Home Distiller

BIG HDA MILESTONE

We have been advised by our lobbyist since the bills were introduced to keep a low profile in order to avoid undue attention by those in the industry who may NOT want to see home distilling legalized, but it looks like the cat is out of the bag...
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THE BILL(S)

The bill we have been working on to establish parity between hobby distillers, home brewers and home winemakers was rolled into a much larger bill called the Craft Beverage Modernization and Tax Reform Act of 2015 (S.1562), which was introduced to the Senate on June 11 by Senator Wyden (D-OR). Our section falls under Title V – Distilled Spirits, Sec. 502. Exemption of home distillery establishments from certain taxation and bonding requirements. The same bill, also called the Craft Beverage Modernization and Tax Reform Act of 2015 (under H.R.2903), was introduced in the House on June 25. Note that although the bill has been introduced in both the House and Senate, it has NOT been voted on by either one yet. Our fingers are still crossed that it will pass..
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CHOOSING A STRATEGY TO GET OUR VOICES HEARD IN CONGRESS
We were advised of this strategy as it parallels the approach home brewers took that led to the passing of H.R.1337 in 1978, which federally legalized home production of beer and wine the following year. The home brewers rolled their bill into a larger bill that would amend excise taxes in the transportation sector. We rolled our bill into a larger bill that would amend excise taxes in the craft beverage sector.

After home brewing became legal federally, home brewers started their campaigns in individual states. Some states did not have their own regulations for home brewing and defaulted to Federal law, which meant that once home brewing became legal federally, it also immediately became legal in those states. We’ve been conducting research into the state laws on hobby distilling over the past couple of months, and we can confirm that we’ve heard back from 40 state offices at this time—of those 40 states, hobby distilling would become legal in 8 of them immediately after it is legalized federally. We’ll have the state information up on our website once we hear back from the remaining states.

THE IMPORTANCE OF USING DISCRETION FOR AS LONG AS POSSIBLE
It was important for us to remain discrete for as long as possible because the public focus of our bill has been on the tax breaks for commercial beer, wine, and distilled spirits producers. Obviously, these tax reductions would benefit “Big Liquor,” so they wouldn’t oppose the passing of this bill. Our hope was that their attention would remain on how the passing of the bill would benefit them and therefore not try to oppose our section.

YOUR SUPPORT GOT US HERE
THANK YOU! Because of all of you, HDA members, this is happening. As a group, we are making history, so give yourself a little pat on the back for helping us get to this point. Your dues have been going directly to help pay our lobbyist, who has been working so hard for us in DC over the past year meeting with legislators, drafting language for our bill, and making sure that our voice would be heard. Even as we’ve had to keep details of our progress under wraps over the past few months, you stuck by the HDA and trusted that leadership and our lobbyist were working in your best interests. We are so grateful for each and every one of you.

CONTINUED SUPPORT KEEPS THE MOMENTUM GOING
So the wheels of change are in motion, folks, but it’s up to all of us to keep this momentum going all the way to the finish line. We’ll keep you updated on the status of these bills, and in the meantime, feel free to contact your representatives to ask them to support the bills in Congress. We have 2 templates for you to download and edit so you can contact your Senator, Representative, or both! Find them in our Downloads section here.

We worked hard on the introduction of these bills, but this is only the end of the first step: We need to maintain our lobbying effort if we want to see this through! In fact, your help in funding our effort may be even more important now than ever before. The fact remains that lobbyist expenses have far outweighed the funding we’ve received from membership dues. Our section of the Craft Beverage bill that pushes for the legalization of hobby distilling would NOT be there if we didn’t have our lobbyist. That is a direct result of the HDA and our lobbyist’s efforts. As home distillers, we have NEVER been so close to seeing our hobby legalized in the US. Membership dues are vital if we want to make this happen.

Now is not the time to be complacent! If you’re not already a member of our organization, join now and help support our cause.

varocketry wrote:We’ve been conducting research into the state laws on hobby distilling over the past couple of months, and we can confirm that we’ve heard back from 40 state offices at this time—of those 40 states, hobby distilling would become legal in 8 of them immediately after it is legalized federally. We’ll have the state information up on our website once we hear back from the remaining states.

It looks like they've completed this work now, you can check your results here:

http://www.hobbydistillersassociation.o ... s-by-state" onclick="window.open(this.href);return false;" rel="nofollow

The "instantly legal" states would be:

Alaska
Arizona
Maine
Massachusetts
Michigan
Missouri (obviously)
Ohio
Rhode Island

This is a big deal, and a very smart move. Thank you to Rick and everyone who supports the HDA.

I thought federal law trumps state law so everyone would be legal

dieselduo wrote:I thought federal law trumps state law so everyone would be legal

Not quite.

States can restrict more than feds, unless federal law or courts mandate that they don't (like gay marriage).

