House File 2629 - Introduced HOUSE FILE 2629 BY COMMITTEE ON STATE GOVERNMENT (SUCCESSOR TO HF 83) A BILL FOR An Act providing for the direct shipment of alcoholic liquor 1 and including effective date provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1124HV (3) 90 nls/ns
H.F. 2629 Section 1. Section 123.28, subsection 5, Code 2023, is 1 amended to read as follows: 2 5. This section does not affect the right of a retail 3 alcohol license holder to purchase, possess, or transport 4 alcoholic liquors subject to this chapter . In addition, this 5 section shall not impact the direct shipment of alcoholic 6 liquor as regulated by section 123.42A. 7 Sec. 2. Section 123.32, subsection 1, paragraph b, Code 8 2023, is amended by adding the following new subparagraph: 9 NEW SUBPARAGRAPH . (4A) An alcoholic liquor direct shipper 10 license as provided in section 123.42A. 11 Sec. 3. Section 123.32, subsection 1, paragraph b, 12 subparagraph (10), Code 2023, is amended to read as follows: 13 (10) A wine An alcoholic beverage carrier permit as provided 14 in section 123.188 . 15 Sec. 4. Section 123.41, subsection 1, Code 2023, is amended 16 to read as follows: 17 1. Each completed application to obtain or renew a 18 manufacturers license shall be submitted to the division 19 electronically, or in a manner prescribed by the administrator, 20 and shall be accompanied by a fee of three hundred dollars 21 payable to the division. The administrator may in accordance 22 with this chapter grant and issue to a manufacturer a 23 manufacturers license, valid for a one-year period after date 24 of issuance, which shall allow the manufacture, storage, and 25 wholesale disposition and sale of alcoholic liquors to the 26 division and to customers outside of the state pursuant to the 27 laws of that jurisdiction . 28 Sec. 5. Section 123.41, Code 2023, is amended by adding the 29 following new subsection: 30 NEW SUBSECTION . 1A. A manufacturer of alcoholic liquor 31 may ship alcoholic liquor in closed containers to individual 32 purchasers inside this state by obtaining an alcoholic liquor 33 direct shipper license pursuant to section 123.42A. 34 Sec. 6. NEW SECTION . 123.42A Direct shipment of alcoholic 35 -1- LSB 1124HV (3) 90 nls/ns 1/ 9
H.F. 2629 liquor license and requirements. 1 1. An alcoholic liquor manufacturer licensed or permitted 2 pursuant to laws regulating alcoholic beverages in this state 3 or another state may apply for an alcoholic liquor direct 4 shipper license, as provided in this section. For the purposes 5 of this section, an alcoholic liquor manufacturer means a 6 business with an operating still which distills spirits, barrel 7 matures spirits for a period of two years on the licensed 8 premises of the distillery where matured, or blends or mixes 9 spirits comprised solely of spirits distilled or barrel matured 10 for a period of two years on the licensed premises of the 11 distillery. 12 2. a. Only an alcoholic liquor manufacturer that holds 13 an alcoholic liquor direct shipper license issued pursuant to 14 this section shall sell alcoholic liquor at retail for direct 15 shipment to any person within this state. This section shall 16 not prohibit an authorized retail licensee or permittee from 17 delivering alcoholic liquor pursuant to section 123.46A. 18 b. An alcoholic liquor manufacturer applying for an 19 alcoholic liquor direct shipper license shall submit an 20 application for the license electronically, or in a manner 21 prescribed by the administrator, accompanied by a true copy 22 of the manufacturers current alcoholic beverage license or 23 permit issued by the state where the manufacturer is primarily 24 located, a copy of the manufacturers basic permit issued by 25 the alcohol and tobacco tax and trade bureau of the United 26 States department of the treasury, and documents filed by the 27 manufacturer with the alcohol and tobacco tax and trade bureau 28 of the United States department of the treasury that show the 29 total number of proof gallons of distilled spirits produced and 30 manufactured by the manufacturer for the preceding calendar 31 year. 32 c. An application submitted pursuant to paragraph b shall 33 be accompanied by a license fee in the amount of twenty-five 34 dollars. 35 -2- LSB 1124HV (3) 90 nls/ns 2/ 9
