House Study Bill 629 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON STATE GOVERNMENT BILL BY CHAIRPERSON BLOOMINGDALE) A BILL FOR An Act relating to the sale of wine, including private wine 1 sales and wine auction permits, providing fees, and making 2 penalties applicable. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5743YC (3) 90 nls/ns
H.F. _____ Section 1. Section 123.32, subsection 1, paragraph b, Code 1 2024, is amended by adding the following new subparagraph: 2 NEW SUBPARAGRAPH . (11) A wine auction permit as provided in 3 section 123.173C. 4 Sec. 2. Section 123.171, Code 2024, is amended by adding the 5 following new subsection: 6 NEW SUBSECTION . 4. Notwithstanding subsection 1, a 7 person of legal age may conduct private wine sales without a 8 certificate, permit, or license, subject to the requirements 9 of this subsection. Except for wine manufactured pursuant 10 to subsection 2, a person may sell wine from the persons 11 private collection in an original, unopened container to either 12 a class A wine permittee for purposes of resale or a wine 13 auction permittee under section 123.173C for resale by means 14 of an auction. A class A wine permittee or wine auction 15 permittee involved in the sale of wine by a person under this 16 subsection shall ensure that each bottle of wine purchased has 17 a permanently affixed label stating that the wine was acquired 18 from a private collection. 19 Sec. 3. NEW SECTION . 123.173C Wine auction permit. 20 1. Upon application to the department and receipt of a wine 21 auction permit, an authorized person may conduct a wine auction 22 subject to the requirements of this section. 23 2. The department shall not issue a wine auction permit to 24 an applicant unless the applicant complies with the application 25 requirements of subsection 3, and unless all of the following 26 requirements are met: 27 a. The applicant is a person of good moral character. 28 b. The applicant is a citizen of the state of Iowa or, if 29 the applicant is a corporation, the applicant is authorized to 30 do business in the state. 31 c. The applicant does not hold a retail alcohol license. 32 d. If the applicant holds a class A wine permit, the 33 applicant has held the permit for a period of not less than two 34 years. 35 -1- LSB 5743YC (3) 90 nls/ns 1/ 8
H.F. _____ e. The premises where the applicant intends to use the 1 permit constitutes a safe and proper place or building and 2 conforms to all applicable laws, ordinances, resolutions, 3 and health and fire regulations. A permittee shall not have 4 or maintain any interior access to residential or sleeping 5 quarters unless the director grants permission in the form of a 6 living quarters permit. 7 f. The applicant gives consent, as required by section 8 123.30, subsection 1, for a person to enter upon the premises 9 of the wine auction without a warrant during normal business 10 hours to inspect for violations of the provisions of this 11 chapter or ordinances and regulations that local authorities 12 may adopt. 13 3. An application for a wine auction permit must include 14 all of the following information and shall be submitted 15 electronically, or in a manner prescribed by the director: 16 a. The name and address of the applicant or, if the 17 applicant is a corporation, limited liability company, or 18 other legal entity, the names and addresses of all officers, 19 directors, and persons owning or controlling ten percent 20 or more of the capital stock of the entity and who have a 21 financial interest, by way of loan, ownership, or otherwise, 22 in the entity. 23 b. The location and name of the owner of the premises 24 where the applicant intends to conduct wine auctions and, if 25 the applicant is not the owner of the premises, whether the 26 applicant is the lessee of the premises. 27 c. As required by the director, and in such form and 28 containing such information as the director may require, a 29 description of the premises where the applicant intends to 30 conduct wine auctions, including a depiction of the premises, 31 and, if applicable, the number of square feet of interior floor 32 space of the retail sales area of the premises. 33 d. Whether any person specified in paragraph a has ever 34 been convicted of any offense against the laws of the United 35 -2- LSB 5743YC (3) 90 nls/ns 2/ 8
H.F. _____ States, or any state, territory, or political subdivision 1 thereof. 2 e. Any other information as required by the director. 3 4. A wine auction conducted by a wine auction permittee must 4 comply with the following requirements: 5 a. A permittee shall not offer wines owned by the permittee 6 at auction. 7 b. If a person, within or outside of the state, ships wine 8 from a private collection to a wine auction permittee to be 9 sold at auction, the permittee shall ensure that each bottle of 10 wine so acquired is permanently affixed with a label stating 11 that the wine was acquired from a private collection. 12 c. A permittee shall ensure that each container of wine 13 to be sold at a wine auction is in the original, unopened 14 container. 15 d. A permittee is responsible for the storage of all wines 16 that are to be offered at auction at the licensed premises, and 17 for the subsequent shipment and delivery of all wines sold at 18 auction to the purchasers of the wines. 