H.F. 521 DIVISION I 1 ALCOHOLIC BEVERAGE CONTROL 2 Section 1. Section 123.3, subsection 25, Code 2017, is 3 amended to read as follows: 4 25. “Licensed premises” or “premises” means all rooms, 5 enclosures, contiguous areas, or places susceptible of precise 6 description satisfactory to the administrator where alcoholic 7 beverages, wine, or beer is sold or consumed under authority 8 of a liquor control license, wine permit, or beer permit. 9 A single licensed premises may consist of multiple rooms, 10 enclosures, areas , or places if they are wholly within the 11 confines of a single building or contiguous grounds , or areas 12 or places susceptible of precise description satisfactory to 13 the administrator . 14 Sec. 2. Section 123.3, Code 2017, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 30A. “Original container” means a vessel 17 containing an alcoholic beverage that has been lawfully 18 obtained, bears a label approved by the alcohol and tobacco 19 tax and trade bureau of the United States department of the 20 treasury, and has been securely capped, sealed, or corked at 21 the location of manufacture. 22 Sec. 3. Section 123.22, Code 2017, is amended to read as 23 follows: 24 123.22 State monopoly. 25 1. The division has the exclusive right of importation 26 into the state of all forms of alcoholic liquor, except as 27 otherwise provided in this chapter , and a person shall not 28 import alcoholic liquor, except that an individual of legal age 29 may import and have in the individual’s possession an amount 30 of alcoholic liquor not exceeding one liter or, in the case of 31 alcoholic liquor personally obtained outside the United States, 32 four liters for personal consumption only in a private home 33 or other private accommodation. A distillery shall not sell 34 alcoholic liquor within the state to any person but only to 35 -1- LSB 1266HV (2) 87 ec/nh 1/ 30

H.F. 521 the division, except as otherwise provided in this chapter . 1 This section vests in the division exclusive control within the 2 state as purchaser of all alcoholic liquor sold by distilleries 3 within the state or imported, except beer and wine, and except 4 as otherwise provided in this chapter . The division shall 5 receive alcoholic liquor on a bailment system for resale by the 6 division in the manner set forth in this chapter . The division 7 shall act as the sole wholesaler of alcoholic liquor to class 8 “E” liquor control licensees. 9 2. No person, acting individually or through another 10 acting for the person shall directly or indirectly, or upon 11 any pretense, or by any device, manufacture, sell, exchange, 12 barter, dispense, give in consideration of the purchase of any 13 property or of any services or in evasion of this chapter , or 14 keep for sale, or have possession of any intoxicating liquor, 15 except as provided in this chapter ; or own, keep, or be in any 16 way concerned, engaged, or employed in owning or keeping, any 17 intoxicating liquor with intent to violate any provision of 18 this chapter , or authorize or permit the same to be done; or 19 manufacture, own, sell, or have possession of any manufactured 20 or compounded article, mixture or substance, not in a liquid 21 form, and containing alcohol which may be converted into a 22 beverage by a process of pressing or straining the alcohol 23 therefrom, or any instrument intended for use and capable of 24 being used in the manufacture of intoxicating liquor; or own 25 or have possession of any material used exclusively in the 26 manufacture of intoxicating liquor; or use or have possession 27 of any material with intent to use it in the manufacture of 28 intoxicating liquors; however, alcohol may be manufactured 29 for industrial and nonbeverage purposes by persons who have 30 qualified for that purpose as provided by the laws of the 31 United States and the laws of this state. Such alcohol, so 32 manufactured, may be denatured, transported, used, possessed, 33 sold, and bartered and dispensed, subject to the limitations, 34 prohibitions and restrictions imposed by the laws of the United 35 -2- LSB 1266HV (2) 87 ec/nh 2/ 30

H.F. 521 States and this state. Any person may manufacture, sell, or 1 transport ingredients and devices other than alcohol for the 2 making of homemade wine or beer . 3 Sec. 4. Section 123.23, subsection 2, Code 2017, is amended 4 to read as follows: 5 2. At the time of applying for a certificate of compliance, 6 each applicant shall submit to the division electronically, 7 or in a manner prescribed by the administrator, the name and 8 address of its authorized agent for service of process which 9 shall remain effective until changed for another, and a list 10 of names and addresses of all representatives, employees, or 11 attorneys whom the applicant has appointed in the state of Iowa 12 to represent it for any purpose. The listing shall be amended 13 from time to time by the certificate holder as necessary to 14 keep the listing current with the division. 15 Sec. 5. Section 123.28, Code 2017, is amended to read as 16 follows: 17 123.28 Restrictions on transportation. 18 1. It is lawful to transport, carry, or convey alcoholic 19 liquors from the place of purchase by the division to a state 20 warehouse or depot established by the division or from one such 21 place to another and, when so permitted by this chapter , it is 22 lawful for the division, a common carrier, or other person to 23 transport, carry, or convey alcoholic liquor sold from a state 24 warehouse, depot, or point of purchase by the state to any 25 place to which the liquor may be lawfully delivered under this 26 chapter . 27 2. The division shall deliver alcoholic liquor purchased 28 by class “E” liquor control licensees. Class “E” liquor 29 control licensees may deliver alcoholic liquor purchased by 30 class “A”, “B”, or “C” liquor control licensees or class 31 “C” micro-distilled spirits liquor control licensees , and 32 class “A”, “B”, or “C” liquor control licensees or class “C” 33 micro-distilled spirits liquor control licensees may transport 34 alcoholic liquor purchased from class “E” liquor control 35 -3- LSB 1266HV (2) 87 ec/nh 3/ 30

H.F. 521 licensees. 1 3. A common carrier or other person shall not break or 2 open or allow to be broken or opened a container or package 3 containing alcoholic liquor or use or drink or allow to be used 4 or drunk any alcoholic liquor while it is being transported or 5 conveyed , but this . 6 4. This section does not prohibit a private person from 7 transporting individual bottles or containers of alcoholic 8 liquor exempted pursuant to section 123.22 and individual 9 bottles or containers bearing the identifying mark prescribed 10 in section 123.26 which have been opened previous to the 11 commencement of the transportation. 12 5. This section does not affect the right of a special 13 permit or liquor control license holder to purchase, possess, 14 or transport alcoholic liquors subject to this chapter . 15 Sec. 6. Section 123.30, subsection 1, paragraph c, Code 16 2017, is amended to read as follows: 17 c. As a further condition for the issuance of a class “E” 18 liquor control license, the applicant shall post a bond in 19 a sum of not less than five thousand nor more than fifteen 20 thousand dollars as determined on a sliding scale established 21 by the division; however, a bond shall not be required if all 22 purchases of alcoholic liquor from the division by the licensee 23 are made by cash payment or by means that ensure that the 24 division will receive full payment in advance of delivery of 25 the alcoholic liquor. 26 Sec. 7. Section 123.31, subsections 6 and 7, Code 2017, are 27 amended by striking the subsections. 28 Sec. 8. Section 123.32, subsection 6, paragraph b, Code 29 2017, is amended to read as follows: 30 b. Upon receipt of an application having been approved by 31 the local authority, the division shall make an investigation 32 as the administrator deems necessary to determine that the 33 applicant complies with all requirements for holding a license 34 or permit, and may require the applicant to appear to be 35 -4- LSB 1266HV (2) 87 ec/nh 4/ 30

