Bill Summary for Bill Number HB10-1186

Date: 02/10/2010

Final
BILL SUMMARY for HB10-1186

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View-->	Action Taken:
Moved amendment L.007 (Attachment J). The motion Moved to refer House Bill 10-1186, as amended, to	PASS PASS

02:09 PM -- House Bill 10-1186

Representative Liston, prime sponsor, presented House Bill 10-1186 concerning conditions on the authority to sell alcohol beverages in establishments of less than five thousand square feet. Currently, there is a separate license category for establishments that sell beer with an alcohol content of 3.2 percent. This bill permits the sale of full strength beer in convenience stores. These stores are defined as retail businesses of less than 5,000 square feet that offer quick purchases of food, beverages, or gasoline, and that do not have a pharmacy or employ pharmacists. The bill establishes annual local license fees of $150 for a convenience store located within municipal boundaries, and $250 for a convenience store located in an unincorporated area of a county. Eighty-five percent of the fee will be credited to the state's Old Age Pension Fund. Retail liquor stores of less than 5,000 square feet are authorized to sell nonperishable food items. The Department of Revenue is required to commence a study of the effects of the new licensing program on or before July 1, 2015, and report its findings to the General Assembly by July 1, 2016.

02:17 PM

Representative Liston talked about the liquor stores and the number of products, including wine and liquor, they are allowed to sell and the fact that the bill is allowing convenience stores to sell only one product. Representative Liston addressed the concern that the bill would increase underage drinking and he referenced some statistics from the Division of Liquor Enforcement.

02:26 PM -- Dan Genovese, representing Balmar Petroleum, testified in support of the bill. He talked about the effect the Sunday sales bill has had on 3.2 beer sales. He explained that sales have decreased by 70 percent along with chips and other merchandise that typically accompany beer purchases. He said House Bill 1186 will allow them to compete on a level playing field. Mr. Genovese talked about the types of beers he would like to see sold in convenience stores, including craft beers. Representative Rice talked about the fact that there is sometimes only one employee in the store, and asked how stores can ensure liquor is not stolen. Mr. Genovese explained that in his stores there are at least two employees and a manager working at a time. He also talked about the use of video surveillance. Representative Soper asked about the average age of the employees in his stores. Representative Priola asked what Mr. Genovese's average sales are per transaction excluding gas. He said they are about $4.50.

02:36 PM -- Kirk Swallow, representing Swallow Oil Company, testified in support of the bill.

02:40 PM -- Phil Hoey, representing KG, testified in support of the bill.

02:42 PM -- Wayne Mathews, representing rocky mountain franchise owners, representing about 90 stores, testified in support of the bill. He talked about the expenses involved in owning a convenience store including medical insurance, workers' compensation, and labor. He talked about the drop in sales following the Sunday liquor law. He said he now sells $30 a day of beer and he used to sell about $200 worth of beer on Sunday and about $80 to $100 on other days. Mr. Matthews added that on Superbowl Sunday he sold only 5 units of beer. Mr. Mathews addressed the age issue that was brought up earlier, stating that an employee cannot ring sales unless they are 18 so that is not a problem. Representative Liston asked Mr. Mathews some questions. Representative Rice asked what Mr. Mathews attributes to the drop in sales during the week. Mr. Mathews responded. Representative Bradford expressed a concern about the age of employees working in convenience stores. Mr. Mathews responded and talked about the amount of surveillance at the store. A discussion ensued regarding the access to liquor by minors.

02:58 PM

Representative Priola asked what amount Mr. Mathews expects his sales will increase by if he is allowed to sell beer. Mr. Mathews explained that based on other states, it would more than double his beer sales. Representative Rice asked Mr. Mathews if he has considered obtaining a liquor license now and having a separate establishment for liquor. Mr. Mathews said he has considered it, but he explained that he is not allowed to split his 7 Eleven.

03:02 PM -- Sejal Patel, a 7 Eleven franchisee, testified in support of the bill and talked about the negative effects the 2008 Sunday sales bill has had on her business. Ms. Patel addressed the age issue as well.

03:05 PM -- Dan Genovese returned to the table to clarify a question regarding the age of employees at convenience stores.

03:06 PM -- Steven Imaeda, representing Circle K, testified in support of the bill.

03:08 PM -- Buzz Calkins, a fourth generation owner of Bradley Petroleum, testified in support of the bill. He talked about various factors that have impacted their sales over the last 10 years. Representative Balmer asked about the impact on sales due to the Sunday liquor bill.

03:15 PM -- Scott Paulson, representing Silco Oil Company, testified in support of the bill. He talked about the impact Sunday sales have had on his business.

03:18 PM -- Rich Spresser, representing Pester Marketing, testified in support of the bill. He talked about the impact Sunday sales have had on his business. Mr. Spresser addressed other factors that have impacted his business as well.

03:23 PM -- Lisa Champan, representing Pacific Convenience and Fuels, testified in support of the bill. She mirrored previous points regarding having a level playing field and talked about the amount of training employees go through in these stores.

