H.F. 2449 Section 1. Section 123.32, subsection 1, paragraph b, Code 1 2024, is amended by adding the following new subparagraph: 2 NEW SUBPARAGRAPH . (11) A wine auction permit as provided in 3 section 123.173C. 4 Sec. 2. Section 123.171, subsection 3, Code 2024, is amended 5 to read as follows: 6 3. Notwithstanding subsection 1 , an individual of legal 7 age may import into the state without a certificate, permit, 8 or license an amount of wine not to exceed nine liters per 9 calendar month that the individual personally obtained outside 10 the state or, in the case of wine personally obtained outside 11 the United States, a quantity which does not exceed the amount 12 allowed by federal law governing the importation of alcoholic 13 beverages into the United States for personal consumption. 14 Wine imported pursuant to this subsection shall be for personal 15 consumption in a private home or other private accommodation 16 and only if the wine is not sold other than as provided in 17 subsection 4 , exchanged, bartered, dispensed, or given in 18 consideration of purchase for any property or services or in 19 evasion of the requirements of this chapter . 20 Sec. 3. Section 123.171, Code 2024, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 4. Notwithstanding subsection 1, a 23 person of legal age may conduct private wine sales without a 24 certificate, permit, or license, subject to the requirements 25 of this subsection. Except for wine manufactured pursuant 26 to subsection 2, a person may sell wine from the person’s 27 private collection in an original, unopened container to either 28 a class “A” wine permittee for purposes of resale or a wine 29 auction permittee under section 123.173C for resale by means 30 of an auction. A class “A” wine permittee or wine auction 31 permittee involved in the sale of wine by a person under this 32 subsection shall ensure that each bottle of wine purchased has 33 a permanently affixed label stating that the wine was acquired 34 from a private collection. 35 -1- LSB 5743HV (2) 90 nls/ns 1/ 9

H.F. 2449 Sec. 4. NEW SECTION . 123.173C Wine auction permit. 1 1. Upon application to the department and receipt of a wine 2 auction permit, an authorized person may conduct a wine auction 3 subject to the requirements of this section. 4 2. The department shall not issue a wine auction permit to 5 an applicant unless the applicant complies with the application 6 requirements of subsection 3, and unless all of the following 7 requirements are met: 8 a. The applicant is a person of good moral character. 9 b. The applicant is a citizen of the state of Iowa or, if 10 the applicant is a corporation, the applicant is authorized to 11 do business in the state. 12 c. The applicant does not hold a retail alcohol license. 13 d. The premises where the applicant intends to use the 14 permit constitutes a safe and proper place or building and 15 conforms to all applicable laws, ordinances, resolutions, 16 and health and fire regulations. A permittee shall not have 17 or maintain any interior access to residential or sleeping 18 quarters unless the director grants permission in the form of a 19 living quarters permit. 20 e. The applicant gives consent, as required by section 21 123.30, subsection 1, for a person to enter upon the premises 22 of the wine auction without a warrant during normal business 23 hours to inspect for violations of the provisions of this 24 chapter or ordinances and regulations that local authorities 25 may adopt. 26 3. An application for a wine auction permit must include 27 all of the following information and shall be submitted 28 electronically, or in a manner prescribed by the director: 29 a. The name and address of the applicant or, if the 30 applicant is a corporation, limited liability company, or 31 other legal entity, the names and addresses of all officers, 32 directors, and persons owning or controlling ten percent 33 or more of the capital stock of the entity and who have a 34 financial interest, by way of loan, ownership, or otherwise, 35 -2- LSB 5743HV (2) 90 nls/ns 2/ 9

