Bill Text: IA HSB574 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A study bill concerning alcoholic beverage control, including micro-distillery production and sales and dramshop liability insurance requirements, requiring a comprehensive study on alcoholic beverage control, and establishing fees.
Spectrum: Unknown
Status: (Introduced - Dead) 2016-02-16 - Voted - State Government. [HSB574 Detail]
Download: Iowa-2015-HSB574-Introduced.html
House
Study
Bill
574
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
STATE
GOVERNMENT
BILL
BY
CHAIRPERSON
VANDER
LINDEN)
A
BILL
FOR
An
Act
concerning
alcoholic
beverage
control,
including
1
micro-distillery
production
and
sales
and
dramshop
liability
2
insurance
requirements,
requiring
a
comprehensive
study
on
3
alcoholic
beverage
control,
and
establishing
fees.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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Section
1.
Section
123.3,
subsection
29,
Code
2016,
is
1
amended
to
read
as
follows:
2
29.
“Micro-distillery”
means
a
business
with
an
operational
3
still
which,
combining
all
production
facilities
of
the
4
business,
produces
and
manufactures
less
than
fifty
one
hundred
5
thousand
proof
gallons
of
distilled
spirits
on
an
annual
basis.
6
Sec.
2.
Section
123.28,
Code
2016,
is
amended
to
read
as
7
follows:
8
123.28
Restrictions
on
transportation.
9
It
is
lawful
to
transport,
carry,
or
convey
alcoholic
10
liquors
from
the
place
of
purchase
by
the
division
to
a
state
11
warehouse
or
depot
established
by
the
division
or
from
one
such
12
place
to
another
and,
when
so
permitted
by
this
chapter
,
it
13
is
lawful
for
the
division,
a
common
carrier,
or
other
person
14
to
transport,
carry,
or
convey
alcoholic
liquor
sold
from
a
15
state
warehouse,
depot,
or
point
of
purchase
by
the
state
to
16
any
place
to
which
the
liquor
may
be
lawfully
delivered
under
17
this
chapter
.
The
division
shall
deliver
alcoholic
liquor
18
purchased
by
class
“E”
liquor
control
licensees.
Class
“E”
19
liquor
control
licensees
may
deliver
alcoholic
liquor
purchased
20
by
class
“A”,
“B”,
or
“C”
liquor
control
licensees
and
class
21
“C”
micro-distilled
spirits
permittees
,
and
class
“A”,
“B”,
22
or
“C”
liquor
control
licensees
and
class
“C”
micro-distilled
23
spirits
permittees
may
transport
alcoholic
liquor
purchased
24
from
class
“E”
liquor
control
licensees.
A
common
carrier
or
25
other
person
shall
not
break
or
open
or
allow
to
be
broken
or
26
opened
a
container
or
package
containing
alcoholic
liquor
or
27
use
or
drink
or
allow
to
be
used
or
drunk
any
alcoholic
liquor
28
while
it
is
being
transported
or
conveyed,
but
this
section
29
does
not
prohibit
a
private
person
from
transporting
individual
30
bottles
or
containers
of
alcoholic
liquor
exempted
pursuant
to
31
section
123.22
and
individual
bottles
or
containers
bearing
32
the
identifying
mark
prescribed
in
section
123.26
which
have
33
been
opened
previous
to
the
commencement
of
the
transportation.
34
This
section
does
not
affect
the
right
of
a
special
permit
35
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or
liquor
control
license
holder
to
purchase,
possess,
or
1
transport
alcoholic
liquors
subject
to
this
chapter
.
2
Sec.
3.
Section
123.32,
subsection
1,
Code
2016,
is
amended
3
to
read
as
follows:
4
1.
Filing
of
application.
