When a Texas City or County Can Regulate Alcohol, and Where State Preemption Ends Their Authority

A Texas city or county can regulate alcohol businesses only where the Alcoholic Beverage Code gives it the power, such as distance rules near schools and churches, extended late-night hours, and a capped local permit fee. Outside those grants, the Code says it exclusively governs alcohol, and a local rule may not hold licensed businesses to stricter standards than similar businesses without a license. Ordinary rules that apply to every business alike remain available to local governments.

The default: the Code governs

Three provisions set the baseline:

• Section 1.06: unless the Code specifically provides otherwise, the manufacture, sale, distribution, transportation, and possession of alcoholic beverages are governed exclusively by the Code.
• Section 109.57(a) and (b): except as the Code expressly authorizes, no regulation, charter, or ordinance may impose stricter standards on premises or businesses required to have a license or permit than on similar ones that are not, and the Legislature’s stated intent is that the Code exclusively governs alcohol regulation and that local governments may not discriminate against license and permit holders except as the Code permits.
• Section 11.38(c): nothing in the Code grants a political subdivision authority to regulate permittees, except by collecting the fees the Code authorizes and exercising powers granted elsewhere in the Code.

The Supreme Court of Texas applied these provisions in Dallas Merchant’s & Concessionaire’s Association v. City of Dallas, 852 S.W.2d 489 (Tex. 1993). Dallas had adopted an ordinance prohibiting alcohol sales within 300 feet of a residential area. The court held that the ordinance was preempted: a subject within a home-rule city’s broad powers is preempted only when the Legislature acts “with unmistakable clarity,” and Section 109.57(b) expressed that intent clearly.

Where the Code grants local authority

Chapter 109 of the Alcoholic Beverage Code and related provisions give cities and counties specific powers:

Power	Who holds it	Source
Prohibit liquor sales in all or part of residential areas	a city, by charter	Section 109.31
Prohibit beer sales in residential areas; regulate beer sales and set beer hours within the Code's limits	an incorporated city or town, by charter or ordinance	Section 109.32
Distance rules near churches, schools, and public hospitals, and variances from them	city governing body; commissioners court outside cities	Section 109.33
Distance rules near day-care and child-care facilities for certain retailers	same	Section 109.331
Adopt extended hours to 2 a.m. where population thresholds are not met	city governing body; commissioners court outside cities	Sections 105.03(d), 105.05(d)
Levy a local permit fee, capped in relation to the state fee	city; county	Section 11.38
Location rules for sexually oriented businesses, businesses earning 75 percent or more of gross revenue from on-premise alcohol, and some border-area and private-club businesses	local governments, as otherwise permitted by law	Section 109.57(d), (e)

Wet and dry status is not a regulatory power of the city council or commissioners court. It is set by voters in local option elections, and local clerks certify it.

Section 109.57(c) also preserves otherwise valid zoning regulations enacted before June 11, 1987, and later amendments that loosen them or add no new restrictions on licensees.

What overreach looks like

A local requirement is outside that authority when it matches one of these patterns:

• A stricter standard with no Code grant. A condition imposed only on licensed businesses, such as extra operating limits or permits that similar unlicensed businesses do not face, with no provision of the Code authorizing it.
• The wrong distance method. A refusal based on a distance measured by a method other than the one Section 109.33(b) fixes for the type of institution.
• A certification refused on grounds outside the statute. The local certification asks whether the location is wet and whether a valid order or ordinance prohibits the sale; TABC tells local officials to certify based on the latest local option elections, not the type of permit sought.
• A permissive provision read as a mandate. Treating a power the Code says a local government “may” use as a rule that already applies, when it was never adopted.

Testing a local rule

For any local requirement, ask which provision of the Code authorizes it, whether the local government actually adopted it in the form the Code allows, and whether it applies equally to comparable businesses without a license. A rule that fails any of these questions is one to raise with the local government, and with counsel, before complying or abandoning a location.

This article is general information about Texas alcoholic beverage law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and TABC rules change; confirm current requirements with the Texas Alcoholic Beverage Commission, the relevant city or county, or a licensed Texas attorney before acting.