Can a Texas city ban or limit cigarette vending machines?

Plain-English summary

Texas cities that operate under "home rule" (generally those with more than 5,000 residents that adopt their own charter) start with broad power to govern local affairs, and the Legislature can take a subject away from them only by saying so clearly. State Representative Fred Hill, who chaired the House Committee on Urban Affairs, asked whether a home-rule city could pass an ordinance that bans selling tobacco through vending machines, or limits those machines to places that are off limits to anyone under 18.

The wrinkle was the Tax Code. Chapters 154 and 155 tax cigarettes and other tobacco products and require distributors, wholesalers, bonded agents, and retailers to hold a state permit, and they say those permits "shall be governed exclusively by the provisions of this code." An earlier opinion, DM-182, had used that language to strike down a city's attempt to run its own tobacco licensing scheme. So the question was whether the same language also blocked a city from regulating where vending machines can go.

The Attorney General said it did not. Comparing the situation to a Supreme Court alcohol case (Dallas Merchant's), the opinion noted that the Alcoholic Beverage Code expressly said it would "exclusively govern the regulation of alcoholic beverages," which is why a city zoning rule on alcohol sales was preempted there. The Tax Code, by contrast, made only permits exclusive, not the whole subject of tobacco regulation. Restricting or banning vending machines does not touch the permitting process, and the Legislature had not preempted tobacco regulation with the "unmistakable clarity" the courts require. So a home-rule city could adopt the ordinance.

Currency note

This opinion was issued in 1997. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant at the time

For home-rule cities: The opinion told cities that the Tax Code's "exclusive" language reached only tobacco permitting, not the broader subject of regulating where and whether tobacco may be sold. A vending-machine location restriction or ban was within their authority.

For tobacco retailers and vending operators: The opinion meant a city could lawfully restrict or prohibit cigarette vending machines, or confine them to adults-only areas, without colliding with the state tax permit system.

Relationship to the earlier DM-182 opinion: The opinion distinguished, rather than overruled, DM-182. A city still could not set up its own licensing or permitting scheme for tobacco sales (that was preempted), but regulating vending-machine placement was a different matter the state had not preempted.

Common questions

Could a Texas city ban cigarette vending machines outright under this opinion?

Yes. The opinion concluded a home-rule city could restrict the location of tobacco vending machines "even to the point of prohibition" without running afoul of the Tax Code.

Why didn't the state tobacco-tax law preempt the ordinance?

Because chapters 154 and 155 made only the permitting of distributors, wholesalers, agents, and retailers "exclusively" governed by the Tax Code. They did not declare that all regulation of tobacco was reserved to the state, and preemption of a home-rule city's powers requires "unmistakable clarity."

How was this different from the alcohol case the opinion discussed?

In Dallas Merchant's, the Alcoholic Beverage Code expressly said it would exclusively govern the regulation of alcoholic beverages and barred stricter local standards, so a city zoning rule on alcohol sales was preempted. The Tax Code had no comparable sweeping language for tobacco.

Did this let cities run their own tobacco licensing system?

No. The opinion left DM-182 intact: a city still could not create its own tobacco licensing or permitting scheme. Only regulation of vending-machine placement (or a ban) was at issue here.

Background and statutory framework

Home-rule cities derive broad self-government authority, and Texas courts hold that a state law preempts a home-rule ordinance only when the Legislature acts with "unmistakable clarity." Chapters 154 and 155 of the Tax Code tax cigarettes and other tobacco products and require a state permit to engage in business as a distributor, wholesaler, bonded agent, or retailer, providing that those permits "shall be governed exclusively by the provisions of this code" (Tax Code §§ 154.101(h), 155.041(h)). Attorney General Opinion DM-182 (1992) had held that this language preempted a city ordinance establishing its own tobacco-retail licensing system.

The opinion measured the vending-machine question against Dallas Merchant's, where the Texas Supreme Court found a city alcohol-zoning ordinance preempted because the Alcoholic Beverage Code (§ 109.57) expressly declared the code would "exclusively govern the regulation of alcoholic beverages" and barred stricter local standards. Because the Tax Code reserved only permitting, not all tobacco regulation, and a vending-machine ordinance does not implicate the permitting process, the opinion concluded the Legislature had not preempted the field and a home-rule city could restrict or ban tobacco vending machines.