An
application
for
a
class
“A”,
5
class
“B”,
class
“C”,
or
class
“E”
liquor
control
license,
for
6
a
class
“A”
micro-distilled
spirits
permit,
for
a
class
“C”
7
micro-distilled
spirits
permit,
for
a
retail
beer
permit
as
8
provided
in
sections
123.128
and
123.129
,
or
for
a
class
“B”,
9
class
“B”
native,
or
class
“C”
native
retail
wine
permit
as
10
provided
in
section
123.178
,
123.178A
,
or
123.178B
,
accompanied
11
by
the
necessary
fee
and
bond,
if
required,
shall
be
filed
with
12
the
appropriate
city
council
if
the
premises
for
which
the
13
license
or
permit
is
sought
are
located
within
the
corporate
14
limits
of
a
city,
or
with
the
board
of
supervisors
if
the
15
premises
for
which
the
license
or
permit
is
sought
are
located
16
outside
the
corporate
limits
of
a
city.
An
application
for
17
a
class
“D”
liquor
control
license
and
for
a
class
“A”
beer
18
or
class
“A”
wine
permit,
accompanied
by
the
necessary
fee
19
and
bond,
if
required,
shall
be
submitted
to
the
division
20
electronically,
or
in
a
manner
prescribed
by
the
administrator,
21
which
shall
proceed
in
the
same
manner
as
in
the
case
of
an
22
application
approved
by
local
authorities.
23
Sec.
4.
Section
123.33,
Code
2016,
is
amended
to
read
as
24
follows:
25
123.33
Records.
26
Every
holder
of
a
liquor
control
license
or
a
class
“C”
27
micro-distilled
spirits
permit
shall
keep
a
daily
record,
in
28
printed
or
electronic
format,
of
the
gross
receipts
of
the
29
holder’s
business.
The
records
required
and
the
premises
of
30
the
licensee
or
permittee
shall
be
accessible
and
open
to
31
inspection
pursuant
to
section
123.30,
subsection
1
,
during
32
normal
business
hours
of
the
licensee
or
permittee
.
33
Sec.
5.
Section
123.43A,
subsection
2,
Code
2016,
is
amended
34
to
read
as
follows:
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2.
A
micro-distillery
shall
not
sell
more
than
one
and
1
one-half
liters
per
person
per
day,
of
micro-distilled
spirits
2
on
the
premises
of
the
micro-distillery.
In
addition,
a
A
3
micro-distillery
shall
not
directly
ship
micro-distilled
4
spirits
for
sale
at
retail.
The
micro-distillery
shall
5
maintain
records
of
individual
purchases
of
micro-distilled
6
spirits
at
the
micro-distillery
for
three
years.
7
Sec.
6.
Section
123.43A,
Code
2016,
is
amended
by
adding
the
8
following
new
subsection:
9
NEW
SUBSECTION
.
4A.
Notwithstanding
any
other
provision
of
10
this
chapter,
a
person
engaged
in
the
business
of
manufacturing
11
micro-distilled
spirits
may
sell
micro-distilled
spirits
12
it
manufactures
at
retail
for
consumption
on
the
premises
13
of
the
manufacturing
facility
by
applying
for
a
class
“C”
14
micro-distilled
spirits
permit
with
the
authority
as
provided
15
in
section
123.43B.
A
manufacturer
of
micro-distilled
spirits
16
may
be
granted
not
more
than
three
class
“C”
micro-distilled
17
spirits
permits.
18
Sec.
7.
Section
123.43A,
subsection
6,
Code
2016,
is
amended
19
to
read
as
follows:
20
6.
The
division
shall
issue
no
more
than
three
class
21
“A”
micro-distilled
spirits
permits
under
this
section
to
a
22
person.
In
addition,
a
micro-distillery
issued
a
permit
under
23
this
section
shall
file
with
the
division
,
on
or
before
the
24
fifteenth
day
of
each
calendar
month,
all
documents
filed
by
25
the
micro-distillery
with
the
alcohol
and
tobacco
tax
and
26
trade
bureau
of
the
United
States
department
of
the
treasury,
27
including
all
production,
storage,
and
processing
reports.
28
Sec.
8.
Section
123.43A,
subsection
7,
Code
2016,
is
amended
29
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
30
following:
31
7.
A
micro-distillery
may
sell
the
micro-distilled
spirits
32
it
manufactures
to
customers
outside
the
state.
