MADE in America Act

I 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 pro- tective 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 Vir- ginia, 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 main- taining, expanding, and relocating the manufacturing of active pharmaceutical ingredients, excipients, medical di- agnostic devices, pharmaceuticals, and personal protec- tive equipment in the United States, and for other pur- poses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 22:57 Apr 25, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2707.IH H2707 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 2707 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Manufacturing API, 2 Drugs, and Excipients in America Act’’ or the ‘‘MADE 3 in America Act’’. 4 SEC. 2. CREDIT FOR PHARMACEUTICAL AND MEDICAL DE- 5 VICE PRODUCTION ACTIVITIES IN DIS- 6 TRESSED ZONES. 7 (a) IN GENERAL.—Subpart D of part IV of sub- 8 chapter A of chapter 1 of the Internal Revenue Code of 9 1986 is amended by adding at the end the following new 10 section: 11 ‘‘SEC. 45BB. DISTRESSED ZONE PHARMACEUTICAL AND 12 MEDICAL DEVICE PRODUCTION CREDIT. 13 ‘‘(a) IN GENERAL.—For purposes of section 38, the 14 distressed zone pharmaceutical and medical device produc- 15 tion credit for the taxable year shall be an amount equal 16 to the applicable percentage of the qualified production ac- 17 tivity expenditures of the taxpayer for the taxable year. 18 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 19 this section— 20 ‘‘(1) IN GENERAL.—Except as provided in para- 21 graph (2), the term ‘applicable percentage’ means 22 25 percent. 23 ‘‘(2) INCREASED AMOUNT WHERE EMPLOYEES 24 RESIDE IN DISTRESSED ZONE.—In the case of any 25 qualified pharmaceutical or medical device produc- 26 VerDate Sep 11 2014 22:57 Apr 25, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2707.IH H2707 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 2707 IH tion business a substantial portion of the employees 1 of which reside in a distressed zone, the applicable 2 percentage shall be 30 percent. 3 ‘‘(c) QUALIFIED PRODUCTION ACTIVITY EXPENDI- 4 TURES.—For purposes of this section— 5 ‘‘(1) IN GENERAL.—The term ‘qualified produc- 6 tion activity expenditures’ means— 7 ‘‘(A) wages paid or incurred to an em- 8 ployee of the taxpayer for services performed by 9 such employee in the conduct of a qualified 10 pharmaceutical or diagnostic medical device 11 production business in a distressed zone (but 12 only if the employee’s principal place of employ- 13 ment is in a distressed zone), and 14 ‘‘(B) qualified pharmaceutical or medical 15 device production expenditures. 16 ‘‘(2) QUALIFIED PHARMACEUTICAL OR MEDICAL 17 DEVICE PRODUCTION BUSINESS.— 18 ‘‘(A) IN GENERAL.—The term ‘qualified 19 pharmaceutical or medical device production 20 business’ means the trade or business of pro- 21 ducing qualified pharmaceuticals in commercial 22 quantities. 23 ‘‘(B) QUALIFIED PHARMACEUTICALS.— 24 VerDate Sep 11 2014 22:57 Apr 25, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2707.IH H2707 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 2707 IH ‘‘(i) IN GENERAL.—The term ‘quali- 1 fied pharmaceuticals’ means pharma- 2 ceuticals, active pharmaceutical ingredi- 3 ents, excipients, medical diagnostic devices, 4 or personal protective equipment. 5 ‘‘(ii) PHARMACEUTICAL.—The term 6 ‘pharmaceuticals’— 7 ‘‘(I) means any drug (as defined 8 in section 201 of the Federal Food, 9 Drug, and Cosmetic Act), and 10 ‘‘(II) includes a biological prod- 11 uct (as defined in section 351 of the 12 Public Health Service Act). 13 ‘‘(iii) ACTIVE PHARMACEUTICAL IN- 14 GREDIENT.—The term ‘active pharma- 15 ceutical ingredients’ has the meaning given 16 to such term in section 207.1 of title 21, 17 Code of Federal Regulations (or any suc- 18 cessor regulations). 19 ‘‘(iv) EXCIPIENT.—The term ‘excip- 20 ient’— 21 ‘‘(I) means any inactive ingre- 22 dient that is intentionally added to a 23 pharmaceutical that is not intended to 24 exert therapeutic effects at the in- 25 VerDate Sep 11 2014 22:57 Apr 25, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2707.IH H2707 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 2707 IH tended dosage, other than by acting to 1 improve product delivery, and 2 ‘‘(II) includes any such filler, ex- 3 tenders, diluent, wetting agent, sol- 4 vent, emulsifier, preservative, flavor, 5 absorption enhancer, sustained release 6 matrix, and coloring agent. 7 ‘‘(v) MEDICAL DIAGNOSTIC DEVICE.— 8 The term ‘medical diagnostic device’ means 9 any device (as defined in section 201(h) of 10 the Federal Food, Drug, and Cosmetic 11 Act) intended for use in the diagnosis of 12 disease or other conditions. 