Sullivan County, Tennessee v. The City Of Bristol, Tennessee

12/27/2017
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
August 8, 2017 Session

SULLIVAN COUNTY, TENNESSEE ET AL. v.
THE CITY OF BRISTOL, TENNESSEE ET AL.

Appeal from the Chancery Court for Sullivan County
No. B0024737 John C. Rambo, Chancellor

No. E2016-02109-COA-R3-CV

This is one of four separate actions currently before this Court with the common issue of
whether the version of Tennessee Code Annotated § 57-4-306(a)(2)(A) in effect prior to
the July 2014 amendment of that statute required a municipality governed by its own
liquor-by-the-drink referendum and operating its own school system to share one-half of
its liquor-by-the-drink tax revenue with the county in which the municipality was located
when the county had not enacted a liquor-by-the-drink referendum. The county initially
filed separate complaints against the two municipalities involved in this appeal,
requesting declaratory judgment as to the county’s asserted right to a portion of liquor-
by-the-drink tax revenue collected within each municipality. The municipalities each
respectively filed answers denying the county’s claims, as well as counterclaims asserting
that the county owed them a portion of liquor-by-the-drink tax revenue collected from
private clubs located within the county but outside the incorporated limits of the
municipalities. By agreement, the trial court subsequently consolidated the actions.
Upon competing motions for summary judgment, the trial court granted partial summary
judgment in favor of the municipalities and dismissed the county’s claims, finding that
the municipalities were entitled, respectively, to keep all liquor-by-the-drink tax monies
distributed to them by the Tennessee Commissioner of Revenue (“the Commissioner”).
The county filed a motion to alter or amend this judgment, and the municipalities filed a
motion for summary judgment on their counterclaims. In a subsequent order, the trial
court denied the county’s motion to alter or amend and granted summary judgment in
favor of the municipalities on their counterclaims, awarding money judgments against the
county in favor of each municipality. The county has appealed solely the judgment
dismissing its claims against the municipalities. Determining that the municipalities were
not required under the applicable version of the statute to share their liquor-by-the-drink
tax revenues with the county, we affirm the trial court’s judgment.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J., and RICHARD H. DINKINS, J., joined.

Daniel P. Street, Blountville, Tennessee, for the appellants, Sullivan County, Tennessee,
and the Sullivan County Board of Education.

K. Erickson Herrin, Johnson City, Tennessee, for the appellees, the City of Bristol,
Tennessee, and the City of Kingsport, Tennessee.

OPINION

I. Factual and Procedural Background

The facts underlying this action are essentially undisputed. Tennessee Code
Annotated § 57-4-301(c) (2013 & Supp. 2017) provides for a tax “to include each and
every retail” of an alcoholic beverage sold for consumption on the premises by various
establishments delineated in section -301, such as restaurants, hotels, sports facilities, and
private clubs. This tax is commonly referred to as a “liquor-by-the-drink tax.” See Tenn.
Code Ann. § 57-4-306 (2013 & Supp. 2017); Copper Cellar Corp. v. Jackson, 762
S.W.2d 560, 562 (Tenn. 1988). Tennessee Code Annotated § 57-4-306, originally
enacted in 1967, prescribes the manner in which proceeds from the liquor-by-the-drink
tax are to be distributed, primarily in support of public education. At issue in this action
is the version of section -306 in effect prior to the Tennessee General Assembly’s 2014
amendment of that statutory section (“2014 Amendment”). See 2014 Tenn. Pub. Acts,
Ch. 901 § 1 (H.B. 1403). Particularly at issue is statutory language added to subsection
-306(a)(2)(A) through an amendment made by the General Assembly in 1982 (“1982
Amendment”). See 1982 Tenn. Pub. Acts, Ch. 942, §§ 1-2 (S.B. 1817).

The Cities of Bristol and Kingsport (collectively, “the Cities”) each passed a
liquor-by-the-drink referendum in 1984. The citizens of Sullivan County (“the County”)
had never had such a referendum put before them at the time this action was commenced.
Prior to 1984 and at least since 1980, private clubs located within the Cities’ boundaries
legally sold liquor-by-the-drink for consumption on the premises, and the Commissioner
distributed one-half of those revenues to the Cities pursuant to Tennessee Code
Annotated § 57-4-306(a). Each of the Cities had continually operated its own separate
school system since at least the 1967 enactment of the liquor-by-the-drink statutory
scheme by the General Assembly. Since passage of the 1984 referendums, the Cities
have continued to receive fifty percent of gross receipt taxes arising from sales of liquor
by the drink. The Cities have not distributed any of their liquor-by-the-drink revenue to
the Sullivan County Schools or to Sullivan County generally.
2
 On May 30, 2014, Sullivan County and the Sullivan County Board of Education
(collectively, “the County”) filed separate complaints against, respectively, the City of
Bristol (“Bristol”) and the City of Kingsport (“Kingsport”) in the Sullivan County
Chancery Court (“trial court”), seeking declaratory judgments regarding the rights and
responsibilities of the parties concerning the liquor-by-the-drink tax. The County
requested, inter alia, orders directing each of the Cities to remit to the County “the full
amount of unremitted tax revenues” plus prejudgment interest. The County estimated the
amount of back liquor-by-the-drink tax revenue it was purportedly owed to be at least
$758,239 from Bristol and at least $1,340,037 from Kingsport.

Bristol and Kingsport each filed an answer to the respective complaints on March
16, 2015, asserting, as pertinent to this appeal, that (1) Title 57, Chapter 4 of the
Tennessee Code was not applicable to the County because the County had not authorized
liquor-by-the-drink sales; (2) the County’s complaint failed to state a claim upon which
relief could be granted pursuant to Tennessee Rule of Civil Procedure 12.02(6); and (3)
the County’s claim was prohibited by Section 29 of Article II of the Tennessee
Constitution.1 Each City also denied that Tennessee Code Annotated § 57-4-306(a)
(2013) operated to require any payment of its portion of liquor-by-the-drink tax proceeds
received from the Commissioner to the County’s school system.

Bristol and Kingsport concomitantly filed counterclaims, asserting that, pursuant
to Tennessee Code Annotated § 57-4-306(a) (2013), each municipality was entitled to a
portion of any liquor-by-the-drink tax revenue received by the county trustee that should
have been distributed to all school systems operating within the County “in accord with
the average daily attendance of the students residing within the County, but being
educated at the expense of the municipalities.” Upon Bristol’s and Kingsport’s
subsequent unopposed motions to consolidate the County’s complaints against them and
their counterclaims against the County, the trial court entered an order of consolidation
on August 10, 2015.2

In the meantime, the General Assembly amended Tennessee Code Annotated §
57-4-306(a)(2), effective July 1, 2014, setting forth, inter alia, a detailed process by
1
The Cities also argued, inter alia, that the Sullivan County Board of Education was not a proper party to
initiate and maintain actions against the Cities, filing a motion to dismiss the County Board of Education
as a party on August 24, 2015. Insofar as Sullivan County was itself a party from the inception of this
action, the trial court did not rule on the issue of whether the County School Board was authorized to
commence the action, and this question is not at issue on appeal.
2
The County did file a response to the motions to consolidate, requesting bifurcation of “liability,” as
primarily a determination of statutory interpretation, and “damages.” The trial court did not address the
County’s request to bifurcate the proceedings in its order of consolidation.
3
which counties that were owed funds by municipalities under Tennessee Code Annotated
§ 57-4-306 could seek those funds and negotiate settlements as applicable. See 2014
Tenn. Pub. Acts, Ch. 901 § 1 (H.B. 1403). The 2014 Amendment included a distinction
between the liquor-by-the-drink tax proceeds received by a local political subdivision in
the time period spanning July 1, 2014, until June 30, 2015, and those proceeds received
after July 1, 2015, when, according to the 2014 Amendment, the statute would revert
back to its pre-amendment language. See Tenn. Code Ann. § 57-4-306(b)-(c) (Supp.
2014); 2014 Tenn. Pub. Acts, Ch. 901 § 1 (H.B. 1403). However, the General Assembly
has also amended Tennessee Code Annotated § 57-4-306 each year since the 2014
Amendment, extending the amended language in subsequent years, one year at a time.
See 2015 Tenn. Pub. Acts, Ch. 220 §§ 1, 2 (S.B. 990); 2016 Tenn. Pub. Acts, Ch. 885 §§
1, 2 (H.B. 1691); 2017 Tenn. Pub. Acts, Ch. 346 §§ 1, 2 (S.B. 1262).

