Us Congress 2023-2024 Regular Session

Us Congress Senate Bill SB33 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	II
2	2	118THCONGRESS
3	3	1
4	4	STSESSION S. 33
5	5	To rescue domestic medical product manufacturing activity by providing incen-
6	6	tives in economically distressed areas of the United States and its posses-
7	7	sions.
8	8	IN THE SENATE OF THE UNITED STATES
9	9	JANUARY24 (legislative day, JANUARY3), 2023
10	10	Mr. R
11	11	UBIOintroduced the following bill; which was read twice and referred
12	12	to the Committee on Finance
13	13	A BILL
14	14	To rescue domestic medical product manufacturing activity
15	15	by providing incentives in economically distressed areas
16	16	of the United States and its possessions.
17	17	Be it enacted by the Senate and House of Representa-1
18	18	tives of the United States of America in Congress assembled, 2
19	19	SECTION 1. SHORT TITLE. 3
20	20	This Act may be cited as the ‘‘Medical Manufac-4
21	21	turing, Economic Development, and Sustainability Act of 5
22	22	2023’’ or the ‘‘MMEDS Act of 2023’’. 6
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26	26	SEC. 2. ECONOMICALLY DISTRESSED ZONES. 1
27	27	(a) I
28	28	NGENERAL.—Chapter 1 of the Internal Rev-2
29	29	enue Code of 1986 is amended by adding at the end the 3
30	30	following new subchapter: 4
31	31	‘‘Subchapter AA—Medical Product Manufac-5
32	32	turing in Economically Distressed Zones 6
33	33	‘‘SUBCHAPTER AA—MEDICAL PRODUCT MANUFACTURING IN ECONOMICALLY
34	34	DISTRESSED ZONES
35	35	‘‘Sec. 1400AA–1. Medical product manufacturing in economically distressed
36	36	zone credit.
37	37	‘‘Sec. 1400AA–2. Credit for economically distressed zone products and services
38	38	acquired by domestic medical product manufacturers.
39	39	‘‘Sec. 1400AA–3. Special rules to secure the national supply chain.
40	40	‘‘Sec. 1400AA–4. Designation of economically distressed zones.
41	41	‘‘SEC. 1400AA–1. MEDICAL PRODUCT MANUFACTURING IN
42	42	7
43	43	ECONOMICALLY DISTRESSED ZONE CREDIT. 8
44	44	‘‘(a) A
45	45	LLOWANCE OF CREDIT.—There shall be al-9
46	46	lowed as a credit against the tax imposed by subtitle A 10
47	47	for the taxable year an amount equal to 40 percent of the 11
48	48	sum of— 12
49	49	‘‘(1) the aggregate amount of the taxpayer’s 13
50	50	medical product manufacturing economically dis-14
51	51	tressed zone wages for such taxable year, 15
52	52	‘‘(2) the allocable employee fringe benefit ex-16
53	53	penses of the taxpayer for such taxable year, and 17
54	54	‘‘(3) the depreciation and amortization allow-18
55	55	ances of the taxpayer for the taxable year with re-19
56	56	spect to qualified medical product manufacturing fa-20
57	57	cility property. 21
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61	61	‘‘(b) DENIAL OFDOUBLEBENEFIT.—Any wages or 1
62	62	other expenses taken into account in determining the cred-2
63	63	it under this section may not be taken into account in de-3
64	64	termining the credit under sections 41, and any other pro-4
65	65	vision determined by the Secretary to be substantially 5
66	66	similar. 6
67	67	‘‘(c) D
68	68	EFINITIONS ANDSPECIALRULES.—For pur-7
69	69	poses of this section— 8
70	70	‘‘(1) E
71	71	CONOMICALLY DISTRESSED ZONE 9
72	72	WAGES.— 10
73	73	‘‘(A) I
74	74	N GENERAL.—The term ‘economi-11
75	75	cally distressed zone wages’ means amounts 12
76	76	paid or incurred for wages during the taxable 13
77	77	year which are— 14
78	78	‘‘(i) in connection with the active con-15
79	79	duct of a trade or business of the taxpayer, 16
80	80	and 17
81	81	‘‘(ii) paid or incurred for an employee 18
82	82	the principal place of employment of whom 19
83	83	is in a qualified medical product manufac-20
84	84	turing facility of such taxpayer. 21
85	85	‘‘(B) L
86	86	IMITATION ON AMOUNT OF WAGES 22
87	87	TAKEN INTO ACCOUNT .— 23
88	88	‘‘(i) I
89	89	N GENERAL.—The amount of 24
90	90	wages which may be taken into account 25
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94	94	under subparagraph (A) with respect to 1
95	95	any employee for any taxable year shall 2
96	96	not exceed the contribution and benefit 3
97	97	base determined under section 230 of the 4
98	98	Social Security Act for the calendar year 5
99	99	in which such taxable year begins. 6
100	100	‘‘(ii) T
101	101	REATMENT OF PART -TIME EM-7
102	102	PLOYEES, ETC.—If— 8
103	103	‘‘(I) any employee is not em-9
