Sec. 803. Animal welfare tax incentives
717 words·~3 min read·
/bill/118/hr/1824/ih/section-803·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
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: For purposes of section 38, in the case of an eligible taxpayer, the independent animal welfare certification credit determined under this section for any taxable year is an amount equal to 25 percent of the qualified independent animal welfare certification expenditures paid or incurred by the taxpayer during the taxable year, and not exceeding $150,000.
For purposes of this section— The term qualified independent animal welfare certification expenditures means amounts paid or incurred for the purpose of complying with the animal welfare standards and protocols of an independent animal welfare certification, including— any amounts so paid or incurred for infrastructure improvements for the purpose of complying with such standards and protocols related to providing animals with access to the outdoors, pastures, or enriching indoor environments, including— fencing to enable pasture access, mobile or permanent housing or shelter on pasture, water lines and irrigation structures for watering animals, infrastructure to enable free movement of animals indoors, enrichment materials to encourage animals to carry out natural behaviors like rooting, pecking, and perching, and infrastructure to improve ventilation and provide natural light, and certification, including— the cost of initial certification, and the cost of certification auditing during the recapture period.
The term qualified independent animal welfare certification expenditures shall only include amounts directly related to complying with animal welfare standards and protocols of an independent animal welfare certification. For purposes of this section— The term eligible taxpayer means any taxpayer which carries on a trade or business of farming livestock or poultry who has an adjusted gross income of less than $900,000. The term independent animal welfare certification means a certification issued pursuant to a value-added certification program which has been approved by the Secretary of Agriculture as meeting each of the following requirements:
Such program uses qualified, independent, on-farm auditors to assess, at least once in a 15 month period, a producer’s compliance with specific farm animal welfare standards. Such program uses a certification protocol and standards that are publicly available. The standards used in such program exceed conventional industry standards, based on industry guidelines published by animal trade associations, prohibit routine caging, crating, and tethering of animals, and include, at a minimum, provisions for daily free access to an outdoor vegetated range area for a majority of animals’ lives, indoor and outdoor space allowance, environmental enrichment, ability to engage in natural behaviors, pain control and physical alterations, animal handling and transport, and responsible antibiotic use.
The auditors used in such program have no vested or financial interest in audit outcomes and possess a background in animal welfare science, or have received equivalent training, and are able to recognize and apply established farm animal welfare standards and protocols. Such program requires producers to comply with 100 percent of standards to receive certification. In the case of any taxpayer with respect to which a credit of $75,000 or more is determined under this section for any taxable year and which ceases to be in compliance with an independent animal welfare certification at any time during the recapture period, the taxpayer may be subject to recapture of some or all of the credit, at the discretion of the Internal Revenue Service.
For purposes of this section, the term recapture period means the 5-taxable-year period beginning with the taxable year two years after the taxable year for which a credit of $75,000 or more is determined under this section. . Section 38(b) of such Code is amended— by striking plus at the end of paragraph (32); by striking the period at the end of paragraph
(33)and inserting , plus ; and by adding at the end the following new paragraph: in the case of an eligible taxpayer (as defined in section 45U(c)(1), the independent animal welfare certification credit determined under section 45U. . The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 45U. Independent animal welfare certification credit.’’. . The amendments made by this section shall apply to amounts paid or incurred during taxable years beginning after December 31, 2023.