H.F. 607 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 123.22, Code 2017, is amended to read as 15 follows: 16 123.22 State monopoly. 17 1. The division has the exclusive right of importation 18 into the state of all forms of alcoholic liquor, except as 19 otherwise provided in this chapter , and a person shall not 20 import alcoholic liquor, except that an individual of legal age 21 may import and have in the individual’s possession an amount 22 of alcoholic liquor not exceeding one liter or, in the case of 23 alcoholic liquor personally obtained outside the United States, 24 four liters for personal consumption only in a private home 25 or other private accommodation. A distillery shall not sell 26 alcoholic liquor within the state to any person but only to 27 the division, except as otherwise provided in this chapter . 28 This section vests in the division exclusive control within the 29 state as purchaser of all alcoholic liquor sold by distilleries 30 within the state or imported, except beer and wine, and except 31 as otherwise provided in this chapter . The division shall 32 receive alcoholic liquor on a bailment system for resale by the 33 division in the manner set forth in this chapter . The division 34 shall act as the sole wholesaler of alcoholic liquor to class 35 -1- LSB 1266HZ (3) 87 ec/nh 1/ 32

H.F. 607 “E” liquor control licensees. 1 2. No person, acting individually or through another 2 acting for the person shall directly or indirectly, or upon 3 any pretense, or by any device, manufacture, sell, exchange, 4 barter, dispense, give in consideration of the purchase of any 5 property or of any services or in evasion of this chapter , or 6 keep for sale, or have possession of any intoxicating liquor, 7 except as provided in this chapter ; or own, keep, or be in any 8 way concerned, engaged, or employed in owning or keeping, any 9 intoxicating liquor with intent to violate any provision of 10 this chapter , or authorize or permit the same to be done; or 11 manufacture, own, sell, or have possession of any manufactured 12 or compounded article, mixture or substance, not in a liquid 13 form, and containing alcohol which may be converted into a 14 beverage by a process of pressing or straining the alcohol 15 therefrom, or any instrument intended for use and capable of 16 being used in the manufacture of intoxicating liquor; or own 17 or have possession of any material used exclusively in the 18 manufacture of intoxicating liquor; or use or have possession 19 of any material with intent to use it in the manufacture of 20 intoxicating liquors; however, alcohol may be manufactured 21 for industrial and nonbeverage purposes by persons who have 22 qualified for that purpose as provided by the laws of the 23 United States and the laws of this state. Such alcohol, so 24 manufactured, may be denatured, transported, used, possessed, 25 sold, and bartered and dispensed, subject to the limitations, 26 prohibitions and restrictions imposed by the laws of the United 27 States and this state. Any person may manufacture, sell, or 28 transport ingredients and devices other than alcohol for the 29 making of homemade wine or beer . 30 Sec. 3. Section 123.23, subsection 2, Code 2017, is amended 31 to read as follows: 32 2. At the time of applying for a certificate of compliance, 33 each applicant shall submit to the division electronically, 34 or in a manner prescribed by the administrator, the name and 35 -2- LSB 1266HZ (3) 87 ec/nh 2/ 32

H.F. 607 address of its authorized agent for service of process which 1 shall remain effective until changed for another, and a list 2 of names and addresses of all representatives, employees, or 3 attorneys whom the applicant has appointed in the state of Iowa 4 to represent it for any purpose. The listing shall be amended 5 from time to time by the certificate holder as necessary to 6 keep the listing current with the division. 7 Sec. 4. Section 123.28, Code 2017, is amended to read as 8 follows: 9 123.28 Restrictions on transportation. 10 1. 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 is 14 lawful for the division, a common carrier, or other person to 15 transport, carry, or convey alcoholic liquor sold from a state 16 warehouse, depot, or point of purchase by the state to any 17 place to which the liquor may be lawfully delivered under this 18 chapter . 19 2. The division shall deliver alcoholic liquor purchased by 20 class “E” liquor control licensees. Class “E” liquor control 21 licensees may deliver alcoholic liquor purchased by class “A”, 22 “B”, or “C” liquor control licensees, and class “A”, “B”, or 23 “C” liquor control licensees may transport alcoholic liquor 24 purchased from class “E” liquor control licensees. 25 3. A common carrier or other person shall not break or 26 open or allow to be broken or opened a container or package 27 containing alcoholic liquor or use or drink or allow to be used 28 or drunk any alcoholic liquor while it is being transported or 29 conveyed , but this . 30 4. This section does not prohibit a private person from 31 transporting individual bottles or containers of alcoholic 32 liquor exempted pursuant to section 123.22 and individual 33 bottles or containers bearing the identifying mark prescribed 34 in section 123.26 which have been opened previous to the 35 -3- LSB 1266HZ (3) 87 ec/nh 3/ 32

H.F. 607 commencement of the transportation. 1 5. This section does not affect the right of a special 2 permit or liquor control license holder to purchase, possess, 3 or transport alcoholic liquors subject to this chapter . 4 Sec. 5. Section 123.30, subsection 1, paragraph c, Code 5 2017, is amended to read as follows: 6 c. As a further condition for the issuance of a class “E” 7 liquor control license, the applicant shall post a bond in 8 a sum of not less than five thousand nor more than fifteen 9 thousand dollars as determined on a sliding scale established 10 by the division; however, a bond shall not be required if all 11 purchases of alcoholic liquor from the division by the licensee 12 are made by cash payment or by means that ensure that the 13 division will receive full payment in advance of delivery of 14 the alcoholic liquor. 15 Sec. 6. Section 123.31, subsections 6 and 7, Code 2017, are 16 amended by striking the subsections. 17 Sec. 7. Section 123.32, subsection 6, paragraph b, Code 18 2017, is amended to read as follows: 19 b. Upon receipt of an application having been approved by 20 the local authority, the division shall make an investigation 21 as the administrator deems necessary to determine that the 22 applicant complies with all requirements for holding a license 23 or permit, and may require the applicant to appear to be 24 examined under oath to demonstrate that the applicant complies 25 with all of the requirements to hold a license or permit. If 26 the administrator requires the applicant to appear and to 27 testify under oath, a record shall be made of all testimony or 28 evidence and the record shall become a part of the application. 29 The administrator may appoint a member of the division or 30 may request an administrative law judge of the department of 31 inspections and appeals to receive the testimony under oath 32 and evidence, and to issue a proposed decision to approve 33 or disapprove the application for a license or permit. The 34 administrator may affirm, reverse, or modify the proposed 35 -4- LSB 1266HZ (3) 87 ec/nh 4/ 32