H.F. 2629 d. A license issued pursuant to this section may be 1 renewed annually by submitting a renewal application with the 2 administrator in a manner prescribed by the administrator, 3 accompanied by the twenty-five dollar license fee. 4 3. The direct shipment of alcoholic liquor pursuant to this 5 section shall be subject to the following requirements and 6 restrictions: 7 a. Alcoholic liquor shall only be shipped to a resident of 8 this state who is at least twenty-one years of age, for the 9 residents personal use and consumption and not for resale as 10 follows: 11 (1) An alcoholic liquor direct shipper licensee may sell 12 and ship alcoholic liquor to any person who is at least 13 twenty-one years of age for personal use and not for resale if 14 the licensee produces in, or imports into, the United States 15 one hundred fifty thousand proof gallons or fewer of distilled 16 spirits per calendar year. 17 (2) An alcoholic liquor direct shipper licensee may sell and 18 ship up to nine liters of alcoholic liquor per calendar year to 19 any person who is at least twenty-one years of age for personal 20 use and not for resale if the licensee produces in, or imports 21 into, the United States more than one hundred fifty thousand 22 proof gallons of distilled spirits per calendar year. 23 b. Alcoholic liquor subject to direct shipping shall be 24 properly registered with the federal alcohol and tobacco tax 25 and trade bureau, and manufactured on the licensed premises of 26 the alcoholic liquor direct shipper licensee. 27 c. Alcoholic liquor subject to direct shipping shall 28 be properly registered with the division. Products which 29 are not listed for sale by the division must be registered 30 electronically with the division for direct shipping. This 31 registration will include the name of the manufacturer, the 32 name of the brand, the standard of fill, the wholesale price, 33 and other information as requested by the division. The 34 registration shall be updated as necessary to ensure the 35 -3- LSB 1124HV (3) 90 nls/ns 3/ 9
H.F. 2629 division possesses an accurate, current registration. 1 d. All containers of alcoholic liquor shipped directly to a 2 resident of this state shall be conspicuously labeled with the 3 words CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 OR OLDER 4 REQUIRED FOR DELIVERY or shall be conspicuously labeled with 5 alternative wording preapproved by the administrator. 6 e. All containers of alcoholic liquor shipped directly 7 to a resident of this state shall be shipped by a holder of 8 an alcoholic beverage carrier permit as provided in section 9 123.188. 10 f. Shipment of alcoholic liquor pursuant to this subsection 11 does not require a refund value for beverage container control 12 purposes under chapter 455C. 13 4. An alcoholic liquor direct shipper licensee shipping 14 alcoholic liquor to this state shall remit the following amount 15 to the division in a manner as directed by the division: 16 a. For alcoholic liquor that is listed for sale by the 17 division, an amount equivalent to fifty percent of the listed 18 wholesale price. 19 b. For alcoholic liquor that is not listed for sale 20 by the division, an amount equivalent to fifty percent of 21 the wholesale price as registered with the division under 22 subsection 3. 23 5. Each alcoholic liquor direct shipper licensee shall make 24 a report under oath to the division electronically, or in a 25 manner prescribed by the administrator, on or before the tenth 26 day of each month, which includes the following information: 27 a. The products and quantities shipped directly to residents 28 of this state in the preceding month. 29 b. The name and address of the individuals to whom the 30 alcoholic liquor was sold in each sale. 31 c. The wholesale price of the alcoholic liquor sold. 32 d. The purchase price of the alcoholic liquor sold and 33 the amount of taxes charged to the individual purchasing the 34 alcoholic liquor. 35 -4- LSB 1124HV (3) 90 nls/ns 4/ 9
