[Congressional Record Volume 167, Number 42 (Friday, March 5, 2021)]
[Senate]
[Pages S1359-S1360]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 1296. Mr. RUBIO submitted an amendment intended to be proposed to 
amendment SA 891 proposed by Mr. Schumer (for himself, Mr. Wyden, Mrs. 
Murray, Mr. Brown, Mr. Peters, Mr. Cardin, Ms. Cantwell, Ms. Stabenow, 
Mr. Tester, Mr. Menendez, Mr. Schatz, Mr. Carper, Mr. Leahy, and Mr. 
Sanders) to the bill H.R. 1319, to provide for reconciliation pursuant 
to title II of S. Con. Res. 5; which was ordered to lie on the table; 
as follows:

       At the end of subtitle G of title IX, add the following:

     SEC. ____. MEDICAL MANUFACTURING ECONOMIC DEVELOPMENT AND 
                   SUSTAINABILITY.

       (a) In General.--Chapter 1 of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new 
     subchapter:

    ``Subchapter AA--Medical Product Manufacturing in Economically 
                            Distressed Zones

    ``subchapter aa--medical product manufacturing in economically 
                            distressed zones

``Sec. 1400AA-1. Medical product manufacturing in economically 
              distressed zone credit.
``Sec. 1400AA-2. Credit for economically distressed zone products and 
              services acquired by domestic medical product 
              manufacturers.
``Sec. 1400AA-3. Special rules to secure the national supply chain.
``Sec. 1400AA-4. Designation of economically distressed zones.

     ``SEC. 1400AA-1. MEDICAL PRODUCT MANUFACTURING IN 
                   ECONOMICALLY DISTRESSED ZONE CREDIT.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by subtitle A for the taxable 
     year an amount equal to 40 percent of the sum of--
       ``(1) the aggregate amount of the taxpayer's medical 
     product manufacturing economically distressed zone wages for 
     such taxable year,
       ``(2) the allocable employee fringe benefit expenses of the 
     taxpayer for such taxable year, and
       ``(3) the depreciation and amortization allowances of the 
     taxpayer for the taxable year with respect to qualified 
     medical product manufacturing facility property.
       ``(b) Denial of Double Benefit.--Any wages or other 
     expenses taken into account in determining the credit under 
     this section may not be taken into account in determining the 
     credit under sections 41, and any other provision determined 
     by the Secretary to be substantially similar.
       ``(c) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Economically distressed zone wages.--
       ``(A) In general.--The term `economically distressed zone 
     wages' means amounts paid or incurred for wages during the 
     taxable year which are--
       ``(i) in connection with the active conduct of a trade or 
     business of the taxpayer, and
       ``(ii) paid or incurred for an employee the principal place 
     of employment of whom is in a qualified medical product 
     manufacturing facility of such taxpayer.
       ``(B) Limitation on amount of wages taken into account.--
       ``(i) In general.--The amount of wages which may be taken 
     into account under subparagraph (A) with respect to any 
     employee for any taxable year shall not exceed the 
     contribution and benefit base determined under section 230 of 
     the Social Security Act for the calendar year in which such 
     taxable year begins.
       ``(ii) Treatment of part-time employees, etc.--If--

       ``(I) any employee is not employed by the taxpayer on a 
     substantially full-time basis at all times during the taxable 
     year, or
       ``(II) the principal place of employment of any employee is 
     not within an economically distressed zone at all times 
     during the taxable year,

     the limitation applicable under clause (i) with respect to 
     such employee shall be the appropriate portion (as determined 
     by the Secretary) of the limitation which would otherwise be 
     in effect under clause (i).
       ``(C) Treatment of certain employees.--The term 
     `economically distressed zone wages' shall not include any 
     wages paid to employees who are assigned by the employer to 
     perform services for another person, unless the principal 
     trade or business of the employer is to make employees 
     available for temporary periods to other persons in return 
     for compensation.
       ``(2) Allocable employee fringe benefit expenses.--
       ``(A) In general.--The term `allocable employee fringe 
     benefit expenses' means the aggregate amount allowable as a 
     deduction under this chapter to the taxpayer for the taxable 
     year for the following amounts which are allocable to 
     employment in a qualified medical product manufacturing 
     facility:
       ``(i) Employer contributions under a stock bonus, pension, 
     profit-sharing, or annuity plan.
       ``(ii) Employer-provided coverage under any accident or 
     health plan for employees.
       ``(iii) The cost of life or disability insurance provided 
     to employees.
       ``(B) Allocation.--For purposes of subparagraph (A), an 
     amount shall be treated as allocable to a qualified medical 
     product manufacturing facility only if such amount is with 
     respect to employment of an individual for services provided, 
     and the principal place of employment of whom is, in such 
     facility.
       ``(3) Qualified medical product manufacturing facility.--
     The term `qualified medical product manufacturing facility' 
     means any facility that--
       ``(A) researches and develops or produces medical products 
     or essential components of medical products, and
       ``(B) is located within an economically distressed zone.
       ``(4) Qualified medical product manufacturing facility 
     property.--The term `qualified medical product manufacturing 
     facility property' means any property used in (or consisting 
     of) a qualified medical product manufacturing facility if 
     such property is directly connected to the research, 
     development, or production of a medical product.
       ``(5) Medical product; essential component.--
       ``(A) Medical product.--The term `medical product' means--
       ``(i) a drug that--