H.F. 607 decision to approve or disapprove the application for the 1 license or permit. If the application is approved by the 2 administrator, the license or permit shall be issued. If the 3 application is disapproved by the administrator, the applicant 4 and the appropriate local authority shall be so notified by 5 certified mail and the appropriate local authority shall be 6 notified electronically, or in a manner prescribed by the 7 administrator . 8 Sec. 8. Section 123.33, Code 2017, is amended to read as 9 follows: 10 123.33 Records. 11 Every holder of a liquor control license shall keep a daily 12 record, in printed or electronic format, of the gross receipts 13 of the holder’s business or permit under this chapter shall 14 maintain records, in printed and electronic format, which 15 include income statements, balance sheets, purchase and sales 16 invoices, purchase and sales ledgers, and any other records as 17 the administrator may require . The records required and the 18 premises of the licensee or permittee shall be accessible and 19 open to inspection pursuant to section 123.30, subsection 1 , 20 during normal business hours of the licensee or permittee . 21 Sec. 9. Section 123.34, subsection 1, Code 2017, is amended 22 to read as follows: 23 1. Liquor control licenses, wine permits, and beer permits, 24 unless sooner suspended or revoked, expire one year from 25 date of issuance. The administrator shall give sixty days’ 26 written notice of the expiration to each licensee or permittee. 27 However, the administrator may issue six-month or eight-month 28 seasonal licenses, class “B” wine permits, or class “B” beer 29 permits for a proportionate part of the license or permit fee 30 or may issue fourteen-day liquor control licenses, native wine 31 permits, or beer permits as provided in subsection 2 . No 32 refund shall be made for seasonal licenses or permits or for 33 fourteen-day liquor control licenses, native wine permits, or 34 beer permits. No seasonal license or permit shall be renewed 35 -5- LSB 1266HZ (3) 87 ec/nh 5/ 32

H.F. 607 except . However, after a period of two months the applicant 1 may apply for a new seasonal license or permit for the same 2 location . 3 Sec. 10. Section 123.49, subsection 2, paragraph b, Code 4 2017, is amended to read as follows: 5 b. Sell or dispense any alcoholic beverage or beer on 6 the premises covered by the license or permit, or permit its 7 consumption thereon between the hours of 2:00 a.m. and 6:00 8 a.m. on a weekday, and between the hours of 2:00 a.m. on Sunday 9 and 6:00 a.m. on the following Monday, however, a holder of a 10 liquor control license or retail wine or beer permit granted 11 the privilege of selling alcoholic liquor , wine, or beer on 12 Sunday may sell or dispense alcoholic liquor , wine, or beer 13 between the hours of 8:00 a.m. on Sunday and 2:00 a.m. on the 14 following Monday. 15 Sec. 11. Section 123.49, subsection 2, paragraph k, Code 16 2017, is amended by striking the paragraph. 17 Sec. 12. Section 123.51, subsection 1, Code 2017, is amended 18 to read as follows: 19 1. No signs or other matter advertising any brand of 20 alcoholic liquor, beer, or wine shall be erected or placed upon 21 the outside of any premises occupied by a licensee or permittee 22 authorized to sell alcoholic liquor, beer, or wine at retail. 23 This subsection does not prohibit the use of signs However, 24 signs or other advertising matter may be erected or placed 25 inside the premises, inside a fence or similar enclosure which 26 wholly or partially surrounds the licensed premises , or inside 27 a window facing outward from the premises . 28 Sec. 13. Section 123.175, Code 2017, is amended by striking 29 the section and inserting in lieu thereof the following: 30 123.175 Class “A” or retail wine permit application and 31 issuance. 32 1. A person applying for a class “A” or retail wine permit 33 shall submit an application electronically, or in a manner 34 prescribed by the administrator, which shall set forth under 35 -6- LSB 1266HZ (3) 87 ec/nh 6/ 32

H.F. 607 oath the following: 1 a. The name and place of residence of the applicant. 2 b. The names and addresses of all persons or, in the case of 3 a corporation, the officers, directors, and persons owning or 4 controlling ten percent or more of the capital stock thereof, 5 having a financial interest, by way of loan, ownership, or 6 otherwise, in the business. 7 c. The location of the premises where the applicant intends 8 to operate. 9 d. The name of the owner of the premises and if the owner of 10 the premises is not the applicant, whether the applicant is the 11 actual lessee of the premises. 12 e. When required by the administrator, and in such form and 13 containing such information as the administrator may require, 14 a description of the premises where the applicant intends to 15 use the permit, to include a sketch or drawing of the premises 16 and, if applicable, the number of square feet of interior floor 17 space which comprises the retail sales area of the premises. 18 f. Whether any person specified in paragraph “b” has ever 19 been convicted of any offense against the laws of the United 20 States, or any state or territory thereof, or any political 21 subdivision of any such state or territory. 22 g. Any other information as required by the administrator. 23 2. The administrator shall issue a class “A” or retail wine 24 permit to any applicant who establishes all of the following: 25 a. That the applicant has submitted a completed application 26 as required by subsection 1. 27 b. That the applicant is a person of good moral character as 28 provided in section 123.3, subsection 34. 29 c. That the applicant is a citizen of the state of Iowa 30 or, if a corporation, that the applicant is authorized to do 31 business in the state. 32 d. That the premises where the applicant intends to use the 33 permit conforms to all applicable laws, health regulations, and 34 fire regulations, and constitutes a safe and proper place or 35 -7- LSB 1266HZ (3) 87 ec/nh 7/ 32

H.F. 607 building. 1 e. That the applicant gives consent to a person, pursuant 2 to section 123.30, subsection 1, to enter upon the premises 3 without a warrant during the business hours of the applicant 4 to inspect for violations of the provisions of this chapter or 5 ordinances and regulations that local authorities may adopt. 6 f. That the applicant has submitted, in the case of a class 7 “A” wine permit, a bond in the amount of five thousand dollars 8 in a manner prescribed by the administrator with good and 9 sufficient sureties to be approved by the division conditioned 10 upon compliance with this chapter. 11 Sec. 14. Section 123.177, Code 2017, is amended by adding 12 the following new subsection: 13 NEW SUBSECTION . 3. A class “A” wine permit holder may sell 14 wine to a person holding both a class “B” beer permit and a 15 class “A” beer permit pursuant to section 123.131, subsection 16 4. 17 Sec. 15. Section 123.178B, subsection 4, Code 2017, is 18 amended to read as follows: 19 4. A person holding a class “C” native wine permit and a 20 class “A” wine permit whose primary purpose is manufacturing 21 native wine may purchase beer from a wholesaler holding a class 22 “A” beer permit for sale at retail for consumption on or off 23 the premises covered by the class “C” native wine permit . 24 Sec. 16. Section 123.180, subsection 2, Code 2017, is 25 amended to read as follows: 26 2. At the time of applying for a vintner’s certificate of 27 compliance, each applicant shall file with the division a list 28 of all class “A” wine permittees with whom it intends to do 29 business. The listing of class “A” wine permittees as filed 30 with the division may shall be amended from time to time by the 31 holder of the certificate of compliance as necessary to keep 32 the listing current with the division . 33 Sec. 17. Section 123.183, subsection 2, paragraph a, Code 34 2017, is amended to read as follows: 35 -8- LSB 1266HZ (3) 87 ec/nh 8/ 32

