FAIR Meat Packing Act

I 116TH CONGRESS 2D SESSION H. R. 8717 To amend the Internal Revenue Code of 1986 to provide incentives for livestock processing facilities. IN THE HOUSE OF REPRESENTATIVES OCTOBER 30, 2020 Mr. SMITH of Missouri (for himself, Mrs. WAGNER, Mrs. HARTZLER, Mr. LUETKEMEYER, Mr. GRAVES of Missouri, Mr. LONG, Mr. JOHNSON of South Dakota, Mr. HAGEDORN, and Mr. CRAWFORD) introduced the fol- lowing bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide incentives for livestock processing facilities. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Feed America by 4 Incentivizing Rural Meat Packing Act’’ or as the ‘‘FAIR 5 Meat Packing Act’’. 6 SEC. 2. CREDIT FOR LIVESTOCK PROCESSING FACILITIES. 7 (a) IN GENERAL.—Subpart E of part IV of sub- 8 chapter A of chapter 1 of the Internal Revenue Code of 9 VerDate Sep 11 2014 02:06 Nov 24, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8717.IH H8717 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 8717 IH 1986 is amended by inserting after section 48C the fol- 1 lowing new section: 2 ‘‘SEC. 48D. LIVESTOCK PROCESSING FACILITIES CREDIT. 3 ‘‘(a) IN GENERAL.—For purposes of section 46, the 4 livestock processing facilities credit for any taxable year 5 is an amount equal to 25 percent of the basis of each live- 6 stock processing facility property placed in service by the 7 taxpayer during such taxable year. 8 ‘‘(b) LIMITATION ON CREDIT AMOUNT.—The credit 9 determined under subsection (a) with respect to any tax- 10 payer for any taxable year shall not exceed $250,000. 11 ‘‘(c) EXCLUSION OF CERTAIN LARGE PROC- 12 ESSORS.—No credit shall be allowed under subsection (a) 13 to any taxpayer for any taxable year if the gross receipts 14 (within the meaning of section 448(c) of the Internal Rev- 15 enue Code of 1986) of such taxpayer for such taxable year 16 exceed $100,000,000. 17 ‘‘(d) LIVESTOCK PROCESSING FACILITY PROP- 18 ERTY.—For purposes of this section— 19 ‘‘(1) IN GENERAL.—The term ‘livestock proc- 20 essing facility property’ means property with respect 21 to which depreciation (or amortization in lieu of de- 22 preciation) is allowable and which is part of a live- 23 stock processing facility. 24 VerDate Sep 11 2014 02:06 Nov 24, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8717.IH H8717 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 8717 IH ‘‘(2) TRADE OR BUSINESS REQUIREMENT.—The 1 term ‘livestock processing facility property’ shall not 2 include any property unless such property is used in 3 the taxpayer’s trade or business of processing live- 4 stock. 5 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 6 section— 7 ‘‘(1) LIVESTOCK PROCESSING FACILITY.—The 8 term ‘livestock processing facility’ means a facility 9 which slaughters livestock for processing into meat 10 and meat products, which participates in a meat and 11 poultry inspection program conducted by the De- 12 partment of Agriculture or the State in which such 13 facility is located, and at which an average of fewer 14 than 500 employees are employed on business days 15 during the taxable year. Such term shall include any 16 property used for the intake or storage of livestock, 17 the disposal or management of livestock waste, or 18 the packaging, handling, warehousing, or storage of 19 meat products, if such property is located on the 20 same site as such facility. 21 ‘‘(2) LIVESTOCK.—The term ‘livestock’ means 22 cattle, sheep, goats, bison, swine, and poultry. 23 ‘‘(f) SPECIAL RULES.— 24 VerDate Sep 11 2014 02:06 Nov 24, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8717.IH H8717 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 8717 IH ‘‘(1) CERTAIN PROGRESS EXPENDITURE RULES 1 MADE APPLICABLE.—Rules similar to the rules of 2 subsections (c)(4) and (d) of section 46 (as in effect 3 on the day before the date of the enactment of the 4 Revenue Reconciliation Act of 1990) shall apply for 5 purposes of subsection (a). 6 ‘‘(2) AGGREGATION RULE.—For purposes of 7 subsections (b) and (c), all members of the same 8 controlled group of corporations (within the meaning 9 of section 267(f)) and all persons under common 10 control (within the meaning of section 52(b) but de- 11 termined by treating an interest of more than 50 12 percent as a controlling interest) shall be treated as 13 1 person and the dollar limitation under subsection 14 (b) shall be allocated in such manner as the Sec- 15 retary may provide. 