H.F. 641 DIVISION I 1 ALCOHOLIC BEVERAGE CONTROL 2 Section 1. Section 123.3, subsections 5, 6, 7, 20, 26, 34, 3 and 48, Code 2019, are amended to read as follows: 4 5. “Alcoholic liquor” means the varieties of liquor defined 5 in subsections 3 and 44 which contain more than five six and 6 twenty-five hundredths percent of alcohol by weight volume , 7 beverages made as described in subsection 7 which beverages 8 contain more than five percent of alcohol by weight or six and 9 twenty-five hundredths percent of alcohol by volume but which 10 are not wine as defined in subsection 48 or high alcoholic 11 content beer as defined in subsection 20 , and every other 12 liquid or solid, patented or not, containing spirits and every 13 beverage obtained by the process described in subsection 48 14 containing more than seventeen percent alcohol by weight or 15 twenty-one and twenty-five hundredths percent of alcohol by 16 volume, and susceptible of being consumed by a human being, 17 for beverage purposes. Alcohol manufactured in this state 18 for use as fuel pursuant to an experimental distilled spirits 19 plant permit or its equivalent issued by the federal bureau of 20 alcohol, tobacco and firearms is not an “alcoholic liquor” . 21 6. “Application” means a written request for the issuance 22 of a permit , or license , or certificate that is supported by a 23 verified statement of facts and submitted electronically, or in 24 a manner prescribed by the administrator. 25 7. “Beer” means any liquid capable of being used for 26 beverage purposes made by the fermentation of an infusion 27 in potable water of barley, malt, and hops, with or without 28 unmalted grains or decorticated and degerminated grains or made 29 by the fermentation of or by distillation of the fermented 30 products of fruit, fruit extracts, or other agricultural 31 products, containing more than one-half of one percent of 32 alcohol by volume but not more than five percent of alcohol by 33 weight or six and twenty-five hundredths percent of alcohol by 34 volume but not including mixed drinks or cocktails mixed on the 35 -1- LSB 1189HV (3) 88 ec/rn 1/ 40

H.F. 641 premises . 1 20. “High alcoholic content beer” means beer which 2 contains more than five percent of alcohol by weight or six 3 and twenty-five hundredths percent of alcohol by volume, but 4 not more than twelve percent of alcohol by weight or fifteen 5 percent of alcohol by volume, that is made by the fermentation 6 of an infusion in potable water of barley, malt, and hops, with 7 or without unmalted grains or decorticated and degerminated 8 grains. Not more than one and five-tenths percent of the 9 volume of a “high alcoholic content beer” may consist of alcohol 10 derived from added flavors and other nonbeverage ingredients 11 containing alcohol. The added flavors and other nonbeverage 12 ingredients may not include added caffeine or other added 13 stimulants including but not limited to guarana, ginseng, and 14 taurine. 15 26. “Licensed premises” or “premises” means all rooms, 16 enclosures, contiguous areas, or places susceptible of precise 17 description satisfactory to the administrator where alcoholic 18 beverages, wine, or beer is sold or consumed under authority 19 of a liquor control license, wine permit, or beer permit. 20 A single licensed premises may consist of multiple rooms, 21 enclosures, areas, or places if they are wholly within the 22 confines of a single building or contiguous grounds , or areas 23 or places susceptible of precise description satisfactory to 24 the administrator . 25 34. “Person” means any individual, association, or 26 partnership, any corporation, limited liability company, or 27 other similar legal entity, any club, hotel or motel, or any 28 municipal corporation owning or operating a bona fide airport, 29 marina, park, coliseum, auditorium, or recreational facility in 30 or at which the sale of alcoholic liquor, wine, or beer is only 31 an incidental part of the ownership or operation. 32 48. “Wine” means any beverage containing more than five 33 six and twenty-five hundredths percent of alcohol by weight 34 volume but not more than seventeen percent of alcohol by weight 35 -2- LSB 1189HV (3) 88 ec/rn 2/ 40

H.F. 641 or twenty-one and twenty-five hundredths percent of alcohol 1 by volume obtained by the fermentation of the natural sugar 2 contents of fruits or other agricultural products but excluding 3 any product containing alcohol derived from malt or by the 4 distillation process from grain, cereal, molasses, or cactus. 5 Sec. 2. Section 123.3, Code 2019, is amended by adding the 6 following new subsections: 7 NEW SUBSECTION . 14A. “Completed application” means an 8 application where all necessary fees have been paid in full, 9 any required bonds have been submitted, the applicant has 10 provided all information requested by the division, and 11 the application meets the requirements of section 123.92, 12 subsection 2, if applicable. 13 NEW SUBSECTION . 28A. “Mixed drink or cocktail” means an 14 alcoholic beverage, composed in whole or in part of alcoholic 15 liquor, that is combined with other alcoholic beverages or 16 nonalcoholic beverages or ingredients including but not limited 17 to ice, water, soft drinks, or flavorings. 18 NEW SUBSECTION . 28B. “Native brewery” means a business 19 which manufactures beer or high alcoholic content beer and is 20 operated by a person who holds a class “A” beer permit that 21 authorizes the holder to manufacture and sell beer pursuant to 22 this chapter. 23 NEW SUBSECTION . 36A. “Private place” means a location 24 which, at the time alcoholic beverages are kept, dispensed, or 25 consumed, meets all of the following criteria: 26 a. The general public does not have access to the location 27 and attendees are limited to bona fide social hosts and invited 28 guests. 29 b. The location is not of a commercial nature. 30 c. Goods or services are neither sold nor purchased at the 31 location. 32 d. The location is not a licensed premises. 33 e. Admission fees or other kinds of entrance fees, fare, 34 ticket, donation or charges are not made or are required of the 35 -3- LSB 1189HV (3) 88 ec/rn 3/ 40

H.F. 641 invited guests to enter the location. 1 Sec. 3. Section 123.10, subsection 13, Code 2019, is amended 2 to read as follows: 3 13. Providing for the issuance of a waiver for an individual 4 of legal age desiring to import alcoholic liquor, wine, or 5 beer in excess of the amount provided in section 123.22 , 6 123.146 123.122 , or 123.171 , as applicable. The waiver shall 7 be limited to those individuals who were domiciled outside the 8 state within one year of the request for a waiver and shall 9 provide that any alcoholic liquor, wine, or beer imported 10 pursuant to the waiver shall be for personal consumption only 11 in a private home or other private accommodation. 12 Sec. 4. Section 123.10, Code 2019, is amended by adding the 13 following new subsections: 14 NEW SUBSECTION . 14. Prescribing the uniform fee to be 15 assessed against a class “B” beer permittee, class “C” native 16 wine permittee, or liquor control licensee, except a class “E” 17 liquor control licensee, to cover the administrative costs 18 incurred by the division resulting from the failure of the 19 licensee or permittee to maintain dramshop liability insurance 20 coverage pursuant to section 123.92, subsection 2, paragraph 21 “a” . 22 NEW SUBSECTION . 15. Prescribing the uniform fee, not to 23 exceed one hundred dollars, to be assessed against a licensee 24 or permittee for a contested case hearing conducted by the 25 division or by an administrative law judge from the department 26 of inspections and appeals which results in administrative 27 action taken against the licensee or permittee by the division. 28 Sec. 5. Section 123.23, subsections 1 and 4, Code 2019, are 29 amended to read as follows: 30 1. Any manufacturer, distiller, or importer of alcoholic 31 liquors shipping, selling, or having alcoholic liquors brought 32 into this state for resale by the state shall, as a condition 33 precedent to the privilege of so trafficking in alcoholic 34 liquors in this state, annually make application for and hold 35 -4- LSB 1189HV (3) 88 ec/rn 4/ 40

H.F. 641 a distiller’s certificate of compliance which shall be issued 1 by the administrator for that purpose. No brand of alcoholic 2 liquor shall be sold by the division in this state unless 3 the manufacturer, distiller, importer, and all other persons 4 participating in the distribution of that brand in this state 5 have obtained a certificate. The certificate of compliance 6 shall expire at the end of one year from the date of issuance 7 and shall be renewed for a like period upon application to the 8 administrator unless otherwise suspended or revoked for cause. 9 Each completed application for a certificate of compliance 10 or renewal shall be submitted electronically, or in a manner 11 prescribed by the administrator, and shall be accompanied by a 12 fee of fifty dollars payable to the division. However, this 13 subsection need not apply to a manufacturer, distiller, or 14 importer who ships or sells in this state no more than eleven 15 gallons or its case equivalent during any fiscal year as a 16 result of “special orders” which might be placed, as defined 17 and allowed by divisional rules adopted under this chapter . 18 4. Any violation of the requirements of this section , except 19 subsection 3 , chapter or rules adopted pursuant to this chapter 20 shall subject the violator holder of a distiller’s certificate 21 of compliance to the general penalties provided in this chapter 22 and in addition to the general penalties, is shall constitute 23 grounds for imposition of a civil penalty, suspension of the 24 certificate, or revocation of the certificate of compliance , 25 after notice and opportunity for a hearing before the 26 administrator pursuant to section 123.39 and chapter 17A . 27 Willful However, willful failure to comply with requirements 28 which may be imposed under subsection 3 is grounds for 29 suspension or revocation of the certificate of compliance only. 30 Sec. 6. Section 123.24, subsection 1, Code 2019, is amended 31 to read as follows: 32 1. The division shall sell alcoholic liquor at wholesale 33 only. The division shall sell alcoholic liquor to class “E” 34 liquor control licensees only. The division shall offer the 35 -5- LSB 1189HV (3) 88 ec/rn 5/ 40