H.F. 607 a. Revenue collected from the wine gallonage tax on wine 1 manufactured for sale and sold at wholesale in this state, 2 and on wine subject to direct shipment as provided in section 3 123.187 by a wine manufacturer licensed or permitted pursuant 4 to laws regulating alcoholic beverages in this state, shall be 5 deposited in the wine gallonage tax fund as created in this 6 section . 7 Sec. 18. Section 123.187, subsection 2, paragraph c, Code 8 2017, is amended to read as follows: 9 c. An application submitted pursuant to paragraph “a” 10 shall also be accompanied by a bond in the amount of five 11 thousand dollars in the form prescribed and furnished by the 12 division with good and sufficient sureties to be approved by 13 the division conditioned upon compliance with this chapter . 14 However, a wine manufacturer that has submitted a bond pursuant 15 to section 123.175, subsection 3 2 , paragraph “f” , shall not be 16 required to provide a bond as provided in this paragraph. 17 DIVISION II 18 BEER PERMITS 19 Sec. 19. Section 123.30, subsection 3, paragraph e, 20 subparagraph (1), Code 2017, is amended to read as follows: 21 (1) A class “E” liquor control license may be issued and 22 shall authorize the holder to purchase alcoholic liquor from 23 the division only and high alcoholic content beer from a class 24 “AA” “A” beer permittee only and to sell the alcoholic liquor 25 and high alcoholic content beer to patrons for consumption off 26 the licensed premises and to other liquor control licensees. 27 A holder of a class “E” liquor control license may hold other 28 retail liquor control licenses or retail wine or beer permits, 29 but the premises licensed under a class “E” liquor control 30 license shall be separate from other licensed premises, though 31 the separate premises may have a common entrance. However, 32 the holder of a class “E” liquor control license may also hold 33 a class “B” wine or class “C” beer permit or both for the 34 premises licensed under a class “E” liquor control license. 35 -9- LSB 1266HZ (3) 87 ec/nh 9/ 32

H.F. 607 Sec. 20. Section 123.124, Code 2017, is amended by striking 1 the section and inserting in lieu thereof the following: 2 123.124 Beer permits —— classes. 3 Permits for the manufacture and sale, or sale, of beer shall 4 be divided into four classes, known as class “A”, special 5 class “A”, class “B”, or class “C” beer permits. A holder of 6 a class “A” or special class “A” beer permit shall have the 7 authority as provided in section 123.130. A holder of a class 8 “B” beer permit shall have the authority as provided in section 9 123.131, and a holder of a class “C” beer permit shall have the 10 authority as provided in section 123.132. 11 Sec. 21. Section 123.125, Code 2017, is amended to read as 12 follows: 13 123.125 Issuance of beer permits. 14 The administrator shall issue class “A”, special class “A”, 15 class “AA”, special class “AA”, class “B”, and class “C” beer 16 permits and may suspend or revoke permits for cause as provided 17 in this chapter . 18 Sec. 22. Section 123.127, Code 2017, is amended by striking 19 the section and inserting in lieu thereof the following: 20 123.127 Class “A” and special class “A” beer permit 21 application and issuance. 22 1. A person applying for a class “A” or special class “A” 23 beer permit shall submit an application electronically, or in a 24 manner prescribed by the administrator, which shall set forth 25 under oath the following: 26 a. The name and place of residence of the applicant. 27 b. The names and addresses of all persons or, in the case of 28 a corporation, the officers, directors, and persons owning or 29 controlling ten percent or more of the capital stock thereof, 30 having a financial interest, by way of loan, ownership, or 31 otherwise, in the business. 32 c. The location of the premises where the applicant intends 33 to operate. 34 d. The name of the owner of the premises and if the owner of 35 -10- LSB 1266HZ (3) 87 ec/nh 10/ 32

H.F. 607 the premises is not the applicant, whether the applicant is the 1 actual lessee of the premises. 2 e. When required by the administrator, and in such form and 3 containing such information as the administrator may require, 4 a description of the premises where the applicant intends to 5 use the permit, to include a sketch or drawing of the premises 6 and, if applicable, the number of square feet of interior floor 7 space which comprises the retail sales area of the premises. 8 f. Whether any person specified in paragraph “b” has ever 9 been convicted of any offense against the laws of the United 10 States, or any state or territory thereof, or any political 11 subdivision of any such state or territory. 12 g. Any other information as required by the administrator. 13 2. The administrator shall issue a class “A” or special 14 class “A” beer permit to any applicant who establishes all of 15 the following: 16 a. That the applicant has submitted a completed application 17 as required by subsection 1. 18 b. That the applicant is a person of good moral character as 19 provided in section 123.3, subsection 34. 20 c. That the applicant is a citizen of the state of Iowa 21 or, if a corporation, that the applicant is authorized to do 22 business in the state. 23 d. That the premises where the applicant intends to use the 24 permit conforms to all applicable laws, health regulations, and 25 fire regulations, and constitutes a safe and proper place or 26 building. 27 e. That the applicant gives consent to a person, pursuant 28 to section 123.30, subsection 1, to enter upon the premises 29 without a warrant during the business hours of the applicant 30 to inspect for violations of the provisions of this chapter or 31 ordinances and regulations that local authorities may adopt. 32 f. That the applicant has submitted a bond in the amount 33 of ten thousand dollars in a manner prescribed by the 34 administrator with good and sufficient sureties to be approved 35 -11- LSB 1266HZ (3) 87 ec/nh 11/ 32

H.F. 607 by the division conditioned upon compliance with this chapter. 1 g. If the person is applying for a special class “A” beer 2 permit, that the applicant holds or has applied for a class “C” 3 liquor control license or class “B” beer permit. 4 Sec. 23. Section 123.128, subsection 1, paragraph a, Code 5 2017, is amended to read as follows: 6 a. All the information required of an applicant by section 7 123.127, subsection 1 , paragraph “a” . 8 Sec. 24. Section 123.128, subsection 2, Code 2017, is 9 amended to read as follows: 10 2. Fulfills the requirements of section 123.127, subsection 11 1 2 , paragraph paragraphs “b” , “c” , and “d” . 12 Sec. 25. Section 123.129, subsection 2, paragraphs a and b, 13 Code 2017, are amended to read as follows: 14 a. Submits an application electronically, or in a manner 15 prescribed by the administrator, which shall state under 16 oath all the information required of an applicant by section 17 123.127, subsection 1 , paragraph “a” . 18 b. Establishes that the person is of good moral character as 19 defined by this chapter Fulfills the requirements of section 20 123.127, subsection 2, paragraphs “b” , “c” , and “d” . 21 Sec. 26. Section 123.129, subsection 2, paragraph d, Code 22 2017, is amended by striking the paragraph. 23 Sec. 27. Section 123.130, Code 2017, is amended to read as 24 follows: 25 123.130 Authority under class “A” , class “AA”, and special 26 class “A” , and special class “AA” beer permits. 27 1. Any person holding a class “A” or class “AA” beer permit 28 issued by the division shall be authorized to manufacture 29 and sell, or sell at wholesale, beer for consumption off the 30 premises, such sales within the state to be made only to 31 persons holding subsisting class “A”, “B”, or “C” beer permits, 32 both a class “C” native wine permit and a class “A” wine 33 permit pursuant to section 123.178B, subsection 4, or liquor 34 control licenses issued in accordance with the provisions of 35 -12- LSB 1266HZ (3) 87 ec/nh 12/ 32

