1 CCR 203-1-7-601 - Penalties
Basis and Purpose. The statutory authority for this rule includes, but is not limited to, subsections 44-7-103, 44-7-105, and 44-7-106, C.R.S. The purpose of this rule is to clarify the penalties for violating various provisions of article 7 of title 44, as well as establishing aggravating and mitigating factors which may be considered in assessing penalties for violations.
A. If a retailer is found to have
violated article
7 of title
44, or any rule promulgated pursuant to
article 7, the Division may fine a retailer or, if the retailer holds a state
license, suspend or revoke the retailer's state license in accordance with
section 44-7-106, C.R.S., and the
provisions of this Rule 7-601. See also Rule 7-705. License Denials,
Disciplinary Actions, and Hearings.
B.
Underage Sales.
1.
Penalties. The
following penalties shall apply for sales to a person under twenty-one years of
age in violation of section
44-7-103(1),
C.R.S.:
a.
First
Violation. If the retailer has had no previous underage sale
violations in the preceding twenty-four months, then the licensee shall be
subject to a fine of at least $250.00 and not more than $500.00.
b.
Second Violation.
If the retailer had one previous underage sale violation in the preceding
twenty-four month period, the retailer shall be subject to:
i. A fine of at least $500.00 and not more
than $750.00; and
ii. If the
retailer holds a state license, a suspension of the state license for at least
seven days or, if the retailer does not hold a state license, a prohibition
against the retailer selling cigarettes, tobacco products, or nicotine products
at the retail location at which the violation occurred for at least seven
days.
c.
Third Violation. If the retailer has had two previous
underage sale violations in the preceding twenty-four month period, the
retailer shall be subject to:
i. A fine of at
least $750.00 and not more than $1000.00; and
ii. If the retailer holds a state license, a
suspension of the state license for at least thirty days or, if the retailer
does not hold a state license, a prohibition against the retailer selling
cigarettes, tobacco products, or nicotine products at the retail location at
which the violation occurred for at least thirty days.
d. Fourth or Subsequent Violation. If the
retailer has had three or more previous underage sale violations in the
preceding twenty-four month period, the retailer shall be subject to:
i. A fine of at least $1,000.00 and not more
than $15,000.00; and
ii. If the
retailer holds a state license, a suspension or revocation of the retailer's
state license or, if the retailer does not hold a state license, a prohibition
against the retailer selling cigarettes, tobacco products, or nicotine products
at the retail location at which the violation occurred for up to three
years.
2.
Affirmative Defenses. Notwithstanding the provisions
of paragraph B(1), a fine for a violation of section
44-7-103(1),
C.R.S. shall not be imposed upon a retailer that can establish an affirmative
defense to the satisfaction of the division or the hearing officer that, prior
to the date of the violation, it:
a. Had
adopted and enforced a written policy against selling cigarettes, tobacco
products, or nicotine products to persons under twenty-one years of
age;
b. Had informed its employees
of the applicable laws regarding the sale of cigarettes, tobacco products, or
nicotine products to persons under twenty-one years of age;
c. Required employees to verify the age of
cigarette, tobacco product, or nicotine product customers by way of
photographic identification; and
d.
Had established and imposed disciplinary sanctions for noncompliance.
3. Except as provided in section
44-7-106(5),
C.R.S., the affirmative defense established in paragraph B(2) may be used by a
retailer only once at each location within any twenty-four-month period.
a. Pursuant to section
44-7-106(5),
C.R.S., a licensed gaming establishment that has a cigar-tobacco bar on July
14, 2020, shall be afforded two affirmative defenses within a twenty-four-month
period.
C.
Sales of Loose Cigarettes. The following penalties
shall apply for sales, or offers to sell, in violation of section
44-3-103(4),
C.R.S.:
1.
First
Violation. If the retailer has not violated section
44-3-103(4),
C.R.S., in the preceding twenty-four months, the retailer shall receive a
written warning.
2.
Second Violation. If the retailer violated section
44-3-103(4),
C.R.S., once in the preceding twenty-four month period, the retailer shall be
subject to a fine of $250.00.
3.
Third Violation. If the retailer violated section
44-3-103(4),
C.R.S., twice in the preceding twenty-four month period, the retailer shall be
subject to a fine of $500.00.
4.
Fourth Violation. If the retailer violated section
44-3-103(4),
C.R.S., three times in the preceding twenty-four month period, the retailer
shall be subject to a fine of $1,000.00.
5.
Fifth or Subsequent
Violation. If the retailer violated section
44-3-103(4),
C.R.S., four or more times in the preceding twenty-four month period, the
retailer shall be subject to a fine of at least $1,000.00 and not more than
$15,000.00
D.
