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Indiana House Bill HB1663

Indiana 2025 Regular Session

Indiana House Bill HB1663 Compare Versions

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1-*HB1663.1*
2-February 4, 2025
1+
2+Introduced Version
33 HOUSE BILL No. 1663
44 _____
5-DIGEST OF HB 1663 (Updated February 4, 2025 10:22 am - DI 144)
6-Citations Affected: IC 7.1-3.
5+DIGEST OF INTRODUCED BILL
6+Citations Affected: IC 7.1-3-27.
77 Synopsis: Collaborative distilling. Allows the holder of an artisan
8-distiller's permit (artisan distiller) to: (1) manufacture liquor, including
9-blending liquor sourced from another licensed manufacturer with
10-liquor the artisan distiller manufactures; and (2) redistill, age, or bottle
11-liquor, including liquor sourced from another licensed manufacturer;
12-in accordance with certain provisions. Allows an artisan distiller to
13-manufacture liquor for another artisan distiller if certain conditions are
14-met. Allows an artisan distiller to blend or sell liquor from another
8+distiller's permit (artisan distiller) to redistill, age, and bottle liquor
9+sourced from another licensed manufacturer. Allows an artisan distiller
10+to manufacture liquor for another artisan distiller if certain conditions
11+are met. Allows an artisan distiller to sell liquor sourced from another
1512 licensed manufacturer as liquor that the artisan distiller manufactures
1613 if the artisan distiller's aggregate annual sales, in gallons, is made up of
1714 not less than 70% of liquor that was fermented and distilled from raw
1815 materials by the artisan distiller at the licensed premises of the artisan
19-distiller. Specifies that brandy or liquor transferred in bond counts, for
20-the calendar year in which the transfer occurs, toward the gallonage
21-limit for the permit holder that receives the liquor or brandy transferred
22-in bond. Provides that a transfer in bond of liquor or brandy that
23-occurred before July 1, 2025, between the holder of an artisan distiller's
24-permit, a farm winery brandy distiller's permit, or a distiller's permit:
25-(1) is not subject to a provision that restricts the amount of sourced
26-liquor that an artisan distiller may sell; and (2) does not, for purposes
27-of that provision, count toward the amount of sourced liquor that an
28-artisan distiller may sell.
16+distiller.
2917 Effective: July 1, 2025.
3018 Mayfield, Clere
3119 January 21, 2025, read first time and referred to Committee on Public Policy.
32-February 4, 2025, amended, reported — Do Pass.
33-HB 1663—LS 7648/DI 137 February 4, 2025
20+2025 IN 1663—LS 7648/DI 137 Introduced
3421 First Regular Session of the 124th General Assembly (2025)
3522 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
3623 Constitution) is being amended, the text of the existing provision will appear in this style type,
3724 additions will appear in this style type, and deletions will appear in this style type.
3825 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
3926 provision adopted), the text of the new provision will appear in this style type. Also, the
4027 word NEW will appear in that style type in the introductory clause of each SECTION that adds
4128 a new provision to the Indiana Code or the Indiana Constitution.
4229 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
4330 between statutes enacted by the 2024 Regular Session of the General Assembly.
4431 HOUSE BILL No. 1663
4532 A BILL FOR AN ACT to amend the Indiana Code concerning
4633 alcohol and tobacco.
4734 Be it enacted by the General Assembly of the State of Indiana:
48-1 SECTION 1. IC 7.1-3-7.5-5 IS AMENDED TO READ AS
49-2 FOLLOWS [EFFECTIVE JULY 1, 2025]: Sec. 5. (a) Brandy produced
50-3 by the holder of a farm winery brandy distiller's permit that is sold
51-4 through a wholesaler licensed under IC 7.1-3-8 is not counted toward
52-5 the gallonage limit established in section 4 of this chapter.
53-6 (b) Brandy or liquor transferred in bond counts, for the
54-7 calendar year in which the transfer occurs, toward the gallonage
55-8 limit established in section 4 of this chapter for the permit holder
56-9 that receives the liquor or brandy transferred in bond.
