House Study Bill 102 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED DEPARTMENT OF COMMERCE/ALCOHOLIC BEVERAGES DIVISION BILL) A BILL FOR An Act relating to matters under the purview of the alcoholic 1 beverages division of the department of commerce, and making 2 penalties applicable. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1243XD (7) 84 rn/nh

S.F. _____ H.F. _____ Section 1. Section 22.7, subsection 24, Code 2011, is 1 amended by striking the subsection. 2 Sec. 2. Section 123.3, Code 2011, is amended by adding the 3 following new subsection: 4 NEW SUBSECTION . 014A. “Grape brandy” means brandy produced 5 by the distillation of fermented grapes or grape juice. 6 Sec. 3. Section 123.41, Code 2011, is amended to read as 7 follows: 8 123.41 Manufacturer’s license. 9 1. Upon application in the prescribed form and accompanied 10 by a fee of three hundred fifty dollars, the administrator may 11 in accordance with this chapter grant and issue a license, 12 valid for a one-year period after date of issuance, to a 13 manufacturer which shall allow the manufacture, storage, and 14 wholesale disposition and sale of alcoholic liquors to the 15 division and to customers outside of the state. 16 2. As a condition precedent to the approval and granting of 17 a manufacturer’s license, an applicant shall file a statement 18 under oath with the division that the applicant is a bona fide 19 manufacturer of alcoholic liquors, and that the applicant 20 will faithfully observe and comply with all laws, rules, and 21 regulations governing the manufacture and sale of alcoholic 22 liquor. 23 2. 3. A person who holds an experimental distilled spirits 24 plant permit or its equivalent issued by the federal bureau 25 of alcohol, tobacco and firearms alcohol and tobacco tax and 26 trade bureau of the United States department of the treasury 27 may produce alcohol for use as fuel without obtaining a 28 manufacturer’s license from the division. 29 4. A violation of the requirements of this section shall 30 subject the licensee to the general penalties provided in this 31 chapter and shall constitute grounds for imposition of a civil 32 penalty or suspension or revocation of the license after notice 33 and opportunity for a hearing pursuant to section 123.39 and 34 chapter 17A. 35 -1- LSB 1243XD (7) 84 rn/nh 1/ 4

S.F. _____ H.F. _____ Sec. 4. Section 123.43A, subsection 8, Code 2011, is amended 1 to read as follows: 2 8. Micro-distilled spirits purchased at a micro-distillery 3 shall not be consumed within three hundred feet of a 4 micro-distillery or on any property owned, operated, or 5 controlled by a micro-distillery. 6 Sec. 5. Section 123.56, subsections 1, 2, and 3, Code 2011, 7 are amended to read as follows: 8 1. Subject to rules of the division, manufacturers of 9 native wines from grapes, cherries, other fruits or other fruit 10 juices, vegetables, vegetable juices, dandelions, clover, 11 honey, or any combination of these ingredients, holding a 12 class “A” wine permit as required by this chapter , may sell, 13 keep, or offer for sale and deliver the wine. Sales may be 14 made at retail for off-premises consumption when sold on the 15 premises of the manufacturer, or in a retail establishment 16 operated by the manufacturer. Sales may also be made to class 17 “A” or retail wine permittees or liquor control licensees as 18 authorized by the class “A” wine permit. Notwithstanding any 19 other provision of this chapter, manufacturers of native wine 20 may purchase and possess grape brandy from the division for the 21 sole purpose of manufacturing wine. 22 2. Native wine may be sold at retail for off-premises 23 consumption when sold on the premises of the manufacturer, 24 or in a retail establishment operated by the manufacturer. 25 Sales may also be made to class “A” or retail wine permittees 26 or liquor control licensees as authorized by the class “A” 27 wine permit. A manufacturer of native wines shall not sell 28 the wines other than as permitted in this chapter and shall 29 not allow wine sold to be consumed upon the premises of the 30 manufacturer. However, prior to sale native wines may be 31 sampled on the premises where made, when no charge is made 32 for the sampling. A person may manufacture native wine for 33 consumption on the manufacturer’s premises, when the wine or 34 any part of it is not manufactured for sale. 35 -2- LSB 1243XD (7) 84 rn/nh 2/ 4

S.F. _____ H.F. _____ 3. A manufacturer of native wines may ship wine in closed 1 containers to individual purchasers inside and outside this 2 state by obtaining a wine direct shipper license pursuant to 3 section 123.187 . The manufacturer shall label the package 4 containing the wine with the words “deliver to adults only”. 5 Sec. 6. Section 123.57, Code 2011, is amended to read as 6 follows: 7 123.57 Examination of accounts. 8 The financial condition and transactions of all offices, 9 departments, warehouses, and depots of the division shall be 10 examined at least once each year by the state auditor and at 11 shorter periods if requested by the administrator, governor, 12 commission, or executive council the general assembly’s 13 standing committees on government oversight . 14 Sec. 7. REPEAL. Section 123.43, Code 2011, is repealed. 15 EXPLANATION 16 This bill makes changes regarding matters under the purview 17 of the alcoholic beverages division of the department of 18 commerce. 19 The bill deletes an exception to the open records law in 20 Code chapter 22 which currently provides that records of 21 purchases of alcoholic liquor from the division which would 22 reveal purchases made by an individual class “E” liquor control 23 licensee shall be kept confidential, unless required to be 24 revealed for law enforcement purposes or for the collection of 25 payments due the division pursuant to Code section 123.24. 26 The bill provides that prior to the approval and granting 27 of a manufacturer’s license, which allows the manufacture, 28 storage, and wholesale disposition and sale of alcoholic 29 liquors to the division and to customers outside of the state, 30 an applicant must file a statement under oath with the division 31 that the applicant is a bona fide manufacturer of alcoholic 32 liquors, and that the applicant will faithfully observe and 33 comply with all laws, rules, and regulations governing the 34 manufacture and sale of alcoholic liquor. The bill subjects 35 -3- LSB 1243XD (7) 84 rn/nh 3/ 4

S.F. _____ H.F. _____ a licensee violating the requirements for issuance of a 1 manufacturer’s license, in addition to any other applicable 2 penalty contained in Code chapter 123, to the civil penalty and 3 suspension or revocation provisions contained in Code section 4 123.39. The civil penalty is in an amount not to exceed $1,000 5 per violation. The bill repeals Code section 123.43, which 6 requires the posting of a $5,000 bond by applicants for a 7 manufacturer’s license. 8 The bill deletes a current provision prohibiting 9 micro-distilled spirits purchased at a micro-distillery from 10 being consumed within 300 feet of a micro-distillery. 11 Additionally, the bill makes specified changes relating 12 to the manufacture of native wine. The bill states that 13 manufacturers of native wine may purchase and possess grape 14 brandy, as defined in the bill, for the sole purpose of 15 manufacturing wine, provided that the grape brandy is purchased 16 from the division. The bill clarifies that a manufacturer of 17 native wine shall obtain a wine shipper’s license pursuant to 18 Code section 123.187 and makes the manufacturer subject to the 19 provisions of the Code section. 20 -4- LSB 1243XD (7) 84 rn/nh 4/ 4