Senate
Study
Bill
1164
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
PETERSEN)
A
BILL
FOR
An
Act
concerning
alcoholic
beverage
control,
including
1
micro-distillery
production
and
sales
and
dramshop
liability
2
insurance
requirements,
and
establishing
fees.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
Section
123.3,
subsection
29,
Code
2015,
is
1
amended
to
read
as
follows:
2
29.
“Micro-distillery”
means
a
business
with
an
operational
3
still
which,
combining
all
production
facilities
of
the
4
business,
produces
and
manufactures
less
than
fifty
nine
5
hundred
thousand
proof
gallons
of
distilled
spirits
on
an
6
annual
basis.
7
Sec.
2.
Section
123.28,
Code
2015,
is
amended
to
read
as
8
follows:
9
123.28
Restrictions
on
transportation.
10
It
is
lawful
to
transport,
carry,
or
convey
alcoholic
11
liquors
from
the
place
of
purchase
by
the
division
to
a
state
12
warehouse
or
depot
established
by
the
division
or
from
one
such
13
place
to
another
and,
when
so
permitted
by
this
chapter
,
it
14
is
lawful
for
the
division,
a
common
carrier,
or
other
person
15
to
transport,
carry,
or
convey
alcoholic
liquor
sold
from
a
16
state
warehouse,
depot,
or
point
of
purchase
by
the
state
to
17
any
place
to
which
the
liquor
may
be
lawfully
delivered
under
18
this
chapter
.
The
division
shall
deliver
alcoholic
liquor
19
purchased
by
class
“E”
liquor
control
licensees.
Class
“E”
20
liquor
control
licensees
may
deliver
alcoholic
liquor
purchased
21
by
class
“A”,
“B”,
or
“C”
liquor
control
licensees
and
class
22
“C”
micro-distilled
spirits
permittees
,
and
class
“A”,
“B”,
23
or
“C”
liquor
control
licensees
and
class
“C”
micro-distilled
24
spirits
permittees
may
transport
alcoholic
liquor
purchased
25
from
class
“E”
liquor
control
licensees.
A
common
carrier
or
26
other
person
shall
not
break
or
open
or
allow
to
be
broken
or
27
opened
a
container
or
package
containing
alcoholic
liquor
or
28
use
or
drink
or
allow
to
be
used
or
drunk
any
alcoholic
liquor
29
while
it
is
being
transported
or
conveyed,
but
this
section
30
does
not
prohibit
a
private
person
from
transporting
individual
31
bottles
or
containers
of
alcoholic
liquor
exempted
pursuant
to
32
section
123.22
and
individual
bottles
or
containers
bearing
33
the
identifying
mark
prescribed
in
section
123.26
which
have
34
been
opened
previous
to
the
commencement
of
the
transportation.
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This
section
does
not
affect
the
right
of
a
special
permit
1
or
liquor
control
license
holder
to
purchase,
possess,
or
2
transport
alcoholic
liquors
subject
to
this
chapter
.
3
Sec.
3.
Section
123.32,
subsection
1,
Code
2015,
is
amended
4
to
read
as
follows:
5
1.
Filing
of
application.
An
application
for
a
class
“A”,
6
class
“B”,
class
“C”,
or
class
“E”
liquor
control
license,
for
7
a
class
“A”
micro-distilled
spirits
permit,
for
a
class
“C”
8
micro-distilled
spirits
permit,
for
a
retail
beer
permit
as
9
provided
in
sections
123.128
and
123.129
,
or
for
a
class
“B”,
10
class
“B”
native,
or
class
“C”
native
retail
wine
permit
as
11
provided
in
section
123.178
,
123.178A
,
or
123.178B
,
accompanied
12
by
the
necessary
fee
and
bond,
if
required,
shall
be
filed
with
13
the
appropriate
city
council
if
the
premises
for
which
the
14
license
or
permit
is
sought
are
located
within
the
corporate
15
limits
of
a
city,
or
with
the
board
of
supervisors
if
the
16
premises
for
which
the
license
or
permit
is
sought
are
located
17
outside
the
corporate
limits
of
a
city.
An
application
for
18
a
class
“D”
liquor
control
license
and
for
a
class
“A”
beer
19
or
class
“A”
wine
permit,
accompanied
by
the
necessary
fee
20
and
bond,
if
required,
shall
be
submitted
to
the
division
21
electronically,
or
in
a
manner
prescribed
by
the
administrator,
22
which
shall
proceed
in
the
same
manner
as
in
the
case
of
an
23
application
approved
by
local
authorities.
24
Sec.
4.
Section
123.33,
Code
2015,
is
amended
to
read
as
25
follows:
26
123.33
Records.
27
Every
holder
of
a
liquor
control
license
or
a
class
“C”
28
micro-distilled
spirits
permit
shall
keep
a
daily
record,
in
29
printed
or
electronic
format,
of
the
gross
receipts
of
the
30
holder’s
business.