H.F. 641 same price on alcoholic liquor to all class “E” liquor control 1 licensees without regard for the quantity of purchase or the 2 distance for delivery. However, the division may assess a 3 split-case charge when liquor is sold in quantities which 4 require a case to be split. 5 Sec. 7. Section 123.24, Code 2019, is amended by adding the 6 following new subsection: 7 NEW SUBSECTION . 1A. The price of alcoholic liquor sold by 8 the division shall consist of the following: 9 a. The manufacturer’s price. 10 b. A markup of up to fifty percent of the wholesale price 11 paid by the division for the alcoholic liquor. The division 12 may increase the markup on selected kinds of alcoholic liquor 13 sold by the division if the average return to the division on 14 all sales of alcoholic liquor does not exceed the wholesale 15 price paid by the division and the fifty percent markup. 16 c. A split case charge in an amount determined by the 17 division when alcoholic liquor is sold in quantities which 18 require a case to be split. 19 d. A bottle surcharge in an amount sufficient, when 20 added to the amount not refunded to class “E” liquor control 21 licensees pursuant to section 455C.2, to pay the costs incurred 22 by the division for collecting and properly disposing of the 23 liquor containers. The amount collected pursuant to this 24 paragraph, in addition to any amounts not refunded to class “E” 25 liquor control licensees pursuant to section 455C.2, shall be 26 deposited in the beer and liquor control fund established under 27 section 123.17. 28 Sec. 8. Section 123.24, subsections 4 and 5, Code 2019, are 29 amended by striking the subsections. 30 Sec. 9. Section 123.27, subsection 3, Code 2019, is amended 31 by striking the subsection. 32 Sec. 10. Section 123.28, subsection 2, Code 2019, is amended 33 to read as follows: 34 2. The division shall deliver alcoholic liquor purchased by 35 -6- LSB 1189HV (3) 88 ec/rn 6/ 40

H.F. 641 class “E” liquor control licensees. Class “E” liquor control 1 licensees may deliver alcoholic liquor purchased by class “A”, 2 class “B”, class “C”, class “C” native distilled spirits, 3 or class “D” liquor control licensees, and class “A”, class 4 “B”, class “C”, class “C” native distilled spirits, or class 5 “D” liquor control licensees may transport alcoholic liquor 6 purchased from class “E” liquor control licensees. 7 Sec. 11. Section 123.30, subsection 2, Code 2019, is amended 8 to read as follows: 9 2. A liquor control license shall not be issued for premises 10 which do not constitute a safe and proper place or building 11 and which do not conform to all applicable laws, ordinances, 12 resolutions, and health and fire regulations. A licensee 13 shall not have or maintain any interior access to residential 14 or sleeping quarters unless permission is granted by the 15 administrator in the form of a living quarters permit. 16 Sec. 12. Section 123.30, subsection 4, Code 2019, is amended 17 to read as follows: 18 4. Notwithstanding any provision of this chapter to the 19 contrary, a person holding a liquor control license to sell 20 alcoholic beverages for consumption on the licensed premises 21 may permit a customer to remove one unsealed bottle of wine 22 for consumption off the premises if the customer has purchased 23 and consumed a portion of the bottle of wine on the licensed 24 premises. The licensee or the licensee’s agent shall securely 25 reseal such bottle in a bag designed so that it is visibly 26 apparent that the resealed bottle of wine has not been tampered 27 with and provide a dated receipt for the resealed bottle of 28 wine to the customer. A wine bottle resealed pursuant to the 29 requirements of this subsection is subject to the requirements 30 of sections 321.284 and 321.284A . A person holding a liquor 31 control license to sell alcoholic beverages for consumption on 32 the licensed premises may permit a customer to carry an open 33 container of wine from their the person’s licensed premises 34 into another immediately adjacent licensed premises , temporary 35 -7- LSB 1189HV (3) 88 ec/rn 7/ 40

H.F. 641 that is covered by a license or permit that authorizes the 1 consumption of wine, a temporarily closed public right-of-way, 2 or a private property place . 3 Sec. 13. Section 123.30, subsection 5, Code 2019, is amended 4 by striking the subsection. 5 Sec. 14. Section 123.31, subsection 3, Code 2019, is amended 6 to read as follows: 7 3. The names and addresses of all persons or , in the case of 8 a corporation, limited liability company, or any other similar 9 legal entity, the officers, directors, and persons owning or 10 controlling ten percent or more of the capital stock thereof, 11 having a financial interest, by way of loan, ownership, or 12 otherwise, in the business. 13 Sec. 15. Section 123.32, subsections 1, 2, 3, and 6, Code 14 2019, are amended to read as follows: 15 1. Filing of application. 16 a. An A completed application for a class “A”, class “B”, 17 class “C”, special class “C”, class “C” native distilled 18 spirits, or class “E” liquor control license as provided in 19 section 123.31 , for a class “A” native distilled spirits 20 license, for a retail beer permit as provided in sections 21 123.128 and 123.129 , or for a class “B”, class “B” native, or 22 class “C” native retail wine permit as provided in section 23 123.175 , accompanied by the necessary fee and bond, if 24 required, shall be filed with the appropriate city council if 25 the premises for which the license or permit is sought are 26 located within the corporate limits of a city, or with the 27 board of supervisors if the premises for which the license or 28 permit is sought are located outside the corporate limits of 29 a city. 30 b. An A completed application for a class “D” liquor control 31 license and for a class “A” beer or class “A” wine permit, 32 accompanied by the necessary fee and bond, if required, any 33 of the following certificates, licenses, or permits shall 34 be submitted to the division electronically, or in a manner 35 -8- LSB 1189HV (3) 88 ec/rn 8/ 40

H.F. 641 prescribed by the administrator, which shall proceed in the 1 same manner as in the case of an application approved by local 2 authorities . : 3 (1) A certificate of compliance as provided in sections 4 123.23, 123.135, and 123.180. 5 (2) A class “D” liquor control license as provided in 6 section 123.31. 7 (3) A manufacturer’s license as provided in section 123.41. 8 (4) A broker’s permit as provided in section 123.42. 9 (5) A class “A” native distilled spirits license as provided 10 in section 123.43. 11 (6) A class “A” or special class “A” beer permit as provided 12 in section 123.127. 13 (7) A charity beer, spirits, and wine auction permit as 14 provided in section 123.173A. 15 (8) A class “A” wine permit as provided in section 123.175. 16 (9) A wine direct shipper’s permit as provided in section 17 123.187. 18 (10) A wine carrier permit as provided in section 123.188. 19 2. Action by local authorities. The local authority shall 20 either approve or disapprove the issuance of a liquor control 21 license, a retail wine permit, or a retail beer permit, shall 22 endorse its approval or disapproval on the application , and 23 shall forward the application with the necessary fee and bond, 24 if required, to the division. There is no limit upon the 25 number of liquor control licenses, retail wine permits, or 26 retail beer permits which may be approved for issuance by local 27 authorities. 28 3. Licensed premises for local events. A local authority 29 may define, by motion of the local authority, licensed premises 30 which shall be used by holders of liquor control licenses, beer 31 permits, and wine permits at festivals, fairs, or celebrations 32 which are sponsored or authorized by the local authority. The 33 licensed premises defined by motion of the local authority 34 shall be used by the holders of five-day or fourteen-day class 35 -9- LSB 1189HV (3) 88 ec/rn 9/ 40

H.F. 641 “A”, class “B”, class “C”, special class “C”, or class “D” 1 liquor control licenses, or five-day or fourteen-day class “B” 2 or class “C” native wine permits, or class “B” beer permits 3 only. 4 6. Action by administrator. 5 a. Upon receipt of an application having been disapproved 6 by the local authority, the administrator shall notify the 7 applicant that the applicant may appeal the disapproval of 8 the application to the administrator. The applicant shall 9 be notified by certified mail or personal service , and the 10 application, the fee, and any bond shall be returned to the 11 applicant. 12 b. Upon receipt of an application having been approved by 13 the local authority, the division shall make an investigation 14 as the administrator deems necessary to determine that 15 the applicant complies with all requirements for holding a 16 license or permit, and may require the applicant to appear 17 to be examined under oath to demonstrate that the applicant 18 complies with all of the requirements to hold a license 19 or permit. If the administrator requires the applicant to 20 appear and to testify under oath, a record shall be made of 21 all testimony or evidence and the record shall become a part 22 of the application. The administrator may appoint a member 23 of the division or may request an administrative law judge 24 of the department of inspections and appeals to receive the 25 testimony under oath and evidence, and to issue a proposed 26 decision to approve or disapprove the application for a license 27 or permit. The administrator may affirm, reverse, or modify 28 the proposed decision to approve or disapprove the application 29 for the license or permit. If the application is approved 30 by the administrator, the license or permit shall be issued. 31 If the application is disapproved by the administrator, the 32 applicant shall be so notified by certified mail or personal 33 service and the appropriate local authority shall be notified 34 electronically, or in a manner prescribed by the administrator. 35 -10- LSB 1189HV (3) 88 ec/rn 10/ 40