57-10 SECTION 2. IC 7.1-3-27-8, AS AMENDED BY P.L.194-2021,
58-11 SECTION 59, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
59-12 JULY 1, 2025]: Sec. 8. (a) The holder of an artisan distiller's permit
60-13 may do only the following:
61-14 (1) Manufacture liquor, including blending liquor purchased
62-15 sourced from another licensed manufacturer with liquor the
63-16 artisan distiller manufactures under in accordance with section
64-17 11 of this chapter.
65-HB 1663—LS 7648/DI 137 2
66-1 (2) Bottle liquor manufactured by the artisan distiller.
67-2 (3) Insert liquor manufactured by the artisan distiller into a
68-3 container.
69-4 (4) Store liquor manufactured by the artisan distiller, including at
70-5 a facility located within ten (10) miles of the artisan distiller's
71-6 distillery.
72-7 (5) Transport, sell, and deliver liquor manufactured by the artisan
73-8 distiller to:
74-9 (A) places outside Indiana; or
75-10 (B) the holder of a liquor wholesaler's permit under IC 7.1-3-8.
76-11 (6) Sell liquor manufactured by the artisan distiller to consumers
77-12 by the drink, bottle, container, or case from the licensed premises
78-13 of the distillery where the liquor was manufactured.
79-14 Notwithstanding IC 7.1-1-3-20, the licensed premises may
80-15 include the distillery parking lot or an area adjacent to the artisan
81-16 distillery. The parking lot or adjacent area may only be used for
82-17 the purpose of conveying alcoholic beverages and other
83-18 nonalcoholic items to a customer subject to section 8.1 of this
84-19 chapter and may not be used for point of sale purposes or any
85-20 other purpose.
86-21 (7) Serve complimentary samples of the liquor manufactured by
87-22 the artisan distiller to consumers on the premises of the distillery
88-23 where the liquor was manufactured.
89-24 (8) Sell liquor as authorized by this section for carryout on
90-25 Sunday in a quantity at any one (1) time of not more than four and
91-26 five-tenths (4.5) liters.
92-27 (9) With the approval of the commission, participate:
93-28 (A) individually; or
94-29 (B) with other permit holders under this chapter, holders of
95-30 farm winery permits, holders of brewer's permits issued under
96-31 IC 7.1-3-2-2(b), or any combination of holders described in
97-32 this clause;
98-33 in a trade show or an exposition at which products of each permit
99-34 holder participant are displayed, promoted, and sold. All of the
100-35 permit holders may occupy the same tent, structure, or building.
101-36 The commission may not grant to a holder of a permit under this
102-37 chapter approval under this subdivision to participate in a trade
103-38 show or exposition for more than forty-five (45) days in a
104-39 calendar year.
105-40 (10) Be the proprietor of a restaurant that is not subject to the
106-41 minimum gross food sales or the minimum projected food sales
107-42 set forth in 905 IAC 1-41-2 and the gross retail income
108-HB 1663—LS 7648/DI 137 3
109-1 requirements to sell carryout under IC 7.1-3-20-9.5. A holder is
110-2 entitled to conduct the following activities:
111-3 (A) Hold a beer retailer's permit, a wine retailer's permit, or a
112-4 liquor retailer's permit for a restaurant.
113-5 (B) Transfer liquor directly from the artisan distillery to a
114-6 restaurant that the artisan distiller has an interest in by means
115-7 of:
116-8 (i) bottles;
117-9 (ii) bulk containers; or
118-10 (iii) a continuous flow system.
119-11 (C) Install a window between the artisan distillery and an
120-12 adjacent restaurant that allows the public and the holder of the
121-13 permit to view both premises.
122-14 (D) Install a doorway or other opening between the artisan
123-15 distillery and an adjacent restaurant that provides the public
124-16 and the holder of the permit with access to both the artisan
125-17 distillery and restaurant.
126-18 (11) A holder that does not distribute through an Indiana liquor
127-19 wholesaler is entitled under the artisan distiller's permit to sell and
128-20 deliver to a person holding a liquor retailer or liquor dealer permit
129-21 under this title a total of not more than one thousand (1,000)
130-22 gallons of the artisan distillery's liquor in a calendar year, if the
131-23 artisan distiller has not sold in Indiana more than nine thousand
132-24 (9,000) gallons the previous calendar year. A holder that sells and
133-25 delivers under this subdivision shall comply with all provisions
134-26 applicable to a wholesaler in 905 IAC 1-5.1, 905 IAC 1-5.2, 905
135-27 IAC 1-21, 905 IAC 1-31, and 905 IAC 1-32.1.
