S.F. _____ H.F. _____ DIVISION I 1 ALCOHOLIC BEVERAGE CONTROL 2 Section 1. Section 123.3, subsection 25, Code 2017, is 3 amended to read as follows: 4 25. “Licensed premises” or “premises” means all rooms, 5 enclosures, contiguous areas, or places susceptible of precise 6 description satisfactory to the administrator where alcoholic 7 beverages, wine, or beer is sold or consumed under authority 8 of a liquor control license, wine permit, or beer permit. 9 A single licensed premises may consist of multiple rooms, 10 enclosures, areas , or places if they are wholly within the 11 confines of a single building or contiguous grounds , or areas 12 or places susceptible of precise description satisfactory to 13 the administrator . 14 Sec. 2. Section 123.3, Code 2017, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 30A. “Original container” means a vessel 17 containing an alcoholic beverage that has been lawfully 18 obtained, bears a label approved by the alcohol and tobacco 19 tax and trade bureau of the United States department of the 20 treasury, and has been securely capped, sealed, or corked at 21 the location of manufacture. 22 Sec. 3. Section 123.22, Code 2017, is amended to read as 23 follows: 24 123.22 State monopoly. 25 1. The division has the exclusive right of importation 26 into the state of all forms of alcoholic liquor, except as 27 otherwise provided in this chapter , and a person shall not 28 import alcoholic liquor, except that an individual of legal age 29 may import and have in the individual’s possession an amount 30 of alcoholic liquor not exceeding one liter or, in the case of 31 alcoholic liquor personally obtained outside the United States, 32 four liters for personal consumption only in a private home 33 or other private accommodation. A distillery shall not sell 34 alcoholic liquor within the state to any person but only to 35 -1- LSB 1266XD (14) 87 ec/nh 1/ 29

S.F. _____ H.F. _____ the division, except as otherwise provided in this chapter . 1 This section vests in the division exclusive control within the 2 state as purchaser of all alcoholic liquor sold by distilleries 3 within the state or imported, except beer and wine, and except 4 as otherwise provided in this chapter . The division shall 5 receive alcoholic liquor on a bailment system for resale by the 6 division in the manner set forth in this chapter . The division 7 shall act as the sole wholesaler of alcoholic liquor to class 8 “E” liquor control licensees. 9 2. No person, acting individually or through another 10 acting for the person shall directly or indirectly, or upon 11 any pretense, or by any device, manufacture, sell, exchange, 12 barter, dispense, give in consideration of the purchase of any 13 property or of any services or in evasion of this chapter , or 14 keep for sale, or have possession of any intoxicating liquor, 15 except as provided in this chapter ; or own, keep, or be in any 16 way concerned, engaged, or employed in owning or keeping, any 17 intoxicating liquor with intent to violate any provision of 18 this chapter , or authorize or permit the same to be done; or 19 manufacture, own, sell, or have possession of any manufactured 20 or compounded article, mixture or substance, not in a liquid 21 form, and containing alcohol which may be converted into a 22 beverage by a process of pressing or straining the alcohol 23 therefrom, or any instrument intended for use and capable of 24 being used in the manufacture of intoxicating liquor; or own 25 or have possession of any material used exclusively in the 26 manufacture of intoxicating liquor; or use or have possession 27 of any material with intent to use it in the manufacture of 28 intoxicating liquors; however, alcohol may be manufactured 29 for industrial and nonbeverage purposes by persons who have 30 qualified for that purpose as provided by the laws of the 31 United States and the laws of this state. Such alcohol, so 32 manufactured, may be denatured, transported, used, possessed, 33 sold, and bartered and dispensed, subject to the limitations, 34 prohibitions and restrictions imposed by the laws of the United 35 -2- LSB 1266XD (14) 87 ec/nh 2/ 29

S.F. _____ H.F. _____ States and this state. Any person may manufacture, sell, or 1 transport ingredients and devices other than alcohol for the 2 making of homemade wine or beer . 3 Sec. 4. Section 123.23, subsection 2, Code 2017, is amended 4 to read as follows: 5 2. At the time of applying for a certificate of compliance, 6 each applicant shall submit to the division electronically, 7 or in a manner prescribed by the administrator, the name and 8 address of its authorized agent for service of process which 9 shall remain effective until changed for another, and a list 10 of names and addresses of all representatives, employees, or 11 attorneys whom the applicant has appointed in the state of Iowa 12 to represent it for any purpose. The listing shall be amended 13 from time to time by the certificate holder as necessary to 14 keep the listing current with the division. 15 Sec. 5. Section 123.28, Code 2017, is amended to read as 16 follows: 17 123.28 Restrictions on transportation. 18 1. It is lawful to transport, carry, or convey alcoholic 19 liquors from the place of purchase by the division to a state 20 warehouse or depot established by the division or from one such 21 place to another and, when so permitted by this chapter , it is 22 lawful for the division, a common carrier, or other person to 23 transport, carry, or convey alcoholic liquor sold from a state 24 warehouse, depot, or point of purchase by the state to any 25 place to which the liquor may be lawfully delivered under this 26 chapter . 27 2. The division shall deliver alcoholic liquor purchased by 28 class “E” liquor control licensees. Class “E” liquor control 29 licensees may deliver alcoholic liquor purchased by class “A”, 30 “B”, or “C” liquor control licensees, and class “A”, “B”, or 31 “C” liquor control licensees may transport alcoholic liquor 32 purchased from class “E” liquor control licensees. 33 3. A common carrier or other person shall not break or 34 open or allow to be broken or opened a container or package 35 -3- LSB 1266XD (14) 87 ec/nh 3/ 29

S.F. _____ H.F. _____ containing alcoholic liquor or use or drink or allow to be used 1 or drunk any alcoholic liquor while it is being transported or 2 conveyed , but this . 3 4. This section does not prohibit a private person from 4 transporting individual bottles or containers of alcoholic 5 liquor exempted pursuant to section 123.22 and individual 6 bottles or containers bearing the identifying mark prescribed 7 in section 123.26 which have been opened previous to the 8 commencement of the transportation. 9 5. This section does not affect the right of a special 10 permit or liquor control license holder to purchase, possess, 11 or transport alcoholic liquors subject to this chapter . 12 Sec. 6. Section 123.30, subsection 1, paragraph c, Code 13 2017, is amended to read as follows: 14 c. As a further condition for the issuance of a class “E” 15 liquor control license, the applicant shall post a bond in 16 a sum of not less than five thousand nor more than fifteen 17 thousand dollars as determined on a sliding scale established 18 by the division; however, a bond shall not be required if all 19 purchases of alcoholic liquor from the division by the licensee 20 are made by cash payment or by means that ensure that the 21 division will receive full payment in advance of delivery of 22 the alcoholic liquor. 23 Sec. 7. Section 123.31, subsections 6 and 7, Code 2017, are 24 amended by striking the subsections. 25 Sec. 8. Section 123.32, subsection 6, paragraph b, Code 26 2017, is amended to read as follows: 27 b. Upon receipt of an application having been approved by 28 the local authority, the division shall make an investigation 29 as the administrator deems necessary to determine that the 30 applicant complies with all requirements for holding a license 31 or permit, and may require the applicant to appear to be 32 examined under oath to demonstrate that the applicant complies 33 with all of the requirements to hold a license or permit. If 34 the administrator requires the applicant to appear and to 35 -4- LSB 1266XD (14) 87 ec/nh 4/ 29

