| 1 | 1 | | I |
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| 2 | 2 | | 119THCONGRESS |
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| 3 | 3 | | 1 |
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| 4 | 4 | | STSESSION H. R. 1328 |
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| 5 | 5 | | To amend the Internal Revenue Code of 1986 to establish the critical supply |
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| 6 | 6 | | chains reshoring investment tax credit. |
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| 7 | 7 | | IN THE HOUSE OF REPRESENTATIVES |
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| 8 | 8 | | FEBRUARY13, 2025 |
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| 9 | 9 | | Ms. M |
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| 10 | 10 | | ALLIOTAKIS(for herself, Mr. PANETTA, Mr. BUCHANAN, Ms. |
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| 11 | 11 | | V |
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| 12 | 12 | | ELA´ZQUEZ, Mr. KELLYof Pennsylvania, Mr. HERNA´NDEZ, and Mr. |
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| 13 | 13 | | L |
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| 14 | 14 | | AWLER) introduced the following bill; which was referred to the Com- |
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| 15 | 15 | | mittee on Ways and Means |
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| 16 | 16 | | A BILL |
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| 17 | 17 | | To amend the Internal Revenue Code of 1986 to establish |
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| 18 | 18 | | the critical supply chains reshoring investment tax credit. |
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| 19 | 19 | | Be it enacted by the Senate and House of Representa-1 |
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| 20 | 20 | | tives of the United States of America in Congress assembled, 2 |
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| 21 | 21 | | SECTION 1. SHORT TITLE. 3 |
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| 22 | 22 | | This Act may be cited as the ‘‘Supply Chain Security 4 |
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| 23 | 23 | | and Growth Act of 2025’’. 5 |
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| 24 | 24 | | SEC. 2. CRITICAL SUPPLY CHAINS RESHORING INVEST-6 |
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| 25 | 25 | | MENT CREDIT. 7 |
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| 26 | 26 | | (a) I |
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| 27 | 27 | | NGENERAL.—Subpart E of part IV of sub-8 |
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| 28 | 28 | | chapter A of the Internal Revenue Code of 1986 is amend-9 |
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| 30 | 30 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 2 |
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| 31 | 31 | | •HR 1328 IH |
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| 32 | 32 | | ed by inserting after section 48E the following new sec-1 |
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| 33 | 33 | | tion: 2 |
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| 34 | 34 | | ‘‘SEC. 48F. CRITICAL SUPPLY CHAINS RESHORING INVEST-3 |
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| 35 | 35 | | MENT CREDIT. 4 |
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| 36 | 36 | | ‘‘(a) I |
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| 37 | 37 | | NGENERAL.—For purposes of section 46, in 5 |
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| 38 | 38 | | the case of a qualifying taxpayer, the critical supply chains 6 |
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| 39 | 39 | | reshoring investment credit is an amount equal to 40 per-7 |
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| 40 | 40 | | cent of the qualified investment with respect to any critical 8 |
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| 41 | 41 | | supply chain facility placed in service during such taxable 9 |
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| 42 | 42 | | year. 10 |
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| 43 | 43 | | ‘‘(b) D |
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| 44 | 44 | | EFINITIONS ANDSPECIALRULES.—For pur-11 |
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| 45 | 45 | | poses of this section— 12 |
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| 46 | 46 | | ‘‘(1) Q |
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| 47 | 47 | | UALIFYING TAXPAYER.— 13 |
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| 48 | 48 | | ‘‘(A) I |
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| 49 | 49 | | N GENERAL.—The term ‘qualifying 14 |
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| 50 | 50 | | taxpayer’ means a taxpayer that is not a pro-15 |
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| 51 | 51 | | hibited foreign entity. 16 |
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| 52 | 52 | | ‘‘(B) P |
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| 53 | 53 | | ROHIBITED FOREIGN ENTITY .—For 17 |
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| 54 | 54 | | purposes of this paragraph, the term ‘prohibited 18 |
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| 55 | 55 | | foreign entity’ means— 19 |
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| 56 | 56 | | ‘‘(i) any foreign entity of concern (as 20 |
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| 57 | 57 | | defined in section 40207(a)(5) of the In-21 |
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| 58 | 58 | | frastructure Investment and Jobs Act), 22 |
