Trade Encourages Allied Manufacturing and Security Act or the TEAMS Act
This bill directs the U.S. Trade Representative (USTR) to take certain actions to strengthen supply chains for critical goods. It also incentivizes the manufacturing of critical goods.
Specifically, the bill requires the USTR to develop and implement a strategy to support the resilience, diversity, security, and strength of supply chains. This strategy must be submitted to Congress and published on the USTR's website.
Additionally, the bill authorizes the USTR to provide duty-free treatment for any eligible article (i.e., any critical good that is the growth, product, or manufacture of a beneficiary country) from any ally or key international partner. This authority terminates on September 30, 2030.
The bill temporarily allows for increased expensing of the costs of certain qualified manufacturing property.
The bill also allows a new tax credit for American security products manufactured in the United States or in ally or key international partner countries.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6309 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 6309
To establish a United States strategy to counter threats to supply
chains for critical goods, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 16, 2021
Mr. Kinzinger introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To establish a United States strategy to counter threats to supply
chains for critical goods, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Trade Encourages Allied
Manufacturing and Security Act'' or the ``TEAMS Act''.
SEC. 2. SENSE OF CONGRESS.
It is the sense of Congress that--
(1) resilient supply chains are paramount to our national
security and economic security;
(2) a coordinated and whole-of-Government approach to
safeguarding supply chains will benefit all Americans and
ensure disruptions are avoided or mitigated; and
(3) the United States Trade Representative, in coordination
with other appropriate interagency stakeholders, should
incentivize the manufacturing of critical goods to increase
manufacturing capacity of the United States, and of an ally or
key international partner country, including by seeking new and
revised trade agreements.
SEC. 3. UNITED STATES STRATEGY TO COUNTER THREATS TO SUPPLY CHAINS FOR
CRITICAL GOODS.
(a) In General.--In accordance with Executive Order 14017 (86 Fed.
Reg. 11849; relating to America's supply chains), the United States
Trade Representative, not later than 1 year after enactment of this
Act, shall develop and implement a strategy taking a governmentwide
approach to support the resilience, diversity, security, and strength
of supply chains.
(b) Elements.--The strategy required by subsection (a) shall
include a plan to do the following:
(1) Support a unified national effort to reduce reliance on
concentrated supply chains and protect against threats from
countries of concern relating to supply chains.
(2) Support sufficient access to critical goods by
mitigating supply chain vulnerabilities, including supply
chains concentrated in countries of concern.
(3) Collaborate with other relevant Federal agencies to
assist allies or key international partners build capacity for
manufacturing critical goods.
(4) Incentivize through trade preferences, and identify tax
incentives, loans and loan guarantees, equity investment, and
other means, as appropriate--
(A) for domestic manufacturers that manufacture
critical goods to--
(i) relocate manufacturing facilities,
industrial equipment, or operations related to
the production of critical goods from countries
of concern to the United States or to other
allies or key international partners; and
(ii) support manufacturing facilities,
industrial equipment, or operations to increase
the production of critical goods and meet
demand for such goods; and
(B) for domestic manufacturers that do not
manufacture critical goods to make necessary or
appropriate modifications to existing manufacturing
facilities, industrial equipment, manufacturing
technology or operations in order to manufacture 1 or
more critical good.
(5) Strengthen and increase trade and other forms of
engagement between the United States and allies or key
international partners in order to mitigate--
(A) supply chain vulnerabilities; and
(B) the effects of supply chain shocks.
(6) Identify, in coordination with other relevant Federal
agencies, actions relating to supply chains with which the
United States might--
(A) raise living standards;
(B) increase employment opportunities;
(C) address the underlying causes of irregular
migration; and
(D) improve critical industry supply chain response
to supply chain shocks.
(7) Protect against supply chain shocks from countries of
concern relating to supply chains.
(8) Provide recommendations to effectuate the strategy
under this section.
(c) Submission of Strategy.--
(1) In general.--Not later than 450 days after the date of
the enactment of this Act, the United States Trade
Representative shall submit to the Committee on Ways and Means
of the House of Representatives and the Committee on Finance of
the Senate, and publish on the website of the Office of the
United States Trade Representative, a report containing the
strategy developed under this section.
(2) Update.--Not less than once every 4 years after the
date on which the strategy is submitted under paragraph (1),
the United States Trade Representative shall submit to Congress
an update to such strategy.
(3) Form.--The report submitted under paragraph (1), and
any update submitted under paragraph (2), shall be submitted in
unclassified form and may include a classified annex.
SEC. 4. ALLIES TRADE PREFERENCE PROGRAM.
(a) Authority To Provide Duty-Free Treatment.--Notwithstanding any
other provision of law and subject to subsection (b), the President,
acting through the United States Trade Representative, is authorized to
provide duty-free treatment for any eligible article from any ally or
key international partner in accordance with the provisions of this
section.
