H.F. _____ Section 1. Section 123.3, Code 2019, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 27A. “Low-proof spirit beverage” means a 3 mixed drink or cocktail that is premixed and packaged in an 4 original container and contains more than six and twenty-five 5 hundredths percent of alcohol by volume but not more than 6 seventeen and one-half percent of alcohol by volume. 7 NEW SUBSECTION . 28A. “Mixed drink or cocktail” means an 8 alcoholic beverage, composed in whole or in part of alcoholic 9 liquor, that is combined with other alcoholic beverages or 10 nonalcoholic beverages or ingredients including but not limited 11 to ice, water, soft drinks, or flavorings. 12 Sec. 2. Section 123.130, subsections 1 and 2, Code 2019, are 13 amended to read as follows: 14 1. Any person holding a class “A” beer permit issued by 15 the division shall be authorized to manufacture and sell, or 16 sell at wholesale, beer and low-proof spirit beverages for 17 consumption off the premises, such sales within the state to 18 be made only to persons holding subsisting class “A”, “B”, or 19 “C” beer permits, both a class “C” native wine permit and a 20 class “A” wine permit pursuant to section 123.178B, subsection 21 4 , or liquor control licenses issued in accordance with the 22 provisions of this chapter . A class “A” or special class “A” 23 beer permit does not grant authority to manufacture wine as 24 defined in section 123.3, subsection 48 . 25 2. All class “A” premises shall be located within the 26 state. All beer and low-proof spirit beverages received by 27 the holder of a class “A” beer permit from the holder of a 28 certificate of compliance before being resold must first come 29 to rest on the licensed premises of the permit holder, must be 30 inventoried, and is subject to the barrel tax when resold as 31 provided in section 123.136 . A class “A” beer permittee shall 32 not store beer or a low-proof spirit beverage overnight except 33 on premises licensed under a class “A” beer permit. 34 Sec. 3. Section 123.131, subsection 1, Code 2019, is amended 35 -1- LSB 1141YC (2) 88 ec/rn 1/ 4

H.F. _____ to read as follows: 1 1. Subject to the provisions of this chapter , any person 2 holding a class “B” beer permit shall be authorized to sell 3 beer and a low-proof spirit beverage for consumption on or off 4 the premises. Sales of beer and a low-proof spirit beverage 5 for consumption off the premises made pursuant to this section 6 shall be made in original containers except as provided in 7 subsection 2 . However, unless otherwise provided in this 8 chapter , no sale of beer and a low-proof spirit beverage shall 9 be made for consumption on the premises unless the place 10 where such service is made is equipped with tables and seats 11 sufficient to accommodate not less than twenty-five persons at 12 one time. 13 Sec. 4. Section 123.132, subsection 1, Code 2019, is amended 14 to read as follows: 15 1. The holder of a class “C” beer permit shall be allowed 16 to sell beer and a low-proof spirit beverage to consumers 17 at retail for consumption off the premises. The sales made 18 pursuant to this section shall be made in original containers 19 except as provided in subsection 2 . 20 Sec. 5. Section 123.132, subsection 2, unnumbered paragraph 21 1, Code 2019, is amended to read as follows: 22 Subject to the rules of the division, sales of beer made 23 pursuant to this section may be made in a container other 24 than the original container only if all of the following 25 requirements are met: 26 Sec. 6. Section 123.136, subsection 1, Code 2019, is amended 27 to read as follows: 28 1. In addition to the annual permit fee to be paid by 29 all class “A” beer permittees under this chapter there shall 30 be levied and collected from the permittees on all beer and 31 low-proof spirit beverages manufactured for sale or sold in 32 this state at wholesale and on all beer and low-proof spirit 33 beverages imported into this state for sale at wholesale and 34 sold in this state at wholesale, and from special class “A” 35 -2- LSB 1141YC (2) 88 ec/rn 2/ 4

H.F. _____ beer permittees on all beer manufactured for consumption on the 1 premises and on all beer and low-proof spirit beverages sold 2 at retail at the manufacturing premises for consumption off 3 the premises pursuant to section 123.130, subsection 3 , a tax 4 of five and eighty-nine hundredths dollars for every barrel 5 containing thirty-one gallons, and at a like rate for any other 6 quantity or for the fractional part of a barrel. However, 7 no tax shall be levied or collected on beer and low-proof 8 spirit beverages shipped outside this state by a class “A” beer 9 permittee or sold by one class “A” beer permittee to another 10 class “A” beer permittee. 11 Sec. 7. Section 123.178B, subsection 4, Code 2019, is 12 amended to read as follows: 13 4. A person holding a class “C” native wine permit and a 14 class “A” wine permit whose primary purpose is manufacturing 15 native wine may purchase beer and a low-proof spirit beverage 16 from a wholesaler holding a class “A” beer permit for sale at 17 retail for consumption on or off the premises covered by the 18 class “C” native wine permit. 19 Sec. 8. Section 123A.2, Code 2019, is amended by adding the 20 following new subsection: 21 NEW SUBSECTION . 9A. “Low-proof spirit beverage” means as 22 defined in section 123.3. 23 Sec. 9. NEW SECTION . 123A.13 Low-proof spirit beverage —— 24 applicability of chapter. 25 The provisions of this chapter that apply to a brewer and 26 wholesaler of beer shall apply to a manufacturer and wholesaler 27 of low-proof spirit beverages. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 This bill concerns low-proof spirit beverages. 32 Code section 123.3 is amended by adding definitions for 33 “low-proof spirit beverage” and “mixed drink or cocktail”. 34 “Low-proof spirit beverage” is defined as a mixed drink or 35 -3- LSB 1141YC (2) 88 ec/rn 3/ 4

H.F. _____ cocktail that is premixed, packaged in an original container, 1 and contains more than 6.25 percent, but not more than 17.5 2 percent, of alcohol by volume. “Mixed drink or cocktail” 3 is defined as an alcoholic beverage, consisting in whole or 4 in part of alcoholic liquors, that is combined with other 5 alcoholic or nonalcoholic beverages. 6 The bill authorizes a class “A” beer permittee to 7 manufacture and sell, or sell at wholesale, low-proof spirit 8 beverages to persons holding class “A”, “B”, or “C” beer 9 permits, both a class “C” native wine permit and a class “A” 10 wine permit, or liquor control licenses. In addition, the 11 bill provides that a holder of a class “B” beer permit may 12 sell a low-proof spirit beverage for consumption on or off the 13 premises and allows a holder of a class “C” beer permit to sell 14 a low-proof spirit beverage for consumption off the premises. 15 The bill also allows a holder of a class “C” native wine permit 16 and a class “A” wine permit to purchase and sell a low-proof 17 spirit beverage for consumption on or off the premises covered 18 by the class “C” native wine permit. 19 Code section 123.136 is amended to provide that the barrel 20 tax on beer also applies to low-proof spirit beverages. 21 New Code section 123A.13 provides that the provisions of 22 Code chapter 123A that apply to brewers and wholesalers of beer 23 also apply to manufacturers and wholesalers of low-proof spirit 24 beverages. 25 -4- LSB 1141YC (2) 88 ec/rn 4/ 4