House lawmakers introduce bill granting brewers $35,000 tax credit for donated spent grain

A bipartisan group of House lawmakers has introduced legislation that would give breweries a federal tax credit for donating spent grain to farmers, a step supporters say could lower costs for small brewers, reduce waste, and reinforce ties between breweries and agricultural producers.

The proposal, called the Brews to Barns Act, was introduced in the U.S. House of Representatives by Reps. Mike Kelly of Pennsylvania, Brad Schneider of Illinois, Jeff Hurd of Colorado, John Larson of Connecticut, Josh Riley of New York, Marilyn Strickland of Washington, and Glenn “GT” Thompson of Pennsylvania. The measure has support from both Republicans and Democrats, but it remains a proposal and has not become law.

Under the bill, eligible brewers would receive a federal excise tax credit of $0.08 per dry-weight pound of spent grain donated for agricultural use, with a maximum annual credit of $35,000 for each brewery. Spent grain is the main byproduct of brewing. It is made up of the barley and other grains left after the brewing process and is commonly used as livestock feed or as a soil amendment.

Supporters of the measure say the bill is aimed in large part at smaller breweries, which often do not have the scale or market access to sell spent grain the way larger brewers can. Instead, many small brewers give the material to nearby farmers for little or no charge and take on the costs of handling and transportation themselves. Backers argue that the tax credit would help offset those expenses and make it easier for breweries to continue the practice.

The Brewers Association, which represents small and independent American brewers, said the bill has been one of its top federal priorities in 2026. The group said nearly 100 brewery representatives, guild leaders, and industry partners raised the issue with lawmakers during its February Hill Climb in Washington. The association estimates the proposal could reduce federal excise tax burdens on small brewers by about $38 million a year.

Bart Watson, the Brewers Association’s president and chief executive, said in a statement that small and independent breweries are facing rising operating costs and difficult decisions about where to direct limited resources. He said the tax relief could allow brewers to put money back into their businesses, including employee support, equipment replacement, and future expansion.

The bill is also being framed by supporters as a waste-reduction measure. According to the Brewers Association, American breweries generate about 4.7 million metric tons of spent grain each year, and about 90% of that material is already reused, mainly as feed or compost. Even so, supporters say the financial burden of moving and managing the byproduct falls unevenly across the industry, with smaller brewers often in a weaker position than larger companies that can sell their grain at scale.

For the beverage sector, the proposal could matter beyond agriculture policy. If enacted, it could ease one operating cost pressure on small breweries at a time when many are working with tight margins, while also encouraging a more formal economic use for a major brewing byproduct. That could strengthen an existing local link between beer production and farming and reward breweries that already divert organic material from landfills.

Kelly, who is a co-chair of the House Small Brewers Caucus, said local breweries and farms are both small businesses that play important roles in their communities. He said the bill would encourage collaboration between brewers and farmers and help strengthen local supply chains. Schneider said working families, Main Street businesses, craft brewers, and farmers are all dealing with higher costs, and he described the legislation as an effort to lower expenses while preventing waste.

The scale of the byproduct helps explain the bill’s focus. According to the Brewers Association, an average 31-gallon barrel of beer produces more than 65 pounds of spent grain. For breweries making beer on a regular schedule, that can add up quickly, creating a constant need for removal, reuse, or disposal. Farmers, in turn, can use the material in ways that give it continued value after the brewing process ends.

Because the proposal is tied to the federal excise tax system, its practical effect would depend on how many breweries qualify, how much grain they donate, and how lawmakers write any final version of the legislation. The current proposal sets the credit based on dry-weight pounds, a distinction that could be important because spent grain is typically wet and heavy when it leaves the brewhouse. The annual cap of $35,000 would also limit how much any single brewery could claim.

The Brewers Association said it plans to work with members of Congress to build bipartisan support for the measure and move it through the legislative process. Lawmakers and industry advocates are presenting the bill as a way to support small business, reduce organic waste, and reinforce a longstanding relationship between breweries and farmers, while giving smaller beer makers a tax benefit they say has so far been out of reach.