Title of Regulation: 22VAC45-20. Regulations to Govern the Operation of Vending Facilities in Public Buildings and Other Property (amending 22VAC45-20-10, 22VAC45-20-110, 22VAC45-20-120).

Statutory Authority: §§ 51.5-65 and 51.5-78 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: August 7, 2019.

Effective Date: August 23, 2019.

Agency Contact: Susan K. Davis, MS, CRC, Policy and Regulatory Coordinator, Department for the Blind and Vision Impaired, 397 Azalea Avenue, Richmond, VA 23235, telephone (804) 371-3184, FAX (804) 371-3157, TTY (800) 371-3157, or email susan.davis@dbvi.virginia.gov.

Basis: The regulation is promulgated under the authority of §§ 51.5-65, 51.5-78, and 51.5-97 of the Code of Virginia. Section 51.5-65 grants the Commissioner of the Department for the Blind and Vision Impaired (DBVI) the legal authority to adopt regulations necessary to carry out the applicable provisions of Chapter 12 of Title 51.5 of the Code of Virginia. Section 51.5-78 authorizes the department to operate vending stands and other business enterprises in public and private buildings for providing blind persons with employment, enlarging the economic opportunities of the blind, and stimulating the blind to make themselves self-supporting. Section 51.5-97 directs the department to set aside or cause to be set aside from the net proceeds of the operations authorized by Article 4 (§§ 51.5-79 through 51.5-100) of Chapter 12 of Title 51.5 of the Code of Virginia such funds as may be necessary for the purposes of (i) maintenance and replacement of equipment, (ii) purchase of new equipment, (iii) management services, (iv) assuring a fair minimum return to vendors, and (v) the establishment and maintenance of retirement or pension funds, health insurance contributions, and the provision for paid sick leave and vacation time in accordance with the Randolph-Sheppard Act Amendment of 1974 (P.L. 93-516).

Purpose: The proposed amendments correct the definition of blind person, clarify the name of the agency to which the regulation refers, and improve the welfare of operators in the Virginia Enterprises for the Blind (VEB) by increasing the frequency of payments for their work from the current requirement of quarterly payments. Payments that are more frequent will allow for more timely cash flow management and income for the operators while not affecting the financial viability of the VEB. This change will enhance the mission of DBVI by allowing operators to be more independent and economically self-sufficient.

Rationale for Using Fast-Track Rulemaking Process: The agency, along with the VEB Vendors Council, recognized the importance of having flexibility to pay operators in a timelier manner that would be defined as "at least" quarterly rather than the more rigid payment schedule defined as "quarterly" in the existing regulations. Because this change is beneficial to operators, the regulatory action is expected to be noncontroversial. Though there is no specific mandate for this regulatory change, the phrase "at least" quarterly conforms to federal law.

Substance: The proposed substantive change adds only the words "at least" to two sections of the regulation, 22VAC45-20-110 and 22VAC45-20-120, providing for increased frequency of setting aside funds and distributing income to operators.

Issues: The primary advantage for private citizens who are operators in the VEB is that they will be able to receive their income more rapidly and no longer have to budget and manage their cash flow over a three-month period. There is no disadvantage to the vendors. The primary advantage to DBVI is that this change enhances its mission to improve the independence of people who are blind and aligns state law as to vending machines located on state property to language in the federal law, 34 CFR 395.8(b), which governs vending machines located on federal property. There is no disadvantage to the agency. This change is fully supported by the VEB Vendors Council, the governing body elected to represent the operators. There is no disadvantage to operators, the general public, or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Board for the Blind and Vision Impaired (Board) proposes to: 1) change the stated frequency that the Department for the Blind and Vision Impaired (DBVI) will disburse vending machine income to eligible blind vendors with prepared statements, 2) conform the definition of "blind person" in the regulation to the definition in the Code of Federal Regulations, and 3) update the name of the agency within the regulation.

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

Estimated Economic Impact. Under the current regulation DBVI "will disburse vending machine income to eligible blind vendors on a quarterly basis." Further, statements pertaining to the disbursement are prepared and rendered quarterly as well. The Board proposes to amend the language to indicate that the income will be disbursed and the statements will be rendered "at least" quarterly. According to the Department for the Blind and Vision Impaired, the intent is to pay vendors monthly. This would be beneficial for the blind vendors in that it would improve their cash flow.

The proposals to conform the definition of "blind person" to the definition in the Code of Federal Regulations and to update the name of the agency within the regulation do not change requirements in practice. Adopting these changes would improve clarity for the reader, but otherwise would have no impact.