(b) Designation of Beneficiary Countries.--
(1) Authority to designate.--The United States Trade
Representative shall engage in an interagency process by which
to designate an ally or key international partner described in
section 7 of this Act as a beneficiary country for purposes of
this section.
(2) Countries ineligible for designation.--The United
States Trade Representative may not designate a country as a
beneficiary country under this section if such country--
(A) does not have a democratically elected
government or a market economy;
(B) has nationalized, expropriated, or otherwise
seized ownership or control of property owned by a
United States citizen or by a corporation, partnership,
or association that is 50 percent or more beneficially
owned by United States citizens;
(C) affords preferential treatment to the products
of a developed country, other than the United States,
which has, or is likely to have, a significant adverse
effect on United States commerce, unless--
(i) the United States Trade Representative
receives satisfactory assurances that such
preferential treatment will be eliminated or
that action will be taken to assure that there
will be no such significant adverse effect; and
(ii) the United States Trade Representative
reports such assurances to Congress;
(D) is not a signatory to a treaty, convention,
protocol, or other agreement regarding the extradition
of United States citizens;
(E) does not afford and enforce in law and practice
internationally recognized worker rights for workers in
the country; or
(F) is a country of concern.
(c) Eligible Articles.--
(1) In general.--Subject to paragraphs (2) and (3), the
duty-free treatment provided under this section shall apply to
any critical good that is the growth, product, or manufacture
of a beneficiary country.
(2) Rules of origin.--The duty-free treatment provided
under this section shall apply to any eligible article that is
the growth, product, or manufacture of a beneficiary country
if--
(A) such article is imported directly from such
country into the customs territory of the United
States; and
(B) the sum of--
(i) the cost or value of the materials
produced in the beneficiary country or any two
or more such countries that are members of the
same association of countries, plus
(ii) the direct costs of processing
operations performed in such beneficiary
country or such member countries,
is not less than 35 percent of the appraised value of
such article at the time it is entered.
(3) Ineligible articles.--An article may not be treated as
the growth, product, or manufacture of a beneficiary country by
virtue of having merely undergone--
(A) simple combining or packaging operations; or
(B) mere dilution with water or another substance
that does not materially alter the characteristics of
the article.
(d) Definitions.--In this section, the terms ``entered'' and
``internationally recognized worker rights'' have the meanings given
such terms in section 507 of the Trade Act of 1974 (19 U.S.C. 2467).
(e) Termination.--No duty-free treatment provided under this
section shall remain in effect after September 30, 2030.
SEC. 5. TEMPORARY INCREASED EXPENSING FOR RELOCATING MANUFACTURING TO
ALLY OR KEY INTERNATIONAL PARTNER COUNTRIES.
(a) In General.--For purposes of section 168(k) of the Internal
Revenue Code of 1986, in the case of any qualified United States
manufacturing property which is placed in service after December 31,
2020, and before January 1, 2026--
(1) such property shall be treated as qualified property
(within the meaning of such section),
(2) the applicable percentage otherwise determined under
section 168(k)(6) of such Code with respect to such property
shall be--
(A) if placed in the United States, 100 percent,
and
(B) if placed within an ally or key international
partner country, 60 percent, and
(3) paragraph (8) of such section shall not apply.
(b) Qualified United States Manufacturing Property Defined.--In
this section the term ``qualified United States manufacturing
property'' means a domestic corporation that is engaged in the business
of manufacturing critical goods with property outside an ally or key
international partner country that places in service tangible property
within an ally or key international partner country.
(c) Termination.--This section shall not apply to any property
placed in service after December 31, 2025.
SEC. 6. AMERICAN SECURITY PRODUCT TAX 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:
``SEC. 45U. AMERICAN SECURITY PRODUCT TAX CREDIT.
``(a) In General.--For purposes of section 38, the American
security product tax credit for any taxable year is an amount equal
to--
``(1) 30 percent of the qualified costs of American
security products manufactured in the United States, or
``(2) 15 percent of the qualified costs of American
security products manufactured in an ally or key international
partner country.
``(b) Maximum Credit.--The aggregate credit determined under
subsection (a) for any taxable year with respect to any taxpayer shall
not exceed the excess (if any) of the taxpayer's net income tax over
the greater of--
``(1) the tentative minimum tax for the taxable year, or
``(2) 25 percent of so much of the taxpayer's net regular
tax liability as exceeds $25,000.
``(c) Definitions.--In this section:
``(1) American security product.--The term `American
security product' means--
``(A) a critical good as such term is defined in
section 7 of the Trade Encourages Allied Manufacturing
and Security Act; and
``(B) at least 50 percent of the value of which
shall be derived from components manufactured in the
United States.
``(2) Qualified costs.--The term `qualified costs' means
costs incurred in the production of an American security
product.
