County board opposes tax rate on new 'alcopop'

County commissioners across Nebraska are taking on the Nebraska Liquor Control Commission and its designation of "alcopops" -- sweet, fruity "starter drinks" marketed to young people -- as beer.

Red Willow County commissioners Monday morning signed a resolution in support of the "Project Extra Mile: Underage Drinking Prevention Project" originated by Douglas County Commissioner Mary Ann Borgeson.

Red Willow County Commission Chairman Earl McNutt said during his board's regular meeting Monday morning that the liquor commission's designation of the sweet drinks as "beer," rather than "distilled spirits," allows the alcohol industry to "dodge a lot of taxes" in Nebraska.

An e-mail from Borgeson indicates that permitting the alcopops to be classified as beer allows the alcohol industry to receive a tax break. "The taxes on beer amount to $.31 per gallon compared with $3.75 per gallon assessed to distilled spirits," Borgeson said, "an amount 12 times higher than the beer tax rate."

Effective Jan. 1, 2004, the Nebraska liquor commission called flavored alcohol beverages "distilled spirits," but reclassified them as "beer" on July 31, 2006. This reclassification, Borgeson said, "has allowed the alcohol industry to continue to profit at the expense of Nebraska's children."

State statute describes "spirits" as "any beverage which contains alcohol obtained by distillation, mixed with water or other substance in solution, and includes brandy, rum, whiskey, gin or other spirituous liquors and such liquors when rectified, blended or otherwise mixed with alcohol or other substances."

Alcopops are sweet, fruity or soda-pop flavored alcoholic drinks. Of 114 flavored alcohol beverage products tested in a 2003 analysis, 105 contained more than 76 percent alcohol derived from distilled alcohol.

Alcopops are particularly popular among girls age 14-18, Borgeson said. Data collected in 2005 by "Monitoring the Future" indicates that 75 percent of current eight-grade drinkers had an alcopop in the past month. Research indicates that 31 percent of teen girls and 19 percent of teen boys have drunk alcopops in the past six months.

Borgeson indicates that she is concerned that classifying alcopops as beer allows the alcohol industry to reach more young people through advertising practices on television. "Independent research indicates that awareness of alcohol advertising and marketing has an impact on the beliefs and expectations of children and youth regarding, alcohol use," Borgeson's resolution reads.

Furthermore, Borgeson indicates, permitting the products to be classified as beer increases their availability to young people throughout the state, as beer products can be sold at 1,535 off-premise locations and spirits can be sold at 718 off-premise locations.

Red Willow County commissioners envision returning alcopops to their original distilled spirits classification as a way for the state to recoup lost tax money as well as a way to address part of the problem of underage drinking.

In other action:

* Andela Taylor of rural Cambridge updated commissioners on progress as she transforms her family's farm into an agri-, eco-tourism retreat using a CDBG grant from the Nebraska Department of Economic Development.

A letter from DED officials to commissioners indicates that the DED is concerned that Taylor did not make any drawdowns from the grant fund during the first year of a two- to 2 1/2-year project. Steve Charleston, CDBG program manager for the DED, asked for revised dates for construction, completion and opening.

Taylor received a $131,000 DED grant on Aug. 8, 2005, for the two-year project,a nd was authorized to draw funds in October 2005. Taylor was to provide matching funds of $123,000, with which she planned to purchase land.

Taylor told commissioners, in a telephone conference Monday morning, that she has responded to DED concerns by letter. She said that she intended her first year's schedule to include in-kind site preparation for roads, grading and the construction of a pond. This schedule, she said, was impacted by her preferred contractor's involvement with the dirt work required for the construction of the new ethanol plant at Cambridge.

Taylor said she has completed some landscaping and transplanting, and that the land acquisition will be completed this month.

"I'm glad I haven't spent any money yet," Taylor told commissioners, explaining that she is still comfortable with the amount of time left to fulfill grant requirements. She said she should be back on schedule next spring and summer. "The majority of the work for which the funds will be expended will take place before October 2007," she said.

Taylor still anticipates opening in the spring of 2008.

McNutt said if the project is not completed, the state will reallocate the money to another project(s). He said he does not want to jeopardize CDBG funds for future projects in Red Willow County.

* Commissioners learned from the Internal Revenue Service that its application for $4,800,000 in Clean Renewable Energy Bonds (CREBs) to construct an open-loop biomass facility at the proposed S.W. Energy LLC ethanol plant west of McCook has been denied.

The county applied for the financing on behalf of ethanol plant officials who planned to operate the plant with the electricity generated by the biomass system.

The project involved the county applying for and receiving CREBs funding; and S.W. Energy and Allco (S.W.'s financial partner) building a biomass system at the ethanol plant and operating, maintaining and monitoring the system for 20 years. The county, which would have been the owner of the system, would have sold the energy generated by the biomass system to S.W. Energy and Allco; S.W. Energy and Allco would have made payments to the county in an amount equal to the bond service payments; and the county would then have made the bond payments. The county would have owned the system at the end of 20 years.

* McNutt and fellow commissioner Steve Downer voted to continue for another year an agreement between the county and the city to purchase fuel at Frenchman Valley Co-Op in McCook, at a discount of 5 cents per gallon at the pump. Commissioner Leigh Hoyt abstained from voting because he is employed by Frenchman Valley.

* Commissioners approved the bond for Shirley Axtell, clerk/treasurer of the Village of Danbury.

* Commissioners designated the McCook Daily Gazette at the county's official newspaper for 2007.

* Commissioners learned that all accounts are current on their loan payments to the county's revolving loan fund.