Second Regular Session

Sixty-seventh General Assembly

STATE OF COLORADO
INTRODUCED

LLS NO. 10-0527.01 Christy Chase HOUSE BILL 10-1279

HOUSE SPONSORSHIP
McFadyen, Balmer, Casso, Pommer

SENATE SPONSORSHIP
Williams,

House Committees Senate Committees

Business Affairs and Labor

A BILL FOR AN ACT

101 CONCERNING THE OWNERSHIP OF A LICENSE TO SELL ALCOHOL
102 BEVERAGES AT RETAIL, AND, IN CONNECTION THEREWITH,
103 ALLOWING A GROCERY STORE TO APPLY TO TRANSFER
104 OWNERSHIP AND CHANGE LOCATION OF A RETAIL LIQUOR STORE
105 LICENSE AND TO CONVERT THE RETAIL LIQUOR STORE LICENSE
106 TO A LIQUOR-LICENSED DRUGSTORE LICENSE.

Bill Summary

(Note: This summary applies to this bill as introduced and does

not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://www.leg.state.co.us/billsummaries.)

Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute.
 On or after January 1, 2011, the bill allows a grocery store to apply
to the state and local licensing authorities, as part of a single application,
to transfer ownership and change the location of a licensed retail liquor
store and to convert the retail liquor store license to a liquor-licensed
drugstore license, thereby allowing the grocery store, if the application is
approved, to sell malt, vinous, and spirituous liquors. Assuming all other
requirements for the transfer and conversion are satisfied, the application
is permitted only if:
! The subject retail liquor store and the grocery store are
within the jurisdiction of the same local licensing authority;
! The grocery store will not be located within 1,000 feet of
another licensed retail liquor store within the same local
licensing authority's jurisdiction; and
! The grocery store provides evidence that its revenues from
food sales during the prior 12 months have been at least
51% of its total revenues.
In making its determination on the application, the local licensing
authority may consider the reasonable requirements of the neighborhood.
A grocery store business would be allowed to obtain multiple
liquor-licensed drugstore licenses.
A grocery store would have to pay an application fee to both the
state licensing authority and the local licensing authority and, if the
application is granted, would be subject to the same annual licensing fees
that liquor-licensed drugstores are required to pay.
A liquor-licensed drugstore, including a grocery store that obtains
a liquor-licensed drugstore license, would not be permitted to conduct
tastings on the licensed premises.

1 Be it enacted by the General Assembly of the State of Colorado:

2 SECTION 1. 12-47-103 (16) and (37.5), Colorado Revised
3 Statutes, are amended, and the said 12-47-103 is further amended BY
4 THE ADDITION OF THE FOLLOWING NEW SUBSECTIONS, to
5 read:
6 12-47-103. Definitions. As used in this article and article 46 of
7 this title, unless the context otherwise requires:
8 (9.5) "GROCERY STORE" MEANS AN ESTABLISHMENT THAT:
9 (a) GENERATES AT LEAST FIFTY-ONE PERCENT OF ITS TOTAL

10 REVENUES FROM THE SALE OF PACKAGED OR FRESH FOOD PRODUCTS, SUCH

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 1 AS FRESH PRODUCE, MEAT, FISH, DAIRY PRODUCTS, BAKERY ITEMS, DRY

2 GOODS, AND OTHER EDIBLE GROCERIES, AND HOUSEHOLD PRODUCTS, SUCH

3 AS TOILETRIES AND CLEANING PRODUCTS; AND

4 (b) OPERATES A PHARMACY ON SITE.

5 (9.7) "GROCERY STORE BUSINESS" MEANS A CORPORATION,

6 LIMITED LIABILITY COMPANY, PARTNERSHIP, OR OTHER BUSINESS ENTITY

7 THAT OWNS AND OPERATES ONE OR MORE GROCERY STORES.

8 (16) "Liquor-licensed drugstore" means:

9 (a) Any drugstore licensed by the state board of pharmacy that has
10 also applied for and has been granted a license by the state licensing
11 authority to sell malt, vinous, and spirituous liquors in original sealed
12 containers for consumption off the premises; OR
13 (b) A GROCERY STORE THAT HAS ACQUIRED A RETAIL LIQUOR