H.F. 641 Sec. 16. Section 123.34, Code 2019, is amended to read as 1 follows: 2 123.34 Expiration of licenses , and permits , and certificates 3 of compliance —— seasonal, five-day, and fourteen-day , and 4 five-day licenses and permits —— fees. 5 1. Liquor control All licenses, wine permits, and beer 6 permits, and certificates of compliance, unless sooner 7 suspended or revoked, expire one year from date of issuance. 8 The administrator shall notify a license , or permit , or 9 certificate holder electronically, or in a manner prescribed by 10 the administrator, sixty days prior to the expiration of each 11 license , or permit , or certificate . 12 2. a. However, the The administrator may issue six-month or 13 eight-month seasonal class “A”, class “B”, class “C”, special 14 class “C”, and class “D” liquor control licenses, class “B” 15 wine permits, class “B” or class “C” native wine permits, 16 or class “B” beer permits for a proportionate part of the 17 license or permit fee or may issue fourteen-day liquor control 18 licenses, native wine permits, or beer permits as provided in 19 subsection 2 . 20 b. No refund shall be made for seasonal licenses or 21 permits or for fourteen-day liquor control licenses, native 22 wine permits, or beer permits. No seasonal license or permit 23 shall be renewed. However, after a period of two months the 24 applicant may apply for a new seasonal license or permit for 25 the same location. The fee for a six-month or eight-month 26 seasonal license or permit issued pursuant to this subsection 27 shall be for a proportionate part of the license or permit fee 28 for that class of license or permit. However, the fee for a 29 seasonal class “B” native wine permit shall be the permit fee 30 provided in section 123.179, subsection 3, and the fee for a 31 seasonal class “C” native wine permit shall be the permit fee 32 provided in section 123.179, subsection 4. 33 2. 3. a. The administrator may issue fourteen-day class 34 “A”, class “B”, class “C”, special class “C”, and class “D” 35 -11- LSB 1189HV (3) 88 ec/rn 11/ 40

H.F. 641 liquor control licenses , and fourteen-day class “B” beer 1 permits, class “B” native wine permits, and class “C” native 2 wine permits. 3 b. A fourteen-day license or permit, if granted, is valid 4 for fourteen consecutive days, but the holder shall not sell on 5 the two Sundays in the fourteen-day period unless the holder 6 qualifies for and obtains the privilege to sell on Sundays 7 contained in section 123.36, subsection 6 , and section 123.134, 8 subsection 4 . 9 3. c. (1) The fee for a fourteen-day liquor control 10 license or beer permit is one quarter of the annual fee for 11 that class of liquor control license or beer permit. The 12 fee for the privilege to sell on the two Sundays in the 13 fourteen-day period is twenty percent of the price of the 14 fourteen-day liquor control license or beer permit. 15 (2) The fee for a fourteen-day class “B” native wine permit 16 shall be the permit fee provided in section 123.179, subsection 17 3, and the fee for a fourteen-day class “C” native wine permit 18 is the permit fee provided in section 123.179, subsection 4 . 19 4. a. The administrator may issue five-day class “A”, class 20 “B”, class “C”, special class “C”, and class “D” liquor control 21 licenses , and five-day class “B” beer permits, class “B” native 22 wine permits, and class “C” native wine permits. 23 b. A five-day license or permit is valid for five 24 consecutive days, but the holder shall not sell alcoholic 25 beverages on Sunday in the five-day period unless the holder 26 qualifies for and obtains the privilege to sell on Sunday 27 pursuant to sections section 123.36 , subsection 6, and section 28 123.134 , subsection 4 . 29 5. c. (1) The fee for the five-day liquor control license 30 or beer permit is one-eighth of the annual fee for that class 31 of license or permit. The fee for the privilege to sell on a 32 Sunday in the five-day period is ten percent of the price of 33 the five-day liquor control license or beer permit. 34 (2) The fee for a five-day class “B” native wine permit 35 -12- LSB 1189HV (3) 88 ec/rn 12/ 40

H.F. 641 shall be the permit fee provided in section 123.179, subsection 1 3, and the fee for a five-day class “C” native wine permit is 2 the permit fee provided in section 123.179, subsection 4 . 3 5. A refund of fees paid shall not be made for seasonal 4 licenses or permits, or for fourteen-day or five-day liquor 5 control licenses, native wine permits, or beer permits. In 6 addition, a seasonal, fourteen-day, or five-day license or 7 permit shall not be renewed. 8 Sec. 17. Section 123.36, subsection 5, paragraph c, Code 9 2019, is amended to read as follows: 10 c. For air common carriers, each company shall pay a 11 base annual fee of five hundred dollars and, in addition, 12 shall quarterly remit to the division an amount equal to 13 seven dollars for each gallon of alcoholic liquor sold, given 14 away, or dispensed in or over this state during the preceding 15 calendar quarter . The class “D” license fee and tax for air 16 common carriers is in lieu of any other fee or tax collected 17 from the carriers in this state for the possession and sale of 18 alcoholic liquor, wine, and beer. 19 Sec. 18. Section 123.36, subsection 6, Code 2019, is amended 20 to read as follows: 21 6. Any club, hotel, motel, native distillery, 22 passenger-carrying boat or ship, railway corporation, air 23 common carrier, or commercial establishment holding a liquor 24 control license, subject to section 123.49, subsection 2 , 25 paragraph “b” , may apply for and receive permission to sell and 26 dispense alcoholic beverages as authorized by section 123.30 to 27 patrons between the hours of 8:00 a.m. on Sunday and 2:00 a.m. 28 on the following Monday. A class “D” liquor control licensee 29 may apply for and receive permission to sell and dispense 30 alcoholic beverages to patrons for consumption on the premises 31 only between the hours of 8:00 a.m. on Sunday and 2:00 a.m. 32 on the following Monday. For the privilege of selling beer, 33 wine, and alcoholic liquor on the premises on Sunday the liquor 34 control license fee of the applicant shall be increased by 35 -13- LSB 1189HV (3) 88 ec/rn 13/ 40

H.F. 641 twenty percent of the regular fee prescribed for the license 1 pursuant to this section , and the privilege shall be noted on 2 the liquor control license. 3 Sec. 19. Section 123.36, subsection 10, Code 2019, is 4 amended to read as follows: 5 10. There is imposed a surcharge on the fee for each class 6 “A”, class “B”, class “C”, class “C” native distilled spirits, 7 or special class “C” liquor control license equal to thirty 8 percent of the scheduled license fee. The surcharges collected 9 under this subsection shall be deposited in the beer and liquor 10 control fund, and notwithstanding subsection 8 , no portion 11 of the surcharges collected under this subsection shall be 12 remitted to the local authority. 13 Sec. 20. NEW SECTION . 123.38A Confidential investigative 14 records. 15 In order to assure a free flow of information for 16 accomplishing the purposes of section 123.4 and section 17 123.9, subsection 6, all complaint information, investigation 18 files, audit files, and inspection files, other investigation 19 reports, and other investigative information in the possession 20 of the division or employees acting under the authority of 21 the administrator are privileged and confidential, and are 22 not subject to discovery, subpoena, or other means of legal 23 compulsion for their release before administrative or criminal 24 charges are filed. However, investigative information in 25 the possession of division employees may be disclosed to the 26 licensing authorities of a city or county within this state, 27 in another state, the District of Columbia, or territory 28 or county in which the licensee or permittee is licensed 29 or permitted or has applied for a license or permit. In 30 addition, the investigative information can be shared with 31 any law enforcement agency or other state agency that also 32 has regulatory or enforcement jurisdiction authorized by law. 33 Records received by the division from other agencies which 34 would be confidential if created by the division are considered 35 -14- LSB 1189HV (3) 88 ec/rn 14/ 40

H.F. 641 confidential. 1 Sec. 21. Section 123.39, subsection 1, Code 2019, is amended 2 to read as follows: 3 1. a. (1) The administrator or the local authority 4 may suspend a license or permit issued pursuant to this 5 chapter class “A”, class “B”, class “C”, special class “C”, 6 class “C” native distilled spirits, or class “E” liquor 7 control license or retail wine or beer permit for a period 8 not to exceed one year, revoke the license or permit, or 9 impose a civil penalty not to exceed one thousand dollars 10 per violation. Before suspension, revocation, or imposition 11 of a civil penalty, the license or permit holder shall be 12 given written notice and an opportunity for a hearing. The 13 administrator may appoint a member of the division or may 14 request an administrative law judge from the department of 15 inspections and appeals to conduct the hearing and issue a 16 proposed decision. Upon the motion of a party to the hearing 17 or upon the administrator’s own motion, the administrator may 18 review the proposed decision in accordance with chapter 17A . 19 Upon review of the proposed decision, the administrator may 20 affirm, reverse, or modify the proposed decision. A licensee 21 or permittee aggrieved by a decision of the administrator 22 may seek judicial review of the administrator’s decision in 23 accordance with chapter 17A . 24 (2) The administrator may suspend a certificate 25 of compliance, a class “D” liquor control license, a 26 manufacturer’s license, a broker’s permit, a class “A” native 27 distilled spirits license, a class “A” or special class “A” 28 beer permit, a charity beer, spirits, and wine auction permit, 29 a class “A” wine permit, a wine direct shipper’s permit, or a 30 wine carrier permit for a period not to exceed one year, revoke 31 the license, permit, or certificate, or impose a civil penalty 32 not to exceed one thousand dollars per violation. 33 b. A license , or permit , or certificate of compliance issued 34 under this chapter may be suspended or revoked, or a civil 35 -15- LSB 1189HV (3) 88 ec/rn 15/ 40

