Title of Regulation: 3VAC5-70. Other Provisions (amending 3VAC5-70-20).

Statutory Authority: § 4.1-103, 4.1-111, and 4.1-213 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: January 11, 2017.

Effective Date: February 3, 2017.

Agency Contact: Shawn Walker, Director of Law Enforcement, Department of Alcoholic Beverage Control, 2901 Hermitage Road, Richmond, VA 23220, telephone (804) 213-4569, FAX (804) 213-4411, or email shawn.walker@abc.virginia.gov.

Basis: Section 4.1-103 of the Code of Virginia authorizes the board to promulgate regulations in accordance with the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia) and § 4.1-111 of the Code of Virginia authorizes the board to amend or repeal regulations adopted by it in accordance with the Administrative Process Act.

Purpose: The purpose of the amendments are to conform to the language found in § 4.1-213 of the Code of Virginia, which was amended by Chapter 787 of the 2014 Acts of Assembly to eliminate the minimum size and one gallon maximum limitations on the size of cider containers. The amendments will have no adverse impact on the health, safety, or welfare of the citizens of the Commonwealth.

Rationale for Using Fast-Track Rulemaking Process: This proposal is expected to be noncontroversial as the proposed amendment is merely bringing the regulation into conformity with the language of § 4.1-213 of the Code of Virginia related to the permitted sizes of containers of cider. The change in this statute was promulgated at the request of members of the regulated community.

Substance: The amendments remove the minimum container size of 375 milliliters and the maximum size limitation of one-gallon and add language consistent with § 4.1-213 D of the Code of Virginia related to the container sizes of cider.

Issues: The primary advantage for the agency and regulated community is to update the regulation to conform with § 4.1-213 D of the Code of Virginia. There are no disadvantages to the public or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Alcoholic Beverage Control Board (Board) proposes to conform this regulation to statutory language in 2014 legislation concerning the sale of cider.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. Chapter 787 of the 2014 Acts of Assembly¹ added the following to § 4.1-213 of the Code of Virginia:

"Cider containing less than seven percent of alcohol by volume may be sold in any containers that comply with federal regulations for wine or beer, provided such containers are labeled in accordance with Board regulations. Cider containing seven percent or more of alcohol by volume may be sold in any containers that comply with federal regulations for wine, provided such containers are labeled in accordance with Board regulations."

The Board proposes to add this same language to the regulation. Adding the language to the regulation will have no impact on the law in effect, but may be beneficial in that readers of the regulation may be better informed of the law in effect concerning the permitted sale of cider in the Commonwealth.

Businesses and Entities Affected. As the proposed language is already in statute, adding it to the regulation does not affect anyone beyond potentially enlightening readers of the regulation who are not aware of the statute.

Localities Particularly Affected. The proposed amendment does not disproportionately affect particular localities.

Projected Impact on Employment. The proposed amendment does not significantly affect employment.

Effects on the Use and Value of Private Property. The proposed amendment does not affect the use and value of private property.

Real Estate Development Costs. The proposed amendment does not affect real estate development costs.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. The proposed amendment does not affect costs for small businesses.

Alternative Method that Minimizes Adverse Impact. The proposed amendment does not adversely affect small businesses.

Adverse Impacts:

Businesses. The proposed amendment does not adversely affect businesses.

Localities. The proposed amendment does not adversely affect localities.

Other Entities. The proposed amendment does not adversely affect other entities.

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¹ See http://leg1.state.va.us/cgi-bin/legp504.exe?141+ful+CHAP0787

Agency's Response to Economic Impact Analysis: The Department of Alcoholic Beverage Control concurs with the economic impact analysis prepared by the Department of Planning and Budget.

Summary:

Pursuant to Chapter 787 of the 2014 Acts of Assembly, the amendments expand the sizes of containers in which cider is permitted to be sold in the Commonwealth.

3VAC5-70-20. Procedures for handling cider; authorized licensees; containers; labels; markup; age limits.

A. The procedures established by regulations of the board for the handling of wine having an alcoholic content of not more than 14% by volume shall, with the necessary change of detail, be applicable to the handling of cider, subject to the following exceptions and modifications.

B. Licensees authorized to sell beer and wine, or either, at retail are hereby approved by the board for the sale of cider and such sales shall be made only in accordance with the age limits set forth below in this section.

C. Containers of cider shall have a capacity of not less than 12 ounces (375 milliliters if in a metric-sized container) nor more than one gallon (three liters if in a metric-sized container). containing less than 7.0% alcohol by volume may be sold in any containers that comply with federal regulations for wine and beer provided such containers are labeled in accordance with board regulations. Cider containing 7.0% of more alcohol by volume may be sold in any containers that comply with federal regulations for wine, provided the containers are labeled in accordance with board regulations.

D. If the label of the product is subject to approval by the federal government, a copy of the federal label approval shall be provided to the board.

E. The markup or profit charged by the board shall be $.08 per liter or fractional part thereof.

F. Persons must be 21 years of age or older to purchase or possess cider.

G. The provisions of subsection A and subdivision B 4 of 3VAC5-60-20 shall not be applicable to the sale of cider by wholesale wine licensees to retail licensees of the board.