Craft beer bill amended, advanced

A bill intended to allow Nebraska craft breweries to have limited self-distribution rights was amended to become an omnibus liquor bill and advanced from general file Feb. 28.

As introduce by Kearney Sen. John Lowe, LB1236 would have allowed a craft brewery license holder to directly sell or re-sell an unspecified number of barrels per calendar year directly to off-premises sites located in Nebraska that hold an appropriate retail license.

A General Affairs Committee amendment, adopted 42-0, replaced the bill and would allow a craft brewer to directly sell up to 250 barrels — equivalent to 82,500 12-ounce bottles or cans — of their own manufactured beer per calendar year if the licensee:
• self-distributes its beer only in a territory in which the licensee does not have a distribution agreement with a licensed wholesaler;
• uses only individuals exclusively and solely employed by the licensee to distribute its beer in vehicles exclusively and solely owned or leased by the licensee; and
• complies with all relevant statutes, rules and regulations that apply to Nebraska beer wholesalers regarding distribution of beer.

A craft brewery licensee could self-distribute beer brewed at its own licensed premises and could not distribute beer produced by any other licensee. The bill also would allow a licensee to store and warehouse tax-paid products in a designated, secure offsite facility if the Liquor Control Commission is notified.

Lowe said the majority of craft breweries in Nebraska sell most of their beer inside their own taprooms, but that the bill would be meaningful for some of the smaller breweries that have had difficulty finding distributers.

“This is a small business bill that will help promote all of the microbreweries in Nebraska,” he said.

The committee amendment also added provisions of two other bills introduced by Lowe.

LB899 would create a new special designated license for nonprofits that are exempt from federal income taxes. The provisions would allow groups of nonprofits to use one application for up to six SDLs as long as each event is held at the same location. The fee would be $40 for the initial license plus $10 for each subsequent license listed on the application.

LB900 would allow Nebraska microdistilleries — entities that make their own whiskey, gin and other spirits — to operate up to five separate physical locations under one license. Currently, craft breweries are allowed to operate up to five separate physical locations and the amendment would allow microdistilleries to do the same. Current law limits a holder of a microdistillery license to one tasting room.

Sen. Tom Briese of Albion, chairperson of the committee, said the amended bill would be important to local economies.

“The combination of these bills … really is a combination of legislation that can help some of our small businesses prosper going forward,” Briese said.

Norfolk Sen. Michael Flood supported both the bill and the amendment, which he said would settle a long-standing dispute between craft beer producers and wholesalers about distribution rights. He said he hoped to see similar legislation in the future that also would allow microdistilleries to self-distribute.

“I’m excited that this has come to fruition,” Flood said. “Let’s take this step today and let’s take a look at how it works and have future discussions about where we can go with distilleries.”

Following adoption of the committee amendment, lawmakers voted 39-0 to advance LB1236 to select file.