If a city owns a museum but runs it through a partnership with a nonprofit, does the state's blind-vendor preference still apply to the gift-shop snack bar?

Subject

Opinion No. 11-39, Applicability of Blind Vendors Program to Municipal Property, April 28, 2011

Plain-English summary

Tennessee gives blind operators a statutory preference to run vending facilities (snack bars, automatic vending machines, cafeterias, counters, catering, food trucks, cart services) on "public property." The senator asking this question wanted to know two practical things about the Pink Palace Family of Museums in Memphis: (1) is the program triggered when the city owns the building but the day-to-day operations sit with a nonprofit through a joint venture, and (2) can the public-property side keep a slice of the vending profits?

The AG answered yes to the first question and mostly no to the second. Ownership by the city is enough to bring the location inside the program; pushing operations to a third party does not strip the location of its public character. As for profit sharing, the statute that authorizes the program allows the public-property management to receive a percentage of sales only for cafeteria operations. By the rule that listing one thing excludes the others, the AG read the silence on snack bars, catering, and counters as a prohibition on retaining profits from those categories.

Currency note

This opinion was issued in 2011. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Tenn. Code Ann. §§ 71-4-501 et seq. establishes Tennessee's Blind Vendors Program. The statute defines "public property" broadly: "all property owned or leased by the state of Tennessee, any county, municipality or any other entity which is created by act of the general assembly to perform any public function." Tenn. Code Ann. § 71-4-502(4). "Vending facility" is also defined broadly, sweeping in automatic vending machines, cafeterias, snack bars, catering services, food concession vehicles, cart services, shelters, and counters. Tenn. Code Ann. § 71-4-502(5).

Section 71-4-503(b) sets the financial terms: public-property management must cooperate with the Department of Human Services, must furnish the space and utilities for vending facilities at no cost, and may receive "a percentage of sales in cafeteria operations." Nothing in the statute authorizes the public-property side to capture profits from non-cafeteria categories.

The AG leaned on three earlier opinions reaching the same conclusion about third-party operating arrangements, including Op. Tenn. Att'y Gen. No. 07-91 and No. 01-128, and on the Court of Appeals' decision in Graybeal v. Tennessee Dept. of Human Services (Tenn. Ct. App. 2009), which directed liberal construction of the program "to give blind individuals the greatest possible opportunities."

Common questions

Does the program apply to property a city leases instead of owns?

Yes. The statutory definition of "public property" covers property "owned or leased" by a municipality. The AG focused on ownership in this opinion because the Pink Palace facts involved a city-owned building, but the leased-property branch of the definition was the same statutory text.

Can a nonprofit operating a city facility get out from under the program by adding the right contract language?

Based on this opinion, no. The AG observed that Tenn. Code Ann. § 71-4-502(4) does not include any exception for property owned by a city but operated by a third party, and that the program is to be construed liberally. The arrangement at issue was a joint venture between Memphis and a nonprofit, and the AG read that as still falling inside the statute.

What can the public-property side actually keep from a vending facility on its property?

Under Tenn. Code Ann. § 71-4-503(b) as read in this opinion, only a percentage of cafeteria sales. For snack bars, catering services, and counters, the AG concluded the public-property management could not retain a percentage of profits. The reasoning was the expressio unius canon, that mentioning cafeteria operations specifically excludes the rest.

Does "joint venture" mean something specific in this opinion?

The AG did not turn the analysis on the formal legal label. The facts the senator presented described the City of Memphis as the owner of the Pink Palace, with the city retaining ownership under the agreement that handed operations to a nonprofit partner. The label "joint venture" appeared in the facts, but the AG's reasoning would apply equally to a management contract, a service agreement, or any other arrangement where the city kept ownership and a third party ran operations.

Did the AG say anything about how a city must implement the preference?

Not in this opinion. The question was confined to applicability and revenue-sharing. The mechanics of how a public-property manager identifies blind vendors, contracts with them, or coordinates with the Department of Human Services were not addressed.

Citations

• Tenn. Code Ann. §§ 71-4-501, et seq.
• Tenn. Code Ann. § 71-4-502(4)
• Tenn. Code Ann. § 71-4-502(5)
• Tenn. Code Ann. § 71-4-503(b)
• Graybeal v. Tennessee Dept. of Human Services, No. M2007-02320-COA-R3-CV, 2009 WL 1470473 (Tenn. Ct. App. 2009)
• Op. Tenn. Att'y Gen. No. 07-91 (June 8, 2007)
• Op. Tenn. Att'y Gen. No. 06-037 (Feb. 21, 2006)
• Op. Tenn. Att'y Gen. No. 01-128 (Aug. 17, 2001)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2011/op11-039.pdf

Original opinion text

April 28, 2011
Opinion No. 11-39
Applicability of Blind Vendors Program to Municipal Property

QUESTIONS

1. Does the Blind Vendors Program, Tenn. Code Ann. §§ 71-4-501, et seq., apply to property owned by a municipality and operated by a joint venture between a municipality and a nonprofit corporation?

