Restoring Critical Supply Chains and Intellectual Property Act

II 116TH CONGRESS 2D SESSION S. 4324 To facilitate the availability, development, and production of domestic re- sources to meet national personal protective equipment and material needs, and ensure American leadership in advanced research and develop- ment and semiconductor manufacturing. IN THE SENATE OF THE UNITED STATES JULY 27, 2020 Mr. GRAHAM (for himself, Mr. BURR, and Mr. DAINES) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To facilitate the availability, development, and production of domestic resources to meet national personal protec- tive equipment and material needs, and ensure American leadership in advanced research and development and semiconductor manufacturing. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Restoring Critical Supply Chains and Intellectual Prop- 5 erty Act’’. 6 VerDate Sep 11 2014 03:23 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4324.IS S4324 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 4324 IS (b) TABLE OF CONTENTS.—The table of contents is 1 as follows: 2 Sec. 1. Short title; table of contents. TITLE I—U.S. MADE ACT Sec. 101. Short title. Sec. 102. Domestic purchasing requirement for personal protective equipment acquisitions for the Strategic National Stockpile. Sec. 103. Investment credit for qualifying medical personal protective equip- ment manufacturing projects. Sec. 104. Special rules for transfers of intangible property relating to medical personal protective equipment to United States shareholders. TITLE II—SAFEGUARDING AMERICAN INNOVATION Sec. 201. Short title. Sec. 202. Definitions. Sec. 203. Federal Research Security Council. Sec. 204. Federal grant application fraud. Sec. 205. Restricting the acquisition of goods, technologies, and sensitive infor- mation to certain aliens. Sec. 206. Limitations on educational and cultural exchange programs. Sec. 207. Amendments to disclosures of foreign gifts. TITLE III—CHIPS FOR AMERICA ACT (CREATING HELPFUL INCENTIVES TO PRODUCE SEMICONDUCTORS FOR AMERICA) Sec. 301. Semiconductor incentive grants. Sec. 302. Department of Defense. Sec. 303. Department of Commerce study on status of microelectronics tech- nologies in the United States industrial base. Sec. 304. Funding for development and adoption of measurably secure micro- electronics and measurably secure microelectronics supply chains. Sec. 305. Advanced semiconductor research and design. Sec. 306. Prohibition relating to foreign adversaries. TITLE IV—CRITICAL MINERALS Sec. 401. Mineral security. Sec. 402. Rare earth element advanced coal technologies. TITLE I—U.S. MADE ACT 3 SEC. 101. SHORT TITLE. 4 This title may be cited as the ‘‘United States Manu- 5 facturing Availability of Domestic Equipment Act’’ or the 6 ‘‘U.S. MADE Act of 2020’’. 7 VerDate Sep 11 2014 03:23 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4324.IS S4324 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 4324 IS SEC. 102. DOMESTIC PURCHASING REQUIREMENT FOR 1 PERSONAL PROTECTIVE EQUIPMENT ACQUI- 2 SITIONS FOR THE STRATEGIC NATIONAL 3 STOCKPILE. 4 Section 319F–2(a) of the Public Health Service Act 5 (42 U.S.C. 247d–6b(a)) is amended by adding at the end 6 the following: 7 ‘‘(6) DOMESTIC PROCUREMENT REQUIREMENT 8 FOR PERSONAL PROTECTIVE EQUIPMENT.— 9 ‘‘(A) REQUIREMENT.—Except as provided 10 in subparagraphs (C) and (D), funds appro- 11 priated or otherwise available to the Secretary 12 for the Strategic National Stockpile may not be 13 used for the procurement of an item described 14 in subparagraph (B) unless the item was 15 grown, reprocessed, reused, or produced in the 16 United States. 17 ‘‘(B) COVERED ITEMS.—An item described 18 in this subparagraph is an article or item of— 19 ‘‘(i) personal protective equipment 20 and clothing (and the materials and com- 21 ponents thereof), other than sensors, elec- 22 tronics, or other items added to, and not 23 normally associated with, such personal 24 protective equipment; 25 VerDate Sep 11 2014 03:23 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4324.IS S4324 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 4324 IS ‘‘(ii) sanitizing supplies and ancillary 1 medical supplies such as disinfecting wipes, 2 privacy curtains, beds and bedding, testing 3 swabs, gauze and bandages, tents, tarpau- 4 lins, covers, or bags; or 5 ‘‘(iii) any other textile medical sup- 6 plies and textile equipment described in 7 paragraph (1). 8 ‘‘(C) AVAILABILITY EXCEPTION.