Senate File 368 - Introduced
SENATE FILE
BY COMMITTEE ON NATURAL RESOURCES
AND ENVIRONMENT
(SUCCESSOR TO SF 276)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to alcoholic beverages, by providing for the
2 manufacture and sale of native distilled spirits and
3 establishing a related permit fee, relating to the activities
4 of the grape and wine development commission, and providing
5 for the transfer of wine sale revenues to the grape and wine
6 development fund.
7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 123.32, subsection 1, Code 2005, is
1 2 amended to read as follows:
1 3 1. FILING OF APPLICATION. An application for a class "A",
1 4 class "B", class "C", or class "E" liquor control license, for
1 5 a class "A" or class "B" native distilled spirits permit, for
1 6 a retail beer permit as provided in sections 123.128 and
1 7 123.129, or for a class "B", class "B" native, or class "C"
1 8 native retail wine permit as provided in section 123.178,
1 9 123.178A, or 123.178B, accompanied by the necessary fee and
1 10 bond, if required, shall be filed with the appropriate city
1 11 council if the premises for which the license or permit is
1 12 sought are located within the corporate limits of a city, or
1 13 with the board of supervisors if the premises for which the
1 14 license or permit is sought are located outside the corporate
1 15 limits of a city. An application for a class "D" liquor
1 16 control license and for a class "A" beer or class "A" wine
1 17 permit, accompanied by the necessary fee and bond, if
1 18 required, shall be filed with the division, which shall
1 19 proceed in the same manner as in the case of an application
1 20 approved by local authorities.
1 21 Sec. 2. Section 123.41, subsection 1, Code 2005, is
1 22 amended to read as follows:
1 23 1. Upon application in the prescribed form and accompanied
1 24 by a fee of three hundred fifty dollars, the administrator may
1 25 in accordance with this chapter grant and issue a license,
1 26 valid for a one=year period after date of issuance, to a
1 27 manufacturer, other than a manufacturer of native distilled
1 28 spirits licensed pursuant to section 123.43A, which shall
1 29 allow the manufacture, storage, and wholesale disposition and
1 30 sale of alcoholic liquors to the division and to customers
1 31 outside of the state.
1 32 Sec. 3. NEW SECTION. 123.43A NATIVE DISTILLED SPIRITS ==
1 33 PERMITS.
1 34 1. Subject to rules of the division, a manufacturer of
1 35 native distilled spirits holding a class "A" native distilled
2 1 spirits permit pursuant to this section may sell, keep, or
2 2 offer for sale native distilled spirits. As provided in this
2 3 section, sales may be made at retail for off=premises
2 4 consumption when sold on the premises of the manufacturer of
2 5 the native distilled spirits, or in a retail establishment
2 6 operated by the manufacturer. Any other sale shall only be
2 7 made to the division for wholesale disposition and sale by the
2 8 division.
2 9 2. For the purposes of this section, "native distilled
2 10 spirits" means distilled spirits manufactured by a distillery
2 11 located in this state in which at least eighty percent of the
2 12 raw materials consumed in the production of the distilled
2 13 spirits are grown in this state.
2 14 3. A manufacturer of native distilled spirits shall not
2 15 sell more than five thousand gallons of native distilled
2 16 spirits on the premises of the manufacturer, or in a retail
2 17 establishment operated by the manufacturer, annually.
2 18 4. A manufacturer of native distilled spirits shall not
2 19 sell native distilled spirits other than as permitted in this
2 20 chapter and shall not allow native distilled spirits sold to
2 21 be consumed upon the premises of the manufacturer except as
2 22 provided in subsection 6. However, prior to sale, native
2 23 distilled spirits may be sampled on the premises where made,
2 24 when no charge is made for the sampling. A person may
2 25 manufacture native distilled spirits for consumption on the
2 26 manufacturer's premises, when the native distilled spirits or
2 27 any part of the native distilled spirits are not manufactured
2 28 for sale.