The
records
required
and
the
premises
of
31
the
licensee
or
permittee
shall
be
accessible
and
open
to
32
inspection
pursuant
to
section
123.30,
subsection
1
,
during
33
normal
business
hours
of
the
licensee
or
permittee
.
34
Sec.
5.
Section
123.43A,
subsection
2,
Code
2015,
is
amended
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_____
to
read
as
follows:
1
2.
A
micro-distillery
shall
not
sell
more
than
one
and
2
one-half
liters
per
person
per
day,
of
micro-distilled
spirits
3
on
the
premises
of
the
micro-distillery.
In
addition,
a
A
4
micro-distillery
shall
not
directly
ship
micro-distilled
5
spirits
for
sale
at
retail.
The
micro-distillery
shall
6
maintain
records
of
individual
purchases
of
micro-distilled
7
spirits
at
the
micro-distillery
for
three
years.
8
Sec.
6.
Section
123.43A,
Code
2015,
is
amended
by
adding
the
9
following
new
subsection:
10
NEW
SUBSECTION
.
4A.
Notwithstanding
any
other
provision
of
11
this
chapter,
a
person
engaged
in
the
business
of
manufacturing
12
micro-distilled
spirits
may
sell
micro-distilled
spirits
13
it
manufactures
at
retail
for
consumption
on
the
premises
14
of
the
manufacturing
facility
by
applying
for
a
class
“C”
15
micro-distilled
spirits
permit
with
the
authority
as
provided
16
in
section
123.43B.
A
manufacturer
of
micro-distilled
spirits
17
may
be
granted
not
more
than
one
class
“C”
micro-distilled
18
spirits
permit.
19
Sec.
7.
Section
123.43A,
subsection
6,
Code
2015,
is
amended
20
to
read
as
follows:
21
6.
The
division
shall
issue
no
more
than
three
class
22
“A”
micro-distilled
spirits
permits
under
this
section
to
a
23
person.
In
addition,
a
micro-distillery
issued
a
permit
under
24
this
section
shall
file
with
the
division
,
on
or
before
the
25
fifteenth
day
of
each
calendar
month,
all
documents
filed
by
26
the
micro-distillery
with
the
alcohol
and
tobacco
tax
and
27
trade
bureau
of
the
United
States
department
of
the
treasury,
28
including
all
production,
storage,
and
processing
reports.
29
Sec.
8.
Section
123.43A,
subsection
7,
Code
2015,
is
amended
30
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
31
following:
32
7.
A
micro-distillery
may
sell
the
micro-distilled
spirits
33
it
manufactures
to
customers
outside
the
state.
34
Sec.
9.
NEW
SECTION
.
123.43B
Authority
under
class
“C”
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micro-distilled
spirits
permit.
1
1.
A
person
holding
a
class
“C”
micro-distilled
spirits
2
permit
for
the
same
location
at
which
the
person
holds
a
class
3
“A”
micro-distilled
spirits
permit
may
sell
its
micro-distilled
4
spirits
only
at
retail
to
patrons
by
the
individual
drink
for
5
consumption
on
the
licensed
premises
where
it
was
manufactured.
6
2.
A
person
holding
a
class
“C”
micro-distilled
spirits
7
permit
shall
purchase
micro-distilled
spirits
it
manufactures
8
from
a
class
“E”
liquor
control
licensee
only.
9
3.
A
class
“C”
micro-distilled
spirits
permit
for
a
10
micro-distillery
shall
be
issued
and
renewed
annually
upon
11
payment
of
a
fee
of
two
hundred
fifty
dollars.
12
Sec.
10.
NEW
SECTION
.
123.43C
Class
“C”
micro-distilled
13
spirits
permit
——
application
contents.
14
Except
as
otherwise
provided
in
this
chapter,
a
class
“C”
15
micro-distilled
spirits
permit
shall
be
issued
to
a
person
who
16
complies
with
all
of
the
following:
17
1.
Submits
electronically,
or
in
a
manner
prescribed
by
the
18
administrator,
an
application
for
the
permit
and
states
on
the
19
application
under
oath:
20
a.
The
name
and
place
of
residence
of
the
applicant
and
21
the
length
of
time
the
applicant
has
lived
at
the
place
of
22
residence.
23
b.
That
the
applicant
is
a
citizen
of
the
state
of
Iowa,
24
or
if
a
corporation,
that
the
applicant
is
authorized
to
do
25
business
in
Iowa.
26
c.
The
location
of
the
class
“A”
micro-distillery
where
the
27
applicant
intends
to
use
the
permit.
28
d.
The
name
of
the
owner
of
the
premises,
and
if
that
owner
29
is
not
the
applicant,
that
the
applicant
is
the
actual
lessee
30
of
the
premises.
31
2.
Establishes
all
of
the
following:
32
a.
That
the
applicant
meets
the
test
of
good
moral
character
33
as
provided
in
section
123.3,
subsection
34.
34
b.
