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April 2, 2024 HB 24-1373
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-1045
Rep. Amabile; Ricks
Sen. Roberts; Will
Date:
Bill Status:
Fiscal Analyst:
April 2, 2024
House Business & Labor
John Armstrong | 303-866-6289
john.armstrong@coleg.gov
Bill Topic: ALCOHOL BEVERAGE RETAIL LICENSEES
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill eliminates the liquor-licensed drugstore license, converts all current holders of
that license to other liquor license types, establishes new requirements for
wholesalers, and allows certain retail licensees to purchase from wholesalers.
Beginning in FY 2024-25, the bill will increase state revenues and expenditures and
may impact local government revenue and expenditures.
Appropriation
Summary:
For FY 2024-25, the bill requires an appropriation of $311,961 to the Department of
Revenue from the Liquor Enforcement Division Cash Fund.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 24-1373
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue Cash Funds $323,598 $266,042
Total Revenue $323,598 $266,042
Expenditures Cash Funds $311,961 $254,135
Centrally Appropriated $11,637 $11,907
Total Expenditures $323,598 $266,042
Total FTE 1.7 FTE 1.5 FTE
Transfers - -
Other Budget Impacts TABOR Refund $323,598 $266,042
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April 2, 2024 HB 24-1373
Summary of Legislation
Liquor-licensed drugstore licenses. The bill repeals the liquor-licensed drugstore license
(LLDS) on January 1, 2025 and converts all current licenses of this type to a fermented malt
beverage and wine (FMBW) retailer license. If the drugstore licensee only possessed one license
for a single location, that licensee may instead convert to a retail liquor store license or
fermented malt beverage off-premises license. License conversions do not affect disciplinary
actions, renewal deadlines, or investigations for a licensee.
Fermented malt beverage and wine licenses. The bill requires FMBW licensees to display all
alcoholic beverages in a single location, without stacking on the floor or displaying alcoholic
beverages in endcaps. These licensees are also prohibited from selling alcohol above 14 percent
alcohol-by-volume.
Wholesalers. Wholesalers are prohibited from offering more favorable treatment to retailers
that are not also available to FMBW or retail liquor store licenses, and prohibits a wholesaler
from aggregating the purchases of multiple locations owned by the same entity over single
location retailers. Wholesalers who violate these provisions may be fined to cover the cost of
enforcement. These funds are deposited into the Liquor Enforcement Division and State
Licensing Authority Cash Fund.
Currently, most retail licensees must purchase products from a wholesaler. Beginning
January 1, 2025, the bill allows businesses who possess the following license types to also
purchase up to $2,000 per year in alcohol from a retail liquor store, provided they abide by
current regulations:
beer and wine license;
hotel and restaurant license;
tavern license;
retail gaming tavern license;
brew pub license;
club license;
arts license;
racetrack license;
vintner’s restaurant license;
distillery pub license; and,
lodging and entertainment license
Access to ATMs. Under current law, those on public assistance may access their benefits from
ATMs in liquor-licensed drugstores. The bill allows these individuals to access benefits from
ATMS in FMBW retailers once licenses are converted.
Background
Liquor-licensed drugstore licenses allow a limited number of pharmacies licensed by the State
Board of Pharmacy to sell alcohol. Most holders of these licenses are large grocery stores that
have a pharmacy on the premises. As of 2023, 33 liquor-licensed drugstore licenses were issued
by the Department of Revenue (DOR).
FMBW licenses are currently held by grocery and convenience stores that are permitted to sell
beer and wine. There are currently 1,900 FMBW licensees in the state. Page 3
April 2, 2024 HB 24-1373
State Revenue
The bill will increase state revenue from fines and fees by $324,000 in FY 2024-25 and by
$266,000 in FY 2025-26, deposited in the Liquor Enforcement Division Cash Fund. It will also
minimally impact revenue to the Old Age Pension Fund.
Increased fees to cover costs. The Liquor Enforcement Division (LED) within the DOR will adjust
its fee structures across certain license types to account for increased enforcement and
rulemaking, as outlined in the State Expenditures section. License fees are subject to TABOR.
Fee differences. LLDS licensees current pay higher annual fees that FMBW licensees; these fees
are set in statute. The resulting revenue loss from converting these licenses is estimated to
reduce General Fund revenue by $425 in FY 2024-25 and by $850 in FY 2025-26. Additionally,
the conversion of these licenses will reduce revenue to the Old Age Pension Fund by $1,934 in
FY 2024-25 and by $3,868 in FY 2025-26. If a liquor licensed drugstore converts to a Retail
Liquor License, there will be no change in fees. The fiscal note assumes all LLDS licenses will
convert to a FMBW license.