``(3) United states.--The term `United States' shall
include the Commonwealth of Puerto Rico and the Commonwealth of
the Northern Mariana Islands.''.
(b) Denial of Double Benefit.--Section 280C of such Code is amended
by adding at the end the following new subsection:
``(i) Credit for american security
products.--No deduction shall be allowed for
that portion of expenses otherwise allowable as
a deduction taken into account in determining
the credit under section 45U for the taxable''.
(c) Credit Made Part of General Business Credit.--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:
``(34) the American security product tax credit determined
under section 45U.''.
(d) Clerical Amendment.--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:
``45U. American security product tax credit.''.
(e) Effective Date.--The amendments made by this section shall
apply to expenses made or incurred beginning on the first day of the
first full calendar quarter after the date of enactment of this
section.
SEC. 7. DEFINITIONS.
In this Act:
(1) Ally or key international partner.--
(A) In general.--The term ``ally or key
international partner'' means a country designated by
the Federal Government, after an appropriate
interagency consultation has taken place among relevant
Federal agencies, and--
(i) is--
(I) a member state of the North
Atlantic Treaty Organization (NATO);
(II) a country designated as a
major non-NATO ally pursuant to section
517(a) of the Foreign Assistance Act of
1961 (22 U.S.C. 2321k(a)); or
(III) a country that is located in
the Western Hemisphere and included on
the list of countries described in
subparagraph (B); and
(ii) is not a country of concern.
(B) List of countries described.--The list of
countries described in subclause (A)(i)(III) are the
following: Anguilla, Antigua and Barbuda, Argentina,
Aruba, The Bahamas, Barbados, Belize, Bermuda, Bolivia,
Brazil, The British Virgin Islands, Canada, Chile,
Colombia, Costa Rica, Dominica, Dominican Republic,
Ecuador, El Salvador, Grenada, Guatemala, Guyana,
Haiti, Honduras, Jamaica, Mexico, Montserrat,
Netherlands Antilles, Panama, Paraguay, Peru, Saint
Kitts and Nevis, Saint Lucia, Saint Vincent and the
Grenadines, Suriname, Trinidad and Tobago, Turks and
Caicos Islands, Uruguay, and the sovereign government
recognized by the United States in Venezuela.
(2) Concentrated.--With respect to a supply chain, the term
``concentrated'' means a supply chain that is--
(A) under a level of control or influence by the
government of a country of concern that presents an
unreasonable risk to national security or economic
security; and
(B) subject to undue manipulation by the government
of a country of concern.
(3) Country of concern.--The term ``country of concern''
means a country in which a concentrated supply chain is located
and--
(A) that poses a significant national security or
economic security threat to the United States; and
(B) whose government, or elements of such
government, has proven, or has been credibly alleged to
have, committed crimes against humanity or genocide.
(4) Critical good.--
(A) In general.--The term ``critical good'' means
any raw, in process, or manufactured material
(including any mineral, metal, or advanced processed
material), article, commodity, supply, product, or item
of supply that--
(i) the absence of which would have a
significant effect on--
(I) the national security or
economic security of the United States;
and
(II) critical infrastructure; and
(ii) is designated as a critical good in
accordance with the requirements of
subparagraph (B).
(B) Designation requirements.--Not later than 270
days after the date of the enactment of this Act, the
President shall--
(i) designate critical goods for purposes
of this Act;
(ii) provide for a period of public comment
and review in carrying out clause (i); and
(iii) update the designations made under
clause (i) not less frequently than once every
four years.
(5) Critical infrastructure.--The term ``critical
infrastructure'' has the meaning given to that term in the
Critical Infrastructures Protection Act of 2001 (42 U.S.C.
5195c(e)).
(6) Manufacture.--The term ``manufacture'' means any
activity that is necessary for or incidental to the
development, production, processing, distribution, or delivery
of any raw, in process, or manufactured material (including
minerals, metals, and advanced processed materials), article,
commodity, supply, product, critical good, or item of supply.
(7) Supply chain.--The term ``supply chain'' means a supply
chain for a critical good.
(8) Supply chain shock.--The term ``supply chain shock''
includes the following:
(A) A natural disaster or extreme weather event.
(B) An accidental or human-caused event.
(C) An economic disruption.
(D) A pandemic.
(E) A biological threat.
(F) A cyberattack.
(G) A great power conflict.
(H) A terrorist or geopolitical attack.
(I) A public health emergency declared by the
Secretary of Health and Human Services pursuant to
section 319 of the Public Health Service Act (42 U.S.C.
247d).
(J) An event for which the President declares a
major disaster or an emergency under section 401 or
501, respectively, of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 5170 and
5191).
(K) A national emergency declared by the President
under the National Emergencies Act (50 U.S.C. 1601 et
seq.).
(L) Any other supply chain disruption or threat
that affects the national security or economic security
of the United States.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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