House File 2670 - Introduced HOUSE FILE 2670 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 2629) (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 1124HZ (3) 90 nls/ns
H.F. 2670 Section 1. Section 123.28, subsection 5, Code 2024, 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 2024, is amended by adding the following new subparagraph: 9 NEW SUBPARAGRAPH . (05) 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 2024, 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 123.39, subsection 1, paragraph a, 16 subparagraph (2), Code 2024, is amended to read as follows: 17 (2) The director may suspend a certificate of compliance, a 18 class D retail alcohol license, a manufacturers license, a 19 brokers permit, a class A native distilled spirits license, 20 a class A or special class A beer permit, a class A wine 21 permit, a wine direct shippers permit, or a wine an alcoholic 22 beverage carrier permit for a period not to exceed one year, 23 revoke the license, permit, or certificate, or impose a civil 24 penalty not to exceed one thousand dollars per violation. 25 Sec. 5. Section 123.41, subsection 1, Code 2024, is amended 26 to read as follows: 27 1. Each completed application to obtain or renew a 28 manufacturers license shall be submitted to the department 29 electronically, or in a manner prescribed by the director, and 30 shall be accompanied by a fee of three hundred dollars payable 31 to the department. The director may in accordance with this 32 chapter grant and issue to a manufacturer a manufacturers 33 license, valid for a one-year period after date of issuance, 34 which shall allow the manufacture, storage, and wholesale 35 -1- LSB 1124HZ (3) 90 nls/ns 1/ 9
H.F. 2670 disposition and sale of alcoholic liquors to the department and 1 to customers outside of the state pursuant to the laws of that 2 jurisdiction . 3 Sec. 6. Section 123.41, Code 2024, is amended by adding the 4 following new subsection: 5 NEW SUBSECTION . 1A. A manufacturer of alcoholic liquor 6 may ship alcoholic liquor in closed containers to individual 7 purchasers inside this state by obtaining an alcoholic liquor 8 direct shipper license pursuant to section 123.42A. 9 Sec. 7. NEW SECTION . 123.42A Direct shipment of alcoholic 10 liquor license and requirements. 11 1. An alcoholic liquor manufacturer licensed or permitted 12 pursuant to laws regulating alcoholic beverages in this state 13 or another state may apply for an alcoholic liquor direct 14 shipper license, as provided in this section. For the purposes 15 of this section, an alcoholic liquor manufacturer means a 16 business with an operating still which distills spirits, barrel 17 matures spirits for a period of two years on the licensed 18 premises of the distillery where matured, or blends or mixes 19 spirits comprised solely of spirits distilled or barrel matured 20 for a period of two years on the licensed premises of the 21 distillery. 22 2. a. Only an alcoholic liquor manufacturer that holds 23 an alcoholic liquor direct shipper license issued pursuant to 24 this section shall sell alcoholic liquor at retail for direct 25 shipment to any person within this state. This section shall 26 not prohibit an authorized retail licensee or permittee from 27 delivering alcoholic liquor pursuant to section 123.46A. 28 b. An alcoholic liquor manufacturer applying for an 29 alcoholic liquor direct shipper license shall submit an 30 application for the license electronically, or in a manner 31 prescribed by the director, accompanied by a true copy of 32 the manufacturers current alcoholic beverage license or 33 permit issued by the state where the manufacturer is primarily 34 located, a copy of the manufacturers basic permit issued by 35 -2- LSB 1124HZ (3) 90 nls/ns 2/ 9