H.F. 521 examined under oath to demonstrate that the applicant complies 1 with all of the requirements to hold a license or permit. If 2 the administrator requires the applicant to appear and to 3 testify under oath, a record shall be made of all testimony or 4 evidence and the record shall become a part of the application. 5 The administrator may appoint a member of the division or 6 may request an administrative law judge of the department of 7 inspections and appeals to receive the testimony under oath 8 and evidence, and to issue a proposed decision to approve 9 or disapprove the application for a license or permit. The 10 administrator may affirm, reverse, or modify the proposed 11 decision to approve or disapprove the application for the 12 license or permit. If the application is approved by the 13 administrator, the license or permit shall be issued. If the 14 application is disapproved by the administrator, the applicant 15 and the appropriate local authority shall be so notified by 16 certified mail and the appropriate local authority shall be 17 notified electronically, or in a manner prescribed by the 18 administrator . 19 Sec. 9. Section 123.33, Code 2017, is amended to read as 20 follows: 21 123.33 Records. 22 Every holder of a liquor control license shall keep a daily 23 record, in printed or electronic format, of the gross receipts 24 of the holder’s business or permit under this chapter shall 25 maintain records, in printed and electronic format, which 26 include income statements, balance sheets, purchase and sales 27 invoices, purchase and sales ledgers, and any other records as 28 the administrator may require . The records required and the 29 premises of the licensee or permittee shall be accessible and 30 open to inspection pursuant to section 123.30, subsection 1 , 31 during normal business hours of the licensee or permittee . 32 Sec. 10. Section 123.34, subsection 1, Code 2017, is amended 33 to read as follows: 34 1. Liquor control licenses, wine permits, and beer permits, 35 -5- LSB 1266HV (2) 87 ec/nh 5/ 30

H.F. 521 unless sooner suspended or revoked, expire one year from 1 date of issuance. The administrator shall give sixty days’ 2 written notice of the expiration to each licensee or permittee. 3 However, the administrator may issue six-month or eight-month 4 seasonal licenses, class “B” wine permits, or class “B” beer 5 permits for a proportionate part of the license or permit fee 6 or may issue fourteen-day liquor control licenses, native wine 7 permits, or beer permits as provided in subsection 2 . No 8 refund shall be made for seasonal licenses or permits or for 9 fourteen-day liquor control licenses, native wine permits, or 10 beer permits. No seasonal license or permit shall be renewed 11 except . However, after a period of two months the applicant 12 may apply for a new seasonal license or permit for the same 13 location . 14 Sec. 11. Section 123.49, subsection 2, paragraph b, Code 15 2017, is amended to read as follows: 16 b. Sell or dispense any alcoholic beverage or beer on 17 the premises covered by the license or permit, or permit its 18 consumption thereon between the hours of 2:00 a.m. and 6:00 19 a.m. on a weekday, and between the hours of 2:00 a.m. on Sunday 20 and 6:00 a.m. on the following Monday, however, a holder of a 21 liquor control license or retail wine or beer permit granted 22 the privilege of selling alcoholic liquor , wine, or beer on 23 Sunday may sell or dispense alcoholic liquor , wine, or beer 24 between the hours of 8:00 a.m. on Sunday and 2:00 a.m. on the 25 following Monday. 26 Sec. 12. Section 123.49, subsection 2, paragraph k, Code 27 2017, is amended by striking the paragraph. 28 Sec. 13. Section 123.51, subsection 1, Code 2017, is amended 29 to read as follows: 30 1. No signs or other matter advertising any brand of 31 alcoholic liquor, beer, or wine shall be erected or placed upon 32 the outside of any premises occupied by a licensee or permittee 33 authorized to sell alcoholic liquor, beer, or wine at retail. 34 This subsection does not prohibit the use of signs However, 35 -6- LSB 1266HV (2) 87 ec/nh 6/ 30

H.F. 521 signs or other advertising matter may be erected or placed 1 inside the premises, inside a fence or similar enclosure which 2 wholly or partially surrounds the licensed premises , or inside 3 a window facing outward from the premises . 4 Sec. 14. Section 123.175, Code 2017, is amended by striking 5 the section and inserting in lieu thereof the following: 6 123.175 Class “A” or retail wine permit application and 7 issuance. 8 1. A person applying for a class “A” or retail wine permit 9 shall submit an application electronically, or in a manner 10 prescribed by the administrator, which shall set forth under 11 oath the following: 12 a. The name and place of residence of the applicant. 13 b. The names and addresses of all persons or, in the case of 14 a corporation, the officers, directors, and persons owning or 15 controlling ten percent or more of the capital stock thereof, 16 having a financial interest, by way of loan, ownership, or 17 otherwise, in the business. 18 c. The location of the premises where the applicant intends 19 to operate. 20 d. The name of the owner of the premises and if the owner of 21 the premises is not the applicant, whether the applicant is the 22 actual lessee of the premises. 23 e. When required by the administrator, and in such form and 24 containing such information as the administrator may require, 25 a description of the premises where the applicant intends to 26 use the permit, to include a sketch or drawing of the premises 27 and, if applicable, the number of square feet of interior floor 28 space which comprises the retail sales area of the premises. 29 f. Whether any person specified in paragraph “b” has ever 30 been convicted of any offense against the laws of the United 31 States, or any state or territory thereof, or any political 32 subdivision of any such state or territory. 33 g. Any other information as required by the administrator. 34 2. The administrator shall issue a class “A” or retail wine 35 -7- LSB 1266HV (2) 87 ec/nh 7/ 30