H.F. 641 penalty may be imposed on the license or permit holder by the 1 local authority or the administrator for any of the following 2 causes: 3 (1) Misrepresentation of any material fact in the 4 application for the license , or permit , or certificate . 5 (2) Violation of any of the provisions of this chapter . 6 (3) Any change in the ownership or interest in the business 7 operated under a liquor control license, or any wine or beer 8 permit, which change was not previously reported in a manner 9 prescribed by the administrator within thirty days of the 10 change and subsequently approved by the local authority , when 11 applicable, and the division. 12 (4) An event which would have resulted in disqualification 13 from receiving the license , or permit , or certificate when 14 originally issued. 15 (5) Any sale, hypothecation, or transfer of the license , or 16 permit , or certificate . 17 (6) The failure or refusal on the part of any licensee or 18 permittee license, permit, or certificate holder to render any 19 report or remit any taxes to the division under this chapter 20 when due. 21 c. A criminal conviction is not a prerequisite to 22 suspension, revocation, or imposition of a civil penalty 23 pursuant to this section . 24 d. A local authority which acts pursuant to this section , 25 section 123.32 , or section 123.50 shall notify the division 26 in writing of the action taken, and shall notify the licensee 27 license or permit holder of the right to appeal a suspension, 28 revocation, or imposition of a civil penalty to the division. 29 e. Before suspension, revocation, or imposition of a 30 civil penalty by the administrator, the license, permit, 31 or certificate holder shall be given written notice and an 32 opportunity for a hearing. The administrator may appoint 33 a member of the division or may request an administrative 34 law judge from the department of inspections and appeals to 35 -16- LSB 1189HV (3) 88 ec/rn 16/ 40

H.F. 641 conduct the hearing and issue a proposed decision. Upon the 1 motion of a party to the hearing or upon the administrator’s 2 own motion, the administrator may review the proposed decision 3 in accordance with chapter 17A. Upon review of the proposed 4 decision, the administrator may affirm, reverse, or modify the 5 proposed decision. A license, permit, or certificate holder 6 aggrieved by a decision of the administrator may seek judicial 7 review of the administrator’s decision in accordance with 8 chapter 17A. 9 f. Civil penalties imposed and collected by the local 10 authority under this section shall be retained by the local 11 authority. Civil penalties imposed and collected by the 12 division under this section shall be retained by the division 13 credited to the general fund of the state pursuant to section 14 123.17, subsection 7 . 15 Sec. 22. Section 123.39, subsection 4, Code 2019, is amended 16 to read as follows: 17 4. If the cause for suspension is a first offense 18 violation of section 123.49, subsection 2 , paragraph “h” , the 19 administrator or local authority shall impose a civil penalty 20 in the amount of five hundred dollars in lieu of suspension of 21 the license or permit. Local authorities shall retain civil 22 penalties collected under this paragraph if the proceeding to 23 impose the penalty is conducted by the local authority. The 24 division shall retain civil penalties collected under this 25 paragraph if the proceeding to impose the penalty is conducted 26 by the administrator of the division. 27 Sec. 23. Section 123.41, subsection 1, Code 2019, is amended 28 to read as follows: 29 1. Each completed application to obtain or renew a 30 manufacturer’s license shall be submitted to the division 31 electronically, or in a manner prescribed by the administrator, 32 and shall be accompanied by a fee of three hundred fifty 33 dollars payable to the division. The administrator may in 34 accordance with this chapter grant and issue to a manufacturer 35 -17- LSB 1189HV (3) 88 ec/rn 17/ 40

H.F. 641 a manufacturer’s license, valid for a one-year period after 1 date of issuance, which shall allow the manufacture, storage, 2 and wholesale disposition and sale of alcoholic liquors to the 3 division and to customers outside of the state. 4 Sec. 24. Section 123.41, Code 2019, is amended by adding the 5 following new subsection: 6 NEW SUBSECTION . 3A. A person who holds a manufacturer’s 7 license shall file with the division, on or before the 8 fifteenth day of each calendar month, all documents filed 9 by the manufacturer with the alcohol and tobacco tax and 10 trade bureau of the United States department of the treasury, 11 including all production, storage, and processing reports. 12 Sec. 25. Section 123.41, subsection 4, Code 2019, is amended 13 to read as follows: 14 4. A Any violation of the requirements of this section 15 chapter or rules adopted pursuant to this chapter shall subject 16 the licensee license holder to the general penalties provided 17 in this chapter and shall constitute grounds for imposition of 18 a civil penalty , or suspension of the license, or revocation of 19 the license after notice and opportunity for a hearing pursuant 20 to section 123.39 and chapter 17A . 21 Sec. 26. Section 123.42, subsection 1, Code 2019, is amended 22 to read as follows: 23 1. Prior to representing or promoting alcoholic liquor 24 products in the state, the broker shall submit an a completed 25 application to the division electronically, or in a manner 26 prescribed by the administrator, for a broker’s permit. The 27 administrator may in accordance with this chapter issue a 28 broker’s permit which shall be valid for one year from the date 29 of issuance unless it is sooner suspended or revoked for a 30 violation of this chapter . 31 Sec. 27. Section 123.42, Code 2019, is amended by adding the 32 following new subsection: 33 NEW SUBSECTION . 7. Any violation of the requirements of 34 this chapter or the rules adopted pursuant to this chapter 35 -18- LSB 1189HV (3) 88 ec/rn 18/ 40

H.F. 641 shall subject the permit holder to the general penalties 1 provided in this chapter and shall constitute grounds for 2 imposition of a civil penalty, suspension of the permit, or 3 revocation of the permit after notice and opportunity for a 4 hearing pursuant to section 123.39 and chapter 17A. 5 Sec. 28. Section 123.43, subsection 1, paragraph b, Code 6 2019, is amended to read as follows: 7 b. The names and addresses of all persons or, in the case of 8 a corporation, limited liability company, or any other similar 9 legal entity, the officers, directors, and persons owning or 10 controlling ten percent or more of the capital stock thereof, 11 having a financial interest, by way of loan, ownership, or 12 otherwise, in the business. 13 Sec. 29. Section 123.43A, subsection 5, Code 2019, is 14 amended to read as follows: 15 5. The division shall issue no more than three class “A” 16 native distilled spirits licenses to a person. In addition, 17 a A native distillery issued a 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 native distillery with the alcohol and tobacco tax and 21 trade bureau of the United States department of the treasury, 22 including all production, storage, and processing reports. 23 Sec. 30. Section 123.49, subsection 2, unnumbered paragraph 24 1, Code 2019, is amended to read as follows: 25 A person or club holding a liquor control license or retail 26 wine or beer permit under this chapter , and the person’s or 27 club’s agents or employees, shall not do any of the following: 28 Sec. 31. Section 123.49, subsection 2, paragraph g, Code 29 2019, is amended to read as follows: 30 g. Allow any person other than the licensee, permittee, 31 or employees of the licensee or permittee, to use or keep 32 on the licensed premises any alcoholic liquor in any bottle 33 or other container which is designed for the transporting of 34 such beverages, except as permitted in section 123.95 . This 35 -19- LSB 1189HV (3) 88 ec/rn 19/ 40

H.F. 641 paragraph does not apply to the lodging quarters of a class “B” 1 liquor control licensee or wine or beer permittee, or to common 2 carriers holding holders of a class “D” liquor control license. 3 Sec. 32. Section 123.50, subsections 2 and 4, Code 2019, are 4 amended to read as follows: 5 2. The conviction of any liquor control licensee or wine 6 or beer permittee for a violation of any of the provisions 7 of section 123.49 , subject to subsection 3 of this section , 8 is grounds for the suspension or revocation of the license 9 or permit by the division or the local authority. However, 10 if any liquor control licensee is convicted of any violation 11 of section 123.49, subsection 2 , paragraph “a” , “d” , or “e” , 12 or any wine or beer permittee is convicted of a violation of 13 section 123.49, subsection 2 , paragraph “a” or “e” , the liquor 14 control license or wine or beer permit shall be revoked and 15 shall immediately be surrendered by the holder, and the bond, 16 if any, of the license or permit holder shall be forfeited to 17 the division. However, the division shall retain only that 18 portion of the bond equal to the amount the division determines 19 the license or permit holder owes the division. 20 4. In addition to any other penalties imposed under this 21 chapter , the division shall assess a civil penalty up to the 22 amount of five thousand dollars upon a class “E” liquor control 23 licensee when the class “E” liquor license is revoked for a 24 violation of section 123.59 . Failure to pay the civil penalty 25 as required under this subsection shall result in forfeiture of 26 the bond to the division. However, the division shall retain 27 only that portion of the bond equal to the amount the division 28 determines the license or permit holder owes the division. 29 Sec. 33. Section 123.56, subsection 1, Code 2019, is amended 30 to read as follows: 31 1. Subject to rules of the division, manufacturers of 32 native wines from grapes, cherries, other fruits or other fruit 33 juices, vegetables, vegetable juices, dandelions, clover, 34 honey, or any combination of these ingredients, holding a class 35 -20- LSB 1189HV (3) 88 ec/rn 20/ 40

