Can a BYOB pool hall operate without a liquor license in Texas?

TX AG Opinion GA-0561: Can a BYOB pool hall operate without a TABC license?

Plain-English summary

A pool hall planned to open in downtown Corsicana on a BYOB ("bring your own bottle") basis: the owners would not sell alcohol, but customers could bring their own drinks onto the premises and consume them there. The Navarro County Criminal District Attorney asked the Attorney General whether the pool hall needed a license or permit from the Texas Alcoholic Beverage Commission (TABC), and, if not, whether the City of Corsicana could regulate it.

The Attorney General concluded the pool hall could operate BYOB without any TABC license or permit. The TABC is a state agency with only the powers the Legislature grants it or that are necessarily implied. The Alcoholic Beverage Code says nothing about BYOB establishments, so the agency has no authority to require a permit for one.

The opinion knocked down several theories for regulation. The city's 2004 vote to go from "dry" to partly "wet" did not change the answer, because "dry area" refers only to places where the sale of alcohol is unlawful; personal possession and consumption are not prohibited in a dry area, so long as a person follows other laws like the drinking age and public intoxication rules. The pool hall also was not a "private club" subject to chapter 32, which applies only when an establishment holds a private club permit or purports to be a club. Nothing in the facts showed the pool hall held itself out as a club.

On local regulation, the Attorney General said the Code "shall exclusively govern the regulation of alcoholic beverages in this state," and municipal regulation that the Code does not expressly authorize is preempted. The Code lets cities regulate the sale of alcohol in specific ways (near schools or churches, residential areas, sale hours), but does not authorize a city to regulate the possession of alcohol inside a BYOB pool hall. So Corsicana could not adopt an ordinance reaching that. The one related power: under section 109.35, a city may petition the TABC to prohibit open containers or public consumption in its central business district, but any such order cannot reach inside motor vehicles, residences, licensed premises, or buildings the municipality does not own or control. So the city could seek to regulate possession and consumption in the vicinity, but not inside the pool hall itself.

Currency note

This opinion was issued in 2007. 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.

The Alcoholic Beverage Code provisions cited here may have been amended since 2007, and later opinions or legislation may have addressed BYOB establishments directly. Confirm current law before relying on this analysis.

Who this opinion affected (as of 2007)

BYOB business owners (pool halls, bars, venues): The opinion told them an establishment that lets customers bring and drink their own alcohol, without selling any, did not need a TABC license or permit, and was not a regulated "private club" unless it held itself out as one.

Cities: The opinion explained that a municipality could not by ordinance regulate alcohol possession or consumption inside a BYOB establishment, because the Code exclusively governs and preempts unauthorized local rules, but that a city could petition the TABC under section 109.35 for a central-business-district open-container or public-consumption order.

The TABC: The opinion confirmed the agency had no authority to require permits for BYOB establishments, consistent with the agency's own brief.

Patrons: The opinion clarified that personal possession and consumption of alcohol are lawful even in a dry area, subject to other laws like the drinking age and public intoxication.

Common questions

Does a BYOB pool hall need a TABC license?
No. The Attorney General concluded a pool hall may operate on a BYOB basis without a license or permit, because the Alcoholic Beverage Code does not address BYOB establishments and the TABC has only the powers the Code grants it.

Does it matter that the area used to be dry?
No. "Dry area" only means the sale of alcohol is unlawful there. Personal possession and consumption are not prohibited in a dry area, so the wet or dry status did not affect BYOB use.

Is a BYOB pool hall a "private club"?
Not on these facts. Chapter 32 reaches an establishment only if it holds a private club permit or purports to hold itself out as a club, and nothing indicated the pool hall did.

Can the city ban customers from drinking inside the pool hall?
No. The opinion concluded the Code exclusively governs alcohol regulation and preempts local rules it does not expressly authorize, so the city could not regulate possession inside the pool hall.

Is there anything the city can do?
Yes, indirectly. Under section 109.35, a city may petition the TABC to prohibit open containers or public consumption in its central business district, but such an order cannot reach inside buildings the city does not own or control.

Background and statutory framework

The TABC is a state agency with only those powers specifically granted or necessarily implied (Tex. Alco. Bev. Code Ann. §§ 5.01(a), 5.31 (Vernon 2007); Tex. Workers' Comp. Comm'n v. Patient Advocates of Tex., 136 S.W.3d 643, 652 (Tex. 2004)). It issues permits and licenses for activities the Code enumerates (Tex. Alco. Bev. Code Ann. § 11.01 (Vernon 2007), with permit and license chapters including brewer's, package store, mixed beverage, and brewpub; the permit requirement in section 11.01 was held unconstitutional as applied to direct out-of-state wine shipments for personal use in Dickerson v. Bailey, 336 F.3d 388, 409 (5th Cir. 2003)). Because the Code never refers to BYOB establishments, the Attorney General concluded the pool hall needs no permit.

