[Congressional Record Volume 161, Number 66 (Monday, May 4, 2015)]
[Senate]
[Pages S2600-S2602]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. McCONNELL (for himself and Mr. Paul):
  S. 1179. A bill to exempt the aging process of distilled spirits from 
the production period for purposes of capitalization of interest costs; 
to the Committee on Finance.
  Mr. McCONNELL. Mr. President, this past Saturday, May 2, saw the 
running of the 141st Kentucky Derby, the most exciting 2 minutes in 
sports. Derby day is a cause for celebration across the State and derby 
celebrations often feature Kentucky's native spirit of bourbon. Bourbon 
is a key ingredient in the legendary Mint Julep, the official drink of 
the derby. Fittingly, today marks the 51st anniversary of the original 
congressional bourbon resolution that designated bourbon as a 
distinctive product of America.
  Kentucky is the birthplace of bourbon. The drink is named for Bourbon 
County, KY, where the product first emerged, and today Kentucky 
produces 95 percent of the world's supply. The bourbon industry 
generates 15,400 jobs with an annual payroll of $707 million statewide. 
It is a $3 billion industry in Kentucky and a vital part of the State's 
tourism and economy. Simply put, the bourbon industry is a signature 
industry for the Commonwealth of Kentucky.
  That is why the legislation I introduce today is so important. I rise 
to introduce the Advancing Growth in the Economy through Distilled 
Spirits Act, or the AGED Spirits Act. Cosponsored by my friend Senator 
Rand Paul, it will correct a provision in the tax code to ensure that 
Kentucky's bourbon producers are no longer at a disadvantage with their 
global competitors.
  Under current law, unlike most other spirits, bourbon, and whiskey 
producers in America must capitalize the interest expense incurred to 
finance inventories, and it is not deductible until the product is 
sold, which could be as long as 23 years after a lengthy aging process.
  In the United Kingdom, however, all spirit producers are permitted to 
deduct interest expense the year it is capitalized. This discrepancy is 
harmful to American makers of distilled spirits as it contributes to 
increased costs that directly create a competitive disadvantage for 
American products in the global marketplace.
  My bill would fix this discrepancy by permitting American bourbon and 
whiskey producers to deduct interest

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expense associated with production in the year it is paid by exempting 
the natural aging process in the determination of the production period 
for distilled spirits. This legislation will not only put Kentucky's 
bourbon industry on a level playing field with its global competitors, 
it is also a pro-growth measure that will help provide a boost to our 
economy and help create jobs in Kentucky.
  Making this change in law is a matter of common sense. The situation 
under current law, where American bourbon and whiskey producers are not 
allowed to deduct the expenses related to storing and aging their 
product until it is bottled and sold, is akin to a homeowner not being 
able to deduct the interest on a home mortgage until the sale of the 
house.
  Over the last several years, high-end premium American bourbons and 
whiskeys have enjoyed significant growth in volume both here in the 
U.S. and in international markets. Bourbon production has increased 
more than 150 percent since 1999. Given equitable tax treatment, 
American bourbon and whiskey products, as well as related jobs, could 
grow even more. Finally, this problem reveals just one of the many 
flaws in our Nation's broken tax code, which ultimately needs to be 
comprehensively reformed to promote even greater job creation and 
economic growth in our country.
  So I hope my colleagues will join me in advancing growth in 
Kentucky's and America's economy by leveling the tax playing field for 
America's distilled spirits. Fifty-one years after its official 
recognition, bourbon is responsibly enjoyed by adults all over the 
world, and not just on Derby Day. The industry has grown and thrived, 
and I am sure it will continue to do so. I want to thank and 
congratulate all the hard-working Kentuckians who have contributed to 
building our State's vibrant bourbon industry.
  I urge my colleagues to support the AGED Spirits Act, and I look 
forward to its swift passage.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1179

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Advancing Growth in the 
     Economy through Distilled Spirits Act'' or the ``AGED Spirits 
     Act''.

     SEC. 2. PRODUCTION PERIOD OF DISTILLED SPIRITS.