H.F. 641 “A” wine permit as required by this chapter , may sell, keep, or 1 offer for sale and deliver the wine. Notwithstanding section 2 123.24, subsection 4 1A, paragraph “b” , or any other provision 3 of this chapter , manufacturers of native wine may obtain and 4 possess grape brandy from the division for the sole purpose of 5 manufacturing wine. 6 Sec. 34. Section 123.56, subsection 4, Code 2019, is amended 7 to read as follows: 8 4. Notwithstanding section 123.179, subsection 1 , a A 9 class “A” wine permit issued for a native wine manufacturer 10 shall be issued and renewed annually upon payment of a fee of 11 twenty-five dollars which shall be in lieu of any other license 12 fee required by this chapter . The class “A” permit shall only 13 allow the native wine manufacturer to sell, keep, or offer for 14 sale and deliver the manufacturer’s native wines as provided 15 under this section . 16 Sec. 35. Section 123.56, Code 2019, is amended by adding the 17 following new subsection: 18 NEW SUBSECTION . 7A. A manufacturer of native wines shall 19 file with the division, on or before the fifteenth day of 20 each calendar month, all documents filed with the alcohol and 21 tobacco tax and trade bureau of the United States department of 22 the treasury, including all wine premises operations and excise 23 tax return reports. 24 Sec. 36. Section 123.95, subsections 1 and 2, Code 2019, are 25 amended to read as follows: 26 1. A person shall not allow the dispensing or consumption of 27 alcoholic liquor, except wines and beer, in any establishment 28 unless the establishment is licensed under this chapter or 29 except as otherwise provided in this section . 30 2. a. The holder of an annual class “B” liquor control 31 license or an annual class “C” liquor control license may 32 act as the agent of a private social host for the purpose 33 of providing and serving alcoholic liquor, wine, and beer 34 beverages as part of a food catering service for a private 35 -21- LSB 1189HV (3) 88 ec/rn 21/ 40

H.F. 641 social gathering in a private place , provided the licensee 1 has applied for and been granted a catering privilege by the 2 division . The holder of an annual special class “C” liquor 3 control license shall not act as the agent of a private social 4 host for the purpose of providing and serving wine and beer as 5 part of a food catering service for a private social gathering 6 in a private place. An applicant for a class “B” or class “C” 7 liquor control license shall state on the application for the 8 license that the licensee intends to engage in catering food 9 and alcoholic beverages for private social gatherings and the 10 catering privilege shall be noted on the license. 11 b. The private social host or the licensee shall not solicit 12 donations in payment of any kind, including donations, for the 13 food or alcoholic beverages from the guests, and the alcoholic 14 beverages and food shall be served without cost to the guests. 15 c. Section 123.92 does not apply to a liquor control 16 licensee who acts in accordance with this section when the 17 liquor control licensee is providing and serving food and 18 alcoholic beverages as an agent of a private social host at a 19 private social gathering in a private place which is not on the 20 licensed premises. 21 2. An applicant for a class “B” liquor control license or 22 class “C” liquor control license shall state on the application 23 for the license that the licensee intends to engage in catering 24 food and alcoholic beverages for private social gatherings and 25 the catering privilege shall be noted on the license or permit. 26 d. A licensee who engages in catering food and alcoholic 27 beverages for private social gatherings shall maintain a record 28 on the licensed premises which includes the name and address 29 of the host of the private social gathering, and the date for 30 which catering was provided. The record maintained pursuant to 31 this section shall be open to inspection pursuant to section 32 123.30, subsection 1 , during normal business hours of the 33 licensee. 34 Sec. 37. Section 123.122, Code 2019, is amended by striking 35 -22- LSB 1189HV (3) 88 ec/rn 22/ 40

H.F. 641 the section and inserting in lieu thereof the following: 1 123.122 Beer certificate, permit, or license required —— 2 exception for personal use. 3 1. A person shall not cause the manufacture, importation, 4 or sale of beer in this state unless a certificate or permit 5 as provided in this subchapter, or a liquor control license as 6 provided in subchapter 1 of this chapter, is first obtained 7 which authorizes that manufacture, importation, or sale. 8 2. Any person of legal age may manufacture beer for 9 personal use without a class “A” beer permit, subject to the 10 requirements of this subsection. Such beer may be consumed 11 on the premises or removed from the premises where it was 12 manufactured only if the beer is not sold, exchanged, bartered, 13 dispensed, or given in consideration of purchase for any 14 property or services or in evasion of the requirements of this 15 chapter. 16 3. Except as otherwise provided in this chapter, a person 17 shall not import beer. However, an individual of legal age 18 may import beer into the state without a certificate, permit, 19 or license an amount of beer not to exceed four and one-half 20 gallons per calendar month that the individual personally 21 obtained outside the state or, in the case of beer personally 22 obtained outside the United States, a quantity which does 23 not exceed the amount allowed by federal law governing the 24 importation of alcoholic beverages into the United States 25 for personal consumption. Beer imported pursuant to this 26 section shall be for personal consumption in a private home or 27 other private accommodation and only if the beer is not sold, 28 exchanged, bartered, dispensed, or given in consideration of 29 purchase for any property or services or in evasion of the 30 requirements of this chapter. 31 Sec. 38. Section 123.127, subsection 1, unnumbered 32 paragraph 1, Code 2019, is amended to read as follows: 33 A person applying for a class “A” or special class “A” beer 34 permit shall submit an a completed application electronically, 35 -23- LSB 1189HV (3) 88 ec/rn 23/ 40

H.F. 641 or in a manner prescribed by the administrator, which shall set 1 forth under oath the following: 2 Sec. 39. Section 123.127, subsection 1, paragraph b, Code 3 2019, is amended to read as follows: 4 b. The names and addresses of all persons or, in the case of 5 a corporation, limited liability company, or any other similar 6 legal entity, the officers, directors, and persons owning or 7 controlling ten percent or more of the capital stock thereof, 8 having a financial interest, by way of loan, ownership, or 9 otherwise, in the business. 10 Sec. 40. Section 123.130, subsection 1, Code 2019, is 11 amended to read as follows: 12 1. Any person holding a class “A” beer permit issued by the 13 division shall be authorized to manufacture and sell, or sell 14 at wholesale, beer for consumption off the premises, such sales 15 within the state to be made only to persons holding subsisting 16 class “A”, “B”, or “C” beer permits, both a class “C” native 17 wine permit and a class “A” wine permit pursuant to section 18 123.178B, subsection 4 , or liquor control licenses issued in 19 accordance with the provisions of this chapter . A person 20 holding a class “A” beer permit may sell beer to distributors 21 outside of the state that are authorized by the laws of that 22 jurisdiction to sell beer at wholesale. A class “A” or special 23 class “A” beer permit does not grant authority to manufacture 24 wine as defined in section 123.3, subsection 48 . 25 Sec. 41. Section 123.130, Code 2019, is amended by adding 26 the following new subsection: 27 NEW SUBSECTION . 1A. Pursuant to section 123.45, subsection 28 2, a native brewery may be granted not more than one class “B” 29 beer permit as defined in section 123.124 for the purpose of 30 selling beer at retail for consumption on or off the premises 31 of the manufacturing facility. 32 Sec. 42. Section 123.130, Code 2019, is amended by adding 33 the following new subsection: 34 NEW SUBSECTION . 4. A manufacturer of beer issued a class 35 -24- LSB 1189HV (3) 88 ec/rn 24/ 40

H.F. 641 “A” or special class “A” beer permit shall file with the 1 division, on or before the fifteenth day of each calendar 2 month, all documents filed with the alcohol and tobacco tax and 3 trade bureau of the United States department of the treasury, 4 including all brewer’s operation and excise tax return reports. 5 Sec. 43. Section 123.131, subsection 2, unnumbered 6 paragraph 1, Code 2019, is amended to read as follows: 7 Subject to the rules of the division, sales of beer for 8 consumption off the premises made pursuant to this section 9 may be made in a container other than the original container 10 only if the container is carried into an immediately adjacent 11 licensed or permitted premises covered by a license or permit 12 that authorizes the consumption of beer , temporary temporarily 13 closed public right-of-way, or a private property place , or if 14 all of the following requirements are met: 15 Sec. 44. Section 123.135, subsection 1, Code 2019, is 16 amended to read as follows: 17 1. A manufacturer, brewer, bottler, importer, or vendor of 18 beer, or any agent thereof, desiring to ship or sell beer, or 19 have beer brought into this state for resale by a class “A” 20 beer permittee, shall first make application for and be issued 21 a brewer’s certificate of compliance by the administrator for 22 that purpose. The certificate of compliance expires at the 23 end of one year from the date of issuance and shall be renewed 24 for a like period upon application to the administrator unless 25 otherwise revoked for cause. Each completed application for 26 a certificate of compliance or renewal of a certificate shall 27 be submitted electronically, or in a manner prescribed by 28 the administrator, and shall be accompanied by a fee of five 29 hundred dollars payable to the division. Each holder of a 30 certificate of compliance shall furnish the information in a 31 manner the administrator requires. 32 Sec. 45. Section 123.135, subsection 5, Code 2019, is 33 amended by striking the subsection and inserting in lieu 34 thereof the following: 35 -25- LSB 1189HV (3) 88 ec/rn 25/ 40