That
the
premises
for
which
the
permit
is
sought
is
and
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will
continue
to
be
equipped
with
sufficient
tables
and
seats
1
to
accommodate
twenty-five
persons
at
one
time,
and
in
areas
2
where
such
business
is
permitted
by
any
valid
zoning
ordinance
3
or
will
be
so
permitted
on
the
effective
date
of
the
permit.
4
c.
That
the
premises
where
the
applicant
intends
to
operate
5
conform
to
all
applicable
laws
and
health
and
fire
regulations.
6
d.
Consents
to
inspection
as
required
in
section
123.30,
7
subsection
1.
8
Sec.
11.
Section
123.92,
subsection
2,
paragraph
a,
Code
9
2015,
is
amended
to
read
as
follows:
10
a.
Every
liquor
control
licensee
,
and
class
“B”
beer
11
permittee,
class
“C”
native
wine
permittee,
and
class
12
“C”
micro-distilled
spirits
permittee,
except
a
class
“E”
13
liquor
control
licensee,
shall
furnish
proof
of
financial
14
responsibility
by
the
existence
of
a
liability
insurance
15
policy
in
an
amount
determined
by
the
division.
If
an
insurer
16
provides
dramshop
liability
insurance
at
a
new
location
to
17
a
licensee
or
permittee
who
has
a
positive
loss
experience
18
at
other
locations
for
which
such
insurance
is
provided
by
19
the
insurer,
and
the
insurer
bases
premium
rates
at
the
new
20
location
on
the
negative
loss
history
of
the
previous
licensee
21
or
permittee
at
that
location,
the
insurer
shall
examine
and
22
consider
adjusting
the
premium
for
the
new
location
not
less
23
than
thirty
months
after
the
insurance
is
issued,
based
on
the
24
loss
experience
of
the
licensee
or
permittee
at
that
location
25
during
that
thirty-month
period
of
time.
26
EXPLANATION
27
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
28
the
explanation’s
substance
by
the
members
of
the
general
assembly.
29
This
bill
concerns
micro-distilleries
and
the
authority
of
30
micro-distilleries
and
micro-distilled
spirits
manufacturers
31
and
makes
dramshop
liability
insurance
requirements
applicable
32
to
certain
native
wine
and
micro-distilled
spirits
permittees.
33
Code
section
123.3(29),
concerning
the
definition
of
a
34
micro-distillery,
is
amended
to
provide
that
a
micro-distillery
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_____
is
a
business
that
produces
less
than
900,000
proof
gallons
of
1
distilled
spirits
instead
of
the
current
limit
of
50,000.
2
Code
section
123.43A,
providing
for
a
class
“A”
3
micro-distilled
spirits
permit,
is
amended.
The
bill
4
eliminates
the
current
one
and
one-half
liters
per
day
limit
5
on
sales
of
micro-distilled
spirits
on
the
premises.
The
6
bill
also
allows
the
micro-distillery
to
sell
the
spirits
it
7
manufactures
to
customers
outside
the
state.
The
bill
also
8
allows
the
micro-distillery
to
sell
the
spirits
it
manufactures
9
for
consumption
on
the
premises
of
the
manufacturing
facility
10
by
applying
for
a
new
class
“C”
micro-distilled
spirits
permit.
11
The
bill
limits
a
manufacturer
to
no
more
than
one
of
the
new
12
permits.
13
Code
provisions
governing
restrictions
on
transportation
14
(123.28),
applications
to
local
authorities
for
certain
permits
15
(123.32),
and
records
(123.33),
are
made
applicable
to
the
new
16
class
“C”
micro-distilled
spirits
permit.
17
New
Code
section
123.43B
establishes
the
authority
for
a
18
class
“C”
micro-distilled
spirits
permit.
The
Code
section
19
provides
that
the
permit
shall
allow
the
manufacturer
to
sell
20
its
micro-distilled
spirits
only
at
retail
to
patrons
by
the
21
individual
drink
for
consumption
on
the
licensed
premises
where
22
it
was
manufactured,
and
that
the
person
holding
the
permit
23
shall
purchase
micro-distilled
spirits
it
manufactures
from
a
24
class
“E”
liquor
control
licensee
only.
The
annual
fee
for
the
25
permit
shall
be
$250.
26
New
Code
section
123.43C
provides
for
the
information
27
necessary
for
a
person
to
apply
for
a
class
“C”
micro-distilled
28
spirits
permit.
The
bill
requires
the
applicant
to
submit
29
information
regarding
the
applicant
and
the
location
of
the
30
micro-distillery.
The
application
shall
also
provide
that
the
31
applicant
is
of
good
moral
character
and
that
the
premises
for
32
which
the
permit
is
sought
is
authorized
to
sell
spirits
for
33
consumption
on
the
premises
by
applicable
zoning
ordinance
and
34
is
of
sufficient
size.
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Code
section
123.92,
concerning
the
dramshop
Act,
is
amended
1
to
provide
that
a
class
“C”
native
wine
permittee
and
a
class
2
“C”
micro-distilled
spirits
permittee
shall
furnish
proof
3
of
financial
responsibility
by
having
a
liability
insurance
4
policy.
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