H.F. 521 permit to any applicant who establishes all of the following: 1 a. That the applicant has submitted a completed application 2 as required by subsection 1. 3 b. That the applicant is a person of good moral character as 4 provided in section 123.3, subsection 34. 5 c. That the applicant is a citizen of the state of Iowa 6 or, if a corporation, that the applicant is authorized to do 7 business in the state. 8 d. That the premises where the applicant intends to use the 9 permit conforms to all applicable laws, health regulations, and 10 fire regulations, and constitutes a safe and proper place or 11 building. 12 e. That the applicant gives consent to a person, pursuant 13 to section 123.30, subsection 1, to enter upon the premises 14 without a warrant during the business hours of the applicant 15 to inspect for violations of the provisions of this chapter or 16 ordinances and regulations that local authorities may adopt. 17 f. That the applicant has submitted, in the case of a class 18 “A” wine permit, a bond in the amount of five thousand dollars 19 in a manner prescribed by the administrator with good and 20 sufficient sureties to be approved by the division conditioned 21 upon compliance with this chapter. 22 Sec. 15. Section 123.178B, subsection 4, Code 2017, is 23 amended to read as follows: 24 4. A person holding a class “C” native wine permit and a 25 class “A” wine permit whose primary purpose is manufacturing 26 native wine may purchase beer from a wholesaler holding a class 27 “A” beer permit for sale at retail for consumption on or off 28 the premises covered by the class “C” native wine permit . 29 Sec. 16. Section 123.180, subsection 2, Code 2017, is 30 amended to read as follows: 31 2. At the time of applying for a vintner’s certificate of 32 compliance, each applicant shall file with the division a list 33 of all class “A” wine permittees with whom it intends to do 34 business. The listing of class “A” wine permittees as filed 35 -8- LSB 1266HV (2) 87 ec/nh 8/ 30

H.F. 521 with the division may shall be amended from time to time by the 1 holder of the certificate of compliance as necessary to keep 2 the listing current with the division . 3 Sec. 17. Section 123.183, subsection 2, paragraph a, Code 4 2017, is amended to read as follows: 5 a. Revenue collected from the wine gallonage tax on wine 6 manufactured for sale and sold at wholesale in this state, 7 and on wine subject to direct shipment as provided in section 8 123.187 by a wine manufacturer licensed or permitted pursuant 9 to laws regulating alcoholic beverages in this state, shall be 10 deposited in the wine gallonage tax fund as created in this 11 section . 12 Sec. 18. Section 123.187, subsection 2, paragraph c, Code 13 2017, is amended to read as follows: 14 c. An application submitted pursuant to paragraph “a” 15 shall also be accompanied by a bond in the amount of five 16 thousand dollars in the form prescribed and furnished by the 17 division with good and sufficient sureties to be approved by 18 the division conditioned upon compliance with this chapter . 19 However, a wine manufacturer that has submitted a bond pursuant 20 to section 123.175, subsection 3 2 , paragraph “f” , shall not be 21 required to provide a bond as provided in this paragraph. 22 DIVISION II 23 BEER PERMITS 24 Sec. 19. Section 123.30, subsection 3, paragraph e, 25 subparagraph (1), Code 2017, is amended to read as follows: 26 (1) A class “E” liquor control license may be issued and 27 shall authorize the holder to purchase alcoholic liquor from 28 the division only and high alcoholic content beer from a class 29 “AA” “A” beer permittee only and to sell the alcoholic liquor 30 and high alcoholic content beer to patrons for consumption off 31 the licensed premises and to other liquor control licensees. 32 A holder of a class “E” liquor control license may hold other 33 retail liquor control licenses or retail wine or beer permits, 34 but the premises licensed under a class “E” liquor control 35 -9- LSB 1266HV (2) 87 ec/nh 9/ 30

H.F. 521 license shall be separate from other licensed premises, though 1 the separate premises may have a common entrance. However, 2 the holder of a class “E” liquor control license may also hold 3 a class “B” wine or class “C” beer permit or both for the 4 premises licensed under a class “E” liquor control license. 5 Sec. 20. Section 123.124, Code 2017, is amended by striking 6 the section and inserting in lieu thereof the following: 7 123.124 Beer permits —— classes. 8 Permits for the manufacture and sale, or sale, of beer shall 9 be divided into four classes, known as class “A”, special 10 class “A”, class “B”, or class “C” beer permits. A holder of 11 a class “A” or special class “A” beer permit shall have the 12 authority as provided in section 123.130. A holder of a class 13 “B” beer permit shall have the authority as provided in section 14 123.131, and a holder of a class “C” beer permit shall have the 15 authority as provided in section 123.132. 16 Sec. 21. Section 123.125, Code 2017, is amended to read as 17 follows: 18 123.125 Issuance of beer permits. 19 The administrator shall issue class “A”, special class “A”, 20 class “AA”, special class “AA”, class “B”, and class “C” beer 21 permits and may suspend or revoke permits for cause as provided 22 in this chapter . 23 Sec. 22. Section 123.127, Code 2017, is amended by striking 24 the section and inserting in lieu thereof the following: 25 123.127 Class “A” and special class “A” beer permit 26 application and issuance. 27 1. A person applying for a class “A” or special class “A” 28 beer permit shall submit an application electronically, or in a 29 manner prescribed by the administrator, which shall set forth 30 under oath the following: 31 a. The name and place of residence of the applicant. 32 b. The names and addresses of all persons or, in the case of 33 a corporation, the officers, directors, and persons owning or 34 controlling ten percent or more of the capital stock thereof, 35 -10- LSB 1266HV (2) 87 ec/nh 10/ 30

H.F. 521 having a financial interest, by way of loan, ownership, or 1 otherwise, in the business. 2 c. The location of the premises where the applicant intends 3 to operate. 4 d. The name of the owner of the premises and if the owner of 5 the premises is not the applicant, whether the applicant is the 6 actual lessee of the premises. 7 e. When required by the administrator, and in such form and 8 containing such information as the administrator may require, 9 a description of the premises where the applicant intends to 10 use the permit, to include a sketch or drawing of the premises 11 and, if applicable, the number of square feet of interior floor 12 space which comprises the retail sales area of the premises. 13 f. Whether any person specified in paragraph “b” has ever 14 been convicted of any offense against the laws of the United 15 States, or any state or territory thereof, or any political 16 subdivision of any such state or territory. 17 g. Any other information as required by the administrator. 18 2. The administrator shall issue a class “A” or special 19 class “A” beer permit to any applicant who establishes all of 20 the following: 21 a. That the applicant has submitted a completed application 22 as required by subsection 1. 23 b. That the applicant is a person of good moral character as 24 provided in section 123.3, subsection 34. 25 c. That the applicant is a citizen of the state of Iowa 26 or, if a corporation, that the applicant is authorized to do 27 business in the state. 28 d. That the premises where the applicant intends to use the 29 permit conforms to all applicable laws, health regulations, and 30 fire regulations, and constitutes a safe and proper place or 31 building. 32 e. That the applicant gives consent to a person, pursuant 33 to section 123.30, subsection 1, to enter upon the premises 34 without a warrant during the business hours of the applicant 35 -11- LSB 1266HV (2) 87 ec/nh 11/ 30

