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 beverages division of the department of commerce, including alcoholic beverage permits and licenses and administrative provisions, modifying fees, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 123.3, Code 2011, is amended by adding the following new subsections:
   NEW SUBSECTION.  014A.  “Grocery store” means any retail establishment, the business of which consists of the sale of food, food products, or beverages for consumption off the premises.
   NEW SUBSECTION.  022A.  “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 where 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.
   NEW SUBSECTION.  022B.  “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.
   NEW SUBSECTION.  26A.  “Pharmacy” means a drug store in which drugs and medicines are exposed for sale and sold at retail, or in which prescriptions of licensed physicians and surgeons, dentists, or veterinarians are compounded and sold by a registered pharmacist.
   NEW SUBSECTION.  32A.  “School” means a public or private school or that portion of a public or private school which provides facilities for teaching any grade from kindergarten through grade twelve.
   Sec. 2.  Section 123.3, subsection 14A, Code 2011, is amended to read as follows:
   14A.  “High alcoholic content beer” means beer which contains more than five percent of alcohol by weight, but not more than twelve percent of alcohol by weight, that is made by the fermentation of an infusion in potable water of barley, malt, and hops, with or without unmalted grains or decorticated and degerminated grains.  Not more than one and five-tenths percent of the volume of a“high alcoholic content beer” may consist of alcohol derived from added flavors and other nonbeverage ingredients containing alcohol. The added flavors and other nonbeverage ingredients may not include added caffeine or other added stimulants including but not limited to guarana, ginseng, and taurine.
   Sec. 3.  Section 123.3, subsection 22A, Code 2011, is amended to read as follows:
   22A.  “Native wine” means wine manufactured in this state pursuant to section 123.56 by a manufacturer of native wine.
   Sec. 4.  Section 123.9, Code 2011, is amended to read as follows:
   123.9  Commission meetings.
   The commission shall meet on or before July 1 of each year for the purpose of selecting one of its members as chairperson, which member shall serve in such capacity for the succeeding year. The commission shall otherwise meet quarterly or at the call of the chairperson or administrator or, when any three members file with the chairperson a written request for a meeting. Written notice of the time and place of each meeting shall be given to each member of the commission. All commission meetings shall be held within the state. A majority of the commission members shall constitute a quorum.
   Sec. 5.  Section 123.30, subsection 3, paragraph e, subparagraph (1), Code 2011, is amended to read as follows:
   (1)  A class “E” liquor control license may be issued and shall authorize the holder to purchase alcoholic liquor from the division only and high alcoholic content beer from a class “AA” beer permittee only and to sell the alcoholic liquor and high alcoholic content beer to patrons for consumption off the licensed premises and to other liquor control licensees. A class “E” license shall not be issued to premises at which gasoline is sold. A holder of a class “E” liquor control license may hold other retail liquor control licenses or retail wine or beer permits, but the premises licensed under a class “E” liquor control license shall be separate from other licensed premises, though the separate premises may have a common entrance. However, the holder of a class “E” liquor control license may also hold a class “B” wine or class “C” beer permit or both for the premises licensed under a class “E” liquor control license.
   Sec. 6.  Section 123.31, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   Except as otherwise provided in section 123.35, verified Verified applications for the original issuance or the renewal of liquor control licenses shall be filed at the time and in the number of copies as the administrator shall prescribe, on forms prescribed by the administrator, and shall set forth under oath the following information:
   Sec. 7.  Section 123.36, subsection 8, Code 2011, is amended to read as follows:
   8.
  a.  Class “E” liquor control license, a sum determined as follows:
   (1)  For licensed premises at which gasoline is not sold, a sum of not less than seven hundred and fifty dollars, and not more than seven thousand five hundred dollars as determined on a sliding scale as established by the division taking into account the factors of square footage of the licensed premises, the location of the licensed premises, and the population of the area of the location of the licensed premises.
   (2)  For licensed premises at which gasoline is sold, a sum equal to the following:
   (a)  For premises located within the corporate limits of a city with a population of less than one thousand five hundred, three thousand five hundred dollars.
   (b)  For premises located within the corporate limits of a city with a population of at least one thousand five hundred but less than ten thousand, five thousand dollars.
   (c)  For premises located within the corporate limits of a city with a population of ten thousand population or more, the greater of five thousand dollars or the amount that would be established pursuant to subparagraph (1) if gasoline were not sold at the premises.
   (d)  For premises located outside the corporate limits of any city, a sum equal to that charged in the incorporated city located nearest the premises to be licensed. If there is doubt as to which of two or more differing corporate limits is the nearest, the license fee which is the largest shall prevail. However, if the premises is located in an unincorporated town, for purposes of this subparagraph, the unincorporated town shall be treated as if it is a city.
   b.  Notwithstanding subsection 5, the holder of a class “E” liquor control license may sell alcoholic liquor for consumption off the licensed premises on Sunday subject to section 123.49, subsection 2, paragraph “b”.
   Sec. 8.  Section 123.43A, subsection 1, Code 2011, is amended by striking the subsection.
   Sec. 9.  Section 123.46, subsection 1, paragraph d, Code 2011, is amended by striking the paragraph.
   Sec. 10.  Section 123.129, subsection 1, Code 2011, is amended by striking the subsection.
   Sec. 11.  Section 123.134, subsection 5, Code 2011, is amended by striking the subsection.
