Senate File 2168 - Introduced SENATE FILE 2168 BY SHIPLEY 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 5837XS (3) 90 nls/ns
S.F. 2168 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 123.41, subsection 1, Code 2024, 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 department 19 electronically, or in a manner prescribed by the director, and 20 shall be accompanied by a fee of three hundred dollars payable 21 to the department. The director may in accordance with this 22 chapter grant and issue to a manufacturer a manufacturers 23 license, valid for a one-year period after date of issuance, 24 which shall allow the manufacture, storage, and wholesale 25 disposition and sale of alcoholic liquors to the department and 26 to customers outside of the state pursuant to the laws of that 27 jurisdiction . 28 Sec. 5. Section 123.41, Code 2024, 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 in 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 5837XS (3) 90 nls/ns 1/ 8
S.F. 2168 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, and which, combining all production facilities 12 of the business, produces and manufactures not more than one 13 hundred thousand proof gallons of native distilled spirits on 14 an annual basis. 15 2. a. Only an alcoholic liquor manufacturer that holds 16 an alcoholic liquor direct shipper license issued pursuant to 17 this section shall sell alcoholic liquor at retail for direct 18 shipment to any person within this state. This section shall 19 not prohibit an authorized retail licensee or permittee from 20 delivering alcoholic liquor pursuant to section 123.46A. 21 b. An alcoholic liquor manufacturer applying for an 22 alcoholic liquor direct shipper license shall submit an 23 application for the license electronically, or in a manner 24 prescribed by the director, accompanied by a true copy of 25 the manufacturers current alcoholic beverage license or 26 permit issued by the state where the manufacturer is primarily 27 located, a copy of the manufacturers basic permit issued by 28 the alcohol and tobacco tax and trade bureau of the United 29 States department of the treasury, and documents filed by the 30 manufacturer with the alcohol and tobacco tax and trade bureau 31 of the United States department of the treasury that show the 32 total number of proof gallons of distilled spirits produced and 33 manufactured by the manufacturer for the preceding calendar 34 year. 35 -2- LSB 5837XS (3) 90 nls/ns 2/ 8
S.F. 2168 c. An application submitted pursuant to paragraph b shall 1 be accompanied by a license fee in the amount of twenty-five 2 dollars. 3 d. A license issued pursuant to this section may be renewed 4 annually by submitting a renewal application with the director 5 in a manner prescribed by the director, accompanied by the 6 twenty-five dollar license fee. 7 3. The direct shipment of alcoholic liquor pursuant to this 8 section shall be subject to the following requirements and 9 restrictions: 10 a. Alcoholic liquor shall only be shipped to a resident of 11 this state who is at least twenty-one years of age, for the 12 residents personal use and consumption and not for resale. 13 b. Alcoholic liquor subject to direct shipping shall be 14 properly registered with the federal alcohol and tobacco tax 15 and trade bureau, and manufactured on the licensed premises of 16 the alcoholic liquor direct shipper licensee. 17 c. Alcoholic liquor subject to direct shipping shall be 18 properly registered with the department. Products which are 19 not listed for sale by the department must be registered 20 electronically with the department for direct shipping. This 21 registration will include the name of the manufacturer, the 22 name of the brand, the standard of fill, the wholesale price, 23 and other information as requested by the department. The 24 registration shall be updated as necessary to ensure the 25 department possesses an accurate, current registration. 26 d. All containers of alcoholic liquor shipped directly to a 27 resident of this state shall be conspicuously labeled with the 28 words CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 OR OLDER 29 REQUIRED FOR DELIVERY or shall be conspicuously labeled with 30 alternative wording preapproved by the director. 31 e. All containers of alcoholic liquor shipped directly 32 to a resident of this state shall be shipped by a holder of 33 an alcoholic beverage carrier permit as provided in section 34 123.188. 35 -3- LSB 5837XS (3) 90 nls/ns 3/ 8
