Bill Summary for Bill Number HB09-1192

Date: 03/11/2009

Final
BILL SUMMARY for HB09-1192

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View-->	Action Taken:
Moved amendment L.002 (Attachment O). The motion Moved amendment L.003 (Attachment L), as amended b Moved amendment L.006 (Attachment M) to amendment Moved amendment L.008 (Attachment N). The motion Moved to postpone House Bill 09-1192 indefinitely. Moved to refer House Bill 091192- to the Committee	FAIL FAIL PASS FAIL PASS FAIL

01:40 PM -- House Bill 09-1192

Representative McFadyen, prime sponsor, presented House Bill 09-1192 concerning the elimination of the alcohol percentage limitations on beer products sold in Colorado. HB09-1192 eliminates the limitation in current law on the percentage of alcohol contained in fermented malt beverages (beer with not more than 3.2 percent alcohol by weight), thereby allowing beer licensees to manufacture, sell at wholesale or retail, or distribute full strength beer. Employees of premises where beer is sold at retail in containers for off-premises consumption who are 18 to 20 years of age would be required to either comply with the server and seller training program requirements established by the Liquor Enforcement Division in the Department of Revenue or be supervised by a person on the licensed premises who is at least 21 years of age.

The bill becomes effective August 4, 2009, assuming the General Assembly adjourns sine die as scheduled on May 6, 2009, unless a referendum petition is filed.

01:49 PM

Representative McFadyen gave the history of liquor laws in Colorado and other states' laws. She gave some statistics on underage liquor sales by type of retailer.

02:02 PM -- Henry Sobanet, representing the Rocky Mountain Food Industry Association, testified in support of the bill and distributed a report of the economic impact of House Bill 09-1192 (Attachment F). He explained that he is the President of Colorado Strategies LLC, an economic and government affairs consulting firm, which prepared an economic analysis of House Bill 09-1192. Mr. Sobanet said that it is estimated that 700 to 900 liquor stores will close if this bill passes because 50 percent of their beer sales will go away. Mr. Sobanet talked about the profit margin for each type of liquor sold in Colorado. Mr. Sobanet continued to discuss the findings from the economic analysis. Mr. Sobanet responded to questions.

02:13 PM -- Dave Reitz, a consultant on alcoholic beverage law and regulation and the former Director of the Colorado Liquor Enforcement Division, testified in support of the bill. He distributed and explained some handouts that showed the number of sales to minors administrative violations from 2005 to 2008, beer alcohol content test results, and Colorado alcohol beverage sales comparison of 2007 versus 2008 (Attachment G). Mr. Reitz responded to a question from the committee regarding underage sales.

02:29 PM -- Sandip Mali, a 7 Eleven franchisee, testified in support of the bill. He said following the 2008 Sunday sales bill, his business lost a lot of money and he had to lay off employees.

02:32 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. Representative Liston asked whether 7 Eleven can sell 3.2 beer 24 hours a day. Ms. Patel explained that they are only allowed to sell 3.2 beer until midnight. Representative Liston asked what customers are saying about 3.2 beer. Ms. Patel explained that customers are no longer coming in her store for 3.2 beer because they can buy full strength beer at liquor stores on Sundays. She said other customers have been asking when they can buy full strength beer at a convenience store. Representative Casso asked if the bill would allow them to compete with liquor stores. She said it would.

02:38 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 last summer. Mr. Willis responded to questions from the committee.

02:52 PM -- Jeff Krams, representing Loaf 'N Jug, testified in support of the bill and talked about the positive effects the bill would have on convenience stores. Mr. Krams said if the bill passes, they plan to hire about 64 employees. He explained that the company solely owns all the stores but bonuses are paid to employees based on sales. Representative McFadyen talked about a petition she has with about 100,000 signatures; 61,000 of which are signatures from 7 Elevens and the rest from stores like Loaf 'N Jug.

02:58 PM -- Tom Dargen, representing Gordon Bersch Brewery, testified in support of the bill and responded to questions from the committee.

03:14 PM -- Douglas Ratto, representing Safeway, testified in support of the bill. He said he feels that the concerns from the craft brewers is not factual and said they provide products consumers want to buy. Representative Ryden asked how the current stores would accommodate additional beer products.

03:23 PM -- Bill Gallagher, Chair of the Colorado Petroleum Marketers Association, testified in support of the bill. He said about 6 out of 10 convenience stores are small businesses. Mr. Gallagher said 70 percent of revenue in convenience stores is from gas, but gas is typically sold without margin and is not enough to sustain the stores. He talked about the effects of the Sunday sales law on his business. Representative Gagliardi asked some questions about the term C-Store that he used. He said it refers to a convenience store that sells quick service items and gas.