H.F. 521 to inspect for violations of the provisions of this chapter or 1 ordinances and regulations that local authorities may adopt. 2 f. That the applicant has submitted a bond in the amount 3 of ten thousand dollars in a manner prescribed by the 4 administrator with good and sufficient sureties to be approved 5 by the division conditioned upon compliance with this chapter. 6 g. If the person is applying for a special class “A” beer 7 permit, that the applicant holds or has applied for a class “C” 8 liquor control license or class “B” beer permit. 9 Sec. 23. Section 123.128, subsection 1, paragraph a, Code 10 2017, is amended to read as follows: 11 a. All the information required of an applicant by section 12 123.127, subsection 1 , paragraph “a” . 13 Sec. 24. Section 123.128, subsection 2, Code 2017, is 14 amended to read as follows: 15 2. Fulfills the requirements of section 123.127, subsection 16 1 2 , paragraph paragraphs “b” , “c” , and “d” . 17 Sec. 25. Section 123.129, subsection 2, paragraphs a and b, 18 Code 2017, are amended to read as follows: 19 a. Submits an application electronically, or in a manner 20 prescribed by the administrator, which shall state under 21 oath all the information required of an applicant by section 22 123.127, subsection 1 , paragraph “a” . 23 b. Establishes that the person is of good moral character as 24 defined by this chapter Fulfills the requirements of section 25 123.127, subsection 2, paragraphs “b” , “c” , and “d” . 26 Sec. 26. Section 123.129, subsection 2, paragraph d, Code 27 2017, is amended by striking the paragraph. 28 Sec. 27. Section 123.130, Code 2017, is amended to read as 29 follows: 30 123.130 Authority under class “A” , class “AA”, and special 31 class “A” , and special class “AA” beer permits. 32 1. Any person holding a class “A” or class “AA” beer permit 33 issued by the division shall be authorized to manufacture 34 and sell, or sell at wholesale, beer for consumption off 35 -12- LSB 1266HV (2) 87 ec/nh 12/ 30

H.F. 521 the premises, such sales within the state to be made only 1 to persons holding subsisting class “A”, “B”, or “C” beer 2 permits, or liquor control licenses issued in accordance with 3 the provisions of this chapter . A class “A” , class “AA”, 4 or special class “A” , or special class “AA” beer permit does 5 not grant authority to manufacture wine as defined in section 6 123.3, subsection 47 . 7 2. All class “A” and class “AA” premises shall be located 8 within the state. All beer received by the holder of a 9 class “A” or class “AA” beer permit from the holder of a 10 certificate of compliance before being resold must first come 11 to rest on the licensed premises of the permit holder, must be 12 inventoried, and is subject to the barrel tax when resold as 13 provided in section 123.136 . A class “A” or class “AA” beer 14 permittee shall not store beer overnight except on premises 15 licensed under a class “A” or class “AA” beer permit. 16 3. All special class “A” and special class “AA” premises 17 shall be located within the state. A person who holds a 18 special class “A” or special class “AA” beer permit for the 19 same location at which the person holds a class “C” liquor 20 control license or class “B” beer permit may manufacture 21 and sell beer to be consumed on the premises, may sell at 22 retail at the manufacturing premises for consumption off the 23 premises beer that is transferred at the time of sale from 24 the original container to another container that is no larger 25 than seventy-two ounces, may sell beer to a class “A” or class 26 “AA” beer permittee for resale purposes, and may sell beer to 27 distributors outside of the state that are authorized by the 28 laws of that jurisdiction to sell beer at wholesale. 29 Sec. 28. Section 123.131, Code 2017, is amended to read as 30 follows: 31 123.131 Authority under class “B” beer permit. 32 1. Subject to the provisions of this chapter , any person 33 holding a class “B” beer permit shall be authorized to sell 34 beer for consumption on or off the premises. Sales of beer 35 -13- LSB 1266HV (2) 87 ec/nh 13/ 30

H.F. 521 for consumption off the premises made pursuant to this section 1 shall be made in original containers except as provided in 2 subsection 2. However, unless otherwise provided in this 3 chapter , no sale of beer shall be made for consumption on 4 the premises unless the place where such service is made is 5 equipped with tables and seats sufficient to accommodate not 6 less than twenty-five persons at one time. 7 2. Subject to the rules of the division, sales of beer for 8 consumption off the premises made pursuant to this section may 9 be made in a container other than the original container only 10 if all of the following requirements are met: 11 a. The beer is transferred from the original container to 12 the container to be sold on the licensed premises at the time 13 of sale. 14 b. The person transferring the beer from the original 15 container to the container to be sold shall be eighteen years 16 of age or more. 17 c. The container to be sold shall be no larger than 18 seventy-two ounces. 19 d. The container to be sold shall be securely sealed by a 20 method authorized by the division that is designed so that if 21 the sealed container is reopened or the seal tampered with, it 22 is visibly apparent that the seal on the container of beer has 23 been tampered with or the sealed container has otherwise been 24 reopened. 25 3. A container of beer other than the original container 26 that is sold and sealed in compliance with the requirements of 27 subsection 2 and the rules of the division shall not be deemed 28 an open container subject to the requirements of sections 29 321.284 and 321.284A if the sealed container is unopened and 30 the seal has not been tampered with, and the contents of the 31 container have not been partially removed. 32 Sec. 29. Section 123.134, subsection 1, Code 2017, is 33 amended to read as follows: 34 1. The annual permit fee for a class “A” or special class 35 -14- LSB 1266HV (2) 87 ec/nh 14/ 30

H.F. 521 “A” beer permit is two seven hundred fifty dollars. 1 Sec. 30. Section 123.134, subsection 2, Code 2017, is 2 amended by striking the subsection. 3 Sec. 31. Section 123.135, Code 2017, is amended to read as 4 follows: 5 123.135 Certificate of compliance —— civil penalty. 6 1. A manufacturer, brewer, bottler, importer, or vendor of 7 beer, or any agent thereof, desiring to ship or sell beer, or 8 have beer brought into this state for resale by a class “A” 9 or class “AA” beer permittee, shall first make application 10 for and be issued a brewer’s certificate of compliance by the 11 administrator for that purpose. The certificate of compliance 12 expires at the end of one year from the date of issuance 13 and shall be renewed for a like period upon application to 14 the administrator unless otherwise revoked for cause. Each 15 application for a certificate of compliance or renewal of a 16 certificate shall be submitted electronically, or in a manner 17 prescribed by the administrator, and shall be accompanied 18 by a fee of five hundred dollars payable to the division. 19 Each holder of a certificate of compliance shall furnish the 20 information in a manner the administrator requires. 21 2. At the time of applying for a certificate of compliance, 22 each applicant shall file with the division a list of all class 23 “A” and class “AA” beer permittees with whom it intends to do 24 business and shall designate the geographic area in which its 25 products are to be distributed by such permittee. The listing 26 of class “A” and class “AA” beer permittees and geographic area 27 as filed with the division may shall be amended from time to 28 time by the holder of a certificate of compliance as necessary 29 to keep the listing current with the division . 30 3. All class “A” and class “AA” beer permit holders shall 31 sell only those brands of beer which are manufactured, brewed, 32 bottled, shipped, or imported by a person holding a current 33 certificate of compliance. Any employee or agent working for 34 or representing the holder of a certificate of compliance 35 -15- LSB 1266HV (2) 87 ec/nh 15/ 30

