Rare Earth Magnet Manufacturing Production Tax Credit Act of 2023
Impact
The passage of HB 2849 is expected to have significant implications for domestic manufacturing and sourcing practices. The bill aims to reduce dependency on foreign sources of rare earth materials, particularly from non-allied foreign nations. By providing a financial incentive for local production, the bill is projected to stimulate economic activity in the rare earth magnet sector, potentially leading to job creation and investment in manufacturing facilities across the country. Furthermore, it encourages compliance with U.S. sourcing regulations, thus ensuring that more of the raw materials used in production are sourced domestically, which can enhance national security related to supply chains.
Summary
House Bill 2849, formally known as the Rare Earth Magnet Manufacturing Production Tax Credit Act of 2023, introduces a tax credit aimed at encouraging the domestic production of rare earth magnets. This bill amends the Internal Revenue Code to provide financial incentives for manufacturers producing these magnets in the United States. Specifically, it establishes a credit of $20 per kilogram for magnets produced domestically and increases to $30 per kilogram if over 90% of the component materials are sourced from within the United States. The intent is to bolster the domestic supply chain for these critical components, which are essential for various high-tech applications, including renewable energy technologies, electric vehicles, and consumer electronics.
Contention
Despite the positive outlook presented by proponents of HB 2849, the bill does face potential contention. Opponents may argue that the required sourcing restrictions could limit the availability of certain rare earth elements necessary for production, thereby increasing costs for manufacturers who may struggle to comply with these regulations. Additionally, stakeholders are likely to question the long-term viability of the tax credit, particularly concerning ongoing support and adjustments to the credit amount as manufacturing scales. This dynamic could lead to debates around how best to balance national interests in securing a domestic supply chain with the economic realities faced by businesses operating in this specialized sector.
Medical Manufacturing, Economic Development, and Sustainability Act of 2023 or the MMEDS Act of 2023 This bill provides incentives for relocating medical manufacturing facilities in the United States and for manufacturing medical products (i.e., drugs and devices) in economically distressed zones. Specifically, the bill allows a income tax credit for 40% of the sum of wages paid in a medical manufacturing economically distressed zone, employee fringe benefit expenses, and depreciation and amortization allowances with respect to qualified medical manufacturing facility property, and a credit for economically distressed zone products and services acquired by domestic medical manufacturers. The bill increases the credit rate for minority businesses.
Relative to tenant and contract manufacturers of beer, wine, and liquor; allowing pharmacists to administer influenza, COVID-19, and other FDA licensed vaccines without explicit approval from the general court; and, restricting the purchase of real property on or around military installations.