S.F. 2425 Section 1. Section 123.3, subsection 15, Code 2024, is 1 amended to read as follows: 2 15. “Completed application” means an application where all 3 necessary fees have been paid in full, any required bonds have 4 been submitted, the applicant has provided all information 5 requested by the department, and the application meets the 6 requirements of section 123.92, subsection 2 , or section 7 123.92A, subsection 2, if applicable. 8 Sec. 2. Section 123.3, Code 2024, is amended by adding the 9 following new subsection: 10 NEW SUBSECTION . 15A. “Consumable hemp product” means the 11 same as defined in section 204.2. 12 Sec. 3. Section 123.10, subsection 14, Code 2024, is amended 13 to read as follows: 14 14. Prescribing the uniform fee to be assessed against 15 a retail alcohol licensee, except a class “B”, special class 16 “B”, or class “E” retail alcohol licensee, to cover the 17 administrative costs incurred by the department resulting from 18 the failure of the licensee to maintain dramshop liability 19 insurance coverage pursuant to section 123.92, subsection 2 , 20 paragraph “a” , or dramshop hemp liability insurance coverage 21 pursuant to section 123.92A, subsection 2, paragraph “a” . 22 Sec. 4. NEW SECTION . 123.92A Civil liability for dispensing 23 or sale and service of any consumable hemp product (dramshop 24 hemp) —— liability insurance. 25 1. a. Subject to the limitation amount specified in 26 paragraph “c” , if applicable, any third party who is not the 27 intoxicated person who caused the injury at issue and who 28 is injured in person or property or means of support by an 29 intoxicated person or resulting from the intoxication of a 30 person, has a right of action for damages actually sustained, 31 severally or jointly against any licensee or permittee, whether 32 or not the license or permit was issued by the department or by 33 the licensing authority of any other state, who sold and served 34 any consumable hemp product, if the licensee or permittee is 35 -1- LSB 6364SV (3) 90 nls/ns 1/ 4

S.F. 2425 also registered to sell consumable hemp products under section 1 204.7 or by another jurisdiction, directly to the intoxicated 2 person, provided that the person was visibly intoxicated at the 3 time of the sale or service. 4 b. If the injury was proximately caused by an intoxicated 5 person, a permittee or licensee may establish as an affirmative 6 defense that the intoxication did not contribute to the 7 injurious action of the person. 8 c. In addition to the amount recoverable under section 9 123.92, subsection 1, paragraph “c” , the total amount 10 recoverable by each plaintiff in any civil action for 11 noneconomic damages for personal injury, whether in tort, 12 contract, or otherwise, against a licensee or permittee who 13 sold and served any consumable hemp product giving rise to such 14 civil action, regardless of whether the licensee or permittee 15 also sold and served any alcoholic beverage giving rise to such 16 civil action, shall be limited to five hundred thousand dollars 17 for any injury or death of a person, unless the jury determines 18 that there is a substantial or permanent loss or impairment of 19 a bodily function, substantial disfigurement, or death, which 20 warrants a finding that imposition of such a limitation would 21 deprive the plaintiff of just compensation for the injuries 22 sustained. 23 2. a. Every retail alcohol licensee, except a class “B”, 24 special class “B”, or class “E” retail alcohol licensee, shall 25 furnish proof of financial responsibility under this section 26 by the existence of a liability insurance policy in an amount 27 determined by the department. If an insurer provides dramshop 28 hemp liability insurance at a new location to a licensee 29 or permittee who has a positive loss experience at other 30 locations for which such insurance is provided by the insurer, 31 and the insurer bases premium rates at the new location on 32 the negative loss history of the previous licensee at that 33 location, the insurer shall examine and consider adjusting the 34 premium for the new location not less than thirty months after 35 -2- LSB 6364SV (3) 90 nls/ns 2/ 4

S.F. 2425 the insurance is issued, based on the loss experience of the 1 licensee at that location during that thirty-month period of 2 time. 3 b. A dramshop hemp liability insurance policy may be written 4 on an aggregate limit basis. 5 c. The purpose of dramshop hemp liability insurance is to 6 provide protection for members of the public who experience 7 damages as a result of licensees serving patrons any consumable 8 hemp product to a point that reaches or exceeds the standard 9 set forth in law for liability. Minimum coverage requirements 10 for such insurance are not for the purpose of making the 11 insurance affordable for all licensees regardless of claims 12 experience. A dramshop hemp liability insurance policy 13 obtained by a licensee shall meet the minimum insurance 14 coverage requirements as determined by the department and is a 15 mandatory condition for holding a license. 16 EXPLANATION 17 The inclusion of this explanation does not constitute agreement with 18 the explanation’s substance by the members of the general assembly. 19 This bill relates to civil liability and associated 20 insurance requirements of alcoholic beverage licensees or 21 permittees who also sell or serve consumable hemp products. 22 Under current law, Code section 123.92 provides for civil 23 liability and insurance requirements for alcoholic beverage 24 licensees and permittees who sell and serve alcoholic beverages 25 to a visibly intoxicated person (dramshop Act). The bill 26 establishes similar dramshop provisions applicable to a 27 licensee or permittee who sells or serves any consumable hemp 28 product (CHP), if the licensee or permittee is also registered 29 to sell CHPs in Iowa (Code section 204.7) or by another 30 jurisdiction. 31 The total amount recoverable by each plaintiff in any civil 32 action for noneconomic damages for personal injury against a 33 licensee or permittee who sold and served any CHP giving rise 34 to such civil action is limited to $500,000 for any injury 35 -3- LSB 6364SV (3) 90 nls/ns 3/ 4

S.F. 2425 or death of a person, unless the jury determines that there 1 is a substantial or permanent loss or impairment of a bodily 2 function, substantial disfigurement, or death, which warrants 3 a finding that imposition of such a limitation would deprive 4 the plaintiff of just compensation for the injuries sustained. 5 This is in addition to any amount recoverable under Code 6 section 123.92 based on sale or service of alcoholic beverages 7 ($250,000, with similar exceptions), and applies regardless 8 of whether the licensee or permittee also sold or served an 9 alcoholic beverage. 10 The bill makes conforming changes to Code section 123.3(15) 11 and Code section 123.10(14). 12 -4- LSB 6364SV (3) 90 nls/ns 4/ 4