H.F. 607 this chapter . A class “A” , class “AA”, or special class “A” , 1 or special class “AA” beer permit does not grant authority to 2 manufacture wine as defined in section 123.3, subsection 47 . 3 2. All class “A” and class “AA” premises shall be located 4 within the state. All beer received by the holder of a 5 class “A” or class “AA” beer permit from the holder of a 6 certificate of compliance before being resold must first come 7 to rest on the licensed premises of the permit holder, must be 8 inventoried, and is subject to the barrel tax when resold as 9 provided in section 123.136 . A class “A” or class “AA” beer 10 permittee shall not store beer overnight except on premises 11 licensed under a class “A” or class “AA” beer permit. 12 3. All special class “A” and special class “AA” premises 13 shall be located within the state. A person who holds a 14 special class “A” or special class “AA” beer permit for the 15 same location at which the person holds a class “C” liquor 16 control license or class “B” beer permit may manufacture 17 and sell beer to be consumed on the premises, may sell at 18 retail at the manufacturing premises for consumption off 19 the premises beer that is transferred at the time of sale 20 to another container subject to the requirements of section 21 123.131, subsection 2, may sell beer to a class “A” or class 22 “AA” beer permittee for resale purposes, and may sell beer to 23 distributors outside of the state that are authorized by the 24 laws of that jurisdiction to sell beer at wholesale. 25 Sec. 28. Section 123.131, Code 2017, is amended to read as 26 follows: 27 123.131 Authority under class “B” beer permit. 28 1. Subject to the provisions of this chapter , any person 29 holding a class “B” beer permit shall be authorized to sell 30 beer for consumption on or off the premises. Sales of beer 31 for consumption off the premises made pursuant to this section 32 shall be made in original containers except as provided in 33 subsection 2. However, unless otherwise provided in this 34 chapter , no sale of beer shall be made for consumption on 35 -13- LSB 1266HZ (3) 87 ec/nh 13/ 32

H.F. 607 the premises unless the place where such service is made is 1 equipped with tables and seats sufficient to accommodate not 2 less than twenty-five persons at one time. 3 2. Subject to the rules of the division, sales of beer for 4 consumption off the premises made pursuant to this section may 5 be made in a container other than the original container only 6 if all of the following requirements are met: 7 a. The beer is transferred from the original container to 8 the container to be sold on the licensed premises at the time 9 of sale. 10 b. The person transferring the beer from the original 11 container to the container to be sold shall be eighteen years 12 of age or more. 13 c. The container to be sold shall be no larger than 14 seventy-two ounces. 15 d. The container to be sold shall be securely sealed by a 16 method authorized by the division that is designed so that if 17 the sealed container is reopened or the seal tampered with, it 18 is visibly apparent that the seal on the container of beer has 19 been tampered with or the sealed container has otherwise been 20 reopened. 21 3. A container of beer other than the original container 22 that is sold and sealed in compliance with the requirements of 23 subsection 2 and the rules of the division shall not be deemed 24 an open container subject to the requirements of sections 25 321.284 and 321.284A if the sealed container is unopened and 26 the seal has not been tampered with, and the contents of the 27 container have not been partially removed. 28 4. A person holding a class “B” beer permit and a class “A” 29 beer permit whose primary purpose is manufacturing beer may 30 purchase wine from a wholesaler holding a class “A” wine permit 31 for sale at retail for consumption on the premises covered by 32 the class “B” beer permit. 33 Sec. 29. Section 123.134, subsection 1, Code 2017, is 34 amended to read as follows: 35 -14- LSB 1266HZ (3) 87 ec/nh 14/ 32

H.F. 607 1. The annual permit fee for a class “A” or special class 1 “A” beer permit is two seven hundred fifty dollars. 2 Sec. 30. Section 123.134, subsection 2, Code 2017, is 3 amended by striking the subsection. 4 Sec. 31. Section 123.135, Code 2017, is amended to read as 5 follows: 6 123.135 Certificate of compliance —— civil penalty. 7 1. A manufacturer, brewer, bottler, importer, or vendor of 8 beer, or any agent thereof, desiring to ship or sell beer, or 9 have beer brought into this state for resale by a class “A” 10 or class “AA” beer permittee, shall first make application 11 for and be issued a brewer’s certificate of compliance by the 12 administrator for that purpose. The certificate of compliance 13 expires at the end of one year from the date of issuance 14 and shall be renewed for a like period upon application to 15 the administrator unless otherwise revoked for cause. Each 16 application for a certificate of compliance or renewal of a 17 certificate shall be submitted electronically, or in a manner 18 prescribed by the administrator, and shall be accompanied 19 by a fee of five hundred dollars payable to the division. 20 Each holder of a certificate of compliance shall furnish the 21 information in a manner the administrator requires. 22 2. At the time of applying for a certificate of compliance, 23 each applicant shall file with the division a list of all class 24 “A” and class “AA” beer permittees with whom it intends to do 25 business and shall designate the geographic area in which its 26 products are to be distributed by such permittee. The listing 27 of class “A” and class “AA” beer permittees and geographic area 28 as filed with the division may shall be amended from time to 29 time by the holder of a certificate of compliance as necessary 30 to keep the listing current with the division . 31 3. All class “A” and class “AA” beer permit holders shall 32 sell only those brands of beer which are manufactured, brewed, 33 bottled, shipped, or imported by a person holding a current 34 certificate of compliance. Any employee or agent working for 35 -15- LSB 1266HZ (3) 87 ec/nh 15/ 32

H.F. 607 or representing the holder of a certificate of compliance 1 within this state shall submit electronically, or in a manner 2 prescribed by the administrator, the employee’s or agent’s name 3 and address with the division. 4 4. It shall be unlawful for any holder of a certificate of 5 compliance or the holder’s agent, or any class “A” or class 6 “AA” beer permit holder or the beer permit holder’s agent, to 7 grant to any retail beer permit holder, directly or indirectly, 8 any rebates, free goods, or quantity discounts on beer which 9 are not uniformly offered to all retail permittees. 10 5. Notwithstanding any other penalties provided by this 11 chapter , any holder of a certificate of compliance or any class 12 “A” or class “AA” beer permit holder who violates this chapter 13 or the rules adopted pursuant to this chapter is subject to a 14 civil penalty not to exceed one thousand dollars or suspension 15 of the holder’s certificate or permit for a period not to 16 exceed one year, or both such civil penalty and suspension. 17 Civil penalties imposed under this section shall be collected 18 and retained by the division. 19 Sec. 32. Section 123.136, subsection 1, Code 2017, is 20 amended to read as follows: 21 1. In addition to the annual permit fee to be paid by all 22 class “A” and class “AA” beer permittees under this chapter 23 there shall be levied and collected from the permittees on all 24 beer manufactured for sale or sold in this state at wholesale 25 and on all beer imported into this state for sale at wholesale 26 and sold in this state at wholesale, and from special class “A” 27 and special class “AA” beer permittees on all beer manufactured 28 for consumption on the premises and on all beer sold at retail 29 at the manufacturing premises for consumption off the premises 30 pursuant to section 123.130, subsection 3 , a tax of five and 31 eighty-nine hundredths dollars for every barrel containing 32 thirty-one gallons, and at a like rate for any other quantity 33 or for the fractional part of a barrel. However, no tax shall 34 be levied or collected on beer shipped outside this state by a 35 -16- LSB 1266HZ (3) 87 ec/nh 16/ 32