Citations

Statutes

• Tax Code chapters 154 and 155; §§ 154.101(h), 155.041(h)
• Alcoholic Beverage Code § 109.57

Cases

• Dallas Merchant's and Concessionaire's Association v. City of Dallas, 852 S.W.2d 489 (Tex. 1993)

Attorney General opinions referenced

• DM-182 (1992)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0433
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1997/dm0433.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

DAN MORALES
ATTORNEY GENERAL

Office of the Attorney General
State of Texas

March 5, 1997

The Honorable Fred Hill
Chair, Committee on Urban Affairs
Texas House of Representatives
P.O. Box 2910
Austin, Texas 78768-2910

Opinion No. DM-433

Re: Authority of a home-rule city to adopt an ordinance restricting or prohibiting cigarette vending machines (RQ-912)

Dear Representative Hill:

You have requested our opinion regarding the authority of a home-rule municipality to adopt an ordinance that either prohibits the sale of tobacco products through vending machines or restricts the placement of such machines to areas in which persons younger than eighteen years of age are barred.

Chapters 154 and 155 of the Tax Code levy a tax on the sale of cigarettes and other tobacco products and establish a system for the administration, collection and enforcement of the tax. The tax is enforced by a requirement that all distributors, wholesalers, bonded agents, and retailers of tobacco products have a state permit to engage in business. Chapters 154 and 155 provide: "Permits for engaging in business as a distributor, wholesaler, bonded agent, or retailer shall be governed exclusively by the provisions of this code." Tax Code §§ 154.101(h), 155.041(h) (emphasis added). In Attorney General Opinion DM-182, we held that a home-rule city ordinance that established a licensing system for the retail sale of tobacco products was preempted by the quoted provisions of the Tax Code. Attorney General Opinion DM-182 (1992). You express concern about the effect of the Tax Code provisions and Attorney General Opinion DM-182 on any attempt by a municipality to ban or restrict the location of tobacco product vending machines.

In Dallas Merchant's and Concessionaire's Association v. City of Dallas, 852 S.W.2d 489, 491 (Tex. 1993), the supreme court considered a challenge to a city zoning ordinance that prohibited the sale of alcoholic beverages within 300 feet of a residential area. The court held that the ordinance was preempted by a portion of the Alcoholic Beverage Code that provides:

(a) Except as is expressly authorized by this code, a regulation, charter, or ordinance promulgated by a governmental entity of this state may not impose stricter standards on premises or businesses required to have a license or permit under this code than are imposed on similar premises or businesses that are not required to have such a license or permit.

(b) It is the intent of the legislature that this code shall exclusively govern the regulation of alcoholic beverages in this state, and that except as permitted by this code, a governmental entity may not discriminate against a business holding a license or permit under this code.

Alco. Bev. Code § 109.57. In concluding that the ordinance in question was incompatible with the statutory provision, however, the supreme court observed that a claim of preemption had to overcome significant obstacles:

[t]he mere fact that the legislature has enacted a law addressing a subject does not mean the complete subject matter is completely preempted . . . . [A] general law and a city ordinance will not be held repugnant to each other if any other reasonable construction leaving both in effect can be reached. . . . Thus, if the Legislature chooses to preempt a subject matter usually encompassed by the broad powers of a home-rule city, it must do so with unmistakable clarity.

852 S.W.2d at 491 (citations omitted).

In the Dallas Merchant's case, the statute provided that the Alcoholic Beverage Code was to "exclusively govern the regulation of alcoholic beverages." Id. Furthermore, an ordinance could not "impose stricter standards" on a business selling alcoholic beverages than one not doing so. It was clear that an ordinance restricting the sale of alcoholic beverages based on location represented an attempt to "regulate," and that such an ordinance sought to "impose stricter standards" on businesses selling alcoholic beverages.

By contrast, the Tax Code does not say that all "regulation" of tobacco products "shall be governed exclusively by the provisions of this code," but merely that "permits for engaging in business" are so governed. In our opinion, an ordinance that restricts the location of tobacco vending machines, even to the point of prohibition, does not implicate the "permitting" procedure established by state law. With regard to the sale of tobacco products, the legislature has not preempted the subject matter with "unmistakable clarity." It has spoken only to the permitting or licensing process, as in Attorney General Opinion DM-182, rather than to the entire spectrum of possible "regulation." We conclude that a home-rule city is authorized to adopt an ordinance restricting the location of tobacco product vending machines, or banning them entirely, and in doing so, does not run afoul of the provisions of chapters 154 and 155 of the Tax Code.

SUMMARY

A home-rule municipality is empowered to adopt an ordinance that either prohibits the sale of tobacco products through vending machines or restricts the placement of such machines to areas in which persons younger than eighteen years of age are barred.

DAN MORALES
Attorney General of Texas