Several pieces of legislation working their ways through Congress would bring much needed relief to the hospitality industry — including breweries, brewpubs and taprooms — as they continue to struggle during the COVID-19 pandemic.
These bills include special provisions for smaller businesses, after the initial Paycheck Protection Program received backlash for extending funds to large chains and shutting out others.
The Restaurants Act, introduced in the U.S. Senate and the House of Representatives on February 4, would give small bars and restaurants a head start on applying for the bill’s $120 billion in grants. Only businesses with less than $1.5 million in revenue in 2019 would be eligible to apply in the first 14 days of funds being available.
“That’s to target small, local businesses, particularly those that are women-, minority-, or veteran-owned,” Brewers Association (BA) director of federal affairs Katie Marisic told Brewbound.
Restaurants with more than 20 locations would be excluded from accessing funds. Under the Restaurants Act, qualifying businesses can apply for grants up to $10 million to cover payroll, benefits, rent, mortgage, utilities, maintenance and costs that have come up since the pandemic began, including the construction of outdoor service facilities, paid sick leave, personal protective equipment and cleaning supplies — a more extensive list of expenses than were eligible under the PPP. Grants will cover expenses retroactively to February 15, 2020, through eight months after the bill is signed into law.
Congressional support for the Restaurants Act has grown, and the bill now has 113 House co-sponsors, mostly Democrats and four Republicans, and eight Senate co-sponsors.
“We’re going to work with our guilds, our members and our government affairs committee to provide them with the information that they need so they can do outreach to their members of Congress as well,” Marisic said.
Beer Institute president and CEO Jim McGreevy reiterated the organization’s support for the Restaurants Act in a statement to Brewbound.
“Our partners in bars, restaurants and the hospitality industry are extremely important to us, and we support policies that will provide them with the help they need as they face unprecedented challenges due to the COVID-19 pandemic,” he said. “We have been, and will continue to be, supportive of the bipartisan, bicameral Restaurants Act which will deliver the targeted support they need to remain open, protect great American jobs, and continue serving America’s favorite beverage alcohol, beer.”
Sens. Kyrsten Sinema (D-AZ) and Roger Wicker (R-MS), who introduced the Restaurants Act in the Senate, secured a 90-10 vote on an amendment to create a $25 billion restaurant revitalization fund to be included in Congress’ budget with requirements mirroring the Restaurants Act.
The proposed fund has broad support from hospitality and beverage alcohol trade associations. Eleven trade leaders last week published a letter in favor of it to House Speaker Nancy Pelosi, House Minority Leader Kevin McCarthy, Senate Majority Leader Charles Schumer and Senator Minority Leader Mitch McConnell.
“This plan is a good first step to help restaurants, bars, and tasting rooms maintain payroll, weather the pandemic, and pay down debts,” the letter said. “The proposal recognizes the unique business models of restaurants and bars, which operate on very low profit margins.
“For instance, the proposal allows businesses to use grants on expenses incurred between February 2020, and the end of 2021, giving restaurants and bars the flexibility they need to manage changing demand or new regulations that may come from a surging virus,” the letter continued.
The letter was signed by the BA and the Beer Institute, as well as the Independent Restaurant Coalition, the National Restaurant Association, the American Beverage Licensees, the American Cider Association, the Distilled Spirits Council of the United State, the Produce Marketing Association, Wine America, the Wine Institute and the Wine & Spirits Wholesalers of America.
In the letter, the organizations called out that restaurants and bars, which employ 12.3 million workers in normal times, have lost $240 billion in sales since they were forced to close in March 2020.
“Providing the restaurants and bars in your communities the tools to fully reopen and reach full employment will be the most impactful thing you can do to help the economy recover,” the letter read.
The letter was sent in support of the House Small Business Committee’s markup of the larger COVID-19 relief package, which would include the $25 billion fund for bars, restaurants and drinking establishments, Marisic told Brewbound.
“The bill is headed to the House Budget Committee to be included in a comprehensive aid package,” she said.
House committees are currently working through the legislation that’s been presented with the goal of voting on a larger bill by late February so the Senate can vote on it by mid-March, Marisic said.
“It’s working within the process of Congress, unfortunately, things never can really move as quickly as you would hope they would,” she said. “They’re working to do what they can to pass this as expediently as they can.”
Fairness for Craft Beverage Producers Act Introduced
A second bill, H.R. 1035, aims to extend to breweries and other craft beverage producers the privileges granted to restaurants in the second PPP draw.
“This legislation would give breweries and other beverage alcohol producers the access to additional Paycheck Protection Program (PPP) funds provided in second draw loans, and add NAICS code 3121 to the list of hardest hit businesses that can receive five additional months of principal and interest payments on 7(a) or 504 loans,” Marisic wrote in a post on the BA’s website.
When the Small Business Administration made a second tranche of PPP funds available last month, businesses in the food service and accommodations sector were eligible for loans 3.5 times their monthly payroll, providing an additional month of funding over what other businesses received. However, craft beverage makers who derive much of their revenue from on-site sales were also drastically affected by pandemic-related closures.
“We’ve been really working hard to educate Congress how much so many small and independent brewers have similar business models to restaurants,” Marisic told Brewbound.
The Fairness for Craft Beverage Producers Act would extend the 3.5 times calculation to businesses with North American Industry Classification System (NAICS) codes starting with 3121 (beverage manufacturers), which includes craft breweries.
“They manufacture the product, but they sell it directly to the consumer,” Marisic said. “And they’ve been impacted similarly, due to the shutdown, due to the decreased capacity.”
Under the bill, craft beverage producers that earned at least 35% of their annual gross revenue in 2019 or 2020 would be eligible for 3.5 times monthly payroll PPP loans and an additional five months of 7(a) or 504 loans through the SBA. Reps. Jennifer Wexton (D-VA), María Elvira Salazar (R-FL), Jason Crow (D-CO), and Dan Newhouse (R-WA) introduced the bill on February 11. It was referred to the House Committee on Small Businesses.