S.F. _____ H.F. _____ testify under oath, a record shall be made of all testimony or 1 evidence and the record shall become a part of the application. 2 The administrator may appoint a member of the division or 3 may request an administrative law judge of the department of 4 inspections and appeals to receive the testimony under oath 5 and evidence, and to issue a proposed decision to approve 6 or disapprove the application for a license or permit. The 7 administrator may affirm, reverse, or modify the proposed 8 decision to approve or disapprove the application for the 9 license or permit. If the application is approved by the 10 administrator, the license or permit shall be issued. If the 11 application is disapproved by the administrator, the applicant 12 and the appropriate local authority shall be so notified by 13 certified mail and the appropriate local authority shall be 14 notified electronically, or in a manner prescribed by the 15 administrator . 16 Sec. 9. Section 123.33, Code 2017, is amended to read as 17 follows: 18 123.33 Records. 19 Every holder of a liquor control license shall keep a daily 20 record, in printed or electronic format, of the gross receipts 21 of the holder’s business or permit under this chapter shall 22 maintain records, in printed and electronic format, which 23 include income statements, balance sheets, purchase and sales 24 invoices, purchase and sales ledgers, and any other records as 25 the administrator may require . The records required and the 26 premises of the licensee or permittee shall be accessible and 27 open to inspection pursuant to section 123.30, subsection 1 , 28 during normal business hours of the licensee or permittee . 29 Sec. 10. Section 123.34, subsection 1, Code 2017, is amended 30 to read as follows: 31 1. Liquor control licenses, wine permits, and beer permits, 32 unless sooner suspended or revoked, expire one year from 33 date of issuance. The administrator shall give sixty days’ 34 written notice of the expiration to each licensee or permittee. 35 -5- LSB 1266XD (14) 87 ec/nh 5/ 29

S.F. _____ H.F. _____ However, the administrator may issue six-month or eight-month 1 seasonal licenses, class “B” wine permits, or class “B” beer 2 permits for a proportionate part of the license or permit fee 3 or may issue fourteen-day liquor control licenses, native wine 4 permits, or beer permits as provided in subsection 2 . No 5 refund shall be made for seasonal licenses or permits or for 6 fourteen-day liquor control licenses, native wine permits, or 7 beer permits. No seasonal license or permit shall be renewed 8 except . However, after a period of two months the applicant 9 may apply for a new seasonal license or permit for the same 10 location . 11 Sec. 11. Section 123.49, subsection 2, paragraph b, Code 12 2017, is amended to read as follows: 13 b. Sell or dispense any alcoholic beverage or beer on 14 the premises covered by the license or permit, or permit its 15 consumption thereon between the hours of 2:00 a.m. and 6:00 16 a.m. on a weekday, and between the hours of 2:00 a.m. on Sunday 17 and 6:00 a.m. on the following Monday, however, a holder of a 18 liquor control license or retail wine or beer permit granted 19 the privilege of selling alcoholic liquor , wine, or beer on 20 Sunday may sell or dispense alcoholic liquor , wine, or beer 21 between the hours of 8:00 a.m. on Sunday and 2:00 a.m. on the 22 following Monday. 23 Sec. 12. Section 123.49, subsection 2, paragraph k, Code 24 2017, is amended by striking the paragraph. 25 Sec. 13. Section 123.51, subsection 1, Code 2017, is amended 26 to read as follows: 27 1. No signs or other matter advertising any brand of 28 alcoholic liquor, beer, or wine shall be erected or placed upon 29 the outside of any premises occupied by a licensee or permittee 30 authorized to sell alcoholic liquor, beer, or wine at retail. 31 This subsection does not prohibit the use of signs However, 32 signs or other advertising matter may be erected or placed 33 inside the premises, inside a fence or similar enclosure which 34 wholly or partially surrounds the licensed premises , or inside 35 -6- LSB 1266XD (14) 87 ec/nh 6/ 29

S.F. _____ H.F. _____ a window facing outward from the premises . 1 Sec. 14. Section 123.175, Code 2017, is amended by striking 2 the section and inserting in lieu thereof the following: 3 123.175 Class “A” or retail wine permit application and 4 issuance. 5 1. A person applying for a class “A” or retail wine permit 6 shall submit an application electronically, or in a manner 7 prescribed by the administrator, which shall set forth under 8 oath the following: 9 a. The name and place of residence of the applicant. 10 b. The names and addresses of all persons or, in the case of 11 a corporation, the officers, directors, and persons owning or 12 controlling ten percent or more of the capital stock thereof, 13 having a financial interest, by way of loan, ownership, or 14 otherwise, in the business. 15 c. The location of the premises where the applicant intends 16 to operate. 17 d. The name of the owner of the premises and if the owner of 18 the premises is not the applicant, whether the applicant is the 19 actual lessee of the premises. 20 e. When required by the administrator, and in such form and 21 containing such information as the administrator may require, 22 a description of the premises where the applicant intends to 23 use the permit, to include a sketch or drawing of the premises 24 and, if applicable, the number of square feet of interior floor 25 space which comprises the retail sales area of the premises. 26 f. Whether any person specified in paragraph “b” has ever 27 been convicted of any offense against the laws of the United 28 States, or any state or territory thereof, or any political 29 subdivision of any such state or territory. 30 g. Any other information as required by the administrator. 31 2. The administrator shall issue a class “A” or retail wine 32 permit to any applicant who establishes all of the following: 33 a. That the applicant has submitted a completed application 34 as required by subsection 1. 35 -7- LSB 1266XD (14) 87 ec/nh 7/ 29