Federally, high-gravity beer is legal, but you can't serve draft beer over 5% or something in utah. Same idea.

This law would remove the federal issue (taxes) from home distillation, but would not remove any state laws against distillation, owning of stills, etc. from the books.

Proud to join the ranks as a HDA hobbyist!

Much appreciated, Ferment_It!

Thanks for all the effort so far Rick! And I got to say I am really happy to see the change of attitude here at HD towards HDA

Brewhaus wrote:We (the HDA) had actually kept this quiet in case ‘big liquor’ was against it and may try to get our piece struck from the bill.

The short-shortsightedness of big business never ceases to amaze me. Is there really no awareness that in the years following the legalization of home-brewing, beer consumption began to soar? Not only that, but the big boys are now bigger and richer than ever before.

And there's a reason for that: beer in America was transformed from only a a couple brands of disgusting, cheap, watery product kept in garages into a wide variety of (to varying degrees) overly-hopped products that costs twice as much and are kept in the kitchen.

And you know what? THEY'RE ALL STILL MADE BY THE SAME COMPANIES. Okay, maybe not all of them, but most of the "micro-brews" you see on all the store shelves have long left behind micro-brew methods and quantities, and are distributed by the majors if not outright owned by them.

In some cases, "microbrews" were developed entirely within the major brewery, but in many others, recipes crafted at home turned into legitimate microbrews and were later bought out, leading to massive paydays for the people who created them.

Right now, in case you're not keeping count, there are two major beer makers: SAB-Miller, and AB-InBev. The former is South African, the latter is Belgian. That's right, the most popular beers in the US (all the Budweisers, all the Millers, all the Coors, Icehouse, Michelob, Busch, Rolling Rock, etc.) are South African and Belgian, at least in ownership if not in level of quality.

Between SAB-Miller and AB-InBev, their directly-owned brands make up close to 2/3 of the beer selection at your local market, at least in the US. If you include brands distributed by those two, you're well over 80 percent and likely more.

Fun fact: SAB-Miller and AB-InBev are now talking about a $250 billion merger arrangement that would leave one company utterly dominating beer production world-wide.

The long and the short of this is that legalizing home-brewing in the US dramatically grew the market for beer in the US, which greatly benefited the largest players, which directly led to the situation we're in today, and which is largely the goal for any big business: to become so dominant that they come under threat of a Congressionally-mandated breakup.

(Note: Any potential SAB-Miller and AB-InBev merger would surely need a lengthy FTC approval process, and would likely garner Congressional attention.)

Big Liquor would be remarkably foolish and shortsighted to be against home-distilling, because home-distilling would only *increase* the demand for spirits. And the people who would most benefit from increased demand are those already making them in the largest quantities.

Here's an honest question: Who's more likely to pay a premium for quality beer: Someone trying to make quality beer at home? Or someone who just wants a cheap, cold beer on a Friday night? Who's more likely to pay $6 for yeasty, over-hopped IPA at a bar: Someone who's tasted a decent home-brew IPA? Or someone who's never heard of IPA?

Why would it be any different with booze?

Well folks, it has been quite a while since I posted anything, but I can assure you that the team at HDA has not been sitting on our back sides doing nothing on behalf of our stated goal which is to legalize hobby distilling. The legalization legislation will in and of itself decriminalize the action. We have been to DC to visit with the head of the TTB (and 4 of his top staffers). We have been to DC to visit with the staff at the Senate Finance Committee as well as folks at Treasury. Our lobbyist has made countless phone calls and attended many meetings with Representatives and their staff. What you see in the bill today is a result of a lot of people looking at what we were proposing and adding their concerns. All of these little steps were paving the way to get a bill into Congress that none of the agencies involved would object to being introduced. The lobbyist we picked turned out be a great choice because of the doors we has been able to open for us. As Rick said, we are not there yet and any number of things could shot us down, but some powerful folks want this piece to stay in there as it is and pass with the rest of the bill. The Craft Beverage and Tax Reform Act has been in the works for a long time by several western Senators who are trying to get the excise taxes reduced for small craft distillers- they pay the same as the big boys currently. Thanks to the efforts of HDA and our lobbyist we were able to get section
502 included in the larger bill - we knew all along that our little bill had zero chance to make it on its own.

While we are not done yet the number of co-sponsors has blown us away. They are bipartisan from all across the country. In March of 2014 I introduced HDA to the HD forum and asked for your support. I can say my post was greeted with a lot of skepticism. We were viewed as just another bunch of cooks talking about legalizing a law that had been in effect since 1933. I was accused of selling lightening rods. Well folks, we are closer to our goal than anyone has ever been. When we asked for financial support by joining HDA, many responded by sending in the $35 membership fee which has gone to pay our lobbyist - period. No other expanses have been paid from the dues. Our trips to DC were paid for personally by the HDA team members. It also appeared to us that far to many home distillers wanted to sit back and let us do all the work, possibly because no one thought we had a chance to succeed. Many home distillers still think the TTB is waiting around the corner and will be coming up the driveway any minute. The Florida raids did not help, but it is very possible that the raids were done for the purpose of getting our attention - hell, it worked.

