Senate Study Bill 3068 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED DEPARTMENT OF COMMERCE/ALCOHOLIC BEVERAGES DIVISION BILL) A BILL FOR An Act relating to alcoholic beverage control and matters under 1 the purview of the alcoholic beverages division of the 2 department of commerce. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5233XD (3) 86 ec/nh
S.F. _____ H.F. _____ Section 1. Section 123.9, subsection 5, Code 2016, is 1 amended to read as follows: 2 5. To grant and issue beer permits, wine permits, special 3 permits, liquor control licenses, and other licenses; and to 4 suspend or revoke all such permits and licenses for cause under 5 this chapter . 6 Sec. 2. Section 123.10, subsections 4 and 6, Code 2016, are 7 amended to read as follows: 8 4. Prescribing forms or information blanks to be used for 9 the purposes of this chapter . The division shall prepare, 10 print, and furnish all forms and information blanks required 11 under this chapter . 12 6. Providing for the issuance and electronic distribution 13 of price lists which show the price to be paid by class “E” 14 liquor control licensees for each brand, class, or variety 15 of liquor kept for sale by the division, providing for the 16 filing or posting of prices charged in sales between class 17 “A” beer and class “A” wine permit holders and retailers, as 18 provided in this chapter , and establishing or controlling 19 the prices based on minimum standards of fill, quantity, or 20 alcoholic content for each individual sale of intoxicating 21 liquor or beer as deemed necessary for retail or consumer 22 protection. However, the division shall not regulate markups, 23 prices, discounts, allowances, or other terms of sale at 24 which alcoholic liquor may be purchased by the retail public 25 or liquor control licensees from class “E” liquor control 26 licensees or at which wine may be purchased and sold by class 27 “A” and retail wine permittees, or change, nullify, or vary the 28 terms of an agreement between a holder of a vintner certificate 29 of compliance and a class “A” wine permittee. 30 Sec. 3. Section 123.30, subsection 4, Code 2016, is amended 31 to read as follows: 32 4. Notwithstanding any provision of this chapter to the 33 contrary, a person holding a liquor control license to sell 34 alcoholic liquors beverages for consumption on the licensed 35 -1- LSB 5233XD (3) 86 ec/nh 1/ 9
S.F. _____ H.F. _____ premises may permit a customer to remove one unsealed bottle 1 of wine for consumption off the premises if the customer has 2 purchased and consumed a portion of the bottle of wine on the 3 licensed premises. The licensee or the licensee’s agent shall 4 securely reseal such bottle in a bag designed so that it is 5 visibly apparent that the resealed bottle of wine has not been 6 tampered with and provide a dated receipt for the resealed 7 bottle of wine to the customer. A wine bottle resealed 8 pursuant to the requirements of this subsection is subject to 9 the requirements of sections 321.284 and 321.284A . 10 Sec. 4. Section 123.32, subsection 3, Code 2016, is amended 11 to read as follows: 12 3. Licensed premises for local events. A local authority 13 may define, by motion of the local authority, licensed premises 14 which shall be used by holders of liquor control licenses, beer 15 permits, and wine permits at festivals, fairs, or celebrations 16 which are sponsored or authorized by the local authority. The 17 licensed premises defined by motion of the local authority 18 shall be used by the holders of five-day or fourteen-day class 19 “B”, class “C”, special class “C”, or class “D” liquor control 20 licenses, or five-day or fourteen-day class “C” native wine or 21 class “B” beer permits only. 22 Sec. 5. Section 123.34, Code 2016, is amended to read as 23 follows: 24 123.34 Expiration —— seasonal, five-day, or fourteen-day 25 license or permit. 26 1. Liquor control licenses, wine permits, and beer permits, 27 unless sooner suspended or revoked, expire one year from 28 date of issuance. The administrator shall give sixty days’ 29 written notice of the expiration to each licensee or permittee. 30 However, the administrator may issue six-month or eight-month 31 seasonal licenses, class “B” wine permits, or class “B” beer 32 permits for a proportionate part of the license or permit fee 33 or may issue fourteen-day liquor control licenses , native wine 34 permits, or beer permits as provided in subsection 2 . No 35 -2- LSB 5233XD (3) 86 ec/nh 2/ 9
