S.F. 2322 Section 1. Section 123.3, subsection 5, Code 2009, is 1 amended to read as follows: 2 5. “Alcoholic liquor” or “intoxicating liquor” means the 3 varieties of liquor defined in subsections 3 and 33 which 4 contain more than five percent of alcohol by weight, beverages 5 made as described in subsection 7 which beverages contain 6 more than five percent of alcohol by weight but which are not 7 wine as defined in subsection 37 or high alcoholic content 8 beer as defined in subsection 14A , and every other liquid or 9 solid, patented or not, containing spirits and every beverage 10 obtained by the process described in subsection 37 containing 11 more than seventeen percent alcohol by weight or twenty-one 12 and twenty-five hundredths percent of alcohol by volume, and 13 susceptible of being consumed by a human being, for beverage 14 purposes. Alcohol manufactured in this state for use as fuel 15 pursuant to an experimental distilled spirits plant permit or 16 its equivalent issued by the federal bureau of alcohol, tobacco 17 and firearms is not an “alcoholic liquor” . 18 Sec. 2. Section 123.3, Code 2009, is amended by adding the 19 following new subsection: 20 NEW SUBSECTION . 14A. “High alcoholic content beer” means 21 beer which contains more than five percent of alcohol by 22 weight, but not more than twelve percent of alcohol by weight, 23 that is made by the fermentation of an infusion in potable 24 water of barley, malt, and hops, with or without unmalted 25 grains or decorticated and degerminated grains. 26 Sec. 3. Section 123.124, Code 2009, is amended to read as 27 follows: 28 123.124 Permits —— classes. 29 Permits for the manufacture and sale, or sale of beer shall 30 be divided into four six classes, known as class “A”, special 31 class “A”, class “AA”, special class “AA”, class “B”, or 32 class “C” permits. A class “A” permit allows the holder to 33 manufacture and sell beer at wholesale. A holder of a special 34 class “A” permit may only manufacture beer to be consumed on 35 -1- LSB 5779SV (2) 83 ec/sc 1/ 4

S.F. 2322 the licensed premises for which the person also holds a class 1 “C” liquor control license or class “B” beer permit and to be 2 sold to a class “A” permittee for resale purposes. A class 3 “AA” permit allows the holder to manufacture and sell high 4 alcoholic content beer at wholesale. A holder of a special 5 class “AA” permit may only manufacture high alcoholic content 6 beer to be consumed on the licensed premises for which the 7 person also holds a class “C” liquor control license or class 8 “B” beer permit and to be sold to a class “AA” permittee for 9 resale purposes. A class “B” permit allows the holder to sell 10 beer to consumers at retail for consumption on or off the 11 premises. A class “C” permit allows the holder to sell beer to 12 consumers at retail for consumption off the premises. 13 Sec. 4. Section 123.130, unnumbered paragraph 1, Code 2009, 14 is amended to read as follows: 15 Any person holding a class “A” permit issued by the division 16 shall be authorized to manufacture and sell, or sell at 17 wholesale, beer for consumption off the premises, such sales 18 within the state to be made only to persons holding subsisting 19 class “A”, “B” , or “C” permits, or liquor control licenses 20 issued in accordance with the provisions of this chapter. The 21 holder of a class “A” permit may manufacture beer of more than 22 five percent alcohol by weight for shipment outside this state 23 only. However, a A class “A” , class “AA”, or special class 24 “AA” permit does not grant authority to manufacture wine as 25 defined in section 123.3, subsection 37. 26 Sec. 5. Section 123.134, Code 2009, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 1A. The annual permit fee for a class “AA” 29 or special class “AA” permit is five hundred dollars. 30 Sec. 6. Section 123.135, subsection 1, Code 2009, is amended 31 to read as follows: 32 1. A manufacturer, brewer, bottler, importer, or vendor 33 of beer or any agent thereof desiring to ship or sell beer, 34 or have beer brought into this state for resale by a class 35 -2- LSB 5779SV (2) 83 ec/sc 2/ 4

S.F. 2322 “A” permittee shall first make application for and be issued 1 a brewer’s certificate of compliance by the administrator 2 for that purpose. The certificate of compliance expires at 3 the end of one year from the date of issuance and shall be 4 renewed for a like period upon application to the administrator 5 unless otherwise revoked for cause. Each application for a 6 certificate of compliance or renewal of a certificate shall be 7 accompanied by a fee of one five hundred dollars payable to the 8 division. Each holder of a certificate of compliance shall 9 furnish the information in the form the administrator requires. 10 A brewer whose plant is located in Iowa and who otherwise holds 11 a class “A” beer permit to sell beer at wholesale is exempt 12 from the fee, but not from the terms and conditions of the 13 permit. The holder of a special class “A” permit is exempt 14 from the requirements of this section . 15 EXPLANATION 16 This bill establishes two new beer permits concerning high 17 alcoholic content beer. 18 The bill defines “high alcoholic content beer” as beer that 19 contains more than 5 percent, but not more than 12 percent, of 20 alcohol by weight that is made by the fermentation of water, 21 barley, malt, and hops. Current law provides that beer with 22 more than 5 percent of alcohol by weight would be considered 23 alcoholic liquor. 24 Code section 123.124, concerning permits for the manufacture 25 and sale of beer, is amended to add a class “AA” and special 26 class “AA” permit which allows for the sale and manufacture 27 of high alcoholic content beer in the same manner as current 28 class “A” and special class “A” permits relative to beer with 5 29 percent or less of alcohol by weight. 30 Code section 123.130 is amended to eliminate the ability of a 31 class “A” beer permit to manufacture and sell beer of more than 32 5 percent of alcohol content for shipment outside the state. 33 Code section 123.134 is amended to provide that the annual 34 permit fee for a class “AA” or special class “AA” permit is 35 -3- LSB 5779SV (2) 83 ec/sc 3/ 4

S.F. 2322 $500. 1 Code section 123.135(1) is amended to increase the fee 2 for a certificate of compliance allowing a manufacturer or 3 vendor of beer to ship or sell beer for resale by a class “A” 4 permittee from $100 to $500. The Code section is also amended 5 to eliminate the exemption from this fee by a brewer whose 6 plant is located in Iowa. In addition, the bill provides that 7 a holder of a special class “A” permit is now subject to the 8 requirements of this Code section. 9 -4- LSB 5779SV (2) 83 ec/sc 4/ 4