A "dry area" is one where the sale of a beverage is unlawful, while a "wet area" is one where the sale is lawful (Tex. Alco. Bev. Code Ann. § 251.71(a) (Vernon 2007)); possession is prohibited only with intent to sell (id. § 101.31(a)). The private club provisions in chapter 32 authorize a club to serve members and guests only with a private club registration permit and impose membership and governance requirements, and section 32.14 reaches only an establishment purporting to be or holding itself out as a club (Tex. Alco. Bev. Code Ann. §§ 32.01, 32.03, 32.14(a) (Vernon 2007)).

On municipal authority, the Code provides it "shall exclusively govern the regulation of alcoholic beverages in this state," and the manufacture, sale, distribution, transportation, and possession of alcohol are governed exclusively by the Code unless it provides otherwise (Tex. Alco. Bev. Code Ann. §§ 1.06, 109.57(b) (Vernon 2007)). The Code authorizes specific municipal regulation of sales (Tex. Alco. Bev. Code Ann. §§ 109.31, 109.32, 109.33, 109.331 (Vernon 2007)), but otherwise preempts unauthorized local regulation; attorney general opinions do not construe particular city ordinances (Tex. Att'y Gen. Op. No. GA-0217 (2004) at 4). The one relevant grant is section 109.35, under which a city may petition the TABC for an order prohibiting open containers or public consumption in its central business district, defined as a compact, contiguous area at least 90 percent commercial that has historically been the primary place of business; such an order may not prohibit possession or consumption in motor vehicles, residences, licensed premises, or buildings not owned or controlled by the municipality (Tex. Alco. Bev. Code Ann. § 109.35 (Vernon 2007)).

Citations

Statutes:

• Tex. Alco. Bev. Code Ann. § 1.06 (Vernon 2007)
• Tex. Alco. Bev. Code Ann. § 5.01(a) (Vernon 2007)
• Tex. Alco. Bev. Code Ann. § 5.31 (Vernon 2007)
• Tex. Alco. Bev. Code Ann. § 11.01 (Vernon 2007)
• Tex. Alco. Bev. Code Ann. § 32.01 (Vernon 2007)
• Tex. Alco. Bev. Code Ann. § 32.03 (Vernon 2007)
• Tex. Alco. Bev. Code Ann. § 32.14(a) (Vernon 2007)
• Tex. Alco. Bev. Code Ann. § 101.31(a) (Vernon 2007)
• Tex. Alco. Bev. Code Ann. §§ 109.31, 109.32, 109.33, 109.331 (Vernon 2007)
• Tex. Alco. Bev. Code Ann. § 109.35 (Vernon 2007)
• Tex. Alco. Bev. Code Ann. § 109.57(b) (Vernon 2007)
• Tex. Alco. Bev. Code Ann. § 251.71(a) (Vernon 2007)

Cases:

• Tex. Workers' Comp. Comm'n v. Patient Advocates of Tex., 136 S.W.3d 643, 652 (Tex. 2004)
• Dickerson v. Bailey, 336 F.3d 388, 409 (5th Cir. 2003)

Attorney General opinions referenced: GA-0217 (2004).

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0561
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2007/ga0561.pdf

Original opinion text

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

GREG ABBOTT

August 14, 2007

The Honorable R. Lowell Thompson
Navarro County Criminal District Attorney
Navarro County Courthouse
300 West Third Avenue, Suite 203
Corsicana, Texas 75110

Opinion No. GA-0561

Re: Authority of the Texas Alcoholic Beverage Commission or the City of Corsicana to regulate a business establishment that permits the possession and consumption of alcoholic beverages on a "BYOB" basis (RQ-0568-GA)

Dear Mr. Thompson:

You inquire about the authority of the Texas Alcoholic Beverage Commission (the "TABC") or the City of Corsicana (the "City") to regulate a business establishment that permits the possession and consumption of alcoholic beverages on a "BYOB" ("bring your own bottle") basis.[1]

You indicate that prior to May 15, 2004, the City was a "dry area." See Thompson Brief, supra note 1, at 1. On that date, the electorate "voted to legalize the sale of beer and wine for off-premises consumption and to legalize the sale of mixed beverages in restaurants by food and beverage certificate holders only." Request Letter, supra note 1, at 1. You state that recently a business entity announced its intention to operate as a pool hall "in the downtown area of the City," and that, while the proprietors of the pool hall do not intend to sell alcoholic beverages to their customers, they do intend to operate on a BYOB basis, "whereby customers can bring onto the premises, and remove from the premises, alcoholic beverages for their own consumption, and for that of any members of their party, while they are on the premises." Id. You ask whether the above-referenced pool hall may operate on a BYOB basis without obtaining a license or permit from the TABC. See id. at 2. In the alternative, you ask whether the City itself may regulate such an establishment. See id.

