The Texas Senate Committee unanimously approved HB 3336 and provides excise taxes to breweries that donate plain grains to local agriculture.
SALAD, Texas – House Bill 3336 was unanimously approved by the Texas Senate Committee on Wednesday.
The bill, designed to boost small Texas breweries and support local farming, was heard in a Senate committee on Monday with testimony highlighting its economic and environmental impacts.
Also known as “steer beer,” HB 3336, will donate sales taxes to farmers within 100 miles to craft breweries and distilleries in Texas. R-Salado Rep. Brad Buckley, who presented the bill, called the measure the measures to strengthen important cooperation between brewers and the agricultural industry.
“Member, it’s time for steer beer,” Buckley said at the committee hearing. “There are over 440 craft breweries in Texas. It’s not just a place to make beer. They’re job creators, economic drivers and active advocates in the agricultural sector.”
Used grains are a brewing by-product high in fat, fiber and protein, and are often used as a sustainable feed source for livestock. Buckley, a licensed veterinarian, emphasized that the practice of ingesting grains used in animals dates back thousands of years and is recognized as safe by the USDA and FDA.
The bill will provide breweries and distilleries with an 8-cent tax credit per pound of dried grain donated. To qualify, participants must submit proof of their contribution to the Texas Alcohol and Beverage Commission (TABC). This will issue a certificate of qualification that will be submitted to the Secretary.
“Texas craft brewers donate over 100 million pounds of spent grain each year,” Buckley said. “This bill will help ensure that these donations continue by offsetting some of the upward costs faced by these small businesses.”
6News spoke with Katie Hill, co-founder of Barrow Brewing Company in Salado. She testified in support of the bill, sharing that donations of grain used by breweries have become an important part of the local economy.
“This is more than just a tax cut,” Hill said. “It’s about community. It’s about strengthening our relationships between small businesses and the AG producers who feed us.”
Economically, Hill added that getting that tax credit would be a huge financial help.
“If this was implemented, we can see that we’ve returned about $4,000,” explained Hill. “That’s less than what we pay in excise tax. But when you’re a small business, every dollar is the problem.”
Hill said their grains help feed local rancher Matt May’s cattle, which serves beef for sale at the farmers market hosted at her brewery.
May, a five-generation rancher and owner of MMM Cattle Company, has also received support, saying that since partnering with Barrow Brewing, his feed costs have dropped by 10-15%.
“My cows are in the best they’ve ever had, mainly because of the quality nutrition they get from the grains they’ve used,” May said. “If it weren’t, that byproduct would just be sitting in the landfill. This bill would benefit the environment, the economy, and the agriculture. It’s a victory for Texas.”
Buckley says that while the $30,000 tax credit is generous, most Texas breweries are far less than they need to reach that limit. Barrow Brewing, for example, produces less than 1,000 barrels a year, paying about $5,100 in excise tax last year. This could be significantly offset by the proposed bill, which Hill said.
The measure includes a provision that wholesalers will request credit on behalf of non-resident brewers, encouraging further participation while maintaining compliance with the Interstate Commercial Code Act.
Finally, Buckley described the bill as “a separate effort to provide tax mitigation to small businesses,” adding that the committee’s alternatives are in the works to streamline management under TABC.
HB 3336 goes to the floor of the house for approval.
