DENVER -- The Colorado Department of Revenue (DOR) has issued an emergency order repealing new rules requiring breweries to test, label and certify that their beers contain a high-enough alcohol content to be sold at bars and liquor stores in this state, said The Denver Business Journal. The state's convenience store interests, which had worked to pass the rule in a 2010 legislative bill, questioned Friday why a rule that had gone through a six-month hearing process and was implemented just two months ago should be gutted by an executive agency.
They acknowledged [image-nocss] that DOR's emergency repeal could make their goal of changing the law to allow them to sell full-strength beer more difficult, said the report.
Colorado law stipulates that grocery and c-stores can sell only beer that is 4% alcohol by volume or lower, a rule that the store groups have been trying to change since 2008. But it also stipulates that bars, breweries and liquor stores cannot sell beer below 4% alcohol by volume--a clause that has rarely been enforced.
With low-alcohol beers like Budweiser Select 55 and Amstel Light becoming more popular, c-store interests got inserted into Senate Bill 83 in 2010 a provision that breweries making or selling beer in Colorado must certify its strength to determine where it can be sold. That meant liquor stores and bars had to stop selling certain products and recodified that the state can test beers to determine their alcohol content.
Liquor stores, bars, breweries and c-stores and grocery stores wrangled over the imposition of the bill for months, the report said, and a late draft of the bill exempted brewpubs from the new rules, angering c-stores and liquor stores. But that clause was removed and the new rules went into effect on January 1, the newspaper said.
Early in this year's legislative session, a bipartisan pair of legislators introduced Senate Bill 60, which would change the law to allow restaurants, bars and breweries to sell low-strength beer as well as full-strength products. That bill passed easily through the Senate Local Government & Energy Committee, even as c-stores and grocery store interests tried to slow or kill it in order to push a more comprehensive bill that would allow them to sell full-strength beer, the report said.
On Thursday, DOR executive director Roxy Huber issued her amendment, essentially eliminating the emergency regulations that her office had put into place on January 1 to achieve compliance with SB 83.
The order does not end the ban on selling low-strength beer in bars, liquor stores and breweries. But by ending the requirement that brewers test, certify and label low-strength beer, it removes the state's ability to enforce the law unless the labels of the beer say it is low-strength, the paper said.
Huber wrote in her order that she was issuing the amendment because requiring compliance with it would be trickier than requiring compliance with proposed permanent regulation. She did not identify that proposed permanent regulation, but observers assume it is SB 60, the Business Journal said.
"Without a simultaneous adoption of an emergency regulation with parallel changes, the regulated community will be subject to inconsistent and changing regulations and will have to comply with new regulations that are unlikely to remain in effect," Huber wrote, according to the paper. "It is imperatively necessary to revise the emergency regulation immediately in order to avoid compliance by the industry with a regulation that is more complicated than the proposed permanent regulation."
An April 19 hearing will determine whether the emergency amendment will become permanent.
The Colorado Brewers Guild was among the groups that had pushed back against the January 1 rules, saying it could cost small breweries hundreds of thousands of dollars each year to have each beer independently tested and certified to determine its alcohol content.
Greer Bailey, manager of government affairs for the Colorado Wyoming Petroleum Marketing Association, which represents many c-stores in the state, said Huber's action came out of nowhere after diverse interests had worked for six months on the rules she nixed. He questioned why there would be a need for the change, especially with SB 60 having been stalled in the Senate since February 15, and how the new rules conform to SB 83.
"This is a drastic departure from the open and transparent process the state conducted in the last half of last year," Bailey told the paper. "We think the legislative intent of SB 83 was completely eviscerated."
State Representative Larry Liston (R), who sponsored the alcohol-strength certification amendment to SB 83 and who is considering running a bill this year to allow full-strength beer sales at grocery and liquor stores, also was upset by Huber's order. He called Governor John Hickenlooper's office looking for answers and wants to know how an executive agency can just throw out a law passed by the legislature.
"Over here we have three branches of government.... Almost at the dark of night, you don't snap your finger and say: 'We don't like you, we're just going to change this,'" Liston told the Business Journal. "It's a poke in the eye."
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