19 e. A permittee is responsible for the payment of all 20 applicable taxes for wines sold at auction pursuant to section 21 123.183. 22 5. Notwithstanding any other provision of this chapter, 23 a class A wine permittee or a retail alcohol licensee, not 24 including a native wine manufacturer, may purchase wine offered 25 at an auction pursuant to this section and may resell wine 26 purchased at auction in accordance with the requirements of 27 the licensees or permittees license or permit. The licensee 28 or permittee shall ensure that each wine resold is in the 29 original, unopened container, and, if applicable, permanently 30 affixed with a label stating that the wine was acquired from a 31 private collection. 32 6. A wine auction permit is valid for a period of one year 33 pursuant to section 123.35, subsection 1. A wine auction 34 permit shall allow the permittee to conduct no more than 35 -3- LSB 5743YC (3) 90 nls/ns 3/ 8
H.F. _____ twenty-four wine auctions during the one-year period of the 1 wine auction permit. 2 7. The fee for a wine auction permit is one hundred dollars. 3 8. Any violation of the requirements of this chapter or 4 rules adopted pursuant to this chapter shall subject the wine 5 auction permit holder to the general penalties provided in this 6 chapter and shall constitute grounds for imposition of a civil 7 penalty, suspension of the permit, or revocation of the permit 8 after notice and opportunity for a hearing pursuant to section 9 123.39 and chapter 17A. 10 Sec. 4. Section 123.180, subsection 3, Code 2024, is amended 11 to read as follows: 12 3. a. All Except as provided in paragraph b , all class 13 A wine permit holders shall sell only those brands of 14 wine which are manufactured, bottled, fermented, shipped, or 15 imported by a person holding a current vintners certificate of 16 compliance. An employee or agent working for or representing 17 the holder of a vintners certificate of compliance within 18 this state shall register the employees or agents name and 19 address with the department. These names and addresses shall 20 be filed with the departments copy of the certificate of 21 compliance issued except that this provision does not require 22 the listing of those persons who are employed on the premises 23 of a bottling plant, or winery where wine is manufactured, 24 fermented, or bottled in Iowa or the listing of those persons 25 who are thereafter engaged in the transporting of the wine. 26 b. A class A wine permit holder may sell brands of wine 27 which are not manufactured, bottled, fermented, shipped, or 28 imported by a person holding a current vintners certificate 29 of compliance if the brands of wine were purchased from a 30 private sale pursuant to section 123.171, subsection 4, or if 31 authorized by the laws of another state. 32 Sec. 5. Section 123.183, subsection 1, Code 2024, is amended 33 to read as follows: 34 1. a. In addition to the annual permit fee to be paid by 35 -4- LSB 5743YC (3) 90 nls/ns 4/ 8
H.F. _____ each class A wine permittee, a wine gallonage tax shall be 1 levied and collected from each class A wine permittee on all 2 of the following: 3 (1) All wine manufactured for sale and sold in this state 4 at wholesale and on all . 5 (2) All wine imported into this state for sale at wholesale 6 and sold in this state at wholesale. A wine gallonage tax 7 shall also be levied and collected on the 8 (3) The direct shipment of wine pursuant to section 123.187 . 9 (4) The sale of wine at auction pursuant to section 123.173C 10 to a retail alcohol license holder. 11 b. The rate of the wine gallonage tax is one dollar and 12 seventy-five cents for each wine gallon. The same rate shall 13 apply for the fractional parts of a wine gallon. The wine 14 gallonage tax shall not be levied or collected on wine sold 15 by one class A wine permittee to another class A wine 16 permittee or on wine that is sold by a class A wine permittee 17 to a distributor outside of the state. 18 Sec. 6. Section 123.183, subsection 2, paragraph a, Code 19 2024, is amended to read as follows: 20 a. Revenue collected from the wine gallonage tax on wine 21 manufactured for sale and sold at wholesale in this state, 22 and on wine subject to direct shipment as provided in section 23 123.187 by a wine manufacturer licensed or permitted pursuant 24 to laws regulating alcoholic beverages in this state, pursuant 25 to subsection 1 shall be deposited in the wine gallonage tax 26 fund as created in this section . 27 Sec. 7. Section 123.184, Code 2024, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 3. Each wine auction permit holder shall 30 make a report under oath to the department electronically, 31 or in a manner prescribed by the director, on or before the 32 tenth day of the calendar months of June and December, showing 33 the exact number of gallons of wine and fractional parts of 34 gallons sold and shipped pursuant to section 123.173C during 35 -5- LSB 5743YC (3) 90 nls/ns 5/ 8