Once again we are asking for your help. 1) Please join HDA to help us (Rick) continue to push this effort. The dues has not gone up. It is only $35. 2) Please call or email your Senators and Congressional representatives and ask for their support. They are not going to turn you in to the TTB just for asking that they support an existing piece of legislation. In case you did not know, S.1562 and H.R. 2903 are identical bills that have been introduced in the Senate and the House. As many on this forum know, I came out of the closet (with my real name) almost 2 years ago and no one has bothered me. The TTB does not have the manpower to chase after us for making a couple of gallons of ethanol. Please, help us get this job finished.

Got any questions or ideas, let us know. I am always available at tocowdrey3@gmail.com or 804-296-6194.

Tom Cowdrey

spisska wrote:And there's a reason for that: beer in America was transformed from only a a couple brands of disgusting, cheap, watery product kept in garages into a wide variety of (to varying degrees) overly-hopped products that costs twice as much and are kept in the kitchen.

There seems to be a hop arms race going on these days, bitterness is reaching S&M proportions.

Tom,
Thank you for all your hard work, unrelenting efforts, and diligence shown to the cause.
As my contribution to this endeavor, I have just joined the HDA as a 3-year Hobbyist member.
I would also like to urge all our members here to consider buying a membership as well, even if it's only for one year.
Keep up the good work guys!

Thanks to everyone who has joined the HDA, and who will in the future.

Even for those of you who would rather not put your name on a letter to your elected officials concerning home hobby distilling, you can still send them a letter asking for support for these bills. The majority of the text is in support of small business growth, which is something that is needed all over the country. Explain that the craft brewing and craft distilling industries are some of the fastest growing small businesses in the USA right now and this bill will help them tremendously. If they claim to support small business growth (and who doesn't), they need to support these bills!

Four more as of yesterday:

New Cosponsor: Rep. Fred Upton [R-MI6]
New Cosponsor: Rep. Billy Long [R-MO7]
New Cosponsor: Rep. Michelle Lujan Grisham [D-NM1]
New Cosponsor: Rep. Ken Buck [R-CO4]

If you haven't called yet, do so! It's actually working. It's easy to get jaded about government actually doing something worthwhile, but then look around at the homebrewing and craft brewing industry today and imagine it with distilling... You'd be able to talk about it openly, share your spirits with whoever you wanted to, etc.

This could be huge. Call!

Cool! Maybe my call to Ken helped in some small way.

It looks like we're doing alright in the House, but the Senate is lagging. Make sure you call them too, in their case it's S.1562:

https://www.govtrack.us/congress/bills/114/s1562" onclick="window.open(this.href);return false;" rel="nofollow

Here's a really easy way to figure out how to contact them:

https://www.opencongress.org/people/zipcodelookup" onclick="window.open(this.href);return false;" rel="nofollow

From what I have learned through this process, it can be a bit tougher to get Senators to sign on than House Reps. And, of course, there are far fewer of them, so the percentages are not too far off:

Including original sponsor:
S 1562- 18 (ie. 18% of all Senators)
HR 2903- 90 (ie. 20.7% of all Reps.)

These are good numbers, but lets keep at all of our representatives to have them cosponsor the bill!

We're doing everything we can here in Michigan! Thanks to everyone who helped to get us this far.

Finally got emails sent to two senators and one congressman. Hope it helps!

Hello,
I had a couple of thoughts I want to share. When we spoke with the administrator of the TTB, he was not at all happy with what the sequester legislation had done to the funding of his agency. He said he was down to like 475 +/- employees. The includes the staff in DC and the 4 or 5 regional offices, the big office in Cincinnati that handles all of the licenses and applications for licenses and the 75 or so field agents. We think they look at legalizing hobby distilling as a reduction in enforcement duties which can be considered a funding increase because their responsibilities just got smaller.

If passed as is, the actual law does not take effect for 1 year. However it is the opinion of the team at HDA that once passed, the chances of the TTB doing any more raids is very slim. Now, if you do something stupid (like selling a few hundred gallons across state line, all bets are off and you are on your own.