       ``(I) is a prescription drug subject to regulation under 
     section 505 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 355) or section 351 of the Public Health Service Act 
     (42 U.S.C. 262);
       ``(II) is subject to regulation under section 802 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 382); or
       ``(III) is described in section 201(jj) of such Act (21 
     U.S.C. 321(jj)); or

       ``(ii) a device, as defined in section 201(h) of such Act 
     (21 U.S.C. 321(h)).
       ``(B) Essential component.--The term `essential component' 
     means, with respect to a medical product--
       ``(i) an active pharmaceutical ingredient; or
       ``(ii) a protein, antibody, enzyme, hormone, or other 
     organic material that is an active ingredient in a biological 
     product.
       ``(6) Aggregation rules.--
       ``(A) In general.--For purposes of this section, members of 
     an affiliated group shall be treated as a single taxpayer.
       ``(B) Affiliated group.--The term `affiliated group' means 
     an affiliated group (as defined in section 1504(a), 
     determined without regard to section 1504(b)(3)) one or more 
     members of which are engaged in the active conduct of a trade 
     or business within an economically distressed zone.

     ``SEC. 1400AA-2. CREDIT FOR ECONOMICALLY DISTRESSED ZONE 
                   PRODUCTS AND SERVICES ACQUIRED BY DOMESTIC 
                   MEDICAL PRODUCT MANUFACTURERS.

       ``(a) Allowance of Credit.--In the case of an eligible 
     medical product manufacturer, there shall be allowed as a 
     credit against the tax imposed by subtitle A for the taxable 
     year an amount equal to the applicable percentage of the 
     aggregate amounts paid or incurred by the taxpayer during 
     such taxable year for qualified products or services.
       ``(b) Applicable Percentage.--For purposes of this section, 
     the term applicable percentage means--
       ``(1) 30 percent in the case of amounts paid or incurred to 
     persons not described in paragraph (2) or (3), and
       ``(2) 5 percent in the case of amounts paid or incurred to 
     a related person.
       ``(c) Eligible Medical Product Manufacturer.--For purposes 
     of this section, the term `eligible medical product 
     manufacturer' means any person in the trade or business of 
     producing medical products in the United States.
       ``(d) Qualified Product or Service.--For purposes of this 
     section, the term `qualified product or service' means--
       ``(1) any product which is produced in an economically 
     distressed zone and which is integrated into a medical 
     product produced by the taxpayer, and
       ``(2) any service which is provided in an economically 
     distressed zone and which is

[[Page S1360]]

     necessary to the production of a medical product by the 
     taxpayer (including packaging).
       ``(e) Related Persons.--For purposes of this section, 
     persons shall be treated as related to each other if such 
     persons would be treated as a single employer under the 
     regulations prescribed under section 52(b).
       ``(f) Other Terms.--Terms used in this section which are 
     also used in section 1400AA-1 shall have the same meaning as 
     when used in such section.

     ``SEC. 1400AA-3. SPECIAL RULES TO SECURE THE NATIONAL SUPPLY 
                   CHAIN.

       ``(a) In General.--In the case of a qualified repatriated 
     pharmaceutical manufacturing facility, section 1400AA-1(a) 
     shall be applied by substituting `60 percent' for `40 
     percent'.
       ``(b) Election To Expense in Lieu of Tax Credit for 
     Depreciation.--In the case of a taxpayer which elects (at 
     such time and in such manner as the Secretary may provide) 
     the application of this subsection with respect to any 
     qualified repatriated medical product manufacturing facility 
     or qualified population health product manufacturing 
     facility--
       ``(1) section 1400AA-1(a)(3) shall not apply with respect 
     to any qualified medical product manufacturing facility 
     property with respect to such facility, and
       ``(2) for purposes of section 168(k)--
       ``(A) such property shall be treated as qualified property, 
     and
       ``(B) the applicable percentage with respect to such 
     property shall be 100 percent.
       ``(c) Qualified Repatriated Medical Product Manufacturing 
     Facility.--For purposes of this section, the term `qualified 
     repatriated medical product manufacturing facility' means any 
     qualified medical product manufacturing facility (as defined 
     in section 1400AA-1) the production of which was moved to an 
     economically distressed zone from a foreign country that the 
     United States Trade Representative has determined could pose 
     a risk to the national supply chain because of political or 
     social factors.