136-28 (12) A holder must annually submit to the commission copies of
137-29 its Indiana and federal excise tax returns.
138-30 (13) Manufacture liquor at the licensed premises for another
139-31 holder of an artisan distiller's permit. Upon completion of the
140-32 manufacturing of the liquor for another permit holder under
141-33 this subdivision, the product must be transported to the
142-34 permit holder for which the liquor was manufactured. To
143-35 qualify under this subdivision:
144-36 (A) the permit holder for which the liquor is manufactured
145-37 must have manufactured not less than forty (40) gallons of
146-38 liquor produced from raw materials at the permit holder's
147-39 licensed premises in the previous calendar year; and
148-40 (B) the total number of gallons of liquor that a permit
149-41 holder manufactures under this subdivision may not
150-42 exceed the number of gallons of liquor the permit holder
151-HB 1663—LS 7648/DI 137 4
152-1 produced from raw materials at the permit holder's
153-2 licensed premises in the same calendar year.
154-3 All records required by the federal Alcohol and Tobacco Tax
155-4 and Trade Bureau regarding the number of gallons of liquor
156-5 produced from raw materials at the licensed premises of a
157-6 permit holder must be available to the commission upon
158-7 request. The activity under this subdivision is not an interest
159-8 under IC 7.1-5-9.
160-9 (14) Redistill, age, or bottle liquor, including liquor sourced
161-10 from another licensed manufacturer in accordance with
162-11 section 11 of this chapter.
163-12 (b) The holder of an artisan distiller's permit who provides samples
164-13 or sells liquor by the glass must furnish the minimum food
165-14 requirements prescribed by the commission.
166-15 (c) A storage facility used by an artisan distiller under subsection
167-16 (a)(4) must conform with federal laws, rules, and regulations. An
168-17 artisan distiller may transfer liquor from a separate storage facility back
169-18 to the artisan distillery. An artisan distiller may sell or transfer liquor
170-19 directly to a liquor wholesaler from a storage facility that is separate
171-20 from the artisan distillery. An artisan distiller may not sell or transfer
172-21 liquor from a storage facility to any other permittee or a consumer. The
173-22 artisan distiller shall maintain an adequate written record of the liquor
174-23 transferred:
175-24 (1) between the artisan distillery and the storage facility; and
176-25 (2) from the storage facility to the liquor wholesaler.
177-26 (d) The holder of an artisan distiller's permit may transport liquor to
178-27 and from a brewery located within the same county for the purposes of
179-28 carbonating and canning by the brewery. The activity under this
180-29 subsection is not an interest under IC 7.1-5-9.
181-30 (e) An artisan distiller who knowingly or intentionally violates this
182-31 section commits a Class B misdemeanor.
183-32 SECTION 3. IC 7.1-3-27-11, AS AMENDED BY P.L.159-2014,
184-33 SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
185-34 JULY 1, 2025]: Sec. 11. (a) An artisan distiller may blend or sell liquor
186-35 that the artisan distiller obtains from another manufacturer with as
187-36 liquor that the artisan distiller manufactures. The artisan distiller may
188-37 sell the blended or sourced liquor as liquor that the artisan distiller
189-38 manufactures only if the final product contains at least sixty percent
190-39 (60%) of liquor artisan distiller's aggregate annual sales, in gallons
191-40 of liquor, is made up of not less than seventy percent (70%) of
192-41 liquor that was fermented and distilled from raw materials by the
193-42 artisan distiller at the licensed premises of the artisan distiller.
194-HB 1663—LS 7648/DI 137 5
195-1 (b) An artisan distiller who knowingly or intentionally sells blended
196-2 or sourced liquor in an amount that contains less than sixty percent
197-3 (60%) of liquor exceeds thirty percent (30%) of the artisan
198-4 distiller's aggregate annual sales, in gallons, that was fermented and
199-5 distilled from raw materials by the artisan distiller sold at the licensed
200-6 premises of the artisan distiller commits a Class B misdemeanor.
