[Congressional Record (Bound Edition), Volume 161 (2015), Part 2]
[Senate]
[Pages 1838-1839]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             SMALL BREW ACT

  Mr. CARDIN. Mr. President, I am very pleased that Senator Collins and 
I have introduced legislation known as the Small Brewer Reinvestment 
and Expanding Workforce Act, S. 375. The two of us have led the effort 
to try to help the craft brewing industry. The craft beer industry is 
composed of small businesses that have used their ingenuity to create 
beers that are becoming very, very popular.
  It is interesting that when we developed the excise tax on beer, I 
don't think we thought of the craft beer industry at the time. The 
craft beer industry, as I said, generally consists of small businesses 
who are struggling to find capital in order to expand. The current law 
imposes an excise tax on the first 60,000 barrels at $7 per barrel for 
breweries that produce 2 million or fewer barrels annually. The Small 
BREW Act would modify that, by increasing the threshold to 6 million 
barrels. Under the bill, brewers producing 6 million or fewer barrels 
each year would pay $3.50 per barrel on the first 60,000 barrels, and 
$16 per barrel on their annual production between 60,001 and 2 million 
barrels. So the Small BREW Act would reduce the amount they pay in 
federal excise taxes.
  I wish to take a moment and then yield to my colleague to explain the 
rationale as to why we have introduced this legislation.
  As I said a moment ago, when we imposed the excise tax on beer, I 
believe we thought about the big companies and that we wanted to have 
taxes on distilled spirits, wine, and beer as an excise tax.
  When we take a look at the craft breweries, they are really burdened 
by this tax. They are creating jobs, they are creating a different 
product, and they are creating new markets for beer in this country. I 
wish to share some of these numbers because I think they are pretty 
impressive.
  In 1989 there were 247 breweries in the entire United States. Today 
there are over 3,200 small and independent breweries and brew pubs in 
the United States that employ over 110,000 Americans. So this has been 
a real growth industry. Here are jobs that can't be outsourced, and 
they have created a better product, a better way of doing business. But 
the challenge is that they are really strapped for capital. It is not 
easy for them to invest in the type of equipment necessary to expand 
their capacity.
  Brewers Association CEO Bob Pease said last month in testimony 
submitted to the House Ways and Means Committee:

       America's small brewers are quintessentially small Main 
     Street manufacturers. They typically employ 10 to 100 
     workers, and many began as home brewers before devoting 
     themselves full time to the brewing industry.

  I think that the No. 1 problem for craft brewers trying to expand 
their capacity is access to sufficient capital. An article in 
yesterday's New York Times entitled ``Betting on the Growth of 
Microbreweries'' quotes Brewers Association economist Dr. Bart Watson:

       Brewery after brewery is looking for ways to grow because 
     when you talk to these companies, the biggest constraint is 
     capacity. They're selling beer as fast as they can make it.

  I recently visited Heavy Seas Brewery in Baltimore. Now, I know this 
brewery quite well because I helped Hugh Sisson, the owner and CEO, tap 
the very first keg he produced in a micropub when he was doing this 
basically as a hobby. Well, he has expanded his operations a couple of 
times now, and it wasn't easy to do this. He has invested a lot of 
money, and he has hired additional people, creating more jobs in 
Baltimore. Hugh hired 8 people in 2013, another 10 last year, and he 
expects to hire at least 6 more people this year. These are good jobs. 
But he needs the capital, and the relief provided by this act would 
allow him to be able to do this.
  So Senator Collins and I wanted to bring attention to this 
legislation which provides some very modest relief from the excise 
taxes I mentioned earlier. It would reduce the $7 per barrel on the 
first 60,000 barrels to $3.50 and establish a new rate of $16 per 
barrel after that up to 2 million barrels for breweries producing up to 
6 million barrels annually.
  It doesn't seem like much, but that would be the difference in making 
the investment to expand the microbrewery and hire another 6, 8 or 10 
people or to start another brewery, to create the excitement in a 
community that comes with these brew pubs, which I think all of us 
would agree should not be subject to a special tax which prevents them 
from expanding.
  This is an important business in my community. It is a growing 
business in Baltimore. It is a growing business around the country. I 
hope we all would want to help these small businesses.
  In this Congress I have assumed a new role as the ranking Democrat on 
the Small Business and Entrepreneurship Committee. We are going to be 
looking for ways in which we can help small businesses in our country 
because we know that small businesses are the growth engine for 
innovation and change and good jobs.
  So if we can help the microbreweries, if we can pass this 
legislation, we will help small businesses, and we will help economic 
growth in our communities.
  I am pleased that Senator Collins and I are joined by 23 of our 
colleagues. Between all of use, 25 percent of the Senate has already 
cosponsored S. 375. We hope we will be able to find a way to move this 
legislation early this year so we can help economic growth.
  In Maryland we are currently home to 43 craft breweries--up from 34 
in

[[Page 1839]]