   Sec. 12.  Section 123.141, Code 2011, is amended to read as follows:
   123.141  Keeping liquor where beer is sold.
   No alcoholic liquor for beverage purposes shall be used, or kept for any purpose in the place of business of class “B” permittees, or on the premises of such class “B” permittees, at any time. A violation of any provision of this section shall be grounds for suspension or revocation of the permit pursuant to section 123.50, subsection 3. This section shall not apply in any manner or in any way, to any railway car of any dining car company, sleeping car company, railroad company or railway company, having a special class “B” permit; to the premises of any hotel or motel for which a class “B” permit has been issued, other than that part of such premises regularly used by the hotel or motel for the principal purpose of selling beer or food to the general public; or to drug stores regularly and continuously employing a registered pharmacist, from having alcohol in stock for medicinal and compounding purposes.
   Sec. 13.  Section 123.142, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   It is unlawful for the holder of a class “B” or class “C” permit issued under this chapter to sell beer, except beer brewed on the premises covered by a special class “A” permit or beer purchased from a person holding a class “A” permit issued in accordance with this chapter, and on which the tax provided in section 123.136 has been paid. However, this section does not apply to the holders of special class “B” permits issued under section 123.133 for sales in cars engaged in interstate commerce nor to class “D” liquor control licensees as provided in this chapter.
   Sec. 14.  REPEAL.  Sections 123.35, 123.133, 123.153, 123.154, 123.155, 123.156, 123.157, 123.158, 123.159, 123.160, 123.161, and 123.162, Code 2011, are repealed.
   Sec. 15.  EFFECTIVE UPON ENACTMENT.  The section of this Act amending section 123.3, subsection 14A, regarding the definition of high alcoholic content beer, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
   This bill makes several changes regarding matters under the purview of the alcoholic beverages division of the department of commerce.
   The bill deletes definitions of grocery store, micro-distillery, micro-distilled spirits, pharmacy, and school contained in respective provisions within Code chapter 123, and inserts the definitions into the general definitions section for the chapter in Code section 123.3. The bill modifies the definition of native wine contained within Code section 123.3 to remove reference to wine manufactured “in this state”, instead providing that “native wine” means wine manufactured pursuant to Code section 123.56 by a manufacturer of native wine.
   The bill modifies the definition of high alcoholic content beer to specify that not more than 1.5 percent of the volume of such beer may consist of alcohol derived from added flavors and other nonbeverage ingredients containing alcohol, and that the added flavors and ingredients may not include added caffeine or other specified added stimulants. The bill makes this modification effective upon enactment.
   The bill amends provisions governing meetings of the alcoholic beverages commission, providing that the commission shall meet to elect a chairperson on or before July 1 annually, rather than on July 1 under current law. The bill provides that the commission shall otherwise meet quarterly, or at any time called by the administrator of the division in addition to the chairperson. The bill deletes a current provision prohibiting commission meetings from being held outside of the state.
   The bill removes a current restriction prohibiting the issuance of a class “E” liquor control license by the alcoholic beverages division of the department of commerce to applicants for premises at which gasoline is sold. A class “E” liquor control license authorizes the holder to purchase alcoholic liquor from the division and to sell the liquor to patrons for consumption off the licensed premises and to other liquor control licensees.
   The bill modifies fees currently applicable to class “E” liquor control licensees, depending upon whether gasoline is sold on the licensed premises. The bill provides that if gasoline is not sold on the premises, the current formula for determining fees set forth in Code section 123.36 for class “E” licensees will be applicable. That formula prescribes a fee in an amount varying between $750 and $7,500 on a sliding scale basis, determined by the alcoholic beverages division, taking into account the factors of square footage of the licensed premises, the location of the licensed premises, and the population of the area of the location of the licensed premises. The bill provides that in the event that gasoline is sold on the premises, a variable fee will be applied based upon the population of the corporate limits within which the premises is located. Specifically, if the premises is located within the corporate limits of a city of less than 1,500 people, the fee is $3,500; if within the corporate limits of a city of at least 1,500 but less than 10,000 people, the fee is $5,000; and if within the corporate limits of a city of 10,000 people or more, the fee is the greater of $5,000 or the amount that would otherwise be applied if gasoline were not sold at the premises. The bill further provides that if the premises is located outside the corporate limits of a city, the fee will be equal to that charged in the incorporated city located nearest the premises, and in case there is doubt as to which of two or more differing corporate limits is the nearest, the largest fee will apply. If the premises is located in an unincorporated town, the bill states that the unincorporated town shall be treated as if it is a city.
   The bill repeals Code section 123.35, which had prescribed simplified application forms for the renewal of liquor control licenses, wine permits, and beer permits when qualifications had not changed since the license or permit was originally issued. The bill also repeals Code section 123.133 providing for the issuance of a special class “B” permit for the sale of beer on trains, and deletes a provision which currently states that Code section 123.141, regarding keeping liquor at a location where beer is sold, shall not be applicable to any railway car of any dining car company, sleeping car company, railroad company, or railway company in possession of a special class “B” beer permit. The bill makes conforming changes consistent with the repeal of these Code sections.
   The bill additionally repeals Code sections 123.153 through 123.162, comprising division IV of Code chapter 123, entitled “Warehouse Project”. The provisions allowed the alcoholic beverages commission to issue revenue bonds for a one-time warehouse project.