EGG SAVE Act of 2025

Bill Number

H.R. 5776

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-10-17: Referred to the House Committee on Ways and Means.

Last Updated

2026-06-03T08:06:13Z

AI-Generated Summary

Purpose

The EGG SAVE Act of 2025 aims to encourage the adoption of advanced technology in the U.S. egg production industry by offering tax incentives for equipment that identifies the sex of chicken embryos before they hatch. This promotes efficiency in "layer" operations (egg-laying hen production) by reducing the need to hatch and cull male chicks, which are not used for egg production.

Key Provisions

• Tax Credit Structure: Provides a non-refundable tax credit equal to a percentage of qualified equipment costs, integrated into the general business credit under Internal Revenue Code (IRC) Section 38. The credit applies to expenditures paid or incurred for:
• Purchasing qualified in-ovo sex identification equipment.
• Installing the equipment.
• Modifying facilities to support its operation.
• Credit Percentages and Timeline:
• 50% for equipment placed in service in 2026.
• 40% for 2027.
• 30% for 2028.
• The credit ends for equipment placed in service after December 31, 2028.
• Qualified Equipment Definition: Refers to technology (optical or non-optical) that determines the sex of avian embryos pre-hatch with at least 95% accuracy. It must be installed at a U.S.-based commercial egg hatchery (a facility primarily focused on hatching chicks for commercial egg production) and meet IRS-prescribed standards.
• Additional Rules:
• Equipment must be placed in service by the taxpayer to qualify.
• No credit for equipment used mostly outside the U.S.
• Basis reduction: The property's tax basis is lowered by the credit amount; recapture rules apply if the equipment no longer qualifies (e.g., if the business stops operating a hatchery).
• The IRS will issue regulations to implement and enforce the credit, including recapture provisions similar to those in IRC Section 50.

Significant Changes to Existing Law

• Adds a new IRC Section 45BB for the "Layer Operation Efficiency Equipment Credit," expanding Subpart D of Part IV of Subchapter A (business-related credits).
• Amends IRC Section 38(b) to include this credit as the 42nd component of the current-year business credit.
• Updates the table of sections for clerical purposes.
• Effective for property placed in service after December 31, 2025, in taxable years ending after that date.

These changes introduce a targeted, time-limited incentive not previously available, without altering broader tax code structures.

Potential Impacts

• On Government Agencies: The IRS will administer the credit, potentially increasing administrative workload for verification and recapture. It may reduce federal tax revenue in the short term (estimated forgone revenue from credits) but could boost long-term economic productivity in agriculture.
• On Citizens: Primarily benefits U.S. egg producers by lowering costs for efficiency upgrades, potentially leading to more stable egg prices. Indirectly supports animal welfare by enabling earlier sex determination, reducing the practice of hatching and euthanizing male chicks. No direct impact on individual consumers or non-agricultural citizens.
• On International Relations: Minimal; the credit is limited to U.S. facilities, which could enhance domestic competitiveness in global egg production but does not directly affect trade or foreign policy.

Main Stakeholders Affected

• Egg Producers and Hatchery Operators: Primary beneficiaries, as they can claim credits to offset costs of adopting sex-identification technology.
• Equipment Manufacturers and Suppliers: Gain from increased demand for qualifying in-ovo technology.
• U.S. Treasury and IRS: Responsible for implementation, oversight, and revenue impacts.
• Animal Welfare and Agricultural Advocacy Groups: Indirectly affected through potential reductions in chick culling practices.

Notable Legal, Constitutional, or Political Implications

• Legal: The bill relies on Congress's taxing and spending powers under Article I of the U.S. Constitution, with no apparent conflicts. Recapture and basis adjustment rules align with existing IRC precedents, ensuring enforceability. The 95% accuracy threshold and IRS regulatory authority provide flexibility while preventing abuse.
• Constitutional: No significant issues; it promotes interstate commerce in agriculture without infringing on states' rights or individual liberties.
• Political: Represents bipartisan support (introduced by representatives from both parties) for agricultural innovation and animal welfare. It could spark debate on federal subsidies for specific industries, but the time-limited nature limits long-term fiscal commitments. Potential for extension if the technology proves effective in reducing industry waste.

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

Sponsor

Rep. Malliotakis, Nicole [R-NY-11]

Cosponsors (7)

Rep. Escobar, Veronica [D-TX-16], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Lawler, Michael [R-NY-17], Rep. Van Drew, Jefferson [R-NJ-2], Rep. Mackenzie, Ryan [R-PA-7], Rep. Harrigan, Pat [R-NC-10], Rep. Thanedar, Shri [D-MI-13]

Recent Actions

• 2025-10-17: Referred to the House Committee on Ways and Means.
• 2025-10-17: Introduced in House
• 2025-10-17: Introduced in House

Bill Versions

• Efficiency Gains through Grading Standards And Viable Enhancement Act of 2025 — issued 2025-10-17 — PDF (6 pages)