03:29 PM -- Mary Szarmach, Vice President of Trade Marketing, Smoker Friendly International, testified in support of the bill. She talked about the effects of the Sunday sales bill.

03:31 PM -- Buzz Calkins, representing Barry Petroleum, testified in support of the bill. He said it has been difficult to sell low cost gas since the passage of the Sunday sales law. Mr. Calkins responded to questions from the committee. Representative Ryden asked how many different types of 3.2 beers there are. Mr. Calkins said mostly the large beers like Coors and Miller provide it.

03:39 PM -- Rich Spresser, representing Pester Marketing, testified in support of the bill and responded to questions.

03:43 PM

Representative McFadyen asked Mr. Spresser to list the products that are being sold in liquor stores that are under the 3.2 limit.

03:44 PM -- Scott Paulson, representing Silco Oil, testified in support of the bill. He said the current law restricts him from competing with other businesses.

03:48 PM -- Lamont Hull, representing Hill Petroleum, testified in support of the bill.

03:50 PM -- Laura Harris, representing the Department of Revenue, Director of the Division of Liquor Enforcement Division, responded to questions from the committee.

03:57 PM -- Stan Dempsey, President of the Colorado Petroleum Association, testified in support of the bill.

04:00 PM -- Richard Oneslager, representing Balmar Management Group, LLC, testified in support of the bill and talked about his convenience stores. Mr. Oneslager responded to questions from the committee.

04:12 PM -- Mark Larson, representing the Colorado Wyoming Petroleum Marketers Association, testified in support of the bill. He talked about the effects of the Sunday sales bill. Mr. Larson stated that when Sunday sales was taken away, they should have taken away the 3.2 beer. He talked about another bill that would have allowed liquor stores to sell food that died.

04:18 PM -- Jeanne McEvoy, the Executive Director of the Colorado Licensed Beverage Association, testified against the bill and distributed a handout (Attachment H). She talked about some potential amendments to the bill.

04:28 PM -- Lieutenant Steve Neumeyer, an Aurora Police representative, spoke in opposition to the bill.

04:29 PM -- Korey Nelson, an attorney representing himself, testified in opposition to the bill. He said he is providing the perspective of local control and community. He spoke to the liquor code and how the bill will affect the local control over liquor licensing. He stated that the bill will affect the ability of the police to use their resources wisely regarding compliance checks. Mr. Nelson stated that it is less likely that teenagers try to acquire liquor at convenience stores since they only sell 3.2 beer which is not as potent as full strength beer. He questioned whether there are enough resources to maintain and keep abreast of the required compliance checks if the bill were to pass.

04:40 PM -- Miccki Langston, representing the Mile Hi Business Alliance, testified in opposition to the bill. She stated that Mile Hi Business Alliance is a group of local businesses that are owned by individuals who live in Colorado. She stated that grocery stores are not allowed to sell liquor and that liquor stores are not allowed to sell food. She stated that people will buy what is cheaper and what is more available to them and that the bill will substantially change the market. Ms. Langston explained that a national chain will sell a national brand, not a beer that is made by a locally based beer brewery. She said it is more than retail sales, it's about the local small businesses in Colorado.

04:44 PM -- John Ribal, representing the Pueblo Licensed Beverage Association, testified in opposition to the bill. Mr. Ribal spoke to the notion that the bill will level the playing field. He stated that convenience stores are open longer than liquor stores, which when added up, equates to approximately 45 more days of business.

04:49 PM -- Pat Ratliff and Tom Binnings, representing the Pueblo Licensed Beverage Association, spoke in opposition of the bill. Ms. Ratliff explained to the committee that she was hired to provide information on the economic impacts of the bill. She spoke to the Executive Summary report regarding the economic impacts of the bill. Tom Binnings, from the Liquor Store Association, spoke about the economic impact study. Mr. Binnings described a variety of data regarding how many liquor stores might close if House Bill 09-1192 passes. He talked about the options the liquor stores have to make up the loss in revenues. Mr. Binnings responded to questions from the committee. Representative Priola mentioned that liquor stores would still have a monopoly over wine and spirits. Mr. Binnings responded.

05:24 PM -- Eric Wallace, representing Left Hand Brewing Company and Vice President of the Colorado Brewers Guild, testified against the bill and distributed a poster (Attachment I) that illustrated an ad from Safeway's store in Colorado with a liquor license. He talked about the grocery stores' ability to sell beer for a much lower cost than liquor stores can. Mr. Wallace responded to questions of the committee.