S.F. _____ H.F. _____ b. That the applicant is a person of good moral character as 1 provided in section 123.3, subsection 34. 2 c. That the applicant is a citizen of the state of Iowa 3 or, if a corporation, that the applicant is authorized to do 4 business in the state. 5 d. That the premises where the applicant intends to use the 6 permit conforms to all applicable laws, health regulations, and 7 fire regulations, and constitutes a safe and proper place or 8 building. 9 e. That the applicant gives consent to a person, pursuant 10 to section 123.30, subsection 1, to enter upon the premises 11 without a warrant during the business hours of the applicant 12 to inspect for violations of the provisions of this chapter or 13 ordinances and regulations that local authorities may adopt. 14 f. That the applicant has submitted, in the case of a class 15 “A” wine permit, a bond in the amount of five thousand dollars 16 in a manner prescribed by the administrator with good and 17 sufficient sureties to be approved by the division conditioned 18 upon compliance with this chapter. 19 Sec. 15. Section 123.178B, subsection 4, Code 2017, is 20 amended to read as follows: 21 4. A person holding a class “C” native wine permit and a 22 class “A” wine permit whose primary purpose is manufacturing 23 native wine may purchase beer from a wholesaler holding a class 24 “A” beer permit for sale at retail for consumption on or off 25 the premises covered by the class “C” native wine permit . 26 Sec. 16. Section 123.180, subsection 2, Code 2017, is 27 amended to read as follows: 28 2. At the time of applying for a vintner’s certificate of 29 compliance, each applicant shall file with the division a list 30 of all class “A” wine permittees with whom it intends to do 31 business. The listing of class “A” wine permittees as filed 32 with the division may shall be amended from time to time by the 33 holder of the certificate of compliance as necessary to keep 34 the listing current with the division . 35 -8- LSB 1266XD (14) 87 ec/nh 8/ 29

S.F. _____ H.F. _____ Sec. 17. Section 123.183, subsection 2, paragraph a, Code 1 2017, is amended to read as follows: 2 a. Revenue collected from the wine gallonage tax on wine 3 manufactured for sale and sold at wholesale in this state, 4 and on wine subject to direct shipment as provided in section 5 123.187 by a wine manufacturer licensed or permitted pursuant 6 to laws regulating alcoholic beverages in this state, shall be 7 deposited in the wine gallonage tax fund as created in this 8 section . 9 Sec. 18. Section 123.187, subsection 2, paragraph c, Code 10 2017, is amended to read as follows: 11 c. An application submitted pursuant to paragraph “a” 12 shall also be accompanied by a bond in the amount of five 13 thousand dollars in the form prescribed and furnished by the 14 division with good and sufficient sureties to be approved by 15 the division conditioned upon compliance with this chapter . 16 However, a wine manufacturer that has submitted a bond pursuant 17 to section 123.175, subsection 3 2 , paragraph “f” , shall not be 18 required to provide a bond as provided in this paragraph. 19 DIVISION II 20 BEER PERMITS 21 Sec. 19. Section 123.30, subsection 3, paragraph e, 22 subparagraph (1), Code 2017, is amended to read as follows: 23 (1) A class “E” liquor control license may be issued and 24 shall authorize the holder to purchase alcoholic liquor from 25 the division only and high alcoholic content beer from a class 26 “AA” “A” beer permittee only and to sell the alcoholic liquor 27 and high alcoholic content beer to patrons for consumption off 28 the licensed premises and to other liquor control licensees. 29 A holder of a class “E” liquor control license may hold other 30 retail liquor control licenses or retail wine or beer permits, 31 but the premises licensed under a class “E” liquor control 32 license shall be separate from other licensed premises, though 33 the separate premises may have a common entrance. However, 34 the holder of a class “E” liquor control license may also hold 35 -9- LSB 1266XD (14) 87 ec/nh 9/ 29

S.F. _____ H.F. _____ a class “B” wine or class “C” beer permit or both for the 1 premises licensed under a class “E” liquor control license. 2 Sec. 20. Section 123.124, Code 2017, is amended by striking 3 the section and inserting in lieu thereof the following: 4 123.124 Beer permits —— classes. 5 Permits for the manufacture and sale, or sale, of beer shall 6 be divided into four classes, known as class “A”, special 7 class “A”, class “B”, or class “C” beer permits. A holder of 8 a class “A” or special class “A” beer permit shall have the 9 authority as provided in section 123.130. A holder of a class 10 “B” beer permit shall have the authority as provided in section 11 123.131, and a holder of a class “C” beer permit shall have the 12 authority as provided in section 123.132. 13 Sec. 21. Section 123.125, Code 2017, is amended to read as 14 follows: 15 123.125 Issuance of beer permits. 16 The administrator shall issue class “A”, special class “A”, 17 class “AA”, special class “AA”, class “B”, and class “C” beer 18 permits and may suspend or revoke permits for cause as provided 19 in this chapter . 20 Sec. 22. Section 123.127, Code 2017, is amended by striking 21 the section and inserting in lieu thereof the following: 22 123.127 Class “A” and special class “A” beer permit 23 application and issuance. 24 1. A person applying for a class “A” or special class “A” 25 beer permit shall submit an application electronically, or in a 26 manner prescribed by the administrator, which shall set forth 27 under oath the following: 28 a. The name and place of residence of the applicant. 29 b. The names and addresses of all persons or, in the case of 30 a corporation, the officers, directors, and persons owning or 31 controlling ten percent or more of the capital stock thereof, 32 having a financial interest, by way of loan, ownership, or 33 otherwise, in the business. 34 c. The location of the premises where the applicant intends 35 -10- LSB 1266XD (14) 87 ec/nh 10/ 29

S.F. _____ H.F. _____ to operate. 1 d. The name of the owner of the premises and if the owner of 2 the premises is not the applicant, whether the applicant is the 3 actual lessee of the premises. 4 e. When required by the administrator, and in such form and 5 containing such information as the administrator may require, 6 a description of the premises where the applicant intends to 7 use the permit, to include a sketch or drawing of the premises 8 and, if applicable, the number of square feet of interior floor 9 space which comprises the retail sales area of the premises. 10 f. Whether any person specified in paragraph “b” has ever 11 been convicted of any offense against the laws of the United 12 States, or any state or territory thereof, or any political 13 subdivision of any such state or territory. 14 g. Any other information as required by the administrator. 15 2. The administrator shall issue a class “A” or special 16 class “A” beer permit to any applicant who establishes all of 17 the following: 18 a. That the applicant has submitted a completed application 19 as required by subsection 1. 20 b. That the applicant is a person of good moral character as 21 provided in section 123.3, subsection 34. 22 c. That the applicant is a citizen of the state of Iowa 23 or, if a corporation, that the applicant is authorized to do 24 business in the state. 25 d. That the premises where the applicant intends to use the 26 permit conforms to all applicable laws, health regulations, and 27 fire regulations, and constitutes a safe and proper place or 28 building. 29 e. That the applicant gives consent to a person, pursuant 30 to section 123.30, subsection 1, to enter upon the premises 31 without a warrant during the business hours of the applicant 32 to inspect for violations of the provisions of this chapter or 33 ordinances and regulations that local authorities may adopt. 34 f. That the applicant has submitted a bond in the amount 35 -11- LSB 1266XD (14) 87 ec/nh 11/ 29

