HR5776-119

What This Bill Does

The EGG SAVE Act creates a new section 45BB tax credit for commercial egg hatchery facilities that buy, install, and adapt facilities for in-ovo sex identification equipment. The credit equals 50 percent of qualified expenditures for equipment placed in service in 2026, 40 percent in 2027, and 30 percent in 2028. To qualify, the technology must determine the sex of avian embryos before hatch with at least 95 percent accuracy and be placed in service at a U.S. commercial egg hatchery. The bill reduces basis by the credit amount, requires recapture if equipment stops being used in a commercial egg hatchery, excludes predominantly foreign-used property, and terminates the credit after 2028.

Who Benefits and How

Commercial egg hatchery operators benefit because the credit offsets a large share of equipment, installation, and facility modification costs. In-ovo sex identification equipment manufacturers benefit because the credit can accelerate hatchery demand for qualifying technology. Animal welfare advocates benefit because the technology is designed to identify chick sex before hatch and reduce post-hatch culling incentives. U.S. egg production facilities benefit if Treasury rules make domestic hatchery modernization cheaper through 2028.

Who Bears the Burden and How

Treasury tax credit administrators must issue requirements, police the 95 percent accuracy rule, and enforce recapture. Commercial hatchery finance teams must reduce basis, document qualified expenditures, and track continued eligible use. Hatcheries using foreign facilities or nonqualifying equipment bear exclusion risk because the credit is limited to U.S. commercial egg hatcheries. Federal taxpayers bear the revenue cost of a 30 to 50 percent investment credit.

Key Provisions

• Adds new Internal Revenue Code section 45BB for layer operation efficiency equipment.
• Provides a 50 percent credit for 2026 placements, 40 percent for 2027, and 30 percent for 2028.
• Requires qualified equipment to determine avian embryo sex before hatch with at least 95 percent accuracy.
• Limits eligibility to U.S. commercial egg hatchery facilities and ends the credit after 2028.
• Requires basis reduction and recapture when equipment stops being used in a qualifying hatchery.