SF 2154 (LSB 5995XS (2) 83)

SENATE FILE 2154

BY  RIELLY

(COMPANION TO LSB 5995HH BY T. OLSON)

A BILL FOR

An Act relating to the manufacture and sale of native distilled spirits, and establishing a related permit fee and excise tax.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 123.32, subsection 1, Code Supplement 2009, is amended to read as follows:
   1.  Filing of application.  An application for a class “A”, class “B”, class “C”, or class “E” liquor control license, for a class “A” native distilled spirits permit, for a retail beer permit as provided in sections 123.128 and 123.129, or for a class “B”, class “B” native, or class “C” native retail wine permit as provided in section 123.178, 123.178A, or 123.178B, accompanied by the necessary fee and bond, if required, shall be filed with the appropriate city council if the premises for which the license or permit is sought are located within the corporate limits of a city, or with the board of supervisors if the premises for which the license or permit is sought are located outside the corporate limits of a city. An application for a class “D” liquor control license and for a class “A” beer or class “A” wine permit, accompanied by the necessary fee and bond, if required, shall be filed with the division, which shall proceed in the same manner as in the case of an application approved by local authorities.
    Sec. 2.  NEW SECTION.  123.43A  Native distilled spirits —— permit —— excise tax.
   1.  Subject to rules of the division, a manufacturer of native distilled spirits holding a class “A” native distilled spirits permit pursuant to this section may sell, keep, or offer for sale native distilled spirits. As provided in this section, sales may be made at retail for off-premises consumption when sold on the premises of the manufacturer of the native distilled spirits. Any other sale shall only be made to the division for wholesale disposition and sale by the division.
   2.  For the purposes of this section, “native distilled spirits” means distilled spirits fermented, distilled, or, for a period of two years, barrel-matured by a distillery located in this state.
   3.  A manufacturer of native distilled spirits shall not manufacture more than fifty thousand proof gallons annually, and shall not sell more than one and one-half liters per person per day, of native distilled spirits on the premises of the manufacturer. In addition, a manufacturer shall not directly ship native distilled spirits for sale at retail. For each proof gallon sold at retail in a month, the manufacturer of native distilled spirits shall remit an excise tax per proof gallon to the division on or before the tenth day of the following month. For purposes of this section, the excise tax shall be in an amount equal to fifty percent of the wholesale price per proof gallon that would have been paid by the division for the native distilled spirits. All revenue derived from the excise tax shall be deposited in the general fund of the state.
   4.  A manufacturer of native distilled spirits shall not sell native distilled spirits other than as permitted in this chapter and shall not allow native distilled spirits sold to be consumed upon the premises of the manufacturer. However, prior to sale, native distilled spirits may be sampled on the premises where made, when no charge is made for the sampling.
   5.  A class “A” native distilled spirits permit for a native distilled spirits manufacturer shall be issued and renewed annually upon payment of a fee of five hundred dollars. The class “A” permit shall allow the native distilled spirits manufacturer to sell, keep, or offer for sale the manufacturer’s native distilled spirits as provided under this section.
   6.  Section 123.43 shall not apply to a manufacturer of native distilled spirits under this section.
   7.  The sale of native distilled spirits to the division for wholesale disposition and sale by the division shall be subject to the requirements of this chapter regarding such disposition and sale.
EXPLANATION
   This bill relates to the manufacture and sale of native distilled spirits, and provides for the obtaining of a class “A” native distilled spirits permit.
   The bill provides that a manufacturer of native distilled spirits may sell, keep, or offer for sale native distilled spirits for off-premises consumption through sales on the manufacturer’s premises. The bill restricts any other form of sale to sales made to the alcoholic beverages division for wholesale disposition and sale by the division. The bill defines “native distilled spirits” to mean distilled spirits fermented, distilled, or barrel-matured for two years by a distillery located in Iowa.
   The bill provides that a manufacturer shall not manufacture more than 50,000 proof gallons of native distilled spirits on the premises of the manufacturer, annually. In addition, the manufacturer shall not sell more than 1.5 liters per person per day. The bill also imposes an excise tax of 50 percent of the wholesale price per proof gallon to be deposited in the general fund of the state. The bill specifies that a manufacturer shall not allow native distilled spirits sold to be consumed upon the premises of the manufacturer, but that prior to sale they may be sampled on the premises where made, when no charge is made for the sampling.
   The bill provides for a new permit applicable to native distilled spirits, requiring a fee of $500 for initial issuance and annual renewal. The class “A” native distilled spirits permit allows a manufacturer to sell, keep, or offer for sale the manufacturer’s native distilled spirits.
   The bill also provides that the sale of native distilled spirits to the alcoholic beverages division for wholesale disposition and sale by the division shall be subject to the requirements of Code chapter 123 relating to liquor sales and distribution by the division.
   The bill provides that a manufacturer of native distilled spirits is not considered a manufacturer pursuant to Code section 123.43.