H.F. 2449 in the entity. 1 b. The location and name of the owner of the premises 2 where the applicant intends to conduct wine auctions and, if 3 the applicant is not the owner of the premises, whether the 4 applicant is the lessee of the premises. 5 c. As required by the director, and in such form and 6 containing such information as the director may require, a 7 description of the premises where the applicant intends to 8 conduct wine auctions, including a depiction of the premises, 9 and, if applicable, the number of square feet of interior floor 10 space of the retail sales area of the premises. 11 d. Whether any person specified in paragraph “a” has ever 12 been convicted of any offense against the laws of the United 13 States, or any state, territory, or political subdivision 14 thereof. 15 e. Any other information as required by the director. 16 4. A wine auction conducted by a wine auction permittee must 17 comply with the following requirements: 18 a. A permittee shall not offer wines owned by the permittee 19 at auction. 20 b. A person, within or outside of the state, who desires to 21 ship wine from a private collection to a wine auction permittee 22 to be sold at auction shall do so through a holder of a wine 23 carrier permit. The wine auction permittee shall ensure that 24 each bottle of wine so acquired is permanently affixed with 25 a label stating that the wine was acquired from a private 26 collection. 27 c. A permittee shall ensure that each container of wine 28 to be sold at a wine auction is in the original, unopened 29 container. 30 d. A permittee is responsible for the storage of all wines 31 that are to be offered at auction at the licensed premises, 32 and for the subsequent shipment and delivery of all wines sold 33 at auction to the purchasers of the wines. Shipment of wine 34 pursuant to this paragraph shall only be done by a holder of a 35 -3- LSB 5743HV (2) 90 nls/ns 3/ 9

H.F. 2449 wine carrier permit. 1 e. A permittee is responsible for the payment of all 2 applicable taxes for wines sold at auction pursuant to section 3 123.183. 4 5. Notwithstanding any other provision of this chapter, 5 a class “A” wine permittee or a retail alcohol licensee, not 6 including a native wine manufacturer, may purchase wine offered 7 at an auction pursuant to this section and may resell wine 8 purchased at auction in accordance with the requirements of 9 the licensee’s or permittee’s license or permit. The licensee 10 or permittee shall ensure that each wine resold is in the 11 original, unopened container, and, if applicable, permanently 12 affixed with a label stating that the wine was acquired from a 13 private collection. 14 6. A wine auction permit is valid for a period of one year 15 pursuant to section 123.35, subsection 1. A wine auction 16 permit shall allow the permittee to conduct no more than 17 twenty-four wine auctions during the one-year period of the 18 wine auction permit. 19 7. Any violation of the requirements of this chapter or 20 rules adopted pursuant to this chapter shall subject the wine 21 auction permit holder to the general penalties provided in this 22 chapter and shall constitute grounds for imposition of a civil 23 penalty, suspension of the permit, or revocation of the permit 24 after notice and opportunity for a hearing pursuant to section 25 123.39 and chapter 17A. 26 Sec. 5. Section 123.179, Code 2024, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 4. The fee for a wine auction permit is one 29 hundred dollars. 30 Sec. 6. Section 123.180, subsection 3, Code 2024, is amended 31 to read as follows: 32 3. a. All Except as provided in paragraph “b” , all class 33 “A” wine permit holders shall sell only those brands of 34 wine which are manufactured, bottled, fermented, shipped, or 35 -4- LSB 5743HV (2) 90 nls/ns 4/ 9

H.F. 2449 imported by a person holding a current vintner’s certificate of 1 compliance. An employee or agent working for or representing 2 the holder of a vintner’s certificate of compliance within 3 this state shall register the employee’s or agent’s name and 4 address with the department. These names and addresses shall 5 be filed with the department’s copy of the certificate of 6 compliance issued except that this provision does not require 7 the listing of those persons who are employed on the premises 8 of a bottling plant, or winery where wine is manufactured, 9 fermented, or bottled in Iowa or the listing of those persons 10 who are thereafter engaged in the transporting of the wine. 11 b. A class “A” wine permit holder may sell brands of wine 12 which are not manufactured, bottled, fermented, shipped, or 13 imported by a person holding a current vintner’s certificate 14 of compliance if the brands of wine were purchased from a 15 private sale pursuant to section 123.171, subsection 4, or if 16 authorized by the laws of another state. 17 Sec. 7. Section 123.183, subsection 1, Code 2024, is amended 18 to read as follows: 19 1. a. In addition to the annual permit fee to be paid by 20 each class “A” wine permittee, a wine gallonage tax shall be 21 levied and collected from each class “A” wine permittee on all 22 of the following: 23 (1) All wine manufactured for sale and sold in this state 24 at wholesale and on all . 25 (2) All wine imported into this state for sale at wholesale 26 and sold in this state at wholesale. A wine gallonage tax 27 shall also be levied and collected on the 28 (3) The direct shipment of wine pursuant to section 123.187 . 29 (4) The sale of wine at auction pursuant to section 123.173C 30 to a retail alcohol license holder. 31 b. The rate of the wine gallonage tax is one dollar and 32 seventy-five cents for each wine gallon. The same rate shall 33 apply for the fractional parts of a wine gallon. The wine 34 gallonage tax shall not be levied or collected on wine sold 35 -5- LSB 5743HV (2) 90 nls/ns 5/ 9

