H.F. 437 Section 1. Section 123.43A, subsection 3, Code 2015, is 1 amended to read as follows: 2 3. A micro-distillery shall not sell micro-distilled 3 spirits other than as permitted in this chapter and shall not 4 allow micro-distilled spirits sold to be consumed upon the 5 premises of the micro-distillery. However, as a part of a 6 micro-distillery tour, micro-distilled spirits of no more than 7 two ounces per person per day may be sampled tasted on the 8 premises where fermented, distilled, or matured, when no charge 9 is made for the sampling tasting . 10 Sec. 2. Section 123.56, subsections 1 and 2, Code 2015, are 11 amended to read as follows: 12 1. Subject to rules of the division, manufacturers of 13 native wines from grapes, cherries, other fruits or other fruit 14 juices, vegetables, vegetable juices, dandelions, clover, 15 honey, or any combination of these ingredients, holding a 16 class “A” wine permit as required by this chapter , may sell, 17 keep, or offer for sale and deliver the wine. Notwithstanding 18 section 123.24, subsection 4, or any other provision of this 19 chapter , manufacturers of native wine may purchase obtain and 20 possess grape brandy from the division for the sole purpose of 21 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 tasted on the premises where made, when no charge is 32 made for the sampling tasting . A person may manufacture native 33 wine for consumption on the manufacturer’s premises, when the 34 wine or any part of it is not manufactured for sale. 35 -1- LSB 1199HV (1) 86 ec/nh 1/ 8

H.F. 437 Sec. 3. Section 123.127, subsection 1, unnumbered paragraph 1 1, Code 2015, is amended to read as follows: 2 A class “A” , or class “AA” , special class “A”, or special 3 class “AA” permit shall be issued by the administrator to any 4 person who: 5 Sec. 4. Section 123.128, subsection 1, paragraph a, Code 6 2015, is amended to read as follows: 7 a. All the information required of a class “A” an applicant 8 by section 123.127, subsection 1 , paragraph “a” . 9 Sec. 5. Section 123.128, subsection 2, Code 2015, is amended 10 to read as follows: 11 2. Fulfills the requirements of section 123.127, subsection 12 1 , paragraph “b” , relating to class “A” applicants . 13 Sec. 6. Section 123.129, subsection 2, paragraph a, Code 14 2015, is amended to read as follows: 15 a. Submits an application electronically, or in a manner 16 prescribed by the administrator, which shall state under oath 17 all the information required of a class “A” an applicant by 18 section 123.127, subsection 1 , paragraph “a” . 19 Sec. 7. Section 123.130, Code 2015, is amended to read as 20 follows: 21 123.130 Authority under class “A”, class “AA”, special class 22 “A”, and special class “AA” permits. 23 1. Any person holding a class “A” or class “AA” permit 24 issued by the division shall be authorized to manufacture 25 and sell, or sell at wholesale, beer for consumption off the 26 premises, such sales within the state to be made only to 27 persons holding subsisting class “A”, “B”, or “C” permits, 28 or liquor control licenses issued in accordance with the 29 provisions of this chapter . A class “A”, class “AA”, special 30 class “A”, or special class “AA” permit does not grant 31 authority to manufacture wine as defined in section 123.3, 32 subsection 47 . 33 2. All class “A” and class “AA” premises shall be located 34 within the state. All beer received by the holder of a class 35 -2- LSB 1199HV (1) 86 ec/nh 2/ 8

H.F. 437 “A” or class “AA” permit from the holder of a certificate 1 of compliance before being resold must first come to rest on 2 the licensed premises licensed by the class “A” of the permit 3 holder, must be inventoried, and is subject to the barrel tax 4 when resold as provided in section 123.136 . A class “A” or 5 class “AA” permittee shall not store beer overnight except on 6 premises licensed under a class “A” or class “AA” permit. 7 3. All special class “A” and special class “AA” premises 8 shall be located within the state. A person who holds a 9 special class “A” or special class “AA” permit for the same 10 location at which the person holds a class “C” liquor control 11 license or class “B” beer permit may manufacture and sell beer 12 to be consumed on the premises and may sell beer to a class “A” 13 or class “AA” permittee for resale purposes. 14 Sec. 8. Section 123.135, Code 2015, is amended to read as 15 follows: 16 123.135 Certificate of compliance —— civil penalty. 17 1. A manufacturer, brewer, bottler, importer, or vendor 18 of beer or any agent thereof desiring to ship or sell beer, 19 or have beer brought into this state for resale by a class 20 “A” or class “AA” permittee shall first make application for 21 and be issued a brewer’s certificate of compliance by the 22 administrator for that purpose. The certificate of compliance 23 expires at the end of one year from the date of issuance 24 and shall be renewed for a like period upon application to 25 the administrator unless otherwise revoked for cause. Each 26 application for a certificate of compliance or renewal of a 27 certificate shall be submitted electronically, or in a manner 28 prescribed by the administrator, and shall be accompanied 29 by a fee of five hundred dollars payable to the division. 30 Each holder of a certificate of compliance shall furnish the 31 information in a manner the administrator requires. 32 2. At the time of applying for a certificate of compliance, 33 each applicant shall file with the division a list of all 34 class “A” and class “AA” permittees with whom it intends to do 35 -3- LSB 1199HV (1) 86 ec/nh 3/ 8