Upon the Cities’ motion for summary judgment filed in September 2015 and the
County’s motion for summary judgment filed in November 2015, the trial court
conducted a hearing on December 23, 2015. The court took the matter under advisement,
subsequently entering a “Final Order” on February 2, 2016, granting partial summary
judgment in favor of the Cities and dismissing the County’s complaints. In response to
the Cities’ argument that Title 57, Chapter 4 was inapplicable to the County, the court
found that although under Tennessee Code Annotated § 57-4-103(a), solely local political
subdivisions that had authorized liquor-by-the-drink sales, such as the Cities in this
action, were to receive fifty percent of gross sale tax receipts from the Commissioner,
nothing in subsection -103(a) prevented the Cities from sharing such tax revenue with the
County’s school system. However, the court concluded that the language of Tennessee
Code Annotated § 57-4-306(a) unambiguously did not require the Cities to share the local
political subdivision’s portion of liquor-by-the-drink tax receipts with the County. The
court further determined that even if the language of subsection -306(a) were found to be
ambiguous, “the legislative history supports this Court’s interpretation of the statute that
municipalities operating their own school system are not required to share these funds
with the other local governments.”

On March 3, 2016, the County filed a motion to alter or amend the February 2016
judgment. The Cities filed a motion for summary judgment on their counterclaims on
April 20, 2016. Following a hearing, the trial court entered a “Rule 58 Final Order” on
September 29, 2016, designating the February 2016 order as “interlocutory,” denying
Sullivan County’s motion to alter or amend, and granting summary judgment in favor of
the Cities on their counterclaims. Finding that, pursuant to Tennessee Code Annotated §
57-4-306(a) (2013), “[l]iquor-by-the-drink revenue collected by the State of Tennessee
and distributed to Sullivan County must be placed in the county’s school fund and
apportioned by the county trustee among the county schools and the two municipal
school systems on the basis of average daily attendance,” the court awarded monetary
4
judgments against the County in the stipulated amounts of, respectively, $75,802 in favor
of Bristol and $107,286 in favor of Kingsport. These money judgments awarded on the
Cities’ counterclaims are not at issue on appeal.

The County timely appealed the grant of summary judgment insofar as the
judgment dismissed the County’s complaints against the Cities. Upon a motion to
consolidate filed by the appellants in a separate action sharing the same overarching
question of statutory interpretation, this Court entered an order on May 26, 2017, granting
the motion “only to the extent that these cases shall be set for oral argument on the same
docket and on the same day.”3

II. Issues Presented

Sullivan County presents two issues on appeal, which we have restated as follows:

1. Whether the trial court erred by declining to find that the version of
Tennessee Code Annotated § 57-4-306(a)(2)(A) in effect prior to the
2014 Amendment required the Cities, as municipalities governed by
their own liquor-by-the-drink referendums and operating their own
school systems, to share one-half of their liquor-by-the-drink tax
revenue with the County when the County had not enacted a liquor-
by-the-drink referendum.

2. Whether the trial court erred by declining to find that the pre-2014
version of Tennessee Code Annotated § 57-4-306(a)(2) required that
one-half of all liquor-by-the-drink sales tax revenue received by the
Cities must be distributed in support of education in the same
manner as the County property tax is distributed.

The Cities present an additional issue, which we have similarly restated as
follows:

3. Whether the trial court erred by declining to dismiss the County’s
claims on the basis that redistribution by the Cities of their liquor-
by-the-drink sales tax revenue to the County and for a purpose not
beneficial to the Cities would violate Article II, Section 29 of the
Tennessee Constitution.

3
The other three cases currently before this Court on the same overarching issue are Bradley Cty. Sch.
Sys. by and through the Bradley Cty. Bd. of Educ. v. City of Cleveland, No. E2016-01030-COA-R3-CV;
Blount Cty. Bd. of Educ. v. City of Maryville, No. E2017-00047-COA-R3-CV; and Washington Cty. Sch.
Sys. v. City of Johnson City, No. E2016-02583-COA-R9-CV.
5
 III. Standard of Review

The grant or denial of a motion for summary judgment is a matter of law;
therefore, our standard of review is de novo with no presumption of correctness. See Rye
v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015); Dick
Broad. Co., Inc. of Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 671 (Tenn. 2013)
(citing Kinsler v. Berkline, LLC, 320 S.W.3d 796, 799 (Tenn. 2010)). As such, this Court
must “make a fresh determination of whether the requirements of Rule 56 of the
Tennessee Rules of Civil Procedure have been satisfied.” Rye, 477 S.W.3d at 250.
“Statutory construction is a question of law that is reviewable on a de novo basis without
any presumption of correctness.” In re Estate of Tanner, 295 S.W.3d 610, 613 (Tenn.
2009).

As our Supreme Court has explained concerning the requirements for a movant to
prevail on a motion for summary judgment pursuant to Tennessee Rule of Civil
Procedure 56:

We reiterate that a moving party seeking summary judgment by attacking
the nonmoving party’s evidence must do more than make a conclusory
assertion that summary judgment is appropriate on this basis. Rather,
Tennessee Rule 56.03 requires the moving party to support its motion with
“a separate concise statement of material facts as to which the moving party
contends there is no genuine issue for trial.” Tenn. R. Civ. P. 56.03. “Each
fact is to be set forth in a separate, numbered paragraph and supported by a
specific citation to the record.” Id. When such a motion is made, any party
opposing summary judgment must file a response to each fact set forth by
the movant in the manner provided in Tennessee Rule 56.03. “[W]hen a
motion for summary judgment is made [and] . . . supported as provided in
[Tennessee Rule 56],” to survive summary judgment, the nonmoving party
“may not rest upon the mere allegations or denials of [its] pleading,” but
must respond, and by affidavits or one of the other means provided in
Tennessee Rule 56, “set forth specific facts” at the summary judgment
stage “showing that there is a genuine issue for trial.” Tenn. R. Civ. P.
56.06. The nonmoving party “must do more than simply show that there is
some metaphysical doubt as to the material facts.” Matsushita Elec. Indus.
Co., 475 U.S. [574,] 586, 106 S.Ct. 1348 [(1986)]. The nonmoving party
must demonstrate the existence of specific facts in the record which could
lead a rational trier of fact to find in favor of the nonmoving party. If a
summary judgment motion is filed before adequate time for discovery has
been provided, the nonmoving party may seek a continuance to engage in
6
 additional discovery as provided in Tennessee Rule 56.07. However, after
adequate time for discovery has been provided, summary judgment should
be granted if the nonmoving party’s evidence at the summary judgment
stage is insufficient to establish the existence of a genuine issue of material
fact for trial. Tenn. R. Civ. P. 56.04, 56.06. The focus is on the evidence
the nonmoving party comes forward with at the summary judgment stage,
not on hypothetical evidence that theoretically could be adduced, despite
the passage of discovery deadlines, at a future trial.