H.F. 2449 by one class “A” wine permittee to another class “A” wine 1 permittee or on wine that is sold by a class “A” wine permittee 2 to a distributor outside of the state. 3 Sec. 8. Section 123.183, subsection 2, paragraph a, Code 4 2024, is amended to read as follows: 5 a. Revenue collected from the wine gallonage tax on wine 6 manufactured for sale and sold at wholesale in this state, 7 and on wine subject to direct shipment as provided in section 8 123.187 by a wine manufacturer licensed or permitted pursuant 9 to laws regulating alcoholic beverages in this state, pursuant 10 to subsection 1 shall be deposited in the wine gallonage tax 11 fund as created in this section . 12 Sec. 9. Section 123.184, Code 2024, is amended by adding the 13 following new subsection: 14 NEW SUBSECTION . 3. Each wine auction permit holder shall 15 make a report under oath to the department electronically, 16 or in a manner prescribed by the director, on or before the 17 tenth day of the calendar months of June and December, showing 18 the exact number of gallons of wine and fractional parts of 19 gallons sold and shipped pursuant to section 123.173C during 20 the preceding six-month calendar period. The report shall also 21 state whatever reasonable additional information the director 22 requires. The permit holder at the time of filing this report 23 shall pay to the department the amount of tax due at the rate 24 fixed in section 123.183. A penalty of ten percent of this 25 amount shall be assessed and collected if the report required 26 to be filed pursuant to this subsection is not filed and the 27 tax paid within the time required by this subsection. 28 Sec. 10. Section 123.188, subsection 1, Code 2024, is 29 amended to read as follows: 30 1. A person desiring to deliver wine subject to direct 31 shipment within this state pursuant to section 123.187 , or to 32 deliver wine shipped to or by a wine auction permittee pursuant 33 to section 123.173C, shall submit an application for a wine 34 carrier permit electronically, or in a manner prescribed by the 35 -6- LSB 5743HV (2) 90 nls/ns 6/ 9

H.F. 2449 director, which shall be accompanied by a fee in the amount of 1 one hundred dollars. 2 Sec. 11. Section 123.188, subsection 4, paragraph c, Code 3 2024, is amended to read as follows: 4 c. A wine carrier permittee shall maintain records of 5 wine shipped which include the permit number and name of the 6 wine manufacturer or wine auction permittee , quantity of wine 7 shipped, recipient’s name and address, and an electronic 8 or paper form of signature from the recipient of the wine. 9 Records shall be submitted to the department on a monthly basis 10 in a form and manner to be determined by the department. 11 EXPLANATION 12 The inclusion of this explanation does not constitute agreement with 13 the explanation’s substance by the members of the general assembly. 14 This bill relates to private wine sales and wine auction 15 permits. 16 The bill authorizes a person to conduct private wine sales 17 from the person’s private collection for wine in an original, 18 unopened container to either a class “A” wine permittee for 19 purposes of resale, or to a wine auction permittee under 20 the bill for resale at a wine auction. A class “A” wine 21 permittee or wine auction permittee who purchases wine from 22 a private collection shall ensure that each bottle of wine 23 has a permanently affixed label stating that fact. The bill 24 authorizes a class “A” wine permit holder to sell brands of 25 wine which are not manufactured, bottled, fermented, shipped, 26 or imported by a person holding a current vintner’s certificate 27 if the brands of wine were purchased from a private sale and 28 meet the labeling requirements under the bill. 29 The bill authorizes a person, upon application to the 30 department of revenue and receipt of a wine auction permit, to 31 conduct a wine auction. A wine auction permit is valid for a 32 period of one year and allows the permittee to conduct no more 33 than 24 wine auctions during the one-year period. The fee for 34 a wine auction permit is $100. A wine auction permit may only 35 -7- LSB 5743HV (2) 90 nls/ns 7/ 9