S.F. _____ H.F. _____ refund shall be made for seasonal licenses or permits or for 1 fourteen-day liquor control licenses , native wine permits, or 2 beer permits. No seasonal license or permit shall be renewed 3 except after a period of two months. 4 2. The administrator may issue fourteen-day class “A”, 5 class “B”, class “C”, special class “C”, and class “D” liquor 6 control licenses and fourteen-day class “B” beer and class “C” 7 native wine permits. A fourteen-day license or permit, if 8 granted, is valid for fourteen consecutive days, but the holder 9 shall not sell on the two Sundays in the fourteen-day period 10 unless the holder qualifies for and obtains the privilege to 11 sell on Sundays contained in section 123.36, subsection 5 , and 12 section 123.134, subsection 5 . 13 3. The fee for a fourteen-day liquor control license or 14 beer permit is one quarter of the annual fee for that class 15 of liquor control license or beer permit. The fee for the 16 privilege to sell on the two Sundays in the fourteen-day period 17 is twenty percent of the price of the fourteen-day liquor 18 control license or beer permit. The fee for a fourteen-day 19 class “C” native wine permit is the permit fee provided in 20 section 123.179, subsection 4. 21 4. The administrator may issue five-day class “A”, class 22 “B”, class “C”, special class “C”, and class “D” liquor control 23 licenses and five-day class “B” beer and class “C” native 24 wine permits. A five-day license or permit is valid for five 25 consecutive days, but the holder shall not sell alcoholic 26 beverages on Sunday in the five-day period unless the holder 27 qualifies for and obtains the privilege to sell on Sunday 28 pursuant to sections 123.36 and 123.134 . 29 5. The fee for the five-day liquor control license or 30 beer permit is one-eighth of the annual fee for that class of 31 license or permit. The fee for the privilege to sell on a 32 Sunday in the five-day period is ten percent of the price of 33 the five-day liquor control license or beer permit. The fee 34 for a five-day class “C” native wine permit is the permit fee 35 -3- LSB 5233XD (3) 86 ec/nh 3/ 9
S.F. _____ H.F. _____ provided in section 123.179, subsection 4. 1 Sec. 6. Section 123.38, subsections 1 and 2, Code 2016, are 2 amended to read as follows: 3 1. A special liquor permit, liquor control license, wine 4 permit, or beer permit is a personal privilege and is revocable 5 for cause. It is not property nor is it subject to attachment 6 and execution nor alienable nor assignable, and it shall 7 cease upon the death of the permittee or licensee. However, 8 the administrator of the division may in the administrator’s 9 discretion allow the executor or administrator of a permittee 10 or licensee to operate the business of the decedent for a 11 reasonable time not to exceed the expiration date of the permit 12 or license. Every permit or license shall be issued in the 13 name of the applicant and no person holding a permit or license 14 shall allow any other person to use it. 15 2. Any licensee or permittee, or the licensee’s or 16 permittee’s executor or administrator, or any person duly 17 appointed by the court to take charge of and administer the 18 property or assets of the licensee or permittee for the benefit 19 of the licensee’s or permittee’s creditors, may voluntarily 20 surrender a license or permit to the division. When a license 21 or permit is surrendered the division shall notify the local 22 authority, and the division or the local authority shall 23 refund to the person surrendering the license or permit, a 24 proportionate amount of the fee received by the division or 25 the local authority for the license or permit as follows: if 26 a license or permit is surrendered during the first three 27 months of the period for which it was issued, the refund shall 28 be three-fourths of the amount of the fee; if surrendered 29 more than three months but not more than six months after 30 issuance, the refund shall be one-half of the amount of the 31 fee; if surrendered more than six months but not more than 32 nine months after issuance, the refund shall be one-fourth of 33 the amount of the fee. No refund shall be made, however, for 34 any special liquor permit, nor for a liquor control license, 35 -4- LSB 5233XD (3) 86 ec/nh 4/ 9
S.F. _____ H.F. _____ wine permit, or beer permit surrendered more than nine months 1 after issuance. For purposes of this subsection, any portion 2 of license or permit fees used for the purposes authorized in 3 section 331.424, subsection 1 , paragraph “a” , subparagraphs 4 (1) and (2), and in section 331.424A , shall not be deemed 5 received either by the division or by a local authority. No 6 refund shall be made to any licensee or permittee , upon the 7 surrender of the license or permit , if there is at the time 8 of surrender , a complaint filed with the division or local 9 authority , charging the licensee or permittee with a violation 10 of this chapter . If upon a hearing on a complaint the license 11 