S.F. _____ H.F. _____ of ten thousand dollars in a manner prescribed by the 1 administrator with good and sufficient sureties to be approved 2 by the division conditioned upon compliance with this chapter. 3 g. If the person is applying for a special class “A” beer 4 permit, that the applicant holds or has applied for a class “C” 5 liquor control license or class “B” beer permit. 6 Sec. 23. Section 123.128, subsection 1, paragraph a, Code 7 2017, is amended to read as follows: 8 a. All the information required of an applicant by section 9 123.127, subsection 1 , paragraph “a” . 10 Sec. 24. Section 123.128, subsection 2, Code 2017, is 11 amended to read as follows: 12 2. Fulfills the requirements of section 123.127, subsection 13 1 2 , paragraph paragraphs “b” , “c” , and “d” . 14 Sec. 25. Section 123.129, subsection 2, paragraphs a and b, 15 Code 2017, are amended to read as follows: 16 a. Submits an application electronically, or in a manner 17 prescribed by the administrator, which shall state under 18 oath all the information required of an applicant by section 19 123.127, subsection 1 , paragraph “a” . 20 b. Establishes that the person is of good moral character as 21 defined by this chapter Fulfills the requirements of section 22 123.127, subsection 2, paragraphs “b” , “c” , and “d” . 23 Sec. 26. Section 123.129, subsection 2, paragraph d, Code 24 2017, is amended by striking the paragraph. 25 Sec. 27. Section 123.130, Code 2017, is amended to read as 26 follows: 27 123.130 Authority under class “A” , class “AA”, and special 28 class “A” , and special class “AA” beer permits. 29 1. Any person holding a class “A” or class “AA” beer permit 30 issued by the division shall be authorized to manufacture 31 and sell, or sell at wholesale, beer for consumption off 32 the premises, such sales within the state to be made only 33 to persons holding subsisting class “A”, “B”, or “C” beer 34 permits, or liquor control licenses issued in accordance with 35 -12- LSB 1266XD (14) 87 ec/nh 12/ 29

S.F. _____ H.F. _____ the provisions of this chapter . A class “A” , class “AA”, 1 or special class “A” , or special class “AA” beer permit does 2 not grant authority to manufacture wine as defined in section 3 123.3, subsection 47 . 4 2. All class “A” and class “AA” premises shall be located 5 within the state. All beer received by the holder of a 6 class “A” or class “AA” beer permit from the holder of a 7 certificate of compliance before being resold must first come 8 to rest on the licensed premises of the permit holder, must be 9 inventoried, and is subject to the barrel tax when resold as 10 provided in section 123.136 . A class “A” or class “AA” beer 11 permittee shall not store beer overnight except on premises 12 licensed under a class “A” or class “AA” beer permit. 13 3. All special class “A” and special class “AA” premises 14 shall be located within the state. A person who holds a 15 special class “A” or special class “AA” beer permit for the 16 same location at which the person holds a class “C” liquor 17 control license or class “B” beer permit may manufacture 18 and sell beer to be consumed on the premises, may sell at 19 retail at the manufacturing premises for consumption off the 20 premises beer that is transferred at the time of sale from 21 the original container to another container that is no larger 22 than seventy-two ounces, may sell beer to a class “A” or class 23 “AA” beer permittee for resale purposes, and may sell beer to 24 distributors outside of the state that are authorized by the 25 laws of that jurisdiction to sell beer at wholesale. 26 Sec. 28. Section 123.131, Code 2017, is amended to read as 27 follows: 28 123.131 Authority under class “B” beer permit. 29 1. Subject to the provisions of this chapter , any person 30 holding a class “B” beer permit shall be authorized to sell 31 beer for consumption on or off the premises. Sales of beer 32 for consumption off the premises made pursuant to this section 33 shall be made in original containers except as provided in 34 subsection 2. However, unless otherwise provided in this 35 -13- LSB 1266XD (14) 87 ec/nh 13/ 29

S.F. _____ H.F. _____ chapter , no sale of beer shall be made for consumption on 1 the premises unless the place where such service is made is 2 equipped with tables and seats sufficient to accommodate not 3 less than twenty-five persons at one time. 4 2. Subject to the rules of the division, sales of beer for 5 consumption off the premises made pursuant to this section may 6 be made in a container other than the original container only 7 if all of the following requirements are met: 8 a. The beer is transferred from the original container to 9 the container to be sold on the licensed premises at the time 10 of sale. 11 b. The person transferring the beer from the original 12 container to the container to be sold shall be eighteen years 13 of age or more. 14 c. The container to be sold shall be no larger than 15 seventy-two ounces. 16 d. The container to be sold shall be securely sealed by a 17 method authorized by the division that is designed so that if 18 the sealed container is reopened or the seal tampered with, it 19 is visibly apparent that the seal on the container of beer has 20 been tampered with or the sealed container has otherwise been 21 reopened. 22 3. A container of beer other than the original container 23 that is sold and sealed in compliance with the requirements of 24 subsection 2 and the rules of the division shall not be deemed 25 an open container subject to the requirements of sections 26 321.284 and 321.284A if the sealed container is unopened and 27 the seal has not been tampered with, and the contents of the 28 container have not been partially removed. 29 4. A person holding a class “B” beer permit and a class “A” 30 beer permit whose primary purpose is manufacturing beer may 31 purchase wine from a wholesaler holding a class “A” wine permit 32 for sale at retail for consumption on the premises covered by 33 the class “B” beer permit. 34 Sec. 29. Section 123.134, subsection 1, Code 2017, is 35 -14- LSB 1266XD (14) 87 ec/nh 14/ 29