H.F. 521 within this state shall submit electronically, or in a manner 1 prescribed by the administrator, the employee’s or agent’s name 2 and address with the division. 3 4. It shall be unlawful for any holder of a certificate of 4 compliance or the holder’s agent, or any class “A” or class 5 “AA” beer permit holder or the beer permit holder’s agent, to 6 grant to any retail beer permit holder, directly or indirectly, 7 any rebates, free goods, or quantity discounts on beer which 8 are not uniformly offered to all retail permittees. 9 5. Notwithstanding any other penalties provided by this 10 chapter , any holder of a certificate of compliance or any class 11 “A” or class “AA” beer permit holder who violates this chapter 12 or the rules adopted pursuant to this chapter is subject to a 13 civil penalty not to exceed one thousand dollars or suspension 14 of the holder’s certificate or permit for a period not to 15 exceed one year, or both such civil penalty and suspension. 16 Civil penalties imposed under this section shall be collected 17 and retained by the division. 18 Sec. 32. Section 123.136, subsection 1, Code 2017, is 19 amended to read as follows: 20 1. In addition to the annual permit fee to be paid by all 21 class “A” and class “AA” beer permittees under this chapter 22 there shall be levied and collected from the permittees on all 23 beer manufactured for sale or sold in this state at wholesale 24 and on all beer imported into this state for sale at wholesale 25 and sold in this state at wholesale, and from special class “A” 26 and special class “AA” beer permittees on all beer manufactured 27 for consumption on the premises and on all beer sold at retail 28 at the manufacturing premises for consumption off the premises 29 pursuant to section 123.130, subsection 3 , a tax of five and 30 eighty-nine hundredths dollars for every barrel containing 31 thirty-one gallons, and at a like rate for any other quantity 32 or for the fractional part of a barrel. However, no tax shall 33 be levied or collected on beer shipped outside this state by a 34 class “A” or class “AA” beer permittee or sold by one class “A” 35 -16- LSB 1266HV (2) 87 ec/nh 16/ 30

H.F. 521 or class “AA” beer permittee to another class “A” or class “AA” 1 beer permittee. 2 Sec. 33. Section 123.137, subsection 1, Code 2017, is 3 amended to read as follows: 4 1. A person holding a class “A” , class “AA”, or special 5 class “A” , or special class “AA” beer permit shall, on or 6 before the tenth day of each calendar month commencing on the 7 tenth day of the calendar month following the month in which 8 the person is issued a beer permit, make a report under oath 9 to the division electronically, or in a manner prescribed by 10 the administrator, showing the exact number of barrels of 11 beer, or fractional parts of barrels, sold by the beer permit 12 holder during the preceding calendar month. The report shall 13 also state information the administrator requires, and beer 14 permit holders shall at the time of filing a report pay to the 15 division the amount of tax due at the rate fixed in section 16 123.136 . 17 Sec. 34. Section 123.138, subsection 1, Code 2017, is 18 amended to read as follows: 19 1. Each class “A” , class “AA”, or special class “A” , or 20 special class “AA” beer permittee shall keep proper records 21 showing the amount of beer sold by the permittee, and these 22 records shall be at all times open to inspection by the 23 administrator and to other persons pursuant to section 123.30, 24 subsection 1 . Each class “B” beer permittee, class “C” beer 25 permittee, or retail liquor control licensee shall keep proper 26 records showing each purchase of beer made by the permittee 27 or licensee, and the date and the amount of each purchase and 28 the name of the person from whom each purchase was made, which 29 records shall be open to inspection pursuant to section 123.30, 30 subsection 1 , during normal business hours of the permittee or 31 licensee. 32 Sec. 35. Section 123.139, Code 2017, is amended to read as 33 follows: 34 123.139 Separate locations —— class “A” , class “AA”, or 35 -17- LSB 1266HV (2) 87 ec/nh 17/ 30

H.F. 521 special class “A” , or special class “AA” beer permit. 1 A class “A” , class “AA”, or special class “A” , or special 2 class “AA” beer permittee having more than one place of 3 business is required to have a separate beer permit for each 4 separate place of business maintained by the permittee where 5 beer is stored, warehoused, or sold. 6 Sec. 36. Section 123.142, Code 2017, is amended to read as 7 follows: 8 123.142 Unlawful sale and importation. 9 1. It is unlawful for the holder of a class “B” or class 10 “C” beer permit issued under this chapter to sell beer, except 11 beer brewed on the premises covered by a special class “A” 12 or special class “AA” beer permit or beer purchased from a 13 person holding a class “A” or class “AA” beer permit issued in 14 accordance with this chapter , and on which the tax provided in 15 section 123.136 has been paid. However, this section does not 16 apply to class “D” liquor control licensees as provided in this 17 chapter . 18 2. It shall be unlawful for any person not holding a class 19 “A” or class “AA” beer permit to import beer into this state 20 for the purpose of sale or resale. 21 Sec. 37. Section 123.143, subsection 3, Code 2017, is 22 amended to read as follows: 23 3. Barrel tax revenues collected on beer manufactured in 24 this state from a class “A” or class “AA” beer permittee which 25 owns and operates a brewery located in Iowa shall be credited 26 to the barrel tax fund hereby created in the office of the 27 treasurer of state. Moneys deposited in the barrel tax fund 28 shall not revert to the general fund of the state without a 29 specific appropriation by the general assembly. Moneys in the 30 barrel tax fund are appropriated to the economic development 31 authority for purposes of section 15E.117 . 32 Sec. 38. Section 123.144, subsection 1, Code 2017, is 33 amended to read as follows: 34 1. No person shall bottle beer within the state of Iowa, 35 -18- LSB 1266HV (2) 87 ec/nh 18/ 30