H.F. 2449 be issued to an applicant who is of good moral character; is 1 a citizen of the state of Iowa or authorized to do business 2 in the state; does not hold a retail alcohol license; and 3 gives consent for a person to enter upon the premises of the 4 wine auction without a warrant during normal business hours 5 to inspect for violations of the provisions of Code chapter 6 123 or ordinances and regulations that local authorities may 7 adopt. The premises that the applicant intends to use for wine 8 auctions must constitute a safe and proper place or building 9 and conform to all applicable laws, ordinances, resolutions, 10 and health and fire regulations. The bill prohibits an 11 applicant from having or maintaining any interior access to 12 residential or sleeping quarters unless the director of revenue 13 grants permission in the form of a living quarters permit. 14 The bill sets forth the information required to be included 15 for a wine auction permit application. 16 The bill requires a wine auction conducted by a wine auction 17 permittee to comply with the following requirements: (1) a 18 permittee shall not offer wines owned by the permittee at 19 auction, (2) wine from a private collection is permanently 20 affixed with a label stating that fact, (3) a permittee 21 shall ensure that each container of wine to be sold is in the 22 original, unopened container, (4) a permittee is responsible 23 for the storage of all wines that are to be offered at auction 24 and for their subsequent shipment by a holder of a wine carrier 25 permit and delivery, and (5) a permittee is responsible for the 26 payment of all applicable taxes for wines sold at auction. 27 The bill authorizes a class “A” wine permittee or a retail 28 alcohol licensee, not including a native wine manufacturer, 29 to purchase wine offered at an auction and resell wine 30 purchased at auction in accordance with the requirements of 31 the licensee’s or permittee’s license or permit, subject to 32 applicable label requirements. 33 A violation of the requirements of the bill subjects the 34 wine auction permit holder to the general penalties provided in 35 -8- LSB 5743HV (2) 90 nls/ns 8/ 9

H.F. 2449 Code chapter 123 and constitutes grounds for imposition of a 1 civil penalty, suspension of the permit, or revocation of the 2 permit after notice and opportunity for a hearing. A person 3 who violates any of the provisions of the bill, or who makes a 4 false statement concerning any material fact in submitting an 5 application for a permit, is guilty of a serious misdemeanor. 6 A serious misdemeanor is punishable by confinement for no more 7 than one year and a fine of at least $430 but not more than 8 $2,560. 9 The bill levies a wine gallonage tax on the sale of wine at 10 auction to a retail alcohol license holder. The rate of the 11 wine gallonage tax is $1.75 per gallon. Revenue collected is 12 deposited in the wine gallonage tax fund. 13 The bill requires each wine auction permit holder to make a 14 biannual report under oath to the department of revenue showing 15 the exact number of gallons of wine and fractional parts of 16 gallons sold and shipped during the preceding six-month period, 17 and whatever reasonable additional information the director 18 requires. The permittee at the time of filing the report must 19 pay to the department of revenue the amount of tax due. A 20 penalty of 10 percent is assessed and collected if the report 21 is not filed and the tax paid within the time required. 22 Under the bill, a person desiring to deliver wine shipped 23 to or by a wine auction permittee shall submit an application 24 for a wine carrier permit accompanied by a fee of $100. A wine 25 auction permittee shall maintain records of wine shipped as 26 prescribed by the bill. 27 -9- LSB 5743HV (2) 90 nls/ns 9/ 9