H.F. _____ the preceding six-month calendar period. The report shall also 1 state whatever reasonable additional information the director 2 requires. The permit holder at the time of filing this report 3 shall pay to the department the amount of tax due at the rate 4 fixed in section 123.183. A penalty of ten percent of this 5 amount shall be assessed and collected if the report required 6 to be filed pursuant to this subsection is not filed and the 7 tax paid within the time required by this subsection. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanations substance by the members of the general assembly. 11 This bill relates to private wine sales and wine auction 12 permits. 13 The bill authorizes a person to conduct private wine sales 14 from the persons private collection for wine in an original, 15 unopened container to either a class A wine permittee for 16 purposes of resale, or to a wine auction permittee under 17 the bill for resale at a wine auction. A class A wine 18 permittee or wine auction permittee who purchases wine from 19 a private collection shall ensure that each bottle of wine 20 has a permanently affixed label stating that fact. The bill 21 authorizes a class A wine permit holder to sell brands of 22 wine which are not manufactured, bottled, fermented, shipped, 23 or imported by a person holding a current vintners certificate 24 if the brands of wine were purchased from a private sale and 25 meet the labeling requirements under the bill. 26 The bill authorizes a person, upon application to the 27 department of revenue and receipt of a wine auction permit, to 28 conduct a wine auction. A wine auction permit is valid for a 29 period of one year and allows the permittee to conduct no more 30 than 24 wine auctions during the one-year period. The fee for 31 a wine auction permit is $100. A wine auction permit may only 32 be issued to an applicant who is of good moral character; is 33 a citizen of the state of Iowa or authorized to do business 34 in the state; does not hold a retail alcohol license; if the 35 -6- LSB 5743YC (3) 90 nls/ns 6/ 8
H.F. _____ applicant holds a class A wine permit, has held such permit 1 for not less than two years; and gives consent for a person to 2 enter upon the premises of the wine auction without a warrant 3 during normal business hours to inspect for violations of the 4 provisions of Code chapter 123 or ordinances and regulations 5 that local authorities may adopt. The premises that the 6 applicant intends to use for wine auctions must constitute a 7 safe and proper place or building and conform to all applicable 8 laws, ordinances, resolutions, and health and fire regulations. 9 The bill prohibits an applicant from having or maintaining any 10 interior access to residential or sleeping quarters unless the 11 director of revenue grants permission in the form of a living 12 quarters permit. 13 The bill sets forth the information required to be included 14 for a wine auction permit application. 15 The bill requires a wine auction conducted by a wine auction 16 permittee to comply with the following requirements: (1) a 17 permittee shall not offer wines owned by the permittee at 18 auction, (2) wine from a private collection is permanently 19 affixed with a label stating that fact, (3) a permittee 20 shall ensure that each container of wine to be sold is in the 21 original, unopened container, (4) a permittee is responsible 22 for the storage of all wines that are to be offered at auction 23 and for their subsequent shipment and delivery, and (5) a 24 permittee is responsible for the payment of all applicable 25 taxes for wines sold at auction. 26 The bill authorizes a class A wine permittee or a retail 27 alcohol licensee, not including a native wine manufacturer, 28 to purchase wine offered at an auction and resell wine 29 purchased at auction in accordance with the requirements of 30 the licensees or permittees license or permit, subject to 31 applicable label requirements. 32 A violation of the requirements of the bill subjects the 33 wine auction permit holder to the general penalties provided in 34 Code chapter 123 and constitutes grounds for imposition of a 35 -7- LSB 5743YC (3) 90 nls/ns 7/ 8
H.F. _____ civil penalty, suspension of the permit, or revocation of the 1 permit after notice and opportunity for a hearing. A person 2 who violates any of the provisions of the bill, or who makes a 3 false statement concerning any material fact in submitting an 4 application for a permit, is guilty of a serious misdemeanor. 5 A serious misdemeanor is punishable by confinement for no more 6 than one year and a fine of at least $430 but not more than 7 $2,560. 8 The bill levies a wine gallonage tax on the sale of wine at 9 auction to a retail alcohol license holder. The rate of the 10 wine gallonage tax is $1.75 per gallon. Revenue collected is 11 deposited in the wine gallonage tax fund. 12 The bill requires each wine auction permit holder to make a 13 biannual report under oath to the department of revenue showing 14 the exact number of gallons of wine and fractional parts of 15 gallons sold and shipped during the preceding six-month period, 16 and whatever reasonable additional information the director 17 requires. The permittee at the time of filing the report must 18 pay to the department of revenue the amount of tax due. A 19 penalty of 10 percent is assessed and collected if the report 20 is not filed and the tax paid within the time required. 21 -8- LSB 5743YC (3) 90 nls/ns 8/ 8