05:41 PM

Representative McFadyen commented on the poster and the type of license that Safeway holds.

05:44 PM -- Jack Sosebee, representing Del Norte Brewing, testified against the bill. He talked about what it will look like when beer moves into grocery stores and referred to the ad Mr. Wallace distributed.

05:51 PM -- Nick DiGiacommo, representing Marketplace Liquor in Brighton, testified against the bill. He said 46 percent of his sales are from beer sales.

05:58 PM -- Jim Dean, representing Westminster Total Beverage, testified against the bill and distributed a handout (Attachment J). He talked about the effects the Sunday sales bill has had on his business and said he has been equally effected. Mr. Dean stated that all the convenience stores have to do is obtain a liquor license like the liquor stores. Representative McFadyen clarified that a convenience store cannot have a liquor license which is why the law needs to be changed.

06:22 PM -- Pat Karns, representing Colorado Pure Distilling, testified against the bill.

06:22 PM -- John Gerlich, representing Bookcliff Wines, testified against the bill.

06:23 PM -- Dennis Dinsmore, representing Colorado Community Liquor, testified against the bill and explained that an individual or company can own one liquor license in Colorado.

06:36 PM -- Jeff Liem, representing the Korean Liquor Association and the owner of a liquor store, testified against the bill.

06:51 PM -- Nick Mead, testifying as a liquor store customer, testified regarding his belief that customer services will decline as a result of the bill.

06:55 PM -- Dale Terry, representing Chips Distributing, testified against the bill, expressing concern that it will be difficult for him to compete with large grocery stores.

06:58 PM -- John Griffin, representing Indigo Payments, testified against the bill.

07:09 PM -- Monty Haltiner, representing Crossroads Wine and Spirit, testified against the bill and stated that the bill is too vague.

07:22 PM -- Mark Thomas, from Sanborn and Company, testified against the bill.

07:26 PM -- Barbara Teish, representing the CBRE Commercial Development, testified against the bill.

07:29 PM -- Emily Tompkins, representing the Mothers Against Drunk Driving, testified against the bill. She said the bill will increase the risk of underage drinking. Ms. Tompkins talked about compliance checks.

07:36 PM

Representative McFadyen responded to Ms. Tompkins' testimony.

07:37 PM -- Scott Robinson, representing the Colorado Community Liquor Store Coalition, testified against the bill.

07:51 PM -- Alan Jenks, representing Bacchus Wine and Spirits, testified against the bill and distributed and discussed a handout that showed the annual store fiscal revenues and net income for convenience stores and grocery stores (Attachment K). Mr. Jenks responded to questions to the bill.

08:01 PM -- Eugene Kahng, representing himself and his business, testified against the bill. He talked about other states that allow grocery stores to sell full strength beer and liquor and the effects that has had on liquor stores in those states.

08:03 PM -- Dave Sheuy, representing Foss Building Wine and Spirits in Golden, testified against the bill.

08:10 PM

Chairman Rice announced that he would read through the remaining witnesses signed up to testify and for members of the audience to either stand up and state they are opposed to the bill or tell the chair they would like to speak and he will call them up later so they can testify. The following people stood up and said they were opposed to the bill:

08:11 PM -- Beverly DeMoss, representing Riverwalk Wine and Spirits.

08:13 PM -- Jeff Jensen, representing Dudley's Discount Liquor.

08:14 PM -- Richard Schoft, representing Aggie Liquors.

08:15 PM -- Henry Wood, representing Upslope Brewing Company.

08:15 PM -- Hal Rogers, representing Rocky Mountain Liquor Mart.

08:15 PM -- Kim Schottleutner, representing DTC Wine and Spirits.

08:16 PM -- David Heller, representing Heritage Wine and Liquors.

08:16 PM -- Douglas Lidiak, representing Bittersweet Liquors.

08:16 PM -- Jim Little.

08:16 PM -- Tom Desta.

08:17 PM -- Andrew Chae, representing himself, testified against the bill. He talked about the effects the bill will have on liquor stores.

08:20 PM -- Hake Gezamagn, representing himself, testified against the bill and talked about the effects the bill will have on his business.

08:22 PM -- Kathy Lane, representing herself as a liquor store owner, testified against the bill. She said that 60 percent of her sales are beer sales and she said if that goes away, her business will suffer.

08:27 PM -- Erik Maxson, representing breweries in Durango Colorado, testified against the bill and talked about the impact the bill will have on rural businesses.

08:33 PM -- Sharon Midcap, representing herself, a liquor store owner from Fort Morgan, testified against the bill. She talked about the cost in the poster that was previously distributed and stated that she cannot even buy the beer for the price the grocery stores sell it. Ms. Midcap said 70 percent of her sales are beer.

