CO Code § 44-3-202 (2021)
2021 Colorado Code|Title 44 - Revenue - Regulation of Activities|Article 3 - Alcohol Beverages|Part 2 - State Licensing Authority - Duties|§ 44-3-202. Duties of State Licensing Authority

  The state licensing authority shall:   Grant or refuse licenses for the manufacture, distribution, and sale of alcohol beverages as provided by law and suspend or revoke such licenses upon a violation of this article 3, article 4 or 5 of this title 44, or any rule adopted pursuant to those articles;    Make general rules and special rulings and findings as necessary for the proper regulation and control of the manufacture, distribution, and sale of alcohol beverages and for the enforcement of this article 3 and articles 4 and 5 of this title 44 and alter, amend, repeal, and publish the same from time to time;    Hear and determine at public hearing all complaints against any licensee and administer oaths and issue subpoenas to require the presence of persons and production of papers, books, and records necessary to the determination of any hearing so held;    Keep complete records of all acts and transactions of the state licensing authority, which records, except confidential reports obtained from the licensee showing the sales volume or quantity of alcohol beverages sold or stamps purchased or customers served, shall be open for inspection by the public;    Prepare and transmit annually, in the form and manner prescribed by the heads of the principal departments pursuant to section 24-1-136, a report accounting to the governor for the efficient discharge of all responsibilities assigned by law or directive to the state licensing authority;    Notify all persons to whom wholesale licenses have been issued as to applications for licenses and renewals of the licenses provided in sections 44-3-409 to 44-3-420 and 44-4-104 (1).           Rules adopted pursuant to subsection (1)(b) of this section may cover, without limitation, the following subjects: (a) (I)Rules adopted pursuant to subsection (1)(b) of this section may cover, without limitation, the following subjects:   Compliance with or enforcement or violation of any provision of this article 3, article 4 or 5 of this title 44, or any rule issued pursuant to those articles;    Specifications of duties of officers and employees;    Instructions for local licensing authorities and law enforcement officers;    All forms necessary or convenient in the administration of this article 3 and articles 4 and 5 of this title 44;    Inspections, investigations, searches, seizures, and activities as may become necessary from time to time, including a range of penalties for use by licensing authorities, which shall include aggravating and mitigating factors to be considered, when licensees' employees violate certain provisions of this article 3 and article 4 of this title 44, including the sale or service of alcohol beverages to persons under twenty-one years of age or to visibly intoxicated persons;    Limitation of number of licensees as to any area or vicinity;    Misrepresentation, unfair practices, and unfair competition;    Control of signs and other displays on licensed premises;    Use of screens;       Nothing in this article 3 and articles 4 and 5 of this title 44 shall be construed as delegating to the state licensing authority the power to fix prices. The licensing authority shall make no rule that would abridge the right of any licensee to fairly, honestly, and lawfully advertise the place of business of or the commodities sold by such licensee. All rules shall be reasonable and just.           The state licensing authority shall make no rule regulating or prohibiting the sale of alcohol beverages on credit offered or extended by a licensee to a retailer where the credit is offered or extended for thirty days or less. The state licensing authority shall enforce the prohibition against extending credit for more than thirty days for the sale of alcohol beverages pursuant to 27 CFR 6 and may adopt rules regulating or prohibiting the sale of alcohol beverages on credit where the credit is offered or extended for more than thirty days, consistent with the federal regulations. (b) (I) (A) The state licensing authority shall make no rule regulating or prohibiting the sale of alcohol beverages on credit offered or extended by a licensee to a retailer where the credit is offered or extended for thirty days or less. The state licensing authority shall enforce the prohibition against extending credit for more than thirty days for the sale of alcohol beverages pursuant to 27 CFR 6 and may adopt rules regulating or prohibiting the sale of alcohol beverages on credit where the credit is offered or extended for more than thirty days, consistent with the federal regulations.    Nothing in this subsection (2)(b)(I) allows the state licensing authority to adopt a rule that restricts the ability of a licensee to, or prohibits a licensee from, making sales of alcohol beverages, on a cash-on-delivery basis, to a retailer who is or may be in arrears in payments to a licensee for prior alcohol beverage sales.       Licensees shall comply with the prohibition against extending credit to a retailer for more than thirty days for the sale of alcohol beverages, including beer, contained in 27 CFR 6 and with rules adopted by the state licensing authority that are consistent with 27 CFR 6.    Notwithstanding any provision of this article 3 to the contrary, a liquor-licensed drugstore licensed under section 44-3-410 on or after January 1, 2017, shall not purchase alcohol beverages on credit or accept an offer or extension of credit from a licensee and shall effect payment upon delivery of the alcohol beverages.    