104	104	ployed by the taxpayer on a substan-10
105	105	tially full-time basis at all times dur-11
106	106	ing the taxable year, or 12
107	107	‘‘(II) the principal place of em-13
108	108	ployment of any employee is not with-14
109	109	in an economically distressed zone at 15
110	110	all times during the taxable year, 16
111	111	the limitation applicable under clause (i) 17
112	112	with respect to such employee shall be the 18
113	113	appropriate portion (as determined by the 19
114	114	Secretary) of the limitation which would 20
115	115	otherwise be in effect under clause (i). 21
116	116	‘‘(C) T
117	117	REATMENT OF CERTAIN EMPLOY -22
118	118	EES.—The term ‘economically distressed zone 23
119	119	wages’ shall not include any wages paid to em-24
120	120	ployees who are assigned by the employer to 25
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124	124	perform services for another person, unless the 1
125	125	principal trade or business of the employer is to 2
126	126	make employees available for temporary periods 3
127	127	to other persons in return for compensation. 4
128	128	‘‘(D) W
129	129	AGES.—For purposes of this para-5
130	130	graph, the term ‘wages’ shall not include any 6
131	131	amounts which are allocable employee fringe 7
132	132	benefit expenses. 8
133	133	‘‘(2) A
134	134	LLOCABLE EMPLOYEE FRINGE BENEFIT 9
135	135	EXPENSES.— 10
136	136	‘‘(A) I
137	137	N GENERAL.—The term ‘allocable 11
138	138	employee fringe benefit expenses’ means the ag-12
139	139	gregate amount allowable as a deduction under 13
140	140	this chapter to the taxpayer for the taxable year 14
141	141	for the following amounts which are allocable to 15
142	142	employment in a qualified medical product 16
143	143	manufacturing facility: 17
144	144	‘‘(i) Employer contributions under a 18
145	145	stock bonus, pension, profit-sharing, or an-19
146	146	nuity plan. 20
147	147	‘‘(ii) Employer-provided coverage 21
148	148	under any accident or health plan for em-22
149	149	ployees. 23
150	150	‘‘(iii) The cost of life or disability in-24
151	151	surance provided to employees. 25
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155	155	‘‘(B) ALLOCATION.—For purposes of sub-1
156	156	paragraph (A), an amount shall be treated as 2
157	157	allocable to a qualified medical product manu-3
158	158	facturing facility only if such amount is with re-4
159	159	spect to employment of an individual for serv-5
160	160	ices provided, and the principal place of employ-6
161	161	ment of whom is, in such facility. 7
162	162	‘‘(3) Q
163	163	UALIFIED MEDICAL PRODUCT MANUFAC -8
164	164	TURING FACILITY.—The term ‘qualified medical 9
165	165	product manufacturing facility’ means any facility 10
166	166	that— 11
167	167	‘‘(A) researches and develops or produces 12
168	168	medical products or essential components of 13
169	169	medical products, and 14
170	170	‘‘(B) is located within an economically dis-15
171	171	tressed zone. 16
172	172	‘‘(4) Q
173	173	UALIFIED MEDICAL PRODUCT MANUFAC -17
174	174	TURING FACILITY PROPERTY .—The term ‘qualified 18
175	175	medical product manufacturing facility property’ 19
176	176	means any property originally used in (or consisting 20
177	177	of) a qualified medical product manufacturing facil-21
178	178	ity if such property is directly connected to the re-22
179	179	search, development, or production of a medical 23
180	180	product. 24
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184	184	‘‘(5) MEDICAL PRODUCT; ESSENTIAL COMPO-1
185	185	NENT.— 2
186	186	‘‘(A) M
187	187	EDICAL PRODUCT.—The term ‘med-3
188	188	ical product’ means— 4
189	189	‘‘(i) a drug that— 5
190	190	‘‘(I) is a prescription drug sub-6
191	191	ject to regulation under section 505 of 7
192	192	the Federal Food, Drug, and Cos-8
193	193	metic Act (21 U.S.C. 355) or section 9
194	194	351 of the Public Health Service Act 10
195	195	(42 U.S.C. 262), 11
196	196	‘‘(II) is subject to regulation 12
197	197	under section 802 of the Federal 13
198	198	Food, Drug, and Cosmetic Act (21 14
199	199	U.S.C. 382), or 15
200	200	‘‘(III) is described in section 16
201	201	201(jj) of such Act (21 U.S.C. 17
202	202	321(jj)), or 18
203	203	‘‘(ii) a device, as defined in section 19
204	204	201(h) of such Act (21 U.S.C. 321(h)). 20
205	205	‘‘(B) E
206	206	SSENTIAL COMPONENT .—The term 21
207	207	‘essential component’ means, with respect to a 22
208	208	medical product— 23