Unlicensed Sales. On or after July 1, 2021, the
following penalties shall apply for a person who sells or offers to sell
cigarettes, tobacco products, or nicotine products without a valid state
license issued pursuant to article
7 of title
44:
1.
First Violation. If the person has not violated
section 44-7-104.5(1),
C.R.S., in the preceding twenty-four months, the person shall be subject to a
fine of $1,000.00.
2.
Second Violation. If the person has one prior
violation of section
44-7-104.5(1),
C.R.S., in the preceding twenty-four months, the person shall be subject to a
fine of $2,000.00.
3.
Third or Subsequent Violation. If the person has two
or more prior violations of section
44-7-104.5(1),
C.R.S., in the preceding twenty-four months, the person shall be subject to:
a. A fine of $3,000.00; and
b. An order issued by the Division
prohibiting the retailer from selling cigarettes, tobacco products, or nicotine
products and rendering the retailer ineligible to apply for a state license for
three years.
4. For
purposes of determining the existence and number of prior violations for
purposes of this paragraph (D), each sale or offer to sell cigarettes, tobacco
products, or nicotine products without a valid state license is a distinct
violation.
E.
Unlawful Advertising of Electronic Smoking Device
Product. The following penalties shall apply for a retailer who
advertises an electronic smoking device product in a manner that is visible
from outside the retail location in violation of section
44-7-104.7(2),
C.R.S.
1.
First
Violation. If the person has not violated section
44-7-104.7(2),
C.R.S., in the preceding twenty-four months, the person shall be subject to a
fine of $1,000.00.
2.
Second Violation. If the person has one prior
violation of section
44-7-104.7(2),
C.R.S., in the preceding twenty-four months, the person shall be subject to a
fine of $2,000.00.
3.
Third or Subsequent Violation. If the person has two
or more prior violations of section
44-7-104.7 (2),
C.R.S., in the preceding twenty-four months, the person shall be subject to a
fine of $3,000.00.
F.
Delivery and Shipment Violations. The following
penalties shall apply for a person that ships or delivers cigarettes, tobacco
products, or nicotine products directly to a consumer in Colorado in violations
of the requirements of 44-7-104.7(3), C.R.S., and any rules promulgated
pursuant to article
7 of title
44:
1.
First Violation. If the person has not violated
section 44-7-104.7(3),
C.R.S., in the preceding twenty-four months, the person shall be subject to a
fine of $1,000.00.
2.
Second Violation. If the person has one prior
violation of section
44-7-104.7(3),
C.R.S., in the preceding twenty-four months, the person shall be subject to a
fine of $2,000.00.
3.
Third or Subsequent Violation. If the person has two
or more prior violations of section
44-7-104.7(3),
C.R.S., in the preceding twenty-four months, the person shall be subject to a
fine of $3,000.00.
G.
Vending Machine Sales. The following penalties shall
apply for a retailer that sells or offers to sell any cigarettes, tobacco
products, or nicotine products by use of a vending machine or other
coin-operated machine in violation of section
44-7-103(2),
C.R.S.:
1.
First
Violation. If the retailer has not violated section
44-7-103(2),
C.R.S., in the preceding twenty-four months, the retailer shall be subject to a
fine of $25.00.
2.
Second Violation. If the retailer has one prior
violation of section
44-7-103(2),
C.R.S., in the preceding twenty-four months, the retailer shall be subject to a
fine of $50.00.
3.
Third Violation. If the retailer has two prior
violations of section
44-7-103(2),
C.R.S., in the preceding twenty-four months, the retailer shall be subject to a
fine of $100.00.
4.
Fourth Violation. If the retailer has three prior
violations of section
44-7-103(2),
C.R.S., in the preceding twenty-four months, the retailer shall be subject to a
fine of $250.00.
5.
Fifth or Subsequent Violation. If the retailer has
four or more prior violations of section
44-7-103(2),
C.R.S., in the preceding twenty-four months, the retailer shall be subject to a
fine of at least $250.00 but not more than $1,000.00.
H.
Warning Sign
Violations. The following penalties shall apply for a retailer
that sells or offers to sell cigarettes, tobacco products, or nicotine products
without displaying a warning sign in conformance with the requirements of
section 44-7-103(3),
C.R.S.:
1.
First
Violation. If the retailer has not violated section
44-7-103(3),
C.R.S., in the preceding twenty-four months, the retailer shall be subject to a
written warning.
2.
Second Violation. If the retailer has one prior
violation of section
44-7-103(3),
C.R.S., in the preceding twenty-four months, the retailer shall be subject to a
fine of $50.00.