33
Sec.
9.
NEW
SECTION
.
123.43B
Authority
under
class
“C”
34
micro-distilled
spirits
permit.
35
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1.
A
person
holding
a
class
“C”
micro-distilled
spirits
1
permit
for
the
same
location
for
which
the
person
holds
a
2
class
“A”
micro-distilled
spirits
permit
may
sell
the
person’s
3
micro-distilled
spirits
only
at
retail
to
patrons
by
the
4
individual
drink
for
consumption
on
the
licensed
premises
where
5
the
spirits
were
manufactured.
6
2.
A
person
holding
a
class
“C”
micro-distilled
spirits
7
permit
shall
purchase
micro-distilled
spirits
the
person
8
manufactures
from
a
class
“E”
liquor
control
licensee
only.
9
3.
A
class
“C”
micro-distilled
spirits
permit
for
a
10
micro-distillery
shall
be
issued
and
renewed
annually
upon
11
payment
of
a
fee
of
two
hundred
fifty
dollars.
12
4.
A
person
holding
a
class
“C”
micro-distilled
spirits
13
permit
may
also
sell
and
dispense
micro-distilled
spirits
and
14
native
wine
the
person
manufactures
to
patrons
on
Sunday
for
15
consumption
on
the
premises
between
the
hours
of
8:00
a.m.
on
16
Sunday
and
2:00
a.m.
on
the
following
Monday.
17
5.
Unless
otherwise
provided
by
this
chapter,
the
18
provisions
of
this
chapter
applicable
to
liquor
control
19
licenses
shall
also
apply
to
class
“C”
micro-distilled
spirits
20
permits.
21
Sec.
10.
NEW
SECTION
.
123.43C
Class
“C”
micro-distilled
22
spirits
permit
——
application.
23
1.
Except
as
otherwise
provided
in
this
chapter,
a
class
“C”
24
micro-distilled
spirits
permit
shall
be
issued
to
a
person
who
25
complies
with
all
of
the
following:
26
a.
Submits
electronically,
or
in
a
manner
prescribed
by
the
27
administrator,
an
application
for
the
permit
and
states
on
the
28
application
under
oath:
29
(1)
The
name
and
place
of
residence
of
the
applicant
and
30
the
length
of
time
the
applicant
has
lived
at
the
place
of
31
residence.
32
(2)
That
the
applicant
is
a
citizen
of
the
state
of
Iowa,
33
or
if
a
corporation,
that
the
applicant
is
authorized
to
do
34
business
in
Iowa.
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(3)
The
location
of
the
class
“A”
micro-distillery
where
the
1
applicant
intends
to
use
the
permit.
2
(4)
The
name
of
the
owner
of
the
premises,
and
if
that
owner
3
is
not
the
applicant,
that
the
applicant
is
the
actual
lessee
4
of
the
premises.
5
b.
Establishes
all
of
the
following:
6
(1)
That
the
applicant
meets
the
test
of
good
moral
7
character
as
provided
in
section
123.3,
subsection
34.
8
(2)
That
the
premises
for
which
the
permit
is
sought
is
and
9
will
continue
to
be
equipped
with
sufficient
tables
and
seats
10
to
accommodate
twenty-five
persons
at
one
time,
and
in
areas
11
where
such
business
is
permitted
by
any
valid
zoning
ordinance
12
or
will
be
so
permitted
on
the
effective
date
of
the
permit.
13
(3)
That
the
premises
where
the
applicant
intends
to
operate
14
conform
to
all
applicable
laws
and
health
and
fire
regulations.
15
(4)
That
the
applicant
is
not
engaged
in
the
business
of
16
manufacturing
beer.
17
c.
Consents
to
inspection
as
required
in
section
123.30,
18
subsection
1.
19
2.
A
manufacturer
of
micro-distilled
spirits
may
be
granted
20
a
class
“C”
micro-distilled
spirits
permit
regardless
of
21
whether
that
manufacturer
is
also
a
manufacturer
of
native
wine
22
pursuant
to
a
class
“A”
wine
permit.
23
Sec.