209	209	‘‘(i) an active pharmaceutical ingre-24
210	210	dient, or 25
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214	214	‘‘(ii) a protein, antibody, enzyme, hor-1
215	215	mone, or other organic material that is an 2
216	216	active ingredient in a biological product. 3
217	217	‘‘(6) A
218	218	GGREGATION RULES.— 4
219	219	‘‘(A) I
220	220	N GENERAL.—For purposes of this 5
221	221	section, members of an affiliated group shall be 6
222	222	treated as a single taxpayer. 7
223	223	‘‘(B) A
224	224	FFILIATED GROUP.—The term ‘af-8
225	225	filiated group’ means an affiliated group (as de-9
226	226	fined in section 1504(a), determined without re-10
227	227	gard to section 1504(b)(3)) one or more mem-11
228	228	bers of which are engaged in the active conduct 12
229	229	of a trade or business within an economically 13
230	230	distressed zone. 14
231	231	‘‘SEC. 1400AA–2. CREDIT FOR ECONOMICALLY DISTRESSED 15
232	232	ZONE PRODUCTS AND SERVICES ACQUIRED 16
233	233	BY DOMESTIC MEDICAL PRODUCT MANUFAC-17
234	234	TURERS. 18
235	235	‘‘(a) A
236	236	LLOWANCE OFCREDIT.—In the case of an eli-19
237	237	gible medical product manufacturer, there shall be allowed 20
238	238	as a credit against the tax imposed by subtitle A for the 21
239	239	taxable year an amount equal to the applicable percentage 22
240	240	of the aggregate amounts paid or incurred by the taxpayer 23
241	241	during such taxable year for qualified products or services. 24
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245	245	‘‘(b) APPLICABLEPERCENTAGE.—For purposes of 1
246	246	this section, the term applicable percentage means— 2
247	247	‘‘(1) 30 percent in the case of amounts paid or 3
248	248	incurred to persons not described in paragraph (2) 4
249	249	or (3), and 5
250	250	‘‘(2) 5 percent in the case of amounts paid or 6
251	251	incurred to a related person. 7
252	252	‘‘(c) E
253	253	LIGIBLEMEDICALPRODUCTMANUFAC-8
254	254	TURER.—For purposes of this section, the term ‘eligible 9
255	255	medical product manufacturer’ means any person in the 10
256	256	trade or business of producing medical products in the 11
257	257	United States. 12
258	258	‘‘(d) Q
259	259	UALIFIEDPRODUCT ORSERVICE.—For pur-13
260	260	poses of this section, the term ‘qualified product or service’ 14
261	261	means— 15
262	262	‘‘(1) any product which is produced in an eco-16
263	263	nomically distressed zone and which is integrated 17
264	264	into a medical product produced by the taxpayer, 18
265	265	and 19
266	266	‘‘(2) any service which is provided in an eco-20
267	267	nomically distressed zone and which is necessary to 21
268	268	the production of a medical product by the taxpayer 22
269	269	(including packaging). 23
270	270	‘‘(e) R
271	271	ELATEDPERSONS.—For purposes of this sec-24
272	272	tion, persons shall be treated as related to each other if 25
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276	276	such persons would be treated as a single employer under 1
277	277	the regulations prescribed under section 52(b). 2
278	278	‘‘(f) O
279	279	THERTERMS.—Terms used in this section 3
280	280	which are also used in section 1400AA–1 shall have the 4
281	281	same meaning as when used in such section. 5
282	282	‘‘SEC. 1400AA–3. SPECIAL RULES TO SECURE THE NATIONAL 6
283	283	SUPPLY CHAIN. 7
284	284	‘‘(a) I
285	285	NGENERAL.—In the case of a qualified repatri-8
286	286	ated pharmaceutical manufacturing facility, section 9
287	287	1400AA–1(a) shall be applied by substituting ‘60 percent’ 10
288	288	for ‘40 percent’. 11
289	289	‘‘(b) E
290	290	LECTIONTOEXPENSE INLIEU OFTAXCRED-12
291	291	IT FORDEPRECIATION.—In the case of a taxpayer which 13
292	292	elects (at such time and in such manner as the Secretary 14
293	293	may provide) the application of this subsection with re-15
294	294	spect to any qualified repatriated medical product manu-16
295	295	facturing facility or qualified population health product 17
296	296	manufacturing facility— 18
297	297	‘‘(1) section 1400AA–1(a)(3) shall not apply 19
298	298	with respect to any qualified medical product manu-20
299	299	facturing facility property with respect to such facil-21
300	300	ity, and 22
301	301	‘‘(2) for purposes of section 168(k)— 23
302	302	‘‘(A) such property shall be treated as 24
303	303	qualified property, and 25
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307	307	‘‘(B) the applicable percentage with respect 1