H.F. 641 5. Any violation of the requirements of this chapter or 1 the rules adopted pursuant to this chapter shall subject the 2 holder of a brewer’s certificate of compliance or a class “A” 3 beer permit holder to the general penalties provided in this 4 chapter and shall constitute grounds for imposition of a civil 5 penalty, suspension of the certificate or permit, or revocation 6 of the certificate or permit after notice and opportunity for a 7 hearing pursuant to section 123.39 and chapter 17A. 8 Sec. 46. Section 123.136, subsection 1, Code 2019, is 9 amended to read as follows: 10 1. In addition to the annual permit fee to be paid by 11 all class “A” beer permittees under this chapter there shall 12 be levied and collected from the permittees on all beer 13 manufactured for sale or sold in this state at wholesale and 14 on all beer imported into this state for sale at wholesale and 15 sold in this state at wholesale, and from special class “A” 16 beer permittees on all beer manufactured for consumption on the 17 premises and on all beer sold at retail at the manufacturing 18 premises for consumption off the premises pursuant to section 19 123.130, subsection 3 , a tax of five and eighty-nine hundredths 20 dollars for every barrel containing thirty-one gallons, and at 21 a like rate for any other quantity or for the fractional part 22 of a barrel. However, no tax shall be levied or collected on 23 beer shipped outside this state by a class “A” beer permittee 24 or special class “A” beer permittee or on beer sold to a class 25 “A” beer permittee by one a special class “A” beer permittee to 26 or another class “A” beer permittee. 27 Sec. 47. Section 123.143, subsection 3, Code 2019, is 28 amended to read as follows: 29 3. Barrel tax revenues collected on beer manufactured in 30 this state from a class “A” beer permittee which owns and 31 operates a native brewery located in Iowa shall be credited 32 to the barrel tax fund hereby created in the office of the 33 treasurer of state. Moneys deposited in the barrel tax fund 34 shall not revert to the general fund of the state without a 35 -26- LSB 1189HV (3) 88 ec/rn 26/ 40

H.F. 641 specific appropriation by the general assembly. Moneys in the 1 barrel tax fund are appropriated to the economic development 2 authority for purposes of section 15E.117 . 3 Sec. 48. Section 123.173A, subsection 2, Code 2019, is 4 amended to read as follows: 5 2. An authorized nonprofit entity may, upon application 6 to the division and receipt of a charity beer, spirits, and 7 wine auction permit from the division, conduct a charity 8 auction which includes beer, spirits, and wine. The completed 9 application shall specify the date and time when the charity 10 beer, spirits, and wine auction is to be conducted and the 11 premises in this state where the charity beer, spirits, and 12 wine auction is to be physically conducted. The applicant 13 shall certify that the objective of the charity beer, spirits, 14 and wine auction is to raise funds solely to be used for 15 educational, religious, or charitable purposes and that the 16 entire proceeds from the charity beer, spirits, and wine 17 auction are to be expended for any of the purposes described in 18 section 423.3, subsection 78 . 19 Sec. 49. Section 123.173A, Code 2019, is amended by adding 20 the following new subsection: 21 NEW SUBSECTION . 8. Any violation of the requirements of 22 this chapter or the rules adopted pursuant to this chapter 23 shall subject the permit holder to the general penalties 24 provided in this chapter and shall constitute grounds for 25 imposition of a civil penalty, suspension of the permit, or 26 revocation of the permit after notice and opportunity for a 27 hearing pursuant to section 123.39 and chapter 17A. 28 Sec. 50. Section 123.175, subsection 1, unnumbered 29 paragraph 1, Code 2019, is amended to read as follows: 30 A person applying for a class “A” or retail wine permit 31 shall submit an a completed application electronically, or in a 32 manner prescribed by the administrator, which shall set forth 33 under oath the following: 34 Sec. 51. Section 123.175, subsection 1, paragraph b, Code 35 -27- LSB 1189HV (3) 88 ec/rn 27/ 40

H.F. 641 2019, is amended to read as follows: 1 b. The names and addresses of all persons or, in the case of 2 a corporation, limited liability company, or any other similar 3 legal entity, 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 Sec. 52. Section 123.177, subsection 1, Code 2019, is 8 amended to read as follows: 9 1. A person holding a class “A” wine permit may manufacture 10 and sell, or sell at wholesale, wine for consumption off the 11 premises. Sales within the state may be made only to persons 12 holding a class “A” or “B” wine permit and to persons holding a 13 retail liquor control license. However, if the person holding 14 the class “A” permit is a manufacturer of native wine, the 15 person may sell only native wine to a person holding a retail 16 wine permit or a retail liquor control license. A person 17 holding a class “A” wine permit may sell wine to distributors 18 outside of the state that are authorized by the laws of that 19 jurisdiction to sell wine at wholesale. A class “A” wine 20 permittee having more than one place of business shall obtain a 21 separate permit for each place of business where wine is to be 22 manufactured, stored, warehoused, or sold. 23 Sec. 53. Section 123.179, subsection 1, Code 2019, is 24 amended to read as follows: 25 1. The annual permit fee for a class “A” wine permit that 26 is not issued to a native wine manufacturer is seven hundred 27 fifty dollars. 28 Sec. 54. Section 123.179, Code 2019, is amended by adding 29 the following new subsection: 30 NEW SUBSECTION . 1A. The annual permit fee for a class “A” 31 wine permit issued to a native wine manufacturer is twenty-five 32 dollars. 33 Sec. 55. Section 123.180, subsection 1, Code 2019, is 34 amended to read as follows: 35 -28- LSB 1189HV (3) 88 ec/rn 28/ 40

H.F. 641 1. A manufacturer, vintner, bottler, importer, or vendor of 1 wine, or an agent thereof, desiring to ship, sell, or have wine 2 brought into this state for sale at wholesale by a class “A” 3 permittee shall first make application for and shall be issued 4 a vintner’s certificate of compliance by the administrator 5 for that purpose. The vintner’s certificate of compliance 6 shall expire at the end of one year from the date of issuance 7 and shall be renewed for a like period upon application to 8 the administrator unless otherwise revoked for cause. Each 9 completed application for a vintner’s certificate of compliance 10 or renewal of a certificate shall be submitted electronically, 11 or in a manner prescribed by the administrator, and shall be 12 accompanied by a fee of one hundred dollars payable to the 13 division. Each holder of a vintner’s certificate of compliance 14 shall furnish the information required by the administrator in 15 the form the administrator requires. A vintner or wine bottler 16 whose plant is located in Iowa and who otherwise holds a class 17 “A” wine permit to sell wine at wholesale is exempt from the 18 fee, but not the other terms and conditions. The holder of a 19 vintner’s certificate of compliance may also hold a class “A” 20 wine permit. 21 Sec. 56. Section 123.180, subsection 6, Code 2019, is 22 amended by striking the subsection and inserting in lieu 23 thereof the following: 24 6. Any violation of the requirements of this chapter or 25 the rules adopted pursuant to this chapter shall subject the 26 holder of a vintner’s certificate of compliance or a class “A” 27 wine permit holder to the general penalties provided in this 28 chapter and shall constitute grounds for imposition of a civil 29 penalty, suspension of the certificate or permit, or revocation 30 of the certificate or permit after notice and opportunity for a 31 hearing pursuant to section 123.39 and chapter 17A. 32 Sec. 57. Section 123.183, subsection 1, Code 2019, is 33 amended to read as follows: 34 1. In addition to the annual permit fee to be paid by each 35 -29- LSB 1189HV (3) 88 ec/rn 29/ 40

H.F. 641 class “A” wine permittee, a wine gallonage tax shall be levied 1 and collected from each class “A” wine permittee on all wine 2 manufactured for sale and sold in this state at wholesale and 3 on all wine imported into this state for sale at wholesale and 4 sold in this state at wholesale. A wine gallonage tax shall 5 also be levied and collected on the direct shipment of wine 6 pursuant to section 123.187 . The rate of the wine gallonage 7 tax is one dollar and seventy-five cents for each wine gallon. 8 The same rate shall apply for the fractional parts of a 9 wine gallon. The wine gallonage tax shall not be levied or 10 collected on wine sold by one class “A” wine permittee to 11 another class “A” wine permittee or on wine that is sold by a 12 class “A” wine permittee to a distributor outside of the state . 13 Sec. 58. Section 123.186, subsection 1, Code 2019, is 14 amended to read as follows: 15 1. The division shall adopt as rules the substance of the 16 federal regulations 27 C.F.R. 17 pt. 6 , 27 C.F.R. pt. 8 , 27 C.F.R. pt. 10, and 27 C.F.R. pt. 11 as they relate to transactions 18 between wholesalers and retailers . 19 Sec. 59. Section 123.187, subsection 3, paragraph d, Code 20 2019, is amended to read as follows: 21 d. All containers of wine shipped directly to a resident 22 of this state shall be shipped by a holder of a wine carrier 23 permit as provided in subsection 6 section 123.188 . 24 Sec. 60. Section 123.187, subsection 6, Code 2019, is 25 amended by striking the subsection. 26 Sec. 61. NEW SECTION . 123.188 Wine carrier —— permit and 27 requirements. 28 1. A person desiring to deliver wine subject to direct 29 shipment within this state pursuant to section 123.187 shall 30 submit an application for a wine carrier permit electronically, 31 or in a manner prescribed by the administrator, and shall be 32 accompanied by a fee in the amount of one hundred dollars. 33 2. The administrator may in accordance with this chapter 34 -30- LSB 1189HV (3) 88 ec/rn 30/ 40

