Tenn. Comp. R. & Regs. 0100-01-.05

Current through October 22, 2024

Section 0100-01-.05 - APPLICATIONS BY PRIVATE CLUBS

(1) Public Notice. Each club, as defined by T.C.A. § 57-4-102, applying for a license to sell alcoholic beverages for on-premises consumption has a duty to place a notice in a newspaper of general circulation in the county or municipality where the club is or will be located indicating the club's intention to apply for a license with the Tennessee Alcoholic Beverage Commission. The notice is required to contain the information prescribed in subsection (2) below. A copy of the published notice is required to be submitted with the club license application.

(2) Format of Notice. Each private club applicant shall place the following notice in the newspaper as described above:

PRIVATE CLUB LIQUOR LICENSE NOTICE

Take notice that __________________________________________________________

(Name of Club)

intends to seek a license from the Tennessee Alcoholic Beverage Commission, 500 James Robertson Parkway; 3rd Floor; Nashville, Tennessee 37243, to sell alcoholic beverages to its members and guests for consumption on the club's premises at ___________________________________________________. The officers of

(Address of Club's Premises)

________________________________ are: ___________________________________

(Name of Club)

_______________________________________________________________________

(Name and Address of Officers)

The club currently has approximately __________________________ regular dues paying members.

_______________________________________________________________________

(Name/Address of Person Actually in Charge of Sale of Alcoholic Beverages)

will be in actual charge of the sale of alcoholic beverages at the club's premises and has applied to ______________________________________________________________

(City or County)

for a certificate of good moral character.

(3) Change of Manager. Whenever there is a change in person or persons who are in actual charge of the sale of alcoholic beverages by a private club licensee, the licensee must submit to the Alcoholic Beverage Commission a certificate of good moral character for the new person or persons who will be in actual charge of the sale of alcoholic beverages within thirty (30) days of the change. Nothing in this rule should be interpreted to relieve a private club licensee from the obligation to inform the Commission of a change in management as set out in Rule 0100-01-.03(1).

(4) Application Process for New Private Club Licenses.

(a) A complete application includes the contact name and information for club officers that will control the sale of alcohol and must be submitted in a manner specified by the Commission. In addition, the following documents must be submitted in support of an on-premises consumption license application by a private club:

1. Charter, constitution, and any amendments, if the club is incorporated;

2. A valid lease, lease assignment, or sublease, and/or deed, or other instrument indicating the club's ownership and/or right of possession of the physical premises;

3. A certificate of good moral character, issued by the city or county, for the person(s) in charge of the sale of alcoholic beverages;

4. Verification that the applicant has complied with 0100-01-.05(2) and 0100-01-.05(3);

5. Menu;

6. Price schedule as set forth by the Department of Revenue;

7. Verification that all alcohol handling employees have TABC issued server permits;

8. Department of Health issued health inspection, or an equivalent government issued document from an appropriate inspector; and

9. Business hours.

(b) In addition, any of the following documents which exist must be submitted:

1. Bylaws;

2. Minutes of membership or board meetings;

3. Management contract;

4. Loan or financing agreements;

5. Past tax returns (2 years);

6. Resolutions relative to changes in name, purpose, or location of club;

7. Financial statements;

8. Written approval of use and occupancy by appropriate local authorities, where applicable.

(c) Applicants should submit any other documents which indicate the club's compliance with licensing requirements. Such documentation may include items such as announcements of past activities, newsletters sent to members, ledgers reflecting payment of dues in past years and disbursement of funds, IRS recognition as tax-exempt non-profit organization, sworn statements regarding the club's history and activities, etc. The applicant for a license has the burden of proving that it meets the requirement of the law and is, therefore, eligible to hold a license to sell alcoholic beverages. The fact that the applicant submits all the documents listed above does not automatically entitle the applicant to a license. Further, the applicant may be required to submit additional information or documentation if questions arise.

(d) A license for a private club to sell alcoholic beverages on its premises may only be granted by action of the Alcoholic Beverage Commission itself.

(5) License Renewal and Transfer of Location by Private Clubs.

(a) License Renewal. Each license issued is valid for one (1) year from the date of issuance and expires at midnight on the expiration date. Both the issuance date and the expiration date shall be clearly printed on the face of the license. Failure to timely and properly file the material required by this rule shall result in the expiration of the license.

1. On or before the expiration date of the license, the licensee shall submit an application for license renewal and the appropriate license fee to the nearest office of the Alcoholic Beverage Commission.

2. Applications for license renewal need not submit material that is required of new applicants by Rule 0100-01-.05(5), unless otherwise requested by the Commission.

3. All financial records shall be maintained and available for inspection for a minimum of three (3) years.

(b) Transfer of Location. Licenses issued to private clubs may be transferred from one location to another only upon the following conditions:

1. Written request for approval of such a transfer with adequate explanation for the need of such a transfer.

2. Submittal of a satisfactory lease or deed to the proposed new location.

3. Written approval of the use and occupancy of the proposed new space by the appropriate local officials.

4. Inspection by the Tennessee Alcoholic Beverage Commission.

5. Submittal of a petition or resolution in favor of such a transfer which reflects that it was adopted by a quorum of the club's members at a membership meeting held pursuant to the club's charter and bylaws.