2 29 5. A class "A" native distilled spirits permit for a
2 30 native distilled spirits manufacturer shall be issued and
2 31 renewed annually upon payment of a fee of twenty=five dollars
2 32 which shall be in lieu of any other license fee required by
2 33 this chapter. The class "A" permit shall allow the native
2 34 distilled spirits manufacturer to sell, keep, or offer for
2 35 sale the manufacturer's native distilled spirits as provided
3 1 under this section.
3 2 6. A class "B" native distilled spirits permit for a
3 3 native distilled spirits manufacturer shall be issued and
3 4 renewed annually upon payment of a fee of twenty=five dollars
3 5 which shall be in lieu of any other license fee required by
3 6 this chapter. The class "B" permit shall allow the native
3 7 distilled spirits manufacturer to sell native distilled
3 8 spirits at retail for consumption on the premises of the
3 9 manufacturing facility, or in a retail establishment operated
3 10 by the manufacturer. A manufacturer of native distilled
3 11 spirits may be granted not more than one class "B" native
3 12 distilled spirits permit.
3 13 7. For the purposes of this section, "manufacturer"
3 14 includes only those persons who process in Iowa the Iowa=grown
3 15 raw materials consumed in the production of distilled spirits
3 16 by the person.
3 17 8. For the purposes of this section, section 123.43 shall
3 18 not apply to a manufacturer of native distilled spirits.
3 19 9. The sale of native distilled spirits to the division
3 20 for wholesale disposition and sale by the division shall be
3 21 subject to the requirements of this chapter regarding such
3 22 disposition and sale.
3 23 Sec. 4. Section 123.53, Code 2005, is amended by adding
3 24 the following new subsection:
3 25 NEW SUBSECTION. 3A. The treasurer of state shall transfer
3 26 to the grape and wine development fund established in section
3 27 175A.5 a sum of money equal to five percent of the gross
3 28 amount of wine sales made by the division from the beer and
3 29 liquor control fund on a monthly basis.
3 30 Sec. 5. Section 123.53, subsection 4, Code 2005, is
3 31 amended to read as follows:
3 32 4. The treasurer of state, after making the transfer
3 33 transfers provided for in subsection subsections 3 and 3A,
3 34 shall transfer to the division from the beer and liquor
3 35 control fund and before any other transfer to the general
4 1 fund, an amount sufficient to pay the costs incurred by the
4 2 division for collecting and properly disposing of the liquor
4 3 containers.
4 4 Sec. 6. Section 175A.3, subsection 1, paragraph a, Code
4 5 2005, is amended to read as follows:
4 6 a. Establish and administer grape and wine development
4 7 programs as provided in section 175A.4 and account for and
4 8 expend moneys from the grape and wine development fund created
4 9 pursuant to section 175A.5. Prior to authorizing an
4 10 expenditure of moneys, the department shall consult with the
4 11 grape and wine development commission. The commission shall
4 12 make recommendations to the department regarding the
4 13 expenditure of moneys to enhance and develop the native wine
4 14 industry and to provide an infrastructure to encourage the
4 15 growth of the native wine industry in this state.
4 16 Sec. 7. Section 175A.3, subsection 2, Code 2005, is
4 17 amended by adding the following new paragraph:
4 18 NEW PARAGRAPH. f. Make recommendations to the department
4 19 regarding a proposed expenditure of funds as provided in
4 20 subsection 1, paragraph "a".
4 21 Sec. 8. Section 175A.5, subsection 1, Code 2005, is
4 22 amended to read as follows:
4 23 1. A grape and wine development fund is created in the
4 24 state treasury under the control of the department. The fund
4 25 is composed of moneys appropriated by the general assembly and
4 26 moneys available to and obtained or accepted by the department
4 27 from the United States or private sources for placement in the
4 28 fund. The fund shall include moneys deposited into the fund
4 29 from the beer and liquor control fund as provided in section
4 30 123.53, and from the wine gallonage tax as provided in section
4 31 123.183.