S.F. _____ H.F. _____ amended to read as follows: 1 1. The annual permit fee for a class “A” or special class 2 “A” beer permit is two seven hundred fifty dollars. 3 Sec. 30. Section 123.134, subsection 2, Code 2017, is 4 amended by striking the subsection. 5 Sec. 31. Section 123.135, Code 2017, is amended to read as 6 follows: 7 123.135 Certificate of compliance —— civil penalty. 8 1. A manufacturer, brewer, bottler, importer, or vendor of 9 beer, or any agent thereof, desiring to ship or sell beer, or 10 have beer brought into this state for resale by a class “A” 11 or class “AA” beer permittee, shall first make application 12 for and be issued a brewer’s certificate of compliance by the 13 administrator for that purpose. The certificate of compliance 14 expires at the end of one year from the date of issuance 15 and shall be renewed for a like period upon application to 16 the administrator unless otherwise revoked for cause. Each 17 application for a certificate of compliance or renewal of a 18 certificate shall be submitted electronically, or in a manner 19 prescribed by the administrator, and shall be accompanied 20 by a fee of five hundred dollars payable to the division. 21 Each holder of a certificate of compliance shall furnish the 22 information in a manner the administrator requires. 23 2. At the time of applying for a certificate of compliance, 24 each applicant shall file with the division a list of all class 25 “A” and class “AA” beer permittees with whom it intends to do 26 business and shall designate the geographic area in which its 27 products are to be distributed by such permittee. The listing 28 of class “A” and class “AA” beer permittees and geographic area 29 as filed with the division may shall be amended from time to 30 time by the holder of a certificate of compliance as necessary 31 to keep the listing current with the division . 32 3. All class “A” and class “AA” beer permit holders shall 33 sell only those brands of beer which are manufactured, brewed, 34 bottled, shipped, or imported by a person holding a current 35 -15- LSB 1266XD (14) 87 ec/nh 15/ 29

S.F. _____ H.F. _____ certificate of compliance. Any employee or agent working for 1 or representing the holder of a certificate of compliance 2 within this state shall submit electronically, or in a manner 3 prescribed by the administrator, the employee’s or agent’s name 4 and address with the division. 5 4. It shall be unlawful for any holder of a certificate of 6 compliance or the holder’s agent, or any class “A” or class 7 “AA” beer permit holder or the beer permit holder’s agent, to 8 grant to any retail beer permit holder, directly or indirectly, 9 any rebates, free goods, or quantity discounts on beer which 10 are not uniformly offered to all retail permittees. 11 5. Notwithstanding any other penalties provided by this 12 chapter , any holder of a certificate of compliance or any class 13 “A” or class “AA” beer permit holder who violates this chapter 14 or the rules adopted pursuant to this chapter is subject to a 15 civil penalty not to exceed one thousand dollars or suspension 16 of the holder’s certificate or permit for a period not to 17 exceed one year, or both such civil penalty and suspension. 18 Civil penalties imposed under this section shall be collected 19 and retained by the division. 20 Sec. 32. Section 123.136, subsection 1, Code 2017, is 21 amended to read as follows: 22 1. In addition to the annual permit fee to be paid by all 23 class “A” and class “AA” beer permittees under this chapter 24 there shall be levied and collected from the permittees on all 25 beer manufactured for sale or sold in this state at wholesale 26 and on all beer imported into this state for sale at wholesale 27 and sold in this state at wholesale, and from special class “A” 28 and special class “AA” beer permittees on all beer manufactured 29 for consumption on the premises and on all beer sold at retail 30 at the manufacturing premises for consumption off the premises 31 pursuant to section 123.130, subsection 3 , a tax of five and 32 eighty-nine hundredths dollars for every barrel containing 33 thirty-one gallons, and at a like rate for any other quantity 34 or for the fractional part of a barrel. However, no tax shall 35 -16- LSB 1266XD (14) 87 ec/nh 16/ 29

S.F. _____ H.F. _____ be levied or collected on beer shipped outside this state by a 1 class “A” or class “AA” beer permittee or sold by one class “A” 2 or class “AA” beer permittee to another class “A” or class “AA” 3 beer permittee. 4 Sec. 33. Section 123.137, subsection 1, Code 2017, is 5 amended to read as follows: 6 1. A person holding a class “A” , class “AA”, or special 7 class “A” , or special class “AA” beer permit shall, on or 8 before the tenth day of each calendar month commencing on the 9 tenth day of the calendar month following the month in which 10 the person is issued a beer permit, make a report under oath 11 to the division electronically, or in a manner prescribed by 12 the administrator, showing the exact number of barrels of 13 beer, or fractional parts of barrels, sold by the beer permit 14 holder during the preceding calendar month. The report shall 15 also state information the administrator requires, and beer 16 permit holders shall at the time of filing a report pay to the 17 division the amount of tax due at the rate fixed in section 18 123.136 . 19 Sec. 34. Section 123.138, subsection 1, Code 2017, is 20 amended to read as follows: 21 1. Each class “A” , class “AA”, or special class “A” , or 22 special class “AA” beer permittee shall keep proper records 23 showing the amount of beer sold by the permittee, and these 24 records shall be at all times open to inspection by the 25 administrator and to other persons pursuant to section 123.30, 26 subsection 1 . Each class “B” beer permittee, class “C” beer 27 permittee, or retail liquor control licensee shall keep proper 28 records showing each purchase of beer made by the permittee 29 or licensee, and the date and the amount of each purchase and 30 the name of the person from whom each purchase was made, which 31 records shall be open to inspection pursuant to section 123.30, 32 subsection 1 , during normal business hours of the permittee or 33 licensee. 34 Sec. 35. Section 123.139, Code 2017, is amended to read as 35 -17- LSB 1266XD (14) 87 ec/nh 17/ 29

S.F. _____ H.F. _____ follows: 1 123.139 Separate locations —— class “A” , class “AA”, or 2 special class “A” , or special class “AA” beer permit. 3 A class “A” , class “AA”, or special class “A” , or special 4 class “AA” beer permittee having more than one place of 5 business is required to have a separate beer permit for each 6 separate place of business maintained by the permittee where 7 beer is stored, warehoused, or sold. 8 Sec. 36. Section 123.142, Code 2017, is amended to read as 9 follows: 10 123.142 Unlawful sale and importation. 11 1. It is unlawful for the holder of a class “B” or class 12 “C” beer permit issued under this chapter to sell beer, except 13 beer brewed on the premises covered by a special class “A” 14 or special class “AA” beer permit or beer purchased from a 15 person holding a class “A” or class “AA” beer permit issued in 16 accordance with this chapter , and on which the tax provided in 17 section 123.136 has been paid. However, this section does not 18 apply to class “D” liquor control licensees as provided in this 19 chapter . 20 2. It shall be unlawful for any person not holding a class 21 “A” or class “AA” beer permit to import beer into this state 22 for the purpose of sale or resale. 23 Sec. 37. Section 123.143, subsection 3, Code 2017, is 24 amended to read as follows: 25 3. Barrel tax revenues collected on beer manufactured in 26 this state from a class “A” or class “AA” beer permittee which 27 owns and operates a brewery located in Iowa shall be credited 28 to the barrel tax fund hereby created in the office of the 29 treasurer of state. Moneys deposited in the barrel tax fund 30 shall not revert to the general fund of the state without a 31 specific appropriation by the general assembly. Moneys in the 32 barrel tax fund are appropriated to the economic development 33 authority for purposes of section 15E.117 . 34 Sec. 38. Section 123.144, subsection 1, Code 2017, is 35 -18- LSB 1266XD (14) 87 ec/nh 18/ 29

