SB 983 — Alcoholic beverage control; winery and farm winery licenses, requirements and privileges.

L "Sale" and "sell" includes soliciting or receiving an order for;

or delivering otherwise than gratuitously, by any means, alcoholic of 11 beverages.

E "Sangria" means a drink consisting of red or white wine mixed with some combination of sweeteners, fruit, fruit juice, soda, or soda water that may also be mixed with brandy, triple sec, or other similar spirits.

"Special agent" means an employee of the Virginia Alcoholic Beverage Control Authority whom the Boa"SpecialBoard event"has meansdesignated anas event sponsored by a dulylaw-enforcement organizedofficer nonprofitpursuant corporationto or§ association4.1-105. and conducted for an athletic, charitable, civic, educational, political, or religious purpose.

"Spirits""Special event" means anyan beverageevent thatsponsored contains alcohol obtained by distillationa mixedduly withorganized drinkablenonprofit watercorporation andor otherassociation substances, in solution, and includes,conducted amongfor otheran things,athletic, brandy,charitable, rum,civic, whiskeySeducational, andpolitical, gin, or anyreligious onepurpose. or more of the last four named ingredients, but shall not include any such liqu9rs completely denatured in accordance with formulas approved by the United States government.

3"Spirits" "Wine" means any alcoholicbeverage beverage,that includingcontains cider,alcohol obtained by thedistillation fermentationmixed ofwith thedrinkable naRuralwater sugarand contentother ofsubstances, fruitsin orsolution, otherand agriculturalincludes, productsamong containingother (i)things, sugar,brandy, includingrum, honeywhiskey, and milk,gin, eitheror withany one or withoutmore additionalof sugar;the last four named ingredients, but shall not include any such liquors completely denatured in accordance with formulas approved by the United States government.

"Wine" means any alcoholic beverage, including cider, obtained by the fermentation of the natural sugar content of fruits or other agricultural products containing (i) sugar, including honey and milk, either with or without additional sugar;

"Wine" includes any wine to which wine spirits have been added, as notprovided exceedin anthe alcoholInternal contentRevenue ofCode, 21to percentmake byproducts volume.s commonly known as "fortified wine" which do "Winenot cooler"exceed meansan a drink containing one-half of one percent or more of alcohol bycontent volume, and not more than three and two-tenths percent of alcohol21 by weight or four percent by volumevolume. consisting of wine mixed with nonalcoholic beverages or flavoring or coloring materials, and which may also contain water, fruit juices, fruit adjuncts, sugar, carbon dioxide, or preservatives and shall include other similar products manufactured by fermenting fruit or fruit juices.

"Wine cooler" means a drink containing one-half of one percent or more of alcohol by volume, and not more than three and two-tenths percent of alcohol by weight or four percent by volume consisting of wine mixed with nonalcoholic beverages or flavoring or coloring materials, and which may also contain water, fruit juices, fruit adjuncts, sugar, carbon dioxide, or preservatives and shall include other similar products manufactured by fermenting fruit or fruit juices.

"With or without meals" means the selling and serving of alcoholic beverages by retail licensees for on-premises consumption whether or not accompanied by food so long as the total food-beverage ratio suchrequired retailby licensee..3,§ 4.1-206.3, or the monthly food sale requirement established by Board regulation, is met by §such 4.1-206.1.retail licensee.

§ 4.1-206.1.

When the Board has established a government store on the distiller's licensed premises pursuant to subsection D of § 4.1-119, such license shall also authorize the licensee to make a charge to consumers to participate in an organized tasting event conducted in accordance with subsection G of § 42.4.1-119 and Board regulations.

2.

Brewery licenses, which shall authorize the licensee to manufacture beer and to sell and deliver or ship the beer so manufactured, in accordance with Board regulations, in closed containers to (i) persons licensed to sell the beer at wholesale and (ii) persons outside the Commonwealth for resale outside thesthe Commonwealth.

Such license shall also authorize the licensee to sell at retail at premises described in of 11 the brewery license (a) the brands of beer that the brewery owns for on-premises consumption, provided that not less than 20 percent of the volume of beer sold for on-premises consumption in any calendar year is manufactured on the licensed premises, and (b) beer in closed containers, which shall include growlers and other reusable containers, for off-premises consumption.

For purposes of this subdivision, "land zoned of 11 agricultural" means (a) land zoned as an agricultural district or classification or (b) land otherwise permitted by a locality for limited brewery use.

and (iv)(v)(iv) sell(v)sell wine at retail at the place of business designated in the winery license for on-premises consumption or in closed containers for off-premises consumption, provided that any brand of wine not owned by the winery licensee is purchased from a wholesale wine licensee and any no less than 20 percent of the wine sold for on-premises consumption is manufactured on the licensed premises.

Wine importer's licenses, which shall authorize persons located within or outside the Commonwealth to sell and deliver or ship wine, in accordance with Board regulations, in closed of 11 containers, to persons in the Commonwealth licensed to sell such wine at wholesale for the purpose of resale, and to persons outside the Commonwealth for resale outside the Commonwealth.

E 8.