4 32 EXPLANATION
4 33 This bill relates to the manufacture and sale of native
4 34 distilled spirits, the activities of the grape and wine
4 35 development commission, and the transfer of wine sale revenues
5 1 to the grape and wine development fund.
5 2 The bill provides that a manufacturer of native distilled
5 3 spirits may sell, keep, or offer for sale native distilled
5 4 spirits for off=premises consumption either through sales on
5 5 the manufacturer's premises, or in a retail establishment
5 6 operated by the manufacturer. The bill restricts any other
5 7 form of sale to sales made to the alcoholic beverages division
5 8 for wholesale disposition and sale by the division. The bill
5 9 defines "native distilled spirits" to mean distilled spirits
5 10 manufactured by a distillery located in Iowa in which at least
5 11 80 percent of the raw materials consumed in the production of
5 12 distilled spirits are Iowa=grown.
5 13 The bill provides that a manufacturer shall not sell more
5 14 than 5,000 gallons of native distilled spirits on the premises
5 15 of the manufacturer, or in a retail establishment operated by
5 16 the manufacturer, annually. The bill specifies that unless a
5 17 manufacturer has obtained a class "B" native distilled spirits
5 18 permit, the manufacturer shall not allow native distilled
5 19 spirits sold to be consumed upon the premises of the
5 20 manufacturer, but that prior to sale they may be sampled on
5 21 the premises where made, when no charge is made for the
5 22 sampling.
5 23 The bill provides for two new permits applicable to native
5 24 distilled spirits, both requiring a fee of $25 for initial
5 25 issuance and annual renewal. A class "A" native distilled
5 26 spirits permit allows a manufacturer to sell, keep, or offer
5 27 for sale the manufacturer's native distilled spirits, and a
5 28 class "B" native distilled spirits permit allows a
5 29 manufacturer to sell native distilled spirits at retail for
5 30 consumption on the premises of the manufacturing facility, or
5 31 in a retail establishment operated by the manufacturer. The
5 32 bill provides that a manufacturer may be granted not more than
5 33 one class "B" native distilled spirits license.
5 34 The bill provides that a "manufacturer" of native distilled
5 35 spirits includes only those persons who process in Iowa the
6 1 Iowa=grown raw materials consumed in the production of
6 2 distilled spirits. The bill also provides that the sale of
6 3 native distilled spirits to the alcoholic beverages division
6 4 for wholesale disposition and sale by the division shall be
6 5 subject to the requirements of Code chapter 123 relating to
6 6 liquor sales and distribution by the division.
6 7 The bill provides that a manufacturer of native distilled
6 8 spirits is not considered a manufacturer pursuant to Code
6 9 sections 123.41 and 123.43, which require a license allowing
6 10 the manufacture, storage, and wholesale disposition and sale
6 11 of alcoholic liquors to the division and to customers outside
6 12 of the state. The bill makes conforming changes to Code
6 13 chapter 123 relating to these provisions.
6 14 The bill also provides that the treasurer of state shall
6 15 transfer on a monthly basis from the beer and liquor control
6 16 fund to the grape and wine development fund established in
6 17 Code section 175A.5 an amount equal to 5 percent of gross wine
6 18 sale revenues. The amount transferred would be added to other
6 19 amounts deposited into the fund and used to carry out grape
6 20 and wine development programs as provided in Code section
6 21 175A.4.
6 22 The bill additionally provides that the department of
6 23 agriculture and land stewardship shall, prior to authorizing
6 24 an expenditure of money from the grape and wine development
6 25 fund, consult with the grape and wine development commission.
6 26 The bill provides that the commission shall make
6 27 recommendations to the department regarding the expenditure of
6 28 moneys to enhance and develop the native wine industry, and to
6 29 provide an infrastructure to encourage its growth in Iowa.
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