S.F. 2168 f. Shipment of alcoholic liquor pursuant to this subsection 1 does not require a refund value for beverage container control 2 purposes under chapter 455C. 3 4. An alcoholic liquor direct shipper licensee shipping 4 alcoholic liquor to this state shall remit the following amount 5 to the department in a manner as directed by the department: 6 a. For alcoholic liquor that is listed for sale by the 7 department, an amount equivalent to fifty percent of the listed 8 wholesale price. 9 b. For alcoholic liquor that is not listed for sale by 10 the department, an amount equivalent to fifty percent of 11 the wholesale price as registered with the department under 12 subsection 3. 13 5. Each alcoholic liquor direct shipper licensee shall make 14 a report under oath to the department electronically, or in a 15 manner prescribed by the director, on or before the tenth day 16 of each month, which includes the following information: 17 a. The products and quantities shipped directly to residents 18 of this state in the preceding month. 19 b. The name and address of the individuals to whom the 20 alcoholic liquor was sold in each sale. 21 c. The wholesale price of the alcoholic liquor sold. 22 d. The purchase price of the alcoholic liquor sold and 23 the amount of taxes charged to the individual purchasing the 24 alcoholic liquor. 25 e. The alcoholic beverage carrier permittee who delivered 26 the shipment. 27 f. All documents filed by the alcoholic liquor direct 28 shipper licensee with the alcohol and tobacco tax and trade 29 bureau of the United States department of treasury for the 30 preceding month, including all production, storage, and 31 processing reports. 32 6. The license holder at the time of filing the report as 33 required by subsection 5 shall pay to the department the amount 34 as required pursuant to subsection 4. A penalty of ten percent 35 -4- LSB 5837XS (3) 90 nls/ns 4/ 8
S.F. 2168 of the amount due shall be assessed and collected if the report 1 required to be filed pursuant to this section and the amount 2 required to be paid as provided by subsection 4 is not filed 3 and the amount paid within the time required by this section. 4 7. An alcoholic liquor direct shipper licensee shall be 5 deemed to have consented to the jurisdiction of the department 6 or any other agency or court in this state concerning 7 enforcement of this section and any related laws, rules, or 8 regulations. A license holder shall allow the department to 9 perform an audit of shipping records upon request. 10 8. A violation of this section shall subject the licensee 11 to the general penalties provided in this chapter and shall 12 constitute grounds for imposition of a civil penalty or 13 suspension or revocation of the license pursuant to section 14 123.39. 15 Sec. 7. Section 123.43A, subsection 2, Code 2024, is amended 16 to read as follows: 17 2. A native distillery shall not sell more than nine 18 liters per person per day, of native distilled spirits on 19 the premises of the native distillery. However, a native 20 distillery shall not directly may ship native distilled spirits 21 for sale at retail manufactured by the native distillery in 22 closed containers to individual purchasers inside the state by 23 obtaining an alcoholic liquor direct shipper license pursuant 24 to section 123.42A . The native distillery shall maintain 25 records of individual purchases of native distilled spirits at 26 the native distillery for three years. 27 Sec. 8. Section 123.43A, subsection 7, Code 2024, is amended 28 to read as follows: 29 7. A native distillery may sell the native distilled spirits 30 it manufactures to customers outside the state , pursuant to the 31 laws of that jurisdiction . 32 Sec. 9. Section 123.46A, subsection 5, Code 2024, is amended 33 to read as follows: 34 5. Nothing in this section shall impact the direct shipment 35 -5- LSB 5837XS (3) 90 nls/ns 5/ 8
S.F. 2168 of alcoholic liquor as regulated by section 123.42A or the 1 direct shipment of wine as regulated by section 123.187 . 2 Sec. 10. Section 123.187, subsection 3, paragraph d, Code 3 2024, is amended to read as follows: 4 d. All containers of wine shipped directly to a resident of 5 this state shall be shipped by a holder of a wine an alcoholic 6 beverage carrier permit as provided in section 123.188 . 7 Sec. 11. Section 123.188, subsections 1, 2, and 4, Code 8 2024, are amended to read as follows: 9 1. A person desiring to deliver alcoholic liquor subject to 10 direct shipment within this state pursuant to section 123.42A 11 and wine subject to direct shipment within this state pursuant 12 to section 123.187 shall submit an application for a wine an 13 alcoholic beverage carrier permit electronically, or in a 14 manner prescribed by the director, which shall be accompanied 15 by a fee in the amount of one hundred dollars. 16 2. The director may in accordance with this chapter issue a 17 wine an alcoholic beverage carrier permit which shall be valid 18 for one year from the date of issuance unless it is sooner 19 suspended or revoked for a violation of this chapter . 