S.F. _____ H.F. _____ amended to read as follows: 1 1. No person shall bottle beer within the state of Iowa, 2 except class “A” , and special class “A” , class “AA”, and 3 special class “AA” beer permittees who have complete equipment 4 for bottling beer and who have received the approval of the 5 local board of health as to sanitation. It shall be the duty of 6 local boards of health to inspect the premises and equipment of 7 class “A” , and special class “A” , class “AA”, and special class 8 “AA” beer permittees who desire to bottle beer. 9 DIVISION III 10 NATIVE DISTILLED SPIRITS 11 Sec. 39. Section 123.3, subsections 28 and 29, Code 2017, 12 are amended to read as follows: 13 28. “Micro-distilled “Native distilled spirits” means 14 distilled spirits fermented, distilled, or, for a period of 15 two years, barrel matured on the licensed premises of the 16 micro-distillery native distillery where fermented, distilled, 17 or matured. “Micro-distilled spirits” “Native distilled spirits” 18 also includes blended or mixed spirits comprised solely of 19 spirits fermented, distilled, or, for a period of two years, 20 barrel matured at a micro-distillery native distillery . 21 29. “Micro-distillery” “Native distillery” means a 22 business with an operational operating still which , combining 23 all production facilities of the business, produces and 24 manufactures less than fifty thousand proof gallons of native 25 distilled spirits on an annual basis . 26 Sec. 40. Section 123.30, subsection 3, paragraph c, Code 27 2017, is amended by adding the following new subparagraph: 28 NEW SUBPARAGRAPH . (3) A class “C” native distilled spirits 29 license may be issued to a native distillery but shall be 30 issued in the name of the individuals who actually own the 31 business. The license shall authorize the holder to sell 32 native distilled spirits manufactured on the premises of the 33 native distillery to patrons by the individual drink for 34 consumption on the premises. All native distilled spirits sold 35 -19- LSB 1266XD (14) 87 ec/nh 19/ 29

S.F. _____ H.F. _____ by a native distillery for on-premises consumption shall be 1 purchased from a class “E” liquor control licensee. 2 Sec. 41. Section 123.32, subsection 1, Code 2017, is amended 3 to read as follows: 4 1. Filing of application. An application for a class “A”, 5 class “B”, class “C”, or class “E” liquor control license, for 6 a class “A” micro-distilled spirits permit, for a retail beer 7 permit as provided in sections 123.128 and 123.129 , or for a 8 class “B”, class “B” native, or class “C” native retail wine 9 permit as provided in section 123.178 , 123.178A , or 123.178B , 10 accompanied by the necessary fee and bond, if required, shall 11 be filed with the appropriate city council if the premises for 12 which the license or permit is sought are located within the 13 corporate limits of a city, or with the board of supervisors 14 if the premises for which the license or permit is sought are 15 located outside the corporate limits of a city. An application 16 for a class “D” liquor control license and for a class “A” 17 beer or class “A” wine permit, accompanied by the necessary 18 fee and bond, if required, shall be submitted to the division 19 electronically, or in a manner prescribed by the administrator, 20 which shall proceed in the same manner as in the case of an 21 application approved by local authorities. 22 Sec. 42. Section 123.36, Code 2017, is amended by adding the 23 following new subsection: 24 NEW SUBSECTION . 3A. Class “C” native distilled spirits 25 license, the sum of one thousand dollars. 26 Sec. 43. Section 123.36, subsection 5, Code 2017, is amended 27 to read as follows: 28 5. Any club, hotel, motel, native distillery, or commercial 29 establishment holding a liquor control license, subject to 30 section 123.49, subsection 2 , paragraph “b” , may apply for and 31 receive permission to sell and dispense alcoholic liquor and 32 wine to patrons on Sunday for consumption on the premises only, 33 and beer for consumption on or off the premises between the 34 hours of 8:00 a.m. on Sunday and 2:00 a.m. on the following 35 -20- LSB 1266XD (14) 87 ec/nh 20/ 29

S.F. _____ H.F. _____ Monday. A class “D” liquor control licensee may apply for and 1 receive permission to sell and dispense alcoholic beverages to 2 patrons for consumption on the premises only between the hours 3 of 8:00 a.m. on Sunday and 2:00 a.m. on the following Monday. 4 For the privilege of selling beer, wine, and alcoholic liquor 5 on the premises on Sunday the liquor control license fee of the 6 applicant shall be increased by twenty percent of the regular 7 fee prescribed for the license pursuant to this section , and 8 the privilege shall be noted on the liquor control license. 9 Sec. 44. Section 123.43A, Code 2017, is amended to read as 10 follows: 11 123.43A Micro-distilled spirits —— permit Native 12 distilleries . 13 1. Subject to rules of the division, a micro-distillery 14 native distillery holding a class “A” micro-distilled spirits 15 permit pursuant to this section manufacturer’s license 16 issued pursuant to section 123.41 may sell or offer for sale 17 micro-distilled native distilled spirits. As provided in this 18 section , sales of native distilled spirits manufactured on the 19 premises may be made at retail for off-premises consumption 20 when sold on the premises of the micro-distillery native 21 distillery that manufactures micro-distilled the native 22 distilled spirits. All sales shall be made through the state’s 23 wholesale distribution system. 24 2. A micro-distillery native distillery shall not sell 25 more than one and one-half nine liters per person per day, 26 of micro-distilled native distilled spirits on the premises 27 of the micro-distillery native distillery . In addition, a 28 micro-distillery A native distillery shall not directly ship 29 micro-distilled native distilled spirits for sale at retail. 30 The micro-distillery native distillery shall maintain records 31 of individual purchases of micro-distilled native distilled 32 spirits at the micro-distillery native distillery for three 33 years. 34 3. A micro-distillery native distillery shall not sell 35 -21- LSB 1266XD (14) 87 ec/nh 21/ 29