03:25 PM -- Robert Marquez, representing LME Inc., testified in support of the bill. He talked about the law that used to be in place that allowed 18-year-old consumers to buy 3.2 beer. Mr. Marquez talked about the difficulty selling 3.2 beer now.

03:29 PM -- David Harper, a franchisee, testified in support of the bill. He talked about the impact Sunday sales have had on his business.

03:34 PM -- Russ Gebbia, a 7 Eleven franchise owner, testified in support of the bill.

03:39 PM -- Don Willis, a 7 Eleven franchisee, testified in support of the bill. He said he has also seen a dramatic drop in beer sales since the Sunday sales bill was passed.

03:42 PM -- Don Buck, a 7 Eleven franchisee, testified in support of the bill.

03:47 PM -- Councilman Reinhart, representing the City Mayor of Wheatridge, testified against the bill and talked about his concerns with underage drinking. Representative Casso asked Councilman Reinhart questions about the effects the bill will have on underage drinking. A discussion ensued.

04:02 PM -- James Dean, representing the Westminster Total Beverage and the Colorado Licensed Beverage Association (CLBA), testified against the bill and distributed a handout (Attachment E). He walked the committee through the handouts provided and expressed concerns over having 18-year-old employees selling beer rather than 21-year-old employees, as required in liquor stores. He spoke to his opinion that liquor stores do not have a monopoly. He suggested that the issue should be put to a vote of the people. He responded to questions from Representative Liston regarding whether Mr. Dean owned a liquor store and his opposition to the bill.

04:21 PM -- Roger Morris, representing the Colorado Licensed Beverage Association, testified that a liquor licensing authority must grant a license to a qualified applicant. He stated there are problems with the definition of "convenience store" in the bill, stating the definition is broad and opens the door to other retail entities seeking to sell beer. He stated that the bill could lead to local liquor licensing authorities to be overwhelmed by applicants.

04:27 PM -- Emily Tompkins, Mothers Against Drunk Driving - Colorado, testified that the organization is concerned about increased access to alcohol by those under age 21. She stated that the bill will allow individuals between 18 and 21 to handle and sell full strength beer which may lead to greater risks for underage drinking. She testified in support of requiring convenience stores to comply with similar employee age limits as liquor stores.

04:33 PM -- Tiffany Hanson, Mothers Against Drunk Driving - Colorado, testified in opposition to the bill. She stated her belief that the bill will increase the accessibility of alcohol to minors. She gave a number of statistics related to underage drinking. Ms. Hanson responded to questions from Representative Bradford regarding statistics concerning underage drinking in states that have less strict liquor laws that Colorado.

04:42 PM -- Kathy Lane, a liquor store owner, testified against the bill. She talked about the number of employees at her store and said her store is a small business. She distributed a handout (Attachment F). Ms. Lane talked about the fact that she can only hold one license for a liquor store, but convenience stores can have more than one. She also talked about the non-perishable food provision, but added that they still cannot sell perishable food. Representative Gagliardi asked a question about the number of licenses a convenience store owner can obtain under the bill.

04:54 PM -- Brandi Fisher Pollock, representing Fisher's Liquor Barn, testified against the bill. Ms. Fisher Pollock discussed her concerns with the bill, including the number of convenience stores that are owned by grocery store chains. She talked about the bill's provision that allows 18-year-old employees to handle beer. Representative Casso asked what the size of her liquor store is. Ms. Fisher Pollock responded. Representative Stephens thanked the witness for coming down to testify. Representative Bradford read some statistics that responded to her earlier concerns about access for underage drinkers.

05:05 PM -- Mat Dinsmore, owner of Wilbur's Liquor Store in Fort Collins, testified against the bill. Mr. Dinsmore talked about job creation and said this bill will destroy jobs. He talked about convenience stores and the number of stores they are allowed to own versus the fact that he can only have one.

05:12 PM -- Dennis Dinsmore, Mat Dinsmore's father and owner of Wilbur's Liquor Store, testified against the bill. He talked about the number of regulations placed on liquor and the fact that the bill would allow 18-year-old employees to sell beer. Mr. Dinsmore talked about a conversation he had with the City of Fort Collins Liquor Enforcement Agency. Representative Gagliardi thanked the witnesses for coming. Representative Balmer asked whether Mr. Dinsmore could sell 3.2 beer, he said he cannot.

05:29 PM -- Patti Robinson, representing herself, a liquor store owner, testified against the bill. She said she does not want to sell non-perishable foods.

05:35 PM -- Eric Wallace, representing Left Hand Brewery, testified against the bill. He talked about the fact that each liquor store can only have one license. He talked about other craft brewers in the state. Mr. Wallace handed out a picture of a liquor store and pointed out the number of craft beers (Attachment G). He said chain stores decide from out of state what type of beer they sell. Mr. Wallace talked about the importance of local craft brewers. Representative Middleton asked how craft beers are distributed. Mr. Wallace responded. Representative Middleton talked about the reasons for the success of craft beers in Colorado and asked Mr. Wallace to comment. Mr. Wallace said he was able to talk to the people that make the decisions of what goes in their stores.