308	308	to such property shall be 100 percent. 2
309	309	‘‘(c) Q
310	310	UALIFIEDREPATRIATEDMEDICALPRODUCT 3
311	311	M
312	312	ANUFACTURING FACILITY.—For purposes of this sec-4
313	313	tion, the term ‘qualified repatriated medical product man-5
314	314	ufacturing facility’ means any qualified medical product 6
315	315	manufacturing facility (as defined in section 1400AA–1) 7
316	316	the production of which was moved to an economically dis-8
317	317	tressed zone from a foreign country that the United States 9
318	318	Trade Representative has determined could pose a risk to 10
319	319	the national supply chain because of political or social fac-11
320	320	tors. 12
321	321	‘‘SEC. 1400AA–4. DESIGNATION OF ECONOMICALLY DIS-13
322	322	TRESSED ZONES. 14
323	323	‘‘(a) I
324	324	NGENERAL.—For purposes of this subchapter, 15
325	325	the term ‘economically distressed zone’ means any popu-16
326	326	lation census tract within the United States which— 17
327	327	‘‘(1) has a poverty rate of not less than 35 per-18
328	328	cent for each of the 5 most recent calendar years for 19
329	329	which information is available, or 20
330	330	‘‘(2) satisfies each of the following require-21
331	331	ments: 22
332	332	‘‘(A) The census tract has pervasive pov-23
333	333	erty, unemployment, low labor force participa-24
334	334	tion, and general distress measured as a pro-25
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338	338	longed period of economic decline measured by 1
339	339	real gross national product. 2
340	340	‘‘(B) The census tract has a poverty rate 3
341	341	of not less than 30 percent for each of the 5 4
342	342	most recent calendar years for which informa-5
343	343	tion is available. 6
344	344	‘‘(C) The census tract has been designated 7
345	345	as such by the Secretary and the Secretary of 8
346	346	Commerce pursuant to an application under 9
347	347	subsection (b). 10
348	348	‘‘(b) A
349	349	PPLICATION FORDESIGNATION.— 11
350	350	‘‘(1) I
351	351	N GENERAL.—An application for designa-12
352	352	tion as an economically distressed zone may be filed 13
353	353	by a State or local government in which the popu-14
354	354	lation census tract to which the application applies 15
355	355	is located. 16
356	356	‘‘(2) R
357	357	EQUIREMENTS.—Such application shall 17
358	358	include a strategic plan for accomplishing the pur-18
359	359	poses of this subchapter, which— 19
360	360	‘‘(A) describes the coordinated economic, 20
361	361	human, community, and physical development 21
362	362	plan and related activities proposed for the 22
363	363	nominated area, 23
364	364	‘‘(B) describes the process by which the af-24
365	365	fected community is a full partner in the proc-25
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369	369	ess of developing and implementing the plan 1
370	370	and the extent to which local institutions and 2
371	371	organizations have contributed to the planning 3
372	372	process, 4
373	373	‘‘(C) identifies the amount of State, local, 5
374	374	and private resources that will be available in 6
375	375	the nominated area and the private/public part-7
376	376	nerships to be used, which may include partici-8
377	377	pation by, and cooperation with, universities, 9
378	378	medical centers, and other private and public 10
379	379	entities, 11
380	380	‘‘(D) identifies the funding requested 12
381	381	under any Federal program in support of the 13
382	382	proposed economic, human, community, and 14
383	383	physical development and related activities, 15
384	384	‘‘(E) identifies baselines, methods, and 16
385	385	benchmarks for measuring the success of car-17
386	386	rying out the strategic plan, including the ex-18
387	387	tent to which poor persons and families will be 19
388	388	empowered to become economically self-suffi-20
389	389	cient, and 21
390	390	‘‘(F) does not include any action to assist 22
391	391	any establishment in relocating from one area 23
392	392	outside the nominated area to the nominated 24
393	393	area, except that assistance for the expansion of 25
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397	397	an existing business entity through the estab-1
398	398	lishment of a new branch, affiliate, or sub-2
399	399	sidiary is permitted if— 3
400	400	‘‘(i) the establishment of the new 4
401	401	branch, affiliate, or subsidiary will not re-5
402	402	sult in a decrease in employment in the 6