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| 59 | 59 | | ‘‘(ii) any entity with respect to which 23 |
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| 60 | 60 | | the government of a covered nation has the 24 |
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| 61 | 61 | | right or power (directly or indirectly) to 25 |
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| 63 | 63 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 3 |
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| 64 | 64 | | •HR 1328 IH |
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| 65 | 65 | | appoint or approve the appointment of a 1 |
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| 66 | 66 | | covered officer, or 2 |
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| 67 | 67 | | ‘‘(iii) any entity 25 percent or more of 3 |
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| 68 | 68 | | the capital or profits interests of which are 4 |
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| 69 | 69 | | owned (directly or indirectly) in the aggre-5 |
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| 70 | 70 | | gate by 1 or more of the following: 6 |
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| 71 | 71 | | ‘‘(I) A covered nation or an enti-7 |
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| 72 | 72 | | ty described in clause (i) or (ii). 8 |
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| 73 | 73 | | ‘‘(II) A citizen, national, or resi-9 |
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| 74 | 74 | | dent of a covered nation. 10 |
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| 75 | 75 | | ‘‘(III) An entity organized under 11 |
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| 76 | 76 | | the laws of a covered nation. 12 |
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| 77 | 77 | | ‘‘(C) C |
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| 78 | 78 | | OVERED OFFICER.—For purposes of 13 |
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| 79 | 79 | | this paragraph, the term ‘covered officer’ 14 |
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| 80 | 80 | | means— 15 |
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| 81 | 81 | | ‘‘(i) any member of the board of direc-16 |
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| 82 | 82 | | tors, board of supervisors, or an equivalent 17 |
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| 83 | 83 | | governing body, 18 |
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| 84 | 84 | | ‘‘(ii) the president, senior vice presi-19 |
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| 85 | 85 | | dent, chief executive officer, chief operating 20 |
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| 86 | 86 | | officer, chief financial officer, or general 21 |
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| 87 | 87 | | counsel, or 22 |
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| 88 | 88 | | ‘‘(iii) any individual who performs du-23 |
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| 89 | 89 | | ties usually associated with a title listed in 24 |
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| 90 | 90 | | clause (i) or (ii). 25 |
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| 92 | 92 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 4 |
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| 93 | 93 | | •HR 1328 IH |
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| 94 | 94 | | ‘‘(D) COVERED NATION.—For purposes of 1 |
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| 95 | 95 | | this paragraph, the term ‘covered nation’ has 2 |
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| 96 | 96 | | the meaning given such term in section 4872(d) 3 |
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| 97 | 97 | | of title 10, United States Code. 4 |
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| 98 | 98 | | ‘‘(2) Q |
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| 99 | 99 | | UALIFIED INVESTMENT .—The qualified 5 |
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| 100 | 100 | | investment with respect to any critical supply chain 6 |
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| 101 | 101 | | facility for any taxable year is an amount equal to 7 |
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| 102 | 102 | | the basis of any qualified property placed in service 8 |
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| 103 | 103 | | by the taxpayer during such taxable year which is 9 |
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| 104 | 104 | | part of a such facility. 10 |
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| 105 | 105 | | ‘‘(3) Q |
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| 106 | 106 | | UALIFYING PROPERTY.— 11 |
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| 107 | 107 | | ‘‘(A) I |
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| 108 | 108 | | N GENERAL.—The term ‘qualifying 12 |
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| 109 | 109 | | property’ means property— 13 |
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| 110 | 110 | | ‘‘(i) that is integral to the operation 14 |
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| 111 | 111 | | of a critical supply chain facility, 15 |
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| 112 | 112 | | ‘‘(ii) that is tangible property, 16 |
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| 113 | 113 | | ‘‘(iii) with respect to which deprecia-17 |
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| 114 | 114 | | tion (or amortization in lieu of deprecia-18 |