or permit is not revoked or suspended, then the licensee or 12 permittee is eligible, upon surrender of the license or permit, 13 to receive a refund as provided in this section ; but . However, 14 if the license or permit is revoked or suspended upon hearing , 15 the licensee or permittee is not eligible for the refund of any 16 portion of the license or permit fee. 17 Sec. 7. Section 123.43A, subsection 3, Code 2016, is amended 18 to read as follows: 19 3. A micro-distillery shall not sell micro-distilled 20 spirits other than as permitted in this chapter and shall 21 not allow micro-distilled spirits sold to be consumed upon 22 the premises of the micro-distillery. However, as a part of 23 a micro-distillery tour, micro-distilled spirits of no more 24 than two ounces per person per day may be tasted pursuant to 25 the rules of the division on the premises where fermented, 26 distilled, or matured, when no charge is made for the tasting. 27 Sec. 8. Section 123.46A, subsection 2, paragraph h, Code 28 2016, is amended to read as follows: 29 h. Deliveries shall be made in a vehicle owned , or leased , 30 or under the control of by the licensee or permittee. 31 Sec. 9. Section 123.56, subsections 2 and 6, Code 2016, are 32 amended to read as follows: 33 2. Native wine may be sold at retail for off-premises 34 consumption when sold on the premises of the manufacturer, 35 -5- LSB 5233XD (3) 86 ec/nh 5/ 9
S.F. _____ H.F. _____ or in a retail establishment operated by the manufacturer. 1 Sales may also be made to class “A” or retail wine permittees 2 or liquor control licensees as authorized by the class 3 “A” wine permit. A manufacturer of native wines shall not 4 sell the wines other than as permitted in this chapter and 5 shall not allow wine sold to be consumed upon the premises 6 of the manufacturer. However, prior to sale, native wines 7 may be tasted pursuant to the rules of the division on the 8 premises where made, when no charge is made for the tasting. 9 A person may manufacture native wine for consumption on the 10 manufacturer’s premises, when the wine or any part of it is not 11 manufactured for sale. 12 6. Notwithstanding any other provision of this chapter , 13 a person employed by a manufacturer of native wine holding a 14 class “A” native wine permittee permit may be employed by a 15 brewery with a class “A” native beer permit provided the person 16 has no ownership interest in either licensed premises. 17 Sec. 10. Section 123.92, subsection 2, paragraph a, Code 18 2016, is amended to read as follows: 19 a. Every liquor control licensee and , class “B” beer 20 permittee, and class “C” native wine permittee, except a class 21 “E” liquor control licensee, shall furnish proof of financial 22 responsibility by the existence of a liability insurance 23 policy in an amount determined by the division. If an insurer 24 provides dramshop liability insurance at a new location to 25 a licensee or permittee who has a positive loss experience 26 at other locations for which such insurance is provided by 27 the insurer, and the insurer bases premium rates at the new 28 location on the negative loss history of the previous licensee 29 or permittee at that location, the insurer shall examine and 30 consider adjusting the premium for the new location not less 31 than thirty months after the insurance is issued, based on the 32 loss experience of the licensee or permittee at that location 33 during that thirty-month period of time. 34 Sec. 11. Section 123.171, Code 2016, is amended to read as 35 -6- LSB 5233XD (3) 86 ec/nh 6/ 9
S.F. _____ H.F. _____ follows: 1 123.171 Wine certificate, permit, or license required —— 2 exception for personal use . 3 1. A person shall not cause the manufacture, importation, 4 or sale of wine in this state unless a certificate or permit 5 as provided in this subchapter , or a liquor control license as 6 provided in subchapter I of this chapter , is first obtained 7 which authorizes that manufacture, importation, or sale. 8 2. Any person of legal age may manufacture wine for 9 personal use without a class “A” wine permit, subject to the 10 requirements of this subsection. Such wine may be consumed 11 on the premises or removed from the premises where it was 12 manufactured only if the wine is not sold, exchanged, bartered, 13 dispensed, or given in consideration of purchase for any 14 property or services or in evasion of the requirements of this 15 chapter. 