14 STORE LICENSE AND CONVERTED THE RETAIL LIQUOR LICENSE TO A

15 LIQUOR-LICENSED DRUGSTORE LICENSE IN ACCORDANCE WITH SECTIONS

16 12-47-407 (6) AND 12-47-408 (6) AND IS AUTHORIZED UNDER THAT

17 LICENSE TO SELL MALT, VINOUS, AND SPIRITUOUS LIQUORS IN ORIGINAL

18 SEALED CONTAINERS FOR CONSUMPTION OFF THE PREMISES.

19 (37.5) "Tastings" means the sampling of malt, vinous, or spiritous

20 liquors that may occur on the premises of a retail liquor store licensee or
21 liquor-licensed drugstore licensee by adult patrons of the licensee
22 pursuant to the provisions of section 12-47-301 (10).
23 SECTION 2. 12-47-301 (10) (b), (10) (c) (I), (10) (d), and (10)
24 (e), Colorado Revised Statutes, are amended to read:
25 12-47-301. Licensing in general. (10) (b) A retail liquor store
26 or liquor-licensed drugstore licensee who wishes to conduct tastings may
27 submit an application or application renewal to the local licensing

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 1 authority. The local licensing authority may reject the application if the
2 applicant fails to establish that he or she is able to conduct tastings
3 without violating the provisions of this section or creating a public safety
4 risk to the neighborhood. A local licensing authority may establish its
5 own application procedure and may charge a reasonable application fee.
6 (c) Tastings shall be subject to the following limitations:
7 (I) Tastings shall be conducted only:
8 (A) By a person who has completed a server training program that
9 meets the standards established by the liquor enforcement division in the
10 department of revenue and who is either a retail liquor store licensee or
11 a liquor-licensed drugstore licensee, or an employee of a licensee; and
12 only
13 (B) On a licensee's licensed premises.
14 (d) A violation of a limitation specified in this subsection (10) or
15 of section 12-47-801 by a retail liquor store or liquor-licensed drugstore
16 licensee, whether by his or her THE RETAIL LIQUOR STORE'S employees,
17 agents, or otherwise, shall be the responsibility of the retail liquor store
18 or liquor-licensed drugstore licensee who is conducting the tasting.
19 (e) A retail liquor store or liquor-licensed drugstore licensee
20 conducting a tasting shall be subject to the same revocation, suspension,
21 and enforcement provisions as otherwise apply to the licensee.
22 SECTION 3. 12-47-303 (1) (c) and (2), Colorado Revised
23 Statutes, are amended to read:
24 12-47-303. Transfer of ownership and temporary permits.
25 (1) (c) (I) EXCEPT AS PROVIDED IN SUBPARAGRAPH (II) OF THIS

26 PARAGRAPH (c), for any other transfer of ownership, application shall be

27 made to the state and local licensing authorities on forms prepared and

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 1 furnished by the state licensing authority. In determining whether to
2 permit a transfer of ownership, the licensing authorities shall consider
3 only the requirements of section 12-47-307 and 1 CCR 203-2, rule
4 47-302, entitled "Changing, Altering, or Modifying Licensed Premises",
5 or any analogous successor rule. The local licensing authority may cause
6 a hearing on the application for transfer of ownership to be held. No
7 hearing provided for by this paragraph (c) shall be held by the local
8 licensing authority until a notice of hearing has been conspicuously
9 posted on the licensed premises for a period of ten days and notice of the
10 hearing has been provided TO the applicant at least ten days prior to the
11 hearing. Any transfer of ownership hearing by the state licensing
12 authority shall be pursuant to section 12-47-305 (2).
13 (II) A LICENSE CONVERSION AS PROVIDED FOR IN SECTIONS