H.F. 2629 e. The alcoholic beverage carrier permittee who delivered 1 the shipment. 2 f. All documents filed by the alcoholic liquor direct 3 shipper licensee with the alcohol and tobacco tax and trade 4 bureau of the United States department of treasury for the 5 preceding month, including all production, storage, and 6 processing reports. 7 6. The license holder at the time of filing the report as 8 required by subsection 5 shall pay to the division the amount 9 as required pursuant to subsection 4. A penalty of ten percent 10 of the amount due shall be assessed and collected if the report 11 required to be filed pursuant to this section and the amount 12 required to be paid as provided by subsection 4 is not filed 13 and the amount paid within the time required by this section. 14 7. An alcoholic liquor direct shipper licensee shall be 15 deemed to have consented to the jurisdiction of the division or 16 any other agency or court in this state concerning enforcement 17 of this section and any related laws, rules, or regulations. A 18 license holder shall allow the division to perform an audit of 19 shipping records upon request. 20 8. A violation of this section shall subject the licensee 21 to the general penalties provided in this chapter and shall 22 constitute grounds for imposition of a civil penalty or 23 suspension or revocation of the license pursuant to section 24 123.39. 25 Sec. 7. Section 123.43A, subsection 2, Code 2023, is amended 26 to read as follows: 27 2. A native distillery shall not sell more than nine 28 liters per person per day, of native distilled spirits on 29 the premises of the native distillery. However, a native 30 distillery shall not directly may ship native distilled spirits 31 for sale at retail manufactured by the native distillery in 32 closed containers to individual purchasers inside the state by 33 obtaining an alcoholic liquor direct shipper license pursuant 34 to section 123.42A . The native distillery shall maintain 35 -5- LSB 1124HV (3) 90 nls/ns 5/ 9
H.F. 2629 records of individual purchases of native distilled spirits at 1 the native distillery for three years. 2 Sec. 8. Section 123.43A, subsection 7, Code 2023, is amended 3 to read as follows: 4 7. A native distillery may sell the native distilled spirits 5 it manufactures to customers outside the state , pursuant to the 6 laws of that jurisdiction . 7 Sec. 9. Section 123.46A, subsection 5, Code 2023, is amended 8 to read as follows: 9 5. Nothing in this section shall impact the direct shipment 10 of alcoholic liquor as regulated by section 123.42A or the 11 direct shipment of wine as regulated by section 123.187 . 12 Sec. 10. Section 123.187, subsection 3, paragraph d, Code 13 2023, is amended to read as follows: 14 d. All containers of wine shipped directly to a resident of 15 this state shall be shipped by a holder of a wine an alcoholic 16 beverage carrier permit as provided in section 123.188 . 17 Sec. 11. Section 123.188, subsections 1, 2, and 4, Code 18 2023, are amended to read as follows: 19 1. A person desiring to deliver alcoholic liquor subject 20 to direct shipment within this state pursuant to section 21 123.42A and wine subject to direct shipment within this state 22 pursuant to section 123.187 shall submit an application for a 23 wine an alcoholic beverage carrier permit electronically, or 24 in a manner prescribed by the administrator, which shall be 25 accompanied by a fee in the amount of one hundred dollars. 26 2. The administrator may in accordance with this chapter 27 issue a wine an alcoholic beverage carrier permit which shall 28 be valid for one year from the date of issuance unless it is 29 sooner suspended or revoked for a violation of this chapter . 30 4. The delivery of alcoholic liquor and wine pursuant to 31 this section shall be subject to the following requirements and 32 restrictions: 33 a. A wine An alcoholic beverage carrier permittee shall not 34 deliver alcoholic liquor or wine to any person under twenty-one 35 -6- LSB 1124HV (3) 90 nls/ns 6/ 9
H.F. 2629 years of age, or to any person who either is or appears to be in 1 an intoxicated state or condition. 2 b. A wine An alcoholic beverage carrier permittee shall 3 obtain valid proof of identity and age prior to delivery, 4 and shall obtain the signature of an adult as a condition of 5 delivery. 6 c. A wine An alcoholic beverage carrier permittee shall 7 maintain records of alcoholic liquor and wine shipped which 8 include the permit number and name of the alcoholic liquor 9 and wine manufacturer, quantity of alcoholic liquor and wine 10 shipped, recipients name and address, and an electronic or 11 paper form of signature from the recipient of the alcoholic 12 liquor and wine. Records shall be submitted to the division 13 on a monthly basis in a form and manner to be determined by the 14 division. 