H.F. 641 issue a wine carrier permit which shall be valid for one year 35 from the date of issuance unless it is sooner suspended or 1 revoked for a violation of this chapter. 2 3. A permit issued pursuant to this section may be 3 renewed annually by submitting a renewal application with the 4 administrator in a manner prescribed by the administrator, 5 accompanied by the one hundred dollar permit fee. 6 4. The delivery of wine pursuant to this section shall be 7 subject to the following requirements and restrictions: 8 a. A wine carrier permittee shall not deliver wine to 9 any person under twenty-one years of age, or to any person 10 who either is or appears to be in an intoxicated state or 11 condition. 12 b. A wine carrier permittee shall obtain valid proof of 13 identity and age prior to delivery, and shall obtain the 14 signature of an adult as a condition of delivery. 15 c. A wine carrier permittee shall maintain records of wine 16 shipped which include the permit number and name of the wine 17 manufacturer, quantity of wine shipped, recipient’s name and 18 address, and an electronic or paper form of signature from 19 the recipient of the wine. Records shall be submitted to 20 the division on a monthly basis in a form and manner to be 21 determined by the division. 22 5. A violation of this section shall subject the permittee 23 to the general penalties provided in this chapter and shall 24 constitute grounds for imposition of a civil penalty or 25 suspension or revocation of the permit pursuant to section 26 123.39. 27 Sec. 62. CODE EDITOR DIRECTIVE. 28 1. The Code editor is directed to make the following 29 transfer: 30 Section 123.56 to section 123.176. 31 2. The Code editor is directed to correct internal 32 references in the Code as necessary due to enactment of this 33 section. 34 -31- LSB 1189HV (3) 88 ec/rn 31/ 40

H.F. 641 Sec. 63. REPEAL. Sections 123.144 and 123.146, Code 2019, 35 are repealed. 1 DIVISION II 2 ALCOHOLIC BEVERAGE DELIVERIES 3 Sec. 64. Section 123.46A, subsection 1, Code 2019, is 4 amended to read as follows: 5 1. Licensees and permittees authorized to sell alcoholic 6 liquor, wine, or beer in original unopened containers for 7 consumption off the licensed premises may deliver alcoholic 8 liquor, wine, or beer to a home , another licensed premises if 9 there is identical ownership of the premises by the licensee 10 or permittee, or other designated location in this state. 11 Deliveries shall be limited to alcoholic beverages authorized 12 by the licensee’s or permittee’s license or permit. 13 Sec. 65. Section 123.46A, subsection 2, paragraph a, Code 14 2019, is amended to read as follows: 15 a. Payment for the alcoholic liquor, wine, or beer shall be 16 received on the licensed premises by the licensee or permittee 17 at the time of order. 18 Sec. 66. Section 123.46A, subsection 2, Code 2019, is 19 amended by adding the following new paragraphs: 20 NEW PARAGRAPH . 0b. Orders for deliveries may be taken by 21 the licensee or permittee between the hours of 2:00 a.m. and 22 6:00 a.m. on a day other than Sunday, and orders for deliveries 23 may be taken between the hours of 2:00 a.m. and 8:00 a.m. on a 24 Sunday provided the licensee or permittee has been granted the 25 privilege of selling alcoholic liquor, wine, or beer on Sunday, 26 notwithstanding any provision of section 123.49, subsection 2, 27 paragraph “b” , to the contrary. 28 NEW PARAGRAPH . k. Orders delivered to another licensed 29 premises shall contain only those alcoholic beverages 30 authorized for sale by the liquor control license or retail 31 wine or beer permit covering the premises to receive the 32 delivery. 33 NEW PARAGRAPH . l. Orders delivered to another licensed 34 -32- LSB 1189HV (3) 88 ec/rn 32/ 40

H.F. 641 premises shall be fulfilled using the alcoholic beverages 35 inventory owned by the licensee or permittee who received the 1 order for delivery. If the recipient refuses or fails to pick 2 up the delivery, or is ineligible to receive the delivery, 3 the alcoholic beverages shall be returned to the licensee or 4 permittee who fulfilled the order. 5 Sec. 67. Section 123.49, subsection 2, paragraph d, 6 subparagraph (1), Code 2019, is amended to read as follows: 7 (1) Keep on premises covered by a liquor control license 8 any alcoholic liquor in any container except the original 9 package purchased from the division, and except mixed drinks 10 or cocktails mixed on the premises for immediate consumption 11 on the licensed premises or as otherwise provided by this 12 paragraph “d” . This prohibition does not apply to common 13 carriers holding holders of a class “D” liquor control license 14 or to alcoholic liquor delivered in accordance with section 15 123.46A . 16 Sec. 68. EFFECTIVE DATE. This division of this Act, being 17 deemed of immediate importance, takes effect upon enactment. 18 EXPLANATION 19 The inclusion of this explanation does not constitute agreement with 20 the explanation’s substance by the members of the general assembly. 21 This bill concerns alcoholic beverage control and matters 22 under the purview of the alcoholic beverages division of the 23 department of commerce. 24 DIVISION I —— ALCOHOLIC BEVERAGE CONTROL. Code section 25 123.3, providing definitions, is amended. The bill amends the 26 definitions for “alcoholic liquor”, “beer”, “high alcoholic 27 content beer”, and “wine”, by removing references to a percent 28 of alcohol by weight and, if not already included in the 29 definition, providing for the percent of alcohol by volume for 30 each definition. In addition, the bill strikes the exclusion 31 of mixed drinks or cocktails mixed on the premises from the 32 definition of “beer”. The definition of “application” is 33 amended by adding certificate. The definition of “licensed 34 -33- LSB 1189HV (3) 88 ec/rn 33/ 40

H.F. 641 premises” is amended by striking areas susceptible of precise 35 definition from what may constitute a single licensed premises. 1 The definition of “person” is also amended to add limited 2 liability companies and to add, in relation to corporations 3 and limited liability companies, other similar legal entities. 4 The bill also adds definitions for “completed application”, 5 “mixed drink or cocktail”, “native brewery”, and “private 6 place”. “Completed application” is defined as an application 7 for a license, permit, or certificate where all necessary fees 8 or bonds have been paid or submitted and the applicant has 9 provided all information to the alcoholic beverages division. 10 The bill makes corresponding changes in Code chapter 123 11 referencing the requirement to file a completed application for 12 a particular license, permit, or certificate. “Mixed drink or 13 cocktail” is defined as an alcoholic beverage, consisting in 14 whole or in part of alcoholic liquors, that is combined with 15 other alcoholic or nonalcoholic beverages. “Native brewery” is 16 defined as a business that manufactures beer or high alcoholic 17 content beer by a person holding a class “A” beer permit that 18 authorizes the manufacture. “Private place” is defined as 19 a location which, at the time alcoholic beverages are kept, 20 dispensed, or consumed, does not provide access to the general 21 public, limits access to bona fide social hosts and invited 22 guests, is not of a commercial nature, does not provide for 23 the sale and purchase of goods and services, is not a licensed 24 premises, and does not charge admission. 25 Code section 123.10, concerning rules, is amended to 26 authorize the alcoholic beverages division to prescribe a 27 uniform fee to be assessed against certain licensees and 28 permittees to recover administrative costs incurred relating 29 to the failure of a licensee or permittee to maintain 30 dramshop liability insurance coverage and for contested case 31 proceedings. 32 Code section 123.23, concerning distiller’s certificate of 33 compliance, is amended to specifically provide that the general 34 -34- LSB 1189HV (3) 88 ec/rn 34/ 40