201-7 SECTION 4. IC 7.1-3-27-11.5 IS ADDED TO THE INDIANA
202-8 CODE AS A NEW SECTION TO READ AS FOLLOWS
203-9 [EFFECTIVE JULY 1, 2025]: Sec. 11.5. (a) A transfer in bond of
204-10 liquor or brandy that occurred before July 1, 2025, between the
205-11 holder of an artisan distiller's permit, a farm winery brandy
206-12 distiller's permit, or a distiller's permit:
207-13 (1) is not subject to section 11 of this chapter; and
208-14 (2) does not, for purposes of section 11 of this chapter, count
209-15 toward the amount of sourced liquor that an artisan distiller
210-16 may sell.
211-17 (b) Brandy or liquor transferred in bond counts, for the
212-18 calendar year in which the transfer occurs, toward the gallonage
213-19 limit established in section 3 of this chapter for the permit holder
214-20 that receives the liquor or brandy transferred in bond.
215-HB 1663—LS 7648/DI 137 6
216-COMMITTEE REPORT
217-Mr. Speaker: Your Committee on Public Policy, to which was
218-referred House Bill 1663, has had the same under consideration and
219-begs leave to report the same back to the House with the
220-recommendation that said bill be amended as follows:
221-Page 1, between the enacting clause and line 1, begin a new
222-paragraph and insert:
223-"SECTION 1. IC 7.1-3-7.5-5 IS AMENDED TO READ AS
224-FOLLOWS [EFFECTIVE JULY 1, 2025]: Sec. 5. (a) Brandy produced
225-by the holder of a farm winery brandy distiller's permit that is sold
226-through a wholesaler licensed under IC 7.1-3-8 is not counted toward
227-the gallonage limit established in section 4 of this chapter.
228-(b) Brandy or liquor transferred in bond counts, for the
229-calendar year in which the transfer occurs, toward the gallonage
230-limit established in section 4 of this chapter for the permit holder
231-that receives the liquor or brandy transferred in bond.".
232-Page 1, line 5, after "blending" delete ", redistilling, aging,".
233-Page 1, line 6, delete "and bottling".
234-Page 1, line 7, reset in roman "with liquor the artisan distiller
235-manufactures".
236-Page 3, between lines 41 and 42, begin a new line block indented
237-and insert:
238-"(14) Redistill, age, or bottle liquor, including liquor sourced
239-from another licensed manufacturer in accordance with
240-section 11 of this chapter.".
241-Page 4, line 22, reset in roman "blend".
242-Page 4, line 22, after "blend" insert "or".
243-Page 4, line 25, reset in roman "blended".
244-Page 4, line 25, after "blended" insert "or".
245-Page 4, line 31, reset in roman "blended".
246-Page 4, line 31, after "blended" insert "or".
247-Page 4, after line 36, begin a new paragraph and insert:
248-"SECTION 4. IC 7.1-3-27-11.5 IS ADDED TO THE INDIANA
249-CODE AS A NEW SECTION TO READ AS FOLLOWS
250-[EFFECTIVE JULY 1, 2025]: Sec. 11.5. (a) A transfer in bond of
251-liquor or brandy that occurred before July 1, 2025, between the
252-holder of an artisan distiller's permit, a farm winery brandy
253-distiller's permit, or a distiller's permit:
254-(1) is not subject to section 11 of this chapter; and
255-(2) does not, for purposes of section 11 of this chapter, count
256-toward the amount of sourced liquor that an artisan distiller
257-HB 1663—LS 7648/DI 137 7
258-may sell.
259-(b) Brandy or liquor transferred in bond counts, for the
260-calendar year in which the transfer occurs, toward the gallonage
261-limit established in section 3 of this chapter for the permit holder
262-that receives the liquor or brandy transferred in bond.".
263-Renumber all SECTIONS consecutively.
264-and when so amended that said bill do pass.
265-(Reference is to HB 1663 as introduced.)
266-MANNING
267-Committee Vote: yeas 12, nays 0.