H.F. 2670 the alcohol and tobacco tax and trade bureau of the United 1 States department of the treasury, and documents filed by the 2 manufacturer with the alcohol and tobacco tax and trade bureau 3 of the United States department of the treasury that show the 4 total number of proof gallons of distilled spirits produced and 5 manufactured by the manufacturer for the preceding calendar 6 year. 7 c. An application submitted pursuant to paragraph b shall 8 be accompanied by a license fee in the amount of twenty-five 9 dollars. 10 d. A license issued pursuant to this section may be renewed 11 annually by submitting a renewal application with the director 12 in a manner prescribed by the director, accompanied by the 13 twenty-five dollar license fee. 14 3. The direct shipment of alcoholic liquor pursuant to this 15 section shall be subject to the following requirements and 16 restrictions: 17 a. Alcoholic liquor shall only be shipped to a resident of 18 this state who is at least twenty-one years of age, for the 19 residents personal use and consumption and not for resale as 20 follows: 21 (1) An alcoholic liquor direct shipper licensee may sell 22 and ship alcoholic liquor to any person who is at least 23 twenty-one years of age for personal use and not for resale if 24 the licensee produces in, or imports into, the United States 25 one hundred fifty thousand proof gallons or fewer of distilled 26 spirits per calendar year. 27 (2) An alcoholic liquor direct shipper licensee may sell and 28 ship up to nine liters of alcoholic liquor per calendar year to 29 any person who is at least twenty-one years of age for personal 30 use and not for resale if the licensee produces in, or imports 31 into, the United States more than one hundred fifty thousand 32 proof gallons of distilled spirits per calendar year. 33 b. Alcoholic liquor subject to direct shipping shall be 34 properly registered with the federal alcohol and tobacco tax 35 -3- LSB 1124HZ (3) 90 nls/ns 3/ 9
H.F. 2670 and trade bureau, and manufactured on the licensed premises of 1 the alcoholic liquor direct shipper licensee. 2 c. Alcoholic liquor subject to direct shipping shall be 3 properly registered with the department. Products which are 4 not listed for sale by the department must be registered 5 electronically with the department for direct shipping. This 6 registration will include the name of the manufacturer, the 7 name of the brand, the standard of fill, the wholesale price, 8 and other information as requested by the department. The 9 registration shall be updated as necessary to ensure the 10 department possesses an accurate, current registration. 11 d. All containers of alcoholic liquor shipped directly to a 12 resident of this state shall be conspicuously labeled with the 13 words CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 OR OLDER 14 REQUIRED FOR DELIVERY or shall be conspicuously labeled with 15 alternative wording preapproved by the director. 16 e. All containers of alcoholic liquor shipped directly 17 to a resident of this state shall be shipped by a holder of 18 an alcoholic beverage carrier permit as provided in section 19 123.188. 20 f. Shipment of alcoholic liquor pursuant to this subsection 21 does not require a refund value for beverage container control 22 purposes under chapter 455C. 23 4. An alcoholic liquor direct shipper licensee shipping 24 alcoholic liquor to this state shall remit the following amount 25 to the department in a manner as directed by the department: 26 a. For alcoholic liquor that is listed for sale by the 27 department, an amount equivalent to fifty percent of the listed 28 wholesale price. 29 b. For alcoholic liquor that is not listed for sale by 30 the department, an amount equivalent to fifty percent of 31 the wholesale price as registered with the department under 32 subsection 3. 33 5. Each alcoholic liquor direct shipper licensee shall make 34 a report under oath to the department electronically, or in a 35 -4- LSB 1124HZ (3) 90 nls/ns 4/ 9
H.F. 2670 manner prescribed by the director, on or before the tenth day 1 of each month, which includes the following information: 2 a. The products and quantities shipped directly to residents 3 of this state in the preceding month. 4 b. The name and address of the individuals to whom the 5 alcoholic liquor was sold in each sale. 6 c. The wholesale price of the alcoholic liquor sold. 7 d. The purchase price of the alcoholic liquor sold and 8 the amount of taxes charged to the individual purchasing the 9 alcoholic liquor. 10 e. The alcoholic beverage carrier permittee who delivered 11 the shipment. 