S.F. 387 DIVISION I 1 DEFINITIONS AND LICENSE AUTHORIZATIONS 2 Section 1. Section 123.3, subsections 10 and 32, Code 2025, 3 are amended to read as follows: 4 10. “Canned cocktail” means a mixed drink or cocktail , the 5 alcohol component of which is primarily composed of alcoholic 6 liquor, that is premixed and packaged in a metal can and 7 contains more than one-half of one percent of alcohol by volume 8 but not more than fifteen percent of alcohol by volume. A 9 mixed drink or cocktail mixed and packaged in a metal can 10 pursuant to section 123.49, subsection 2 , paragraph “d” , 11 subparagraph (3), shall not be considered a canned cocktail. 12 32. “Mixed drink or cocktail” means an alcoholic beverage, 13 composed in whole or in part of alcoholic liquor, wine, or 14 beer, that is combined with other alcoholic beverages or 15 nonalcoholic beverages or ingredients including but not limited 16 to ice, water, soft drinks, or flavorings. 17 Sec. 2. Section 123.30, subsection 1, paragraph a, Code 18 2025, is amended to read as follows: 19 a. A retail alcohol license may be issued to any person 20 who is of good moral character as defined by this chapter , the 21 state of Iowa, or any state agency as defined in section 669.2 . 22 Sec. 3. Section 123.30, subsection 3, paragraph b, 23 subparagraph (2), subparagraph division (c), Code 2025, is 24 amended to read as follows: 25 (c) The holder of a special class “C” retail alcohol 26 license shall be authorized to sell wine and beer to patrons 27 by the individual drink for consumption on the premises only. 28 However, wine and beer in original unopened containers may 29 also be sold for consumption off the premises. In addition, a 30 mixed drink or cocktail that does not contain alcoholic liquor 31 may be sold for consumption off the premises subject to the 32 requirements of section 123.49, subsection 2, paragraph “d” . 33 Sec. 4. Section 123.31, subsection 2, paragraphs b and c, 34 Code 2025, are amended to read as follows: 35 -1- LSB 1392SV (1) 91 ll/ns 1/ 6

S.F. 387 b. That the applicant is a person of good moral character 1 as provided in section 123.3, subsection 40 . This paragraph 2 does not apply if the applicant is the state of Iowa or a state 3 agency as defined in section 669.2. 4 c. That the applicant is a citizen of the state of Iowa 5 or, if a corporation, that the applicant is authorized to do 6 business in the state. This paragraph does not apply if the 7 applicant is the state of Iowa or a state agency as defined in 8 section 669.2. 9 Sec. 5. Section 123.31C, subsection 1, Code 2025, is amended 10 to read as follows: 11 1. A person holding a special class “C” retail native 12 wine license may sell beer and native wine only at retail for 13 consumption on or off the premises. Sales of beer and native 14 wine for consumption off the premises made pursuant to this 15 section shall be made in original containers except as provided 16 in subsection 5 . A sale of a mixed drink or cocktail that does 17 not contain alcoholic liquor may be sold for consumption off 18 the premises subject to the requirements of section 123.49, 19 subsection 2, paragraph “d” . 20 Sec. 6. Section 123.43, subsection 2, paragraphs b and c, 21 Code 2025, are amended to read as follows: 22 b. That the applicant is a person of good moral character 23 as provided in section 123.3, subsection 40 . This paragraph 24 does not apply if the applicant is the state of Iowa or a state 25 agency as defined in section 669.2. 26 c. That the applicant is a citizen of the state of Iowa 27 or, if a corporation, that the applicant is authorized to do 28 business in the state. This paragraph does not apply if the 29 applicant is the state of Iowa or a state agency as defined in 30 section 669.2. 31 Sec. 7. Section 123.49, subsection 2, paragraph d, 32 subparagraph (3), Code 2025, is amended to read as follows: 33 (3) Mixed drinks or cocktails mixed on premises covered by 34 a class “C” or special class “C” retail alcohol license , or a 35 -2- LSB 1392SV (1) 91 ll/ns 2/ 6

S.F. 387 special class “C” retail native wine license, for consumption 1 off the licensed premises may be sold if the mixed drink or 2 cocktail is immediately filled in a sealed container and is 3 promptly taken from the licensed premises prior to consumption 4 of the mixed drink or cocktail. A mixed drink or cocktail 5 that is sold in a sealed container in compliance with the 6 requirements of this subparagraph and rules adopted by the 7 department shall not be deemed an open container subject to the 8 requirements of sections 321.284 and 321.284A if the sealed 9 container is unopened and the seal has not been tampered with, 10 and the contents of the container have not been partially 11 removed. 12 Sec. 8. Section 123.127, subsection 2, paragraphs b and c, 13 Code 2025, are amended to read as follows: 14 b. That the applicant is a person of good moral character 15 as provided in section 123.3, subsection 40 . This paragraph 16 does not apply if the applicant is the state of Iowa or a state 17 agency as defined in section 669.2. 18 c. That the applicant is a citizen of the state of Iowa 19 or, if a corporation, that the applicant is authorized to do 20 business in the state. This paragraph does not apply if the 21 applicant is the state of Iowa or a state agency as defined in 22 section 669.2. 23 Sec. 9. Section 123.175, subsection 2, paragraphs b and c, 24 Code 2025, are amended to read as follows: 25 b. That the applicant is a person of good moral character 26 as provided in section 123.3, subsection 40 . This paragraph 27 does not apply if the applicant is the state of Iowa or a state 28 agency as defined in section 669.2. 29 c. That the applicant is a citizen of the state of Iowa 30 or, if a corporation, that the applicant is authorized to do 31 business in the state. This paragraph does not apply if the 32 applicant is the state of Iowa or a state agency as defined in 33 section 669.2. 34 Sec. 10. EFFECTIVE DATE. This division of this Act, being 35 -3- LSB 1392SV (1) 91 ll/ns 3/ 6

