House Study Bill 187 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON STATE GOVERNMENT BILL BY CHAIRPERSON COWNIE) A BILL FOR An Act relating to matters under the purview of the alcoholic 1 beverages division of the department of commerce, including 2 alcoholic beverage permits and licenses and administrative 3 provisions, modifying fees, and including effective date 4 provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 2700YC (3) 84 rn/nh

H.F. _____ Section 1. Section 123.3, Code 2011, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 014A. “Grocery store” means any retail 3 establishment, the business of which consists of the sale of 4 food, food products, or beverages for consumption off the 5 premises. 6 NEW SUBSECTION . 022A. “Micro-distilled spirits” means 7 distilled spirits fermented, distilled, or, for a period of 8 two years, barrel matured on the licensed premises of the 9 micro-distillery where fermented, distilled, or matured. 10 “Micro-distilled spirits” also includes blended or mixed spirits 11 comprised solely of spirits fermented, distilled, or, for a 12 period of two years, barrel matured at a micro-distillery. 13 NEW SUBSECTION . 022B. “Micro-distillery” means a business 14 with an operational still which, combining all production 15 facilities of the business, produces and manufactures less than 16 fifty thousand proof gallons of distilled spirits on an annual 17 basis. 18 NEW SUBSECTION . 26A. “Pharmacy” means a drug store in 19 which drugs and medicines are exposed for sale and sold at 20 retail, or in which prescriptions of licensed physicians and 21 surgeons, dentists, or veterinarians are compounded and sold by 22 a registered pharmacist. 23 NEW SUBSECTION . 32A. “School” means a public or private 24 school or that portion of a public or private school which 25 provides facilities for teaching any grade from kindergarten 26 through grade twelve. 27 Sec. 2. Section 123.3, subsection 14A, Code 2011, is amended 28 to read as follows: 29 14A. “High alcoholic content beer” means beer which contains 30 more than five percent of alcohol by weight, but not more 31 than twelve percent of alcohol by weight, that is made by the 32 fermentation of an infusion in potable water of barley, malt, 33 and hops, with or without unmalted grains or decorticated and 34 degerminated grains. Not more than one and five-tenths percent 35 -1- LSB 2700YC (3) 84 rn/nh 1/ 8

H.F. _____ of the volume of a “high alcoholic content beer” may consist 1 of alcohol derived from added flavors and other nonbeverage 2 ingredients containing alcohol. The added flavors and other 3 nonbeverage ingredients may not include added caffeine or other 4 added stimulants including but not limited to guarana, ginseng, 5 and taurine. 6 Sec. 3. Section 123.3, subsection 22A, Code 2011, is amended 7 to read as follows: 8 22A. “Native wine” means wine manufactured in this state 9 pursuant to section 123.56 by a manufacturer of native wine . 10 Sec. 4. Section 123.9, Code 2011, is amended to read as 11 follows: 12 123.9 Commission meetings. 13 The commission shall meet on or before July 1 of each year 14 for the purpose of selecting one of its members as chairperson , 15 which member shall serve in such capacity for the succeeding 16 year. The commission shall otherwise meet quarterly or at 17 the call of the chairperson or administrator or , when any 18 three members file with the chairperson a written request 19 for a meeting. Written notice of the time and place of each 20 meeting shall be given to each member of the commission. All 21 commission meetings shall be held within the state. A majority 22 of the commission members shall constitute a quorum. 23 Sec. 5. Section 123.30, subsection 3, paragraph e, 24 subparagraph (1), Code 2011, is amended to read as follows: 25 (1) A class “E” liquor control license may be issued and 26 shall authorize the holder to purchase alcoholic liquor from 27 the division only and high alcoholic content beer from a class 28 “AA” beer permittee only and to sell the alcoholic liquor and 29 high alcoholic content beer to patrons for consumption off 30 the licensed premises and to other liquor control licensees. 31 A class “E” license shall not be issued to premises at which 32 gasoline is sold. A holder of a class “E” liquor control 33 license may hold other retail liquor control licenses or 34 retail wine or beer permits, but the premises licensed under a 35 -2- LSB 2700YC (3) 84 rn/nh 2/ 8

