Layer operation efficiency equipment credit

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45BB.

Layer operation efficiency equipment credit

(a)

General rule

For purposes of section 38, the layer operation efficiency equipment credit for any taxable year is an amount equal to the applicable percentage of the qualified equipment expenditures paid or incurred by the taxpayer during such taxable year.(b)

Applicable percentage

For purposes of this section, the applicable percentage is—(1)50 percent, in the case of property placed in service during calendar year 2027,(2)40 percent, in the case of property placed in service during calendar year 2028, and(3)30 percent, in the case of property placed in service during calendar year 2029.(c)

Qualified equipment expenditures

For purposes of this section—(1)

In general

The term qualified equipment expenditures means amounts paid or incurred for—(A)the purchase of qualified in-ovo sex identification equipment,(B)the installation of such equipment, and(C)facility modifications necessary for the operation of such equipment.(2)

Qualified in-ovo sex identification equipment

The term qualified in-ovo sex identification equipment means equipment which—(A)utilizes optical or non-optical technology to determine the sex of avian embryos before hatch,(B)is placed in service at a commercial egg hatchery facility located in the United States,(C)achieves an accuracy rate of not less than 95 percent in sex determination, and(D)meets such other requirements as the Secretary may prescribe.(3)

Limitation to property placed in service

No expenditure shall be taken into account under paragraph (1) with respect to any equipment unless such equipment is placed in service by the taxpayer.(d)

Other rules

(1)

Basis reduction

For purposes of this subtitle, if a credit is determined under this section with respect to any property, the basis of such property shall be reduced by the amount of the credit so determined. If during any taxable year there is a recapture amount determined with respect to any property the basis of which was reduced under the preceding sentence, the basis of such property (immediately before the event resulting in such recapture) shall be increased by an amount equal to such recapture amount.(2)

Recapture

The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit (including recapture in cases where the taxpayer ceases to be engaged in the trade or business of operating a commercial egg hatchery).(3)

Property used outside United States not qualified

No credit shall be allowable under subsection (a) with respect to any property which is used predominantly outside the United States. The preceding sentence shall not apply to any property described in section 50(b)(2).(4)

Certain rules to apply

Rules similar to the rules of section 50 shall apply for purposes of this section.(e)

Definitions

For purposes of this section, the term commercial egg hatchery facility means a facility the primary purpose of which is to hatch chicks for commercial egg production.(f)

Regulations

The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.(g)

Termination

This section shall not apply to property placed in service after December 31, 2029.

(b)

Credit made part of general business credit

Section 38(b) of the Internal Revenue Code of 1986 (relating to current year business credit) is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting , plus, and by adding at the end the following new paragraph:

(42)the layer operation efficiency equipment credit determined under section 45BB(a).

(c)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

Sec. 45BB. Layer operation efficiency equipment credit.

(d)

Effective date

The amendments made by this section shall apply to property placed in service after December 31, 2026, in taxable years ending after such date.