11.
Section
123.56,
subsection
5,
Code
2016,
is
amended
24
to
read
as
follows:
25
5.
Notwithstanding
any
other
provision
of
this
chapter
,
a
26
person
engaged
in
the
business
of
manufacturing
native
wine
may
27
sell
native
wine
at
retail
for
consumption
on
the
premises
of
28
the
manufacturing
facility
by
applying
for
a
class
“C”
native
29
wine
permit
as
provided
in
section
123.178B
.
A
manufacturer
of
30
native
wine
may
be
granted
not
more
than
one
class
“C”
native
31
wine
permit.
A
manufacturer
of
native
wine
may
be
granted
32
a
class
“C”
native
wine
permit
regardless
of
whether
that
33
manufacturer
is
also
a
manufacturer
of
micro-distilled
spirits
34
pursuant
to
a
class
“A”
micro-distilled
spirits
permit.
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Sec.
12.
Section
123.92,
subsection
2,
paragraph
a,
Code
1
2016,
is
amended
to
read
as
follows:
2
a.
Every
liquor
control
licensee
,
and
class
“B”
beer
3
permittee,
class
“C”
native
wine
permittee,
and
class
4
“C”
micro-distilled
spirits
permittee,
except
a
class
“E”
5
liquor
control
licensee,
shall
furnish
proof
of
financial
6
responsibility
by
the
existence
of
a
liability
insurance
7
policy
in
an
amount
determined
by
the
division.
If
an
insurer
8
provides
dramshop
liability
insurance
at
a
new
location
to
9
a
licensee
or
permittee
who
has
a
positive
loss
experience
10
at
other
locations
for
which
such
insurance
is
provided
by
11
the
insurer,
and
the
insurer
bases
premium
rates
at
the
new
12
location
on
the
negative
loss
history
of
the
previous
licensee
13
or
permittee
at
that
location,
the
insurer
shall
examine
and
14
consider
adjusting
the
premium
for
the
new
location
not
less
15
than
thirty
months
after
the
insurance
is
issued,
based
on
the
16
loss
experience
of
the
licensee
or
permittee
at
that
location
17
during
that
thirty-month
period
of
time.
18
Sec.
13.
ALCOHOLIC
BEVERAGE
CONTROL
——
COMPREHENSIVE
STUDY.
19
1.
The
alcoholic
beverages
division
of
the
department
of
20
commerce,
in
collaboration
with
the
office
of
the
attorney
21
general
and
interested
stakeholders,
shall
conduct
a
22
comprehensive
study
concerning
alcoholic
beverage
control,
23
to
include
consideration
of
the
manner
of
properly
balancing
24
appropriate
regulation
of
the
manufacturing,
distribution,
and
25
sale
of
alcohol,
wine,
and
beer
in
this
state
with
emerging
26
trends
in
the
industry.
27
2.
In
conducting
the
study,
the
division
shall
consider,
28
among
any
other
relevant
issues
the
division
identifies
29
for
study,
issues
relating
to
the
three-tiered
system
as
it
30
impacts
the
ability
of
manufacturers
and
retailers
to
meet
31
changing
marketplace
conditions
and
business
opportunities,
32
the
marketing
of
beer,
wine,
and
alcohol
manufactured
in
this
33
state,
and
the
manner
of
licensing
and
regulating
liquor
34
licensees
and
wine
and
beer
permittees
in
this
state.
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3.
The
division
shall
submit
an
interim
report
on
the
1
study,
including
any
findings
and
recommendations,
to
the
2
general
assembly
by
January
27,
2017.
The
division
shall
3
submit
a
final
report
on
the
results
of
the
study,
including
4
any
findings
and
recommendations,
to
the
general
assembly
by
5
January
5,
2018.
6
EXPLANATION
7
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
8
the
explanation’s
substance
by
the
members
of
the
general
assembly.
9
This
bill
concerns
micro-distilleries
and
the
authority
of
10
micro-distilleries
and
micro-distilled
spirits
manufacturers
11
and
makes
dramshop
liability
insurance
requirements
applicable
12
to
certain
native
wine
and
micro-distilled
spirits
permittees.