H.F. _____ class “E” liquor control license shall be separate from other 1 licensed premises, though the separate premises may have a 2 common entrance. However, the holder of a class “E” liquor 3 control license may also hold a class “B” wine or class “C” 4 beer permit or both for the premises licensed under a class “E” 5 liquor control license. 6 Sec. 6. Section 123.31, unnumbered paragraph 1, Code 2011, 7 is amended to read as follows: 8 Except as otherwise provided in section 123.35 , verified 9 Verified applications for the original issuance or the renewal 10 of liquor control licenses shall be filed at the time and in 11 the number of copies as the administrator shall prescribe, on 12 forms prescribed by the administrator, and shall set forth 13 under oath the following information: 14 Sec. 7. Section 123.36, subsection 8, Code 2011, is amended 15 to read as follows: 16 8. a. Class “E” liquor control license, a sum determined 17 as follows: 18 (1) For licensed premises at which gasoline is not sold, a 19 sum of not less than seven hundred and fifty dollars, and not 20 more than seven thousand five hundred dollars as determined 21 on a sliding scale as established by the division taking into 22 account the factors of square footage of the licensed premises, 23 the location of the licensed premises, and the population of 24 the area of the location of the licensed premises. 25 (2) For licensed premises at which gasoline is sold, a sum 26 equal to the following: 27 (a) For premises located within the corporate limits of a 28 city with a population of less than one thousand five hundred, 29 three thousand five hundred dollars. 30 (b) For premises located within the corporate limits of a 31 city with a population of at least one thousand five hundred 32 but less than ten thousand, five thousand dollars. 33 (c) For premises located within the corporate limits of a 34 city with a population of ten thousand population or more, the 35 -3- LSB 2700YC (3) 84 rn/nh 3/ 8

H.F. _____ greater of five thousand dollars or the amount that would be 1 established pursuant to subparagraph (1) if gasoline were not 2 sold at the premises. 3 (d) For premises located outside the corporate limits of 4 any city, a sum equal to that charged in the incorporated city 5 located nearest the premises to be licensed. If there is doubt 6 as to which of two or more differing corporate limits is the 7 nearest, the license fee which is the largest shall prevail. 8 However, if the premises is located in an unincorporated town, 9 for purposes of this subparagraph, the unincorporated town 10 shall be treated as if it is a city. 11 b. Notwithstanding subsection 5 , the holder of a class 12 “E” liquor control license may sell alcoholic liquor for 13 consumption off the licensed premises on Sunday subject to 14 section 123.49, subsection 2 , paragraph “b” . 15 Sec. 8. Section 123.43A, subsection 1, Code 2011, is amended 16 by striking the subsection. 17 Sec. 9. Section 123.46, subsection 1, paragraph d, Code 18 2011, is amended by striking the paragraph. 19 Sec. 10. Section 123.129, subsection 1, Code 2011, is 20 amended by striking the subsection. 21 Sec. 11. Section 123.134, subsection 5, Code 2011, is 22 amended by striking the subsection. 23 Sec. 12. Section 123.141, Code 2011, is amended to read as 24 follows: 25 123.141 Keeping liquor where beer is sold. 26 No alcoholic liquor for beverage purposes shall be used, 27 or kept for any purpose in the place of business of class “B” 28 permittees, or on the premises of such class “B” permittees, at 29 any time. A violation of any provision of this section shall 30 be grounds for suspension or revocation of the permit pursuant 31 to section 123.50, subsection 3 . This section shall not apply 32 in any manner or in any way , to any railway car of any dining 33 car company, sleeping car company, railroad company or railway 34 company, having a special class “B” permit; to the premises 35 -4- LSB 2700YC (3) 84 rn/nh 4/ 8

H.F. _____ of any hotel or motel for which a class “B” permit has been 1 issued, other than that part of such premises regularly used by 2 the hotel or motel for the principal purpose of selling beer 3 or food to the general public; or to drug stores regularly and 4 continuously employing a registered pharmacist, from having 5 alcohol in stock for medicinal and compounding purposes. 6 Sec. 13. Section 123.142, unnumbered paragraph 1, Code 7 2011, is amended to read as follows: 8 It is unlawful for the holder of a class “B” or class “C” 9 permit issued under this chapter to sell beer, except beer 10 brewed on the premises covered by a special class “A” permit or 11 beer purchased from a person holding a class “A” permit issued 12 in accordance with this chapter , and on which the tax provided 13 in section 123.136 has been paid. However, this section does 14 not apply to the holders of special class “B” permits issued 15 under section 123.133 for sales in cars engaged in interstate 16 commerce nor to class “D” liquor control licensees as provided 17 in this chapter . 18 Sec. 14. REPEAL. Sections 123.35, 123.133, 123.153, 19 123.154, 123.155, 123.156, 123.157, 123.158, 123.159, 123.160, 20 123.161, and 123.162, Code 2011, are repealed. 21 Sec. 15. EFFECTIVE UPON ENACTMENT. The section of this 22 Act amending section 123.3, subsection 14A, regarding the 23 definition of high alcoholic content beer, being deemed of 24 immediate importance, takes effect upon enactment. 25 EXPLANATION 26 This bill makes several changes regarding matters under the 27 purview of the alcoholic beverages division of the department 28 of commerce. 29 The bill deletes definitions of grocery store, 30 micro-distillery, micro-distilled spirits, pharmacy, and school 31 contained in respective provisions within Code chapter 123, and 32 inserts the definitions into the general definitions section 33 for the chapter in Code section 123.3. The bill modifies the 34 definition of native wine contained within Code section 123.3 35 -5- LSB 2700YC (3) 84 rn/nh 5/ 8