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| 115 | 115 | | tion) is allowable, and 19 |
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| 116 | 116 | | ‘‘(iv) which is— 20 |
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| 117 | 117 | | ‘‘(I) constructed, reconstructed, 21 |
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| 118 | 118 | | or erected by the taxpayer, or 22 |
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| 119 | 119 | | ‘‘(II) acquired by the taxpayer if 23 |
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| 120 | 120 | | the original use of such property com-24 |
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| 121 | 121 | | mences with the taxpayer. 25 |
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| 123 | 123 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 5 |
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| 124 | 124 | | •HR 1328 IH |
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| 125 | 125 | | ‘‘(B) RECONSTRUCTED PROPERTY .—Prop-1 |
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| 126 | 126 | | erty shall be treated as reconstructed for pur-2 |
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| 127 | 127 | | poses of this paragraph if improvements to such 3 |
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| 128 | 128 | | property satisfy the substantial improvement 4 |
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| 129 | 129 | | test of section 1400Z–2(d)(2)(D)(ii). 5 |
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| 130 | 130 | | ‘‘(4) C |
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| 131 | 131 | | RITICAL SUPPLY CHAIN FACILITY .—The 6 |
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| 132 | 132 | | term ‘critical supply chain facility’ means a facil-7 |
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| 133 | 133 | | ity— 8 |
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| 134 | 134 | | ‘‘(A) the primary purpose of which is the 9 |
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| 135 | 135 | | manufacturing of— 10 |
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| 136 | 136 | | ‘‘(i) An active pharmaceutical ingre-11 |
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| 137 | 137 | | dient (as defined in section 2017.1 of title 12 |
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| 138 | 138 | | 21, Code of Federal Regulations (or any 13 |
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| 139 | 139 | | successor regulations)), 14 |
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| 140 | 140 | | ‘‘(ii) A drug (as defined in section 15 |
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| 141 | 141 | | 201(g) of the Federal Food, Drug, and 16 |
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| 142 | 142 | | Cosmetic Act), 17 |
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| 143 | 143 | | ‘‘(iii) A biological product (as defined 18 |
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| 144 | 144 | | in section 351(i)(1) of the Public Health 19 |
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| 145 | 145 | | Service Act), 20 |
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| 146 | 146 | | ‘‘(iv) A medical countermeasure (as 21 |
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| 147 | 147 | | defined in section 319F–3(i)(1) of the 22 |
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| 148 | 148 | | Public Health Service Act), 23 |
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| 149 | 149 | | ‘‘(v) A medical diagnostic device (as 24 |
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| 150 | 150 | | defined in section 201(h) of the Federal 25 |
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| 152 | 152 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 6 |
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| 153 | 153 | | •HR 1328 IH |
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| 154 | 154 | | Food, Drug, and Cosmetic Act) intended 1 |
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| 155 | 155 | | for use in the diagnosis of disease or other 2 |
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| 156 | 156 | | conditions, 3 |
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| 157 | 157 | | ‘‘(vi) Semiconductors or semicon-4 |
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| 158 | 158 | | ductor manufacturing equipment, 5 |
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| 159 | 159 | | ‘‘(vii) Aerospace equipment as defined 6 |
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| 160 | 160 | | under North American Industry Classifica-7 |
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| 161 | 161 | | tion Code 3364, or 8 |
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| 162 | 162 | | ‘‘(viii) Artificial nanomaterials, and 9 |
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| 163 | 163 | | ‘‘(B) located in— 10 |
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| 164 | 164 | | ‘‘(i) a ‘specified possession’ within the 11 |
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| 165 | 165 | | meaning of section 937(c), 12 |
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| 166 | 166 | | ‘‘(ii) or Puerto Rico. 13 |
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| 167 | 167 | | ‘‘(5) A |
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| 168 | 168 | | GGREGATION RULE.— 14 |
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| 169 | 169 | | ‘‘(A) I |
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| 170 | 170 | | N GENERAL.—Members of a quali-15 |
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| 171 | 171 | | fied affiliated group shall be treated as a single 16 |