14 12-47-407 (6) AND 12-47-408 (6) INCLUDES A TRANSFER OF OWNERSHIP,

15 A CHANGE OF LOCATION, AND A CHANGE IN CLASS OF LICENSE IN A SINGLE

16 TRANSACTION, AND THE GROCERY STORE APPLICANT NEED NOT APPLY

17 SEPARATELY FOR A TRANSFER OF OWNERSHIP UNDER THIS SECTION. THE

18 GROCERY STORE APPLYING FOR A LICENSE CONVERSION PURSUANT TO

19 SECTIONS 12-47-407 (6) AND 12-47-408 (6) IS NOT ELIGIBLE FOR A

20 TEMPORARY PERMIT PURSUANT TO THIS SECTION. THE LOCAL LICENSING

21 AUTHORITY MAY CONSIDER THE REASONABLE REQUIREMENTS OF THE

22 NEIGHBORHOOD PURSUANT TO SECTION 12-47-312 WHEN MAKING A

23 DETERMINATION ON THE CHANGE IN CLASS OF LICENSE FROM A RETAIL

24 LIQUOR STORE LICENSE TO A LIQUOR-LICENSED DRUGSTORE LICENSE.

25 (2) Notwithstanding the provisions of this article to the contrary,

26 a local licensing authority shall have discretionary authority to issue a
27 temporary permit to a transferee of any retail class of alcohol beverage

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 1 license issued by the local licensing authority pursuant to this article or
2 article 46 of this title; EXCEPT THAT A LOCAL LICENSING AUTHORITY

3 SHALL NOT ISSUE A TEMPORARY PERMIT TO A GROCERY STORE THAT HAS

4 ACQUIRED OWNERSHIP OF A LICENSED RETAIL LIQUOR STORE IN

5 ACCORDANCE WITH SECTIONS 12-47-407 (6) AND 12-47-408 (6). Such

6 temporary permit shall authorize a transferee to continue selling such
7 alcohol beverages as permitted under the permanent license during the
8 period in which an application to transfer the ownership of the license is
9 pending.
10 SECTION 4. 12-47-312 (2) (a), Colorado Revised Statutes, is
11 amended to read:
12 12-47-312. Results of investigation - decision of authorities.
13 (2) (a) Before entering any decision approving or denying the
14 application, the local licensing authority shall consider, except where this
15 article specifically provides otherwise, the facts and evidence adduced as
16 a result of its investigation, as well as any other facts, the reasonable
17 requirements of the neighborhood for the type of license for which
18 application has been made, the desires of the adult inhabitants, the
19 number, type, and availability of alcohol beverage outlets located in or
20 near the neighborhood under consideration, and any other pertinent
21 matters affecting the qualifications of the applicant for the conduct of the
22 type of business proposed; except that the reasonable requirements of the
23 neighborhood shall not be considered in the issuance of a club liquor
24 license. The reasonable requirements of the neighborhood may, but are
25 not required to, be considered in the conversion or transfer of a
26 liquor-licensed drugstore license to a retail liquor store license OR THE

27 CONVERSION OR TRANSFER OF A RETAIL LIQUOR STORE LICENSE TO A

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1 LIQUOR-LICENSED DRUGSTORE IN ACCORDANCE WITH SECTIONS 12-47-407

2 (6) AND 12-47-408 (6).

3 SECTION 5. 12-47-407, Colorado Revised Statutes, is amended
4 BY THE ADDITION OF A NEW SUBSECTION to read:
5 12-47-407. Retail liquor store license. (6) A GROCERY STORE
6 MAY APPLY TO THE STATE AND LOCAL LICENSING AUTHORITIES, AS PART

7 OF A SINGLE APPLICATION, FOR A LICENSE CONVERSION FROM A RETAIL

8 LIQUOR STORE TO A LIQUOR-LICENSED DRUGSTORE AS PROVIDED IN

9 SECTION 12-47-408 (6).

10 SECTION 6. 12-47-408 (1) and (4), Colorado Revised Statutes,

11 are amended, and the said 12-47-408 is further amended BY THE
12 ADDITION OF A NEW SUBSECTION, to read:
13 12-47-408. Liquor-licensed drugstore license. (1) A
14 liquor-licensed drugstore license shall be issued to persons selling malt,
15 vinous, and spirituous liquors in sealed containers not to be consumed at
16 the place where sold. Nothing in this subsection (1) shall prohibit a
17 liquor-licensed drugstore licensee from allowing tastings to be conducted
18 on his or her licensed premises if an authorization for the tastings has
19 been granted pursuant to section 12-47-301.
20 (4) (a) EXCEPT AS PROVIDED IN PARAGRAPH (b) OF THIS