Businesses and Entities Affected. The proposed amendments would particularly affect the approximate 48 licensed blind vending machine operators¹ in the Commonwealth. All of these vendors are likely small businesses.

Localities Particularly Affected. The proposed amendments do not disproportionately affect particular localities.

Projected Impact on Employment. The proposed amendments are unlikely to significantly affect employment.

Effects on the Use and Value of Private Property. The proposed amendments are unlikely to significantly affect the use and value of private property.

Real Estate Development Costs. The proposed amendments do 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 proposal to effectively speed the payment of income owed to licensed blind vending machine operators would reduce their costs associated with waiting for funds to use in their business.

Alternative Method that Minimizes Adverse Impact. The proposed amendments do not adversely affect small businesses.

Adverse Impacts:

Businesses. The proposed amendments do not adversely affect businesses.

Localities. The proposed amendments do not adversely affect localities.

Other Entities. The proposed amendments do not adversely affect other entities.

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¹Data source: Department for the Blind and Vision Impaired

Agency's Response to Economic Impact Analysis: The Department for the Blind and Vision Impaired concurs with the Department of Planning and Budget's economic impact analysis.

Summary:

The amendments (i) correct the agency name in regulation text, (ii) update the definition of "blind person," and (iii) align the frequency of disbursements to vendors with federal regulations.

Part I
Introduction

22VAC45-20-10. Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

"Act" means the Randolph-Sheppard Vending Stand Act (P.L. 74-732), as amended by P.L. 83-565 and P.L. 93-516, 20 USC, Chapter 6A, § 107.

"Blind licensee" means a blind person licensed by the state licensing agency to operate a vending stand or vending facility on public or other property.

"Blind person" means the condition as defined in §§ 63.1-142 and 63.1-166 of the Code of Virginia a person who, after examination by a physician skilled in diseases of the eye or by an optometrist, whichever such person shall select, has been determined to have (i) not more than 20/200 central visual acuity in the better eye with correcting lenses, or (ii) an equally disabling loss of the visual field as evidenced by a limitation to the field of vision in the better eye to such a degree that its widest diameter subtends an angle of no greater than 20 degrees pursuant to 34 CFR 395.1(c).

"Custodian" means any person or group of persons having the authority to grant permission for the installation and operation of vending facilities and vending stands.

"Department" or "DBVI" means the Department for the Visually Handicapped Blind and Vision Impaired.

"Direct competition" means the presence of an operation of a vending machine or a vending facility on the same premises as a vending facility operated by a blind vendor. (Vending machines or vending facilities operated in areas where the majority of employees do not have direct access to the vending facility operated by a blind vendor, shall not be considered to be in direct competition with the vending facility operated by a blind vendor.)

"DVH" means the Department for the Visually Handicapped.

"License" means a written instrument issued by the state licensing agency to a blind person, authorizing such person to operate a vending facility or vending stand.

"Management services" means supervision, inspection, quality control, consultation, accounting, regulating, in-service training, and other related services provided on a systematic basis to support and improve vending facilities and vending stands operated by blind vendors. "Management services" does not include those services or costs which pertain to the on-going ongoing operating of an individual facility after the establishment period.

"Net proceeds" means the amount remaining from the sale of articles or services of vending facilities, vending stands, or other income accruing to blind vendors after deducting the cost of such sale and other expenses.

"Nominee" means a nonprofit agency or organization designated by a state licensing agency through a contractual arrangement to act as its agent in the provision of services to blind licensees.

"Permit" means the official approval given to a state licensing agency by a department, agency, or instrumentality in control of maintenance operation and protection of federal property, or person in control of public and private buildings and other properties, whereby the state licensing agency is authorized to establish a vending facility or vending stand.

"Program" means all the activities of the state licensing agency under this chapter related to public and private buildings and other properties throughout the Commonwealth.

"Public and private buildings and other properties throughout the Commonwealth" means buildings, land, or other property owned by or leased to the Commonwealth or a political subdivision, including a municipality, or a corporation or individual.

"Set aside funds" means funds which accrue to a state licensing agency from an assessment against the net proceeds of each vending facility or vending stand in the state's vending facility program and any income from vending machines on public and private buildings and other properties which accrue to the state licensing agency.

"State vocational rehabilitation agency" means the state agency designated by the Secretary of Education to issue licenses to blind persons for the operation of vending facilities and vending stands on public and private buildings and other properties throughout the Commonwealth.