12 f. All documents filed by the alcoholic liquor direct 13 shipper licensee with the alcohol and tobacco tax and trade 14 bureau of the United States department of treasury for the 15 preceding month, including all production, storage, and 16 processing reports. 17 6. The license holder at the time of filing the report as 18 required by subsection 5 shall pay to the department the amount 19 as required pursuant to subsection 4. A penalty of ten percent 20 of the amount due shall be assessed and collected if the report 21 required to be filed pursuant to this section and the amount 22 required to be paid as provided by subsection 4 is not filed 23 and the amount paid within the time required by this section. 24 7. An alcoholic liquor direct shipper licensee shall be 25 deemed to have consented to the jurisdiction of the department 26 or any other agency or court in this state concerning 27 enforcement of this section and any related laws, rules, or 28 regulations. A license holder shall allow the department to 29 perform an audit of shipping records upon request. 30 8. A violation of this section shall subject the licensee 31 to the general penalties provided in this chapter and shall 32 constitute grounds for imposition of a civil penalty or 33 suspension or revocation of the license pursuant to section 34 123.39. 35 -5- LSB 1124HZ (3) 90 nls/ns 5/ 9
H.F. 2670 Sec. 8. Section 123.43A, subsection 2, Code 2024, is amended 1 to read as follows: 2 2. A native distillery shall not sell more than nine 3 liters per person per day, of native distilled spirits on 4 the premises of the native distillery. However, a native 5 distillery shall not directly may ship native distilled spirits 6 for sale at retail manufactured by the native distillery in 7 closed containers to individual purchasers inside the state by 8 obtaining an alcoholic liquor direct shipper license pursuant 9 to section 123.42A . The native distillery shall maintain 10 records of individual purchases of native distilled spirits at 11 the native distillery for three years. 12 Sec. 9. Section 123.43A, subsection 7, Code 2024, is amended 13 to read as follows: 14 7. A native distillery may sell the native distilled spirits 15 it manufactures to customers outside the state , pursuant to the 16 laws of that jurisdiction . 17 Sec. 10. Section 123.46A, subsection 5, Code 2024, is 18 amended to read as follows: 19 5. Nothing in this section shall impact the direct shipment 20 of alcoholic liquor as regulated by section 123.42A or the 21 direct shipment of wine as regulated by section 123.187 . 22 Sec. 11. Section 123.187, subsection 3, paragraph d, Code 23 2024, is amended to read as follows: 24 d. All containers of wine shipped directly to a resident of 25 this state shall be shipped by a holder of a wine an alcoholic 26 beverage carrier permit as provided in section 123.188 . 27 Sec. 12. Section 123.188, subsections 1, 2, and 4, Code 28 2024, are amended to read as follows: 29 1. A person desiring to deliver alcoholic liquor subject to 30 direct shipment within this state pursuant to section 123.42A 31 and wine subject to direct shipment within this state pursuant 32 to section 123.187 shall submit an application for a wine an 33 alcoholic beverage carrier permit electronically, or in a 34 manner prescribed by the director, which shall be accompanied 35 -6- LSB 1124HZ (3) 90 nls/ns 6/ 9
H.F. 2670 by a fee in the amount of one hundred dollars. 1 2. The director may in accordance with this chapter issue a 2 wine an alcoholic beverage carrier permit which shall be valid 3 for one year from the date of issuance unless it is sooner 4 suspended or revoked for a violation of this chapter . 5 4. The delivery of alcoholic liquor and wine pursuant to 6 this section shall be subject to the following requirements and 7 restrictions: 8 a. A wine An alcoholic beverage carrier permittee shall not 9 deliver alcoholic liquor or wine to any person under twenty-one 10 years of age, or to any person who either is or appears to be in 11 an intoxicated state or condition. 12 b. A wine An alcoholic beverage carrier permittee shall 13 obtain valid proof of identity and age prior to delivery, 14 and shall obtain the signature of an adult as a condition of 15 delivery. 