FAIR Meat Packing Act
Bill: S.2558 | Sponsor: Sen. Marshall, Roger (R-KS)
Policy area: Taxation

Summary:
Feed America by Incentivizing Rural Meat Packing Act or the FAIR Meat Packing Act
This bill allows an investment tax credit through 2026 for 25% of the basis of each livestock processing facility property placed in service during the taxable year. The amount of the credit may not exceed $250,000 in any taxable year and is not available to taxpayers whose gross receipts exceed $100 million in a taxable year.
The bill defines livestock processing facility as a facility that slaughters livestock (i.e., cattle, sheep, goats, bison, swine, and poultry) for processing into meat and meat products and participates in a meat and poultry inspection program, The facility must employ an average of fewer than 500 employees and include property used for the intake or storage of livestock, the disposal or management of livestock waste, or the packaging, handling, warehousing, or storage of meat products.
The bill also allows a refundable income tax credit for the startup and organizational expenditures of livestock processing facilities.

To amend the Internal Revenue Code of 1986 to provide incentives for 
                    livestock processing facilities.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Feed America by Incentivizing Rural 
Meat Packing Act'' or as the ``FAIR Meat Packing Act''.

SEC. 2. CREDIT FOR LIVESTOCK PROCESSING FACILITIES.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 48C the following new section:

``SEC. 48D. LIVESTOCK PROCESSING FACILITIES CREDIT.

    ``(a) In General.--For purposes of section 46, the livestock 
processing facilities credit for any taxable year is an amount equal to 
25 percent of the basis of each livestock processing facility property 
placed in service by the taxpayer during such taxable year.
    ``(b) Limitation on Credit Amount.--The credit determined under 
subsection (a) with respect to any taxpayer for any taxable year shall 
not exceed $250,000.
    ``(c) Exclusion of Certain Large Processors.--No credit shall be 
allowed under subsection (a) to any taxpayer for any taxable year if 
the gross receipts (within the meaning of section 448(c) of the 
Internal Revenue Code of 1986) of such taxpayer for such taxable year 
exceed $100,000,000.
    ``(d) Livestock Processing Facility Property.--For purposes of this 
section--
            ``(1) In general.--The term `livestock processing facility 
        property' means property with respect to which depreciation (or 
        amortization in lieu of depreciation) is allowable and which is 
        part of a livestock processing facility.
            ``(2) Trade or business requirement.--The term `livestock 
        processing facility property' shall not include any property 
        unless such property is used in the taxpayer's trade or 
        business of processing livestock.
    ``(e) Other Definitions.--For purposes of this section--
            ``(1) Livestock processing facility.--The term `livestock 
        processing facility' means a facility which slaughters 
        livestock for processing into meat and meat products, which 
        participates in a meat and poultry inspection program conducted 
        by the Department of Agriculture or the State in which such 
        facility is located, and at which an average of fewer than 500 
        employees are employed on business days during the taxable 
        year. Such term shall include any property used for the intake 
        or storage of livestock, the disposal or management of 
        livestock waste, or the packaging, handling, warehousing, or 
        storage of meat products, if such property is located on the 
        same site as such facility.
            ``(2) Livestock.--The term `livestock' means cattle, sheep, 
        goats, bison, swine, and poultry.
    ``(f) Special Rules.--
            ``(1) Certain progress expenditure rules made applicable.--
        Rules similar to the rules of subsections (c)(4) and (d) of 
        section 46 (as in effect on the day before the date of the 
        enactment of the Revenue Reconciliation Act of 1990) shall 
        apply for purposes of subsection (a).
            ``(2) Aggregation rule.--For purposes of subsections (b) 
        and (c), all members of the same controlled group of 
        corporations (within the meaning of section 267(f)) and all 
        persons under common control (within the meaning of section 
        52(b) but determined by treating an interest of more than 50 
        percent as a controlling interest) shall be treated as 1 person 
        and the dollar limitation under subsection (b) shall be 
        allocated in such manner as the Secretary may provide.
            ``(3) Election to not have section apply.--No credit shall 
        be determined under subsection (a) with respect to any taxpayer 
        for any taxable year if such taxpayer make an election under 
        this paragraph (at such time and in such manner as the 
        Secretary may provide) to have such subsection not apply for 
        such taxable year.
    ``(g) Termination.--No credit shall be allowed under subsection (a) 
with respect to any taxable year beginning after December 31, 2026.''.
    (b) Conforming Amendments.--
            (1) Section 46 of such Code is amended by striking ``and'' 
        at the end of paragraph (5), by striking the period at the end 
        of paragraph (6) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(7) the livestock processing facilities credit.''.
            (2) Section 49(a)(1)(C) of such Code is amended by striking 
        ``and'' at the end of clause (iv), by striking the period at 
        the end of clause (v) and inserting a comma, and by adding at 
        the end the following new clause:
                            ``(vi) the basis of any livestock 
                        processing facility property under section 
                        48D.''.
            (3) Section 50(a)(2)(E) of such Code is amended by striking 
        ``or 48C(b)(2)'' and inserting ``48C(b)(2), or 48D(d)(1)''.
            (4) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 48C the following new item:

``Sec. 48D. Livestock processing facilities credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to periods after the date of the enactment of this Act under 
rules similar to the rules of section 48(m) of the Internal Revenue 
Code of 1986 (as in effect on the day before the date of the enactment 
of the Revenue Reconciliation Act of 1990).