The TABC is "an agency of the state." TEX. ALCO. BEV. CODE ANN. § 5.01(a) (Vernon 2007). It is authorized to "exercise all powers, duties, and functions conferred by [the Alcoholic Beverage Code], and all powers incidental, necessary, or convenient to the administration of [the] code." Id. § 5.31. The TABC is empowered to issue permits and licenses for various kinds of activity relating to alcoholic beverages. See id. § 11.01.[2] See, e.g., id. chs. 12 (brewer's permit), 18 (wine bottler's permit), 19 (wholesaler's permit), 22 (package store permit), 28 (mixed beverage permit), 38 (industrial permit), 62 (manufacturer's license), 64 (general distributor's license), 67 (importer's license), 74 (brewpub license).

As we have indicated, the TABC, as a state agency, has only those powers that are specifically granted by the Legislature and those that may necessarily be implied therefrom. See Tex. Workers' Comp. Comm'n v. Patient Advocates of Tex., 136 S.W.3d 643, 652 (Tex. 2004). As you acknowledge, the Alcoholic Beverage Code (the "Code") does not refer to BYOB establishments. See Request Letter, supra note 1, at 2. Because the Code contains no reference to the TABC's regulation of BYOB establishments, we conclude that the referenced pool hall may operate on a BYOB basis without obtaining a license or permit from the TABC.[3]

Your brief and that of the City[4] suggest that the City's conversion in 2004 from a "dry" to a partially "wet" area has some effect on your inquiry. Thompson Brief, supra note 1, at 1-2; City Brief, supra note 4, at 1-2. "Dry area" refers only to an area where the sale of alcoholic beverages is prohibited. See TEX. ALCO. BEV. CODE ANN. § 251.71(a) (Vernon 2007) ("An area is a 'dry area' as to an alcoholic beverage of a particular type and alcohol content if the sale of that beverage is unlawful in the area.").[5] Personal possession and consumption of alcoholic beverages are not prohibited in a "dry area." See id. § 101.31(a) (prohibiting possession only if with intent to sell). Thus, so long as an individual complies with certain other provisions of Texas law, such as those relating to the legal drinking age and public intoxication, that person may possess and consume alcoholic beverages regardless of a jurisdiction's wet or dry status.

You also suggest that a business such as the pool hall in question might properly be considered a "private club," or simply a "club," so as to be subject to TABC regulation under section 32.14 of the Code. See Thompson Brief, supra note 1, at 4; see also City Brief, supra note 4, at 3-4. We understand you to argue that the pool hall is subject to regulation as such because it is otherwise unregulated by the Code. See Thompson Brief, supra note 1, at 4-8. Chapter 32 of the Code authorizes a private club to serve alcohol to members and guests for on-premises consumption only when the club holds a private club registration permit. See TEX. ALCO. BEV. CODE ANN. § 32.01 (Vernon 2007). In order to obtain a permit, a club must satisfy a variety of membership, operational, governance, and management requirements. See id. § 32.03. Unless the club holds a private club registration permit, section 32.14 prohibits a person from, inter alia, possessing, or carrying onto the premises an alcoholic beverage in any establishment "purporting to be a club," or "holding itself out to the public or any person as a club or private club." Id. § 32.14(a).

Your focus on whether the pool hall falls within the definition of "private club" or "club" is misplaced. A violation under section 32.14 occurs only if the pool hall is purporting to be a club or is holding itself out to be a club or private club. Nothing in the facts you have presented indicate that the pool hall holds itself out to the public as a club or private club.[6] Absent facts to the contrary, we conclude that the referenced pool hall may not be regulated by the TABC under chapter 32 of the Code as a "club" or "private club."

You also ask whether the City may regulate a BYOB pool hall by municipal ordinance. See Request Letter, supra note 1, at 2. You specifically argue that the City may regulate the pool hall pursuant to its special use permit ordinance. See Thompson Brief, supra note 1, at 8-9. Attorney general opinions do not construe particular city ordinances. See Tex. Att'y Gen. Op. No. GA-0217 (2004) at 4. The general rule regarding alcoholic beverages is, however, that the Code "shall exclusively govern the regulation of alcoholic beverages in this state." TEX. ALCO. BEV. CODE ANN. § 109.57(b) (Vernon 2007). Moreover, "[u]nless otherwise specifically provided by the terms of this code, the manufacture, sale, distribution, transportation, and possession of alcoholic beverages shall be governed exclusively by the provisions" of the Code. Id. § 1.06. The Code itself authorizes a municipality, in certain instances, to regulate the sale of alcoholic beverages, but provides no other authority in this area to a municipality. See, e.g., id. § 109.31 (authorizing home-rule cities to prohibit the sale of liquor in residential areas), § 109.32 (authorizing cities to impose more restrictive hours on the sale of beer), § 109.33 (authorizing cities to prohibit the sale of alcoholic beverages within certain distances of schools, churches, and hospitals), § 109.331 (authorizing cities to prohibit the sale of alcoholic beverages within certain distances of day care and child care centers). Municipal regulation not expressly authorized by the Code is therefore preempted. See id. §§ 1.06, 109.57. Because the Code does not expressly authorize a municipality to regulate the possession of alcoholic beverages on the premises of a BYOB pool hall, the City may not adopt an ordinance attempting to do so.

