholic beverages in those clubs or the other establishments; that is the function of the ABC.

Less Than Five Per Cent By Weight

The city has a beer ordinance reflected in title 2, chapter 2 of the Municipal Code. But that ordinance is based on the authority of municipalities to regulate the sale of alcoholic beverages containing less than five per cent alcohol by weight. [See Tennessee Code Annotated, title 57, chapter 5, particularly section 57-5-108].

Those statutes give municipalities broad authority to regulate the sale of beer to the extent of the prohibition of its sale. [See Ketner v. Clabo, 189 Tenn. 260, 225 S.W.2d 54 (1949)] If the sale of beer is permitted by the municipality, it can "fix zones and territories and provide hours of opening and closing and such other rules and regulations as will promote public health, morals and safety as they by ordinance provide." [See Tennessee Code Annotated, section 57-5-108]

Beer Ordinance Review

My review of your beer ordinance leads me to several observations regarding changes that need to be made to bring it up-to-date:

Section 2-207 provides for a beer permit fee of $36. Under Tennessee Code Annotated, section 57-5-108(c) the application fee for a beer permit is $100. There is no provision for a graduated fee based on months remaining in a fiscal year as is contained in section 2-207. In fact, under Tennessee Code Annotated, section 57-5-108, a municipality cannot subject beer permit holders to an annual permit renewal; therefore, there is no reason for a graduated permit fee.

Section 2-209 prohibits the issuance of a beer license to aliens. Although that provision is based on Tennessee Code Annotated, section 57-5-301(a)(1), the Tennessee Attorney General has opined that such a restriction is likely unconstitutional. [See OAG Opinion 88-197, a copy of which is enclosed].

Section 2-210 provides for a distance requirement "measured along the street rights of way." That method of measuring the distance requirements is illegal; the method of measurement required is a straight line. I am enclosing the MTAS publication A Public Official's Guide to Measuring Distance Regulations in Beer Regulations, which I wrote in 1986. It still accurately reflects the law.

Section 2-212(2). From our discussion on the telephone today, I gather there might be a question of whether this section is legal as to its exemption for grocery stores selling beer for off premises consumption. The Tennessee Attorney General has opined that Tennessee Code Annotated, section 57-3-210(h) prohibits persons under the age of 18 from engaging in the manufacture, storage, sale or distribution of intoxicating liquor. [See OAG Opinion 87-28, a copy of which is enclosed]. However, that statute governs the sale of packaged liquor with more than five per cent alcohol by weight; it does not apply to persons working in the manufacture, storage, sale or distribution of beer. I find no equivalent statute that applies to the sale of beer. However, I believe that under Tennessee Code Annotated, section 57-5-108 a municipality can establish age limits for the sale of beer, as long as such age limits apply to persons under 18 years of age. The city has done that in section 2-212(2) of its code. I see nothing in the law that prohibits the exemption made for persons under 18 selling beer in grocery stores which have an off premises permit.

Section 2-212(5) and (6) need to be changed to reflect the age of 21 rather than 18.

Section 2-213 should be changed to reflect the option of suspension as well as revocation of beer permits. A revocation is more draconian than a suspension, and the courts will not uphold a revocation when a suspension for a period of time would have better fit the offense in question. In fact, too-long suspensions will also not be upheld.

I hope this letter helps you update your beer ordinance. If I can help you accomplish that update in any way, please let me know.

Sincerely,

Sidney D. Hemsley
Senior Law Consultant
SDH/

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