     ``SEC. 1400AA-4. DESIGNATION OF ECONOMICALLY DISTRESSED 
                   ZONES.

       ``(a) In General.--For purposes of this subchapter, the 
     term `economically distressed zone' means any population 
     census tract within the United States which--
       ``(1) has a poverty rate of not less than 35 percent for 
     each of the 5 most recent calendar years for which 
     information is available, or
       ``(2) satisfies each of the following requirements:
       ``(A) The census tract has pervasive poverty, unemployment, 
     low labor force participation, and general distress measured 
     as a prolonged period of economic decline measured by real 
     gross national product.
       ``(B) The census tract has a poverty rate of not less than 
     30 percent for each of the 5 most recent calendar years for 
     which information is available.
       ``(C) The census tract has been designated as such by the 
     Secretary and the Secretary of Commerce pursuant to an 
     application under subsection (b).
       ``(b) Application for Designation.--
       ``(1) In general.--An application for designation as an 
     economically distressed zone may be filed by a State or local 
     government in which the population census tract to which the 
     application applies is located.
       ``(2) Requirements.--Such application shall include a 
     strategic plan for accomplishing the purposes of this 
     subchapter, which--
       ``(A) describes the coordinated economic, human, community, 
     and physical development plan and related activities proposed 
     for the nominated area,
       ``(B) describes the process by which the affected community 
     is a full partner in the process of developing and 
     implementing the plan and the extent to which local 
     institutions and organizations have contributed to the 
     planning process,
       ``(C) identifies the amount of State, local, and private 
     resources that will be available in the nominated area and 
     the private/public partnerships to be used, which may include 
     participation by, and cooperation with, universities, medical 
     centers, and other private and public entities,
       ``(D) identifies the funding requested under any Federal 
     program in support of the proposed economic, human, 
     community, and physical development and related activities,
       ``(E) identifies baselines, methods, and benchmarks for 
     measuring the success of carrying out the strategic plan, 
     including the extent to which poor persons and families will 
     be empowered to become economically self-sufficient, and
       ``(F) does not include any action to assist any 
     establishment in relocating from one area outside the 
     nominated area to the nominated area, except that assistance 
     for the expansion of an existing business entity through the 
     establishment of a new branch, affiliate, or subsidiary is 
     permitted if--
       ``(i) the establishment of the new branch, affiliate, or 
     subsidiary will not result in a decrease in employment in the 
     area of original location or in any other area where the 
     existing business entity conducts business operations,
       ``(ii) there is no reason to believe that the new branch, 
     affiliate, or subsidiary is being established with the 
     intention of closing down the operations of the existing 
     business entity in the area of its original location or in 
     any other area where the existing business entity conducts 
     business operation, and
       ``(iii) includes such other information as may be required 
     by the Secretary and the Secretary of Commerce.
       ``(c) Period for Which Designations Are in Effect.--
     Designation as an economically distressed zone may be made at 
     any time during the 10-year period beginning on the date of 
     the enactment of this section, and shall remain in effect 
     with respect to such zone during the 15-year period beginning 
     on the date of such designation. Economically distressed 
     zones described in subsection (a)(1) shall take effect on the 
     date of the enactment of this Act and shall remain in effect 
     during the 15-year period beginning on such date.
       ``(d) Territories and Possessions.--The term `United 
     States' includes the 50 States, the District of Columbia, and 
     the territories and possessions of the United States.
       ``(e) Regulations.--The Secretary shall issue such 
     regulations or other guidance as may be necessary or 
     appropriate to carry out the purposes of this section, 
     including--
       ``(1) not later than 30 days after the date of the 
     enactment of this section, a list of the population census 
     tracts described in subsection (a)(1), and
       ``(2) not later than 60 days after the date of the 
     enactment of this section, regulations or other guidance 
     regarding the designation of population census tracts 
     described in subsection (a)(2).''.
       (b) Clerical Amendment.--The table of subchapters for 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following new item:

    ``subchapter aa--medical product manufacturing in economically 
                          distressed zones''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2020.
                                 ______