Manufacturing API, Drugs, and Excipients in America Act or the MADE in America Act
This bill establishes a tax credit for certain manufacturers of pharmaceuticals or medical products.
Specifically, the bill establishes a tax credit for manufacturers of pharmaceuticals, active pharmaceutical ingredients, excipients (i.e., inactive ingredients), medical diagnostic devices, or personal protective equipment, if they are located in a designated distressed zone. The tax credit is equal to 25% of the manufacturer's production expenditures; the credit increases to 30% of expenditures if a substantial portion of the manufacturer's employees reside in a distressed zone.
The bill defines distressed zone as an area that has been designated as a qualified opportunity zone by the Internal Revenue Service (i.e., an economically distressed community in which certain new investments may be eligible for preferential tax treatment) and that has a poverty rate of over 30%.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2707 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 2707
To mitigate drug shortages and provide incentives for maintaining,
expanding, and relocating the manufacturing of active pharmaceutical
ingredients, excipients, medical diagnostic devices, pharmaceuticals,
and personal protective equipment in the United States, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 19, 2023
Mr. Carter of Georgia (for himself, Mr. Soto, Mrs. Miller of West
Virginia, Mr. Cartwright, Mr. Hudson, Mr. Bilirakis, Mr. Griffith, Mr.
Balderson, Mr. Van Drew, Mr. Crawford, Mrs. Harshbarger, and Mr.
Langworthy) introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To mitigate drug shortages and provide incentives for maintaining,
expanding, and relocating the manufacturing of active pharmaceutical
ingredients, excipients, medical diagnostic devices, pharmaceuticals,
and personal protective equipment in the United States, 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 ``Manufacturing API, Drugs, and
Excipients in America Act'' or the ``MADE in America Act''.
SEC. 2. CREDIT FOR PHARMACEUTICAL AND MEDICAL DEVICE PRODUCTION
ACTIVITIES IN DISTRESSED ZONES.
(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. 45BB. DISTRESSED ZONE PHARMACEUTICAL AND MEDICAL DEVICE
PRODUCTION CREDIT.
``(a) In General.--For purposes of section 38, the distressed zone
pharmaceutical and medical device production credit for the taxable
year shall be an amount equal to the applicable percentage of the
qualified production activity expenditures of the taxpayer for the
taxable year.
``(b) Applicable Percentage.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2), the
term `applicable percentage' means 25 percent.
``(2) Increased amount where employees reside in distressed
zone.--In the case of any qualified pharmaceutical or medical
device production business a substantial portion of the
employees of which reside in a distressed zone, the applicable
percentage shall be 30 percent.
``(c) Qualified Production Activity Expenditures.--For purposes of
this section--
``(1) In general.--The term `qualified production activity
expenditures' means--
``(A) wages paid or incurred to an employee of the
taxpayer for services performed by such employee in the
conduct of a qualified pharmaceutical or diagnostic
medical device production business in a distressed zone
(but only if the employee's principal place of
employment is in a distressed zone), and
``(B) qualified pharmaceutical or medical device
production expenditures.
``(2) Qualified pharmaceutical or medical device production
business.--
``(A) In general.--The term `qualified
pharmaceutical or medical device production business'
means the trade or business of producing qualified
pharmaceuticals in commercial quantities.
``(B) Qualified pharmaceuticals.--
``(i) In general.--The term `qualified
pharmaceuticals' means pharmaceuticals, active
pharmaceutical ingredients, excipients, medical
diagnostic devices, or personal protective
equipment.
``(ii) Pharmaceutical.--The term
`pharmaceuticals'--
``(I) means any drug (as defined in
section 201 of the Federal Food, Drug,
and Cosmetic Act), and
``(II) includes a biological
product (as defined in section 351 of
the Public Health Service Act).
``(iii) Active pharmaceutical ingredient.--
The term `active pharmaceutical ingredients'
has the meaning given to such term in section
207.1 of title 21, Code of Federal Regulations
(or any successor regulations).
``(iv) Excipient.--The term `excipient'--
``(I) means any inactive ingredient
that is intentionally added to a
pharmaceutical that is not intended to
exert therapeutic effects at the
intended dosage, other than by acting
to improve product delivery, and
``(II) includes any such filler,
extenders, diluent, wetting agent,
solvent, emulsifier, preservative,
flavor, absorption enhancer, sustained
release matrix, and coloring agent.
``(v) Medical diagnostic device.--The term
`medical diagnostic device' means any device
(as defined in section 201(h) of the Federal
Food, Drug, and Cosmetic Act) intended for use
in the diagnosis of disease or other
conditions.
``(vi) Personal protective equipment.--The
term `personal protective equipment' means--
``(I) any device (as defined in
section 201(h) of the Federal Food,
Drug, and Cosmetic Act) that is a face
mask, filtering facepiece respirator,
face shield, surgical mask, gown, other
apparel, or glove that is intended for
a medical purpose, and
``(II) any particulate filtering
air purifying respiratory protective
device that is approved by the National
Institute for Occupational Safety and
Health under part 84 of title 42, Code
of Federal Regulations (or successor
regulations).
``(3) Certain health plan expenses treated as wages.--
``(A) In general.--The term `wages' shall include
so much of the eligible employer's qualified health
plan expenses as are properly allocable to such wages.
``(B) Qualified health plan expenses.--For purposes
of this paragraph, the term `qualified health plan
expenses' means amounts paid or incurred by the
eligible employer to provide and maintain a group
health plan (as defined in section 5000(b)(1)), but
only to the extent that such amounts are excluded from
the gross income of employees by reason of section
106(a) of such Code.
