At the 1964 session of the General Assembly of Virginia, two bills were passed relating to the price of beer charged by wholesalers to retail outlets. The bills were prompted by a growing apprehension on the part of the members of the legislature that a substantial quantity of tax-exempt beer sold to military outlets was finding its way into the hands of civilian consumers who were not entitled to purchase such beer. Beer distributors also expressed concern at certain procurement policies followed by the military authorities in the purchase of such beverage.

Following the adjournment of the General Assembly, the Governor concluded that this legislation was not in the best interest of the State, or of the parties concerned, and accordingly vetoed the bills. The Governor was convinced that through a fair and impartial inquiry the facts could be determined, and the condition which prompted the bills could be alleviated, possibly by administrative action on the part of the State and the federal agencies involved.

Accordingly, the Governor appointed a "Committee to make inquiry, and recommendations, if indicated, looking to the correction of any practices that might now exist concerning the procurement and sale of alcoholic beverages to those instrumentalities of government entitled to tax exemption."

The Honorable William Earle White, attorney and President of the Virginia State Bar, was appointed Chairman of the Committee to study and report on the matters contained in the Governor's directive. Selected to serve with Mr. White were the following: Herbert E. Bickel, Secretary, Virginia Malt Beverage Association, Incorporated, Richmond; Colonel Joseph H. Botts, Assistant Chief of Staff, G-1, Fort Eustis; W. C. (Dan) Daniel, member of the House of Delegates, Danville; Thomas C. Gordon, Jr., attorney and President of the Virginia State Bar Association, Richmond; John W. Hardy, senior member of the Alcoholic Beverage Control Board; Richmond; Colonel George H. Kneen, Jr., Commanding Officer, Langley Air Force Base, Langley Field; C. H. Morrissett, Tax Commissioner of Virginia, Richmond; and Rear Admiral E. B. Taylor, Commandant, Fifth Naval District, Norfolk.

Subsequent to the commencement of the study, Honorable Thomas C. Gordon was appointed as a Justice of the Supreme Court of Appeals of Virginia. Mr. Gordon accordingly resigned from the Committee. Also, Colonel George H. Kneen, Jr., withdrew from the Committee and was replaced by Colonel Harry R. Burrell, Commanding Officer, Langley Air Force Base, Langley Field, Virginia.

John B. Boatwrlght, Jr., Director; Division of Statutory Research and Drafting, and Robert L. Masden, staff attorney in the Division, served as Secretary and Recording Secretary, respectively, to the Committee.

To gain full appreciation of the problems involved in the matters under study, comments and suggestions were invited from all interested groups, organizations and individuals. After due publicity, the Committee held a public hearing in Richmond on May 25, 1965, which was well attended.

The Committee also invited, through the Virginia Malt Beverage Association, beer wholesalers and distributors who testified as to their activities with the military generally. Representatives of various military installation facilities selling beer, wine and distilled spirits also appeared before the Committee giving information on the operation of their facilities. Many hundreds of pages of testimony were taken by the Committee at several executive sessions held by it.

The Committee secured information from the Armed Forces through the office of the Secretary of Defense concerning the number of military personnel, their dependents and others stationed or living in Virginia who are authorized to purchase tax free beer, wine and distilled spirits. In addition, with the cooperation of the military services, a subcommittee was appointed to conduct a survey of all military installation. facilities throughout the State selling tax-free beer, wine and distilled spirits. The Committee was assisted in its survey by personnel of the Alcoholic Beverage Control Board.

The Committee carefully considered the large quantity of information and material gathered and the comments and suggestions presented to it and now makes its Report.