SEC. 3. REFUNDABLE CREDIT FOR STARTUP AND ORGANIZATIONAL EXPENDITURES 
              WITH RESPECT TO LIVESTOCK PROCESSING FACILITIES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 36B the following new section:

``SEC. 36C. CREDIT FOR STARTUP AND ORGANIZATIONAL EXPENDITURES OF 
              LIVESTOCK PROCESSING FACILITIES.

    ``(a) In General.--There shall be allowed as a credit against the 
tax imposed by this subtitle for any taxable year an amount equal to 90 
percent of the sum of--
            ``(1) the qualified livestock processing facility start-up 
        expenditures of the taxpayer for such taxable year,
            ``(2) the qualified livestock processing facility corporate 
        organizational expenditures of the taxpayer for such taxable 
        year, plus
            ``(3) the qualified livestock processing facility 
        partnership organizational expenditures of the taxpayer for 
        such taxable year.
    ``(b) Qualified Livestock Processing Facility Start-Up 
Expenditures.--For purposes of this section, the term `qualified 
livestock processing facility start-up expenditures' means, with 
respect to any taxpayer for any taxable year, the amount which would be 
allowed as a deduction under section 195 to such taxpayer for such 
taxable year with respect to any trade or business which slaughters 
livestock into meat or meat products if--
            ``(1) section 195(b)(1)(A)(ii) were applied--
                    ``(A) by substituting `$10,000' for `$5,000', and
                    ``(B) by substituting `$60,000' for `$50,000', and
            ``(2) subsection (f) of this section did not apply.
    ``(c) Qualified Livestock Processing Facility Corporate 
Organizational Expenditures.--For purposes of this section, the term 
`qualified livestock processing facility corporate organizational 
expenditures' means, with respect to any taxable year of any 
corporation substantially all of the gross receipts (within the meaning 
of section 448(c) of the Internal Revenue Code of 1986) of which are 
reasonably expected to be derived from a trade or business which 
slaughters livestock into meat or meat products, the amount which would 
be allowed as a deduction under section 248 to such corporation for 
such taxable year if--
            ``(1) section 248(a)(1)(B) were applied--
                    ``(A) by substituting `$10,000' for `$5,000', and
                    ``(B) by substituting `$60,000' for `$50,000',
            ``(2) in the case of any entity with a single owner that is 
        disregarded as an entity separate from its owner, section 248 
        were applied as if such entity were a corporation, and
            ``(3) subsection (f) of this section did not apply.
    ``(d) Qualified Livestock Processing Facility Partnership 
Organizational Expenditures.--For purposes of this section, the term 
`qualified livestock processing facility partnership organizational 
expenditures' means, with respect to any taxable year of any 
partnership substantially all of the gross receipts (within the meaning 
of section 448(c) of the Internal Revenue Code of 1986) of which are 
reasonably expected to be derived from a trade or business which 
slaughters livestock into meat or meat products, the amount which would 
be allowed as a deduction under section 709 with respect to such 
partnership for such taxable year if--
            ``(1) section 709(b)(1)(A)(ii) were applied--
                    ``(A) by substituting `$10,000' for `$5,000', and
                    ``(B) by substituting `$60,000' for `$50,000', and
            ``(2) subsection (f) of this section did not apply.
    ``(e) Livestock.--For purposes of this section, the term 
`livestock' means cattle, elk, reindeer, bison, deer, sheep, goats, 
swine, and poultry.
    ``(f) Denial of Double Benefit.--Any deduction or credit allowed 
under this title (other than this section) with respect to any 
qualified livestock processing facility start-up expenditures, 
qualified livestock processing facility corporate organizational 
expenditures, or qualified livestock processing facility partnership 
organizational expenditures shall be reduced by the amount of the 
credit determined under this section.
    ``(g) Recapture.--If any credit is allowed under this section to 
any taxpayer for any taxable year with respect to any trade or business 
of processing livestock (including with respect to any entity 
substantially all of the gross receipts of which are with respect to 
the trade or business of processing of livestock) and such trade or 
business ceases to be conducted during the 3-taxable-year period 
following the taxable in which such credit is so allowed, the tax 
imposed under this chapter on such taxpayer for the taxable year in 
which such trade or business ceases shall be increased by the amount of 
the credit so allowed.
    ``(h) Termination.--No credit shall be allowed under subsection (a) 
with respect to any taxable year beginning after December 31, 2026.''.
    (b) Conforming Amendments.--
            (1) Section 6211(b)(4)(A) of such Code is amended by 
        inserting ``36C,'' after ``36B,''.
            (2) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36C,'' after ``36B,''.
            (3) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 36B 
        the following new item:

``Sec. 36C. Credit for startup and organizational expenditures of 
                            livestock processing facilities.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable year ending after the date of the enactment of this 
Act.
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