In one instance, however, the Code might be construed to authorize the City to regulate the possession and consumption of alcoholic beverages in the vicinity of the referenced pool hall. Section 109.35 of the Code is entitled "Orders for Prohibition on Consumption" and provides as follows:

If the governing body of a municipality determines that the possession of an open container or the public consumption of alcoholic beverages in the central business district of the municipality is a risk to the health and safety of the citizens of the municipality, the governing body may petition for the adoption of an order by the [TABC] that prohibits the possession of an open container or the public consumption of alcoholic beverages in that central business district.

Id. § 109.35(a). "Central business district" is defined as "a compact and contiguous geographical area of a municipality in which at least 90 percent of the land is used or zoned for commercial purposes and that is the area that has historically been the primary location in the municipality where business has been transacted." Id. § 109.35(d). The statute sets out the procedural requirements for the submission of such a petition. See id. § 109.35(b). Significantly, however, any order issued by the TABC under section 109.35 "may not prohibit the possession of an open container or the consumption of alcoholic beverages in motor vehicles, buildings not owned or controlled by the municipality, residential structures, or licensed premises located in the area of prohibition." Id. § 109.35(c). Thus, while the City may not regulate the possession and consumption of alcoholic beverages on the premises of the pool hall itself, it may presumably seek to regulate possession and consumption within the immediate vicinity of the pool hall.

We conclude that, under the Code, a pool hall may operate on a BYOB basis without a permit or license from the TABC. Moreover, the City may not by municipal ordinance regulate the possession or consumption of alcoholic beverages within a pool hall that operates on a BYOB basis.

SUMMARY

Under the terms of the Texas Alcoholic Beverage Code, a pool hall may operate on a BYOB ("bring your own bottle") basis without a permit or license from the Texas Alcoholic Beverage Commission. Moreover, the City of Corsicana may not by municipal ordinance regulate the possession or consumption of alcoholic beverages within a pool hall that operates on a BYOB basis.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

KENT C. SULLIVAN
First Assistant Attorney General

NANCY S. FULLER
Chair, Opinion Committee

Rick Gilpin
Assistant Attorney General, Opinion Committee

Footnotes

[1] Letter from Honorable R. Lowell Thompson, Navarro County Criminal District Attorney, to Honorable Greg Abbott, Attorney General of Texas (Feb. 7, 2007) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us) [hereinafter Request Letter], and attached brief [hereinafter Thompson Brief].

[2] Section 11.01 of the Alcoholic Beverage Code, which requires a permit for various activities relating to alcoholic beverages, has been declared unconstitutional to the extent that it restricts the right of Texas residents, who were not otherwise statutorily prohibited from possessing alcoholic beverages, to order out-of-state wines to be shipped directly to their homes for their personal consumption. See Dickerson v. Bailey, 336 F.3d 388, 409 (5th Cir. 2003).

[3] A brief from the TABC asserts that "there is no violation of alcoholic beverage laws presented by a commercial establishment that allows patrons to possess and consume their own alcoholic beverages." Brief from Lou Bright, General Counsel, Texas Alcoholic Beverage Commission, to Nancy S. Fuller, Chair, Opinion Committee, Office of the Attorney General, at 2 (Apr. 4, 2007) (on file with the Opinion Committee) [hereinafter TABC Brief].

[4] Brief from Terry Jacobson, Jacobson, Beard & Edmondson, P.C., on behalf of the City, to Nancy S. Fuller, Chair, Opinion Committee, Office of the Attorney General (Mar. 21, 2007) (on file with the Opinion Committee) [hereinafter City Brief].

[5] By contrast, an "area is a 'wet area' as to an alcoholic beverage of a particular type and alcoholic content if the sale of that beverage is lawful in the area." TEX. ALCO. BEV. CODE ANN. § 251.71(a) (Vernon 2007).

[6] The TABC brief likewise points out that "[w]e do not know whether the establishment of which the requestor complains will be one 'purporting to be a club or holding itself out to the public or any person as a club.'" TABC Brief, supra note 3, at 2.