Rye, 477 S.W.3d at 264-65 (emphasis in original). Pursuant to Tennessee Rule of Civil
Procedure 56.04, the trial court must “state the legal grounds upon which the court denies
or grants the motion” for summary judgment, and our Supreme Court has instructed that
the trial court must state these grounds “before it invites or requests the prevailing party
to draft a proposed order.” See Smith v. UHS of Lakeside, Inc., 439 S.W.3d 303, 316
(Tenn. 2014).

IV. Distribution of Liquor-by-the-Drink Tax Revenue

The County contends that the trial court erred by finding that the version of
Tennessee Code Annotated § 57-4-306(a)(2)(A) (2013) in effect prior to the 2014
Amendment did not require the Cities to share one-half of their liquor-by-the-drink tax
revenue with the County’s school system. The Cities assert that the trial court properly
interpreted the governing statute as directing that because the Cities each operated their
own school systems, the portion of their liquor-by-the-drink revenue not paid into the
state’s general education fund was to be split between each City’s respective school
system and the City itself. Upon careful review, we determine that the governing statute
was ambiguous in that the distribution scheme for a city operating its own school system
could be reasonably interpreted in more than one way. Having therefore analyzed the
surrounding statutory scheme, the legislative history, and other applicable authorities, as
well as the record in this action, we conclude that the trial court did not err in determining
that the Cities were not required to share one-half of their liquor-by-the-drink tax revenue
with the County’s school system.

In conducting this analysis, we adhere to the following longstanding principles of
statutory interpretation:

When dealing with statutory interpretation, well-defined precepts apply.
Our primary objective is to carry out legislative intent without broadening
or restricting the statute beyond its intended scope. Houghton v. Aramark
Educ. Res., Inc., 90 S.W.3d 676, 678 (Tenn. 2002). In construing
legislative enactments, we presume that every word in a statute has
7
 meaning and purpose and should be given full effect if the obvious
intention of the General Assembly is not violated by so doing. In re
C.K.G., 173 S.W.3d 714, 722 (Tenn. 2005). When a statute is clear, we
apply the plain meaning without complicating the task. Eastman Chem.
Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn. 2004). Our obligation is
simply to enforce the written language. Abels ex rel. Hunt v. Genie Indus.,
Inc., 202 S.W.3d 99, 102 (Tenn. 2006). It is only when a statute is
ambiguous that we may reference the broader statutory scheme, the history
of the legislation, or other sources. Parks v. Tenn. Mun. League Risk
Mgmt. Pool, 974 S.W.2d 677, 679 (Tenn. 1998). Further, the language of a
statute cannot be considered in a vacuum, but “should be construed, if
practicable, so that its component parts are consistent and reasonable.”
Marsh v. Henderson, 221 Tenn. 42, 424 S.W.2d 193, 196 (1968). Any
interpretation of the statute that “would render one section of the act
repugnant to another” should be avoided. Tenn. Elec. Power Co. v. City of
Chattanooga, 172 Tenn. 505, 114 S.W.2d 441, 444 (1937). We also must
presume that the General Assembly was aware of any prior enactments at
the time the legislation passed. Owens v. State, 908 S.W.2d 923, 926
(Tenn. 1995).

In re Estate of Tanner, 295 S.W.3d at 613-14.

A. Ambiguity of Tennessee Code Annotated § 57-4-306(a)(2)(A) (2013)

The version of Tennessee Code Annotated § 57-4-306 in effect when this action
was commenced provided in pertinent part:

(a) All gross receipt taxes collected under § 57-4-301(c) shall be
distributed by the commissioner as follows:

(1) Fifty percent (50%) to the general fund to be earmarked for
education purposes; and

(2) Fifty percent (50%) to the local political subdivision as
follows:

(A) One half (½) of the proceeds shall be expended and
distributed in the same manner as the county property
tax for schools is expended and distributed; provided,
however, that except in counties having a population
of not less than twenty-seven thousand nine hundred
8
 (27,900) nor more than twenty-seven thousand nine
hundred twenty (27,920), according to the 1980 federal
census or any subsequent federal census, any proceeds
expended and distributed to municipalities which do
not operate their own school systems separate from the
county are required to remit one half (½) of their
proceeds of the gross receipts liquor-by-the-drink tax
to the county school fund; and

(B) The other one half (½) shall be distributed as follows:

(i) Collections of gross receipts collected in
unincorporated areas, to the county general
fund; and

(ii) Collections of gross receipts in incorporated
cities and towns, to the city or town wherein
such tax is collected.

(b) Notwithstanding subdivision (a)(2), the fifty percent (50%) of the
gross receipt taxes allocated to local political subdivisions by
subdivision (a)(2) and collected in a municipality which is a premier
tourist resort shall be distributed to and expended by such
municipality for schools in such municipality.
Tenn. Code Ann. § 57-4-306 (2013).

The applicable version of Tennessee Code Annotated § 57-4-301(c) (2013),
referenced in subsection -306(a), provided:

(c) In addition to the privilege taxes levied in subdivision (b)(1), there is
further levied a tax equal to the rate of fifteen percent (15%) of the
sales price of all alcoholic beverages sold for consumption on the
premises, the tax to be computed on the gross sales of alcoholic
beverages for consumption on the premises for the purpose of
remitting the tax due the state, and to include each and every retail
thereof.4

4
Effective May 9, 2017, the General Assembly amended Tennessee Code Annotated § 57-4-301(c) to
designate the prior version of subsection -301(c) as -301(c)(1) and add a subsection -301(c)(2). See 2017
Tenn. Pub. Acts, Ch. 338 § 4 (S.B. 798).
9
Subsection -301(b)(1) (2013 & Supp. 2017) sets forth privilege taxes to be paid to the
alcoholic beverage commission by “[e]ach applicant for an on-premises consumption
license” during the application process and on an ongoing basis as the privilege is
exercised, according to such criteria as the type of seller, seating capacity, and percentage
of gross sales. Subsection -301(c), in both its prior and current versions, thus adds to the
privilege taxes levied in -301(b)(1) the fifteen-percent, liquor-by-the-drink tax applied to
alcoholic beverages consumed on the premises. Pursuant to subsection -306(a)(1), which
remains unchanged since the version governing here, all of the gross receipt liquor-by-
the-drink taxes are to be distributed by the Commissioner, with fifty percent allocated to
the state’s general fund, where they are earmarked for education purposes. Tenn. Code
Ann. § 57-4-306(a)(1) (2013 & Supp. 2017). Up to this point, the clarity of section -306
is not in dispute.

At issue in this action is the second fifty percent of the gross receipt taxes, which,
under the governing version of the statute, were to be distributed to the “local political
subdivision.” See Tenn. Code Ann. § 57-4-306(a)(2) (2013). Particularly at issue is the
distribution of the twenty-five percent (half of the fifty percent returned to the local
political subdivision by the Commissioner) as set forth in subsection -306(a)(2)(A). The
phrase, “local political subdivision,” is not expressly defined in Title 57, Chapter 4. In
general, a “political subdivision” may be defined as “[a] division of a state that exists
primarily to discharge some function of local government.” BLACK’S LAW DICTIONARY
1197 (8th ed. 2004). For example, within Tennessee’s Governmental Tort Liability Act,
a “governmental entity” is defined in part as “any political subdivision of the state of
Tennessee including, but not limited to, any municipality, metropolitan government,
county, utility district, school district . . . .” Tenn. Code Ann. § 29-20-102(3)(A) (2012 &
Supp. 2017) (emphasis added). Accordingly, the County and each of the Cities are local
political subdivisions of the state. However, whether the applicable version of Title 57,
Chapter 4 applied to a local political subdivision that had not authorized liquor-by-the-
drink sales is a separate question, which we will address in a subsequent portion of this
analysis.