6. When the proposed transfer is into a new jurisdiction, the club shall publish a new notice in compliance with paragraphs (1) through (3) of this rule and supply copies of that notice along with required sworn statement to the ABC as well as a certificate of good moral character upon the person pursuant to T.C.A. § 57-4-201(c)(2).

7. No such transfer shall be approved unless the Commission, in its sole discretion, determines that the licensee continues to meet the requirements of these rules and Chapter 4 of Title 57, T.C.A.

(6) Definitions. For the purpose of this chapter, the following definitions shall be used:

(a) "Non-profit association" shall mean a legal entity which is not-for-profit and has at least the following characteristics:

1. Financial statements covering the immediately preceding years of the club's operations. Financial statements shall clearly indicate the amount and source of all club receipts and the amount and purpose of all club disbursements in specific categories consistent with standard accounting practices. In addition, the financial statements must show a balance sheet of the club's assets and liabilities at the end of the immediately preceding year. Copies of IRS Form W-2 for each employee shall be maintained and made available upon request.

2. Bylaws or rules of the association which provide membership application procedures. Those bylaws or rules shall provide for (a) at least one (1) week waiting period between application for membership and election to membership and (b) a committee composed of three (3) or more members of the club vested with the authority by charter, bylaws or regulations, to approve, reject, or make recommendations on membership applications.

3. An association shall have a written guest policy which reasonably limits access to club facilities by guests.

(b) "In existence and operating" shall mean for at least two (2) years prior to the application for a club license, the association shall have had at least an annual meeting of the membership with a quorum present, shall have taken actions toward the performance of their non-profit purposes, and shall have elected a governing body which meets periodically.

(c) "Regularly paying dues" shall mean that the members have paid dues on a regular schedule at least annually.

(d) "Salary" shall mean a fixed periodical compensation paid for services rendered. No salary may be paid which is based on the amount of liquor or malt beverages sold or on the profits made from such sales.

(e) "Suitable kitchen" shall mean that the kitchen is adequate to prepare regular meals. Said kitchen shall have sufficient cookware, tableware, and food preparation and storage equipment to actually store, prepare, and serve meals. These facilities shall be inspected and approved by appropriate local zoning and codes inspectors.

(7) Additional Rules for Private Clubs.

(a) Each club shall maintain a complete membership roster. The membership roster shall contain the names of all members, their addresses, and the date on which their dues are to be paid. Private club licensees shall maintain their membership records at the club premises and make them available to representatives of the Alcoholic Beverage Commission during hours when the club is open to its members. Since minimum membership is one hundred (100), failure to have ten (10) members at any annual meeting shall be prima-facie evidence of the non-existence of the association.

(b) All salaries, rents, or management fees paid by a private club to any person or legal entity must be reasonable and proper compensation under the circumstances.

(c) No private club shall dispense alcoholic beverage on the premises of the club to any person other than a bona fide member of the club or a bona fide guest of a member of the club. Alcoholic beverages should not be served in an area to which the general public is admitted. If the club's bar area is in a separate room from that to which the general public is admitted and admission to the bar is limited to members of the club and their guests, the bar may remain open. If, however, the bar is in the room to which the general public is admitted, no alcoholic beverages are to be served in that room during the time the general public is present.

(d) The Alcoholic Beverage Commission shall determine whether a club exists exclusively for non-profit purposes. No such license shall be issued where the ABC determines that the purpose is to make a profit.

(e) Violation of any of the rules set out herein may, in the judgment of the ABC, result in the suspension or revocation of the club's license or the imposition of a fine under the rules of the Commission. These rules are in addition to the other rules of the ABC and shall apply to club licensees only.

(f) Whenever membership in the club drops below one hundred (100), the club ceases to have facilities in which to serve its members or guests, or the club discontinues its operations, it shall surrender its license immediately.

(g) No private club licensed by the Commission shall utilize any name other than the name approved by the Commission and appearing on the club's license. Use of a d/b/a name is prohibited.

Tenn. Comp. R. & Regs. 0100-01-.05

Original rule filed July 29, 1980; effective October 29, 1980. Amendment filed April 26, 1984; effective May 26, 1984. Amendment filed August 20, 1985; effective November 14, 1985. Amendment repealing and replacing the rule was filed March 10, 2010; effective June 8, 2010. Repeal and new rules filed January 25, 2019; to have become effective April 25, 2019. However, the Government Operations Committee filed a 60-day stay of the effective date of the rules; new effective date June 24, 2019. Amendments filed February 9, 2024; effective 5/9/2024.

Authority: T.C.A. §§ 57-1-209, 57-3-104, 57-4-102, and 57-4-201.