—Sub- 9 paragraph (A) shall not apply to an item de- 10 scribed in subparagraph (B)— 11 ‘‘(i) that is, or that includes, a mate- 12 rial listed in section 25.104 of the Federal 13 Acquisition Regulation as one for which a 14 non-availability determination has been 15 made; 16 ‘‘(ii) as to which the Secretary deter- 17 mines that a sufficient quantity of a satis- 18 factory quality of such item that is grown, 19 reprocessed, reused, or produced in the 20 United States cannot be procured as, and 21 when, needed; or 22 ‘‘(iii) if, after maximizing to the ex- 23 tent feasible sources consistent with sub- 24 paragraph (A), the Secretary certifies 25 VerDate Sep 11 2014 03:23 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4324.IS S4324 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 4324 IS every 90 days that it is necessary to pro- 1 cure products under this paragraph under 2 expedited procedures to respond to the im- 3 mediate needs of a public health emergency 4 pursuant to section 319. 5 ‘‘(D) EXCEPTION FOR SMALL PROCURE- 6 MENTS.—Subparagraph (A) shall not apply to 7 procurements for amounts that do not exceed 8 $150,000. A proposed procurement for an 9 amount in excess of $150,000 may not be di- 10 vided into several procurements or contracts for 11 lesser amounts in order to qualify for the excep- 12 tion under this subparagraph. 13 ‘‘(E) CONSULTATION.—The Secretary shall 14 consult with the United States Trade Rep- 15 resentative on a matter under this subsection 16 that concerns an obligation of the United States 17 under any international trade agreement. 18 ‘‘(F) NOTIFICATION REQUIRED WITHIN 7 19 DAYS AFTER PROCUREMENT CONTRACT AWARD 20 IF CERTAIN EXCEPTIONS APPLIED.—In the case 21 of any procurement contracts of an item de- 22 scribed in subparagraph (B), if the Secretary 23 applies the exception described in subparagraph 24 (C) with respect to that procurement contract, 25 VerDate Sep 11 2014 03:23 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4324.IS S4324 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 4324 IS the Secretary shall, not later than 7 days after 1 the awarding of the procurement contract, post 2 a notification that the exception has been ap- 3 plied on the relevant Internet website main- 4 tained by the General Services Administration, 5 except for any information that is exempt from 6 mandatory disclosure under section 552 of title 7 5, United States Code. 8 ‘‘(G) TRAINING DURING FISCAL YEAR 9 2021.— 10 ‘‘(i) IN GENERAL.—The Secretary 11 shall ensure that each member of the ac- 12 quisition workforce in the Department of 13 Health and Human Services who partici- 14 pates substantially on a regular basis in 15 procurements related to the maintenance 16 of the Strategic National Stockpile receives 17 training during fiscal year 2021 on the re- 18 quirements of this paragraph. 19 ‘‘(ii) INCLUSION OF INFORMATION IN 20 NEW TRAINING PROGRAMS.—The Secretary 21 shall ensure that any training program for 22 the acquisition workforce, as described in 23 clause (i), developed or implemented after 24 fiscal year 2021, includes comprehensive 25 VerDate Sep 11 2014 03:23 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4324.IS S4324 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 4324 IS information on the requirements described 1 in subparagraph (A). 2 ‘‘(H) EFFECTIVE DATE.—The Secretary 3 shall increase the percentage of contracts by 4 value entered into for products described in 5 subparagraph (B) incrementally to 100 percent 6 as soon as practicable, but in no event later 7 than the end of the 5-year period beginning on 8 the date of enactment of this paragraph. The 9 Secretary shall notify the Committee on Health, 10 Education, Labor, and Pensions of the Senate 11 and the Committee on Energy and Commerce 12 of the House of Representatives within 60 days 13 of such date of enactment regarding the per- 14 centage of products described in subparagraph 15 (B) that meet the requirements of this para- 16 graph. 17 ‘‘(I) REPORT.—Not later than 90 days 18 after the date of enactment of this paragraph, 19 the Secretary shall submit to the Committee on 20 Health, Education, Labor, and Pensions of the 21 Senate and the Committee on Energy and Com- 22 merce of the House of Representatives a report 23 assessing the implementation of this paragraph 24 VerDate Sep 11 2014 03:23 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4324.IS S4324 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 4324 IS and the feasibility of applying the requirements 1 of this paragraph to— 2 ‘‘(i) not less than 50 percent of con- 3 tracts by value entered into for products 4 described in subparagraph (B) by Sep- 5 tember 30, 2021; 6 ‘‘(ii) not less than 75 percent of con- 7 tracts by value entered into for products 8 described in subparagraph (B) by March 9 31, 2022; and 10 ‘‘(iii) not less than 100 percent of 11 contracts by value entered into for prod- 12 ucts described in subparagraph (B) by a 13 date that is not less than 2 years after the 14 date of enactment of this paragraph.’’. 15 SEC. 103. INVESTMENT CREDIT FOR QUALIFYING MEDICAL 16 PERSONAL PROTECTIVE EQUIPMENT MANU- 17 FACTURING PROJECTS. 