2. Is the "public property" management allowed to retain any percentage of profits from the operation of "snack bars, catering services, [and] counters?"

OPINIONS

1. Yes, property owned or leased by a municipality is subject to the provisions of Tenn. Code Ann. §§ 71-4-501, et seq., even if such property is operated as a joint venture between the municipality and a nonprofit corporation.

2. No, as provided in Tenn. Code Ann. § 71-4-503(b), the space for vending facilities and utilities must be provided at no cost. Public property management, however, may be entitled to a percentage of sales in cafeteria operations.

ANALYSIS

1. As provided in Tenn. Code Ann. §§ 71-4-501, et seq., blind individuals are entitled to a preference in the operation of vending facilities on public property in Tennessee (the "Blind Vendors Program"). "Public property" is defined to include "all property owned or leased by the state of Tennessee, any county, municipality or any other entity which is created by act of the general assembly to perform any public function." Tenn. Code Ann. § 71-4-502(4). This Office has previously opined that the requirements of the Blind Vendors Program apply to vending facilities operated on property owned or leased by local municipalities and counties even if accomplished through a third party contract. See Op. Tenn. Att'y Gen. No. 07-91 (June 8, 2007); Op. Tenn. Att'y Gen. No. 06-037 (Feb. 21, 2006); Op. Tenn. Att'y Gen. No. 01-128 (Aug. 17, 2001).

In the facts you have provided, the City of Memphis is the owner of the Pink Palace Family of Museums. The Museum is operated as a "joint venture" between the City of Memphis and a nonprofit corporation. Under the agreement for the operation of the Museum, however, the City of Memphis specifically retains ownership of this property.

As noted above, Tenn. Code Ann. § 71-4-502(4) defines "public property" to include all property owned or leased by a municipality. This statute does not include an exception for property owned by a municipality but operated by a third party. The Court of Appeals has recently recognized that the statutes regarding the Blind Vendors Program are to be liberally construed to give blind individuals "the greatest possible opportunities." Graybeal v. Tennessee Dept. of Human Services, No. M2007-02320-COA-R3-CV, 2009 WL 1470473, *3 (Tenn. Ct. App. 2009). Accordingly, it is our opinion that the priority established by Tenn. Code Ann. §§ 71-4-501, et seq., applies to property owned by a municipality even if that property is operated in a joint venture with a nonprofit corporation.

2. You have also asked whether public property management is allowed to retain any percentage of profits from the operation of vending facilities through the Blind Vendors Program. For purposes of the Blind Vendors Program, "vending facility" includes "automatic vending machines, cafeterias, snack bars, catering services, food concession vehicles, cart services, shelters, counters, and any appropriate equipment necessary for the sale of articles or services described in this subdivision (5)." Tenn. Code Ann. § 71-4-502(5). Public property management must cooperate with the Department of Human Services "in whatever manner necessary" to establish a vending facility under the Blind Vendors Program and the space for vending facilities and utilities must be provided at no cost. Tenn. Code Ann. § 71-4-503(b). The only statutory provision for the payment of a percentage of sales to the public property management is for cafeteria operations. Id.

In construing statutes, courts must "ascertain and give effect to the legislative intent without unduly restricting or expanding a statute's coverage beyond its intended scope." Wilson v. Johnson County, 879 S.W.2d 807, 809 (Tenn. 1994). When the statute is unambiguous, legislative intent is determined from the plain and ordinary meaning of the language used in the statute. Freeman v. Marco Transp. Co., 27 S.W.3d 909, 911 (Tenn. 2000). In addition, it is a fundamental rule of statutory construction that the mention of one subject in a statute means the exclusion of other subjects that are not mentioned. Phillips v. Tenn. Technological University, 984 S.W.2d 217, 219 (Tenn. 1998).

In this case, the General Assembly has expressly allowed public property management to receive payment of a percentage of sales for cafeteria operations. Tenn. Code Ann. § 71-4-503(b). This statute, however, is silent as to any payment to public property management for the operation of any other type of vending facility. Therefore, it is our opinion that public property management is not allowed to retain any percentage of profits from vending facilities operated under the Blind Vendors Program other than cafeteria operations.

ROBERT E. COOPER, JR.
Attorney General and Reporter

CHARLES L. LEWIS
Deputy Attorney General

DIANNE STAMEY DYCUS
Deputy Attorney General

Requested by:
Honorable Beverly Marrero
State Senator
War Memorial Building, Suite 312
Nashville, TN 37243