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April 9, 2024 HB 24-1373
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated April 2, 2024)
Drafting Number:
Prime Sponsors:
LLS 24-1045
Rep. Amabile; Ricks
Sen. Roberts; Will
Date:
Bill Status:
Fiscal Analyst:
April 9, 2024
House Finance
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 most 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 $190,086 to the Department of
Revenue from the Liquor Enforcement Division Cash Fund.
Fiscal Note
Status:
The revised fiscal note reflects the introduced bill, as amended by the House Business
Affairs and Labor Committee.
Table 1
State Fiscal Impacts Under HB 24-1373
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue Cash Funds $201,723 $168,491
Total Revenue $201,723 $168,491
Expenditures Cash Funds $190,086 $156,584
Centrally Appropriated $11,637 $11,907
Total Expenditures $201,723 $168,491
Total FTE 1.1 FTE 1.0 FTE
Transfers - -
Other Budget Impacts TABOR Refund $201,723 $168,491
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April 9, 2024 HB 24-1373
Summary of Legislation
Liquor-licensed drugstore licenses. The bill prevents any new liquor-licensed drugstore
licenses (LLDS) from being issued after January 1, 2025. LLDSs may not be renewed unless the
licensee is also an independent pharmacy. All other LLDS licensees convert to a Fermented Malt
Beverage and Wine (FMBW) retailer license. License conversions do not affect disciplinary
actions, renewal deadlines, or investigations for a licensee.
Fermented malt beverage and wine licenses. The bill prohibits FMBW licensees from placing
temporary displays of alcoholic beverages next to non-alcoholic beverages, candy, toys, or near
an entry or exit of the premises. FMBW licensees must ensure that handling, sales and delivery
of products are performed by their own employees. These licensees are also prohibited from
selling fermented malt beverages above 14 percent alcohol-by-volume or wine above
17 percent alcohol-by-volume.
Wholesalers. Wholesalers are prohibited from offering more favorable treatment to retailers
that are not also available to 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.
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.
State Revenue
The bill will increase state revenue from fines and fees by $201,723 in FY 2024-25 and by
$168,491 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. Page 3
April 9, 2024 HB 24-1373
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 $202,000 in FY 2024-25 and
by $168,000 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 $125,460 $102,416
Centrally Appropriated Costs
1
$11,636 $11,907
FTE – Personal Services 0.6 FTE 0.6 FTE
FTE – Legal Services 0.5 FTE 0.4 FTE
Total Cost $201,723 $168,491
Total FTE
1.1 FTE 1.0 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Staff. The DOR requires 0.5 FTE criminal investigator beginning in January 2025 and ongoing,
and 0.5 FTE 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. Page 4
April 9, 2024 HB 24-1373
Legal services. The LED requires 980 hours in legal services provided by the Department of Law
in FY 2024-25, which equates to 0.5 FTE, and 800 hours in FY 2025-26 and ongoing, which
equates to 0.4 FTE. Legal services are required to address rulemaking, enforcement actions
related to license conversions and legal actions against 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.
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 $190,086 from the Liquor Enforcement
Division Cash Fund to the Department of Revenue, and 0.6 FTE. Of this amount, $125,460 is
reappropriated to the Department of Law for legal services, with an additional 0.5 FTE. Page 5
April 9, 2024 HB 24-1373
Departmental Difference
The Department of Revenue estimates that an additional $392,805 and 4.4 FTE will be required
in FY 2025-26 to conduct investigations annually and handle consumer complaints as a result of
the bill. These additional FTE include an additional 2.3 FTE criminal investigators, 1.0 FTE analyst,
1.0 FTE compliance investigator, and 0.1 FTE legal assistant. Investigation workload assumes an
estimated 120 investigations, resulting from an additional 10 investigations per month from
retail liquor stores alleging discrimination from a wholesaler who has offered more favorable
treatment to another store. The fiscal note differs from the DOR’s estimate by assuming that the
number of additional investigations required by the bill will be closer to 5 investigations per
year, and that if additional resources are required, these will be requested through the annual
budget process.
State and Local Government Contacts
Counties Information Technology Public Safety
Revenue Judicial Law
Municipalities
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.