H.F. 437 business and shall designate the geographic area in which its 1 products are to be distributed by such permittee. The listing 2 of class “A” and class “AA” permittees and geographic area as 3 filed with the division may be amended from time to time by the 4 holder of a certificate of compliance. 5 3. All class “A” and class “AA” permit holders shall sell 6 only those brands of beer which are manufactured, brewed, 7 bottled, shipped, or imported by a person holding a current 8 certificate of compliance. Any employee or agent working for 9 or representing the holder of a certificate of compliance 10 within this state shall submit electronically, or in a manner 11 prescribed by the administrator, the employee’s or agent’s name 12 and address with the division. 13 4. It shall be unlawful for any holder of a certificate of 14 compliance or the holder’s agent, or any class “A” or class 15 “AA” permit holder or the permit holder’s agent, to grant to 16 any retail beer permit holder, directly or indirectly, any 17 rebates, free goods, or quantity discounts on beer which are 18 not uniformly offered to all retail permittees. 19 5. Notwithstanding any other penalties provided by this 20 chapter , any holder of a certificate of compliance or any class 21 “A” or class “AA” permit holder who violates this chapter or 22 the rules adopted pursuant to this chapter is subject to a 23 civil penalty not to exceed one thousand dollars or suspension 24 of the holder’s certificate or permit for a period not to 25 exceed one year, or both such civil penalty and suspension. 26 Civil penalties imposed under this section shall be collected 27 and retained by the division. 28 Sec. 9. Section 123.136, Code 2015, is amended to read as 29 follows: 30 123.136 Barrel tax. 31 1. In addition to the annual permit fee to be paid by all 32 class “A” and class “AA” permittees under this chapter there 33 shall be levied and collected from the permittees on all beer 34 manufactured for sale or sold in this state at wholesale and 35 -4- LSB 1199HV (1) 86 ec/nh 4/ 8

H.F. 437 on all beer imported into this state for sale at wholesale and 1 sold in this state at wholesale, and from special class “A” 2 and special class “AA” permittees on all beer manufactured for 3 consumption on the premises, a tax of five and eighty-nine 4 hundredths dollars for every barrel containing thirty-one 5 gallons, and at a like rate for any other quantity or for the 6 fractional part of a barrel. However, no tax shall be levied 7 or collected on beer shipped outside this state by a class “A” 8 or class “AA” permittee or sold by one class “A” or class “AA” 9 permittee to another class “A” or class “AA” permittee. 10 2. All revenue derived from the barrel tax shall accrue to 11 the state general fund. 12 3. All of the provisions of this chapter relating to the 13 administration of the barrel tax on beer shall apply to this 14 section . 15 Sec. 10. Section 123.137, subsection 1, Code 2015, is 16 amended to read as follows: 17 1. A person holding a class “A” or , class “AA”, special 18 class “A” , or special class “AA” permit shall on or before 19 the tenth day of each calendar month commencing on the tenth 20 day of the calendar month following the month in which the 21 person is issued a permit, make a report under oath to the 22 division electronically, or in a manner prescribed by the 23 administrator, showing the exact number of barrels of beer, or 24 fractional parts of barrels, sold by the permit holder during 25 the preceding calendar month. The report shall also state 26 information the administrator requires, and permit holders 27 shall at the time of filing a report pay to the division the 28 amount of tax due at the rate fixed in section 123.136 . 29 Sec. 11. Section 123.138, subsection 1, Code 2015, is 30 amended to read as follows: 31 1. Each class “A” or , class “AA”, special class “A” , or 32 special class “AA” permittee shall keep proper records showing 33 the amount of beer sold by the permittee, and these records 34 shall be at all times open to inspection by the administrator 35 -5- LSB 1199HV (1) 86 ec/nh 5/ 8

