August 13, 1991
Your questions are whether a county beer permit issued to beer establishments in the town are valid permits, and whether the town has the authority to regulate the hours of Sunday beer sales. Apparently, some beer establishments in the town are operating under a county, rather than a town, beer permit, and there is some confusion in the town over whether the town can permit Sunday beer sales in light of the law which prohibits Sunday beer sales in counties
[Tennessee Code Annotated, section 57-5-301].
To begin with, it is clear that a person wishing to sell beer within the town must obtain a beer permit from the town, and that a county beer permit provides the holder no authority whatever to operate in the town. Tennessee Code Annotated, section 57-5-104 provides that:
It is unlawful for any person to sell, distribute and manufacture the beverages described in section 57-5-101 [beer, etc. of alcoholic beverages of less than 5%] without first having made application to and obtained a permit from the county and/or the city where such business is to be conducted under the authority herein delegated to counties and cities.
A reading of Tennessee Code Annotated, title 57, chapter 5 in its entirety, or even only Tennessee Code Annotated, sections 57-5-101 et seq., makes it abundantly clear that the "authority herein delegated to counties and cities" includes the authority to issue beer permits and to further regulate the sale of beer on the part of the County and on the part of the City, but that the authority is not interchangeable. An applicant for a beer permit obtains his permit from the county if the establishment in question is located in the county, and from the city [town] if it is located in the city [town].
In particular, Tennessee Code Annotated, section 57-5-108(c) provides that "in all incorporated cities and towns" the municipal governing body or beer board shall collect a nonrefundable $100 permit application fee. That provision follows Tennessee Code Annotated, section 57-5-108(a) which provides that:
All incorporated cities and towns in the state of Tennessee are authorized to pass proper ordinances governing the issuance and revocation or suspension of licenses for the storage, sale, manufacture and/or distribution of such beer and/or other beverages as herein prescribed within the corporate limits, providing a board of persons before whom such application shall be made, but the power of such cities to issue licenses shall in no event be greater than the power herein granted to counties, but cities and towns may impose additional restrictions, fixing 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 may be ordinance provide.
The courts have routinely and repeatedly held that the power granted to municipalities to regulate the sale of beer is extremely broad, including to the point of the prohibition of its sale. Rather than list all the cases relevant to that power, let me cite only a few recent important ones: Thompson v. City of Harriman, 568 S.W.2d 92 (1968); Watkins v. Naifeh, 635 S.W.2d 104 (1982); Metropolitan Government v. Shaw, 721 S.W.2d 799 (1986); Rivergate Wine & Liquors, Inc. v. City of Goodlettsville, 647 S.W.2d 631 (1983).
The establishment and maintenance of a beer board by a city or town that permits the sale of beer is probably mandatory. Under Tennessee Code Annotated, section 57-5-108(a) the application for a permit "shall" be made before the beer board. But even without that statute the whole tenor of Tennessee Code Annotated, title 57, chapter 5, particularly part 1 leads one to the same conclusion; the entire effect and enforcement of that chapter relies upon a beer board. That conclusion is also supported by Brooks v. Garner, 566 S.W.2d 531 (1978), in which it was declared that the statutes governing the sale of beer are mandatory. Although that case involved a decision made by a beer board, it undoubtedly stands for the proposition that all of the statutes governing the sale of beer are mandatory, including those which apply to the acquisition of a permit from, and the enforcement of local beer regulations by, a beer board.
The beer board can be comprised of a board of citizens appointed by the municipal governing body or may be the governing body itself. That conclusion is reached by a reading of the above statutes and of Tennessee Code Annotated, section 57-5-109 which, in outlining the method of suspension or repeal of beer permits, provides that "Any permits or licenses issued under this chapter by the governmental body of any incorporated city, or by any committed or board created by such governmental body, may be revoked or suspended by such governmental body, committee or board."
If the sale of beer is permitted within the town, but for any reason an applicant who meets the requirements of the law and of the municipal regulations governing the issuance of a beer permit, including the reason that there is no beer board to consider the application for a permit, under Tennessee Code Annotated, section 57-5-109 [especially subsections (d), (f), and (j)] the applicant for a permit turns not to the county for a permit, but to the chancery court.
It bears repeating that an applicant who meets the requirements of the ordinances governing the sale of beer in a municipality is entitled to a permit, under a number of cases, including Brooks.
The 1981 Municipal Code, section, title 2, chapter 2 reflects both the establishment of a city beer board and of regulations governing the sale of beer. As I understand it, those provisions related to the beer board may have been repealed by subsequent ordinance, and the town may be without a beer board. If that is not the case, the city commission may reactivate the board without further legislative action. If that is the case, the city commission, by ordinance or resolution, may either reestablish a separate board or designate itself the beer board.
The authority of a municipality to regulate the hours of sale of beer is contained in Tennessee Code Annotated, section 57-5-107(a), cited above and in Tennessee Code Annotated, section 57-5-301 (b)(3). Both statutes make it clear that municipalities ares entitled to set hours of sale different from those prescribed for county sales. [Also see Barnes v. Dayton, 216 Tenn. 400, 392 S.W.2d 813 (1965), and Tennessee Attorney General Opinion 402, dated December 6, 1983, a copy of which is enclosed].
If chapter 2 of title 2 of the 1981 Municipal Code is still in effect, the hours for beer sales are as set out in section 2-212 of that chapter. Those hours presently prohibit Sunday beer sales, but the board of commissioners has the authority to amend that section to legalize Sunday beer sales.
May I offer a little bit of advice here? If the town has no beer board, the city commission should seriously consider designating itself the beer board. I think that is logistically the easiest way for a town the size of yours to handle applications for beer permits. An appointed board may be difficult to regularly assemble to conduct the beer board's business, but generally the city commission will regularly assemble through thick and thin. In addition, the town should impose its authority over beer establishments operating under a county permit by requiring them to obtain a town beer permit and by compelling them to operate under the town's beer regulations.
If I can help you further in this or any other matter, please let me know.
Sidney D. Hemsley
Senior Law Consultant