16 c. A wine An alcoholic beverage carrier permittee shall 17 maintain records of alcoholic liquor and wine shipped which 18 include the permit number and name of the alcoholic liquor 19 and wine manufacturer, quantity of alcoholic liquor and wine 20 shipped, recipients name and address, and an electronic or 21 paper form of signature from the recipient of the alcoholic 22 liquor and wine. Records shall be submitted to the department 23 on a monthly basis in a form and manner to be determined by the 24 department. 25 Sec. 13. EFFECTIVE DATE. This Act takes effect January 1, 26 2025. 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanations substance by the members of the general assembly. 30 This bill allows for the direct shipment of alcoholic liquor 31 within the state. 32 New Code section 123.42A provides for the direct shipment of 33 alcoholic liquor and provides for an alcoholic liquor direct 34 shipper license. An alcoholic liquor direct shipper licensee 35 -7- LSB 1124HZ (3) 90 nls/ns 7/ 9
H.F. 2670 may sell and ship any amount of alcoholic liquor to any person 1 who is at least 21 years of age for personal use and not for 2 resale if the licensee produces in, or imports into, the United 3 States 150,000 proof gallons or fewer of distilled spirits per 4 calendar year. If the licensee produces or imports more than 5 150,000 proof gallons of distilled spirits, a licensee may sell 6 and ship up to nine liters of alcoholic liquor per calendar 7 year to a person 21 years of age or older. 8 Provisions governing the direct shipment of wine and the 9 wine direct shipper permit are generally made applicable to the 10 new Code section providing for the direct shipment of alcoholic 11 liquor. 12 The new Code section requires all alcoholic liquor 13 subject to direct shipping to be properly registered with the 14 department of revenue (department) and that products which are 15 not listed for sale by the department must be registered to 16 include information on the name of the manufacturer, the name 17 of the brand, the standard of fill, the wholesale price, and 18 other information as requested by the department. The new Code 19 section also requires each alcoholic liquor direct shipper 20 licensee to make a monthly report to the department that lists 21 the products and quantities shipped directly to residents 22 of this state in the preceding month, the name and address 23 of the individuals to whom the alcoholic liquor was sold in 24 each sale, the wholesale price of the alcoholic liquor sold, 25 the purchase price and taxes charged of the alcoholic liquor 26 sold, the alcoholic beverage carrier permittee who delivered 27 each shipment, and documents filed by the licensee with the 28 alcohol and tobacco tax and trade bureau of the United States 29 department of treasury for the preceding month, including all 30 production, storage, and processing reports. 31 Finally, the new Code section provides that an alcoholic 32 liquor direct shipper licensee shall remit an amount to the 33 department depending on whether the alcoholic liquor shipped 34 is listed for sale by the department. If the alcoholic liquor 35 -8- LSB 1124HZ (3) 90 nls/ns 8/ 9
H.F. 2670 is listed for sale by the department, the permittee shall 1 remit to the department an amount equivalent to 50 percent of 2 the wholesale price paid by the department for the alcoholic 3 liquor. If the alcoholic liquor is not listed for sale by the 4 department, the permittee shall remit to the department an 5 amount equivalent to 50 percent of the wholesale price of the 6 alcoholic liquor as registered with the department. The bill 7 provides that a penalty of 10 percent of the amount due shall 8 be assessed and collected if the amount required to be paid to 9 the department as provided by the bill is not paid within the 10 time required. 11 The bill allows a manufacturer of alcoholic liquor and a 12 native distillery to ship alcoholic liquor or native distilled 13 spirits, as applicable, to individual purchasers inside this 14 state by obtaining an alcoholic liquor direct shipper license 15 as established in the bill. 16 Code section 123.188, providing for a wine carrier permit, 17 is amended to provide for the direct shipment of alcoholic 18 liquor as provided by the bill. 19 The bill takes effect January 1, 2025. 20 -9- LSB 1124HZ (3) 90 nls/ns 9/ 9