S.F. _____ H.F. _____ micro-distilled native distilled spirits other than as 1 permitted in this chapter and shall not allow micro-distilled 2 native distilled spirits sold for consumption off the premises 3 to be consumed upon the premises of the micro-distillery native 4 distillery . However, as a part of a micro-distillery native 5 distillery tour, micro-distilled native distilled spirits may 6 be tasted pursuant to the rules of the division on the premises 7 where fermented, distilled, or matured, when no charge is made 8 for the tasting. 9 4. A class “A” micro-distilled spirits permit for a 10 micro-distillery shall be issued and renewed annually upon 11 payment of a fee of five hundred dollars. 12 5. The sale of micro-distilled native distilled spirits to 13 the division for wholesale disposition and sale by the division 14 shall be subject to the requirements of this chapter regarding 15 such disposition and sale. 16 6. 5. The division shall issue no more than three permits 17 under this section manufacturer’s licenses to a person 18 native distillery . In addition, a micro-distillery native 19 distillery issued a permit manufacturer’s license under this 20 section 123.41 shall file with the division , on or before the 21 fifteenth day of each calendar month, all documents filed by 22 the micro-distillery native distillery with the alcohol and 23 tobacco tax and trade bureau of the United States department of 24 the treasury, including all production, storage, and processing 25 reports. 26 7. Micro-distilled spirits purchased at a micro-distillery 27 shall not be consumed on any property owned, operated, or 28 controlled by a micro-distillery. 29 6. Notwithstanding any provision of this chapter to 30 the contrary or the fact that a person is the holder of a 31 manufacturer’s license, a native distillery may sell those 32 native distilled spirits manufactured on the premises of the 33 native distillery for consumption on the premises by applying 34 for a class “C” native distilled spirits license as provided 35 -22- LSB 1266XD (14) 87 ec/nh 22/ 29

S.F. _____ H.F. _____ in section 123.30. A native distillery may be granted not 1 more than one class “C” native distilled spirits license. 2 All native distilled spirits sold by a native distillery for 3 on-premises consumption shall be purchased from a class “E” 4 liquor control licensee. 5 Sec. 45. Section 123.173A, subsections 4 and 7, Code 2017, 6 are amended to read as follows: 7 4. The authorized nonprofit entity conducting the charity 8 beer, spirits, and wine auction shall obtain the beer, spirits, 9 and wine to be auctioned at the charity beer, spirits, and wine 10 auction from an Iowa retail beer permittee, an Iowa retail 11 liquor control licensee, or an Iowa retail wine permittee, or 12 may receive donations of beer, spirits, or wine to be auctioned 13 at the charity beer, spirits, and wine auction from persons 14 who purchased the donated beer, spirits, or wine from an Iowa 15 retail beer permittee, an Iowa retail liquor control licensee, 16 an Iowa micro-distilled spirits permittee native distillery , 17 or an Iowa retail wine permittee and who present a receipt 18 documenting the purchase at the time the beer, spirits, or wine 19 is donated. The authorized nonprofit entity conducting the 20 charity beer, spirits, and wine auction shall retain a copy 21 of the receipt for a period of one year from the date of the 22 charity beer, spirits, and wine auction. 23 7. A liquor control licensee, beer permittee, 24 micro-distilled spirits permittee native distillery , or wine 25 permittee shall not purchase beer, spirits, or wine at a 26 charity beer, spirits, and wine auction. The charity beer, 27 spirits, and wine auction may be conducted on a premises for 28 which a class “B” liquor control license or class “C” liquor 29 control license has been issued, provided that the liquor 30 control licensee does not participate in the charity beer, 31 spirits, and wine auction, supply beer, spirits, or wine to be 32 auctioned at the charity beer, spirits, and wine auction, or 33 receive any of the proceeds of the charity beer, spirits, and 34 wine auction. 35 -23- LSB 1266XD (14) 87 ec/nh 23/ 29

S.F. _____ H.F. _____ EXPLANATION 1 The inclusion of this explanation does not constitute agreement with 2 the explanation’s substance by the members of the general assembly. 3 This bill concerns alcoholic beverage control and matters 4 under the purview of the alcoholic beverages division of the 5 department of commerce. 6 DIVISION I —— ALCOHOLIC BEVERAGE CONTROL. Code section 7 123.3, providing definitions, is amended. The bill adds a 8 definition for “original container”, which means a vessel 9 containing an alcoholic beverage that bears a federally 10 approved label and is appropriately sealed at the location 11 of manufacture. In addition, the definition of “licensed 12 premises” is amended to include noncontiguous areas or places 13 susceptible of a precise description. 14 Code section 123.22 is amended to allow individuals to 15 manufacture, sell, or transport ingredients and devices used to 16 make homemade beer. Current law allows this for homemade wine. 17 Code section 123.23, concerning a distiller’s certificate of 18 compliance, is amended to delete a reference that a listing of 19 authorized agents of the certificate holder be amended “from 20 time to time”. The bill does not eliminate the requirement 21 that the listing be amended as necessary. 22 Code section 123.28, concerning restrictions on 23 transportation, is amended by dividing the section into 24 numbered subsections. 25 Code section 123.30, concerning liquor control licenses, 26 is amended by removing cash payment as a type of payment 27 for purchasing alcoholic liquor from the alcoholic beverages 28 division. The bill retains language in current law that 29 requires payment by other means that ensure the division 30 receives full payment in advance of delivery of alcoholic 31 liquor. 32 Code section 123.31, concerning application contents for 33 a liquor control license, is amended by striking provisions 34 requiring the applicant to set forth whether the applicant 35 -24- LSB 1266XD (14) 87 ec/nh 24/ 29

S.F. _____ H.F. _____ possesses a federal gambling stamp and whether, if required, 1 all designated security employees have received security 2 employee training and certification as required by Code section 3 123.32. 4 Code section 123.32 is amended to provide that if an 5 application for a liquor control license or other permit is 6 disapproved by the administrator of the alcoholic beverages 7 division, the appropriate local authority shall be notified 8 electronically, or in a manner prescribed by the administrator, 9 instead of by certified mail. The applicant is still required 10 to be notified of the disapproval by certified mail. 11 Code section 123.33, concerning records required to be 12 maintained by a licensee or permittee, is amended to describe 13 the types of records to be maintained, which shall include 14 income statements, balance sheets, and purchase and sale 15 invoices and ledgers. 16 Code section 123.34, concerning seasonal licenses, is 17 amended to provide that an applicant may apply for a new 18 seasonal permit or license at the same location after two 19 months. 20 Code section 123.49 is amended to consolidate the rules 21 governing Sunday sales of alcoholic liquor, wine, or beer 22 within subsection 2, paragraph “b”, of that section. 23 Code section 123.51, concerning allowable signs and branded 24 advertising of a licensee authorized to sell liquor, wine, 25 or beer at retail, is amended to provide that signs or other 26 advertising matter may be erected inside the premises and 27 inside a window facing outward from the premises. 28 Code section 123.175, concerning class “A” or retail 29 wine permit applications, is stricken and rewritten by the 30 bill. The bill provides specifically for the contents of 31 the application to be submitted to the administrator of the 32 alcoholic beverages division and what the applicant must 33 establish before the administrator issues a permit. In 34 addition to requirements currently provided in Code section 35 -25- LSB 1266XD (14) 87 ec/nh 25/ 29