Beer importer's licenses, which shall authorize persons located within or outside the Commonwealth to sell and deliver or ship beer, in accordance with Board regulations, in closed N containers, to persons in the Commonwealth licensed to sell such beer at wholesale for the purpRsepurpose of resale and to persons outside the Commonwealth for resale outside the Commonwealth.

The§ Board4.1-206.1. may grant the following manufacturer licenses:ses.

O(Effective 1.July 1, 2024) Manufacturer licenses.

Distiller'sThe licenses, which shall authorize the licensee to manufacture alcoholic beverages other than wine and beer, and to sell and deliver or ship the same, in accordance with Board regulations,may ingrant closed containers, to the Boardfollowing andmanufacturer tolicenses: persons outside the Commonwealth for resale outside the L Commonwealth.

When1. the Board has established a government store on the distiller's licensed preEises pursuant to subsection D of § 4.1-119, such license shall also authorize the licensee to make a charge to consumers to participate in an organized tasting event conducted in accordance with subsection G of § 4.1-119 and Board regulations.

Distiller's licenses, which shall authorize the licensee to manufacture alcoholic beverages other than wine and beer, and to sell and deliver or ship the same, in accordance with Board regulations, in closed containers, to the Board and to persons outside the Commonwealth for resale outside the Commonwealth.

When the Board has established a government store on the distiller's licensed premises pursuant to subsection D of § 4.1-119, such license shall also authorize the licensee to make a charge to consumers to participate in an organized tasting event conducted in accordance with subsection G of § 4.1-119 and Board regulations.

Limited distiller's licenses, to distilleries that (i) are located on a farm in the Commonwealth on land zoned agricultural and owned or leased by such distillery or its owner and (ii) use agricultural of 11 products that are grown on the farm in the manufacture of their alcoholic beverages.

For purposes of this subdivision, "land zoned agricultural" means (a) land zoned as an agricultural district or classification or (b) land otherwise permitted by a locality for limitSdlimited distillery use.

For purposes of this subdivision, "land zoned agricultural" does not include land zoned "r9sidential"residential conservation." Except for the limitation on land zoned "residential conservation," nothing in t3isthis definition shall otherwise limit or affect local zoning authority.

R 3.

Brewery licenses, which shall authorize the licensee to manufacture beer and to sell and deliver or ship the beer so manufactured, in accordance with Board regulations, in closed containers to (i) persons licensed to sell the beer at wholesale and (ii) persons outside the Commonwealth for resale outside the theCommonwealth. brewery license (a) the brands of beer that the brewery owns for on-premises consumption, providedn that not less than 20 percent of the volume of beer sold for on-premises consumption in any calendar year is manufactured on the licensed premises, and (b) beer in closed containers, which shall include growlers and other reusable containers, for off-premises consumption.

Such license shall also authorize the licensee to sell at retail at premises described in the brewery license (a) the brands of beer that the brewery owns for on-premises consumption, provided that not less than 20 percent of the volume of beer sold for on-premises consumption in any calendar year is manufactured on the licensed premises, and (b) beer in closed containers, which shall include growlers and other reusable containers, for off-premises consumption.

The licensed premises shall be limited to the portion of the farm on which agricultural products, including barley, other grains, hops, or fruit, used by such brewery in the manufacture of its beer are grown and that is contiguous to the premises of such brewery where the beer is manufactured,itsmanufactured, exclusive of any residence and the curtilage thereof.

otherwiseLimited providedbrewery inlicensees thisshall subdivision.reatedbe treated as breweries for all purposes of this title except as 5.otherwise provided in this subdivision.

5.

and (iv) (v) sell wine at retail at the place of business designated in the winery license for on-premises consumption or in closed containers for off-premises consumption, provided that any brand of wine not owned by the winery licensee is purchased from aisesa wholesale wine licensee and any no less than 20 percent of the wine sold for on-premises consumption of 11 is manufactured on the licensed premises.

Wine may be sold The licensee may sell at these places of business places for on-premises consumption and in closed of 11 containers for off-premises consumption, provided that any brand of wine manufactured by such licensee, wine manufactured by a contract winemaking facility with which the licensee has entered into an agreement pursuant to the provisions of this subtitle and Board regulations, and wine not owned by the farm winery licensee is purchased from a wholesale wine licensee.

of 11 E.

A farm winery licensees licensee may trade with other farm winery licensees fruits or agricultural products grown or produced on such farms with other property in the Commonwealth that is owned Eror leased by such farm winery licensees.

For the purposes of this section, fruit or agricultural products traded or exchanged between farm winery licensees shall be considered grown or produced on the N licensed premises of the receiving farm licensee for the purposes of meeting the fruit sourcingRsourcing requirement in subsections A and, B, C, and D, provided that verification is provided to the receiving farm licensee that the fruit or agricultural products traded or exchanged were grown or produced in the Commonwealth by the farm winery licensee engaging in such trade or exchange.

Both licensees shallinshall the maintain complete and accurate records of the quantity and source of any fruit or agricultural products traded or exchanged.

For the purposes of this subsection, "agricultural products" means the raw materials used or intended to be used in the manufacture Efof wine or cider by farm winery licensees.