H.F. 641 penalty provisions of the Code chapter apply to any violation 35 of the Code chapter or rules adopted pursuant to the Code 1 chapter by a holder of a distiller’s certificate of compliance. 2 Code section 123.24, relating to liquor prices, is amended 3 to contain all current provisions of the Code section relating 4 to establishing liquor prices sold by the alcoholic beverages 5 division in a new Code subsection. 6 Code section 123.27, concerning sales and deliveries of 7 alcoholic liquor from the state warehouse, is amended to 8 eliminate the restriction on sales and deliveries on Sunday. 9 Code section 123.30, concerning liquor control licenses, is 10 amended. The bill provides that a liquor control license not 11 be issued for a premises that does not constitute a safe and 12 proper place or building. The bill also strikes a provision 13 that allowed a person holding a liquor control license to 14 permit a customer to carry an open container of alcoholic 15 liquor from the licensed premises to an adjacent licensed 16 premises, temporary closed public right-of-way, or private 17 property. 18 Code section 123.31, concerning liquor control license 19 applications, is amended to provide that officers, directors, 20 and persons owning at least 10 percent of stock in a limited 21 liability company or other similar legal entity shall be 22 included on the application for a license. 23 Code section 123.32, concerning action by local authorities 24 and the alcoholic beverages division on applications for 25 certain licenses and permits is amended. The bill adds a 26 completed application for a certificate of compliance to 27 the list of applications covered by the Code section and 28 specifically lists all completed applications for licenses, 29 permits, and certificates that shall be submitted to the 30 alcoholic beverages division. The bill also allows the 31 administrator of the alcoholic beverages division to notify 32 an applicant of a disapproval of an application by personal 33 service. 34 -35- LSB 1189HV (3) 88 ec/rn 35/ 40

H.F. 641 Code section 123.34, concerning seasonal and shorter 35 duration licenses and permits, is amended to specifically 1 authorize these types of permits for class “B” and class “C” 2 native wine permits and to provide for the appropriate fee for 3 these shorter duration class “B” and class “C” native wine 4 permits. 5 Code section 123.36, concerning liquor control license fees, 6 is amended to eliminate the additional tax imposed on an air 7 common carrier for a class “D” license. 8 New Code section 123.38A provides for the confidential 9 treatment of investigative information in the possession of 10 the alcoholic beverages division before administrative or 11 criminal charges are filed. The new Code section authorizes 12 the disclosure of information to other law enforcement or 13 regulatory agencies, including other licensing authorities in 14 other jurisdictions. 15 Code section 123.39, concerning suspension or revocation 16 of a license or permit, is amended to include a certificate 17 of compliance and to provide that civil penalties imposed and 18 collected by the alcoholic beverages division shall be credited 19 and used as provided in the general provision covering civil 20 penalties imposed and collected by the division in Code section 21 123.17, subsection 7. 22 Code section 123.41, concerning manufacturer’s licenses, 23 is amended to specifically provide that the general penalty 24 provisions of the Code chapter apply to any violation of the 25 Code chapter or rules adopted pursuant to the Code chapter by a 26 holder of a manufacturer’s license. 27 Code section 123.43, concerning class “A” native distilled 28 spirits license applications and issuance, is amended to 29 provide that officers, directors, and persons owning at least 30 10 percent of stock in a limited liability company or other 31 similar legal entity shall be included on the application for 32 a license. 33 Code section 123.43A, concerning native distilleries, is 34 -36- LSB 1189HV (3) 88 ec/rn 36/ 40

H.F. 641 amended to eliminate the restriction on the number of class 35 “A” native distilled spirits licenses that may be issued to a 1 person. 2 Code section 123.50, concerning criminal and civil 3 penalties, is amended to provide that if a bond of a liquor 4 control licensee or beer or wine permit holder is forfeited to 5 the alcoholic beverage division, the division shall retain only 6 that portion of the bond equal to the amount the licensee or 7 permit holder owes the division. 8 Code section 123.56, concerning native wines, is amended. 9 The bill removes the license fee for a class “A” wine permit 10 for a native wine manufacturer from the Code section and adds 11 the fee to Code section 123.179 providing for wine permit fees. 12 The bill also requires a person who manufactures native wine 13 to file with the division the records that are filed monthly 14 with the alcohol and tobacco tax and trade bureau of the United 15 States department of the treasury. The bill directs the Code 16 editor to transfer this Code section to new Code section 17 123.176. 18 Code section 123.122, concerning required beer permits or 19 licenses, is amended to add to the Code section provisions 20 concerning exceptions for personal use relative to homemade 21 beer and importation of beer currently provided in Code section 22 123.144, subsection 2, and Code section 123.146. 23 Code section 123.127, concerning class “A” and special 24 class “A” beer permit applications, is amended to provide that 25 officers, directors, and persons owning at least 10 percent of 26 stock in a limited liability company or other similar legal 27 entity shall be included on the application for the permit. 28 Code section 123.130, concerning authority under a class “A” 29 and special class “A” beer permit, is amended to provide that a 30 holder of a class “A” beer permit may sell beer to distributors 31 outside Iowa, pursuant to the laws of that jurisdiction, to 32 provide that a native brewery may be granted not more than one 33 class “B” beer permit for selling beer at the manufacturing 34 -37- LSB 1189HV (3) 88 ec/rn 37/ 40

H.F. 641 facility, and to require a person who manufactures beer to file 35 with the alcoholic beverages division the records it files 1 monthly with the alcohol and tobacco tax and trade bureau of 2 the United States department of the treasury. 3 Code section 123.131, concerning authority under a class “B” 4 beer permit, is amended. The bill provides that sales of beer 5 for consumption off the premises in a container that is not the 6 original container may be carried into an immediately adjacent 7 premises only if the premises is covered by a license or permit 8 that allows the consumption of beer. 9 Code section 123.135, concerning a brewer’s certificate of 10 compliance, is amended to provide that the general penalty 11 provisions of Code chapter 123 apply to any violation of the 12 Code chapter or rules adopted pursuant to the Code chapter by a 13 holder of a brewer’s certificate of compliance. 14 Code section 123.136, concerning the barrel tax on beer, is 15 amended to provide that the exceptions for tax applicable to 16 class “A” beer permittees also applies to special class “A” 17 beer permittees. 18 Code section 123.173A, concerning a charity beer, spirits, 19 and wine auction permit, is amended to provide that the general 20 penalty provisions of Code chapter 123 apply to any violation 21 of the Code chapter or rules adopted pursuant to the Code 22 chapter by a holder of an auction permit. 23 Code section 123.175, concerning class “A” or retail wine 24 permit applications, is amended to provide that officers, 25 directors, and persons owning at least 10 percent of stock in a 26 limited liability company or other similar legal entity shall 27 be included on the application for the permit. 28 Code section 123.177, concerning authority under a class “A” 29 wine permit, is amended to provide that a holder of a class 30 “A” wine permit may sell wine to distributors outside Iowa, 31 pursuant to the laws of that jurisdiction. 32 Code section 123.179, concerning wine permit fees, is 33 amended to include the fee for a class “A” wine permit issued 34 -38- LSB 1189HV (3) 88 ec/rn 38/ 40

H.F. 641 to a native wine manufacturer currently provided in Code 35 section 123.56. 1 Code section 123.180, concerning a vintner’s certificate 2 of compliance, is amended to provide that the general penalty 3 provisions of Code chapter 123 apply to any violation of the 4 Code chapter or rules adopted pursuant to the Code chapter by a 5 holder of a vintner’s certificate or a class “A” permit. 6 Code section 123.183, concerning the wine gallonage tax, is 7 amended to provide that the tax shall not be levied on wine 8 sold by a class “A” wine permittee to a distributor outside of 9 the state. 10 Code section 123.186, concerning federal regulations adopted 11 as rules, is amended to provide that the alcoholic beverages 12 division adopt as rules the substance of the entirety of 13 federal regulations 27 C.F.R. pt. 6, 27 C.F.R. pt. 8, 27 C.F.R. 14 pt. 10, and 27 C.F.R. pt. 11, and not just those regulations as 15 they relate to transactions between wholesalers and retailers. 16 Code section 123.187, concerning the direct shipment of 17 wine, is amended by striking provisions relating to a wine 18 carrier permit. The bill relocates the stricken provisions to 19 new Code section 123.188. 20 Code sections 123.144, relating to bottling beer, and 21 123.146, relating to importation of beer for personal use, are 22 repealed. 23 DIVISION II —— ALCOHOLIC BEVERAGE DELIVERIES. Code section 24 123.46A, concerning delivery of alcoholic beverages by 25 retailers is amended. The bill allows a licensee or permittee 26 authorized to sell alcoholic beverages to deliver the alcoholic 27 beverages to another licensed premises if there is identical 28 ownership of the premises by the licensee or permittee. The 29 bill also allows orders for deliveries between 2:00 a.m. and 30 6:00 a.m. on a day other than Sunday and between 2:00 a.m. 31 and 8:00 a.m. on a Sunday. The bill provides that deliveries 32 to another licensed premises contain only those alcoholic 33 beverages authorized for sale by the license or permit covering 34 -39- LSB 1189HV (3) 88 ec/rn 39/ 40

H.F. 641 the premises receiving delivery. In addition, orders delivered 35 to another licensed premises shall be fulfilled using alcoholic 1 beverages owned by the licensee or permittee who received the 2 delivery order and if the recipient of the order fails or is 3 unable to pick up the order, the alcoholic beverages shall be 4 returned to the licensee or permittee who fulfilled the order. 5 Code section 123.49, miscellaneous provisions, is amended 6 to provide that the exception on certain prohibitions relating 7 to the keeping of any alcoholic liquor in certain containers 8 for common carriers holding a class “D” liquor control license 9 applies to all holders of that license or to alcoholic liquor 10 delivered in accordance with Code section 123.46A. 11 This division of the bill takes effect upon enactment. 12 -40- LSB 1189HV (3) 88 ec/rn 40/ 40