The subject came up in a previous post about folks who already own stills larger than 15.5 gallons. The bills as written on page 23 say that vessels with a mash capacity greater than 15.5 gallons may not be sold or transferred if the still is to used a part of a home distillery. Rick at Brewhuas does not sell boilers larger than 15.5 gallons and has already been released by the TTB from having to send in the quarterly reports of customers who buys stills from him. We have no way to know what the TTB might do about folks who already bought a 25 or 30 gallon boiler, but we know they are not looking for additional paperwork. My guess (and mine alone) is they will do nothing unless you try to sell it on eBay or where ever. It sounds like suppliers selling boilers larger than 15.5 gallons will still have to report the sales and the customer may have to explain what they going to do with it- again, just my wild ass guess.

We heard several months ago the OMB estimated the cost of these bills at $1 billion over 10 years. I am going to try to find out what is in that estimate. Is that just the decrease in excise taxes or is Title IV section 601 - Program Integrity Cap Adjustment for the Alcohol and Tobacco Tax Trade Bureau in the estimate as well. At some point, the cost of this bill will have to be considered. Of course if we can spend $500 million to train 4 Iraqi troops, what the hell in a billion dollars over 10 years??

ps. Don't forget to join the Hobby Distiller's Association and please call or email your reps in DC. Every Senator and Representative has someone of staff who deal with legislative issues. If you call, ask to speak to the legislative staffer. Thanks for reading.

Tom

Tom, what's the condensed talking point if we get ahold of the staffer? Is there a couple sentence compelling argument about supporting this bill?

Is it common practice for a bill to be initiated by both bodies of congress? Is there any indication of how long it might take these to move out of committee and onto the floor for a vote?

I emailed my congressman a few days ago. He's a pretty straight up guy. Guess I'll need to hold my nose and email the two senators.

When the same bill is introduced into the second chamber it is called a 'companion bill'. Doing this allows both houses of Congress to work on the same bill at the same time, theoretically streamlining things because the bill approved by each would not then have to be merged and sent back to each house (any change in a bill requires a new vote). Hopefully this means that things will happen sooner rather than later (or not at all), but as I have told people as we moved through this process, things move at the speed of government. I do not mean that in a derogatory way- just that there are so many hoops that it is a slow process.

I must admit that this process and walking the halls of Congress, setting up meetings with pertinent agencies (TTB, Treasury, Senate Finance) has taught me a tremendous amount about how our government truly functions. It is also pretty cool- and intimidating- when you meet with the head of the TTB, or the second in command at the Treasury, where you look out onto the White House from their office.

Lot of ifs and I understand that. Any chance this thing could move along, be approved by the house and senate, and end up being vetoed? It is, after all, a tax cut of sorts. Has there been any speculation about what the president might do with it? Will we need to email him as well?

I am pleasantly surprised to find that my senator sponsored that bill and my congressman cosponsored the House version. I sent them both form letters when I first joined HDA. Kudos to HDA for writing such persuasive forms. I guess it's time for thank you notes.

Keep up the good work, and lets keep supporting the vendors that support us, especially Brewhaus.

EDIT: http://www.hobbydistillersassociation.o ... supporters

I have emailed my reprsentative asking for her support, have you? It matters...

I got a very positive reply back to my email. I don't know that any VA congressmen are co-sponsoring the bill, but the tone of the reply tells me that he would be a yes vote if it reaches the floor of the House.

In Virginia Tim Kaine has been very responsive as has Rob Wittman in the 1st District. Have never gotten a peep out of Mark Warner.

I think the answer to when this might come up for a vote is "we just do not know". From a personal standpoint I have been hoping for a vote by year end - I have nothing to base that on other than a lot of stuff seems to push through around that time of the year.

Jimbo - am not ignoring your question for talking points. I think the answer is anything that is personal to you. some examples: 1) you have your Grandfather's still and want to learn how to use it, but have been afraid to do so. 2) You like to make wine and think it is unfair that you are allowed to make up to 200 gallons of 10/12% ABV wine/beer, but it is against the law to run that very same alcohol that you made legally through a distillation device - be sure to include that the resulting product will be for your own personal consumption. 3) You are thinking about starting a small craft distillery one day and need to be able to legally practice making a good saleable product (no one but you will know if that is true or not and is not important). 4) The current laws were passed in 1933 at the end of prohibition and ere designed to stop the backwoods moonshiner making hundreds of gallons of untaxed alcohol to be sold in the underground market. The intent of those laws do not ally to the home distillers - all you want to be able to do is make a few gallons for you and your family. Maybe the best point is why hobby distilling is important to you. Just be honest. Let me know if I can be of more help. Thanks for the question.

Tom

Thanks Tom, those are all good points. Thought it would be nice to get some ideas posted for all our benefit. Not everyone can wax poetic, but everyone here wants to see this bill pass.

re: 3). It is true.

To address another point made above, I have not heard anything pro or con on the President's take on this bill. The co-sponsors are so bipartisan, I would hope he will not see it a negative and we all know he has someone brewing beer in the kitchen of the Whitehouse. Rick - have you heard anything on this topic?

Tom