S.F. 387 deemed of immediate importance, takes effect upon enactment. 1 DIVISION II 2 LICENSE FEE DETERMINATION 3 Sec. 11. Section 123.36, subsection 1, paragraph a, 4 subparagraph (4), Code 2025, is amended to read as follows: 5 (4) For premises located outside the corporate limits of 6 any city, a fee equal to that charged to for a premises with 7 of the same square footage in the nearest incorporated city 8 located nearest the premises to be licensed , as determined by 9 the address assigned by the United States postal service . If 10 there is doubt as to which of two or more differing corporate 11 limits is the nearest, the license fee which is the largest 12 shall prevail. However, if the premises is located in an 13 unincorporated town, for purposes of this paragraph, the 14 unincorporated town shall be treated as if it is a city. 15 Sec. 12. Section 123.36, subsection 1, paragraph c, 16 subparagraph (4), Code 2025, is amended to read as follows: 17 (4) Commercial establishments located outside the corporate 18 limits of any city, a fee equal to that charged in the 19 incorporated city located nearest the premises to be licensed, 20 and in case there is doubt as to which of two or more differing 21 corporate limits is the nearest, the license fee which is the 22 largest shall prevail as determined by the address assigned by 23 the United States postal service . However, if a commercial 24 establishment is located in an unincorporated town, for 25 purposes of this paragraph, the unincorporated town shall be 26 treated as if it is a city. 27 Sec. 13. Section 123.36, subsection 1, paragraph d, 28 subparagraph (4), Code 2025, is amended to read as follows: 29 (4) Commercial establishments located outside the corporate 30 limits of any city, a fee equal to that charged in the 31 incorporated city located nearest the premises to be licensed, 32 and in case there is doubt as to which of two or more differing 33 corporate limits is the nearest, the license fee which is the 34 largest shall prevail as determined by the address assigned by 35 -4- LSB 1392SV (1) 91 ll/ns 4/ 6

S.F. 387 the United States postal service . However, if a commercial 1 establishment is located in an unincorporated town, for 2 purposes of this paragraph, the unincorporated town shall be 3 treated as if it is a city. 4 Sec. 14. Section 123.36, subsection 1, paragraph g, 5 subparagraph (4), Code 2025, is amended to read as follows: 6 (4) For premises located outside the corporate limits of 7 any city, a fee equal to that charged to for a premises with 8 of the same square footage in the nearest incorporated city 9 located nearest the premises to be licensed , as determined by 10 the address assigned by the United States postal service . If 11 there is doubt as to which of two or more differing corporate 12 limits is the nearest, the license fee which is the largest 13 shall prevail. However, if the premises is located in an 14 unincorporated town, for purposes of this paragraph, the 15 unincorporated town shall be treated as if it is a city. 16 Sec. 15. APPLICABILITY. This division of this Act applies 17 to licenses issued or renewed on or after November 10, 2025. 18 A license issued prior to that date and in effect on that date 19 shall continue in full force and effect with the authority 20 originally granted by the license until expiration or renewal. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanation’s substance by the members of the general assembly. 24 This bill relates to alcoholic beverages. 25 DEFINITIONS AND LICENSE AUTHORIZATIONS. The bill modifies 26 the definition of “canned cocktail” by specifying that the 27 alcohol component is primarily alcoholic liquor, and expands 28 the definition of “mixed drink or cocktail” to include 29 alcoholic beverages composed of wine or beer. The bill 30 authorizes a special class “C” retail alcohol licensee or a 31 special class “C” retail native wine licensee to sell mixed 32 drinks or cocktails for consumption off the premises pursuant 33 to Code section 123.49(2)(d)(3), if the beverage does not 34 contain alcoholic liquor. 35 -5- LSB 1392SV (1) 91 ll/ns 5/ 6

S.F. 387 The bill specifically authorizes the state of Iowa or a state 1 agency to be issued a retail alcohol license and excludes them 2 from the requirements that the applicant for a retail alcohol 3 license, class “A” native distilled spirits license, class “A” 4 or special class “A” beer permit, or class “A” wine permit be a 5 person of good moral character and authorized to do business in 6 the state of Iowa. The bill does not enact such an exclusion 7 for a wine auction permit (Code section 123.173C). 8 This division takes effect upon enactment. 9 LICENSING FEE DETERMINATION. Under current law, when 10 determining the applicable fee for a class “B”, class “C”, 11 special class “C”, or class “E” retail alcohol license, where 12 the premises or commercial establishment is located outside the 13 corporate limits of any city, the population of the nearest 14 incorporated city is used, unless the licensed premises is 15 located in an unincorporated town, then the unincorporated 16 town is treated as a city. The bill instead determines such 17 fees based on the population of the nearest incorporated city 18 as determined by the address assigned by United State postal 19 service. 20 This division applies to licenses issued or renewed on or 21 after November 10, 2025. A license issued prior to that date 22 and in effect on that date shall continue in full force and 23 effect until expiration or renewal. 24 -6- LSB 1392SV (1) 91 ll/ns 6/ 6