13
Code
section
123.3(29),
concerning
the
definition
of
a
14
micro-distillery,
is
amended
to
provide
that
a
micro-distillery
15
is
a
business
that
produces
less
than
100,000
proof
gallons
of
16
distilled
spirits
instead
of
the
current
limit
of
50,000.
17
Code
section
123.43A,
providing
for
a
class
“A”
18
micro-distilled
spirits
permit,
is
amended.
The
bill
19
eliminates
the
current
one
and
one-half
liters
per
day
limit
20
on
sales
of
micro-distilled
spirits
on
the
premises.
The
21
bill
also
allows
the
micro-distillery
to
sell
the
spirits
it
22
manufactures
to
customers
outside
the
state.
The
bill
also
23
allows
the
micro-distillery
to
sell
the
spirits
it
manufactures
24
for
consumption
on
the
premises
of
the
manufacturing
facility
25
by
applying
for
a
new
class
“C”
micro-distilled
spirits
permit.
26
The
bill
limits
a
manufacturer
to
no
more
than
three
of
the
new
27
permits.
28
Code
provisions
governing
restrictions
on
transportation
29
(Code
section
123.28),
applications
to
local
authorities
for
30
certain
permits
(Code
section
123.32),
and
records
(Code
31
section
123.33),
are
made
applicable
to
the
new
class
“C”
32
micro-distilled
spirits
permit.
33
New
Code
section
123.43B
establishes
the
authority
for
a
34
class
“C”
micro-distilled
spirits
permit.
The
Code
section
35
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provides
that
the
permit
shall
allow
the
manufacturer
to
sell
1
its
micro-distilled
spirits
only
at
retail
to
patrons
by
the
2
individual
drink
for
consumption
on
the
licensed
premises
where
3
it
was
manufactured,
and
that
the
person
holding
the
permit
4
shall
purchase
micro-distilled
spirits
it
manufactures
from
a
5
class
“E”
liquor
control
licensee
only.
The
new
Code
section
6
also
allows
a
person
holding
a
class
“C”
micro-distilled
7
spirits
permit
and
the
new
class
“A”
micro-distilled
spirits
8
permit
to
sell
and
dispense
micro-distilled
spirits
and
native
9
wine
the
person
manufactures
on
Sunday.
The
annual
fee
for
the
10
permit
shall
be
$250.
11
New
Code
section
123.43C
provides
the
information
necessary
12
for
a
person
to
apply
for
a
class
“C”
micro-distilled
13
spirits
permit.
The
bill
requires
the
applicant
to
submit
14
information
regarding
the
applicant
and
the
location
of
the
15
micro-distillery.
The
application
shall
also
provide
that
the
16
applicant
is
of
good
moral
character
and
that
the
premises
for
17
which
the
permit
is
sought
is
authorized
to
sell
spirits
for
18
consumption
on
the
premises
by
applicable
zoning
ordinance
and
19
is
of
sufficient
size.
The
bill
provides
that
the
applicant
20
may
be
a
manufacturer
of
native
wine
but
shall
not
also
21
manufacture
beer.
22
Code
section
123.56,
concerning
native
wines,
is
amended
to
23
allow
a
manufacturer
of
native
wine
to
be
granted
a
class
“C”
24
native
wine
permit
regardless
of
whether
the
manufacturer
also
25
manufactures
micro-distilled
spirits.
26
Code
section
123.92,
concerning
the
dramshop
Act,
is
amended
27
to
provide
that
a
class
“C”
native
wine
permittee
and
a
class
28
“C”
micro-distilled
spirits
permittee
shall
furnish
proof
29
of
financial
responsibility
by
having
a
liability
insurance
30
policy.
31
The
bill
requires
the
alcoholic
beverages
division
of
the
32
department
of
commerce,
in
collaboration
with
the
attorney
33
general
and
interested
stakeholders,
to
conduct
a
comprehensive
34
study
concerning
alcoholic
beverage
control,
and
to
submit
to
35
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