H.F. 521 except class “A” , and special class “A” , class “AA”, and 1 special class “AA” beer permittees who have complete equipment 2 for bottling beer and who have received the approval of the 3 local board of health as to sanitation. It shall be the duty of 4 local boards of health to inspect the premises and equipment of 5 class “A” , and special class “A” , class “AA”, and special class 6 “AA” beer permittees who desire to bottle beer. 7 DIVISION III 8 MICRO-DISTILLED SPIRITS 9 Sec. 39. Section 123.3, subsection 29, Code 2017, is amended 10 to read as follows: 11 29. “Micro-distillery” means a business with an operational 12 still which, combining all production facilities of the 13 business, produces and manufactures less than fifty one hundred 14 thousand proof gallons of distilled spirits on an annual basis. 15 Sec. 40. Section 123.30, subsection 3, paragraph c, Code 16 2017, is amended by adding the following new subparagraph: 17 NEW SUBPARAGRAPH . (3) A class “C” micro-distilled spirits 18 liquor control license may be issued to a micro-distillery but 19 shall be issued in the name of the individuals who actually 20 own the business. The license shall authorize the holder to 21 sell micro-distilled spirits manufactured on the premises of 22 the micro-distillery to patrons by the individual drink for 23 consumption on the premises. All micro-distilled spirits sold 24 by a micro-distillery for on-premises consumption shall be 25 purchased from a class “E” liquor control licensee. 26 Sec. 41. Section 123.32, subsection 1, Code 2017, is amended 27 to read as follows: 28 1. Filing of application. An application for a class “A”, 29 class “B”, class “C”, or class “E” liquor control license, for 30 a class “C” micro-distilled spirits liquor control license, 31 for a class “A” micro-distilled spirits permit license , for a 32 retail beer permit as provided in sections 123.128 and 123.129 , 33 or for a class “B”, class “B” native, or class “C” native 34 retail wine permit as provided in section 123.178 , 123.178A , 35 -19- LSB 1266HV (2) 87 ec/nh 19/ 30

H.F. 521 or 123.178B , accompanied by the necessary fee and bond, if 1 required, shall be filed with the appropriate city council if 2 the premises for which the license or permit is sought are 3 located within the corporate limits of a city, or with the 4 board of supervisors if the premises for which the license or 5 permit is sought are located outside the corporate limits of a 6 city. An application for a class “D” liquor control license 7 and for a class “A” beer or class “A” wine permit, accompanied 8 by the necessary fee and bond, if required, shall be submitted 9 to the division electronically, or in a manner prescribed by 10 the administrator, which shall proceed in the same manner as in 11 the case of an application approved by local authorities. 12 Sec. 42. NEW SECTION . 123.43 Class “C” micro-distilled 13 spirits liquor control license —— application and issuance —— 14 fees. 15 1. A person applying for a class “C” micro-distilled 16 spirits liquor control license shall submit an application 17 electronically, or in a manner prescribed by the administrator, 18 which shall set forth under oath the following: 19 a. The name and place of residence of the applicant. 20 b. The names and addresses of all persons or, in the case of 21 a corporation, the officers, directors, and persons owning or 22 controlling ten percent or more of the capital stock thereof, 23 having a financial interest, by way of loan, ownership, or 24 otherwise, in the business. 25 c. The location of the premises where the applicant intends 26 to operate. 27 d. The name of the owner of the premises and if the owner of 28 the premises is not the applicant, whether the applicant is the 29 actual lessee of the premises. 30 e. When required by the administrator, and in such form and 31 containing such information as the administrator may require, a 32 description of the premises where the applicant intends to use 33 the liquor control license, to include a sketch or drawing of 34 the premises and, if applicable, the number of square feet of 35 -20- LSB 1266HV (2) 87 ec/nh 20/ 30

H.F. 521 interior floor space which comprises the retail sales area of 1 the premises. 2 f. Whether any person specified in paragraph “b” has ever 3 been convicted of any offense against the laws of the United 4 States, or any state or territory thereof, or any political 5 subdivision of any such state or territory. 6 g. Any other information as required by the administrator. 7 2. Except as otherwise provided in this chapter, the 8 administrator shall issue a class “C” micro-distilled spirits 9 liquor control license to any applicant who establishes all of 10 the following: 11 a. That the applicant has submitted a completed application 12 as required by subsection 1. 13 b. That the applicant is a person of good moral character as 14 provided in section 123.3, subsection 34. 15 c. That the applicant is a citizen of the state of Iowa 16 or, if a corporation, that the applicant is authorized to do 17 business in the state. 18 d. That the premises for which the liquor control license 19 is sought is and will continue to be equipped with sufficient 20 tables and seats to accommodate twenty-five persons at one 21 time, and in areas where such business is permitted by any 22 valid zoning ordinance or will be so permitted on the effective 23 date of the liquor control license. 24 e. That the premises where the applicant intends to use the 25 liquor control license conforms to all applicable laws, health 26 regulations, and fire regulations, and constitutes a safe and 27 proper place or building. 28 f. That the applicant is not engaged in the business of 29 manufacturing beer. 30 g. That the applicant gives consent to a person, pursuant 31 to section 123.30, subsection 1, to enter upon the premises 32 without a warrant during the business hours of the applicant 33 to inspect for violations of the provisions of this chapter or 34 ordinances and regulations that local authorities may adopt. 35 -21- LSB 1266HV (2) 87 ec/nh 21/ 30

H.F. 521 3. A manufacturer of micro-distilled spirits may be issued 1 a class “C” micro-distilled spirits liquor control license 2 regardless of whether the manufacturer is also a manufacturer 3 of native wine pursuant to a class “A” wine permit. 4 4. A class “C” micro-distilled spirits liquor control 5 license for a micro-distillery shall be issued and renewed 6 annually upon payment of a fee of two hundred fifty dollars. 7 Sec. 43. Section 123.43A, subsection 1, Code 2017, is 8 amended to read as follows: 9 1. Subject to rules of the division, a micro-distillery 10 holding a class “A” micro-distilled spirits permit license 11 pursuant to this section may sell or offer for sale 12 micro-distilled spirits. As provided in this section , sales 13 may be made at retail for off-premises consumption when sold 14 on the premises of the micro-distillery that manufactures 15 micro-distilled spirits. All sales shall be made through the 16 state’s wholesale distribution system. 17 Sec. 44. Section 123.43A, subsection 2, Code 2017, is 18 amended to read as follows: 19 2. A micro-distillery shall not sell more than one and 20 one-half nine liters per person per day, of micro-distilled 21 spirits on the premises of the micro-distillery. In addition, 22 a micro-distillery shall not directly ship micro-distilled 23 spirits for sale at retail. The micro-distillery shall 24 maintain records of individual purchases of micro-distilled 25 spirits at the micro-distillery for three years. 26 Sec. 45. Section 123.43A, subsection 4, Code 2017, is 27 amended to read as follows: 28 4. A class “A” micro-distilled spirits permit license for 29 a micro-distillery shall be issued and renewed annually upon 30 payment of a fee of five hundred dollars. 31 Sec. 46. Section 123.43A, Code 2017, is amended by adding 32 the following new subsection: 33 NEW SUBSECTION . 4A. Notwithstanding any other provision of 34 this chapter, a person engaged in the business of manufacturing 35 -22- LSB 1266HV (2) 87 ec/nh 22/ 30