S.F. _____ H.F. _____ 123.175, the bill provides that an applicant that is a 1 corporation shall list all officers and persons with a certain 2 financial interest in the corporation in the application. The 3 bill also requires an applicant to state in the application 4 whether certain persons required to be listed in the 5 application have been convicted of any offense and, if required 6 by the administrator of the division, to include in the 7 application a sketch or drawing of the premises. Code section 8 123.187 is amended to reflect the rewritten Code section. 9 Code section 123.178B, concerning class “C” native wine 10 permits, is amended to specify that a permittee authorized to 11 purchase beer for sale at retail may sell it for consumption 12 on or off the premises covered by the class “C” native wine 13 permit. 14 Code section 123.180, concerning a vintner’s certificate of 15 compliance, is amended to provide that the listing of class “A” 16 wine permittees the applicant intends to do business with that 17 is filed with the alcoholic beverages division shall be amended 18 as necessary to keep the listing current. 19 Code section 123.183 is amended to provide that the 20 gallonage tax on wine is collected when the wine is sold at 21 wholesale. 22 DIVISION II —— BEER PERMITS. This division eliminates 23 class “AA” and special class “AA” beer permits and makes other 24 changes relative to beer permits. 25 Code section 123.124, concerning beer permit classes, is 26 rewritten to reflect the elimination of class “AA” and special 27 class “AA” beer permits. The Code section is also amended to 28 refer to the Code sections that describe the authority for each 29 beer permit class. 30 Code section 123.127, concerning class “A” or class “AA” 31 and special class “A” or special class “AA” beer permits, is 32 stricken and rewritten by the bill. The bill eliminates the 33 class “AA” and special class “AA” beer permits and provides 34 specifically for the contents of the application to be 35 -26- LSB 1266XD (14) 87 ec/nh 26/ 29

S.F. _____ H.F. _____ submitted to the administrator of the alcoholic beverages 1 division and what the applicant must establish before the 2 administrator issues a permit. The bill also increases from 3 $5,000 to $10,000 the amount of the bond an applicant must 4 submit to the administrator. 5 In addition to requirements currently provided in Code 6 section 123.127, the bill provides that an applicant that is a 7 corporation shall list all officers and persons with a certain 8 financial interest in the corporation in the application. The 9 bill also requires an applicant to state in the application 10 whether certain persons required to be listed in the 11 application have been convicted of any offense and, if required 12 by the administrator of the division, to include in the 13 application a sketch or drawing of the premises. Code sections 14 123.128 and 123.129, concerning class “B” and class “C” beer 15 permits, are amended to reflect the rewritten Code section. 16 Code section 123.130, is amended to eliminate class “AA” 17 and special class “AA” beer permits and provides that certain 18 special class “A” beer permittees may sell at retail at the 19 manufacturing premises for consumption off the premises beer 20 that is transferred at the time of sale from the original 21 container to another container that is no larger than 72 22 ounces. 23 Code section 123.131, concerning authority under a class “B” 24 beer permit, is amended to allow a class “B” beer permittee 25 whose primary purpose is manufacturing beer that also holds 26 a class “A” beer permit to purchase wine from a wholesaler 27 for sale at retail or consumption on the premises covered by 28 the class “B” beer permit. In addition, the Code section 29 is amended to provide that sales of beer for consumption 30 off the premises may be made in a container other than the 31 original container that is no larger than 72 ounces under 32 certain circumstances and shall be deemed an open container for 33 purposes of Code sections 321.284 and 321.284A. 34 Code section 123.134, concerning beer permit fees, is 35 -27- LSB 1266XD (14) 87 ec/nh 27/ 29

S.F. _____ H.F. _____ amended to increase the annual fee for a class “A” or special 1 class “A” beer permit from $250 to $750. 2 Code section 123.135, concerning a certificate of compliance 3 concerning beer, is amended to provide that the listing of 4 class “A” permittees and geographic area as filed with the 5 alcoholic beverages division shall be amended as necessary to 6 keep the listing current. 7 Code section 123.136, concerning the barrel tax on beer, 8 is amended to provide that the tax applies to all beer 9 sold at retail by a special class “A” beer permittee at the 10 manufacturing premises for consumption off the premises. 11 DIVISION III —— NATIVE DISTILLED SPIRITS. Code section 12 123.3, providing definitions, is amended to change the terms 13 “micro-distilled spirits” and “micro-distillery” to “native 14 distilled spirits” and “native distillery”. In addition, the 15 bill eliminates the requirement that a native distillery has to 16 produce and manufacture less than 50 proof gallons of distilled 17 spirits annually. Corresponding changes in Code chapter 123 18 are made to reflect the changed definitions. 19 Code section 123.30, concerning liquor control licenses, 20 is amended to provide for the issuance of a class “C” native 21 distilled spirits license which authorizes the holder to sell 22 native distilled spirits manufactured on the premises for 23 consumption on the premises. 24 Code section 123.32, concerning applications for certain 25 licenses, is amended to eliminate the application for a class 26 “A” micro-distilled spirits permit. 27 Code section 123.36, concerning liquor fees, is amended to 28 provide that the annual fee for a class “C” native distilled 29 spirits license is $1,000. The Code section is also amended to 30 allow a native distillery the ability to make certain sales of 31 alcoholic liquor, wine, and beer on Sundays in the same manner 32 as a club, hotel, motel, or other commercial establishment. 33 Code section 123.43A, concerning micro-distilled spirits, is 34 amended to reflect the change of the term to native distilled 35 -28- LSB 1266XD (14) 87 ec/nh 28/ 29

S.F. _____ H.F. _____ spirits and the elimination of the class “A” micro-distilled 1 spirits permit. The Code section requires the native 2 distillery to obtain a manufacturer’s license and limits 3 the number of manufacturer’s licenses to three for a native 4 distillery. The Code section is also amended to allow for 5 sales of nine, instead of one and one-half, liters of native 6 distilled spirits per person per day. The Code section also 7 allows a native distillery to sell native distilled spirits 8 manufactured on the premises for consumption on the premises by 9 applying for a class “C” native distilled spirits license. A 10 native distillery may be granted not more than one class “C” 11 native distilled spirits license. 12 -29- LSB 1266XD (14) 87 ec/nh 29/ 29