- Associated Press - Monday, February 2, 2015

LINCOLN, Neb. (AP) - The state Legislature is considering a bill that would offer tax incentives to beer brewers that use Nebraska-grown barley and hops and another that would allow more restaurants and bars to sell growlers of craft beer.

Sponsor Sen. Ken Schilz of Ogallala urged members of the General Affairs Committee at a Monday hearing to support the legislation, saying it would boost agriculture and bring more visitors to Nebraska.

“If we can bring things like breweries, that brings economic investment, that brings tourism, that brings people to our state wanting to spend money,” Schilz said.

The first measure would offer a nonrefundable tax credit to breweries using barley and hops grown in Nebraska in production.

In-state brewers could receive a tax credit on a percentage of the tax paid in the previous year on the first 20,000 barrels of beer. If 10 to 40 percent of the barley and hops used were Nebraska-grown, the credit would be 15 percent. Forty to 70 percent Nebraska crops would receive a 25 percent tax credit, and manufacturers using more than 70 percent would receive a 35 percent tax credit.



There are 38 breweries with licenses or license requests in Nebraska, according to Hobert Rupe, executive director of the Nebraska Liquor Control Commission. But last year the state had just 12 acres of hops and one known grower of barley commercially for malt.

Brian Podwinski of Nebraska Malt and co-founder of Blue Blood Brewing Company in Lincoln said many brewers use fruit and honey from in the state, but very few use Nebraska-grown grains. The challenge for growers is competition with larger, more cost-effective operations out of state.

“While grain coming out of the field is the same expense, the increased cost due to lack of large-scale operations and higher overhead inhibit our pricing,” he said.

Podwinski said the tax credits could close the gap between local producers and large-scale suppliers. Attracting breweries to supply locally would boost the barley and hops industries toward their full potentials, he said.

The state has already lowered taxes for Nebraska wineries that source 75 percent of their products from within the state. Those wineries pay 6 cents per gallon in excise taxes compared to 91 cents per gallon, Rupe said.

The second bill would allow more restaurants and bars to sell growlers- refillable large bottles - of craft beers to customers for off-site consumption. Current law only allows for growlers to be sold if the beer is brewed on the premises.

Larissa Himes, general manager at Blatt Beer & Table in Omaha, said the measure would allow customers better access to beers from smaller breweries that cannot afford bottling or canning.

Nicole Carritt, executive director of underage drinking prevention organization Project Extra Mile, said Nebraska ranks ninth in adult binge drinking rates, which correlate with youth drinking. Carritt said Project Extra Mile would recommend that the bill limit the number of growlers that one individual can purchase at any time.

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The bills are LB 204 and LB 486.

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