20 4. The delivery of alcoholic liquor and wine pursuant to 21 this section shall be subject to the following requirements and 22 restrictions: 23 a. A wine An alcoholic beverage carrier permittee shall not 24 deliver alcoholic liquor or wine to any person under twenty-one 25 years of age, or to any person who either is or appears to be in 26 an intoxicated state or condition. 27 b. A wine An alcoholic beverage carrier permittee shall 28 obtain valid proof of identity and age prior to delivery, 29 and shall obtain the signature of an adult as a condition of 30 delivery. 31 c. A wine An alcoholic beverage carrier permittee shall 32 maintain records of alcoholic liquor and wine shipped which 33 include the permit number and name of the alcoholic liquor 34 and wine manufacturer, quantity of alcoholic liquor and wine 35 -6- LSB 5837XS (3) 90 nls/ns 6/ 8
S.F. 2168 shipped, recipients name and address, and an electronic or 1 paper form of signature from the recipient of the alcoholic 2 liquor and wine. Records shall be submitted to the department 3 on a monthly basis in a form and manner to be determined by the 4 department. 5 Sec. 12. EFFECTIVE DATE. This Act takes effect January 1, 6 2025. 7 EXPLANATION 8 The inclusion of this explanation does not constitute agreement with 9 the explanations substance by the members of the general assembly. 10 This bill allows for the direct shipment of alcoholic liquor 11 within the state. 12 New Code section 123.42A provides for the direct shipment of 13 alcoholic liquor and provides for an alcoholic liquor direct 14 shipper license. The bill provides that only alcoholic liquor 15 manufacturers that produce and manufacture not more than 16 100,000 proof gallons of native distilled spirits on an annual 17 basis are eligible for this license. Provisions governing the 18 direct shipment of wine and the wine direct shipper permit are 19 generally made applicable to the new Code section providing 20 for the direct shipment of alcoholic liquor. In addition to 21 these requirements, the new Code section requires all alcoholic 22 liquor subject to direct shipping to be properly registered 23 with the department of revenue and that products which are 24 not listed for sale by the department must be registered to 25 include information on the name of the manufacturer, the name 26 of the brand, the standard of fill, the wholesale price, and 27 other information as requested by the department. The new Code 28 section also requires each alcoholic liquor direct shipper 29 licensee to make a monthly report to the department that lists 30 the products and quantities shipped directly to residents 31 of this state in the preceding month, the name and address 32 of the individuals to whom the alcoholic liquor was sold in 33 each sale, the wholesale price of the alcoholic liquor sold, 34 the purchase price and taxes charged of the alcoholic liquor 35 -7- LSB 5837XS (3) 90 nls/ns 7/ 8
S.F. 2168 sold, the alcoholic beverage carrier permittee who delivered 1 each shipment, and documents filed by the licensee with the 2 alcohol and tobacco tax and trade bureau of the United States 3 department of treasury for the preceding month, including all 4 production, storage, and processing reports. Finally, the 5 new Code section provides that an alcoholic liquor direct 6 shipper licensee shall remit an amount to the department 7 depending on whether the alcoholic liquor shipped is listed 8 for sale by the department. If the alcoholic liquor is listed 9 for sale by the department, the permittee shall remit to the 10 department an amount equivalent to 50 percent of the wholesale 11 price paid by the department for the alcoholic liquor. If the 12 alcoholic liquor is not listed for sale by the department, the 13 permittee shall remit to the department an amount equivalent 14 to 50 percent of the wholesale price of the alcoholic liquor 15 as registered with the department. The bill provides that a 16 penalty of 10 percent of the amount due shall be assessed and 17 collected if the amount required to be paid to the department 18 as provided by the bill is not paid within the time required. 19 The bill allows a manufacturer of alcoholic liquor and a 20 native distillery to ship alcoholic liquor or native distilled 21 spirits, as applicable, to individual purchasers inside this 22 state by obtaining an alcoholic liquor direct shipper license 23 as established in the bill. 24 Code section 123.188, providing for a wine carrier permit, 25 is amended to provide for the direct shipment of alcoholic 26 liquor as provided by the bill. 27 The bill takes effect January 1, 2025. 28 -8- LSB 5837XS (3) 90 nls/ns 8/ 8