21 SUBSECTION (4), it is unlawful for any owner, part owner, shareholder, or

22 person interested directly or indirectly in a liquor-licensed drugstore to

23 conduct, own either in whole or in part, or be directly or indirectly
24 interested in any other business licensed pursuant to this article. except
25 that such
26 (b) (I) A person THAT HAS AN INTEREST IN A LIQUOR-LICENSED

27 DRUGSTORE, AS DESCRIBED IN PARAGRAPH (a) OF THIS SUBSECTION (4),

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 1 may have an interest in:
2 (A) An arts license; or
3 (B) An airline public transportation system license granted under
4 this article; or in
5 (C) A financial institution referred to in section 12-47-308 (4); OR
6 (D) OTHER LIQUOR-LICENSED DRUGSTORE LICENSES OBTAINED

7 PURSUANT TO SUBSECTION (6) OF THIS SECTION.

8 (II) A GROCERY STORE BUSINESS MAY OBTAIN AN UNLIMITED

9 NUMBER OF LIQUOR-LICENSED DRUGSTORE LICENSES IN THE MANNER

10 PROVIDED IN SUBSECTION (6) OF THIS SECTION.

11 (6) (a) A GROCERY STORE MAY APPLY TO THE STATE AND LOCAL
12 LICENSING AUTHORITIES, AS PART OF A SINGLE APPLICATION, FOR A