We note that the plain language of Tennessee Code Annotated § 57-4-
306(a)(2)(B) (2013), which disposed of the final twenty-five percent of liquor-by-the-
drink gross receipt taxes, is not in dispute. This subsection provided that twenty-five
percent of gross receipt taxes (or fifty percent of the revenue returned to the local
political subdivision by the Commissioner) would be distributed to a county’s general
fund if the gross receipt taxes were collected in unincorporated areas of the county and to
a city or town if the gross receipt taxes were collected in that city or town. Tenn. Code
Ann. § 57-4-306(a)(2)(B) (2013). The applicable version of subsection -306(b), which
provided for distribution of gross receipt taxes collected in a municipality that was a
premier tourist resort, as that term was defined in Tennessee Code Annotated § 57-4-
10
102(26) (2013), is also not in dispute. The question of statutory interpretation at issue is
thus narrowed to the distribution scheme set forth for twenty-five percent of the gross
receipt taxes from liquor-by-the-drink revenue in subsection -306(a)(2)(A) (2013).

In the applicable version, subsections -306(a)(2)(A) and -306(a)(2)(B) were joined
by a semi-colon and the coordinating conjunction, “and.” Subsection -306(a)(2)(A), up
to the conjunction joining it to -306(a)(2)(B), stated:

One half (½) of the proceeds shall be expended and distributed in the same
manner as the county property tax for schools is expended and distributed;
provided, however, that except in counties having a population of not less
than twenty-seven thousand nine hundred (27,900) nor more than twenty-
seven thousand nine hundred twenty (27,920), according to the 1980
federal census or any subsequent federal census, any proceeds expended
and distributed to municipalities which do not operate their own school
systems separate from the county are required to remit one half (½) of their
proceeds of the gross receipts liquor-by-the-drink tax to the county school
fund; . . . .

The paragraph began with an independent clause, ending with the first semi-colon, which
provided: “One half (½) of the proceeds shall be expended and distributed in the same
manner as the county property tax for schools is expended and distributed; . . . .” This
statement, which stood as its own sentence prior to the 1982 Amendment, was linked in
the applicable version to an additional clause by the semi-colon, beginning with
“provided, however that . . . .”

We note that when the 1982 Amendment was approved by the General Assembly,
“provided” began a new sentence and that the punctuation was subsequently changed to a
semi-colon, apparently during codification of the 1982 Amendment. However, we find
this distinction immaterial to analysis of the statute. The meaning of “provided,” as it
was utilized here as a conjunction, is “[o]n the condition or understanding (that).” See
BLACK’S LAW DICTIONARY at 1261-62. Combined with “however,” “provided”
functioned as a conjunctive adverbial phrase, with the standard function of “join[ing] two
clauses and indicat[ing] the relationship between them.” See generally BRYAN A.
GARNER, THE REDBOOK, A MANUAL ON LEGAL STYLE, 207 (3d ed. 2013).

A semi-colon, when utilized in its non-listing function, separates two independent
but related clauses and “generally signals addition or contrast.” See CHERYL GLENN &
LORETTA GRAY, HODGES’ HARBRACE HANDBOOK 63 (16th ed. 2007). Of course, a
period also separates independent clauses, but one sentence does not follow another in a
vacuum. In this instance, the amended language began with the conjunctive adverbial
11
phrase, “provided, however,” which through its meaning connected the proviso to the
clause preceding it, whether that connection was signaled by a semi-colon, as in the
printed version of the amended statute, or simply through the neighboring proximity of
two sentences and context of those sentences, as in the version of the 1982 Amendment
passed by the legislature. The phrase, “provided, however,” was followed by the
nominalizer, “that,” signaling what was provided, which in this case was the entire clause
up to the end of subsection -306(a)(2)(A). The use of “provided that” thus created a
proviso, or “a provision that begins with the words provided that and supplies a
condition, exception, or addition.” See BLACK’S LAW DICTIONARY at 1262 (emphasis in
original).

Immediately following “provided, however that . . .” the General Assembly
included an exception, narrowly drawn as applying “in counties having a population of
not less than twenty-seven thousand nine hundred (27,900) nor more than twenty-seven
thousand nine hundred twenty (27,920).” Tenn. Code Ann. § 57-4-306(a)(2)(A) (2013).
As the legislative history of the 1982 Amendment indicates, the General Assembly
designed the exception to the proviso to apply solely to Bedford County. Given that the
above population parameters do not apply to Sullivan County, we can, for the purpose of
our analysis, omit the exception, yielding the following:

One half (½) of the proceeds shall be expended and distributed in the same
manner as the county property tax for schools is expended and distributed;
provided, however, that . . . any proceeds expended and distributed to
municipalities which do not operate their own school systems separate from
the county are required to remit one half (½) of their proceeds of the gross
receipts liquor-by-the-drink tax to the county school fund; . . . .

See id.

In other words, one-half of the proceeds were to be expended and distributed in
the same manner as the county property tax for schools on the condition or understanding
that “any proceeds expended and distributed to municipalities which [did] not operate
their own school systems separate from the county [were] required to remit one half (½)
of their proceeds of the gross receipts liquor-by-the-drink tax to the county school fund.”
See id. (emphasis added). The underlined clause functioned as a restrictive relative
clause, restricting the “municipalities” to which this proviso applied to those that did not
operate their own school systems.5

5
Although the relative pronoun, “which,” generally would be used to indicate a nonrestrictive relative
clause while the relative pronoun, “that,” would be used to indicate a restrictive clause, interpreting
“which” as nonrestrictive in this instance would be nonsensical because it would mean that no
municipalities operated their own school systems. We note also that this “which” clause is not marked by
12
 The Cities rely in part on this proviso as excluding them from remitting any part of
their liquor-by-the-drink proceeds to the County’s school system, whether in the manner
in which the county property tax for schools is distributed or into the County’s school
fund, because the Cities have each operated their own separate school systems since at
least the 1967 initial enactment of the liquor-by-the-drink tax. We agree that under the
plain language of the applicable version of subsection -306(a)(2)(A), the Cities were
excluded from the proviso of remitting one-half of their proceeds into the County’s
school fund because the Cities operated their own school systems. However, it is not
clear from the structure and plain language of the first part of subsection -306(a)(2)(A)
whether the Cities’ operation of their own school systems excluded them from the
general rule that “one-half of the proceeds [were to] be expended and distributed in the
same manner as the county property tax for schools [was] expended and distributed[.]”
See id.

The statute established this general rule and then set forth a condition or
understanding that applied to municipalities not operating their own schools. This
version of the statute did not clarify whether the opposite of the proviso was true, in other
words, whether a municipality operating its own school system could disregard the
general rule of distribution in the manner of county property tax and instead distribute
one-half of its proceeds to its own school system. Although the placement of the
conjunctive adverb, “however,” following “provided” in subsection -306(a)(2)(A) would
typically indicate that the proviso is in some manner antithetical to the general rule of
distribution in the manner of county property tax, it is not clear from the plain language
of subsection -306(a)(2)(A) how it would be so.

