Football and beer a perfect match? Maybe, maybe not.

Becky Campbell • Apr 6, 2019 at 12:00 AM

Legislation awaiting Gov. Bill Lee’s signature could help draw more big-name events to public university campuses by allowing alcohol sales in certain situations.

But don’t expect East Tennessee State University to jump on that boat right away, if at all.

The bill was introduced by Sen. Becky Duncan Massey, R-Knoxville, and Rep. Cameron Sexton, R-Crossville, in February. Massey’s reasoning for proposing the legislation was that Knoxville was losing out on bringing more popular artists to Knoxville because of the alcohol ban on college campuses.

Knoxville’s civic center only seats 6,500, while Thompson-Boling Arena seats 22,000, and Neyland Stadium — the sixth largest stadium in the world — seats around 102,000.

The bill summary says the legislation:

“Designates any facility on the campus of a public institution of higher education that is designed and used for sporting events sanctioned by the institution a “sports authority facility” for purposes of consumption of alcoholic beverages on the premises.”

But the bill does not give broad permission to sell alcohol at public college or university to the public that might attend a campus-sanctioned sports event.

The scope is narrowed to only apply to suites or sky boxes at a campus-sanctioned event, but if the sports facility is contracted for a concert or other outside event, then the event sponsor could sell alcohol to ticketholders.

“This bill would allow universities in Tennessee, including ETSU, to have the option of serving alcohol at its athletic facilities on campus.” said Joe Smith, ETSU’s executive assistant to the president for university relations and chief communications officer. 

“If in the future ETSU were to pursue this avenue, additional levels of approval would be required, including that of the university’s Board of Trustees,” he said.

Estimated Fiscal Impact:

According to the fiscal note attached to the bill, it could have a positive impact on state and local revenue.

The fiscal note is based on a number of assumptions, including:

•This legislation applies to each facility on the campus of a public institution of higher education in Tennessee that is used for sporting events sanctioned by the institution;

• The Tennessee Higher Education Commission reports that there are approximately 50 facilities in Tennessee that would meet the definition of a sports authority facility, as defined in this legislation;

• There is an initial application fee of $300 and a $2,000 annual fee payable to the Tennessee Alcoholic Beverage Commission;

• A one-time increase in state revenue to the ABC of $15,000 (50 facilities x $300 application fee);

• A recurring increase in state revenue to the ABC of $100,000 (50 facilities x $2,000 annual fee);

• No additional personnel or resources will be required by the ABC;

• Local privilege tax is estimated to be $1,500 annually. Any increase in local government expenditures for collecting local privilege taxes is estimated to be not significant;

• State and local sales taxes and a 15-percent liquor-by-the-drink tax will be assessed on alcoholic beverage sales;

• The current state sales tax rate is 7 percent; the average local option sales tax rate in Tennessee is 2.5 percent; the effective rate of apportionment to local government pursuant to the state- shared allocation is estimated to be 3.617 percent; and

• Pursuant to Tenn. Code Ann. § 57-4-306(a), 50 percent of the 15 percent liquor-by-the-drink tax is allocated to the state General Fund and 50 percent is distributed to the local government.

There are additional assumptions in the note that deal with the sizes of the 50 facilities affected by the bill and mathematical calculations to estimate the tax base used to determine the estimated fiscal impact.

In 2018, Middle Tennessee State University and Tennessee State University began selling alcohol to fans at sporting events after legislation passed to specifically allow those institutions to do it.

That law allows those universities to sell no more than three beers per person; the purchaser must be wearing a specific armband, but the sales apply to anyone over 21 at the event.  

This new law, however, only applies to attendees at campus-sanctioned sports events who have seats in suites or to anyone 21 and over who attend concerts or other privately contracted events held at those sports facilities.

Some of the limitations for universities ability to sell alcohol at sports events depends on which athletic conference they belong to and the rules implemented by that conference. MTSU plays in the Conference USA while TSU is in the Ohio Valley Conference.

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