As used in this subsection (2)(b), “licensee” shall have the same meaning as “industry member”, as defined in 27 CFR 6.11, and includes a person engaged in business as a distiller, brewer, rectifier, blender, or other producer; as an importer or wholesaler of alcohol beverages; or as a bottler or warehouseman and bottler of spiritous liquors.          In any hearing held by the state licensing authority pursuant to this article 3 or article 4 or 5 of this title 44, no person may refuse, upon request of the state licensing authority, to testify or provide other information on the ground of self-incrimination; but no testimony or other information produced in the hearing or any information directly or indirectly derived from such testimony or other information may be used against such person in any criminal prosecution based on a violation of this article 3 or article 4 or 5 of this title 44 except a prosecution for perjury in the first degree committed in so testifying. Continued refusal to testify or provide other information shall constitute grounds for suspension or revocation of any license granted pursuant to this article 3 or article 4 or 5 of this title 44.     (J) Identification of licensees and their employees;   (K) Storage, warehouses, and transportation;   (L) Health and sanitary requirements;   (M) Standards of cleanliness, orderliness, and decency, and sampling and analysis of products;   (N) Standards of purity and labeling;   (O) Records to be kept by licensees and availability thereof;   (P) Practices unduly designed to increase the consumption of alcohol beverages;   (Q) Implementation, standardization, and enforcement of alternating proprietor licensed premises. The state licensing authority shall consult with interested parties from the alcohol beverage industry in developing appropriate rules to ensure adequate oversight and regulation of alternating proprietor licensed premises.   (R) Such other matters as are necessary for the fair, impartial, stringent, and comprehensive administration of this article 3 and articles 4 and 5 of this title 44;   (S) Repealed.   (T) Sales rooms operated by licensed wineries, distilleries, limited wineries, or beer wholesalers, including the manner by which a licensee operating a sales room notifies the state licensing authority of its sales rooms, the content of the notice, and any other necessary provisions related to the notice requirement.   History. Source: L. 2018: Entire article added with relocations,(HB 18-1025), ch. 152, p. 962, § 2, effective October 1.    Editor's note:    This section is similar to former § 12-47-202 as it existed prior to 2018.    Subsection (2)(a)(I)(S) provided for the repeal of subsection (2)(a)(I)(S), effective January 1, 2019. (See L. 2016, pp. 1530, 1539.)     ANNOTATION   Annotator's note. Since § 44-2-202 is similar to §§ 12-46-105 and 12-47-105 as they existed prior to the 1997 amendment of articles 46 and 47 of title 12, which resulted in the relocation of provisions, and to former § 12-47-202 , relevant cases construing those provisions have been included in the annotations to this section.   State licensing authority has jurisdiction to revoke expired liquor license. Department may revoke a license upon a violation of this article or a rule promulgated under this article. This article is silent concerning when the proceedings must be completed; therefore, the state licensing authority has jurisdiction to revoke a license so long as the violation occurs before the license expires. Trappers Lake Lodge & Resort, LLC v. Colo. Dept. of Rev., 179 P.3d 198 (Colo. App. 2007).   Cases Decided Under Former § 12-46-105 .   No untrammeled authority. An agency empowered with discretion to grant or deny a fermented malt beverage license does not have untrammeled power; it too is subject to standards and delimitations. Capra v. Davenport, 158 Colo. 537 , 408 P.2d 448 (1965).   Nor unbridled discretion. The general assembly in giving to the licensing authority the power to grant or deny a license did not give it unbridled discretion, and did not permit it to exercise such discretion without the application of the standards upon which its conclusion was to be exercised. Capra v. Davenport, 158 Colo. 537 , 408 P.2d 448 (1965).   Prima facie right to license established. Where an applicant establishes a prima facie right to a license to dispense 3.2 beer at its race track, and the only evidence before the commissioners in opposition thereto is incompetent and irrelevant, the license should be granted. Cloverleaf Kennel Club v. Bd. of County Comm'rs, 136 Colo. 441 , 319 P.2d 487 (1957).   Denial because of neighborhood arbitrary and capricious. The denial of a license to dispense 3.2 beer to a kennel club on the ground that the reasonable requirements of a neighborhood do not warrant issuance thereof is not supported by evidence where the neighborhood is not supplied at all and that there are no such outlets within a radius of five miles, and is arbitrary and capricious. Cloverleaf Kennel Club v. Bd. of County Comm'rs, 136 Colo. 441 , 319 P.2d 487 (1957).   Department acts capriciously and arbitrarily without proper statutory framework. Where there is no statutory framework within which a transfer application for a 3.2 percent license can properly be denied, the department acts capriciously and arbitrarily in denying the application. Adams County Golf, Inc. v. Colo. Dept. of Rev., 199 Colo. 423 , 610 P.2d 97 (1980).   