``(C) Allocation rules.--For purposes of this
paragraph, qualified health plan expenses shall be
allocated to qualified wages in such manner as the
Secretary may prescribe. Except as otherwise provided
by the Secretary, such allocation shall be treated as
properly made if made on the basis of being pro rata
among employees and pro rata on the basis of periods of
coverage (relative to the periods to which such wages
relate).
``(4) Qualified pharmaceutical or medical device production
expenditures.--
``(A) Definition.--The term `qualified
pharmaceutical or medical device production
expenditures' means amounts paid or incurred (whether
or not chargeable to capital account) for qualified
property used in the conduct of a qualified
pharmaceutical or medical device production business in
a distressed zone (but only if the primary use of such
property is in a distressed zone).
``(B) Qualified property.--
``(i) In general.--The term `qualified
property' means any tangible personal property
(other than a building or its structural
components) used in the conduct of a qualified
pharmaceutical or medical device production
business in a distressed zone (but only if the
primary use of such property is in a distressed
zone).
``(ii) Exception.--Such term shall not
include any property described in section 50(b)
(determined as if the United States included
Puerto Rico).
``(d) Distressed Zone.--For purposes of this section, the term
`distressed zone' means a population census tract which--
``(1) has been designated as a qualified opportunity zone
under section 1400Z-1, and
``(2) has a poverty rate in excess of 30 percent for the
calendar year prior to the calendar year that includes the date
of enactment of this section.
``(e) Special Rules.--
``(1) Application to united states shareholders of
controlled foreign corporations.--
``(A) In general.--In the case of a domestic
corporation that is a United States shareholder of a
qualified controlled foreign corporation, the credit
under subsection (a) (determined without regard to this
paragraph) shall be increased by an amount equal to 30
percent of the corporation's pro rata share (determined
under rules similar to the rules of section 951(a)(2))
of qualified production activity expenditures of such
controlled foreign corporation for the taxable year of
the qualified controlled foreign corporation ending
with or within the taxable year of the domestic
corporation.
``(B) Qualified corporation.--For purposes of
subparagraph (A), the term `qualified controlled
foreign corporation' means, for any taxable year, a
controlled foreign corporation which does not have
gross income that is effectively connected with the
conduct of a trade or business within the United States
for such taxable year.
``(2) Reduction in basis.--If a credit is determined under
this section with respect to any property by reason of any
qualified production activity expenditures described in
subsection (b)(1)(B), the basis of such property shall be
reduced by the amount of the credit so determined.
``(3) Coordination with other credits.--Any qualified
production activity expenditures taken into account in
determining the amount of the credit under subsection (a) shall
not be taken into account in determining a credit under any
other provision of this chapter.
``(f) Recapture.--
``(1) In general.--If, during any taxable year, property
taken into account under subsection (c)(1)(B) is disposed of,
or otherwise ceases to be used by the taxpayer in the active
trade or business of producing qualified pharmaceuticals in
commercial quantities, before the close of the recapture
period, then the tax under this chapter for such taxable year
shall be increased by the recapture percentage of the aggregate
decrease in the credits allowed under section 38 for all prior
taxable years which would have resulted solely from reducing to
zero any credit determined under this section with respect to
such property.
``(2) Recapture percentage.--For purposes of subparagraph
(A), the recapture percentage shall be determined in the same
manner as under section 50(a)(1)(B).
``(3) Application to united states shareholders.--In the
case of any taxpayer to whom a credit is allowed by reason of
subsection (e)(1), paragraph (1) shall be applied by
substituting `the controlled foreign corporation with respect
to which the taxpayer is a United States shareholder' for `the
taxpayer'.
``(4) Application of other rules.--For purposes of this
paragraph, rules similar to the rules of paragraphs (3), (4),
and (5) (other than subparagraph (A) thereof) of section
50(a)(1) shall apply.''.
(b) Credit Allowed Against Alternative Minimum Tax.--Section
38(c)(4)(B) of such Code is amended by redesignating clauses (x), (xi),
and (xii) as clauses (xi), (xii), and (xiii), respectively, and by
inserting after clause (ix) the following new clause:
``(x) the credit determined under section
45BB,''.
(c) Credit Allowed Against Base Erosion Anti-Abuse Tax.--Section
59A(b)(1)(B)(ii) of such Code is amended by striking ``plus'' at the
end of subclause (I), by redesignating subclause (II) as subclause
(III), and by inserting after subclause (I) (as so amended) the
following new subclause:
``(II) the credit allowed under
section 38 for the taxable year which
is properly allocable to the distressed
zone pharmaceutical and medical device
production credit determined under
section 45BB(a), plus''.
(d) Denial of Deduction.--Section 280C of such Code is amended by
adding at the end the following new subsection:
``(i) Distressed Zone Pharmaceutical and Medical Device Production
Credit.--No deduction shall be allowed for that portion of the
qualified production activity expenditures (as defined in section
45BB(b)) otherwise allowable as a deduction for the taxable year which
is equal to the amount of the distressed zone pharmaceutical and
medical device production credit determined for such taxable year under
section 45BB(a).''.
(e) Part of General Business Credit.--Section 38(b) of such Code is
amended by striking ``plus'' at the end of paragraph (40), by striking
the period at the end of paragraph (41) and inserting ``, plus'', and
by adding at the end the following new paragraph:
``(42) the distressed zone pharmaceutical and medical
device production credit determined under section 45BB(a).''.
(f) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 is amended by adding at the end
the following new item:
``Sec. 45BB. Distressed zone pharmaceutical and medical device
production credit.''.
(g) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after the date of the enactment of
this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
Referred to the Subcommittee on Health.
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