H.F. 607 class “A” or class “AA” beer permittee or sold by one class “A” 1 or class “AA” beer permittee to another class “A” or class “AA” 2 beer permittee. 3 Sec. 33. Section 123.137, subsection 1, Code 2017, is 4 amended to read as follows: 5 1. A person holding a class “A” , class “AA”, or special 6 class “A” , or special class “AA” beer permit shall, on or 7 before the tenth day of each calendar month commencing on the 8 tenth day of the calendar month following the month in which 9 the person is issued a beer permit, make a report under oath 10 to the division electronically, or in a manner prescribed by 11 the administrator, showing the exact number of barrels of 12 beer, or fractional parts of barrels, sold by the beer permit 13 holder during the preceding calendar month. The report shall 14 also state information the administrator requires, and beer 15 permit holders shall at the time of filing a report pay to the 16 division the amount of tax due at the rate fixed in section 17 123.136 . 18 Sec. 34. Section 123.138, subsection 1, Code 2017, is 19 amended to read as follows: 20 1. Each class “A” , class “AA”, or special class “A” , or 21 special class “AA” beer permittee shall keep proper records 22 showing the amount of beer sold by the permittee, and these 23 records shall be at all times open to inspection by the 24 administrator and to other persons pursuant to section 123.30, 25 subsection 1 . Each class “B” beer permittee, class “C” beer 26 permittee, or retail liquor control licensee shall keep proper 27 records showing each purchase of beer made by the permittee 28 or licensee, and the date and the amount of each purchase and 29 the name of the person from whom each purchase was made, which 30 records shall be open to inspection pursuant to section 123.30, 31 subsection 1 , during normal business hours of the permittee or 32 licensee. 33 Sec. 35. Section 123.139, Code 2017, is amended to read as 34 follows: 35 -17- LSB 1266HZ (3) 87 ec/nh 17/ 32

H.F. 607 123.139 Separate locations —— class “A” , class “AA”, or 1 special class “A” , or special class “AA” beer permit. 2 A class “A” , class “AA”, or special class “A” , or special 3 class “AA” beer permittee having more than one place of 4 business is required to have a separate beer permit for each 5 separate place of business maintained by the permittee where 6 beer is stored, warehoused, or sold. 7 Sec. 36. Section 123.142, Code 2017, is amended to read as 8 follows: 9 123.142 Unlawful sale and importation. 10 1. It is unlawful for the holder of a class “B” or class 11 “C” beer permit issued under this chapter to sell beer, except 12 beer brewed on the premises covered by a special class “A” 13 or special class “AA” beer permit or beer purchased from a 14 person holding a class “A” or class “AA” beer permit issued in 15 accordance with this chapter , and on which the tax provided in 16 section 123.136 has been paid. However, this section does not 17 apply to class “D” liquor control licensees as provided in this 18 chapter . 19 2. It shall be unlawful for any person not holding a class 20 “A” or class “AA” beer permit to import beer into this state 21 for the purpose of sale or resale. 22 Sec. 37. Section 123.143, subsection 3, Code 2017, is 23 amended to read as follows: 24 3. Barrel tax revenues collected on beer manufactured in 25 this state from a class “A” or class “AA” beer permittee which 26 owns and operates a brewery located in Iowa shall be credited 27 to the barrel tax fund hereby created in the office of the 28 treasurer of state. Moneys deposited in the barrel tax fund 29 shall not revert to the general fund of the state without a 30 specific appropriation by the general assembly. Moneys in the 31 barrel tax fund are appropriated to the economic development 32 authority for purposes of section 15E.117 . 33 Sec. 38. Section 123.144, subsection 1, Code 2017, is 34 amended to read as follows: 35 -18- LSB 1266HZ (3) 87 ec/nh 18/ 32

H.F. 607 1. No person shall bottle beer within the state of Iowa, 1 except class “A” , and special class “A” , class “AA”, and 2 special class “AA” beer permittees who have complete equipment 3 for bottling beer and who have received the approval of the 4 local board of health as to sanitation. It shall be the duty of 5 local boards of health to inspect the premises and equipment of 6 class “A” , and special class “A” , class “AA”, and special class 7 “AA” beer permittees who desire to bottle beer. 8 DIVISION III 9 NATIVE DISTILLED SPIRITS 10 Sec. 39. Section 123.3, subsections 28 and 29, Code 2017, 11 are amended to read as follows: 12 28. “Micro-distilled “Native distilled spirits” means 13 distilled spirits fermented, distilled, or, for a period of 14 two years, barrel matured on the licensed premises of the 15 micro-distillery native distillery where fermented, distilled, 16 or matured. “Micro-distilled spirits” “Native distilled spirits” 17 also includes blended or mixed spirits comprised solely of 18 spirits fermented, distilled, or, for a period of two years, 19 barrel matured at a micro-distillery native distillery . 20 29. “Micro-distillery” “Native distillery” means a 21 business with an operational operating still which , combining 22 all production facilities of the business, produces and 23 manufactures less than fifty thousand proof gallons of native 24 distilled spirits on an annual basis . 25 Sec. 40. Section 123.30, subsection 3, paragraph c, Code 26 2017, is amended by adding the following new subparagraph: 27 NEW SUBPARAGRAPH . (3) A class “C” native distilled spirits 28 liquor control license may be issued to a native distillery but 29 shall be issued in the name of the individuals who actually own 30 the business and shall only be issued to a native distillery 31 which, combining all production facilities of the business, 32 produces and manufactures not more than one hundred thousand 33 proof gallons of distilled spirits on an annual basis. The 34 license shall authorize the holder to sell native distilled 35 -19- LSB 1266HZ (3) 87 ec/nh 19/ 32

H.F. 607 spirits manufactured on the premises of the native distillery 1 to patrons by the individual drink for consumption on the 2 premises. All native distilled spirits sold by a native 3 distillery for on-premises consumption shall be purchased from 4 a class “E” liquor control licensee. 5 Sec. 41. Section 123.32, subsection 1, Code 2017, is amended 6 to read as follows: 7 1. Filing of application. An application for a class “A”, 8 class “B”, class “C”, or class “E” liquor control license, for 9 a class “A” micro-distilled native distilled spirits permit 10 license , for a retail beer permit as provided in sections 11 123.128 and 123.129 , or for a class “B”, class “B” native, or 12 class “C” native retail wine permit as provided in section 13 123.178 , 123.178A , or 123.178B , accompanied by the necessary 14 fee and bond, if required, shall be filed with the appropriate 15 city council if the premises for which the license or permit 16 is sought are located within the corporate limits of a city, 17 or with the board of supervisors if the premises for which the 18 license or permit is sought are located outside the corporate 19 limits of a city. An application for a class “D” liquor 20 control license and for a class “A” beer or class “A” wine 21 permit, accompanied by the necessary fee and bond, if required, 22 shall be submitted to the division electronically, or in a 23 manner prescribed by the administrator, which shall proceed in 24 the same manner as in the case of an application approved by 25 local authorities. 26 Sec. 42. Section 123.36, Code 2017, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 3A. Class “C” native distilled spirits 29 liquor control license, the sum of two hundred fifty dollars. 30 Sec. 43. Section 123.36, subsection 5, Code 2017, is amended 31 to read as follows: 32 5. Any club, hotel, motel, native distillery, or commercial 33 establishment holding a liquor control license, subject to 34 section 123.49, subsection 2 , paragraph “b” , may apply for and 35 -20- LSB 1266HZ (3) 87 ec/nh 20/ 32

