Title of Regulation: 3VAC5-70. Other Provisions (amending 3VAC5-70-10).

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

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: March 31, 2017.

Effective Date: April 15, 2017.

Agency Contact: LaTonya D. Hucks, Legal Liaison, Department of Alcoholic Beverage Control, 2901 Hermitage Road, Richmond, VA 23220, telephone (804) 213-4698, FAX (804) 213-4574, or email latonya.hucks@abc.virginia.gov.

Basis: Section 4.1-103 of the Code of Virginia authorizes the Alcoholic Beverage Control 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.

Section 4.1-111 of the Code of Virginia authorizes the board the authority to promulgate reasonable regulations necessary to carry out the provision of Title 4.1 of the Code of Virginia.

Section 4.1-212 of the Code of Virginia grants the board the authority to issue permits for the transportation of alcoholic beverages within or through the Commonwealth.

Purpose: The purpose of the amendments is to eliminate the requirement for the agency to issue a permit to commercial carriers (now motor carriers) regularly engaged in the transportation of alcoholic beverages within or through the Commonwealth. The amendment adds language to require motor carriers transporting alcoholic beverages to have in their possession a bill of lading or other commercial document describing the alcoholic beverages being transported and showing the names and addresses of the consignor and consignee who may lawfully ship and receive such shipment and requires that such documentation be provided to special agents of the board or any law-enforcement officer for inspection upon request.

Currently transportation permits are issued without cost. The agency has no electronic means to track these permits and as such they are not readily accessible to law-enforcement agencies. The amended language will bring regulation into conformity with current practice of the agency of deeming shipments of alcoholic beverages to be legal provided the motor carrier has bill of lading or other commercial document in its possession.

The amendments will have no impact on the public's safety. The proposed amendment will provide law enforcement the ability to quickly determine the legality of the shipment of alcoholic beverages.

Rationale for Using Fast-Track Rulemaking Process: This proposal is expected to be noncontroversial as it reduces a regulatory requirement on the transportation industry.

Substance: The amendments eliminate the requirement for motor carriers to obtain a transportation permit to lawfully transport alcoholic beverages within or through the Commonwealth provided that they have a bill of lading or other commercial document in their possession while transporting alcoholic beverages.

Issues: The primary advantage for the agency and the transportation industry is to conform current language to standard practices of this industry and eliminate a regulatory burden on motor carriers. The agency benefits by not having to expend personnel resources in issuing the no cost permits. 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 amend its Other Provisions regulation to eliminate the requirement that commercial carriers engaged in the regular transport of alcoholic beverages within or through Virginia obtain a Board permit for such transportation. Instead of requiring a permit, the Board proposes to allow carriers to use bills of lading¹ or other commercial memorandum describing what is being shipped and the addresses and names of who is shipping the alcohol and who is receiving it.

Result of Analysis. Benefits outweigh costs for all proposed changes.

Estimated Economic Impact. Current regulation requires commercial carriers who will be transporting alcohol in or through Virginia to first obtain a permit from the Board to do so. This permit allows the Board to know what is being shipped and allows special agents of the board and law-enforcement officers to check shipments when necessary to ensure that the permit matches the cargo. Although there is no fee charged to commercial carriers for Board issued permits, they still incur time costs for obtaining this extra document. The Board also incurs costs for staff time to issue such permits.

The Board proposes to eliminate the requirement that commercial carriers obtain a permit and instead let them use bills of lading and other commercial memorandum that they would have in their possession as a matter of course when completing the commercial transaction of shipping cargo in the same manner that permits are now used. Commercial carriers will be required to have this documentation in their possession and present it to special agents of the Board or law-enforcement officers if asked. Since carriers already have documentation of their shipments for verification of receipt and delivery of cargo, no entities are likely to incur costs on account of this proposed regulation. Both commercial carriers and Board staff are likely to see small saving for time not spent on obtaining or issuing permits.

Businesses and Entities Affected. These proposed regulatory changes will affect all commercial carriers who transport alcoholic beverages in or through the Commonwealth of Virginia.

Localities Particularly Affected. No locality is likely to be particularly affected by these proposed regulatory changes.

Projected Impact on Employment. These proposed regulatory changes are unlikely to affect employment in the Commonwealth.

Effects on the Use and Value of Private Property. These proposed regulatory changes are unlikely to affect the use or value of private property in the Commonwealth.

Real Estate Development Costs. These proposed regulatory changes are unlikely to affect real estate development costs in the Commonwealth.

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. No small businesses will be adversely affected by these proposed regulatory changes.

Alternative Method that Minimizes Adverse Impact. No small businesses will be adversely affected by these proposed regulatory changes.

Adverse Impacts:

Businesses. No businesses will be adversely affected by these proposed regulatory changes.

Localities. Localities in the Commonwealth are unlikely to see any adverse impacts on account of these proposed regulatory changes.

