House File 668 - IntroducedA Bill ForAn Act 1concerning alcoholic beverage control, relating to
2limitations on business interests of certain manufacturers,
3wholesalers, and retailers of alcoholic beverages.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  Section 123.45, Code 2019, is amended by adding
2the following new subsection:
3   NEW SUBSECTION.  01.  For purposes of this section,
4“institutional investor” means a person who maintains a
5diversified portfolio of investments through a state or
6federally chartered bank, a mutual fund, a retirement plan
7or account created by an employer, the person, or another
8individual to provide retirement benefits or deferred
9compensation to the person, a private investment firm, or a
10holding company publicly traded on the New York stock exchange,
11the American stock exchange, or NASDAQ stock market and who has
12a majority of investments in businesses other than businesses
13that manufacture, bottle, wholesale, or sell at retail
14alcoholic beverages.
15   Sec. 2.  Section 123.45, subsection 1, unnumbered paragraph
161, Code 2019, is amended to read as follows:
   17A Subject to such exceptions as otherwise authorized
18under this chapter, a
person engaged in the business of
19manufacturing, bottling, or wholesaling alcoholic beverages,
20wine, or beer excluding an institutional investor, or any
21jobber, representative, broker, employee, or agent of such a
22person, shall not do any of the following:
23   Sec. 3.  Section 123.45, subsection 1, paragraphs c and d,
24Code 2019, are amended to read as follows:
   25c.  Directly or indirectly be interested in the ownership,
26conduct, or operation of the business of another licensee or
27permittee authorized under this chapter to sell at retail,
28unless the licensee or permittee authorized under this
29chapter to sell at retail does not purchase or sell the
30alcoholic beverages of the person engaged in the business of
31manufacturing, bottling, or wholesaling alcoholic beverages.
32However, the licensee or permittee authorized under this
33chapter to sell at retail may purchase and sell the wine of the
34person engaged in the business of manufacturing wine that is
35not native wine provided the licensed premises is the principal
-1-1office, as defined in section 490.140, of the manufacturer
.
   2d.  Hold a retail liquor control license or retail wine or
3beer permit, unless the licensee or permittee holding a retail
4liquor control license or retail wine or beer permit does not
5purchase or sell the alcoholic beverages of the person engaged
6in the business of manufacturing, bottling, or wholesaling
7alcoholic beverages. However, a person engaged in the business
8of manufacturing wine that is not native wine may purchase and
9sell the person’s wine under the authority of a special class
10“C” liquor control license and a class “B” wine permit provided
11the licensed premises is the principal office, as defined in
12section 490.140, of the person
.
13   Sec. 4.  Section 123.45, Code 2019, is amended by adding the
14following new subsections:
15   NEW SUBSECTION.  1A.  Notwithstanding any provision of law to
16the contrary, a broker, employee, or agent of a person engaged
17in the business of manufacturing, bottling, or wholesaling
18alcoholic beverages may be a broker, employee, or agent of
19another person engaged in the business of manufacturing,
20bottling, or wholesaling alcoholic beverages or a broker,
21employee, or agent of a business authorized under this chapter
22to sell alcoholic beverages at retail as long as the broker,
23employee, or agent is not an officer, owner, director, or
24employee in a position to exercise any control or influence
25over the types of sales or the purchasing of alcoholic
26beverages in either position of employment.
27   NEW SUBSECTION.  4.  The exceptions established by
28subsection 1 to the general prohibition against tied interests
29shall be limited to their express terms so as not to undermine
30the general prohibition and shall therefore be construed
31accordingly, and shall not be construed to affect exceptions
32to the general prohibition against tied interests as otherwise
33authorized under this chapter.
34   Sec. 5.  Section 123.130, subsection 1, Code 2019, is amended
35to read as follows:
-2-   11.  a.  Any person holding a class “A” beer permit issued
2by the division shall be authorized to manufacture and sell,
3or sell at wholesale, beer for consumption off the premises,
4such sales within the state to be made only to persons holding
5subsisting class “A”, “B”, or “C” beer permits, both a class
6“C” native wine permit and a class “A” wine permit pursuant
7to section 123.178B, subsection 4, or liquor control licenses
8issued in accordance with the provisions of this chapter.
 9However, a person holding a class “A” beer permit issued by
10the division who also holds a brewer’s notice issued by the
11alcohol and tobacco tax and trade bureau of the United States
12department of the treasury shall be authorized to sell, at
13wholesale, no more than thirty thousand barrels of beer on an
14annual basis for consumption off the premises.

   15b.  A class “A” or special class “A” beer permit does not
16grant authority to manufacture wine as defined in section
17123.3, subsection 48.
18EXPLANATION
19The inclusion of this explanation does not constitute agreement with
20the explanation’s substance by the members of the general assembly.
   21This bill concerns alcoholic beverage control relating
22to limitations on business interests of manufacturers,
23wholesalers, and retailers of alcoholic beverages.
   24Code section 123.45, concerning limitations on business
25interests, is amended. The bill, for purposes of the Code
26section, defines “institutional investor” to mean a person
27who maintains a diversified portfolio of investments and
28who has a majority of investments in businesses other than
29businesses that manufacture, bottle, wholesale, or sell at
30retail alcoholic beverages.
   31Code section 123.45(1), providing the general limitation on
32business interests, is amended. The bill provides that the
33limitation on business interests applicable to a person engaged
34in the business of manufacturing, bottling, or wholesaling
35alcoholic beverages does not apply to a person who is an
-3-1institutional investor. In addition, the bill provides that a
2manufacturer, bottler, or wholesaler of alcoholic beverages is
3not prohibited from being interested in the business of another
4retail licensee or permittee, or from holding a retail liquor
5control license or retail wine or beer permit, if the retail
6business, licensee, or permittee does not purchase or sell the
7alcoholic beverages of the person engaged in the business of
8manufacturing, bottling, or wholesaling alcoholic beverages.
9The bill further provides that a person engaged in the business
10of manufacturing wine that is not native wine who is interested
11in the business of another retail licensee or permittee may
12still purchase and sell the person’s wine on the premises of a
13retail licensee of the person so long as the licensed premises
14is the principal office of the manufacturer.
   15Code section 123.45, new subsection 1A, provides that a
16broker, employee, or agent of a person engaged in the business
17of manufacturing, bottling, or wholesaling alcoholic beverages
18may be a broker, employee, or agent of another person engaged
19in the business of manufacturing, bottling, or wholesaling
20alcoholic beverages or a business authorized to sell alcoholic
21beverages at retail as long as the broker, employee, or agent
22is not an officer, owner, director, or employee in a position
23to exercise any control or influence over the types of sales
24or the purchasing of alcoholic beverages in either position of
25employment.
   26Code section 123.45 is further amended to provide that the
27exceptions established by subsection 1 of this Code section to
28the general prohibition against tied interests shall be limited
29and shall not be construed to affect exceptions to the general
30prohibition against tied interests as otherwise authorized
31under Code chapter 123.
   32Code section 123.130, concerning authority under a class
33“A” beer permit, is amended to provide that a person holding a
34class “A” beer permit who also holds a brewer’s notice issued
35by the alcohol and tobacco tax and trade bureau of the United
-4-1States department of the treasury shall be authorized to sell,
2at wholesale, no more than 30,000 barrels of beer on an annual
3basis for consumption off the premises.
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