This bill establishes conditions and penalties for large egg producers receiving federal compensation for avian influenza outbreaks, including restrictions on stock buybacks and dividend payments.
John "Jack" Reed
Senator
RI
This bill establishes new rules for providing federal compensation to very large egg producers following avian influenza outbreaks. To qualify for aid, these major entities must agree to temporarily halt stock buybacks and dividend payments for two years. Publicly traded or private equity-owned companies face additional certification requirements proving financial necessity, with severe penalties, including prison time, for false claims.
New Bill Creates Taxpayer-Funded Bailout for Egg Producers Over $100M in Revenue, Restricts Dividends for Two Years
The aptly titled Ending Taxpayer Support for Big Egg Producers Act actually sets up a brand new, taxpayer-funded indemnification program—but only for the biggest players in the egg game. This isn't about cutting subsidies; it’s about creating a specific safety net for corporate giants when avian flu hits.
The Golden Ticket Threshold
This aid is highly exclusive. To qualify as a “covered entity” under Section 2, a company and all its related affiliates must clear two very high bars: over $100,000,000 in yearly revenue AND at least 1,500 employees. Think about that: this isn't for the regional operation or the mid-sized farm; this is specifically designed for the industry’s major corporations. If you’re a smaller producer—say, $50 million in revenue and 500 employees—you’re completely shut out of this particular program, even if avian flu wipes out your entire flock. This bill essentially ensures that taxpayers socialize the risk for the largest, most profitable companies while leaving smaller competitors to fend for themselves.
The Catch: No Stock Perks on Taxpayer Dime
If one of these mega-producers takes the government money, there’s a condition attached, which is where the bill attempts to show some teeth. For two years after receiving the payment, the company cannot pay out dividends on common stock or buy back its own stock listed on an exchange (Section 2). This is a clear attempt to prevent a company from taking federal aid for operational losses and immediately turning around to reward shareholders. For the regular person, this means the aid is theoretically going toward stabilizing the business and the egg supply, not just boosting stock prices.
Extra Hurdles for Public and Private Equity Giants
For companies that are publicly traded or owned by private equity—the ones often managing the most complex financial structures—the rules get even tighter. They have to certify that the aid is “absolutely necessary to keep their business running” due to economic uncertainty and that they genuinely can’t find enough other money (liquidity) to operate without “seriously hurting the company” (Section 2). This is a crucial detail because it forces the largest companies to publicly declare a state of near-financial emergency to get the funds, suggesting they must exhaust private options first.
The Price of Lying
If these large, publicly accountable entities knowingly lie on that certification form, the penalties are severe. They must pay back the entire compensation amount plus interest. More importantly, knowingly making a false statement carries a potential penalty of up to 5 years in prison and a fine of up to $1,000,000 (Section 2). This provision adds a necessary layer of accountability, ensuring that the financial executives who sign off on these claims face serious consequences if they misuse the taxpayer-funded safety net. It’s a strong deterrent against corporate fraud when accessing this specific aid.