To summarize, it is possible to reasonably interpret the proviso as simply
operating to ensure that a municipality without its own school system would remit one-
half of its liquor-by-the-drink proceeds to the county within which it was located. It is
also possible to reasonably interpret the proviso as operating to require solely those
municipalities not operating their own school systems to remit proceeds to the counties in
which they were located, effectively exempting those municipalities that operated their
own school systems. The latter interpretation utilizes the longstanding maxim of
statutory construction maintaining that “the expression of one thing implies the exclusion
of all things not expressly mentioned.” See Limbaugh v. Coffee Med. Ctr., 59 S.W.3d 73,
84 (Tenn. 2001) (citing City of Knoxville v. Brown, 260 S.W.2d 264, 268 (Tenn. 1953)).
We do not find this maxim dispositive in this instance, however, because the statute is
ambiguous regarding whether the general rule of distribution in the manner of the

paired commas as a nonrestrictive relative clause normally would be. The drafters appear simply to have
made the very common grammatical error of using “which” rather than “that” as a restrictive relative
pronoun. See generally GARNER, THE REDBOOK, A MANUAL ON LEGAL STYLE at 188-90.
13
property tax for schools would still apply to municipalities to which the proviso does not
apply. Because the requirement in Tennessee Code Annotated § 57-4-306(a)(2)(A)
(2013) that municipalities without school systems must remit proceeds to counties can be
reasonably interpreted in more than one way when municipalities that do operate their
own school systems are at issue, we determine this requirement in the applicable version
of the statute to be ambiguous. See Bryant v. HCA Health Servs. of N. Tenn., Inc., 15
S.W.3d 804, 809 (Tenn. 2000) (“A statute is ambiguous if the statute is capable of
conveying more than one meaning.”).

B. Consideration of Statutory Framework, Legislative History, and Other Sources

Having determined that Tennessee Code Annotated § 57-4-306(a)(2)(A) (2013)
was ambiguous with regard to whether municipalities with their own school systems were
required to remit a portion of liquor-by-the-drink tax proceeds to the counties in which
they were located, we now consider the statutory framework, legislative history, and
other sources surrounding the version of the statute governing this action. See Arden v.
Kozawa, 466 S.W.3d 758, 764 (Tenn. 2015) (“Where statutory language is ambiguous,
we may decipher legislative intent in other ways, including consideration of the broader
statutory scheme, legislative history, and other sources.”). We begin with the Cities’
assertion that Tennessee Code Annotated § 57-4-103(a)(1) (2013) operated to render
subsection -306 inapplicable to a county, such as Sullivan County, that had not passed a
liquor-by-the-drink referendum. Upon careful review, we conclude that because
subsection -103(a)(1) set forth the effectiveness of the entire statutory chapter in which
the applicable version of subsection -306(a) was located, subsection -103(a)(1) operated
to classify a “local political subdivision” receiving liquor-by-the-drink taxes from the
Commissioner as one that had passed a liquor-by-the-drink referendum. We further
conclude, however, as did the trial court, that this did not necessarily exempt the Cities
from the general requirement of subsection -306(a)(2)(A) of distributing one-half of their
respective liquor-by-the-drink revenue in the manner of county property tax distribution.

Title 57 of the Tennessee Code is entitled, “Intoxicating Liquors.” Chapter 4 of
Title 57 is entitled, “Consumption of Alcoholic Beverages on Premises,” and it consists
of three parts: Part 1 – “General Provisions,”; Part 2 – “Administration, Enforcement,
Prohibited Acts”; and Part 3 – “Taxes and Fees.” This overall structure has remained
unchanged since the present action was commenced, as has the language of Tennessee
Code Annotated § 57-4-103(a)(1), which provides within the general provisions of Title
57:

This chapter shall be effective in any jurisdiction which authorizes the sale
of alcoholic beverages for consumption on the premises in a referendum in
the manner prescribed by § 57-3-106; provided, that, in addition to any
14
 other method authorized for holding an election pursuant to § 57-3-106, an
election may be held for such sales upon adoption of a resolution by a two-
thirds (2/3) vote of the legislative body of a county or municipality.

We determine this language regarding the effectiveness of Chapter 4 to be clear
and unambiguous. Because Part 3 is within Chapter 4, Part 3 is effective in any
jurisdiction that has authorized liquor-by-the-drink sales by referendum. See In re Estate
of Tanner, 295 S.W.3d at 614 (“Any interpretation of the statute that ‘would render one
section of the act repugnant to another’ should be avoided.”) (quoting Tenn. Elec. Power
Co. v. City of Chattanooga, 114 S.W.2d 441, 444 (Tenn. 1937)). Although the statutory
scheme regarding alcoholic beverages does not provide a definition of “jurisdiction” as it
is used in subsection §-103(a)(1), we further determine that the generally accepted
definition of jurisdiction as it applies to governmental authority is applicable within the
context of a jurisdiction’s authorization of alcoholic beverage sales. Black’s Law
Dictionary defines “jurisdiction” within this context of governmental authority as a
“government’s general power to exercise authority over all persons and things within its
territory,” “geographic area within which political . . . authority may be exercised,” or
“political . . . subdivision within such an area.” BLACK’S LAW DICTIONARY at 867.
Therefore, at the time this action was commenced, Part 3 of Chapter 4 was effective in
the jurisdiction of each of the Cities, which had authorized liquor-by-the-drink sales, but
was not effective in the jurisdiction of the County, which had not authorized such sales.

The Cities argue that the ineffectiveness of Tennessee Code Annotated § 57-4-
306(a) (2013) in the jurisdiction of the County means that the Cities were not required to
remit any portion of their liquor-by-the-drink proceeds distributed by the Commissioner
to the County. However, we do not agree that this conclusion automatically follows from
subsection -103(a)(1) because the Cities, as jurisdictions having authorized the sale of
alcoholic beverages for consumption on the premises, see Tenn. Code Ann. § 57-4-
103(a)(1), and thereby local political subdivisions receiving liquor-by-the-drink gross
receipt taxes from the Commissioner, see Tenn. Code Ann. § 57-4-306(a)(2), were
required to follow the requirements of Chapter 4. This analysis leads us back to the
ambiguity previously identified in subsection -306(a)(2)(A) but does not clarify it. It is
still possible to reasonably interpret the proviso of subsection -306(a)(2)(A) as either
simply ensuring that a municipality without its own school system would remit one-half
of its liquor-by-the-drink proceeds to the county within which it was located or as
actually exempting municipalities with their own school systems, such as the Cities of
Bristol and Kingsport, from the general requirement of distributing one-half of their
liquor-by-the-drink revenue in the manner of county property tax distribution.

Inasmuch as Tennessee Code Annotated § 57-4-306(a)(2)(A) (2013) provided that
“[o]ne half (½) of the proceeds shall be expended and distributed in the same manner as
15
the county property tax for schools is expended and distributed,” it is important to
consider the statutory scheme for expenditure and distribution of the county property tax
for schools. Tennessee Code Annotated § 49-3-315(a) (2016) provides in pertinent part:

For each LEA [local education agency] there shall be levied for current
operation and maintenance not more than one (1) school tax for all grades
included in the LEA. Each LEA shall place in one (1) separate school fund
all school revenues for current school operation purposes received from the
state, county and other political subdivisions, if any. . . . All school funds
for current operation and maintenance purposes collected by any county . . .
shall be apportioned by the county trustee among the LEAs in the county
on the basis of the WFTEADA [weighted full-time equivalent average daily
attendance] maintained by each, during the current school year. For the
purposes of making the apportionment of local school funds as set forth in
this subsection (a), and in defining the WFTEADA for the current school
year, the county director of schools and the county trustee shall be guided
by the following procedure: . . . .6

The above statute goes on to delineate the procedure by which the county director
of schools shall certify to the county trustee the weighted full-time equivalent average
daily attendance (“WFTEADA”) during the preceding school year and, in progressive
fashion, estimate “the WFTEADA in the schools of the LEAs in the county” for
successive quarters of the current and upcoming years. See Tenn. Code Ann. § 49-3-
315(a)(1)-(5). Although the statutory procedure for determining the WFTEADAs
involves county officials, the Cities, as local political subdivisions receiving liquor-by-
the-drink tax revenue, would be able to remit a portion of those gross receipt taxes
received from the Commissioner to the County’s school fund, which arguably could then
be distributed by the County according to the procedure delineated in the above statute.
See Tenn. Code Ann. § 49-3-315(a) (“Each LEA shall place in one (1) separate school
fund all school revenues for current school operation purposes received from the state,
county and other political subdivisions . . . .”) (emphasis added).