H.F. 607 receive permission to sell and dispense alcoholic liquor and 1 wine to patrons on Sunday for consumption on the premises only, 2 and beer for consumption on or off the premises between the 3 hours of 8:00 a.m. on Sunday and 2:00 a.m. on the following 4 Monday. A class “D” liquor control licensee may apply for and 5 receive permission to sell and dispense alcoholic beverages to 6 patrons for consumption on the premises only between the hours 7 of 8:00 a.m. on Sunday and 2:00 a.m. on the following Monday. 8 For the privilege of selling beer, wine, and alcoholic liquor 9 on the premises on Sunday the liquor control license fee of the 10 applicant shall be increased by twenty percent of the regular 11 fee prescribed for the license pursuant to this section , and 12 the privilege shall be noted on the liquor control license. 13 Sec. 44. NEW SECTION . 123.43 Class “A” native distilled 14 spirits license —— application and issuance —— fees. 15 1. A person applying for a class “A” native distilled 16 spirits license shall submit an application electronically, or 17 in a manner prescribed by the administrator, which shall set 18 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, 32 a description of the premises where the applicant intends to 33 use the license, to include a sketch or drawing of the premises 34 and, if applicable, the number of square feet of interior floor 35 -21- LSB 1266HZ (3) 87 ec/nh 21/ 32

H.F. 607 space which comprises the retail sales area of the premises. 1 f. Whether any person specified in paragraph “b” has ever 2 been convicted of any offense against the laws of the United 3 States, or any state or territory thereof, or any political 4 subdivision of any such state or territory. 5 g. Any other information as required by the administrator. 6 2. Except as otherwise provided in this chapter, the 7 administrator shall issue a class “A” native distilled spirits 8 license to any applicant who establishes all of the following: 9 a. That the applicant has submitted a completed application 10 as required by subsection 1. 11 b. That the applicant is a person of good moral character as 12 provided in section 123.3, subsection 34. 13 c. That the applicant is a citizen of the state of Iowa 14 or, if a corporation, that the applicant is authorized to do 15 business in the state. 16 d. That the applicant is a bona fide manufacturer of 17 alcoholic liquors, and that the applicant will faithfully 18 observe and comply with all laws, rules, and regulations 19 governing the manufacture and sale of alcoholic liquor. 20 e. That the premises where the applicant intends to use the 21 license conforms to all applicable laws, health regulations, 22 and fire regulations, and constitutes a safe and proper place 23 or building. 24 f. That the applicant gives consent to a person, pursuant 25 to section 123.30, subsection 1, to enter upon the premises 26 without a warrant during the business hours of the applicant 27 to inspect for violations of the provisions of this chapter or 28 ordinances and regulations that local authorities may adopt. 29 3. A class “A” native distilled spirits license for a native 30 distillery shall be issued and renewed annually upon payment of 31 a fee of five hundred dollars. 32 4. A violation of the requirements of this chapter shall 33 subject the licensee to the general penalties provided in this 34 chapter and shall constitute grounds for imposition of a civil 35 -22- LSB 1266HZ (3) 87 ec/nh 22/ 32

H.F. 607 penalty or suspension or revocation of the license after notice 1 and opportunity for a hearing pursuant to section 123.39 and 2 chapter 17A. 3 Sec. 45. Section 123.43A, Code 2017, is amended to read as 4 follows: 5 123.43A Micro-distilled spirits —— permit Native 6 distilleries . 7 1. Subject to rules of the division, a micro-distillery 8 native distillery holding a class “A” micro-distilled native 9 distilled spirits permit pursuant to this section license 10 issued pursuant to section 123.43 may sell or offer for sale 11 micro-distilled native distilled spirits. As provided in this 12 section , sales of native distilled spirits manufactured on the 13 premises may be made at retail for off-premises consumption 14 when sold on the premises of the micro-distillery native 15 distillery that manufactures micro-distilled native distilled 16 spirits. All sales intended for resale in this state shall be 17 made through the state’s wholesale distribution system. 18 2. A micro-distillery native distillery shall not sell 19 more than one and one-half liters per person per day, of 20 micro-distilled native distilled spirits on the premises of 21 the micro-distillery native distillery . However, a native 22 distillery which, combining all production facilities of 23 the business, produces and manufactures not more than one 24 hundred thousand proof gallons of native distilled spirits 25 on an annual basis, may sell not more than nine liters per 26 person per day, of native distilled spirits. In addition, a 27 micro-distillery native distillery shall not directly ship 28 micro-distilled native distilled spirits for sale at retail. 29 The micro-distillery native distillery shall maintain records 30 of individual purchases of micro-distilled native distilled 31 spirits at the micro-distillery native distillery for three 32 years. 33 3. A micro-distillery native distillery shall not sell 34 micro-distilled native distilled spirits other than as 35 -23- LSB 1266HZ (3) 87 ec/nh 23/ 32

H.F. 607 permitted in this chapter and shall not allow micro-distilled 1 native distilled spirits sold for consumption off the premises 2 to be consumed upon the premises of the micro-distillery native 3 distillery . However, as a part of a micro-distillery tour, 4 micro-distilled native distilled spirits may be tasted pursuant 5 to the rules of the division on the premises where fermented, 6 distilled, or matured, when no charge is made for the tasting. 7 4. A class “A” micro-distilled spirits permit for a 8 micro-distillery shall be issued and renewed annually upon 9 payment of a fee of five hundred dollars. 10 5. The sale of micro-distilled native distilled spirits to 11 the division for wholesale disposition and sale by the division 12 shall be subject to the requirements of this chapter regarding 13 such disposition and sale. 14 6. 5. The division shall issue no more than three permits 15 under this section class “A” native distilled spirits licenses 16 to a person. In addition, a micro-distillery native distillery 17 issued a permit under this section class “A” native distilled 18 spirits license shall file with the division , on or before the 19 fifteenth day of each calendar month, all documents filed by 20 the micro-distillery native distillery with the alcohol and 21 tobacco tax and trade bureau of the United States department of 22 the treasury, including all production, storage, and processing 23 reports. 24 7. Micro-distilled spirits purchased at a micro-distillery 25 shall not be consumed on any property owned, operated, or 26 controlled by a micro-distillery. 27 6. Notwithstanding any provision of this chapter to the 28 contrary or the fact that a person is the holder of a class 29 “A” native distilled spirits license, a native distillery 30 which, combining all production facilities of the business, 31 produces and manufactures not more than one hundred thousand 32 proof gallons of native distilled spirits on an annual basis 33 may sell those native distilled spirits manufactured on the 34 premises of the native distillery for consumption on the 35 -24- LSB 1266HZ (3) 87 ec/nh 24/ 32