Other Entities. No other entities are likely to be adversely affected by these proposed changes.

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¹ A bill of lading is a document issued by a carrier or its agent to acknowledge receipt of cargo for shipment.

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:

The amendments eliminate the requirement for the board to issue a permit to commercial carriers engaged in the regular transportation of alcoholic beverages within or through the Commonwealth by adding the requirement that (i) motor carriers transporting alcoholic beverages have in their possession a bill of lading or other commercial memorandum describing the alcoholic beverages being shipped and the name and address of the consignor and consignee who lawfully may ship and receive such alcoholic beverages and (ii) a motor carrier transporting alcoholic beverages make the bill of lading or commercial memorandum available for inspection by special agents of the board or any law-enforcement officer upon request.

3VAC5-70-10. Transportation of alcoholic beverages; noncommercial permits; commercial carrier permits; refusal, suspension or revocation of permits; exceptions; out-of-state limitation not affected.

A. The transportation within or through this Commonwealth of alcoholic beverages lawfully purchased within this Commonwealth is prohibited, except upon a permit issued by the board, when in excess of the following limits:

1. Wine and beer. No limitation.

2. Alcoholic beverages other than those described in subdivision 1 of this subsection. Three gallons; provided, however, that not more than one gallon thereof shall be in containers containing less than ⅕ 1/5 of a gallon.

If any part of the alcoholic beverages being transported is contained in a metric-sized container, the three-gallon limitation shall be construed to be 12 liters, and not more than four liters shall be in containers smaller than 750 milliliters.

The transportation within, into, or through this Commonwealth of alcoholic beverages lawfully purchased outside of this Commonwealth is prohibited, except upon a permit issued by the board, when in excess of the following limits:

Alcoholic beverages, including wine and beer. One gallon (four liters if any part is in a metric-sized container).

If satisfied that the proposed transportation is otherwise lawful, the board shall issue a transportation permit, which shall accompany the alcoholic beverages at all times to the final destination.

B. Commercial carriers desiring to engage regularly in the transportation of alcoholic beverages within, into, or through this Commonwealth shall, except as hereinafter noted, file application in writing for a transportation permit obtain a transportation permit from the board or otherwise possess acceptable documentation as required by the following provisions.

A transportation permit may be obtained by filing an application in writing upon forms furnished by the board. If satisfied that the proposed transportation is otherwise lawful, the board shall issue a transportation permit. Such permit shall not be transferable and shall authorize the carrier to engage in the regular transportation of alcoholic beverages upon condition that there shall accompany each such transporting vehicle: 1. A a bill of lading or other memorandum describing the alcoholic beverages being transported, and showing the names and addresses of the consignor and consignee, who shall be lawfully entitled to make and to receive the shipment; and 2. Except for express companies and carriers by rail or air, a certified photocopy of the carrier's transportation permit. Such a bill of lading or other memorandum may serve as a transportation permit so long as it is made available for inspection to special agents of the board or any law-enforcement officer upon request.

C. The board may refuse, suspend, or revoke a carrier's transportation permit, including the use of a bill of lading or other memorandum as a transportation permit as provided in subsection B of this section, if it shall have reasonable cause to believe that alcoholic beverages have been illegally transported by such carrier or that such carrier has violated any condition of a permit. Before refusing, suspending, or revoking such permit, the board shall accord the carrier involved the same notice, and opportunity to be heard, and follow the same administrative procedures accorded an applicant or licensee under Title 4.1 of the Code of Virginia.

D. There shall be exempt from the requirements of this section:

1. Common carriers by water engaged in transporting lawfully acquired alcoholic beverages for a lawful consignor to a lawful consignee;

2. Persons transporting wine, beer, or cider purchased from the board or a licensee;

3. Persons transporting alcoholic beverages which that may be manufactured and sold without a license;

4. A licensee transporting lawfully acquired alcoholic beverages he is authorized to sell in a vehicle owned or leased by the licensee;

5. Persons transporting alcoholic beverages to the board, or to licensees, provided that a bill of lading or a complete and accurate memorandum accompanies the shipment, and provided further, in the case of the licensee, that the merchandise is such as his license entitles him to sell;

6. Persons transporting alcoholic beverages as a part of their official duties as federal, state, or municipal officers or employees; and

7. Persons transporting lawfully acquired alcoholic beverages in a passenger vehicle, other than those alcoholic beverages referred to in subdivisions D 2 and D 3 of this section, provided the same are in the possession of the bona fide owners thereof, and that no occupant of the vehicle possesses any alcoholic beverages in excess of the maximum limitations set forth in subsection A of this section.

E. This section shall not be construed to alter the one-gallon (four liters if any part is in a metric-sized container) limitation upon alcoholic beverages which that may be brought into the Commonwealth pursuant to § 4.1-310 E of the Code of Virginia.