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Text of Document: October 14, 2002
Re: Regulation of Hours for Sale of Beer
Dear Chief:
Rex Barton asked me to write you to let you know what authority the City has to regulate hours for the sale of beer, particularly in regard to sales for on premises consumption. State statutes make no distinction relative to the authority of municipalities to regulate hours of sale based upon a sale being for on premises or off premises consumption. The municipality is given broad authority in either case, with exceptions that do not apply in your City.
T.C.A. § 57-5-301(b)(1) sets hours during which the sale of beer is prohibited in counties. Subdivision (b)(3) provides in pertinent part as follows:
This subsection shall not affect the power of governing bodies of municipal corporations ... to fix the hours when such beverages may be sold within the incorporated limits of such respective municipalities .... Municipal corporations may authorize the sale of such beverages in their respective corporate limits on Sundays or at such hours as may be prescribed by ordinance.
The courts have also recognized the broad authority municipalities have to regulate the sale of beer, even to the point of prohibition. See Grubb v. Mayor of Morristown, 185 Tenn. 114, 203 S.W.2d 593 (1947). In Ketner v. Clabo, 189 Tenn. 260, 225 S.W.2d 54 (1949), the state Supreme Court stated:
[W]e cannot escape the conclusion that the municipal authority having power to prohibit, has the power to limit to any extent less than prohibition, since the greater power includes the less. 225 S.W.2d at 56.
Both the courts and state statute, however, make a distinction between regulation of hours of sale and hours of on premises consumption. T.C.A. § 57-5-301(b)(1) contains this sentence: “No such beverage shall be consumed, or opened for consumption, on or about any premises licensed hereunder, in either bottle, glass, or other container, after twelve fifteen o’clock a.m.(12:15 a.m.).” Although this language appears in a subsection that appears to apply to counties and not municipalities, the Court of Appeals has interpreted this language as applying to municipalities when the municipal ordinance is silent about hours of consumption. In ruling on a municipal beer ordinance that regulated hours of sale but not hours for consumption on the premises, the Court held:
The city’s ordinance and the statute should be construed in harmony. Where the ordinance is silent with respect to hours of on premises consumption, the statute is controlling. Claiborne Country Club v. City of Tazewell, 872 S.W.2d 685 at 687 (Tenn. App. 1993).
The implication here is that regulating the hours of sale is not enough if the city also wants to regulate hours of consumption on the premises. The city’s ordinance would have to have provisions relative to both.
It is my understanding that your City allows the retail sale of liquor at package liquor stores but has not authorized liquor by the drink. Although municipalities have extensive authority to regulate sales of beer (alcoholic beverages with 5% alcohol by weight or less) they have much less authority to regulate liquor (alcoholic beverages with more than 5% alcohol by weight). Most regulation of liquor is done by state statute and the Alcoholic Beverage Commission (ABC). When a municipality authorizes the sale of liquor by the drink, its authority to regulate hours for the sale of beer is restricted. These restrictions do not apply, however, in cases where the municipality has authorized sales of liquor only from package stores for off premises consumption.
State statutes mandate the separation of retail liquor stores from any other business, including beer businesses. Therefore, beer and liquor may not be sold in the same store. Tennessee Code Annotated, § 57-3-404(e)(1), provides relative to liquor retailers that “No licensee shall sell intoxicating liquors at retail in connection with any wholesale business, or as a part of or in connection with any other business or in the same store where any other business is carried on.” Perhaps because of this separation, state statutes do not limit the authority of municipalities to regulate the hours for beer sales if the municipality also happens to have package liquor stores.
Only in situations that could result in liquor and beer being served in the same establishment for consumption on the premises has the General Assembly chosen to restrict the authority of municipalities to regulate hours for the sale of beer. In cases in which a municipality by referendum has authorized the sale of liquor by the drink and therefore any particular establishment may sell and serve both types of beverages, the statutes provide that the hours for the sale of beer must at least coincide with hours for the sale of liquor by the drink, but that the local governing body may extend hours for the sale of beer.(T.C.A. § 57-5-301(b)(3) and (5)). This precludes establishing shorter or more restrictive periods for the sale of beer but would allow longer periods for beer sales. This restriction on the authority of municipalities to regulate hours for beer sales in these municipalities appears to apply, however, even to establishments that sell beer for off premises consumption. Perhaps the General Assembly reasoned that it made little sense to restrict the sale of beer, even for off premises consumption, when more potent beverages could be sold for on premises consumption.
In short, state statutes place no restrictions on regulation by the City of the hours of beer sales since the City does not allow sales of liquor by the drink. The City’s authority to regulate hours of sale of beer applies both to sales for on premises and off premises consumption. To regulate the actual consumption of beer at on-premises establishments, however, the City’s ordinance would have to have a separate restriction on consumption.
I hope this is helpful. If we may be of further assistance on any matter, please contact us.
Sincerely,
Dennis Huffer
Legal Consultant |