The question arises as to whether, if the County were successful in the present
action, funds remitted by the Cities to the County’s school fund would in turn be partially
apportioned to schools operated by the Cities as LEAs geographically existing within the
County. This Court recently interpreted Tennessee Code Annotated § 49-3-315(a) in
light of whether a county was required to apportion funds from its “educational capital
projects fund” to the school boards of cities located within the county. See City of Athens
Bd. of Educ. v. McMinn Cty., 467 S.W.3d 458, 459-60 (Tenn. Ct. App. 2014), perm. app.
6
The definitions in brackets are provided pursuant to Tennessee Code Annotated §§ 49-1-103(2) (2016)
(LEA) and 49-3-302(18) (2016) (WFTEADA).
16
denied (Tenn. May 14, 2015). This Court noted that, with one exception for
transportation levies not relevant here, “[a]ll school funds for current operation and
maintenance purposes collected by any county . . . shall be apportioned by the county
trustee among the LEAs,” including those LEAs operated by the cities located in the
county. Id. at 460 (quoting Tenn. Code Ann. § 49-3-315(a)) (emphasis in City of Athens).
Because the funds at issue in City of Athens had been collected by the county through
levying “a special tax designated for a capital projects fund,” this Court held that the
funds had not been collected “for current operation and maintenance purposes” and
therefore did not fall under the purview of Tennessee Code Annotated § 49-3-315(a).
City of Athens, 467 S.W.3d at 465-66 (affirming the trial court’s grant of summary
judgment in favor of the county).

In the current analysis, the County is requesting that this Court interpret the
language of Tennessee Code Annotated § 57-4-306(a)(2)(A) (2013) to mean that twenty-
five percent (half of the amount returned to the local political subdivision by the
Commissioner) of the gross receipt liquor-by-the-drink taxes collected within the
incorporated limits of the Cities would be paid in the manner of the county property tax
to the county school fund for distribution to all of the LEAs in the County, including
those located within each of the Cities. Because such a distribution within the County of
funds obtained from a “local political subdivision” such as each of the Cities is possible,
see Tenn. Code Ann. § 49-3-315(a), we do not find the statutory scheme for expenditure
and distribution of the county property tax for schools to be dispositive of the ambiguity
previously identified in Tennessee Code Annotated § 57-4-306(a)(2)(A) (2013).7

However, we do find the legislative history surrounding the 1982 Amendment,
which added the ambiguous language at issue to Tennessee Code Annotated § 57-4-
306(a), to be instructive of the General Assembly’s intent. Prior to the 1982 Amendment,
the subject statutory section, then codified at § 57-162, provided in full:

Distribution of collections.—All gross receipt taxes collected under
subdivision (b) of § 57-157 shall be distributed by the commissioner of
revenue as follows:

7
The County also requests that this Court compare the language of the statute at issue to that utilized by
the General Assembly when enacting the local option sales tax in 1963. See Tenn. Code Ann. § 67-6-
712(a) (2013); 1963 Tenn. Pub. Acts, Ch. 329 § 4. The County asserts that because the local sales tax
statute demonstrated a disbursement method involving the county property tax for schools according to
weighted average daily attendance of students, this Court should conclude that proceeds from the liquor-
by-the-drink gross receipts were intended to be distributed solely as in the county property tax for
schools. Finding such a foray to be far afield from the statute at issue, we decline the County’s invitation
to superimpose the local sales tax statutory scheme upon the proviso effected within the liquor-by-the-
drink statutory scheme by the 1982 Amendment to Tennessee Code Annotated § 57-4-306(a)(2)(A).
17
 (a) Fifty percent (50%) to the general fund to be earmarked for
education purposes; and

(b) Fifty percent (50%) to the local political subdivision.

(1) One half (½) of the proceeds shall be expended and
distributed in the same manner as the county property
tax for schools is expended and distributed.

(2) The other one half (½) shall be distributed as follows:

(a) Collections of gross receipts collected in
unincorporated areas, to the county general
fund; and

(b) Collections of gross receipts in incorporated
cities, towns, to the city or town wherein such
tax is collected.

Tenn. Code Ann. § 57-162 (1968).

Regarding the original enactment of the statute, the County posits that because the
statute was initially effective solely in “those counties with population in excess of
235,000,” see Tenn. Code Ann. § 57-164 (1968) (emphasis added), the legislature could
not have meant for municipalities to be considered local political subdivisions under the
statute in that municipalities, initially those with a population of at least 110,000, were
not added until a 1971 amendment, see 1971 Tenn. Pub. Acts, Ch. 59 § 1. We note,
however, that by the time of the 1982 Amendment’s enactment, the General Assembly
was well aware that municipalities had been statutorily authorized to adopt liquor-by-the-
drink sales through referendum for several years. See In re Estate of Tanner, 295 S.W.3d
at 614. (“We also must presume that the General Assembly was aware of any prior
enactments at the time the legislation passed.”). Moreover, having determined the
relevant ambiguity to be contained in the proviso of the 1982 Amendment, we further
determine the County’s argument regarding the initial exclusion of municipalities in 1967
to be unavailing.

In introducing the applicable Senate bill to the Finance, Ways and Means
Committee in March 1982, Senator Albright explained the bill’s purpose as follows:

Right now, the law provides that one-half of one percent of the gross
receipts by liquor by the drink tax goes to the, to, into the school system –
18
 provide into the school system – goes to the city for the school systems. In
many counties, the cities do not operate a school system. They have been
turning this over to the county because the county provides that school
system for the city. There has been some. There was a couple of ‘em. I
have a whole bunch of little cities around Chattanooga. There was a couple
of them that did not want to return this money over. They simply asked for
an Attorney General’s ruling that the legislative intent was that that’s where
it would go in the school system. And they didn’t have a school system,
they shouldn’t be getting the money. That’s an Attorney General ruling.
Our county simply said rather than have an Attorney General’s ruling,
which – cause they would like to put this in legislation. And this just
provides, however, then if proceeds expanding or distribution to
municipalities which do not operate their own school system separate from
the county, are required to remit one-half of their proceedings from the
gross receipts liquor by the drink tax to the county school fund. And that is
where it is intended to go anyway.

As the sponsoring legislator, Senator Albright then engaged in the following exchange
with a committee member, Senator Crouch:

Senator Crouch: In other words, if, uh, we [are] still operating a city
school system it doesn’t affect –

Senator Albright: It doesn’t affect you at all. It goes to the city –

Senator Crouch: They’re still getting their . . . percent?

Senator Albright: See the legislation . . . says for the school fund.
That’s what the –

Senator Crouch: Okay.

Senator Albright thus assured Senator Crouch that if a municipality were operating its
own school system, the provision added by the 1982 Amendment would not affect the
municipality because the liquor-by-the-drink taxes returned by the commissioner would
still go “to the city.”