05:51 PM -- John Bryant, representing Oskar Blues Brewery, testified against the bill. He distributed a handout from the Coloradoan (Attachment H). He said current laws are working just fine. Mr. Bryant talked about the negative effects the bill would have on breweries.

05:57 PM -- Bill Eye, representing Dry Deck Brewing in Aurora, Colorado, testified against the bill. He said he was the only brewer in Aurora for a while and eventually moved and had a 50 percent growth in business. Mr. Eye said the bill will be an access to market problem. He said independent liquor stores will go out of business if convenience stores are allowed to sell beer. Representative Liston asked some questions to the witness.

06:03 PM -- Matt Cutter, representing Upslope Brewing Company, testified against the bill. He talked about his experience becoming a craft brewer a couple of years ago.

06:11 PM -- John Ribal, representing himself, testified against the bill. He talked about the definition of monopoly and distributed a handout of his testimony (Attachment I). Pat Ratliff also joined him at the table. Mr. Ribal talked about the number of regulations for liquor. Pat Ratliff, representing the Licensed Beverage Association, testified against the bill. She talked about a projected impact the bill would have on the industry that was used last year. Representative Liston clarified that the language on page five addresses Mr. Ribal's concerns that just anyone can get a license under the bill.

06:31 PM -- Alem Syoumj, representing the Colorado Ethiopian and Eritrean Liquor Association, testified against the bill. He talked about the bill returning every year and said he feels there is already a level playing field.

06:38 PM -- Jeff Lim, owner of a liquor store and convenience store, representing the Korean Liquor Association, testified against the bill. Mr. Lim had a group of liquor store owners stand up that were against the bill and about 20-30 people stood up. He said he was also representing 300 other Korean liquor stores. Mr. Lim said the Sunday sales have not brought in additional revenue. Andrew Chae also representing the Korean Liquor Association, testified against the bill with Mr. Lim. He talked about his financial situation as a liquor store owner. Mr. Chae said 30-35 percent of his sales come from beer at his store. If the convenience store can sell beer, that business will be taken away. He said he shares a parking lot with 7 Eleven.

06:50 PM -- Matthew Margeson, representing the consumers, testified against the bill. He said current law is working and it doesn't need to be changed. Representative Priola talked about the number of craft brewers on the top ten list in the nation. He explained that five out of ten are in California, a state that allows grocery stores to sell, and only one is in Colorado. A discussion regarding the list ensued, with Representative Rice commenting as well.

07:03 PM

Representative Liston gave some examples of beer that liquor stores are selling that they are not supposed to be selling.

07:11 PM -- Ken Horn and his son, Bryan Noland, testified against the bill. He said he has worked in all three tiers of the industry. Mr. Horn addressed the non-perishable food provision.

07:17 PM -- Eugene Kahng, a liquor store owner in Wheatridge, testified against the bill. He talked about the safety issue with underage drinkers.

07:20 PM -- Mulugeta Gessesse, an owner of a liquor store in Edgewater, testified against the bill.

07:24 PM -- Tef Berhane, representing himself, an owner of a liquor store in Commerce City, testified against the bill. He talked about the financial state of the liquor store industry. He said he does not want to sell non-perishable food in his liquor store.

07:27 PM -- Patrick Linney, representing himself, testified against the bill. He talked about California's law and the impact it had on liquor stores.

07:33 PM -- Jeanne McEvoy, representing the Colorado Licensed Beverage Association, testified against the bill and addressed some earlier comments from the sponsor regarding beers and other things liquor stores are selling that they are not supposed to be.


BILL:	HB10-1186
TIME:	07:37:39 PM
MOVED:	Bradford
MOTION:	Moved amendment L.007 (Attachment J). The motion passed 9-1.
SECONDED:	Balmer
		VOTE
	Balmer	Yes
	Bradford	Yes
	Casso	Yes
	Kerr A.	Excused
	Liston	Yes
	Middleton	Yes
	Priola	Yes
	Soper	Yes
	Stephens	Yes
	Gagliardi	No
	Rice	Yes

Not Final YES: 9 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS

07:42 PM

Representative Liston gave some closing remarks on the bill and addressed the concerns that came up during the opposition's testimony. Representative Liston also discussed the fiscal note.

08:04 PM

Representative Gagliardi thanked the witnesses for coming and commented on the fiscal note. She said she shares the concerns of the liquor stores and MADD. Representative A. Kerr explained that he has been across the street in the Finance Committee presenting a bill.


BILL:	HB10-1186
TIME:	08:06:39 PM
MOVED:	Liston
MOTION:	Moved to refer House Bill 10-1186, as amended, to the Committee on Finance. The motion passed 7-4.
SECONDED:	Balmer
		VOTE
	Balmer	Yes
	Bradford	Yes
	Casso	Yes
	Kerr A.	No
	Liston	Yes
	Middleton	No
	Priola	Yes
	Soper	Yes
	Stephens	Yes
	Gagliardi	No
	Rice	No

Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS

08:10 PM

The committee adjourned.