268-HB 1663—LS 7648/DI 137
35+1 SECTION 1. IC 7.1-3-27-8, AS AMENDED BY P.L.194-2021,
36+2 SECTION 59, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
37+3 JULY 1, 2025]: Sec. 8. (a) The holder of an artisan distiller's permit
38+4 may do only the following:
39+5 (1) Manufacture liquor, including blending, redistilling, aging,
40+6 and bottling liquor purchased sourced from another licensed
41+7 manufacturer with liquor the artisan distiller manufactures under
42+8 in accordance with section 11 of this chapter.
43+9 (2) Bottle liquor manufactured by the artisan distiller.
44+10 (3) Insert liquor manufactured by the artisan distiller into a
45+11 container.
46+12 (4) Store liquor manufactured by the artisan distiller, including at
47+13 a facility located within ten (10) miles of the artisan distiller's
48+14 distillery.
49+15 (5) Transport, sell, and deliver liquor manufactured by the artisan
50+16 distiller to:
51+17 (A) places outside Indiana; or
52+2025 IN 1663—LS 7648/DI 137 2
53+1 (B) the holder of a liquor wholesaler's permit under IC 7.1-3-8.
54+2 (6) Sell liquor manufactured by the artisan distiller to consumers
55+3 by the drink, bottle, container, or case from the licensed premises
56+4 of the distillery where the liquor was manufactured.
57+5 Notwithstanding IC 7.1-1-3-20, the licensed premises may
58+6 include the distillery parking lot or an area adjacent to the artisan
59+7 distillery. The parking lot or adjacent area may only be used for
60+8 the purpose of conveying alcoholic beverages and other
61+9 nonalcoholic items to a customer subject to section 8.1 of this
62+10 chapter and may not be used for point of sale purposes or any
63+11 other purpose.
64+12 (7) Serve complimentary samples of the liquor manufactured by
65+13 the artisan distiller to consumers on the premises of the distillery
66+14 where the liquor was manufactured.
67+15 (8) Sell liquor as authorized by this section for carryout on
68+16 Sunday in a quantity at any one (1) time of not more than four and
69+17 five-tenths (4.5) liters.
70+18 (9) With the approval of the commission, participate:
71+19 (A) individually; or
72+20 (B) with other permit holders under this chapter, holders of
73+21 farm winery permits, holders of brewer's permits issued under
74+22 IC 7.1-3-2-2(b), or any combination of holders described in
75+23 this clause;
76+24 in a trade show or an exposition at which products of each permit
77+25 holder participant are displayed, promoted, and sold. All of the
78+26 permit holders may occupy the same tent, structure, or building.
79+27 The commission may not grant to a holder of a permit under this
80+28 chapter approval under this subdivision to participate in a trade
81+29 show or exposition for more than forty-five (45) days in a
82+30 calendar year.
83+31 (10) Be the proprietor of a restaurant that is not subject to the
84+32 minimum gross food sales or the minimum projected food sales
85+33 set forth in 905 IAC 1-41-2 and the gross retail income
86+34 requirements to sell carryout under IC 7.1-3-20-9.5. A holder is
87+35 entitled to conduct the following activities:
88+36 (A) Hold a beer retailer's permit, a wine retailer's permit, or a
89+37 liquor retailer's permit for a restaurant.
90+38 (B) Transfer liquor directly from the artisan distillery to a
91+39 restaurant that the artisan distiller has an interest in by means
92+40 of:
93+41 (i) bottles;
94+42 (ii) bulk containers; or
95+2025 IN 1663—LS 7648/DI 137 3
96+1 (iii) a continuous flow system.
97+2 (C) Install a window between the artisan distillery and an
98+3 adjacent restaurant that allows the public and the holder of the
99+4 permit to view both premises.
100+5 (D) Install a doorway or other opening between the artisan
101+6 distillery and an adjacent restaurant that provides the public
102+7 and the holder of the permit with access to both the artisan
103+8 distillery and restaurant.