       (a) In General.--Section 263A(f) of the Internal Revenue 
     Code of 1986 is amended--
       (1) by redesignating paragraph (4) as paragraph (5), and
       (2) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) Exemption for aging process of distilled spirits.--
     For purposes of this subsection, the production period shall 
     not include the aging period for distilled spirits (as 
     described in section 5002(a)(8)).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to the production of distilled spirits that 
     begins on or after the date of the enactment of this Act.
                                 ______
                                 
      By Mr. WYDEN (for himself and Mr. Hoeven):
  S. 1186. A bill to amend the Internal Revenue Code of 1986 to provide 
for Move America bonds and to allow such bonds to be converted into tax 
credits to support public-private partnerships; to the Committee on 
Finance.
  Mr. WYDEN. Mr. President, modern transportation infrastructure is a 
critical building block to ensure that the U.S. economy is in a 
position for long term growth and prosperity. It creates jobs, draws 
investment and supports overall global competitiveness. With the 
deadline for the Highway Trust Fund reauthorization looming just a 
month away, we are faced with the reality that our crumbling 
transportation systems simply are not up to the job.
  Our aging infrastructure impacts everyone. Every day, Americans leave 
their homes to commute to work or school only to be faced with more 
than just snarled traffic, but roads in dire need of repair. More than 
one-fifth of U.S. roads are in poor condition, with nearly one-half 
trillion dollars in needed repairs across the country over the next 
decade.
  U.S. ports, a critical economic doorway, are struggling under the 
weight of increased cargo traffic, leading to congestion and slowing 
exports. They now require nearly $30 billion in landside investment 
alone to keep up with the general demands they are under. Our national 
infrastructure is in a clear state of decline, demanding $3.6 trillion 
in total investment by 2020, according to the American Society of Civil 
Engineers.
  For one of the largest economies in the world known for its strength 
and leadership, we are falling behind other countries. Our 
infrastructure spending has continued to decline since 1960. It is now 
at less than two percent of GDP annually. That falls behind China's 
nine percent and Europe's five. Meanwhile, our population continues to 
grow, placing new demands on our aging transportation system.
  How do we get back on track and safeguard the health of our 
transportation infrastructure? The first step is for Congress to ensure 
the solvency of the trust funds for highways, transit, airports, ports, 
and waterways. Critical infrastructure projects demand long term 
planning and certainty, not a continual cycle of start-stop efforts. We 
must aim for a long-term, bipartisan solution so that every year states 
don't have to put projects on hold for fear of running out of funds.
  Second, its time Congress looked beyond Washington and bring the 
private sector to the table to spur new financing partnerships that 
support our infrastructure needs.
  There is an untapped opportunity here: Standard and Poor's estimates 
that private investors could provide more than $100 billion in 
infrastructure investment each year. Public-private partnerships, P3s, 
are unique in that they offer upfront capital financing, along with the 
transfer of risk to the private partner, allowing for more efficient 
project design, construction and maintenance. P3s have been successful 
in the U.S., as well as other countries around the world.
  Recognizing this pressing need and opportunity, today Senator Hoeven 
and I are introducing the Move America program. Move America is 
designed to strengthen our transportation system by making it easier 
for the states to put together P3s and draw private investment. This 
unique, bipartisan driven proposal complements federal funding efforts, 
by creating cheaper and more effective financing tools to expand 
investment in roads, bridges, transit, ports, rail, and airports.
  Move America expands tax exempt private activity bonds and creates a 
new infrastructure tax credit, giving stakeholders significant 
flexibility to pursue infrastructure projects that are badly needed in 
states and localities. And these tools are available for use regardless 
of who owns the project--government or private groups--making 
financing, management, and leasing arrangements much simpler. The bonds 
also exempt the interest income from the alternative minimum tax, 
making it an attractive proposal to investors.
  For states that are hesitant to issue more debt, or that are looking 
to leverage more private equity, Move America credits would be 
available for the state to attract equity investors for infrastructure 
projects. The credits are available to the extent there is at least 
twice as much private investment in the project. This one-to-one match 
leverages additional equity investment at a lower cost to states and 
cities, lowering their capital costs or allowing them to reduce tolls 
or other revenues required for the project.
  Critical transportation projects come to life in less time and at 
less cost to taxpayers. Americans can travel on safer footing. The 
private sector finds a new investment opportunity.
  Strengthening our country's transportation infrastructure shouldn't 
be a political issue. It is time we come together and create a path to 
move America forward and build the 21st century infrastructure that our 
country deserves.

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