16 Sec. 12. Section 123.173, subsection 2, Code 2016, is 17 amended to read as follows: 18 2. A class “A” wine permit allows the holder to manufacture 19 and sell, or sell at wholesale, in this state, wine as defined 20 in section 123.3, subsection 47 . The holder of a class “A” 21 wine permit may manufacture in this state wine having an 22 alcoholic content greater than seventeen percent by weight or 23 twenty-one and twenty-five hundredths percent of alcohol by 24 volume for shipment outside this state. All class “A” premises 25 shall be located within the state. A class “B” or class “B” 26 native wine permit allows the holder to sell wine at retail 27 for consumption off the premises. A class “B” or class “B” 28 native wine permittee who also holds a class “E” liquor control 29 license may sell wine to class “A”, class “B”, and class “C” , 30 and special class “C” liquor control licensees for resale for 31 consumption on the premises. Such wine sales shall be in 32 quantities of less than one case of any wine brand but not more 33 than one such sale shall be made to the same liquor control 34 licensee in a twenty-four-hour period. A class “B” or class 35 -7- LSB 5233XD (3) 86 ec/nh 7/ 9
S.F. _____ H.F. _____ “B” native wine permittee shall not sell wine to other class 1 “B” or class “B” native wine permittees. A class “C” native 2 wine permit allows the holder to sell wine for consumption on 3 or off the premises. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanation’s substance by the members of the general assembly. 7 This bill makes several changes relative to matters 8 under the purview of the alcoholic beverages division of the 9 department of commerce. 10 Code section 123.9 is amended to add wine permits to the list 11 of licenses and permits that are issued by the administrator of 12 the alcoholic beverages division. 13 Code section 123.10 is amended by striking the requirement 14 that the alcoholic beverages division prepare, print, 15 and furnish paper forms and by allowing the alcoholic 16 beverages division to distribute monthly pricing to licensees 17 electronically. 18 Code section 123.30(4), concerning the ability of a 19 licensee to reseal bottles of wine that have been purchased and 20 partially consumed on the premises by their patrons, is amended 21 to grant this authority to all liquor control licensees that 22 sell alcoholic beverages, and not just to those licensees that 23 sell alcoholic liquor. 24 Code section 123.32 is amended to specifically list the 25 types of liquor control licenses and wine or beer permits that 26 may be issued on a temporary basis for local events. 27 Code section 123.34, concerning temporary licenses, is 28 amended to provide that a special class “C” liquor control 29 license and a class “C” native wine permit may be issued on a 30 temporary basis and to provide that the fee to obtain a 5-day 31 or 14-day class “C” native wine permit is the same as the fee to 32 obtain the annual permit. 33 Code section 123.38, concerning the nature of a permit 34 or license, is amended to eliminate the term “liquor” when 35 -8- LSB 5233XD (3) 86 ec/nh 8/ 9
S.F. _____ H.F. _____ referring to a special permit. 1 Code section 123.43A, concerning micro-distilled spirits, is 2 amended to eliminate the amount limit for a tasting as part of 3 a tour of the manufacturing facility. The bill provides that 4 micro-distilled spirits may be tasted pursuant to rules of the 5 alcoholic beverages division. 6 Code section 123.46A, concerning delivery of alcoholic 7 beverages by retailers, is amended to provide that deliveries 8 by a retailer shall only be made in a vehicle owned or leased 9 by the licensee or permittee. 10 Code section 123.56, concerning native wines, is amended 11 to provide that tastings of native wine on the premises 12 where made shall be allowed pursuant to rules adopted by the 13 alcoholic beverages division. The section is also amended to 14 strike reference to a class “A” native beer permit and instead 15 references a class “A” beer permit in language relating to 16 employment of persons who are also employed by a native wine 17 manufacturer. The bill also strikes language that pertains 18 to wine that is made for personal use when it is made on the 19 premises of a manufacturer. 20 Code section 123.92, concerning dramshop liability, is 21 amended to require class “C” native wine permit holders to 22 furnish proof of financial responsibility by obtaining dramshop 23 insurance as a condition of obtaining a new or renewal permit. 24 Code section 123.171 is amended to allow any person of legal 25 age to manufacture wine for personal use without a class “A” 26 wine permit if the wine is not sold or otherwise given in 27 consideration of purchase for any property or services or in 28 evasion of the requirements of Code chapter 123. 29 Code section 123.173(2) is amended to authorize class “E” 30 liquor control license holders to sell limited quantities of 31 wine at wholesale to special class “C” liquor control license 32 holders. 33 -9- LSB 5233XD (3) 86 ec/nh 9/ 9