House Study Bill 587 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED DEPARTMENT OF REVENUE BILL) A BILL FOR An Act relating to prohibited activities in the administration 1 of alcoholic beverage control by the department of revenue, 2 and including effective date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5479XD (5) 91 jm/ns

S.F. _____ H.F. _____ Section 1. Section 123.5, subsection 3, Code 2026, is 1 amended to read as follows: 2 3. Members of the commission shall be chosen on the basis 3 of managerial ability and experience as business executives. 4 Not more than two members of the commission may be the holder 5 of or have an interest in a permit or license to manufacture 6 alcoholic liquor, wine, or beer or to sell alcoholic liquor, 7 wine, or beer at wholesale or retail directly or indirectly; 8 individually; as a member of a partnership or an association; 9 as a member, owner, or stockholder, except as an institutional 10 investor, of a corporation or other entity; or as a relative to 11 an individual by blood or marriage within the second degree, 12 do any of the following: 13 a. Hold a permit or license to manufacture alcoholic 14 beverages or sell alcoholic beverages at wholesale or retail . 15 b. Have an interest in the manufacture of or dealing in 16 alcoholic beverages or in an enterprise or industry in which 17 alcoholic beverages are required. 18 c. Receive a commission or profit on the purchase or sale of 19 alcoholic beverages by any person. 20 d. Have an interest in or mortgage or deed of trust on any 21 land or building where alcoholic beverages are manufactured for 22 sale, offered for sale, or sold, or in any personal property 23 used in the manufacture or sale of alcoholic beverages. 24 Sec. 2. Section 123.5, Code 2026, is amended by adding the 25 following new subsections: 26 NEW SUBSECTION . 3A. In addition to the requirements of 27 chapter 68B, members of the commission shall not directly or 28 indirectly use the office of the member to influence, persuade, 29 or induce any person to adopt their political views or to favor 30 any particular candidate for an elective or appointive public 31 office. 32 NEW SUBSECTION . 6. This section does not prohibit a 33 commission member from lawfully purchasing and keeping 34 alcoholic beverages in the possession of the commission member. 35 -1- LSB 5479XD (5) 91 jm/ns 1/ 4

S.F. _____ H.F. _____ Sec. 3. Section 123.13, Code 2026, is amended by striking 1 the section and inserting in lieu thereof the following: 2 123.13 Prohibitions —— director and employees. 3 1. For purposes of this section, “director” means the 4 director of revenue but does not include the director’s 5 designee. 6 2. The requirements of this section are in addition to the 7 requirements of chapter 68B. 8 3. The director shall not directly or indirectly; 9 individually; as a member of a partnership or an association; 10 as a member, owner, or stockholder, except as an institutional 11 investor, of a corporation or other entity; or as a relative to 12 an individual by blood or marriage within the second degree, 13 do any of the following: 14 a. Have an interest in the manufacture of or dealing in 15 alcoholic beverages or in an enterprise or industry in which 16 alcoholic beverages are required. 17 b. Receive a commission or profit from the purchase or sale 18 of alcoholic beverages by any person. 19 c. Have an interest in or mortgage or deed of trust on any 20 land or building where alcoholic beverages are manufactured for 21 sale, offered for sale, or sold, or in any personal property 22 used in the manufacture or sale of alcoholic beverages. 23 4. An employee of the department shall not license, 24 permit, or participate in the licensing or permitting of a 25 person, business, or organization that requires a license or 26 permit under the laws and rules governing alcoholic beverages, 27 if the employee has an ownership interest related to that 28 person, business, or organization, or is in a position to 29 exercise any control over the purchasing of alcoholic beverages 30 through a position of employment with the person, business, or 31 organization. 32 5. An employee of the department shall not enforce any 33 law or rule governing alcoholic beverages against a person, 34 business, or organization that requires a license or permit 35 -2- LSB 5479XD (5) 91 jm/ns 2/ 4

S.F. _____ H.F. _____ under the laws and rules governing alcoholic beverages, 1 if the employee has an ownership interest related to that 2 person, business, or organization, or is in a position to 3 exercise any control over the purchase of alcoholic beverages 4 through a position of employment with the person, business, or 5 organization. 6 6. The director or an employee of the department violating 7 this section or any other provision of this chapter shall, in 8 addition to any other penalties provided by law, be subject 9 to disciplinary action up to and including discharge from 10 employment. 11 7. This section does not prohibit the director or an 12 employee of the department from lawfully purchasing and keeping 13 alcoholic beverages in the possession of the director or the 14 employee. 15 Sec. 4. EFFECTIVE DATE. This Act, being deemed of immediate 16 importance, takes effect upon enactment. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 This bill relates to prohibited activities in the 21 administration of alcoholic beverage control by the department 22 of revenue (IDR). 23 The bill specifies that not more than two members of the 24 alcoholic beverages commission (member) shall directly or 25 indirectly have an interest in alcohol-related enterprises, 26 except as institutional investors. The bill prohibits a member 27 from influencing, persuading, or inducing others to adopt 28 political views of the member or favor any particular elective 29 or appointive candidates. 30 The bill prohibits the director of revenue from having 31 any interest in alcohol-related enterprises, except as an 32 institutional investor. 33 The bill prohibits an IDR employee from licensing, 34 permitting, or participating in the licensing or permitting of 35 -3- LSB 5479XD (5) 91 jm/ns 3/ 4

S.F. _____ H.F. _____ a person, business, or organization under the laws governing 1 alcoholic beverages, if the employee has an ownership interest 2 related to that person, business, or organization, or is in 3 a position to exercise any control over the purchasing of 4 alcoholic beverages through a position of employment with the 5 person, business, or organization. The bill also prohibits an 6 IDR employee from enforcing any law or rule governing alcoholic 7 beverages against a person, business, or organization, if the 8 employee has an ownership interest related to that person, 9 business, or organization, or is in a position to exercise 10 any control over the purchasing of alcoholic beverages 11 through a position of employment with the person, business, or 12 organization. 13 The bill provides the director of revenue or an IDR employee 14 who violates the bill shall, in addition to any other penalties 15 provided by law, be subject to disciplinary action up to and 16 including discharge from employment. 17 The bill does not prohibit a member, the director of revenue, 18 or an IDR employee from lawfully purchasing and keeping an 19 alcoholic beverage in the person’s possession. 20 The bill takes effect upon enactment. 21 -4- LSB 5479XD (5) 91 jm/ns 4/ 4