HF 526 (LSB 1103HV (2) 91)

HOUSE FILE 526

BY  COMMITTEE ON STATE GOVERNMENT

(SUCCESSOR TO HF 57)

A BILL FOR

An Act providing for the direct shipment of beer, levying a barrel tax, providing fees, making penalties applicable, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 123.32, subsection 1, paragraph b, Code 2025, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (07)  A beer direct shipper permit as provided in section 123.147.
    Sec. 2.  Section 123.32, subsection 1, paragraph b, subparagraph (10), Code 2025, is amended to read as follows:
   (10)  A wine An alcoholic beverage carrier permit as provided in section 123.188.
    Sec. 3.  Section 123.35, subsection 4, unnumbered paragraph 1, Code 2025, is amended to read as follows:
   Notwithstanding section sections 123.147 and 123.187, and any other provision of this chapter to the contrary, a beer or wine direct shipper’s shipper permit shall automatically renew without approval by the director upon collection of the annual fee by the department, provided all of the following conditions are met since the preceding permit was issued:
    Sec. 4.  Section 123.35, subsection 4, paragraph e, Code 2025, is amended to read as follows:
   e.  The permittee has filed all required reports and remitted all beer barrel tax owed pursuant to section 123.136 or wine gallonage tax owed pursuant to section 123.183, as applicable.
    Sec. 5.  Section 123.39, subsection 1, paragraph a, subparagraph (2), Code 2025, is amended to read as follows:
   (2)  The director may suspend a certificate of compliance, a class “D” retail alcohol license, a manufacturer’s license, a broker’s permit, a class “A” native distilled spirits license, a class “A” or special class “A” beer permit, a beer direct shipper permit, a class “A” wine permit, a wine direct

shipper’s shipper permit, or a wine an alcoholic beverage carrier permit for a period not to exceed one year, revoke the license, permit, or certificate, or impose a civil penalty not to exceed one thousand dollars per violation.
    Sec. 6.  Section 123.46A, subsection 5, Code 2025, is amended to read as follows:
   5.  Nothing in this section shall impact the direct shipment of beer as regulated by section 123.147 or the direct shipment of wine as regulated by section 123.187.
    Sec. 7.  Section 123.136, subsection 1, Code 2025, is amended to read as follows:
   1.  In addition to the annual permit fee to be paid by all class “A” beer permittees under this chapter there shall be levied and collected from the permittees on all beer manufactured for sale or sold in this state at wholesale and on all beer imported into this state for sale at wholesale and sold in this state at wholesale, and from special class “A” beer permittees on all beer manufactured for consumption on the premises and on all beer sold at retail at the manufacturing premises for consumption off the premises pursuant to section 123.130, subsection 4, a tax of five and eighty-nine hundredths dollars for every barrel containing thirty-one gallons, and at a like rate for any other quantity or for the fractional part of a barrel.  A barrel tax shall also be levied and collected on the direct shipment of beer pursuant to section 123.147. However, no tax shall be levied or collected on beer shipped outside this state by a class “A” beer permittee or special class “A” beer permittee to an out-of-state wholesaler of beer or on beer sold to a class “A” beer permittee by a special class “A” beer permittee or another class “A” beer permittee.
    Sec. 8.  Section 123.137, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  Each beer direct shipper permit holder shall make a report under oath to the department electronically, or in a manner prescribed by the director, on or before the tenth day of the calendar months of June and December, showing the exact number of barrels of beer and fractional parts of barrels sold and shipped pursuant to section 123.147 during the preceding six-month calendar period. The report must also state whatever reasonable additional information the director requires. The permit holder at the time of filing this report shall pay to the department the amount of tax due at the rate fixed in section 123.136.
    Sec. 9.  NEW SECTION.  123.147  Direct shipment of beer —— permit and requirements.
   1.  A beer manufacturer holding a class “A” beer permit issued by the department who also holds a brewer’s notice issued by the alcohol and tobacco tax and trade bureau of the United States department of the treasury may apply for a beer direct shipper permit as provided in this section.
   2.  a.  Only a class “A” beer permit holder that holds a beer direct shipper permit issued pursuant to this section may sell beer at retail for direct shipment to any person within this state, or from this state to any person outside the state if also authorized pursuant to the laws of that jurisdiction. This section does not prohibit an authorized retail licensee from delivering beer pursuant to section 123.46A.
   b.  A class “A” beer permit holder applying for a beer direct shipper permit shall submit an application for the permit electronically, or in a manner prescribed by the director, accompanied by a true copy of the manufacturer’s class “A” beer permit issued by the department and a copy of the manufacturer’s brewer’s notice issued by the alcohol and tobacco tax and trade bureau of the United States department of the treasury.
   c.  An application submitted pursuant to paragraph “b” shall be accompanied by a permit fee in the amount of twenty-five dollars.
   d.  A permit issued pursuant to this section may be renewed annually by submitting a renewal application with the director in a manner prescribed by the director, accompanied by the twenty-five dollar permit fee.
   3.  The direct shipment of beer pursuant to this section is subject to the following requirements and restrictions:
   a.  Beer shall only be shipped to a resident of this state, or from this state to a person outside the state if also authorized pursuant to the laws of that jurisdiction, who is at least twenty-one years of age, for the person’s personal use and consumption and not for resale.
   b.  Beer subject to direct shipping shall be properly registered with the federal alcohol and tobacco tax and trade bureau, and manufactured on the licensed premises of the beer direct shipper permittee.
   c.  All containers of beer shipped under this section shall be conspicuously labeled with the words “CONTAINS ALCOHOL:  SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY” or shall be conspicuously labeled with alternative wording preapproved by the director.
   d.  All containers of beer shipped under this section shall be shipped by a holder of an alcoholic beverage carrier permit as provided in section 123.188.
   e.  Shipment of beer pursuant to this subsection does not require a refund value for beverage container control purposes under chapter 455C.
   4.  A beer direct shipper permittee shall remit to the department an amount equivalent to the barrel tax on beer subject to direct shipment, whether shipped within the state or out of state, at the rate specified in section 123.136 for deposit as provided in section 123.136, subsection 2. The amount shall be remitted at the time and in the manner provided in section 123.137, subsection 1A, and the ten percent penalty specified in section 123.137, subsection 2, shall be applicable.
   5.  A beer direct shipper permittee shall be deemed to have consented to the jurisdiction of the department or any other agency or court in this state concerning enforcement of this section and any related laws, rules, or regulations. A permit holder shall allow the department to perform an audit of shipping records upon request.
   6.  A violation of this section shall subject the permittee to the general penalties provided in this chapter and shall constitute grounds for imposition of a civil penalty or suspension or revocation of the permit pursuant to section 123.39.
    Sec. 10.  Section 123.173C, subsection 4, paragraphs b and d, Code 2025, are amended to read as follows:
   b.  A person, within or outside of the state, who desires to ship wine from a private collection to a wine auction permittee to be sold at auction shall do so through a holder of