H.F. _____ to remove reference to wine manufactured “in this state”, 1 instead providing that “native wine” means wine manufactured 2 pursuant to Code section 123.56 by a manufacturer of native 3 wine. 4 The bill modifies the definition of high alcoholic content 5 beer to specify that not more than 1.5 percent of the volume of 6 such beer may consist of alcohol derived from added flavors and 7 other nonbeverage ingredients containing alcohol, and that the 8 added flavors and ingredients may not include added caffeine 9 or other specified added stimulants. The bill makes this 10 modification effective upon enactment. 11 The bill amends provisions governing meetings of the 12 alcoholic beverages commission, providing that the commission 13 shall meet to elect a chairperson on or before July 1 annually, 14 rather than on July 1 under current law. The bill provides 15 that the commission shall otherwise meet quarterly, or at any 16 time called by the administrator of the division in addition 17 to the chairperson. The bill deletes a current provision 18 prohibiting commission meetings from being held outside of the 19 state. 20 The bill removes a current restriction prohibiting the 21 issuance of a class “E” liquor control license by the alcoholic 22 beverages division of the department of commerce to applicants 23 for premises at which gasoline is sold. A class “E” liquor 24 control license authorizes the holder to purchase alcoholic 25 liquor from the division and to sell the liquor to patrons 26 for consumption off the licensed premises and to other liquor 27 control licensees. 28 The bill modifies fees currently applicable to class “E” 29 liquor control licensees, depending upon whether gasoline is 30 sold on the licensed premises. The bill provides that if 31 gasoline is not sold on the premises, the current formula for 32 determining fees set forth in Code section 123.36 for class 33 “E” licensees will be applicable. That formula prescribes a 34 fee in an amount varying between $750 and $7,500 on a sliding 35 -6- LSB 2700YC (3) 84 rn/nh 6/ 8

H.F. _____ scale basis, determined by the alcoholic beverages division, 1 taking into account the factors of square footage of the 2 licensed premises, the location of the licensed premises, and 3 the population of the area of the location of the licensed 4 premises. The bill provides that in the event that gasoline 5 is sold on the premises, a variable fee will be applied based 6 upon the population of the corporate limits within which the 7 premises is located. Specifically, if the premises is located 8 within the corporate limits of a city of less than 1,500 9 people, the fee is $3,500; if within the corporate limits of 10 a city of at least 1,500 but less than 10,000 people, the fee 11 is $5,000; and if within the corporate limits of a city of 12 10,000 people or more, the fee is the greater of $5,000 or the 13 amount that would otherwise be applied if gasoline were not 14 sold at the premises. The bill further provides that if the 15 premises is located outside the corporate limits of a city, 16 the fee will be equal to that charged in the incorporated city 17 located nearest the premises, and in case there is doubt as to 18 which of two or more differing corporate limits is the nearest, 19 the largest fee will apply. If the premises is located in an 20 unincorporated town, the bill states that the unincorporated 21 town shall be treated as if it is a city. 22 The bill repeals Code section 123.35, which had prescribed 23 simplified application forms for the renewal of liquor control 24 licenses, wine permits, and beer permits when qualifications 25 had not changed since the license or permit was originally 26 issued. The bill also repeals Code section 123.133 providing 27 for the issuance of a special class “B” permit for the sale 28 of beer on trains, and deletes a provision which currently 29 states that Code section 123.141, regarding keeping liquor at 30 a location where beer is sold, shall not be applicable to any 31 railway car of any dining car company, sleeping car company, 32 railroad company, or railway company in possession of a special 33 class “B” beer permit. The bill makes conforming changes 34 consistent with the repeal of these Code sections. 35 -7- LSB 2700YC (3) 84 rn/nh 7/ 8