403	403	area of original location or in any other 7
404	404	area where the existing business entity 8
405	405	conducts business operations, 9
406	406	‘‘(ii) there is no reason to believe that 10
407	407	the new branch, affiliate, or subsidiary is 11
408	408	being established with the intention of clos-12
409	409	ing down the operations of the existing 13
410	410	business entity in the area of its original 14
411	411	location or in any other area where the ex-15
412	412	isting business entity conducts business op-16
413	413	eration, and 17
414	414	‘‘(iii) includes such other information 18
415	415	as may be required by the Secretary and 19
416	416	the Secretary of Commerce. 20
417	417	‘‘(c) P
418	418	ERIOD FORWHICHDESIGNATIONSARE INEF-21
419	419	FECT.—Designation as an economically distressed zone 22
420	420	may be made at any time during the 10-year period begin-23
421	421	ning on the date of the enactment of this section, and shall 24
422	422	remain in effect with respect to such zone during the 15- 25
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426	426	year period beginning on the date of such designation. 1
427	427	Economically distressed zones described in subsection 2
428	428	(a)(1) shall take effect on the date of the enactment of 3
429	429	this Act and shall remain in effect during the 15-year pe-4
430	430	riod beginning on such date. 5
431	431	‘‘(d) T
432	432	ERRITORIES AND POSSESSIONS.—The term 6
433	433	‘United States’ includes the 50 States, the District of Co-7
434	434	lumbia, and the territories and possessions of the United 8
435	435	States. 9
436	436	‘‘(e) R
437	437	EGULATIONS.—The Secretary shall issue such 10
438	438	regulations or other guidance as may be necessary or ap-11
439	439	propriate to carry out the purposes of this section, includ-12
440	440	ing— 13
441	441	‘‘(1) not later than 30 days after the date of 14
442	442	the enactment of this section, a list of the population 15
443	443	census tracts described in subsection (a)(1), and 16
444	444	‘‘(2) not later than 60 days after the date of 17
445	445	the enactment of this section, regulations or other 18
446	446	guidance regarding the designation of population 19
447	447	census tracts described in subsection (a)(2).’’. 20
448	448	(b) C
449	449	LERICALAMENDMENT.—The table of sub-21
450	450	chapters for chapter 1 of the Internal Revenue Code of 22
451	451	1986 is amended by adding at the end the following new 23
452	452	item: 24
453	453	‘‘SUBCHAPTER AA—MEDICAL PRODUCT MANUFACTURING IN ECONOMICALLY
454	454	DISTRESSED ZONES’’.
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458	458	(c) EFFECTIVEDATE.—The amendments made by 1
459	459	this section shall apply to taxable years beginning after 2
460	460	December 31, 2022. 3
461	461	SEC. 3. REPORT ON NEED FOR INCENTIVIZING DEVELOP-4
462	462	MENT OF THERAPIES. 5
463	463	Not later than 90 days after the date of enactment 6
464	464	of this Act, the Secretary of Health and Human Services 7
465	465	shall examine and report to the Congress on— 8
466	466	(1) the extent to which the health of aging indi-9
467	467	viduals in the United States, African Americans, 10
468	468	Hispanics, Native Americans, veterans, or other vul-11
469	469	nerable populations in the United States has been 12
470	470	disproportionately harmed by the COVID–19 pan-13
471	471	demic and prior epidemics and pandemics; 14
472	472	(2) the therapies currently available, and 15
473	473	whether there is a need for additional innovation 16
474	474	and development to produce therapies, to reduce the 17
475	475	exposure of vulnerable populations in the United 18
476	476	States to risk of disproportionate harm in epidemics 19
477	477	and pandemics; and 20
478	478	(3) whether the Secretary recommends pro-21
479	479	viding the same incentives for the development and 22
480	480	marketing of therapies described in paragraph (2) as 23
481	481	is provided under the Federal Food, Drug, and Cos-24
482	482	metic Act (21 U.S.C. 301 et seq.) with respect to 25
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484	484	kjohnson on DSK79L0C42PROD with BILLS 17
485	485	•S 33 IS
486	486	qualified infectious disease products designated 1
487	487	under section 505E(d) of such Act (21 U.S.C. 2
488	488	355f(d)). 3
489	489	Æ
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491	491	kjohnson on DSK79L0C42PROD with BILLS