13 TRANSFER OF OWNERSHIP OF A LICENSED RETAIL LIQUOR STORE, A CHANGE

14 OF LOCATION OF THE RETAIL LIQUOR STORE, AND A CHANGE IN CLASS OF

15 LICENSE FROM A RETAIL LIQUOR STORE LICENSE TO A LIQUOR-LICENSED

16 DRUGSTORE LICENSE. A GROCERY STORE MAY APPLY FOR SUCH TRANSFER

17 AND CONVERSION ONLY IF ALL OF THE FOLLOWING JURISDICTION,

18 DISTANCE, AND FOOD SALES REQUIREMENTS ARE MET:

19 (I) THE RETAIL LIQUOR STORE THAT IS THE SUBJECT OF THE

20 TRANSFER OF OWNERSHIP IS LOCATED WITHIN THE SAME LOCAL LICENSING

21 AUTHORITY JURISDICTION AS THE GROCERY STORE MAKING THE

22 APPLICATION.

23 (II) UPON TRANSFER AND CONVERSION OF THE RETAIL LIQUOR

24 STORE LICENSE TO A LIQUOR-LICENSED DRUGSTORE LICENSE, THE

25 GROCERY STORE THAT HAS OBTAINED THE LIQUOR-LICENSED DRUGSTORE

26 LICENSE WILL NOT BE LOCATED WITHIN ONE THOUSAND FEET OF ANOTHER

27 RETAIL LIQUOR STORE LICENSEE THAT IS WITHIN THE SAME LOCAL

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 1 LICENSING AUTHORITY JURISDICTION AS THE GROCERY STORE, AS

2 DETERMINED BY A RADIUS MEASUREMENT THAT BEGINS AT THE PRINCIPAL

3 DOORWAY OF THE GROCERY STORE AND ENDS AT THE PRINCIPAL DOORWAY

4 OF THE RETAIL LIQUOR STORE.

5 (III) AT THE TIME OF APPLICATION, THE GROCERY STORE PROVIDES

6 EVIDENCE TO THE STATE AND LOCAL LICENSING AUTHORITIES THAT ITS

7 FOOD SALES REVENUES DURING THE PRIOR TWELVE MONTHS HAVE BEEN

8 AT LEAST FIFTY-ONE PERCENT OF THE GROCERY STORE'S TOTAL REVENUES.

9 (b) IN MAKING ITS DETERMINATION ON THE TRANSFER OF

10 OWNERSHIP, CHANGE OF LOCATION, AND CONVERSION OF CLASS OF

11 LICENSE APPLICATION, THE LOCAL LICENSING AUTHORITY MAY CONSIDER

12 THE REASONABLE REQUIREMENTS OF THE NEIGHBORHOOD AND THE

13 DESIRES OF THE ADULT INHABITANTS IN ACCORDANCE WITH SECTION

14 12-47-312.
15 SECTION 7. 12-47-501 (2) (a), Colorado Revised Statutes, is
16 amended BY THE ADDITION OF A NEW SUBPARAGRAPH to read:
17 12-47-501. State fees. (2) (a) The state licensing authority shall
18 establish fees for processing the following types of applications, notices,
19 or reports required to be submitted to the state licensing authority:
20 (XV) APPLICATIONS FOR TRANSFER OF OWNERSHIP, CHANGE OF
21 LOCATION, AND CONVERSION OF CLASS OF LICENSE PURSUANT TO

22 SECTIONS 12-47-407 (6) AND 12-47-408 (6).

23 SECTION 8. 12-47-505 (4) (a), Colorado Revised Statutes, is

24 amended BY THE ADDITION OF A NEW SUBPARAGRAPH to read:
25 12-47-505. Local license fees. (4) (a) Each application for a
26 license provided for in this article and article 46 of this title filed with a
27 local licensing authority shall be accompanied by an application fee in an

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 1 amount determined by the local licensing authority to cover actual and
2 necessary expenses, subject to the following limitations:
3 (V) FOR A TRANSFER OF OWNERSHIP, CHANGE OF LOCATION, AND
4 CONVERSION OF CLASS OF LICENSE PURSUANT TO SECTIONS 12-47-407 (6)

5 AND 12-47-408 (6), NOT TO EXCEED FIVE THOUSAND DOLLARS.

6 SECTION 9. 12-47-901 (1) (h) (III), (5) (i) (II), (5) (k) (II), and
7 (7) (b), Colorado Revised Statutes, are amended to read:
8 12-47-901. Unlawful acts - exceptions. (1) Except as provided
9 in section 18-13-122, C.R.S., it is unlawful for any person:
10 (h) (III) Notwithstanding subparagraph (I) of this paragraph (h),
11 it shall not be unlawful for adult patrons of a retail liquor store or
12 liquor-licensed drugstore licensee to consume malt, vinous, or spirituous
13 liquors on the licensed premises when the consumption is conducted
14 within the limitations of the licensee's license and is part of a tasting if
15 authorization for the tasting has been granted pursuant to section
16 12-47-301.
17 (5) It is unlawful for any person licensed to sell at retail pursuant
18 to this article:
19 (i) (II) Notwithstanding subparagraph (I) of this paragraph (i), it
20 shall not be unlawful for a retail liquor store or liquor-licensed drugstore
21 licensee to allow tastings to be conducted on his or her licensed premises
22 if authorization for the tastings has been granted pursuant to section
23 12-47-301.
24 (k) (II) Notwithstanding subparagraph (I) of this paragraph (k), it
25 shall IS not be unlawful for a retail liquor store or liquor-licensed
26 drugstore licensee to allow tastings to be conducted on his or her THE

27 licensed premises if authorization for the tastings has been granted

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 1 pursuant to section 12-47-301.
2 (7) (b) Notwithstanding paragraph (a) of this subsection (7), it
3 shall IS not be unlawful for a retail liquor store or liquor-licensed
4 drugstore licensee to allow tastings to be conducted on his or her licensed
5 premises if authorization for the tastings has been granted pursuant
6 section 12-47-301.
7 SECTION 10. Act subject to petition - effective date -
8 applicability. (1) This act shall take effect at 12:01 a.m. on the day
9 following the expiration of the ninety-day period after final adjournment
10 of the general assembly (August 11, 2010, if adjournment sine die is on
11 May 12, 2010); except that, if a referendum petition is filed pursuant to
12 section 1 (3) of article V of the state constitution against this act or an
13 item, section, or part of this act within such period, then the act, item,
14 section, or part shall not take effect unless approved by the people at the
15 general election to be held in November 2010 and shall take effect on the
16 date of the official declaration of the vote thereon by the governor.
17 (2) The provisions of this act shall apply to applications to transfer
18 ownership, change location, and convert a class of license submitted by
19 grocery stores on or after January 1, 2011.

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