In introducing the bill to the committee, Senator Albright referenced a “ruling” of
the attorney general. At this point in time, the attorney general had issued two opinions
interpreting the distribution scheme set forth in Tennessee Code Annotated § 57-4-306,
the first in September 1980 (“1980 AG Opinion”), see Tenn. Op. Atty. Gen. 80-457, 1980
19
WL 103875 (Sept. 19, 1980), and the second in April 1981 (“1981 AG Opinion”), see
Tenn. Op. Atty. Gen. 81-270, 1981 WL 142843 (Apr. 27, 1981). We note that “although
opinions of the Attorney General may be persuasive authority, they are not controlling.”
Beacon4, LLC v. I & L Invs., LLC, 514 S.W.3d 153, 173 (Tenn. Ct. App. 2016).
However, we do afford such opinions “‘considerable deference,’” particularly because
“‘government officials rely upon them for guidance.’” See id. (quoting State v. Black,
897 S.W.2d 680, 683 (Tenn. 1995)). As to the statutory section at issue in this action, a
series of three attorney general’s opinions, released from 1981 to 1983, are informative
concerning the situation surrounding the 1982 Amendment. Moreover, insofar as
legislators indicated while introducing and explaining the 1982 Amendment that they
were responding to various municipalities’ reliance on the attorney general’s 1980 and
1981 opinions, those opinions are integral to the legislative history as well.

The question proffered in the 1980 AG Opinion focused on the situation presented
when a municipality had passed a liquor-by-the drink referendum but the county in which
the municipality was located had not. See Tenn. Op. Atty. Gen. 80-457, 1980 WL
103875, at *1. The attorney general opined:

It is the opinion of this office that if a municipality but not the county has
approved by referendum the sale of alcoholic beverages for consumption on
the premises the fifty percent (50%) distribution, under T.C.A. § 57-4-
306(2), of the gross receipts tax collected would go entirely to the local
municipality.

Id. The attorney general further concluded:

[I]f there has been no countywide election approving the sale of alcoholic
beverages for consumption on the premises in accord with T.C.A. § 57-4-
103, then the provisions of Chapter 4 dealing with both the imposition of
the tax and the distribution of the tax would have no application to such
county and it would not be entitled to a distribution of any amounts under
T.C.A. § 57-4-306(2) which go to the local political subdivision. Such
local political subdivision, i.e., the city or town, would then be required to
expend one half of the amount received in the same manner as the county
property tax for schools would be expended within the city or town.

Id. at *2 (emphasis added). Thus, according to the 1980 AG Opinion, a municipality
acting as the local political subdivision receiving gross receipt liquor-by-the-drink taxes
would be required to expend and distribute one-half of the monies returned by the
commissioner solely to the schools located within the municipality.

20
 The 1980 AG Opinion did not address the distinction between a municipality that
operated its own school system and one that utilized a county school system to educate its
students. However, this question was the focus of the 1981 AG Opinion, with the
attorney general opining: “[T]hose municipalities which do not operate their own school
system separate from the county would be required to remit one-half of [their] proceeds
of the gross receipts liquor-by-the-drink tax to the county school fund.” Tenn. Op. Atty.
Gen. No. 81-270, 1981 WL 142843, at *1. Building on the prior analysis of Tennessee
Code Annotated § 57-4-306 in the 1980 AG Opinion, the attorney general reasoned as
follows:

If the local municipality does not operate a separate school system,
the one-half of the proceeds expended and distributed in the same manner
as the county property tax for schools as mandated by subparagraph (A)
would naturally have to be remitted to the county school fund.

It appears clear that the purpose of the statute is to earmark a certain
percentage of the proceeds of such taxes for the purpose of local education.
This objective could be accomplished by the remittance of such amount to
the county school fund where the municipality itself does not operate its
own school system.

Tenn. Op. Atty. Gen. No. 81-270, 1981 WL 142843, at *1.

In introducing to his committee the Senate bill that became the 1982 Amendment,
Senator Albright expressed an intent to codify the attorney general’s opinion, requiring
municipalities not operating their own school systems “to remit one-half of their
proceedings from the gross receipts liquor by the drink tax to the county school fund.” In
sponsoring the bill during a March 4, 1982 session of the entire Senate, Senator Albright
stated in pertinent part:

This bill . . . just puts into law what’s been the practice. And it says that
one-half of the proceeds of the gross receipt liquor by the drink to the
county school system where the city does not provide one.

The following exchange occurred in response:

Senator Darnell: Senator Albright as I understand it this is to make sure
that the funds actually go to, to the county for schools
– is that the intent of the bill? Or is that just a
peripheral sort of thing that’s involved here?

21
 Senator Albright: This just makes sure – right some of, in my area in
Chattanooga – we’ve had a couple of them that had to
be told, you don’t have your own school system – the
county permits this – the statute says – can I just read
one brief sentence –

Senator Darnell: --they won’t turn over the money to the county?

Senator Albright: This would make it that they have to turn it over.

This exchange demonstrates that when he stated previously that a city would have to
distribute gross receipt taxes to the county in which it was located “where the city does
not provide one,” Senator Albright meant a city that does not provide a school system.
At the close of the March 4, 1982 session, the Senate approved the bill as sponsored by
Senator Albright.

We determine that as presented to and adopted in the Senate, the legislative intent
of the 1982 Amendment was to correct a situation in which some municipalities that did
not operate their own school systems were failing to distribute the statutorily required
portion of liquor-by-the-drink gross receipt taxes to the counties whose school systems
they utilized. As explained by the Senate sponsor, the intent was not to require
municipalities that operated their own school systems to distribute liquor-by-the-drink
revenue to the corresponding counties.

Subsequently, Representative Davis introduced the companion bill to the House
Calendar and Rules Committee on April 7, 1982, by stating in relevant part:

Mr. Chairman and Members of the Committee House Bill 2277 provides
that if, provides that in the distribution of liquor, local liquor by the drink
taxes that it will be distributed as it is now in the same fashion that local
property taxes is distributed for education. In the event that the
municipality affected operates a school system, right now the, the reason
for division in the law originally was for this percentage of the money to go
[to] education – fifty percent to the county, fifty percent to the municipality
involved. There are municipalities such as the one involved in my county
that are collecting this tax but that are, that are not operating school
systems. This simply changes the law to provide that in the event the city
does not operate a, a, the school system, that the money will go to the
county.

22
In response to a committee member’s question regarding under what circumstances the
proviso added by the 1982 Amendment would be “activated,” Representative Davis
replied:

If there’s, if a municipality is operating its own system it’ll continue to get
its share of the liquor by the drink money. Uh, only if it’s not operating a
school system and thereby using the county school system uh, will the
money that has been going to the municipality for education go instead to
the county.

The House approved the bill, with an amendment added to exclude Bedford
County, in a vote taken during a full session conducted on May 5, 1982.8 In introducing
the bill to the House as a whole during an April 8, 1982 session, Representative Davis
presented it as a remedy to a situation in which “[a]t the present time, there is no
provision . . . that those municipalities that do not operate school systems will permit the
money – which is to go to education from the liquor by the drink tax – to go to the
county.” The Senate subsequently adopted the bill as amended by the House without
further discussion.

Upon thorough review of the language of the statute in light of the statutory
framework, legislative history, and attorney general’s opinions referenced by the
legislative history, we hold that the General Assembly’s intent in enacting the 1982
Amendment to Tennessee Code Annotated § 57-4-306(a)(2)(A) was to require solely
those municipalities that did not operate their own school systems to share liquor-by-the-
drink tax proceeds with the counties in which they were located. This conclusion is also
supported by an opinion issued by the attorney general in January 1983, six months
following enactment of the 1982 Amendment (“1983 AG Opinion”). See Tenn. Op. Atty.
Gen. No. 83-36, 1983 WL 166853 (Jan. 18, 1983). Concluding that “the 1982
amendment to the statute was merely a codification of our opinion dated April 27, 1981,”
the attorney general opined in pertinent part:

It is the opinion of this office that the proper distribution of the liquor-by-
the-drink gross receipt privilege taxes under T.C.A. § 57-4-306(2)(A)
depends upon whether a municipality maintains a separate school system,
when the municipality but not the county has approved by referendum the
sale of alcoholic beverages for consumption on the premises.