H.F. 607 premises by applying for a class “C” native distilled spirits 1 liquor control license as provided in section 123.30. A native 2 distillery may be granted not more than one class “C” native 3 distilled spirits liquor control license. All native distilled 4 spirits sold by a native distillery for on-premises consumption 5 shall be purchased from a class “E” liquor control licensee. A 6 manufacturer of native distilled spirits may be issued a class 7 “C” native distilled spirits liquor control license regardless 8 of whether the manufacturer is also a manufacturer of native 9 wine pursuant to a class “A” wine permit. A native distillery 10 engaged in the business of manufacturing beer shall not be 11 issued a class “C” native distilled spirits liquor control 12 license. 13 7. A native distillery may sell the native distilled spirits 14 it manufactures to customers outside the state. 15 Sec. 46. Section 123.56, subsection 5, Code 2017, is amended 16 to read as follows: 17 5. Notwithstanding any other provision of this chapter , a 18 person engaged in the business of manufacturing native wine may 19 sell native wine at retail for consumption on the premises of 20 the manufacturing facility by applying for a class “C” native 21 wine permit as provided in section 123.178B . A manufacturer 22 of native wine may be granted not more than one class “C” 23 native wine permit. A manufacturer of native wine may be 24 issued a class “C” native wine permit regardless of whether the 25 manufacturer is also a manufacturer of native distilled spirits 26 pursuant to a class “A” native distilled spirits license. 27 Sec. 47. Section 123.173A, subsections 4 and 7, Code 2017, 28 are amended to read as follows: 29 4. The authorized nonprofit entity conducting the charity 30 beer, spirits, and wine auction shall obtain the beer, spirits, 31 and wine to be auctioned at the charity beer, spirits, and wine 32 auction from an Iowa retail beer permittee, an Iowa retail 33 liquor control licensee, or an Iowa retail wine permittee, or 34 may receive donations of beer, spirits, or wine to be auctioned 35 -25- LSB 1266HZ (3) 87 ec/nh 25/ 32

H.F. 607 at the charity beer, spirits, and wine auction from persons 1 who purchased the donated beer, spirits, or wine from an Iowa 2 retail beer permittee, an Iowa retail liquor control licensee, 3 an Iowa micro-distilled class “A” native distilled spirits 4 permittee licensee , or an Iowa retail wine permittee and who 5 present a receipt documenting the purchase at the time the 6 beer, spirits, or wine is donated. The authorized nonprofit 7 entity conducting the charity beer, spirits, and wine auction 8 shall retain a copy of the receipt for a period of one year from 9 the date of the charity beer, spirits, and wine auction. 10 7. A liquor control licensee, beer permittee, 11 micro-distilled class “A” native distilled spirits permittee 12 licensee , or wine permittee shall not purchase beer, spirits, 13 or wine at a charity beer, spirits, and wine auction. The 14 charity beer, spirits, and wine auction may be conducted on a 15 premises for which a class “B” liquor control license or class 16 “C” liquor control license has been issued, provided that the 17 liquor control licensee does not participate in the charity 18 beer, spirits, and wine auction, supply beer, spirits, or wine 19 to be auctioned at the charity beer, spirits, and wine auction, 20 or receive any of the proceeds of the charity beer, spirits, 21 and wine auction. 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 This bill concerns alcoholic beverage control and matters 26 under the purview of the alcoholic beverages division of the 27 department of commerce. 28 DIVISION I —— ALCOHOLIC BEVERAGE CONTROL. Code section 29 123.3, providing definitions, is amended. The bill amends the 30 definition of “licensed premises” to include noncontiguous 31 areas or places susceptible of a precise description. 32 Code section 123.22 is amended to allow individuals to 33 manufacture, sell, or transport ingredients and devices used to 34 make homemade beer. Current law allows this for homemade wine. 35 -26- LSB 1266HZ (3) 87 ec/nh 26/ 32

H.F. 607 Code section 123.23, concerning a distiller’s certificate of 1 compliance, is amended to delete a reference that a listing of 2 authorized agents of the certificate holder be amended “from 3 time to time”. The bill does not eliminate the requirement 4 that the listing be amended as necessary. 5 Code section 123.28, concerning restrictions on 6 transportation, is amended by dividing the section into 7 numbered subsections. 8 Code section 123.30, concerning liquor control licenses, 9 is amended by removing cash payment as a type of payment 10 for purchasing alcoholic liquor from the alcoholic beverages 11 division. The bill retains language in current law that 12 requires payment by other means that ensure the division 13 receives full payment in advance of delivery of alcoholic 14 liquor. 15 Code section 123.31, concerning application contents for 16 a liquor control license, is amended by striking provisions 17 requiring the applicant to set forth whether the applicant 18 possesses a federal gambling stamp and whether, if required, 19 all designated security employees have received security 20 employee training and certification as required by Code section 21 123.32. 22 Code section 123.32 is amended to provide that if an 23 application for a liquor control license or other permit is 24 disapproved by the administrator of the alcoholic beverages 25 division, the appropriate local authority shall be notified 26 electronically, or in a manner prescribed by the administrator, 27 instead of by certified mail. The applicant is still required 28 to be notified of the disapproval by certified mail. 29 Code section 123.33, concerning records required to be 30 maintained by a licensee or permittee, is amended to describe 31 the types of records to be maintained, which shall include 32 income statements, balance sheets, and purchase and sale 33 invoices and ledgers. 34 Code section 123.34, concerning seasonal licenses, is 35 -27- LSB 1266HZ (3) 87 ec/nh 27/ 32

H.F. 607 amended to provide that an applicant may apply for a new 1 seasonal permit or license at the same location after two 2 months. 3 Code section 123.49 is amended to consolidate the rules 4 governing Sunday sales of alcoholic liquor, wine, or beer 5 within subsection 2, paragraph “b”, of that section. 6 Code section 123.51, concerning allowable signs and branded 7 advertising of a licensee authorized to sell liquor, wine, 8 or beer at retail, is amended to provide that signs or other 9 advertising matter may be erected inside the premises and 10 inside a window facing outward from the premises. 11 Code section 123.175, concerning class “A” or retail 12 wine permit applications, is stricken and rewritten by the 13 bill. The bill provides specifically for the contents of 14 the application to be submitted to the administrator of the 15 alcoholic beverages division and what the applicant must 16 establish before the administrator issues a permit. In 17 addition to requirements currently provided in Code section 18 123.175, the bill provides that an applicant that is a 19 corporation shall list all officers and persons with a certain 20 financial interest in the corporation in the application. The 21 bill also requires an applicant to state in the application 22 whether certain persons required to be listed in the 23 application have been convicted of any offense and, if required 24 by the administrator of the division, to include in the 25 application a sketch or drawing of the premises. Code section 26 123.187 is amended to reflect the rewritten Code section. 27 The bill also amends Code section 123.177 to allow a class 28 “A” wine permit holder to sell wine to a person holding both a 29 class “B” beer permit and a class “A” beer permit. 30 Code section 123.178B, concerning class “C” native wine 31 permits, is amended to specify that a permittee authorized to 32 purchase beer for sale at retail may sell it for consumption 33 on or off the premises covered by the class “C” native wine 34 permit. 35 -28- LSB 1266HZ (3) 87 ec/nh 28/ 32

