On October 2, the U.S. House of Representatives passed the HEROES Act 2.0, a revised version of an earlier bill with the same name that includes many provisions that would provide relief to small and independent breweries. One particular item of note is the inclusion of the language from the “Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive” (RESTAURANTS) Act, a bill introduced by Rep. Earl Blumenauer (D-OR) which would provide $120 billion in grants for restaurants, bars, breweries, and other similar businesses.
Although the initial language of the RESTAURANTS Act (H.R. 7197) did not include language specifically including breweries, through joint efforts and advocacy at the Brewers Association’s (BA) virtual hill climb, both the House and Senate sponsors of this legislation agreed that they would add language specifying brewpubs, tasting rooms, taprooms, licensed facilities, or premises of a beverage alcohol producer where the public may taste, sample, or purchase products in future versions of the bill.
This is a clear result of the BA’s hard work and growing influence in Washington, D.C. The BA will continue to push for inclusion of this relief for brewers as the debate over stimulus legislation moves forward.
The RESTAURANTS Act
The RESTAURANTS Act was introduced as a way to help small and independent businesses in the hospitality sector who have been severely impacted by the pandemic by providing restaurants and similar places of businesses (e.g. food trucks, bars, tasting rooms) with a grant for the difference between the businesses’ 2019 revenues and estimated 2020 revenues for each quarter.
Brewers Association President and CEO Bob Pease applauded the decision to include the language in the most recent coronavirus relief package. “We have heard from our members across the country that they can’t take on more debt. The RESTAURANTS Act provides grants and flexibility for the businesses that need it the most. This legislation is a win for breweries. Not only would it help brewpubs, tasting rooms, and taprooms who have been hit especially hard by COVID-19, it would also help restaurants and bars who are experiencing the same issues we are. The health and success of the brewing industry is directly tied to these outlets and the larger hospitality industry.”
In the HEROES Act 2.0, eligible entities for the grants are described as a restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility, or premise of a beverage alcohol producer where the public may taste, sample, or purchase products, or other similar place of business.
Who would qualify for the grants?
- The program will be administered by the Department of the Treasury and be available to food service or drinking establishments, including brewpubs, taprooms, and tasting rooms, that are not publicly traded or part of a chain with 20 or more locations doing business under the same name.
- The first 14 days of funds will only be made available to qualifying businesses with annual revenues of $1.5 million or less to target local small businesses, particularly those that are women, veteran, or minority-owned and operated.
- Recipients must certify that current economic conditions make the grant request necessary, that the funds will be used retain workers, maintain payroll, and make other payments. Companies that received Payroll Protection Program (PPP) funding or other grants would be eligible for this new program but likely would receive lower grant amounts.
What would the grants cover?
- Eligible expenses include payroll (not including employee compensation exceeding $100,000/year), benefits, mortgage, rent, utilities, maintenance, supplies (including protective equipment and cleaning materials), food, debt obligations to suppliers, and any other expenses deemed essential by the Secretary of the Treasury.
How much are the grants for?
- Grant values would cover the difference between revenues from 2019 and projected revenues through 2020.
- Breweries that got PPP loans or Economic Injury Disaster Loan (EIDL) funding recipients would be required to subtract funds received (that were forgiven) from the maximum Restaurant Stabilization Grant value. Example: If a brewery received a loan of $50,000 through the paycheck protection program and had that loan forgiven by the SBA, they would subtract that amount from their total grant supplied under the RESTAURANTS Act.
- Restaurant Revitalization Grants do not need to be paid back and funding is made available through June 30, 2021.
- If a restaurant permanently ceases operations before the end of 2020, unspent funds must be returned. If the grant award exceeds the actual end-of-year revenues the grant is converted to a loan with a 10-year term at 1% interest.
The language passing the House is a step forward for the RESTAURANTS Act, but the larger bill has yet to be taken up in the Senate. The White House and House Democrats are continuing to negotiate on a COVID-19 package that they can pass before the election but have yet to come to an agreement. The Brewers Association will continue to advocate for the RESTAURANTS Act, Craft Beverage Modernization and Tax Reform Act (CBMTRA), and other legislation that will provide our industry with the necessary resources to weather the pandemic.