Title of Regulation: 3VAC5-50. Retail Operations (adding 3VAC5-50-230).

Statutory Authority: § 4.1-210 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comments: Public comments may be submitted until 5 p.m. on October 2, 2009.

Agency Contact: W. Curtis Coleburn III, Chief Operating Officer, Department of Alcoholic Beverage Control, 2901 Hermitage Rd., Richmond, VA 23220, telephone (804) 213-4409, FAX (804) 213-4411, TTY (804) 213-4687, or email curtis.coleburn@abc.virginia.gov.

Basis: Section 4.1-210 of the Code of Virginia requires the Alcoholic Beverage Control Board to define "dessert wines" for the purposes of that section. The authority to promulgate a regulation is mandatory, but the content of the regulation is discretionary.

Purpose: The new section to be promulgated provides a definition of "dessert wines" that holders of limited mixed beverage restaurant licenses will be authorized to sell and serve. The board is required to define the term by statute. The goal of the new section is to provide a broad definition and to enable licensees to sell and serve most wine products consumers desire to drink with dessert, while at the same time allowing easy compliance with and enforcement of the regulation. Limited mixed beverage restaurants are not subject to the full food sale requirements of other mixed beverage restaurants. The General Assembly has determined that such restaurants should sell a limited number of liqueurs mixed with coffee or other drinks, as well as dessert wines. The proposed regulatory action is necessary to protect the health, safety, or welfare of citizens by insuring that the alcoholic beverage products offered for sale fall within the limits prescribed by the legislature.

Substance: "Dessert wines" shall mean any wine having an alcohol content of more than 14% by volume, any wine whose label indicates that it contains more than 2.0% residual sugar, or any wine described on its label as a "dessert," "late harvest," or "ice" wine.

Issues: The regulatory action poses no disadvantages to the public or the Commonwealth. The primary advantages to the affected businesses and the Commonwealth include enabling licensees to sell and serve most wine products consumers desire to drink with dessert, while at the same time allowing easy compliance with and enforcement of the regulation.

The Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. Pursuant to Chapter 172 of the 2008 Acts of the Assembly, the Alcoholic Beverage Control Board (ABC) proposes to add a definition for dessert wine to its regulations that govern retail operations.

Result of Analysis. The benefits likely exceed the costs for this proposed change.

Estimated Economic Impact. Current regulations do not contain a definition for dessert wine. In 2008, the legislature expanded the scope of ABC issued limited mixed beverage restaurant licenses so that they will cover sales of dessert wines as defined by ABC. To accommodate this code change, ABC now proposes to define dessert wine as "any wine having an alcohol content of more than 14% by volume, any wine whose label contains a statement that it contains more than 2% residual sugar or any wine described on its label as a "dessert," "late harvest" or "ice" wine.

Holders of limited mixed beverage restaurant licenses are unlikely to incur any additional costs on account of this regulatory change. They will, however, benefit from being able to expand the variety of wines and liqueurs that they offer for sale.

Businesses and Entities Affected. ABC reports that currently only one business in the state holds a limited mixed beverage restaurant license.

Localities Particularly Affected. No locality will be particularly affected by this proposed regulatory action.

Projected Impact on Employment. This regulatory action will likely have no impact on employment in the Commonwealth.

Effects on the Use and Value of Private Property. This regulatory action will likely have no significant effect on the use or value of private property in the Commonwealth.

Small Businesses: Costs and Other Effects. Small businesses in the Commonwealth are unlikely to incur any costs on account of this regulatory action.

Small Businesses: Alternative Method that Minimizes Adverse Impact. Small businesses in the Commonwealth are unlikely to incur any costs on account of this regulatory action.

Real Estate Development Costs. This regulatory action will likely have no effect on real estate development costs in the Commonwealth.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 36 (06). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB's best estimate of these economic impacts.

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

Summary:

Chapter 172 of the 2008 Acts of Assembly amended the provisions of subdivision A 12 of § 4.1-210 of the Code of Virginia, adding "dessert wines as defined by Board regulation" to the types of alcoholic beverages that may be sold and sold and served by holders of limited mixed beverage restaurant licenses. This action creates a new section, defining "dessert wines" for the purposes of the act.

3VAC5-50-230. Dessert wines.

For the purposes of § 4.1-210 A 12 of the Code of Virginia, "dessert wines" shall mean any wine having an alcohol content of more than 14% by volume, any wine whose label contains a statement that it contains more than 2.0% residual sugar, or any wine described on its label as a "dessert," "late harvest," or "ice" wine.