2013--and 24 more are in the planning stages. I have been to many of 
these craft breweries. I enjoy their product, but, more importantly, I 
enjoy their entrepreneurial spirit, which they have been able to show 
in a growth industry in our country and of which we all can be proud.
  Mr. President, I yield the floor to Senator Collins.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. COLLINS. Mr. President, Maine and Maryland have in common not 
only delicious seafood but also fine craft beers.
  I am delighted to join my friend and colleague Senator Cardin in 
support of the legislation that we have introduced, S. 375, the Small 
Brewer Reinvestment and Expanding Workforce Act, or Small BREW Act.
  The title is more than just a clever acronym. It is a statement of 
what our bipartisan bill really is all about. This is a jobs bill, and 
those covered by the bill are small businesses, entrepreneurs who are 
taking risks and creating jobs in communities around the country.
  We often talk in this Chamber about what we can do to help create the 
environment that encourages job creation. Our bill is one such 
practical means where we can spur the creation of new jobs as well as 
great products.
  In Maine, we are proud to boast that our State is now home to more 
than 60 breweries that produce more than 200 different brands. Maine 
beer is shipped around the country and has developed a real following 
among connoisseurs who have come to appreciate its quality and 
craftsmanship. This, in turn, has led to new tourism opportunities as 
visitors are drawn to our State to sample our delicious Maine craft 
beers. As the craft beer industry grows, so too does demand for 
American-grown barley and hops and American-made brewing, bottling, 
canning, and other equipment. Beyond creating delicious beer, these 
breweries are creating jobs. That is the whole rationale behind the 
bill we have introduced.
  In Maine alone, our craft breweries employ more than 1,400 people. 
That is an extraordinary number of jobs. As the Senator from Maryland 
has pointed out, these are jobs that are going to stay right here in 
America. They are not going to be outsourced. These are small 
businesses in our communities that are hiring people and making a 
difference.
  Nationally small and independent brewers employ more than 110,000 
full- and part-time employees, generating more than $3 billion in wages 
and benefits, and pay more than $2.3 billion in business, personal, and 
consumption taxes, according to the Brewers Association.
  What could we do to encourage even more employment in this area? The 
answer is to reduce the Federal excise tax on small craft brewers, and 
that is exactly what our bill would do. It would free up capital so 
these small business owners can reinvest in their companies and create 
more jobs.
  Under the current law, as Senator Cardin has pointed out, these small 
businesses pay $7 per barrel in Federal excise tax on the first 60,000 
barrels they brew and $18 per barrel on every barrel thereafter. The 
Small BREW Act would reduce these rates to $3.50 on the first 60,000 
barrels and $16 for production between 60,000 and 2 million barrels. 
Thereafter, the rate would remain at $18 per barrel.
  We know from the economic analysis that has been done that such a 
change would have a significant positive economic impact. A June 2013 
study prepared by a professor, then at Harvard's Kennedy School of 
Government, estimated that our bill would increase economic activity by 
$1 billion over 5 years, create more than 5,000 new jobs in the first 
year to 18 months after passage, and create approximately 400 new jobs 
annually thereafter.
  Again, I want to repeat, this is a jobs bill, and I am proud to 
sponsor it with my friend Senator Cardin. I am also delighted that we 
have the support of such a large number of colleagues on both sides of 
the aisle, including my colleague from Maine, Senator King.
  I urge all of our colleagues to take a look at this bill. If you want 
to do something that is concrete and we know will create more jobs for 
a growing industry that is carving out a niche in so many States across 
this Nation, then work with us to achieve passage of the Small BREW 
Act.
  I thank the Presiding Officer.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. CARDIN. Mr. President, I thank Senator Collins not only for her 
leadership but for also pointing out something very important here: 
This is a jobs bill. The passage of this bill will create more jobs. We 
know that because we know that craft breweries are strapped for 
capital. Every dollar they save here will be reinvested and create more 
jobs because they don't have the capacity to meet the current demand 
for their beers. If they could produce more beer today, they would sell 
more beer, but they don't have the capital to make the investments.
  Senator Collins is absolutely right when she says this is a jobs bill 
that will create more jobs.
  It also creates a lot of indirect jobs. I was pleased Senator Collins 
pointed out that many of the ingredients the craft breweries use come 
from the community. They are helping local farmers and local industries 
grow, which are also generally small businesses. So as they grow, they 
help other small businesses grow.
  One interesting fact is we are now starting to see an increase in 
craft beer exports. There is a real desire for our craft brews outside 
of the United States. It is a relatively new phenomenon, but exports 
grew by 49 percent in 2013. We exported 283,000 barrels in 2013, and I 
expect we will see those numbers greatly increase.
  This chart shows some of the Maryland craft breweries. They are 
becoming well known outside of my State of Maryland. I already 
mentioned Heavy Seas, and Flying Dog is another brewery I had a chance 
to visit. There are many other breweries, including some with names 
that are synonymous with my State, such as Raven Beer, Ellicott Mills 
Brewing Company, Eastern Shore, and Antietam. These are companies and 
brand names that are now becoming better known because they are 
producing a great product and people really do like to encourage this 
type of industry.
  I thank Senator Collins and our 23 cosponsors. I see Senator King is 
on the floor, and I thank the Senator for his help on this bill. I hope 
we will have an opportunity to show, in a bipartisan fashion, that we 
can pass legislation to help job growth here in the United States.
  With that, I yield the floor to my colleague from Maine.
  The PRESIDING OFFICER. The Senator from Maine.
  Mr. KING. Mr. President, first I wish to associate myself with the 
comments of the Senator from Maryland and my senior colleague from 
Maine. I know this industry is growing in Maine. It is entrepreneurial, 
exciting, energetic, and they are adding jobs and only want to continue 
to grow.
  I think this bill makes total sense. It is a way we can express 
support for the entrepreneurial and innovative growth of businesses in 
all of our States. I am delighted to be able to join and essentially 
add my encouragement and support to your work on this bill. Since it is 
a bipartisan bill, I hope we can move it through this body in a 
reasonably short period of time.

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