104+9 (11) A holder that does not distribute through an Indiana liquor
105+10 wholesaler is entitled under the artisan distiller's permit to sell and
106+11 deliver to a person holding a liquor retailer or liquor dealer permit
107+12 under this title a total of not more than one thousand (1,000)
108+13 gallons of the artisan distillery's liquor in a calendar year, if the
109+14 artisan distiller has not sold in Indiana more than nine thousand
110+15 (9,000) gallons the previous calendar year. A holder that sells and
111+16 delivers under this subdivision shall comply with all provisions
112+17 applicable to a wholesaler in 905 IAC 1-5.1, 905 IAC 1-5.2, 905
113+18 IAC 1-21, 905 IAC 1-31, and 905 IAC 1-32.1.
114+19 (12) A holder must annually submit to the commission copies of
115+20 its Indiana and federal excise tax returns.
116+21 (13) Manufacture liquor at the licensed premises for another
117+22 holder of an artisan distiller's permit. Upon completion of the
118+23 manufacturing of the liquor for another permit holder under
119+24 this subdivision, the product must be transported to the
120+25 permit holder for which the liquor was manufactured. To
121+26 qualify under this subdivision:
122+27 (A) the permit holder for which the liquor is manufactured
123+28 must have manufactured not less than forty (40) gallons of
124+29 liquor produced from raw materials at the permit holder's
125+30 licensed premises in the previous calendar year; and
126+31 (B) the total number of gallons of liquor that a permit
127+32 holder manufactures under this subdivision may not
128+33 exceed the number of gallons of liquor the permit holder
129+34 produced from raw materials at the permit holder's
130+35 licensed premises in the same calendar year.
131+36 All records required by the federal Alcohol and Tobacco Tax
132+37 and Trade Bureau regarding the number of gallons of liquor
133+38 produced from raw materials at the licensed premises of a
134+39 permit holder must be available to the commission upon
135+40 request. The activity under this subdivision is not an interest
136+41 under IC 7.1-5-9.
137+42 (b) The holder of an artisan distiller's permit who provides samples
138+2025 IN 1663—LS 7648/DI 137 4
139+1 or sells liquor by the glass must furnish the minimum food
140+2 requirements prescribed by the commission.
141+3 (c) A storage facility used by an artisan distiller under subsection
142+4 (a)(4) must conform with federal laws, rules, and regulations. An
143+5 artisan distiller may transfer liquor from a separate storage facility back
144+6 to the artisan distillery. An artisan distiller may sell or transfer liquor
145+7 directly to a liquor wholesaler from a storage facility that is separate
146+8 from the artisan distillery. An artisan distiller may not sell or transfer
147+9 liquor from a storage facility to any other permittee or a consumer. The
148+10 artisan distiller shall maintain an adequate written record of the liquor
149+11 transferred:
150+12 (1) between the artisan distillery and the storage facility; and
151+13 (2) from the storage facility to the liquor wholesaler.
152+14 (d) The holder of an artisan distiller's permit may transport liquor to
153+15 and from a brewery located within the same county for the purposes of
154+16 carbonating and canning by the brewery. The activity under this
155+17 subsection is not an interest under IC 7.1-5-9.
156+18 (e) An artisan distiller who knowingly or intentionally violates this
157+19 section commits a Class B misdemeanor.
158+20 SECTION 2. IC 7.1-3-27-11, AS AMENDED BY P.L.159-2014,
159+21 SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
160+22 JULY 1, 2025]: Sec. 11. (a) An artisan distiller may blend sell liquor
161+23 that the artisan distiller obtains from another manufacturer with as
162+24 liquor that the artisan distiller manufactures. The artisan distiller may
163+25 sell the blended sourced liquor as liquor that the artisan distiller
164+26 manufactures only if the final product contains at least sixty percent
165+27 (60%) of liquor artisan distiller's aggregate annual sales, in gallons
166+28 of liquor, is made up of not less than seventy percent (70%) of
167+29 liquor that was fermented and distilled from raw materials by the
168+30 artisan distiller at the licensed premises of the artisan distiller.
169+31 (b) An artisan distiller who knowingly or intentionally sells blended
170+32 sourced liquor in an amount that contains less than sixty percent
171+33 (60%) of liquor exceeds thirty percent (30%) of the artisan
172+34 distiller's aggregate annual sales, in gallons, that was fermented and
173+35 distilled from raw materials by the artisan distiller sold at the licensed
174+36 premises of the artisan distiller commits a Class B misdemeanor.
175+2025 IN 1663—LS 7648/DI 137