Notwithstanding the provisions of subsections A and, B, C, and D, upon petition by theDthe Department of Agriculture and Consumer Services, the Board may permit the use (i) of a greater quantity of out-of-state products if supplies grown or produced in the Commonwealth are insufficient for a farm winery licensee, whether Class A or I, Class B II, Class III, or Class IV, to achieve the level of production which that otherwise could be anticipated during a given license year or (ii) by a Class A I,fI, Class II, or Class IV farm winery of a lesser percentage of products grown or produced on the farm licensed premises or on property in the Commonwealth that is owned or leased by the licensee, as applicable, if unusually severe weather or disease conditions cause a significant reduction in Shethe availability of fruit or other agricultural products grown or produced on the farm such propert9property to manufacture wine during a given license year.

3of 11 G.

As used in this section, the terms "owner" and "lessee" phrase "property in the CommonweaRthCommonwealth that is owned or leased by the licensee" shall include, in the case of a cooperative formed by an association of individuals for the purpose of manufacturing wine.

The term "farm" as used in this section includes all of the land licensed as a farm winery, any property in the Commonwealth that is owned or leased by the farm winery licensee as long as such land is located in the Commonwealth a member of such cooperative.

winery licensee as long as such land is located in the Commonwealth a § 4.1-231.1.

Brewery license and limited brewery license, if not more than 500 barrels of beer manufactured manufactured during the year in which the license is granted, $2,350;$380;

if not more than 10,000 barrels of beer manufactured during the year in which the license is granted, $2,350;

less,a. $1,545 for any wholesaler who sells more than 300,000 but not more than 600,000 cases of beer a year, and $2,010 for any wholesaler who sells more than 600,000 cases of beer a year;

(1) Wholesale beer license, $1,005 for any wholesaler who sells 300,000 cases of beer a year or less, $1,545 for any wholesaler who sells more than 300,000 but not more than 600,000 cases of beer a year, and $2,010 for any wholesaler who sells more than 600,000 cases of beer a year;

and (2) Wholesale wine license, including that granted pursuant to subdivision 3 of § 4.1-206.2, applicable to two or more premises, the annual state license tax shall be the amount set forth in subdivision b (1), multiplied by the number of separate locations covered by the license.

of 11 3.

of 11 (3) $520 for each common carrier of passengers by bus;

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a.8.

WineRetail andlicenses beer–– shipper'sshipper, license,bottler, $230;ndand related licenses.

Ea. b.

Wine and beer shipper's license, $230;

b.

N c.

R d.

and Of. that the licensee has no more than 25 delivery personnel, including employees, agents, and independentBoard contractors that engage in direct-to-consumer alcoholic beverage delivery, in which case the license fee shall be $2,500.

LThird-party 9.delivery license, $7,500, unless the licensee provides written certification to the Board that the licensee has no more than 25 delivery personnel, including employees, agents, and independent contractors that engage in direct-to-consumer alcoholic beverage delivery, in which case the license fee shall be $2,500.

9.

For each temporary license authorized by § 4.1-211, one-half of the tExtax imposed by this section on the license for which the applicant applied.

D B.

The tax on each license granted or reissued for a period other than 12, 24, or 36 months shall be equal to one-twelfth of the taxes required by subsection A computed to the nearest cent, multiplied by the number of months in the license period, and then increased by five percent.

Such tax shall not beybe refundable, except as provided in § 4.1-232.

Every licensee, in addition to the taxes imposed by this chapter, shall be liable to state merchants' license taxation and state restaurant license taxation and other state wholesalertaxation to merchants' license taxation, however, and in computing the wholesalesame merchants'as licenseif beer tax on a beer wholesaler, the firstalcoholic $163,800beverages ofwere beernonalcoholic. purchases shall be disregarded;

In ascertaining the liability of a beer wholesaler to merchants' license taxation, however, and in computing the wholesale merchants' license tax on a beer wholesaler, the first $163,800 of beer purchases shall be disregarded;

In addition to the taxes set forth in this section, a fee of $5 may be imposed on any license 2.purchased in person from the Board if such license is available for purchase online.

That2. any person that holds a farm winery license that was applied for prior to July 1, 2023, and granted prior to January 1, 2024, by the Board of Directors of the Virginia Alcoholic Beverage Control Authority shall, until July 1, 2028, (i) be exempt from the requirements created by this act in §§ 4.1-219 and 4.1-231.1 of the Code of Virginia and (ii) remain subject to the requirements of §§ 4.1-219 and 4.1-231.1 of the Code of Virginia as those sections were in effect on June 30, 2023.

That any person that holds a farm winery license that was applied for prior to July 1, 2023, of 11 and granted prior to January 1, 2024, by the Board of Directors of the Virginia Alcoholic Beverage Control Authority shall, until July 1, 2028, (i) be exempt from the requirements created by this act in §§ 4.1-219 and 4.1-231.1 of the Code of Virginia and (ii) remain subject to the requirements of §§ 4.1-219 and 4.1-231.1 of the Code of Virginia as those sections were in effect on June 30, 2023.