16 ‘‘(3) ELECTION TO NOT HAVE SECTION 17 APPLY.—No credit shall be determined under sub- 18 section (a) with respect to any taxpayer for any tax- 19 able year if such taxpayer make an election under 20 this paragraph (at such time and in such manner as 21 the Secretary may provide) to have such subsection 22 not apply for such taxable year. 23 VerDate Sep 11 2014 02:06 Nov 24, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8717.IH H8717 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 8717 IH ‘‘(g) TERMINATION.—No credit shall be allowed 1 under subsection (a) with respect to any taxable year be- 2 ginning after December 31, 2025.’’. 3 (b) CONFORMING AMENDMENTS.— 4 (1) Section 46 of such Code is amended by 5 striking ‘‘and’’ at the end of paragraph (5), by strik- 6 ing the period at the end of paragraph (6) and in- 7 serting ‘‘, and’’, and by adding at the end the fol- 8 lowing new paragraph: 9 ‘‘(7) the livestock processing facilities credit.’’. 10 (2) Section 49(a)(1)(C) of such Code is amend- 11 ed by striking ‘‘and’’ at the end of clause (iv), by 12 striking the period at the end of clause (v) and in- 13 serting a comma, and by adding at the end the fol- 14 lowing new clause: 15 ‘‘(vi) the basis of any livestock proc- 16 essing facility property under section 17 48D.’’. 18 (3) Section 50(a)(2)(E) of such Code is amend- 19 ed by striking ‘‘ or 48C(b)(2)’’ and inserting 20 ‘‘48C(b)(2), or 48D(d)(1)’’. 21 (4) The table of sections for subpart E of part 22 IV of subchapter A of chapter 1 of such Code is 23 amended by inserting after the item relating to sec- 24 tion 48C the following new item: 25 ‘‘Sec. 48D. Livestock processing facilities credit.’’. VerDate Sep 11 2014 02:06 Nov 24, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6211 E:\BILLS\H8717.IH H8717 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 8717 IH (c) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to periods after the date of the 2 enactment of this Act under rules similar to the rules of 3 section 48(m) of the Internal Revenue Code of 1986 (as 4 in effect on the day before the date of the enactment of 5 the Revenue Reconciliation Act of 1990). 6 SEC. 3. REFUNDABLE CREDIT FOR STARTUP AND ORGANI- 7 ZATIONAL EXPENDITURES WITH RESPECT TO 8 LIVESTOCK PROCESSING FACILITIES. 9 (a) IN GENERAL.—Subpart C of part IV of sub- 10 chapter A of chapter 1 of the Internal Revenue Code of 11 1986 is amended by inserting after section 36B the fol- 12 lowing new section: 13 ‘‘SEC. 36C. CREDIT FOR STARTUP AND ORGANIZATIONAL 14 EXPENDITURES OF LIVESTOCK PROCESSING 15 FACILITIES. 16 ‘‘(a) IN GENERAL.—There shall be allowed as a cred- 17 it against the tax imposed by this subtitle for any taxable 18 year an amount equal to 90 percent of the sum of— 19 ‘‘(1) the qualified livestock processing facility 20 start-up expenditures of the taxpayer for such tax- 21 able year, 22 ‘‘(2) the qualified livestock processing facility 23 corporate organizational expenditures of the tax- 24 payer for such taxable year, plus 25 VerDate Sep 11 2014 02:06 Nov 24, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8717.IH H8717 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 8717 IH ‘‘(3) the qualified livestock processing facility 1 partnership organizational expenditures of the tax- 2 payer for such taxable year. 3 ‘‘(b) QUALIFIED LIVESTOCK PROCESSING FACILITY 4 START-UP EXPENDITURES.—For purposes of this section, 5 the term ‘qualified livestock processing facility start-up ex- 6 penditures’ means, with respect to any taxpayer for any 7 taxable year, the amount which would be allowed as a de- 8 duction under section 195 to such taxpayer for such tax- 9 able year with respect to any trade or business which 10 slaughters livestock into meat or meat products if— 11 ‘‘(1) section 195(b)(1)(A)(ii) were applied— 12 ‘‘(A) by substituting ‘$10,000’ for 13 ‘$5,000’, and 14 ‘‘(B) by substituting ‘$60,000’ for 15 ‘$50,000’, and 16 ‘‘(2) subsection (f) of this section did not apply. 17 ‘‘(c) QUALIFIED LIVESTOCK PROCESSING FACILITY 18 CORPORATE ORGANIZATIONAL EXPENDITURES.