House File 668 - Reprinted HOUSE FILE 668 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HSB 210) (COMPANION TO LSB 2490SV BY COMMITTEE ON COMMERCE) (As Amended and Passed by the House March 13, 2019 ) A BILL FOR An Act concerning alcoholic beverage control, relating to 1 limitations on business interests of certain manufacturers, 2 wholesalers, and retailers of alcoholic beverages. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 HF 668 (4) 88 ec/rn/md

H.F. 668 Section 1. Section 123.3, Code 2019, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 24A. “Institutional investor” means a 3 person who maintains a diversified portfolio of investments 4 through a state or federally chartered bank, a mutual fund, 5 a retirement plan or account created by an employer, the 6 person, or another individual to provide retirement benefits or 7 deferred compensation to the person, a private investment firm, 8 or a holding company publicly traded on the New York stock 9 exchange, the American stock exchange, or NASDAQ stock market 10 and who has a majority of investments in businesses other than 11 businesses that manufacture, bottle, wholesale, or sell at 12 retail alcoholic beverages. 13 Sec. 2. Section 123.45, subsection 1, unnumbered paragraph 14 1, Code 2019, is amended to read as follows: 15 A Subject to such exceptions as otherwise authorized 16 under this chapter, a person engaged in the business of 17 manufacturing, bottling, or wholesaling alcoholic beverages, 18 wine, or beer excluding an institutional investor , or any 19 jobber, representative, broker, employee, or agent of such a 20 person, shall not do any of the following: 21 Sec. 3. Section 123.45, subsection 1, paragraphs c and d, 22 Code 2019, are amended to read as follows: 23 c. Directly or indirectly be interested in the ownership, 24 conduct, or operation of the business of another licensee or 25 permittee authorized under this chapter to sell at retail , 26 unless the licensee or permittee authorized under this 27 chapter to sell at retail does not purchase or sell the 28 alcoholic beverages of the person engaged in the business of 29 manufacturing, bottling, or wholesaling alcoholic beverages. 30 However, the licensee or permittee authorized under this 31 chapter to sell at retail may purchase and sell the wine of the 32 person engaged in the business of manufacturing wine that is 33 not native wine provided the licensed premises is the principal 34 office, as defined in section 490.140, of the person . 35 -1- HF 668 (4) 88 ec/rn/md 1/ 3

H.F. 668 d. Hold a retail liquor control license or retail wine or 1 beer permit , unless the licensee or permittee holding a retail 2 liquor control license or retail wine or beer permit does not 3 purchase or sell the alcoholic beverages of the person engaged 4 in the business of manufacturing, bottling, or wholesaling 5 alcoholic beverages. However, a person engaged in the business 6 of manufacturing wine that is not native wine may purchase and 7 sell the person’s wine under the authority of a special class 8 “C” liquor control license and a class “B” wine permit provided 9 the licensed premises is the principal office, as defined in 10 section 490.140, of the person . 11 Sec. 4. Section 123.45, Code 2019, is amended by adding the 12 following new subsections: 13 NEW SUBSECTION . 1A. Notwithstanding any provision of law to 14 the contrary, a broker, employee, or agent of a person engaged 15 in the business of manufacturing, bottling, or wholesaling 16 alcoholic beverages may be a broker, employee, or agent of 17 another person engaged in the business of manufacturing, 18 bottling, or wholesaling alcoholic beverages or a broker, 19 employee, or agent of a business authorized under this chapter 20 to sell alcoholic beverages at retail as long as the broker, 21 employee, or agent is not an officer, owner, director, or 22 employee in a position to exercise any control or influence 23 over the types of sales or the purchasing of alcoholic 24 beverages in either position of employment. 25 NEW SUBSECTION . 4. The exceptions established by 26 subsection 1 to the general prohibition against tied interests 27 shall be limited to their express terms so as not to undermine 28 the general prohibition and shall therefore be construed 29 accordingly, and shall not be construed to affect exceptions 30 to the general prohibition against tied interests as otherwise 31 authorized under this chapter. 32 Sec. 5. Section 123.130, subsection 1, Code 2019, is amended 33 to read as follows: 34 1. a. Any person holding a class “A” beer permit issued 35 -2- HF 668 (4) 88 ec/rn/md 2/ 3

H.F. 668 by the division shall be authorized to manufacture and sell, 1 or sell at wholesale, beer for consumption off the premises, 2 such sales within the state to be made only to persons holding 3 subsisting class “A”, “B”, or “C” beer permits, both a class 4 “C” native wine permit and a class “A” wine permit pursuant 5 to section 123.178B, subsection 4 , or liquor control licenses 6 issued in accordance with the provisions of this chapter . 7 However, a person holding a class “A” beer permit issued by 8 the division who also holds a brewer’s notice issued by the 9 alcohol and tobacco tax and trade bureau of the United States 10 department of the treasury shall be authorized to sell, at 11 wholesale, no more than thirty thousand barrels of beer on an 12 annual basis for consumption off the premises to a licensee or 13 permittee authorized under this chapter to sell beer at retail. 14 b. A class “A” or special class “A” beer permit does not 15 grant authority to manufacture wine as defined in section 16 123.3, subsection 48 . 17 -3- HF 668 (4) 88 ec/rn/md 3/ 3