[Congressional Record Volume 157, Number 35 (Wednesday, March 9, 2011)]
[Senate]
[Pages S1510-S1511]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY (for himself, Mr. Crapo, Mr. Wyden, Ms. Snowe, Mr. 
        Schumer, Mr. Cornyn, Mr. Leahy, Mr. Burr, Ms. Mikulski, Mr. 
        Brown of Massachusetts, Mr. Merkley, Mr. Wicker, Mr. Brown of 
        Ohio, Mr. Chambliss, Mr. Tester, Mr. Cochran, Ms. Cantwell, Mr. 
        Portman, and Mr. Cardin):
  S. 534. A bill to amend the Internal Revenue Code of 1986 to provide 
a reduced rate of excise tax on beer produced domestically by certain 
small producers; to the Committee on Finance.
  Mr. KERRY. Mr. President, today Senator Crapo and I are reintroducing 
legislation to assist small brewers across the country. The Brewer's 
Employment and Excise Relief, BEER, Act of 2011 would reduce the excise 
tax on domestic small beer producers as well as update the definition 
of what constitutes a small brewer to reflect today's market. Senators 
Wyden, Snowe, Schumer, Cornyn, Leahy, Burr, Mikulski, Scott Brown, 
Merkley, Wicker, Sherrod Brown, Chambliss, Tester, Cochran, and 
Cantwell are cosponsors of this legislation.
  As our economy continues on a track to recovery, we should remain 
focused on reducing unemployment and putting American's back to work. 
This legislation will do just that by helping an industry that is 
hiring and plans on expanding. Massachusetts is home to 38 small 
breweries.
  Though there has been a continued increase in consumer demand for the 
unique brews created by these small brewers, these beer producers 
operate at a distinct disadvantage when compared to the largest brewers 
in this country. While demand is growing, small brewers account for 
just 5 percent of beer sales nationwide and they face higher costs for 
production, raw materials, and market entry when compared to their much 
larger counterparts.
  The BEER Act legislation will revise the classification of a domestic 
small brewer, a definition that has not been updated since 1976. Under 
current law, small brewers are limited to those that produce 2 million 
barrels of beer per year. This legislation would update and raise the 
ceiling for the small brewer tax rate to 6 million barrels per year to 
reflect the original intent of differentiation between the large and 
small brewers. The largest beer producer in America used to produce 45 
million barrels annually and that has increased to over 100 million 
barrels.

[[Page S1511]]

  This legislation will also lower the excise tax rate on these small 
brewers on their first 60,000 barrels produced from $7 per barrel to 
$3.50 per barrel. Currently for the production over 60,000 barrels up 
to 2 million barrels, these brewers pay $18 per barrel in taxes, the 
same amount that the large brewers pay. This legislation would reduce 
that rate for small brewers to $16 per barrel.
  Small brewers employ nearly 100,000 people nationwide. This 
legislation will provide tax relief for this important industry, and 
allow these companies to expand both their production and their work 
force. A March 2010 economic analysis of this legislation done by Dr. 
John Friedman of Harvard University has estimated that the legislation 
will stimulate job creation at a rate of 2,700 new jobs in the first 
year to 18 months, with an additional 375 new jobs each year for the 
following 4 years.
  The benefits do not simply begin and end with the ability for these 
small breweries to grow. This legislation would benefit the consumer 
buying a 6 pack of Sierra Nevada or Harpoon in their local supermarket 
where prices on craft beer would be reduced by about 20 cents per case. 
The farms in the states that produce the barely, hops, and other 
materials that go into these fine brews would also see an increased 
demand for their products.
  This legislation would provide important benefits to America's small 
brewers and spur economic activity. It will provide relief and allow 
them to expand to meet the demands of a growing marketplace. I urge my 
colleagues to support this legislation and support small, domestic beer 
producers.

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