H.F. 607 Code section 123.180, concerning a vintner’s certificate of 1 compliance, is amended to provide that the listing of class “A” 2 wine permittees the applicant intends to do business with that 3 is filed with the alcoholic beverages division shall be amended 4 as necessary to keep the listing current. 5 Code section 123.183 is amended to provide that the 6 gallonage tax on wine is collected when the wine is sold at 7 wholesale. 8 DIVISION II —— BEER PERMITS. This division eliminates 9 class “AA” and special class “AA” beer permits and makes other 10 changes relative to beer permits. 11 Code section 123.124, concerning beer permit classes, is 12 rewritten to reflect the elimination of class “AA” and special 13 class “AA” beer permits. The Code section is also amended to 14 refer to the Code sections that describe the authority for each 15 beer permit class. 16 Code section 123.127, concerning class “A” or class “AA” 17 and special class “A” or special class “AA” beer permits, is 18 stricken and rewritten by the bill. The bill eliminates the 19 class “AA” and special class “AA” beer permits and provides 20 specifically for the contents of the application to be 21 submitted to the administrator of the alcoholic beverages 22 division and what the applicant must establish before the 23 administrator issues a permit. The bill also increases from 24 $5,000 to $10,000 the amount of the bond an applicant must 25 submit to the administrator. 26 In addition to requirements currently provided in Code 27 section 123.127, the bill provides that an applicant that is a 28 corporation shall list all officers and persons with a certain 29 financial interest in the corporation in the application. The 30 bill also requires an applicant to state in the application 31 whether certain persons required to be listed in the 32 application have been convicted of any offense and, if required 33 by the administrator of the division, to include in the 34 application a sketch or drawing of the premises. Code sections 35 -29- LSB 1266HZ (3) 87 ec/nh 29/ 32

H.F. 607 123.128 and 123.129, concerning class “B” and class “C” beer 1 permits, are amended to reflect the rewritten Code section. 2 Code section 123.130, is amended to eliminate class “AA” and 3 special class “AA” beer permits, allow a class “A” beer permit 4 holder to sell beer to persons holding both a class “C” native 5 wine permit and a class “A” wine permit, and provides that 6 certain special class “A” beer permittees may sell at retail 7 at the manufacturing premises for consumption off the premises 8 beer that is transferred at the time of sale to another 9 container subject to the requirements of Code section 123.131 10 as provided in the bill. 11 Code section 123.131, concerning authority under a class “B” 12 beer permit, is amended to allow a class “B” beer permittee 13 whose primary purpose is manufacturing beer that also holds 14 a class “A” beer permit to purchase wine from a wholesaler 15 for sale at retail or consumption on the premises covered by 16 the class “B” beer permit. In addition, the Code section is 17 amended to provide that sales of beer for consumption off the 18 premises may be made in a container other than the original 19 container that is no larger than 72 ounces under certain 20 circumstances and shall not be deemed an open container for 21 purposes of Code sections 321.284 and 321.284A. 22 Code section 123.134, concerning beer permit fees, is 23 amended to increase the annual fee for a class “A” or special 24 class “A” beer permit from $250 to $750. 25 Code section 123.135, concerning a certificate of compliance 26 concerning beer, is amended to provide that the listing of 27 class “A” permittees and geographic area as filed with the 28 alcoholic beverages division shall be amended as necessary to 29 keep the listing current. 30 Code section 123.136, concerning the barrel tax on beer, 31 is amended to provide that the tax applies to all beer 32 sold at retail by a special class “A” beer permittee at the 33 manufacturing premises for consumption off the premises. 34 DIVISION III —— NATIVE DISTILLED SPIRITS. Code section 35 -30- LSB 1266HZ (3) 87 ec/nh 30/ 32

H.F. 607 123.3, providing definitions, is amended to change the terms 1 “micro-distilled spirits” and “micro-distillery” to “native 2 distilled spirits” and “native distillery”. In addition, the 3 bill eliminates the requirement that a native distillery has to 4 produce and manufacture less than 50 proof gallons of distilled 5 spirits annually. Corresponding changes in Code chapter 123 6 are made to reflect the changed definitions. 7 Code section 123.30, concerning liquor control licenses, 8 is amended to provide for the issuance of a class “C” native 9 distilled spirits license to a native distillery that produces 10 not more than 100,000 proof gallons of native distilled spirits 11 on an annual basis which authorizes the holder to sell native 12 distilled spirits manufactured on the premises for consumption 13 on the premises. 14 Code section 123.32, concerning applications for certain 15 licenses, is amended to change a reference to a class “A” 16 micro-distilled spirits permit to a class “A” native distilled 17 spirits license. 18 Code section 123.36 is amended to allow a native distillery 19 the ability to make certain sales of alcoholic liquor, wine, 20 and beer on Sundays in the same manner as a club, hotel, motel, 21 or other commercial establishment. 22 New Code section 123.43 provides for the information 23 necessary for a person to apply for and be issued a class 24 “A” native distilled spirits license. The bill requires the 25 applicant to submit information regarding the applicant and the 26 location of the native distillery. The application shall also 27 provide that the applicant is of good moral character, that the 28 applicant is a bona fide manufacturer of alcoholic liquors and 29 will comply with laws relating to alcoholic liquors, and that 30 the premises for which the license is sought complies with all 31 applicable zoning ordinances. The annual fee for the license 32 shall be $500. The bill also provides that a violation of the 33 requirements of Code chapter 123 shall subject the licensee to 34 the penalties provided by the Code chapter and shall constitute 35 -31- LSB 1266HZ (3) 87 ec/nh 31/ 32

H.F. 607 grounds for imposition of a civil penalty or suspension or 1 revocation of the license. 2 Code section 123.43A, providing for a class “A” 3 micro-distilled spirits permit, is amended to reflect the 4 change of the term to native distilled spirits. The bill 5 changes the permit to a license and provides an exception to 6 the current one and one-half liters per day limit on sales 7 of such spirits on the premises and instead allows sales of 8 nine liters per person per day for those native distilleries 9 that produce not more than 100,000 proof gallons of native 10 distilled spirits on an annual basis. The bill also allows 11 a native distillery to sell the spirits it manufactures to 12 customers outside the state. The bill also allows a native 13 distillery that produces not more than 100,000 proof gallons 14 of native distilled spirits on an annual basis to sell the 15 spirits it manufactures for consumption on the premises of the 16 manufacturing facility by applying for a new class “C” native 17 distilled spirits liquor control license. The bill limits a 18 native distillery to no more than one of the new class “C” 19 licenses. The bill also provides that a native distillery 20 may be issued a class “C” license regardless of whether the 21 manufacturer is also a manufacturer of native wine but shall 22 not be issued a class “C” license if the native distillery is 23 engaged in the business of manufacturing beer. 24 Code section 123.56, concerning native wines, is amended to 25 allow a manufacturer of native wine to be issued a class “C” 26 native wine permit regardless of whether the manufacturer also 27 manufactures native distilled spirits. 28 -32- LSB 1266HZ (3) 87 ec/nh 32/ 32