H.F. 437 and to other persons pursuant to section 123.30, subsection 1 1 . Each class “B” permittee, class “C” permittee, or retail 2 liquor control licensee shall keep proper records showing each 3 purchase of beer made by the permittee or licensee, and the 4 date and the amount of each purchase and the name of the person 5 from whom each purchase was made, which records shall be open 6 to inspection pursuant to section 123.30, subsection 1 , during 7 normal business hours of the permittee or licensee. 8 Sec. 12. Section 123.139, Code 2015, is amended to read as 9 follows: 10 123.139 Separate locations —— class “A”, class “AA”, special 11 class “A” , special class “AA” . 12 A class “A” or , class “AA”, special class “A” , or special 13 class “AA” permittee having more than one place of business 14 is required to have a separate permit for each separate place 15 of business maintained by the permittee where beer is stored, 16 warehoused, or sold. 17 Sec. 13. Section 123.142, Code 2015, is amended to read as 18 follows: 19 123.142 Unlawful sale and importation. 20 1. It is unlawful for the holder of a class “B” or class 21 “C” permit issued under this chapter to sell beer, except 22 beer brewed on the premises covered by a special class “A” 23 or special class “AA” permit or beer purchased from a person 24 holding a class “A” or class “AA” permit issued in accordance 25 with this chapter , and on which the tax provided in section 26 123.136 has been paid. However, this section does not apply to 27 class “D” liquor control licensees as provided in this chapter . 28 2. It shall be unlawful for any person not holding a class 29 “A” or class “AA” permit to import beer into this state for the 30 purpose of sale or resale. 31 Sec. 14. Section 123.143, subsection 3, Code 2015, is 32 amended to read as follows: 33 3. Barrel tax revenues collected on beer manufactured in 34 this state from a class “A” or class “AA” permittee which owns 35 -6- LSB 1199HV (1) 86 ec/nh 6/ 8

H.F. 437 and operates a brewery located in Iowa shall be credited to the 1 barrel tax fund hereby created in the office of the treasurer 2 of state. Moneys deposited in the barrel tax fund shall not 3 revert to the general fund of the state without a specific 4 appropriation by the general assembly. Moneys in the barrel 5 tax fund are appropriated to the economic development authority 6 for purposes of section 15E.117 . 7 Sec. 15. Section 123.180, subsection 1, Code 2015, is 8 amended to read as follows: 9 1. A manufacturer, vintner, bottler, importer, or vendor 10 of wine or an agent thereof desiring to ship, sell, or have 11 wine brought into this state for resale by the division or for 12 sale at wholesale by a class “A” permittee shall first make 13 application for and shall be issued a vintner’s certificate 14 of compliance by the administrator for that purpose. The 15 vintner’s certificate of compliance shall expire at the end of 16 one year from the date of issuance and shall be renewed for 17 a like period upon application to the administrator unless 18 otherwise revoked for cause. Each application for a vintner’s 19 certificate of compliance or renewal of a certificate shall 20 be submitted electronically, or in a manner prescribed by the 21 administrator, and shall be accompanied by a fee of one hundred 22 dollars payable to the division. Each holder of a vintner’s 23 certificate of compliance shall furnish the information 24 required by the administrator in the form the administrator 25 requires. A vintner or wine bottler whose plant is located in 26 Iowa and who otherwise holds a class “A” wine permit to sell 27 wine at wholesale is exempt from the fee, but not the other 28 terms and conditions. The holder of a vintner’s certificate of 29 compliance may also hold a class “A” wine permit. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanation’s substance by the members of the general assembly. 33 This bill concerns alcoholic beverage control. 34 Code sections 123.43A and 123.56, concerning micro-distilled 35 -7- LSB 1199HV (1) 86 ec/nh 7/ 8

H.F. 437 spirits and native wines, are amended to replace the word 1 “sample” with “taste” when describing spirits or wine given 2 to an individual for no cost. Code section 123.56 is further 3 amended to provide that manufacturers of native wine may 4 obtain, instead of purchase, grape brandy from the alcoholic 5 beverages division of the department of commerce for the sole 6 purpose of manufacturing wine. 7 Division II of Code chapter 123, entitled “beer provisions”, 8 is amended, where applicable, to provide that provisions 9 referencing class “A” and special class “A” beer permits also 10 specifically reference class “AA” and special class “AA” beer 11 permits relating to high alcoholic content beer. Code section 12 123.130 is further amended to require all special class “A” and 13 special class “AA” permit premises to be located within the 14 state. 15 Code section 123.180 is amended to provide that wine brought 16 into the state for sale at wholesale by a class “A” permittee 17 need not be resold by the alcoholic beverages division prior 18 to that sale. 19 -8- LSB 1199HV (1) 86 ec/nh 8/ 8