American Craft Beer Week came to a fitting end this weekend for Tennesseans as the state Senate on Friday passed a bill designed to make a number of welcome changes to Tennessee beer law. The aspect of the bill getting the most attention among the state’s craft beer community is language that defines “high-alcohol content beer” and makes accomodations for Tennessee breweries to produce and sell it.
UPDATE: Just after 10:30 a.m. CT on Saturday, May 21, the Tennessee House voted to concur with the amended bill passed by the Senate on Friday. The vote was 68 ayes, 15 nos and six present not voting. The bill will now go to Governor Bill Haslam, who is expected to sign it into law.
The bill (SB1224/HB0986), which swiftly and unexpectedly came to the attention of area brewers and beer enthusiasts late last week, moved through the Senate in direct response to California-based craft brewer Sierra Nevada’s interest in an Alcoa, Tenn., location for eastern U.S. expansion. Originally drafted in February to lessen the residential requirements for alcohol retailer’s license applicants, the bill morphed over time via amendments—the most controversial of which proposed a “pilot program” that would limit the number of high-alcohol brewers to one in each of Tennessee’s three Grand Divisions (East, Middle and West).
An outcry over that amendment and a clarification from Sierra Nevada that the company had no desire to see limitations placed upon Tennessee breweries brought about a compromise amendment that revised the state’s beer laws to incorporate high-alcohol content beer but did so without the pilot program and without restricting the number of brewers who could produce high-alcohol malted beverages.
“[The bill's amendments] started out working with the folks in the city of Alcoa/Blount County for a significant economic development opportunity that required some changes in state law in order for our state to stay in the mix for this economic development opportunity,” said Senator Doug Overbey (R-Maryville) during the May 17, 2011, meeting of the Senate Finance, Ways and Means committee.
Overbey, the bill’s sponsor in the Senate, referred again to Blount County’s economic prospect—without naming Sierra Nevada or any entity directly—when he brought the bill to the Senate floor Friday. With no debate and a number of Senators signing on as co-sponsors, it sailed to a 28-3 victory. The bill will now return to the state House, where representatives there will vote on whether or not to concur with the final Senate version. If the House concurs, the bill would go to Governor Bill Haslam and become effective upon being signed into law by him.
Per Overbey’s description at the May 17 Senate Finance committee hearing, the final amended bill will do the following:
- “Sections 7 through 11 of the amendment allows any regular beer brewer to also brew high-alcohol beer, high-alcohol beer being defined as more than 5 percent alcohol by weight.” (High-alcohol content beer, which was not previously distinguished from liquor in Tennessee state law, is also capped at 20 percent alcohol by volume in the bill.)
- “Section 12 says you can only brew high-alcohol beer in places where [one] already can have distilled spirits.”
- “Section 13 says a high-alcohol brewer can offer tastings of both regular and high-alcohol beer to visitors. Any high-alcohol brewer can sell up to 1/6 of a barrel of beer to visitors. That would be a total of both high-alcohol beer and regular.”
- “Section 17 imposes a 15 percent tax on those sales.”
- “Section 14: Any high-alcohol brewer can also obtain a restaurant license including a full bar with regular and high [alcohol] beer.”
- “Section 16 removes the requirement that distilleries sell whiskey in commemorative bottles. They can sell in regular bottles.”
- “Section 18 clarifies the tax rates on high-alcohol beer.”
- “Section 19 allows tastings at retail package stores.”
Read the full language of SB1224’s third amendment in PDF form. (Amendments 1 and 2 were withdrawn on the floor before the final vote was taken.)
Friday afternoon, the bill was placed on the House Message Calendar #4 scheduled for later Friday. The House session adjourned for the day before addressing the bill.