3.
Third Violation. If the retailer has two prior
violations of section
44-7-103(3),
C.R.S., in the preceding twenty-four months, the retailer shall be subject to a
fine of $100.00.
4.
Fourth Violation. If the retailer has three prior
violations of section
44-7-103(3),
C.R.S., in the preceding twenty-four months, the retailer shall be subject to a
fine of $250.00.
5.
Fifth or Subsequent Violation. If the retailer has
four prior violations of section
44-7-103(3),
C.R.S., in the preceding twenty-four months, the retailer shall be subject to a
fine of at least $250.00 but not more than $1,000.
I.
Sales By Persons Under
Eighteen Years of Age. The following penalties shall apply for a
retailer that permits a person under eighteen years of age to sell or
participate in the sale of cigarettes, tobacco products, or nicotine products
in violation of section
44-7-103 (4.5), C.R.S.:
1.
First Violation.
If the retailer has not violated section
44-7-103 (4.5), C.R.S., in the
preceding twenty-four months, the retailer shall be subject to a fine of
$25.00.
2.
Second
Violation. If the retailer has one prior violation of section
44-7-103 (4.5), C.R.S., in the
preceding twenty-four months, the retailer shall be subject to a fine of
$50.00.
3.
Third
Violation. If the retailer has two prior violations of section
44-7-103 (4.5), C.R.S., in the
preceding twenty-four months, the retailer shall be subject to a fine of
$100.00.
4.
Fourth
Violation. If the retailer has three prior violations of section
44-7-103 (4.5), C.R.S., in the
preceding twenty-four months, the retailer shall be subject to a fine of
$250.00.
5.
Fifth or
Subsequent Violation. If the retailer has four or more prior
violations of section
44-7-103 (4.5), C.R.S., in the
preceding twenty-four months, the retailer shall be subject to a fine of at
least $250.00 but not more than $1,000.00.
J.
Suspension.
1.
Prohibited Activity During
Active Suspension. During any period of license suspension, the
retailer shall not sell or permit the selling of cigarettes, tobacco products,
or nicotine products.
2.
Suspension Notice. Every retailer whose state license
has been suspended by the Division, whether summarily or after an
administrative hearing, shall, if ordered to, post two notices in conspicuous
places, one on the exterior and one on the interior of the retail location, for
the duration of the suspension.
a. The
notices shall be two feet in length and fourteen inches in width containing
lettering not less than 1/2 inch in height, and shall be in the following form:
NOTICE OF SUSPENSION. THE CIGARETTE, TOBACCO PRODUCTS, AND NICOTINE RETAILER LICENSE ISSUED FOR THE RETAIL LOCATION HAS BEEN SUSPENDED BY ORDER OF THE LIQUOR ENFORCEMENT DIVISION, COLORADO DEPARTMENT OF REVENUE FOR VIOLATION OF ARTICLE 7 OF TITLE44 OF THE COLORADO REVISED STATUTES.
b. Advertising or
posting signs to the effect that the premises have been closed or business
suspended for any reason other than by order of the Division suspending its
state license, shall be deemed a violation of this rule.
3.
Renewal.
Suspension of a license or permit does not relieve the retailer of the
obligation to timely comply with all license or permit renewal
requirements.
K.
Aggravating and Mitigating Factors.
1. When the penalty limitation for a
particular violation contained in section
44-7-106, C.R.S., includes an
authorized range of potential penalties, the Division when entering into a
stipulation, agreement and order with a licensee to settle an administrative
action, or a hearing officer in a hearing conducted pursuant to section
44-7-105, C.R.S., may take
aggravating and mitigating factors into consideration to determine a penalty
within the range. These factors may include, but are not limited to:
a.
Mitigating
Factors:
i. The licensee has a
substantial history of compliance with tobacco laws and rules;
ii. The violation is a first violation, as
defined in this Regulation 7-601;
iii. The violation was
self-reported;
iv. The extent to
which the licensee took prompt and effective self-initiated action to correct
the violation and to prevent future violations of the same type from
occurring;
v. The violation is not
part of a pattern or practice of violations.
b.
Aggravating
Factors:
i. The licensee has a
substantial history of non-compliance with tobacco laws and rules;
ii. The violation is a second or subsequent
offense;
iii. The violation was
discovered, and later substantiated through investigation, as a result of a
complaint, or multiple complaints;
iv. The violation was willful, and not
negligent;
v. The violation is part
of a pattern or practice of violations;
vi. The implicated licensee encouraged others
to participate in the same, or similar violations; or
vii. The owner or management personnel
engaged in the violation and/or directed an employee to violate the
law.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.