18 (a) IN GENERAL.—Subpart E of part IV of sub- 19 chapter A of chapter 1 of the Internal Revenue Code of 20 1986 is amended by inserting after section 48C the fol- 21 lowing new section: 22 VerDate Sep 11 2014 03:23 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4324.IS S4324 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 4324 IS ‘‘SEC. 48D. QUALIFYING MEDICAL PERSONAL PROTECTIVE 1 EQUIPMENT MANUFACTURING PROJECT 2 CREDIT. 3 ‘‘(a) IN GENERAL.—For purposes of section 46, the 4 qualifying medical personal protective equipment manu- 5 facturing project credit for any taxable year is an amount 6 equal to 30 percent of the qualified investment for such 7 taxable year with respect to any qualifying medical per- 8 sonal protective equipment manufacturing project of the 9 taxpayer. 10 ‘‘(b) QUALIFIED INVESTMENT.— 11 ‘‘(1) IN GENERAL.—For purposes of subsection 12 (a), the qualified investment for any taxable year 13 is— 14 ‘‘(A) in the case of any eligible property 15 placed in service by the taxpayer during such 16 taxable year, the basis of such property, and 17 ‘‘(B) in the case of any property previously 18 placed in service by the taxpayer during any pe- 19 riod before such taxable year which qualifies as 20 eligible property for such taxable year, the ad- 21 justed basis of such property (as determined as 22 of the beginning of such taxable year). 23 ‘‘(2) CERTAIN QUALIFIED PROGRESS EXPENDI- 24 TURES RULES MADE APPLICABLE.—Rules similar to 25 the rules of subsections (c)(4) and (d) of section 46 26 VerDate Sep 11 2014 03:23 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4324.IS S4324 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 4324 IS (as in effect on the day before the enactment of the 1 Revenue Reconciliation Act of 1990) shall apply for 2 purposes of this section. 3 ‘‘(3) LIMITATION.—The amount which is treat- 4 ed as the qualified investment for all taxable years 5 with respect to any qualifying medical personal pro- 6 tective equipment manufacturing project shall not 7 exceed the amount designated by the Secretary as el- 8 igible for the credit under this section. 9 ‘‘(c) DEFINITIONS.— 10 ‘‘(1) QUALIFYING MEDICAL PERSONAL PROTEC- 11 TIVE EQUIPMENT MANUFACTURING PROJECT.— 12 ‘‘(A) IN GENERAL.—The term ‘qualifying 13 medical personal protective equipment manufac- 14 turing project’ means a project— 15 ‘‘(i) which re-equips, expands, estab- 16 lishes, or continues a manufacturing facil- 17 ity for the production of— 18 ‘‘(I) any item described in para- 19 graph (6)(B) of section 319F–2(a) of 20 the Public Health Service Act (42 21 U.S.C. 247d–6b(a)), or 22 ‘‘(II) any textile products for 23 medical applications which are not de- 24 scribed in subclause (I), as identified 25 VerDate Sep 11 2014 03:23 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4324.IS S4324 pamtmann on DSKBC07HB2PROD with BILLS 11 •S 4324 IS by the Secretary, in consultation with 1 the Secretary of Health and Human 2 Services, and 3 ‘‘(ii) any portion of the qualified in- 4 vestment of which is certified by the Sec- 5 retary under subsection (d) as eligible for 6 a credit under this section. 7 ‘‘(B) EXCEPTION.—Subclause (I) of sub- 8 paragraph (A)(i) shall not include sensors, elec- 9 tronics, or other items added to, and not nor- 10 mally associated with, equipment or clothing de- 11 scribed in such subclause. 12 ‘‘(2) ELIGIBLE PROPERTY.—The term ‘eligible 13 property’ means any property— 14 ‘‘(A) which is necessary for the production 15 of property described in paragraph (1)(A)(i), 16 ‘‘(B) which is— 17 ‘‘(i) tangible personal property, or 18 ‘‘(ii) other tangible property (not in- 19 cluding a building or its structural compo- 20 nents), but only if such property is used as 21 an integral part of the manufacturing fa- 22 cility described in such paragraph, 23 VerDate Sep 11 2014 03:23 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S4324.IS S4324 pamtmann on DSKBC07HB2PROD with BILLS 12 •S 4324 IS ‘‘(C) with respect to which depreciation (or 1 amortization in lieu of depreciation) is allow- 2 able, and 3 ‘‘(D) which is part of a qualifying medical 4 personal protective equipment manufacturing 5 project. 6 ‘‘(d) QUALIFYING MEDICAL PERSONAL PROTECTIVE 7 EQUIPMENT MANUFACTURING PROJECT PROGRAM.— 8 ‘‘(1) ESTABLISHMENT.— 9 ‘‘(A) IN GENERAL.—Not later than 90 10 days after the date of enactment of this section, 11 the Secretary, in consultation with the Sec- 12 retary of Health and Human Services, shall es- 13 tablish a qualifying medical personal protective 14 equipment manufacturing project program to 15 consider and award certifications for qualified 16 investments eligible for credits under this sec- 17 tion to qualifying medical personal protective 18 equipment manufacturing p [Text truncated for display. 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