House File 2020 - Introduced HOUSE FILE 2020 BY SWAIM A BILL FOR An Act providing specified individuals an exception from 1 alcoholic beverage control business interest limitations. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5140YH (2) 84 ec/nh

H.F. 2020 Section 1. Section 123.45, Code 2011, is amended to read as 1 follows: 2 123.45 Limitations on business interests. 3 1. Except as provided in section 123.6 , a commission 4 member or division employee shall not, directly or indirectly, 5 individually, or as a member of a partnership or shareholder 6 in a corporation, have any interest in dealing in or in the 7 manufacture of alcoholic liquor, wine, or beer, and shall 8 not receive any kind of profit nor have any interest in the 9 purchase or sale of alcoholic liquor, wine, or beer by persons 10 so authorized under this chapter . However, this provision does 11 not prohibit any member or employee from lawfully purchasing 12 and keeping alcoholic liquor, wine, or beer in the member’s or 13 employee’s possession for personal use. 14 2. A person engaged in the business of manufacturing, 15 bottling, or wholesaling alcoholic beverages, wine, or beer, or 16 any jobber, representative, broker, employee, or agent of such 17 a person, shall not directly or indirectly supply, furnish, 18 give, or pay for any furnishings, fixtures, or equipment used 19 in the storage, handling, serving, or dispensing of alcoholic 20 beverages, wine, beer, or food within the place of business of 21 a licensee or permittee authorized under this chapter to sell 22 at retail; nor shall the person directly or indirectly extend 23 any credit for alcoholic beverages or beer or pay for any such 24 license or permit , ; nor directly or indirectly be interested in 25 the ownership, conduct, or operation of the business of another 26 licensee or permittee authorized under this chapter to sell at 27 retail , ; nor hold a retail liquor control license or retail 28 wine or beer permit. However, a 29 3. The limitations contained in subsection 2 shall be 30 subject to the following exceptions: 31 a. A person engaged in the wholesaling of beer or wine 32 may sell only disposable glassware, which is constructed of 33 paper, paper laminated, or plastic materials and designed 34 primarily for personal consumption on a one-time usage 35 -1- LSB 5140YH (2) 84 ec/nh 1/ 3

H.F. 2020 basis, to retailers for use within the premises of licensed 1 establishments, for an amount which is greater than or equal 2 to an amount which represents the greater of either the amount 3 paid for the disposable glassware by the supplier or the amount 4 paid for the disposable glassware by the wholesaler. Also, a 5 b. A person engaged in the business of manufacturing beer 6 may sell beer at retail for consumption on or off the premises 7 of the manufacturing facility and, notwithstanding any other 8 provision of this chapter or the fact that a person is the 9 holder of a class “A” beer permit, may be granted not more than 10 one class “B” beer permit as defined in section 123.124 for 11 that purpose. 12 4. An employee of a person engaged in the business of 13 manufacturing, bottling, or wholesaling alcoholic beverages, 14 wine, or beer may also be employed by another licensee or 15 permittee authorized under this chapter to sell alcoholic 16 beverages at retail provided that the employee does not 17 directly or indirectly possess an ownership interest in either 18 business or engage in exclusionary practices as defined by 19 rule. 20 5. A licensee or permittee who permits or assents to or is a 21 party in any way to a violation or infringement of this section 22 is guilty of a violation of this section . 23 EXPLANATION 24 This bill relates to provisions which restrict or limit 25 potentially conflicting business interests among alcoholic 26 beverage, wine, or beer licensees under Code chapter 123. 27 Among other restrictions, Code section 123.45 provides that 28 a person engaged in the business of manufacturing, bottling, 29 or wholesaling alcoholic beverages, wine, or beer, or any 30 jobber, representative, broker, employee, or agent of such a 31 person, shall not directly or indirectly be interested in the 32 ownership, conduct, or operation of the business of another 33 licensee or permittee authorized under Code chapter 123 to sell 34 at retail. The bill creates an exception allowing an employee 35 -2- LSB 5140YH (2) 84 ec/nh 2/ 3

H.F. 2020 of a person engaged in the business of manufacturing, bottling, 1 or wholesaling alcoholic beverages, wine, or beer to also be 2 employed by another licensee or permittee authorized under the 3 Code chapter to sell alcoholic beverages at retail, provided 4 that the employee does not directly or indirectly possess an 5 ownership interest in either business or engage in exclusionary 6 practices as defined by rule. 7 -3- LSB 5140YH (2) 84 ec/nh 3/ 3