H.F. 521 micro-distilled spirits may sell the micro-distilled spirits 1 the person manufactures at retail for consumption on the 2 premises of the manufacturing facility by applying for a class 3 “C” micro-distilled spirits liquor control license as provided 4 in section 123.43. A manufacturer of micro-distilled spirits 5 may be granted not more than one class “C” micro-distilled 6 spirits liquor control license. 7 Sec. 47. Section 123.43A, subsection 6, Code 2017, is 8 amended to read as follows: 9 6. The division shall issue no more than three permits 10 class “A” micro-distilled spirits licenses under this section 11 to a person. In addition, a micro-distillery issued a permit 12 license under this section shall file with the division , on or 13 before the fifteenth day of each calendar month, all documents 14 filed by the micro-distillery with the alcohol and tobacco 15 tax and trade bureau of the United States department of the 16 treasury, including all production, storage, and processing 17 reports. 18 Sec. 48. Section 123.43A, subsection 7, Code 2017, is 19 amended by striking the subsection and inserting in lieu 20 thereof the following: 21 7. A micro-distillery may sell the micro-distilled spirits 22 it manufactures to customers outside the state. 23 Sec. 49. NEW SECTION . 123.43B Authority under class “C” 24 micro-distilled spirits liquor control license. 25 1. A person holding a class “C” micro-distilled spirits 26 liquor control license for the same location at which the 27 person holds a class “A” micro-distilled spirits license may 28 sell the person’s micro-distilled spirits only at retail to 29 patrons by the individual drink for consumption on the licensed 30 premises where it was manufactured. 31 2. A person holding a class “C” micro-distilled spirits 32 liquor control license shall purchase micro-distilled spirits 33 the person manufactures from a class “E” liquor control 34 licensee only. 35 -23- LSB 1266HV (2) 87 ec/nh 23/ 30

H.F. 521 3. Unless otherwise provided by this chapter, the 1 provisions of this chapter applicable to liquor control 2 licenses shall also apply to class “C” micro-distilled spirits 3 liquor control licenses. 4 Sec. 50. Section 123.56, subsection 5, Code 2017, is amended 5 to read as follows: 6 5. Notwithstanding any other provision of this chapter , a 7 person engaged in the business of manufacturing native wine may 8 sell native wine at retail for consumption on the premises of 9 the manufacturing facility by applying for a class “C” native 10 wine permit as provided in section 123.178B . A manufacturer 11 of native wine may be granted not more than one class “C” 12 native wine permit. A manufacturer of native wine may be 13 issued a class “C” native wine permit regardless of whether the 14 manufacturer is also a manufacturer of micro-distilled spirits 15 pursuant to a class “A” micro-distilled spirits license. 16 EXPLANATION 17 The inclusion of this explanation does not constitute agreement with 18 the explanation’s substance by the members of the general assembly. 19 This bill concerns alcoholic beverage control and matters 20 under the purview of the alcoholic beverages division of the 21 department of commerce. 22 DIVISION I —— ALCOHOLIC BEVERAGE CONTROL. Code section 23 123.3, providing definitions, is amended. The bill adds a 24 definition for “original container”, which means a vessel 25 containing an alcoholic beverage that bears a federally 26 approved label and is appropriately sealed at the location 27 of manufacture. In addition, the definition of “licensed 28 premises” is amended to include noncontiguous areas or places 29 susceptible of a precise description. 30 Code section 123.22 is amended to allow individuals to 31 manufacture, sell, or transport ingredients and devices used to 32 make homemade beer. Current law allows this for homemade wine. 33 Code section 123.23, concerning a distiller’s certificate of 34 compliance, is amended to delete a reference that a listing of 35 -24- LSB 1266HV (2) 87 ec/nh 24/ 30

H.F. 521 authorized agents of the certificate holder be amended “from 1 time to time”. The bill does not eliminate the requirement 2 that the listing be amended as necessary. 3 Code section 123.28, concerning restrictions on 4 transportation, is amended by dividing the section into 5 numbered subsections and adding a reference to class “C” 6 micro-distilled liquor control licenses created by the bill. 7 Code section 123.30, concerning liquor control licenses, 8 is amended by removing cash payment as a type of payment 9 for purchasing alcoholic liquor from the alcoholic beverages 10 division. The bill retains language in current law that 11 requires payment by other means that ensure the division 12 receives full payment in advance of delivery of alcoholic 13 liquor. 14 Code section 123.31, concerning application contents for 15 a liquor control license, is amended by striking provisions 16 requiring the applicant to set forth whether the applicant 17 possesses a federal gambling stamp and whether, if required, 18 all designated security employees have received security 19 employee training and certification as required by Code section 20 123.32. 21 Code section 123.32 is amended to provide that if an 22 application for a liquor control license or other permit is 23 disapproved by the administrator of the alcoholic beverages 24 division, the appropriate local authority shall be notified 25 electronically, or in a manner prescribed by the administrator, 26 instead of by certified mail. The applicant is still required 27 to be notified of the disapproval by certified mail. 28 Code section 123.33, concerning records required to be 29 maintained by a licensee or permittee, is amended to describe 30 the types of records to be maintained, which shall include 31 income statements, balance sheets, and purchase and sale 32 invoices and ledgers. 33 Code section 123.34, concerning seasonal licenses, is 34 amended to provide that an applicant may apply for a new 35 -25- LSB 1266HV (2) 87 ec/nh 25/ 30

H.F. 521 seasonal permit or license at the same location after two 1 months. 2 Code section 123.49 is amended to consolidate the rules 3 governing Sunday sales of alcoholic liquor, wine, or beer 4 within subsection 2, paragraph “b”, of that section. 5 Code section 123.51, concerning allowable signs and branded 6 advertising of a licensee authorized to sell liquor, wine, 7 or beer at retail, is amended to provide that signs or other 8 advertising matter may be erected inside the premises and 9 inside a window facing outward from the premises. 10 Code section 123.175, concerning class “A” or retail 11 wine permit applications, is stricken and rewritten by the 12 bill. The bill provides specifically for the contents of 13 the application to be submitted to the administrator of the 14 alcoholic beverages division and what the applicant must 15 establish before the administrator issues a permit. In 16 addition to requirements currently provided in Code section 17 123.175, the bill provides that an applicant that is a 18 corporation shall list all officers and persons with a certain 19 financial interest in the corporation in the application. The 20 bill also requires an applicant to state in the application 21 whether certain persons required to be listed in the 22 application have been convicted of any offense and, if required 23 by the administrator of the division, to include in the 24 application a sketch or drawing of the premises. Code section 25 123.187 is amended to reflect the rewritten Code section. 26 Code section 123.178B, concerning class “C” native wine 27 permits, is amended to specify that a permittee authorized to 28 purchase beer for sale at retail may sell it for consumption 29 on or off the premises covered by the class “C” native wine 30 permit. 31 Code section 123.180, concerning a vintner’s certificate of 32 compliance, is amended to provide that the listing of class “A” 33 wine permittees the applicant intends to do business with that 34 is filed with the alcoholic beverages division shall be amended 35 -26- LSB 1266HV (2) 87 ec/nh 26/ 30