13 ‘‘(vi) PERSONAL PROTECTIVE EQUIP- 14 MENT.—The term ‘personal protective 15 equipment’ means— 16 ‘‘(I) any device (as defined in 17 section 201(h) of the Federal Food, 18 Drug, and Cosmetic Act) that is a 19 face mask, filtering facepiece res- 20 pirator, face shield, surgical mask, 21 gown, other apparel, or glove that is 22 intended for a medical purpose, and 23 ‘‘(II) any particulate filtering air 24 purifying respiratory protective device 25 VerDate Sep 11 2014 22:57 Apr 25, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2707.IH H2707 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 2707 IH that is approved by the National In- 1 stitute for Occupational Safety and 2 Health under part 84 of title 42, Code 3 of Federal Regulations (or successor 4 regulations). 5 ‘‘(3) CERTAIN HEALTH PLAN EXPENSES TREAT- 6 ED AS WAGES.— 7 ‘‘(A) IN GENERAL.—The term ‘wages’ 8 shall include so much of the eligible employer’s 9 qualified health plan expenses as are properly 10 allocable to such wages. 11 ‘‘(B) QUALIFIED HEALTH PLAN EX- 12 PENSES.—For purposes of this paragraph, the 13 term ‘qualified health plan expenses’ means 14 amounts paid or incurred by the eligible em- 15 ployer to provide and maintain a group health 16 plan (as defined in section 5000(b)(1)), but 17 only to the extent that such amounts are ex- 18 cluded from the gross income of employees by 19 reason of section 106(a) of such Code. 20 ‘‘(C) ALLOCATION RULES.—For purposes 21 of this paragraph, qualified health plan ex- 22 penses shall be allocated to qualified wages in 23 such manner as the Secretary may prescribe. 24 Except as otherwise provided by the Secretary, 25 VerDate Sep 11 2014 22:57 Apr 25, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2707.IH H2707 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 2707 IH such allocation shall be treated as properly 1 made if made on the basis of being pro rata 2 among employees and pro rata on the basis of 3 periods of coverage (relative to the periods to 4 which such wages relate). 5 ‘‘(4) QUALIFIED PHARMACEUTICAL OR MEDICAL 6 DEVICE PRODUCTION EXPENDITURES.— 7 ‘‘(A) DEFINITION.—The term ‘qualified 8 pharmaceutical or medical device production ex- 9 penditures’ means amounts paid or incurred 10 (whether or not chargeable to capital account) 11 for qualified property used in the conduct of a 12 qualified pharmaceutical or medical device pro- 13 duction business in a distressed zone (but only 14 if the primary use of such property is in a dis- 15 tressed zone). 16 ‘‘(B) QUALIFIED PROPERTY.— 17 ‘‘(i) IN GENERAL.—The term ‘quali- 18 fied property’ means any tangible personal 19 property (other than a building or its 20 structural components) used in the conduct 21 of a qualified pharmaceutical or medical 22 device production business in a distressed 23 zone (but only if the primary use of such 24 property is in a distressed zone). 25 VerDate Sep 11 2014 22:57 Apr 25, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2707.IH H2707 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 2707 IH ‘‘(ii) EXCEPTION.—Such term shall 1 not include any property described in sec- 2 tion 50(b) (determined as if the United 3 States included Puerto Rico). 4 ‘‘(d) DISTRESSED ZONE.—For purposes of this sec- 5 tion, the term ‘distressed zone’ means a population census 6 tract which— 7 ‘‘(1) has been designated as a qualified oppor- 8 tunity zone under section 1400Z–1, and 9 ‘‘(2) has a poverty rate in excess of 30 percent 10 for the calendar year prior to the calendar year that 11 includes the date of enactment of this section. 12 ‘‘(e) SPECIAL RULES.— 13 ‘‘(1) APPLICATION TO UNITED STATES SHARE- 14 HOLDERS OF CONTROLLED FOREIGN CORPORA- 15 TIONS.— 16 ‘‘(A) IN GENERAL.—In the case of a do- 17 mestic corporation that is a United States 18 shareholder of a qualified controlled foreign cor- 19 poration, the credit under subsection (a) (deter- 20 mined without regard to this paragraph) shall 21 be increased by an amount equal to 30 percent 22 of the corporation’s pro rata share (determined 23 under rules similar to the rules of section 24 951(a)(2)) of qualified production activity ex- 25 VerDate Sep 11 2014 22:57 Apr 25, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2707.IH H2707 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 2707 IH penditures of such controlled foreign corpora- 1 tion for the taxable year of the qualified con- 2 trolled foreign corporation ending with or with- 3 in the taxable year of the domestic corporation. 4 ‘‘(B) QUALIFIED CORPORATION.