Fines. The bill minimally increase revenue to the Liquor Enforcement Division Cash Fund in DOR.
Revenue will increase from fines against wholesalers found to be in violation of the bill’s
discrimination requirements. The fiscal note assumes wholesalers will comply with the bill.
State Expenditures
The bill will increase expenditures to the Department of Revenue by $324,000 in FY 2024-25 and
by $266,000 in FY 2025-26, paid from the Liquor Enforcement Division Cash Fund. Costs may be
partially offset by fine revenue collected for violations by wholesalers. Costs are detailed in
Table 2 and explained below.
Table 2
Expenditures Under HB 24-1373
FY 2024-25 FY 2025-26
Department of Revenue
Personal Services
$50,519 $53,400
Operating Expenses $768 $768
Capital Outlay Costs $13,340 -
Legal Services $247,335 $199,967
Centrally Appropriated Costs
1
$11,636 $11,907
FTE – Personal Services 0.6 FTE 0.6 FTE
FTE – Legal Services 1.1 FTE 0.9 FTE
Total Cost $323,598 $266,042
Total FTE
1.7 FTE 1.5 FTE
1
Centrally appropriated costs are not included in the bill's appropriation. Page 4
April 2, 2024 HB 24-1373
Staff. The DOR will require 0.5 FTE for a Criminal Investigator, beginning in January 2025 and
ongoing, and 0.5 FTE for a Legal Assistant from September 2025 through January 2025, reducing
to 0.1 FTE beginning January 2025. The criminal investigator will conduct investigations against
wholesalers and converted licensees to enforce the bill’s requirements. The legal assistant will
assist with the necessary rulemaking to implement the conversion of licenses and
enforcement related to the requirements for FMBW licensees. Costs are prorated to assume a
September 2024 start date and standard capital outlay and operating costs are included.
Legal services. The LED requires 1,932 hours in legal services provided by the Department of
Law in FY 2024-25, which equates to 1.1 FTE, and 1,562 hours in FY 2025-26 and ongoing, which
equates to 0.9 FTE. Legal services are required to address rulemaking, enforcement actions
related to license conversions, and FMBW requirements, assumed at 500 hours in FY 2024-25
and 130 hours ongoing. Another 432 hours per year are estimated for license-related
enforcement actions. Finally, the fiscal note assumes 1,000 hours will be required in initial
implementation years related to legal actions from wholesalers who violate the bill’s anti-
discrimination provisions. If additional litigation costs are necessary, these resources will be
requested through the annual budget process. Legal services are provided at a rate of
$128.02 per hour.
Centrally appropriated costs. Pursuant to a Joint Budget Committee policy, certain costs
associated with this bill are addressed through the annual budget process and centrally
appropriated in the Long Bill or supplemental appropriations bills, rather than in this bill. These
costs, which include employee insurance and supplemental employee retirement payments, are
shown in Table 2.
Other Budget Impacts
TABOR refunds. The bill is expected to increase the amount of state revenue required to be
refunded to taxpayers by the amounts shown in the State Revenue section above. This estimate
assumes the March 2024 LCS revenue forecast. A forecast of state revenue subject to TABOR is
not available beyond FY 2025-26. Because TABOR refunds are paid from the General Fund,
increased cash fund revenue will reduce the amount of General Fund available to spend or save.
Local Government
The bill will result in administrative costs for local licensing authorities in counties and
municipalities to convert the liquor-licensed drugstore licenses to fermented malt beverage and
wine retailer licenses. It may be slightly offset by a minimal workload reduction from no longer
having to handle conversions of retail liquor store licenses to liquor-licensed drugstore licenses.
Additionally, the bill may reduce revenue to local licensing authorities where liquor-licensed
drugstores are located. Fees for an FMBW license are lower than that of a liquor-licensed
drugstore, so fee revenue will be lower if liquor-licensed drugstores convert to an FMBW. Fee
revenue will not change if liquor-licensed drugstores are converted to retail liquor stores.
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April 2, 2024 HB 24-1373
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed.
State Appropriations
For FY 2024-25, the bill requires an appropriation of $311,961 from the Liquor Enforcement
Division Cash Fund to the Department of Revenue, and 0.4 FTE. Of this amount, $247,335 is
reappropriated to the Department of Law for legal services.
State and Local Government Contacts
Counties Information Technology Judicial
Law Municipalities Public Safety
Revenue
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.