Vol. 34 Iss. 24 - July 23, 2018

Chapter 10
Fast-Track Regulation

Title of Regulation: 3VAC5-10. Procedural Rules for the Conduct of Hearings Before the Board and Its Hearing Officers (amending 3VAC5-10-240).

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: August 22, 2018.

Effective Date: September 10, 2018.

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

Basis: Sections 4.1-103 and 4.1-111 of the Code of Virginia enumerate the powers of the Board of Directors of the Virginia Alcoholic Beverage Control Authority, which includes the authority to adopt regulations, and to amend and repeal such regulations, and to do all acts necessary or advisable to carry out the purposes of Alcoholic Beverage Control Act (Title 4.1 of the Code of Virginia) in accordance with the Administrative Process Act.

Purpose: The purpose of this amendment is to adjust the appeals process so that it requires the interested party to identify some type of error in the initial decision in the request for an appeal instead of merely expressing a desire for an appeal. This regulation has little impact on public health, safety, or welfare; however, the general welfare of the public is benefited in that the regulation helps ensure agency resources are allocated to legitimate appeals that warrant immediate agency attention and action.

Rationale for Using Fast-Track Rulemaking Process: The amendments are expected to be noncontroversial because as the Department of Alcoholic Beverage Control transitions into an Authority, it is expected that certain regulations will have to be amended in order to accommodate a part-time board. Requiring an interested party to identify error in the request for an appeal will eliminate many meritless appeals and avoid overburdening the board.

Substance: Requests for appeals will have to identify the error in the decision.

Issues: The primary advantage of the amendment to the agency is that it will make the appeal process more efficient because requiring the interested party to identify the error in the decision will help to reduce or even eliminate meritless appeals to the board. The advantage to the public with the change to this regulation is that licensees with valid appeals will have their appeals cases heard more efficiently because time and resources will not have to be expended on meritless appeals. The disadvantage is that it will require the licensee to engage in more critical thinking when filing an appeal, which could prove difficult for some less sophisticated licensees, or require licensees to hire an attorney to handle their appeal, which could be expensive for some. There are no disadvantages to the agency or the Commonwealth. The pertinent matter to the regulated community, government officials, and the public is that no longer will an interested party be able to request an appeal without identifying an error in the initial decision.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Alcoholic Beverage Control Board (Board) proposes to specify that in appealing an adverse initial decision, the interested party must identify any alleged errors in the decision of the Board.

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

Estimated Economic Impact. The current regulation governing appeals to the Board does not require the interested party to identify any grounds for an appeal. Consequently, it is common for licensees to file an appeal effectively stating no more than "I appeal." In calendar year 2017, 70% of the appeals were of this category.1 Appeals are costly in that they require significant staff time. In order to limit the wasting of resources where the licensee has no specified grounds for appeal, the Board proposes to require that the filed appeal include identifying any alleged errors in the initial decision. This is consistent with Code of Virginia § 2.2-4027, which requires that a party complaining of an agency action designate and demonstrate an error of law subject to review by the court.

It is expected that this would discourage the filing of appeals where the interested party has no specified grounds beyond unhappiness with the initial decision. Based on the estimated time saved and rate of compensation of the chief hearing officer, the Board's clerk, the appeals clerk, a court reporter, and the record backup clerk, on a per case avoided basis the proposed amendment would save approximately $540 to $935 in staff time.2

Businesses and Entities Affected. All 13,000 plus licensees could potentially be subject to disciplinary proceedings, and thus could be affected by the proposed amendments.3 The Department of Alcoholic Beverage Control issues licenses for manufacturers, wholesalers and shippers of alcoholic beverages; retail licenses for the sale of alcohol at restaurants, hotels, convenience stores, grocery stores, etc.; and banquet licenses to allow persons or groups to host events such as wedding receptions, tastings, or fundraisers, where alcohol is served in an unlicensed location or club premise.

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

Projected Impact on Employment. The proposed amendments do not significantly affect employment.

Effects on the Use and Value of Private Property. The proposed amendments do not 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 proposed amendments do not affect costs for small businesses.

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.


1Data Source: Virginia Alcoholic Beverage Control Authority.

2Estimates of time saved and employee compensation provided by the Alcoholic Beverage Control Authority.

3Data source: Alcoholic Beverage Control Authority.

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


The amendment adds the requirement that the interested party identify the error in the decision being appealed in the written request to the board for an appeal.

3VAC5-10-240. Appeals.

A. An interested party may appeal to the board an adverse initial decision, including the findings of fact and the conclusions, of a hearing officer or a proposed decision, or any portion thereof, of the board provided a request therefor in writing identifying any alleged errors in the decision is received within 30 days after the date of mailing of the initial decision or the proposed decision, whichever is later.

B. At his option, an interested party may submit written exceptions to the initial or proposed decision within the 30-day period and waive further hearing proceedings.

C. If an interested party fails to appear at a hearing, the board may proceed in his absence and render a decision.

VA.R. Doc. No. R18-5368; Filed June 27, 2018, 8:44 a.m.