SF 2339 (LSB 5995SV (3) 83)

SENATE FILE 2339

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO SF 2154)

A BILL FOR

An Act relating to the manufacture and sale of micro-distilled spirits and establishing a related permit fee.
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” micro-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  Micro-distilled spirits —— permit.

   1.  For the purposes of this section, unless the context other requires:
   a.  “Micro-distillery” means a business with an operational still which, combining all production facilities of the business, produces and manufactures less than fifty thousand proof gallons of distilled spirits on an annual basis.
   b.  “Micro-distilled spirits” means distilled spirits fermented, distilled, or, for a period of two years, barrel matured on the licensed premises of the micro-distillery when fermented, distilled, or matured. “Micro-distilled spirits” also includes blended or mixed spirits comprised solely of spirits fermented, distilled, or, for a period of two years, barrel matured at a micro-distillery.
   2.  Subject to rules of the division, a micro-distillery holding a class “A” micro-distilled spirits permit pursuant to this section may sell or offer for sale micro-distilled spirits. As provided in this section, sales may be made at retail for off-premises consumption when sold on the premises of the micro-distillery that manufactures micro-distilled spirits. All sales shall be made through the state’s wholesale distribution system.
   3.  A micro-distillery shall not sell more than one and one-half liters per person per day, of micro-distilled spirits on the premises of the micro-distillery. In addition, a micro-distillery shall not directly ship micro-distilled spirits for sale at retail. The micro-distillery shall maintain records of individual purchases of micro-distilled spirits at the micro-distillery for three years.
   4.  A micro-distillery shall not sell micro-distilled spirits other than as permitted in this chapter and shall not allow micro-distilled spirits sold to be consumed upon the premises of the micro-distillery. However, as a part of a micro-distillery tour, micro-distilled spirits of no more than two ounces per person per day may be sampled on the premises where fermented, distilled, or matured, when no charge is made for the sampling.
   5.  A class “A” micro-distilled spirits permit for a micro-distillery shall be issued and renewed annually upon payment of a fee of five hundred dollars.
   6.  The sale of micro-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.
   7.  The division shall issue no more than three permits under this section to a person. In addition, a micro-distillery issued a permit under this section shall file with the division all documents filed by the micro-distillery with the alcohol and tobacco tax and trade bureau of the United States department of the treasury, including all production, storage, and processing reports.
   8.  Micro-distilled spirits purchased at a micro-distillery shall not be consumed within three hundred feet of a micro-distillery nor on any property owned, operated, or controlled by a micro-distillery.
EXPLANATION
   This bill relates to the manufacture and sale of micro-distilled spirits by a micro-distillery, and provides for the obtaining of a class “A” micro-distilled spirits permit.
   The bill defines a micro-distillery as a distillery that manufactures less than 50,000 proof gallons of micro-distilled spirits annually. Micro-distilled spirits are defined as distilled spirits fermented, distilled, or, for a period of two years, barrel matured at the micro-distillery.
   The bill provides that a micro-distillery may sell or offer for sale micro-distilled spirits which may be sold for off-premises consumption through sales on the micro-distillery’s premises. The bill provides that all sales be made through the state’s wholesale distribution system.
   The bill provides that a micro-distillery shall not sell more than 1.5 liters per person per day and shall maintain records of sales to individuals for three years. The bill provides that a micro-distillery shall not directly ship micro-distilled spirits for sale at retail. The bill does not allow micro-distilled spirits sold to be consumed within 300 feet of the micro-distillery but does allow, as part of a tour, no more than 2 ounces of micro-distilled spirits to be sampled on the premises where made, when no charge is made for the sampling.
   The bill provides for a new permit applicable to micro-distilled spirits, requiring a fee of $500 for initial issuance and annual renewal. The bill limits the number of permits issued to a person to three and requires a micro-distillery issued a permit to file with the alcoholic beverages division documents the micro-distillery files with the federal alcohol and tobacco tax and trade bureau of the U.S. department of the treasury.