H.F. 521 as necessary to keep the listing current. 1 Code section 123.183 is amended to provide that the 2 gallonage tax on wine is collected when the wine is sold at 3 wholesale. 4 DIVISION II —— BEER PERMITS. This division eliminates 5 class “AA” and special class “AA” beer permits and makes other 6 changes relative to beer permits. 7 Code section 123.124, concerning beer permit classes, is 8 rewritten to reflect the elimination of class “AA” and special 9 class “AA” beer permits. The Code section is also amended to 10 refer to the Code sections that describe the authority for each 11 beer permit class. 12 Code section 123.127, concerning class “A” or class “AA” 13 and special class “A” or special class “AA” beer permits, is 14 stricken and rewritten by the bill. The bill eliminates the 15 class “AA” and special class “AA” beer permits and provides 16 specifically for the contents of the application to be 17 submitted to the administrator of the alcoholic beverages 18 division and what the applicant must establish before the 19 administrator issues a permit. The bill also increases from 20 $5,000 to $10,000 the amount of the bond an applicant must 21 submit to the administrator. 22 In addition to requirements currently provided in Code 23 section 123.127, the bill provides that an applicant that is a 24 corporation shall list all officers and persons with a certain 25 financial interest in the corporation in the application. The 26 bill also requires an applicant to state in the application 27 whether certain persons required to be listed in the 28 application have been convicted of any offense and, if required 29 by the administrator of the division, to include in the 30 application a sketch or drawing of the premises. Code sections 31 123.128 and 123.129, concerning class “B” and class “C” beer 32 permits, are amended to reflect the rewritten Code section. 33 Code section 123.130, is amended to eliminate class “AA” 34 and special class “AA” beer permits and provides that certain 35 -27- LSB 1266HV (2) 87 ec/nh 27/ 30

H.F. 521 special class “A” beer permittees may sell at retail at the 1 manufacturing premises for consumption off the premises beer 2 that is transferred at the time of sale from the original 3 container to another container that is no larger than 72 4 ounces. 5 Code section 123.131, concerning authority under a class 6 “B” beer permit, is amended to provide that sales of beer 7 for consumption off the premises may be made in a container 8 other than the original container that is no larger than 72 9 ounces under certain circumstances and shall be deemed an open 10 container for purposes of Code sections 321.284 and 321.284A. 11 Code section 123.134, concerning beer permit fees, is 12 amended to increase the annual fee for a class “A” or special 13 class “A” beer permit from $250 to $750. 14 Code section 123.135, concerning a certificate of compliance 15 concerning beer, is amended to provide that the listing of 16 class “A” permittees and geographic area as filed with the 17 alcoholic beverages division shall be amended as necessary to 18 keep the listing current. 19 Code section 123.136, concerning the barrel tax on beer, 20 is amended to provide that the tax applies to all beer 21 sold at retail by a special class “A” beer permittee at the 22 manufacturing premises for consumption off the premises. 23 DIVISION III —— MICRO-DISTILLED SPIRITS. Code section 24 123.3(29), concerning the definition of a micro-distillery, is 25 amended to provide that a micro-distillery is a business that 26 produces less than 100,000 proof gallons of distilled spirits 27 instead of the current limit of 50,000. 28 Code section 123.30, concerning liquor control licenses, 29 is amended to provide for the issuance of a class “C” 30 micro-distilled spirits license which authorizes the holder to 31 sell micro-distilled spirits manufactured on the premises for 32 consumption on the premises. 33 Code section 123.32, concerning applications for certain 34 licenses, is amended to add a reference to the class “C” 35 -28- LSB 1266HV (2) 87 ec/nh 28/ 30

H.F. 521 micro-distilled spirits liquor control license and to change 1 a reference to a class “A” micro-distilled spirits permit to 2 a license. 3 New Code section 123.43 provides for the information 4 necessary for a person to apply for and be issued a class 5 “C” micro-distilled spirits liquor control license. The 6 bill requires the applicant to submit information regarding 7 the applicant and the location of the micro-distillery. The 8 application shall also provide that the applicant is of good 9 moral character and that the premises for which the permit 10 is sought is authorized to sell spirits for consumption 11 on the premises by applicable zoning ordinance and is of 12 sufficient size. The applicant shall not be engaged in the 13 business of manufacturing beer. In addition, a manufacturer of 14 micro-distilled spirits may be issued a license regardless of 15 whether the manufacturer also manufactures native wine. The 16 annual fee for the license shall be $250. 17 Code section 123.43A, providing for a class “A” 18 micro-distilled spirits permit, is amended. The bill changes 19 the permit to a license and eliminates the current one and 20 one-half liters per day limit on sales of micro-distilled 21 spirits on the premises and instead allows sales of nine liters 22 per person per day. The bill also allows the micro-distillery 23 to sell the spirits it manufactures to customers outside the 24 state. The bill also allows the micro-distillery to sell the 25 spirits it manufactures for consumption on the premises of 26 the manufacturing facility by applying for a new class “C” 27 micro-distilled spirits liquor control license. The bill 28 limits a manufacturer to no more than one of the new class “C” 29 licenses. 30 New Code section 123.43B establishes the authority for a 31 class “C” micro-distilled spirits liquor control license. The 32 Code section provides that a person holding a license for the 33 same location for which it holds a class “A” micro-distilled 34 spirits license may sell its micro-distilled spirits only at 35 -29- LSB 1266HV (2) 87 ec/nh 29/ 30

H.F. 521 retail to patrons by the individual drink for consumption on 1 the licensed premises where it was manufactured, and that the 2 person holding the license shall purchase micro-distilled 3 spirits it manufactures from a class “E” liquor control 4 licensee only. 5 Code section 123.56, concerning native wines, is amended to 6 allow a manufacturer of native wine to be issued a class “C” 7 native wine permit regardless of whether the manufacturer also 8 manufactures micro-distilled spirits. 9 -30- LSB 1266HV (2) 87 ec/nh 30/ 30