15 Sec. 12. EFFECTIVE DATE. This Act takes effect January 1, 16 2024. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanations substance by the members of the general assembly. 20 This bill allows for the direct shipment of alcoholic liquor 21 within the state. 22 New Code section 123.42A provides for the direct shipment of 23 alcoholic liquor and provides for an alcoholic liquor direct 24 shipper license. An alcoholic liquor direct shipper licensee 25 may sell and ship any amount of alcoholic liquor to any person 26 who is at least 21 years of age for personal use and not for 27 resale if the licensee produces in, or imports into, the United 28 States 150,000 proof gallons or fewer of distilled spirits per 29 calendar year. If the licensee produces or imports more than 30 150,000 proof gallons of distilled spirits, a licensee may sell 31 and ship up to nine liters of alcoholic liquor per calendar 32 year to a person 21 years of age or older. 33 Provisions governing the direct shipment of wine and the 34 wine direct shipper permit are generally made applicable to the 35 -7- LSB 1124HV (3) 90 nls/ns 7/ 9
H.F. 2629 new Code section providing for the direct shipment of alcoholic 1 liquor. 2 The new Code section requires all alcoholic liquor subject 3 to direct shipping to be properly registered with the alcoholic 4 beverages division and that products which are not listed for 5 sale by the division must be registered to include information 6 on the name of the manufacturer, the name of the brand, the 7 standard of fill, the wholesale price, and other information 8 as requested by the division. The new Code section also 9 requires each alcoholic liquor direct shipper licensee to make 10 a monthly report to the alcoholic beverages division that lists 11 the products and quantities shipped directly to residents 12 of this state in the preceding month, the name and address 13 of the individuals to whom the alcoholic liquor was sold in 14 each sale, the wholesale price of the alcoholic liquor sold, 15 the purchase price and taxes charged of the alcoholic liquor 16 sold, the alcoholic beverage carrier permittee who delivered 17 each shipment, and documents filed by the licensee with the 18 alcohol and tobacco tax and trade bureau of the United States 19 department of treasury for the preceding month, including all 20 production, storage, and processing reports. 21 Finally, the new Code section provides that an alcoholic 22 liquor direct shipper licensee shall remit an amount to the 23 alcoholic beverages division depending on whether the alcoholic 24 liquor shipped is listed for sale by the division. If the 25 alcoholic liquor is listed for sale by the division, the 26 permittee shall remit to the division an amount equivalent to 27 50 percent of the wholesale price paid by the division for the 28 alcoholic liquor. If the alcoholic liquor is not listed for 29 sale by the division, the permittee shall remit to the division 30 an amount equivalent to 50 percent of the wholesale price of 31 the alcoholic liquor as registered with the division. The bill 32 provides that a penalty of 10 percent of the amount due shall 33 be assessed and collected if the amount required to be paid to 34 the division as provided by the bill is not paid within the 35 -8- LSB 1124HV (3) 90 nls/ns 8/ 9
H.F. 2629 time required. 1 The bill allows a manufacturer of alcoholic liquor and a 2 native distillery to ship alcoholic liquor or native distilled 3 spirits, as applicable, to individual purchasers inside this 4 state by obtaining an alcoholic liquor direct shipper license 5 as established in the bill. 6 Code section 123.188, providing for a wine carrier permit, 7 is amended to provide for the direct shipment of alcoholic 8 liquor as provided by the bill. 9 The bill takes effect January 1, 2024. 10 The bill does not reflect current law, including the 11 transfer of administration of alcoholic beverages provisions to 12 the department of revenue as passed by the general assembly in 13 2023 and other 2023 changes made to the Code. The bill does not 14 update all references to the wine carrier permit nor does the 15 bill note that the effective date of the bill is retroactive. 16 -9- LSB 1124HV (3) 90 nls/ns 9/ 9