—For pur- 5 poses of subparagraph (A), the term ‘qualified 6 controlled foreign corporation’ means, for any 7 taxable year, a controlled foreign corporation 8 which does not have gross income that is effec- 9 tively connected with the conduct of a trade or 10 business within the United States for such tax- 11 able year. 12 ‘‘(2) REDUCTION IN BASIS.—If a credit is de- 13 termined under this section with respect to any 14 property by reason of any qualified production activ- 15 ity expenditures described in subsection (b)(1)(B), 16 the basis of such property shall be reduced by the 17 amount of the credit so determined. 18 ‘‘(3) COORDINATION WITH OTHER CREDITS.— 19 Any qualified production activity expenditures taken 20 into account in determining the amount of the credit 21 under subsection (a) shall not be taken into account 22 in determining a credit under any other provision of 23 this chapter. 24 ‘‘(f) RECAPTURE.— 25 VerDate Sep 11 2014 22:57 Apr 25, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2707.IH H2707 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 2707 IH ‘‘(1) IN GENERAL.—If, during any taxable year, 1 property taken into account under subsection 2 (c)(1)(B) is disposed of, or otherwise ceases to be 3 used by the taxpayer in the active trade or business 4 of producing qualified pharmaceuticals in commer- 5 cial quantities, before the close of the recapture pe- 6 riod, then the tax under this chapter for such tax- 7 able year shall be increased by the recapture per- 8 centage of the aggregate decrease in the credits al- 9 lowed under section 38 for all prior taxable years 10 which would have resulted solely from reducing to 11 zero any credit determined under this section with 12 respect to such property. 13 ‘‘(2) RECAPTURE PERCENTAGE.—For purposes 14 of subparagraph (A), the recapture percentage shall 15 be determined in the same manner as under section 16 50(a)(1)(B). 17 ‘‘(3) APPLICATION TO UNITED STATES SHARE- 18 HOLDERS.—In the case of any taxpayer to whom a 19 credit is allowed by reason of subsection (e)(1), 20 paragraph (1) shall be applied by substituting ‘the 21 controlled foreign corporation with respect to which 22 the taxpayer is a United States shareholder’ for ‘the 23 taxpayer’. 24 VerDate Sep 11 2014 00:03 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2707.IH H2707 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 2707 IH ‘‘(4) APPLICATION OF OTHER RULES.—For 1 purposes of this paragraph, rules similar to the rules 2 of paragraphs (3), (4), and (5) (other than subpara- 3 graph (A) thereof) of section 50(a)(1) shall apply.’’. 4 (b) CREDIT ALLOWED AGAINST ALTERNATIVE MIN- 5 IMUM TAX.—Section 38(c)(4)(B) of such Code is amended 6 by redesignating clauses (x), (xi), and (xii) as clauses (xi), 7 (xii), and (xiii), respectively, and by inserting after clause 8 (ix) the following new clause: 9 ‘‘(x) the credit determined under sec- 10 tion 45BB,’’. 11 (c) CREDIT ALLOWED AGAINST BASE EROSION 12 ANTI-ABUSE TAX.—Section 59A(b)(1)(B)(ii) of such 13 Code is amended by striking ‘‘plus’’ at the end of sub- 14 clause (I), by redesignating subclause (II) as subclause 15 (III), and by inserting after subclause (I) (as so amended) 16 the following new subclause: 17 ‘‘(II) the credit allowed under 18 section 38 for the taxable year which 19 is properly allocable to the distressed 20 zone pharmaceutical and medical de- 21 vice production credit determined 22 under section 45BB(a), plus’’. 23 VerDate Sep 11 2014 22:57 Apr 25, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2707.IH H2707 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •HR 2707 IH (d) DENIAL OF DEDUCTION.—Section 280C of such 1 Code is amended by adding at the end the following new 2 subsection: 3 ‘‘(i) DISTRESSED ZONE PHARMACEUTICAL AND 4 MEDICAL DEVICE PRODUCTION CREDIT.—No deduction 5 shall be allowed for that portion of the qualified produc- 6 tion activity expenditures (as defined in section 45BB(b)) 7 otherwise allowable as a deduction for the taxable year 8 which is equal to the amount of the distressed zone phar- 9 maceutical and medical device production credit deter- 10 mined for such taxable year under section 45BB(a).’’. 11 (e) PART OF GENERAL BUSINESS CREDIT.—Section 12 38(b) of such Code is amended by striking ‘‘plus’’ at the 13 end of paragraph (40), by striking the period at the end 14 of paragraph (41) and inserting ‘‘, plus’’, and by adding 15 at the end the following new paragraph: 16 ‘‘(42) the distressed zone pharmaceutical and 17 medical device production credit determined under 18 section 45BB(a).’’. 19 (f) CLERICAL AMENDMENT.—The table of sections 20 for subpart D of part IV of subchapter A of chapter 1 21 is amended by adding at the end the following new item: 22 ‘‘Sec. 45BB. Distressed zone pharmaceutic [Text truncated for display. Full text available on Congress.gov.]