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| 172 | 172 | | taxpayer. 17 |
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| 173 | 173 | | ‘‘(B) Q |
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| 174 | 174 | | UALIFIED AFFILIATED GROUP .— 18 |
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| 175 | 175 | | ‘‘(i) I |
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| 176 | 176 | | N GENERAL.—The term ‘quali-19 |
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| 177 | 177 | | fied affiliated group’ means an affiliated 20 |
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| 178 | 178 | | group (as defined in section 1504(a), de-21 |
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| 179 | 179 | | termined without regard to section 22 |
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| 180 | 180 | | 1504(b)(3)) at least 1 member of which 23 |
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| 181 | 181 | | has made a qualified investment in a crit-24 |
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| 183 | 183 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 7 |
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| 184 | 184 | | •HR 1328 IH |
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| 185 | 185 | | ical supply chain facility located in an eco-1 |
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| 186 | 186 | | nomically distressed zone. 2 |
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| 187 | 187 | | ‘‘(ii) E |
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| 188 | 188 | | CONOMICALLY DISTRESSED 3 |
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| 189 | 189 | | ZONE.—For purposes of this subpara-4 |
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| 190 | 190 | | graph, the term ‘economically distressed 5 |
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| 191 | 191 | | zone’ means a population census tract 6 |
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| 192 | 192 | | that— 7 |
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| 193 | 193 | | ‘‘(I) is a qualified opportunity 8 |
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| 194 | 194 | | zone (as defined in section 1400z– 9 |
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| 195 | 195 | | 1(a)), and 10 |
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| 196 | 196 | | ‘‘(II) has a poverty rate of not 11 |
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| 197 | 197 | | less than 30 percent. 12 |
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| 198 | 198 | | ‘‘(6) E |
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| 199 | 199 | | XEMPTION FROM CERTAIN SPECIAL 13 |
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| 200 | 200 | | RULES.—The credit determined under subsection (a) 14 |
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| 201 | 201 | | shall be determined without regard to paragraphs 15 |
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| 202 | 202 | | (1) and (4) of section 50(b).’’. 16 |
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| 203 | 203 | | (b) C |
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| 204 | 204 | | OORDINATION BETWEENCRITICALSUPPLY 17 |
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| 205 | 205 | | C |
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| 206 | 206 | | HAINSRESHORINGCREDIT ANDELECTRICITYPRODUC-18 |
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| 207 | 207 | | TIONCREDIT.—Section 45(e) of such Code is amended 19 |
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| 208 | 208 | | by adding at the end the following new subsection: 20 |
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| 209 | 209 | | ‘‘(e) C |
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| 210 | 210 | | OORDINATION WITHCRITICALSUPPLY 21 |
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| 211 | 211 | | C |
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| 212 | 212 | | HAINSRESHORINGINVESTMENT CREDIT.—The term 22 |
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| 213 | 213 | | ‘qualified facility’ shall not include any facility if a credit 23 |
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| 214 | 214 | | is allowed under section 48F with respect to such facility 24 |
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| 215 | 215 | | for the taxable year or any prior taxable year.’’. 25 |
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| 217 | 217 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 8 |
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| 218 | 218 | | •HR 1328 IH |
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| 219 | 219 | | (c) ELECTIVEPAYMENTALLOWED.— 1 |
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| 220 | 220 | | (1) I |
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| 221 | 221 | | N GENERAL.—Section 6417(b) of such 2 |
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| 222 | 222 | | Code is amended by adding at the end the following: 3 |
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| 223 | 223 | | ‘‘(13) The critical supply chains reshoring in-4 |
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| 224 | 224 | | vestment credit determined under section 48F.’’. 5 |
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| 225 | 225 | | (2) E |
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| 226 | 226 | | LECTION TO BE TREATED AS APPLICABLE 6 |
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| 227 | 227 | | ENTITY.—Section 6417(d)(1) is amended— 7 |
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| 228 | 228 | | (A) by redesignating subparagraph (E) as 8 |
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| 229 | 229 | | subparagraph (F), and 9 |