Cases Decided Under Former § 12-47-105 .   Authority granted to director to define criminal conduct is not an unconstitutional delegation of legislative authority. Although the general assembly may not delegate to an administrative agency the power to define criminal conduct, it may authorize the agency to adopt rules carrying criminal sanctions as long as the statutory scheme provides sufficient standards and safeguards to protect against the unreasonable exercise of discretionary power and offers adequate notice of the penalties applicable to a violator. People v. Lowrie, 761 P.2d 778 (Colo. 1988).   Enabling legislation which charges the director to adopt rules and regulations not only with respect to the sale of alcoholic beverages in licensed taverns but also in relation to practices unduly designed to increase the consumption of alcoholic beverages provides sufficient standards and safeguards to protect the public against the unreasonable exercise of the director's power. Prohibiting the service of alcoholic beverages to intoxicated persons and the performance of certain live entertainment are therefore constitutional and not an unauthorized delegation of legislative authority. People v. Lowrie, 761 P.2d 778 (Colo. 1988).   The licensing authority is charged with the duty and task of determining whether a license should be granted or denied. Bd. of County Comm'rs v. Salardino, 138 Colo. 66 , 329 P.2d 629 (1958).   The Colorado liquor code does not authorize a conspiracy to fix prices to the injury of competitors. United States v. Colo. Whsle. Wine & Liquor Dealers Ass'n, 47 F. Supp. 160 (D. Colo. 1942 ), aff'd sub nom. United States v. Frankfort Distilleries, Inc., 324 U.S. 293, 65 S. Ct. 661, 89 L. Ed. 951 (1945).   Licensee presumed to know regulations. Having applied for and received a license pursuant to the state liquor code, a licensee is presumed to know the regulations governing use of that license. Chroma Corp. v. County of Adams, 36 Colo. App. 345, 543 P.2d 83 (1975).   Regulation prohibiting employees of liquor licensee from soliciting drinks was not overbroad and was reasonably related to a valid exercise of police power. 4-D Bros. v. Heckers, 33 Colo. App. 421, 522 P.2d 749 (1974).   Regulation of department of revenue, prohibiting liquor establishment licensee from employing a person to “mingle with patrons” and personally solicit the purchase or sale of drinks for use of one soliciting, was a proper exercise of authority delegated by the general assembly. People v. Willson, 187 Colo. 141 , 528 P.2d 1315 (1974).   Validity of credit sales recognized. No rules or regulations pertaining to sales on credit have been promulgated by the state licensing authority; however, it is clear that the validity of credit sales is recognized. Majestic Marketing Co. v. Anderson Enters. of Colo., Inc., 32 Colo. App. 369, 511 P.2d 943 (1973).   An applicant for a liquor license is entitled to a hearing on application, and if refused, to be advised of the reasons therefor. Sheeley v. Bd. of County Comm'rs, 137 Colo. 350 , 325 P.2d 275 (1958).   The action of the board in failing to hold a hearing and in refusing to give reasons for denial of a license is improper. Sheeley v. Bd. of County Comm'rs, 137 Colo. 350 , 325 P.2d 275 (1958).   Where a hearing has been held but no record made by the board, no judicial determination can be made as to whether the denial of an application itself is arbitrary and capricious, and that the courts should not in such a case order the board to issue a license but should remand the matter to the board for a hearing, the taking and recording of evidence and the making of specific findings of fact. Sheeley v. Bd. of County Comm'rs, 137 Colo. 350 , 325 P.2d 275 (1958).   Remand for hearing proper. In an action to compel a board of county commissioners to issue a liquor license, where it is shown that the board refused to issue the license but held no hearing and gave no reasons for such refusal, an order requiring the applicant to republish his notice and directing the board to hold a regular hearing thereon with a court reporter present is proper, since a liquor license cannot be secured by default. Sheeley v. Bd. of County Comm'rs, 137 Colo. 350 , 325 P.2d 275 (1958).   Director's request to see documents not violative of secrecy of grand jury. Request by director to see documents, which had been, or may at some time be, shown to a grand jury, which was examining books and records of liquor outlets but had not as yet returned an indictment, did not violate the policy of secrecy surrounding grand jury proceedings. Granbery v. District Court 187 Colo. 316 , 531 P.2d 390 (1975).   Regulations under the liquor code are presumed to be valid, and the burden is upon the party challenging the constitutionality to establish by a clear and convincing showing beyond a reasonable doubt an asserted invalidity. C.V. Enters., Inc. v. State, Dept. of Rev., 42 Colo. App. 337, 593 P.2d 984 (1979).   Sale of “charge-a-drink” cards did not constitute sale of liquor. A company which sold “charge-a-drink” cards, which entitled holder to obtain, without charge, one drink worth up to $2 at each of 40 restaurants and lounges was not a liquor retailer since its activities do not constitute a sale of liquor under the terms of this article. Contemporary Enters., Inc. v. Charnes, 44 Colo. App. 26, 613 P.2d 339 (1980).   Applied in People ex rel. Heckers v. District Court, 170 Colo. 533 , 463 P.2d 310 (1970); Citizens for Free Enter. v. Dept. of Rev., 649 P.2d 1054 (Colo. 1982).