—For 19 purposes of this section, the term ‘qualified livestock proc- 20 essing facility corporate organizational expenditures’ 21 means, with respect to any taxable year of any corporation 22 substantially all of the gross receipts (within the meaning 23 of section 448(c) of the Internal Revenue Code of 1986) 24 of which are reasonably expected to be derived from a 25 VerDate Sep 11 2014 02:06 Nov 24, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8717.IH H8717 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 8717 IH trade or business which slaughters livestock into meat or 1 meat products, the amount which would be allowed as a 2 deduction under section 248 to such corporation for such 3 taxable year if— 4 ‘‘(1) section 248(a)(1)(B) were applied— 5 ‘‘(A) by substituting ‘$10,000’ for 6 ‘$5,000’, and 7 ‘‘(B) by substituting ‘$60,000’ for 8 ‘$50,000’, 9 ‘‘(2) in the case of any entity with a single 10 owner that is disregarded as an entity separate from 11 its owner, section 248 were applied as if such entity 12 were a corporation, and 13 ‘‘(3) subsection (f) of this section did not apply. 14 ‘‘(d) QUALIFIED LIVESTOCK PROCESSING FACILITY 15 PARTNERSHIP ORGANIZATIONAL EXPENDITURES.—For 16 purposes of this section, the term ‘qualified livestock proc- 17 essing facility partnership organizational expenditures’ 18 means, with respect to any taxable year of any partnership 19 substantially all of the gross receipts (within the meaning 20 of section 448(c) of the Internal Revenue Code of 1986) 21 of which are reasonably expected to be derived from a 22 trade or business which slaughters livestock into meat or 23 meat products, the amount which would be allowed as a 24 VerDate Sep 11 2014 02:06 Nov 24, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8717.IH H8717 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 8717 IH deduction under section 709 with respect to such partner- 1 ship for such taxable year if— 2 ‘‘(1) section 709(b)(1)(A)(ii) were applied— 3 ‘‘(A) by substituting ‘$10,000’ for 4 ‘$5,000’, and 5 ‘‘(B) by substituting ‘$60,000’ for 6 ‘$50,000’, and 7 ‘‘(2) subsection (f) of this section did not apply. 8 ‘‘(e) LIVESTOCK.—For purposes of this section, the 9 term ‘livestock’ means cattle, elk, reindeer, bison, deer, 10 sheep, goats, swine, and poultry. 11 ‘‘(f) DENIAL OF DOUBLE BENEFIT.—Any deduction 12 or credit allowed under this title (other than this section) 13 with respect to any qualified livestock processing facility 14 start-up expenditures, qualified livestock processing facil- 15 ity corporate organizational expenditures, or qualified live- 16 stock processing facility partnership organizational ex- 17 penditures shall be reduced by the amount of the credit 18 determined under this section. 19 ‘‘(g) RECAPTURE.—If any credit is allowed under this 20 section to any taxpayer for any taxable year with respect 21 to any trade or business of processing livestock (including 22 with respect to any entity substantially all of the gross 23 receipts of which are with respect to the trade or business 24 of processing of livestock) and such trade or business 25 VerDate Sep 11 2014 02:06 Nov 24, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8717.IH H8717 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 8717 IH ceases to be conducted during the 3-taxable-year period 1 following the taxable in which such credit is so allowed, 2 the tax imposed under this chapter on such taxpayer for 3 the taxable year in which such trade or business ceases 4 shall be increased by the amount of the credit so allowed. 5 ‘‘(h) TERMINATION.—No credit shall be allowed 6 under subsection (a) with respect to any taxable year be- 7 ginning after December 31, 2025.’’. 8 (b) CONFORMING AMENDMENTS.— 9 (1) Section 6211(b)(4)(A) of such Code is 10 amended by inserting ‘‘36C,’’ after ‘‘36B,’’. 11 (2) Paragraph (2) of section 1324(b) of title 12 31, United States Code, is amended by inserting 13 ‘‘36C,’’ after ‘‘36B,’’. 14 (3) The table of sections for subpart C of part 15 IV of subchapter A of chapter 1 of the Internal Rev- 16 enue Code of 1986 is amended by inserting after the 17 item relating to section 36B the following new item: 18 ‘‘Sec. 36C. Credit for startup and organizational expenditures of livestock proc- essing facilities.’’. (c) EFFECTIVE DATE.—The amendments made by 19 this section shall apply to taxable year ending after the 20 date of the enactment of this Act. 21 Æ VerDate Sep 11 2014 02:06 Nov 24, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H8717.IH H8717 pbinns on DSKJLVW7X2PROD with BILLS