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| 230 | 230 | | (B) by inserting after subparagraph (D) 10 |
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| 231 | 231 | | the following new subparagraph: 11 |
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| 232 | 232 | | ‘‘(E) E |
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| 233 | 233 | | LECTION WITH RESPECT TO CRIT -12 |
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| 234 | 234 | | ICAL SUPPLY CHAINS RESHORING CREDIT .—If a 13 |
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| 235 | 235 | | taxpayer other than an entity described in sub-14 |
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| 236 | 236 | | paragraph (A) makes an election under this 15 |
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| 237 | 237 | | subparagraph with respect to any taxable year 16 |
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| 238 | 238 | | in which such taxpayer has placed in service a 17 |
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| 239 | 239 | | critical supply chain facility (as defined in sec-18 |
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| 240 | 240 | | tion 48F(b)(4)), such taxpayer shall be treated 19 |
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| 241 | 241 | | as an applicable entity for purposes of this sec-20 |
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| 242 | 242 | | tion for such taxable year, but only with respect 21 |
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| 243 | 243 | | to the credit described in subsection (b)(13).’’. 22 |
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| 244 | 244 | | (d) C |
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| 245 | 245 | | REDITMADETRANSFERABLE.—Section 23 |
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| 246 | 246 | | 6418(f)(1)(A) of such Code is amended by adding at the 24 |
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| 247 | 247 | | end the following: 25 |
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| 249 | 249 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 9 |
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| 250 | 250 | | •HR 1328 IH |
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| 251 | 251 | | ‘‘(xii) The critical supply chains re-1 |
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| 252 | 252 | | shoring investment credit determined 2 |
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| 253 | 253 | | under section 48F.’’. 3 |
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| 254 | 254 | | (e) C |
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| 255 | 255 | | REDITINCLUDED ININVESTMENTCREDIT.— 4 |
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| 256 | 256 | | Section 46 of such Code is amended by striking ‘‘and’’ 5 |
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| 257 | 257 | | at the end of paragraph (6), by striking the period at the 6 |
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| 258 | 258 | | end of paragraph (7) and inserting ‘‘, and’’, and by adding 7 |
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| 259 | 259 | | at the end the following new paragraph: 8 |
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| 260 | 260 | | ‘‘(8) the critical supply chains reshoring invest-9 |
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| 261 | 261 | | ment credit.’’. 10 |
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| 262 | 262 | | (f) E |
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| 263 | 263 | | FFECTIVEDATE.—The amendments made by 11 |
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| 264 | 264 | | this section shall apply to property placed in service after 12 |
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| 265 | 265 | | December 31, 2024. 13 |
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| 266 | 266 | | SEC. 3. INCREASE IN DEEMED CREDIT FOR TAXES PAID TO 14 |
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| 267 | 267 | | POSSESSION OF THE UNITED STATES. 15 |
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| 268 | 268 | | (a) I |
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| 269 | 269 | | NGENERAL.—Section 960(d) of the Internal 16 |
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| 270 | 270 | | Revenue Code of 1986 is amended by adding at the end 17 |
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| 271 | 271 | | the following new paragraph: 18 |
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| 272 | 272 | | ‘‘(4) I |
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| 273 | 273 | | NCREASE FOR TAXES PAID TO POSSES -19 |
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| 274 | 274 | | SION OF UNITED STATES.—In the case of tested for-20 |
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| 275 | 275 | | eign income taxes paid or accrued to a possession of 21 |
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| 276 | 276 | | the United States, paragraph (1) shall be applied by 22 |
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| 277 | 277 | | substituting ‘100 percent’ for ‘80 percent’.’’. 23 |
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| 280 | 280 | | •HR 1328 IH |
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| 281 | 281 | | (b) EFFECTIVEDATE.—The amendments made by 1 |
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| 282 | 282 | | this section shall apply to taxes paid or accrued after De-2 |
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| 283 | 283 | | cember 31, 2024. 3 |
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| 284 | 284 | | Æ |
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