a wine an alcoholic beverage carrier permit. The wine auction permittee shall ensure that each bottle of wine so acquired is permanently affixed with a label stating that the wine was acquired from a private collection.
   d.  A permittee is responsible for the storage of all wines that are to be offered at auction at the licensed premises, and for the subsequent shipment and delivery of all wines sold at auction to the purchasers of the wines. Shipment of wine pursuant to this paragraph shall only be done by a holder of a wine an alcoholic beverage carrier permit.
    Sec. 11.  Section 123.187, subsection 3, paragraph d, Code 2025, is amended to read as follows:
   d.  All containers of wine shipped directly to a resident of this state shall be shipped by a holder of a wine an alcoholic beverage carrier permit as provided in section 123.188.
    Sec. 12.  Section 123.188, subsections 1, 2, and 4, Code 2025, are amended to read as follows:
   1.  A person desiring to deliver beer subject to direct shipment pursuant to section 123.147, to deliver wine subject to direct shipment within this state pursuant to section 123.187, or to deliver wine shipped to or by a wine auction permittee pursuant to section 123.173C, shall submit an application for a wine an alcoholic beverage carrier permit electronically, or in a manner prescribed by the director, which shall be accompanied by a fee in the amount of one hundred dollars.
   2.  The director may in accordance with this chapter issue a wine an alcoholic beverage carrier permit which shall be valid for one year from the date of issuance unless it is sooner suspended or revoked for a violation of this chapter.
   4.  The delivery of beer or wine pursuant to this section shall be subject to the following requirements and restrictions:
   a.  A wine An alcoholic beverage carrier permittee shall not deliver beer or wine to any person under twenty-one years of age, or to any person who either is or appears to be in an intoxicated state or condition.
   b.  A wine An alcoholic beverage carrier permittee shall obtain valid proof of identity and age prior to delivery, and shall obtain the signature of an adult as a condition of delivery.
   c.  A wine An alcoholic beverage carrier permittee shall maintain records of beer or wine shipped which include the permit number and name of the beer or wine manufacturer or wine auction permittee, quantity of beer or wine shipped, recipient’s name and address, and an electronic or paper form of signature from the recipient of the beer or wine. Records shall be submitted to the department on a monthly basis in a form and manner to be determined by the department.
    Sec. 13.  EFFECTIVE DATE.  This Act takes effect January 1, 2026.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill allows for the direct shipment of beer.
   New Code section 123.147 provides for the direct shipment of beer to any person within this state, or from this state to any person outside the state if also authorized pursuant to the laws of that jurisdiction, and provides for a beer direct shipper permit. A class “A” beer permittee who holds a federal brewer’s notice may apply for a beer direct shipper permit. Provisions governing the direct shipment of wine and the wine direct shipper permit are generally made applicable to the direct shipment of beer. Under current law, the wine direct shipper permit under Code section 123.187 does not authorize the permittee to ship wine to persons out of state.
   The bill provides for application requirements and establishes a $25 annual fee for the permit. The bill also provides that a permittee under the bill shall pay the barrel tax on beer subject to direct shipment at the rate specified for beer sold in the state. Code section 123.135, concerning the barrel tax, and Code section 123.136, concerning reporting of barrel sales, are made applicable to beer subject to direct shipment.
   Code section 123.188, providing for a wine carrier permit, is amended to provide for the direct shipment of beer as provided by the bill.
   The bill takes effect January 1, 2026.