08:36 PM -- Mark Rubin, representing himself, a liquor store owner, testified against the bill talked about the effects the bill will have on his store including him having to lay off employees.

08:39 PM -- Diane Turek, representing West Ranch Center, testified against the bill. She talked about the effects the bill will have on the tenants in her building.

08:41 PM -- Ken Horn, representing himself and Brian Noland, testified against the bill. He talked about the differences between Colorado and other states that have implemented similar legislation.

08:45 PM -- Larry Gray, representing Bottles, testified against the bill.

08:50 PM -- Drew Owen, representing Centennial Wine and Spirits, a second generation owner, testified against the bill. He talked about the charity work that he does for his community.

08:53 PM -- Andy Touch, representing Ted's Liquor, testified against the bill.

08:58 PM -- Mark Johnson, representing Foothills Liquor, testified against the bill.

08:58 PM -- Brian Slanovich, a liquor store owner in Sloans lake, testified against the bill and said he has spent two years and over $100,000 on his store.

09:01 PM -- Jon Guelzow, representing Biggie Wine and Liquor, testified against the bill.

09:05 PM -- Hassan Mattjoub, representing himself, testified against the bill. He talked about the effects the bill will have on his business and his ability to support his family.

09:08 PM

Representative McFadyen asked her witnesses, Mr. Sobanet and Mr. Reitz, to come back to the table to respond to some testimony. Mr. Sobanet briefly addressed the fiscal note. Mr. Reitz talked about the concerns over the current liquor licenses offered in Colorado. Representative McFadyen said she feels there is no economically viable product left in 3.2 beer.


BILL:	HB09-1192
TIME:	09:17:57 PM
MOVED:	Casso
MOTION:	Moved amendment L.003 (Attachment L), as amended by L.006. The motion failed 8-3.
SECONDED:	Balmer
		VOTE
	Balmer	Yes
	Bradford	No
	Gagliardi	No
	Liston	No
	Priola	No
	Ryden	No
	Scanlan	No
	Soper	Yes
	Stephens	No
	Casso	Yes
	Rice	No

Not Final YES: 3 NO: 8 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1192
TIME:	09:31:03 PM
MOVED:	Casso
MOTION:	Moved amendment L.006 (Attachment M) to amendment L.003. The motion passed 6-5.
SECONDED:	Balmer
		VOTE
	Balmer	Yes
	Bradford	No
	Gagliardi	No
	Liston	Yes
	Priola	Yes
	Ryden	No
	Scanlan	No
	Soper	Yes
	Stephens	No
	Casso	Yes
	Rice	Yes

Not Final YES: 6 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	HB09-1192
TIME:	09:38:42 PM
MOVED:	Liston
MOTION:	Moved amendment L.008 (Attachment N). The motion passed 7-4.
SECONDED:	Casso
		VOTE
	Balmer	Yes
	Bradford	No
	Gagliardi	No
	Liston	Yes
	Priola	Yes
	Ryden	No
	Scanlan	No
	Soper	No
	Stephens	No
	Casso	Yes
	Rice	No

Not Final YES: 4 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1192
TIME:	09:47:01 PM
MOVED:	Casso
MOTION:	Moved amendment L.002 (Attachment O). The motion passed 6-5.
SECONDED:	Balmer
		VOTE
	Balmer	Yes
	Bradford	No
	Gagliardi	No
	Liston	Yes
	Priola	Yes
	Ryden	No
	Scanlan	No
	Soper	No
	Stephens	No
	Casso	Yes
	Rice	Yes

Not Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1192
TIME:	09:51:56 PM
MOVED:	Casso
MOTION:	Moved to refer House Bill 091192- to the Committee of the Whole. The motion failed 7-4.
SECONDED:	Balmer
		VOTE
	Balmer	Yes
	Bradford	No
	Gagliardi	No
	Liston	No
	Priola	Yes
	Ryden	No
	Scanlan	No
	Soper	Yes
	Stephens	No
	Casso	Yes
	Rice	No

Not Final YES: 4 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1192
TIME:	10:01:40 PM
MOVED:	Soper
MOTION:	Moved to postpone House Bill 09-1192 indefinitely. The motion passed 8-3.
SECONDED:	Priola
		VOTE
	Balmer	No
	Bradford	Yes
	Gagliardi	Yes
	Liston	No
	Priola	Yes
	Ryden	Yes
	Scanlan	Yes
	Soper	Yes
	Stephens	Yes
	Casso	No
	Rice	Yes

Final YES: 8 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS

10:05 PM

The committee adjourned.