CHEFS Act

Bill Number

H.R. 4537

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-07-17: Referred to the House Committee on Ways and Means.

Last Updated

2025-07-30T23:23:07Z

AI-Generated Summary

Purpose of the Legislation

The CHEFS Act (Cutting Harmful Emissions in Food Service Act) aims to encourage small restaurant businesses to reduce air pollution from cooking equipment by providing a tax credit for installing devices that capture fine particulate matter (known as PM2.5, tiny particles that can harm health when emitted into the air). This supports cleaner air in communities while helping small businesses afford upgrades.

Key Provisions

• Tax Credit Structure: Eligible small restaurant businesses can claim a credit against their income taxes for costs of buying and installing qualified emissions control devices on wood-fired or coal-fired cook stoves or char broilers (grill-like devices used for cooking).
• The credit is a percentage of total costs, scaled by expense level:
• 10% for costs up to $30,000.
• 15% for $30,001–$60,000.
• 20% for $60,001–$90,000.
• 25% for $90,001–$120,000.
• 30% for $120,001–$150,000.
• 35% for costs over $150,000.
• Bonus percentages apply for restaurants in "eligible historical buildings" (structures at least 50 years old): +10 percentage points if 50–100 years old, or +15 if over 100 years old.
• Eligibility Rules:
• Businesses must be "small" under Small Business Administration (SBA) standards for the restaurant industry (based on revenue or employee limits set by the SBA).
• They must use the specified cooking equipment.
• The control device must capture or contain PM2.5 to prevent its release into the air.
• Limitations: No double benefits—no other tax credits or deductions can be claimed for the same expenses, and the tax basis (value used for depreciation) of the equipment is reduced by the credit amount.
• Depreciation Treatment: These devices qualify as 3-year property for faster tax depreciation (spreading the deduction over 3 years instead of longer periods).
• Effective Date: Applies to tax years starting at least one year after the bill becomes law.

Significant Changes to Existing Law

• Adds a new section (45BB) to the Internal Revenue Code (the main U.S. tax law) to create this specific business tax credit.
• Integrates the credit into the "general business credit" (a bundle of various business incentives under section 38), allowing it to offset taxes alongside other credits.
• Amends depreciation rules (section 168) to classify these devices as short-term property, speeding up tax recovery for businesses.
• No changes to broader environmental laws, but it indirectly supports air quality regulations by incentivizing voluntary pollution controls.

Potential Impacts

• On Government Agencies: The Internal Revenue Service (IRS) will need to administer the credit, verify eligibility (e.g., SBA size standards and historical building status), and track claims, potentially increasing administrative workload. It may reduce federal tax revenue short-term due to credits claimed.
• On Citizens: Improves local air quality by reducing PM2.5 emissions from restaurants, which could lower health risks like respiratory issues in nearby communities. Small restaurant owners benefit from lower upgrade costs, potentially preserving jobs and affordable dining options.
• On International Relations: Minimal direct impact, though reduced U.S. emissions could align with global climate goals (e.g., under Paris Agreement commitments) by addressing local pollution sources.

Main Stakeholders Affected

• Small Restaurant Businesses: Primary beneficiaries, especially independent or family-owned operations using traditional cooking methods; they gain financial relief for eco-friendly upgrades.
• Owners in Historical Buildings: Extra incentives for urban or preserved-area restaurants, aiding preservation efforts.
• Environmental and Health Advocates: Indirectly supported through pollution reduction.
• Taxpayers and Government: Bear the cost via forgone tax revenue but gain from public health improvements.
• Equipment Suppliers and Installers: Potential boost in demand for emissions control technology.

Notable Legal, Constitutional, or Political Implications

• Legal: The bill fits within Congress's authority to regulate taxes (under the Constitution's tax power) and promote business incentives. It avoids conflicts with existing clean air laws (e.g., Clean Air Act) by focusing on voluntary adoption rather than mandates. Challenges could arise over IRS enforcement of definitions like "qualified" devices, but these are standard for tax credits.
• Constitutional: No apparent issues; it promotes equal treatment for small businesses without discriminating by state or group.
• Political: Supports bipartisan goals of small business aid and environmental protection, potentially appealing to urban lawmakers (air quality) and rural ones (restaurant support). Could set precedent for targeted green tax incentives in other industries, but fiscal conservatives might critique the revenue loss without offsetting cuts.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Torres, Ritchie [D-NY-15]

Recent Actions

• 2025-07-17: Referred to the House Committee on Ways and Means.
• 2025-07-17: Introduced in House
• 2025-07-17: Introduced in House

Bill Versions

• CHEFS Act — issued 2025-07-17 — PDF (6 pages)