***
8
During the April 7, 1982 House Calendar and Rules Committee meeting, Representative Phillips from
Bedford County explained that his county was requesting an exception because a municipality within the
county owned and paid expenses on buildings operated by the county’s school system.
23
 If the municipality does operate a separate school system, it would be
entitled to the fifty percent of the liquor-by-the-drink gross receipts
privilege tax collected under T.C.A. § 57-4-306(2)(A).

Id. at *1. Although opinions of the attorney general are but persuasive authority, see
Beacon4, 514 S.W.3d at 173, we conclude that the 1983 AG Opinion merits considerable
deference given its issuance contemporaneously with the General Assembly’s enactment
of the 1982 Amendment and its consistency with the 1980 and 1981 opinions referenced
by legislators who sponsored the 1982 Amendment. See id.

C. 2014 Amendment to Tennessee Code Annotated § 57-4-306

Having concluded that the General Assembly’s intent in enacting the 1982
Amendment was to require solely those municipalities that did not operate their own
school systems to share liquor-by-the-drink tax proceeds with the counties in which they
were located, we further determine that nothing in the General Assembly’s adoption of
the 2014 Amendment contradicts this conclusion. It is undisputed that the 2014
Amendment was not adopted with retroactive application. When analyzing legislative
intent, we may view a subsequent, non-retroactive amendment as “‘declaratory of the
original legislative intent.’” See Sneed v. City of Red Bank, 459 S.W.3d 17, 32 (Tenn.
2014) (quoting Fretwell v. Chaffin, 652 S.W.2d 755, 757 (Tenn. 1983)). However, being
mindful of the thirty-two-year time span between the 1982 and 2014 Amendments, we
determine that the best indicator of legislative intent in this instance is the legislative
history surrounding the 1982 Amendment itself.

Moreover, although the 2014 Amendment provided for a process by which
counties that were owed funds by municipalities under Tennessee Code Annotated § 57-
4-306 could seek those funds and negotiate settlements as applicable, nothing in the
amended statutory language provided that municipalities operating their own
kindergarten through twelfth-grade school systems, separate from the counties in which
the municipalities were located, owed such funds to the corresponding counties. See
Tenn. Code Ann. § 57-4-306 (Supp. 2014); 2014 Tenn. Pub. Acts, Ch. 901 § 1 (H.B.
1403). As amended in 2014, Tennessee Code Annotated § 57-4-306(a) provided:

(a) All gross receipt taxes collected under § 57-4-301(c) shall be
distributed by the commissioner of revenue as follows:

(1) Fifty percent (50%) to the general fund to be earmarked for
education purposes; and

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 (2) The other fifty percent (50%) to be distributed to local
political subdivisions as follows:

(A) Collections for privileges exercised in an incorporated
municipality shall be distributed by the commissioner
to the city recorder; and

(B) Collections for privileges exercised in an
unincorporated area of the county shall be distributed
by the commissioner to the county trustee.

Subsection (a) was thus amended to expressly provide for more than one local political
subdivision, with distribution of collections for privileges exercised to be sent to the city
recorder for those collections originating from a municipality and to the county trustee
for those collections originating from unincorporated areas of a county. See Tenn. Code
Ann. § 57-4-306(a) (Supp. 2014). Subsections (b) through (h) then provided a
distribution scheme for liquor-by-the-drink proceeds received from July 1, 2014, until
June 30, 2015. See id. at -306(b)-(h).9 Although we find a detailed analysis of this
distribution scheme unwarranted in an analysis of the prior version of the statute, we have
examined the distribution scheme of the 2014 Amendment and determined that it
essentially follows the ongoing intent of the General Assembly to have a portion of the
proceeds from the liquor-by-the-drink tax benefit children who attend school within the
jurisdiction, incorporated municipality or unincorporated county, wherein the gross
receipts originated. See id. Insofar as the County argues that the 2014 Amendment
demonstrates a contrary legislative intent underlying the 1982 Amendment, the County’s
argument is unavailing.

Finally, the County references the trial court’s decision being appealed in one of
the other three cases currently before this Court on the same underlying issue,
Washington Cty. Sch. Sys. v. City of Johnson City, No. E2016-02583-COA-R9-CV, as
supporting the County’s general position that public policy regarding funding education
equally for all students supports the conclusion that a municipality must share its liquor-
by-the-drink tax revenue with the county in which it is located. We note, however, that
Tennessee Code Annotated § 57-3-106(a) (2013 & Supp. 2017) provides for a local
option election in any county wherein the voters may decide to either permit or forbid
“the manufacture, receipt, sale, storage, transportation, distribution and possession of
alcoholic beverages . . . .” Even in counties, such as the County in this action, that have

9
As noted previously, the General Assembly has amended Tennessee Code Annotated § 57-4-306 each
year since the 2014 Amendment, extending the amended language in subsequent years, one year at a time.
See 2015 Tenn. Pub. Acts, Ch. 220 §§ 1, 2 (S.B. 990); 2016 Tenn. Pub. Acts, Ch. 885 §§ 1, 2 (H.B.
1691); 2017 Tenn. Pub. Acts, Ch. 346 §§ 1, 2 (S.B. 1262).
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not approved a liquor-by-the-drink referendum, students benefit from the distribution of
fifty percent of liquor-by-the-drink gross receipt taxes to the state’s general fund,
earmarked for education. See Tenn. Code Ann. § 57-4-306(a)(1).

Moreover, such an argument concerning perceived fairness of the tax distribution
scheme provided by the statute would properly be directed to the General Assembly
rather than to this Court. See, e.g., City of Athens Bd. of Educ., 467 S.W.3d at 466
(“However compelling this argument [regarding the city’s receiving its “fair share” of
property taxes designated for county capital improvements] may be, it is properly
directed to others, e.g., the General Assembly, not to this Court.”). Inasmuch as we must
apply Tennessee Code Annotated § 57-4-306 as it was amended in 1982 and as the
General Assembly intended the amendment, we hold that, as a matter of law, the
applicable version of the statute did not require the Cities to share their liquor-by-the-
drink proceeds with the County. The trial court did not err in granting summary
judgment in favor of the Cities on this issue.

V. The Cities’ Constitutional Issue

In support of their position, the Cities raise an additional issue, arguing that if this
Court were to adopt the County’s interpretation of Tennessee Code Annotated § 57-4-306
(2013) and hold that a privilege tax collected in the Cities should have benefitted citizens
of another jurisdiction, such a holding would render the statute in violation of Article II,
Section 29 of the Tennessee Constitution. Having determined that the applicable version
of Tennessee Code Annotated § 57-4-306 did not require the Cities to share their liquor-
by-the-drink proceeds with the County, we further determine the Cities’ constitutional
argument to be pretermitted as moot.

VI. Conclusion

For the reasons stated above, we affirm the trial court’s judgment. This case is
remanded to the trial court, pursuant to applicable law, for enforcement of the trial court’s
judgment and collection of costs assessed below. The costs on appeal are assessed
against the appellants, Sullivan County, Tennessee, and the Sullivan County Board of
Education.

_________________________________
THOMAS R. FRIERSON, II, JUDGE

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