"Vending facility" means automatic vending machines, cafeterias, snack bars, cart service, shelters, counters, and such other appropriate auxiliary equipment which that may be operated by blind licensees and which that is necessary for the sale of newspapers, periodicals, confections, tobacco products, foods, beverages, and other articles or services dispensed automatically or manually and prepared on or off the premises in accordance with all applicable health laws, and including the vending for any lottery authorized by state law and conducted by an agency of a state within such state.

"Vending stand" means an installation in any public or private building for the sale of newspapers, periodicals, confections, tobacco products, soft drinks, ice cream, wrapped foods, and other such articles as may be approved by the custodian and the department.

"Vending machine" means a coin or currency operated machine which that dispenses articles or services, except that those machines operated by the United States Postal Service for the sale of stamps or other postal products and services, machines providing services of a recreational nature, and telephones shall not be considered to be vending machines.

"Vending machine income" means receipts from public, private, and other property after deducting applicable costs where: (i) the machines are operated by the property custodian, (ii) commissions are received by the property custodian, and (iii) an activity receives income from a commercial vending firm which that provides vending machines on the property with the approval of the property custodian.

"Vendor" means a blind licensee who is operating a vending facility or vending stand on federal property, in a public or private building, or on other property throughout the Commonwealth.

Part IV
Fiscal: Income and Distribution of Funds

22VAC45-20-110. Setting aside of funds

A. Funds will be set aside from the net proceeds of the operations of the vending facilities under the program and from retained vending machine income according to the formula submitted to and approved by the U.S. Commissioner of Rehabilitation Services Administration and the U.S. Secretary of Education in an amount determined to be reasonable.

B. These charges shall be assessed quarterly. Statements shall be prepared and rendered, along with settlement, to each blind vendor at least quarterly.

C. Moneys collected from the setting aside of funds shall be used solely for the following purposes:

1. Maintenance and replacement of equipment;

2. Purchase of new equipment;

3. Management services;

4. Assuring a fair minimum return to vendors; and

5. The establishment and maintenance of retirement or pension funds, health insurance contributions, and provision for paid sick leave and vacation time, if it is so determined by a majority vote of blind vendors licensed by the state licensing agency, after such agency provides to each vendor information on all matters relevant to such proposed purposes.

D. The charge for each of the listed purposes will be determined by the department on the basis of records or expenditures made for each of these purposes over a reasonable period of time, with allowances for reasonable charges for improving services, fluctuation in costs, and for program expansion. The charges shall be reviewed and approved by the commissioner of the department with the assistance of the operations management team. Charges will be reevaluated periodically and necessary adjustments made. Adequate records will be maintained by the department to support the reasonableness of the charge for each of the purposes listed, including any reserves necessary to assure that such purposes can be achieved on a consistent basis.

E. The policy on setting aside of funds shall be reviewed annually with the active participation of the vending facility vendors council.

22VAC45-20-120. Distribution and use of income from vending machines.

A. Income from vending machines (with the exception of revenues derived from the state highway vending program), shall accrue to each vendor operating a vending facility on such property. The amount shall not exceed the average net income of the total number of blind vendors within the Commonwealth as determined each fiscal year on the basis of each prior year's operation, except that vending machine income shall not accrue to any blind vendor in any amount exceeding the average net income of the total number of blind vendors in the United States.

B. No blind vendor shall receive less vending machine income than he that vendor was receiving during the calendar year prior to January 1, 1974, as a direct result of any limitation imposed on such income under this ceiling.

C. No limitation shall be imposed on income from vending machines combined to create a vending facility when such facility is maintained, serviced, or operated by a blind vendor.

D. The department will disburse vending machine income to eligible blind vendors on at least a quarterly basis.

E. The department shall retain vending machine income which that is in excess of the amount eligible to accrue to a blind vendor in a facility. Funds received from these facilities will be used for:

1. The establishment and maintenance of retirement or pension plan;

2. Contributions toward a health insurance program; and

3. The provision of paid sick leave and vacation time for blind licensees.

The purposes stated must be approved by a majority vote of the licensed vendors after each licensee has been furnished information relevant to such purpose.

F. Any vending machine income not necessary for such purposes shall be used for one or more of the following:

1. Maintenance and replacement of equipment;

2. Purchase of new equipment;

3. Management services; and

4. Assuring a fair minimum return to vendors.

F. G. Any assessment charged to blind vendors shall be reduced pro rata in an amount equal to the total of such remaining vending machine income.