S. 4324

116TH CONGRESS
2D SESSION

S. 4324

To facilitate the availability, development, and production of domestic
resources to meet national personal protective equipment and material
needs, and ensure American leadership in advanced research
and development and semiconductor manufacturing.

IN THE SENATE OF THE UNITED STATES

JULY 27, 2020

Mr. GRAHAM introduced the following bill; which was read
twice and referred to the Committee on _____

A BILL

To facilitate the availability, development, and production of domestic resources to meet national personal protective 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 Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE. — This Act may be cited as the

"Restoring Critical Supply Chains and Intellectual Property Act".

(b) TABLE OF CONTENTS. — The table of contents is as follows:

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 equipment manufacturing projects.

Sec. 104. Special Rules for transfers of intangible property relating to medical personal protective equipment to United States shareholders.

* * *

TITLE I — U.S. MADE ACT

SEC. 101. SHORT TITLE.

This title may be cited as the "United States Manufacturing Availability of Domestic Equipment Act" or the U.S. MADE Act of 2020.

* * *

SEC. 103. INVESTMENT CREDIT FOR QUALIFYING MEDICAL PERSONAL PROTECTIVE EQUIPMENT MANUFACTURING PROJECTS.

(a) IN GENERAL. — Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 48C the following new section:

"SEC. 48D. QUALIFYING MEDICAL PERSONAL PROTECTIVE EQUIPMENT MANUFACTURING PROJECT CREDIT.

"(a) IN GENERAL. — For purposes of section 46, the qualifying medical personal protective equipment manufacturing project credit for any taxable year is an amount equal to 30 percent of the qualified investment for such taxable year with respect to any qualifying medical personal protective equipment manufacturing project of the taxpayer.

"(b) QUALIFIED INVESTMENT. —

"(1) IN GENERAL. — For purposes of subsection (a), the qualified investment for any taxable year is —

"(A) in the case of any eligible property placed in service by the taxpayer during such taxable year, the basis of such property, and

"(B) in the case of any property previously placed in service by the taxpayer during any period before such taxable year which qualifies as eligible property for such taxable year, the adjusted basis of such property (as determined as of the beginning of such taxable year).

"(2) CERTAIN QUALIFIED PROGRESS EXPENDITURES RULES MADE APPLICABLE. — Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section.

"(3) LIMITATION. — The amount which is treated as the qualified investment for all taxable years with respect to any qualifying medical personal protective equipment manufacturing project shall not exceed the amount designated by the Secretary as eligible for the credit under this section.

"(c) DEFINITIONS. —

"(1) QUALIFYING MEDICAL PERSONAL PROTECTIVE EQUIPMENT MANUFACTURING PROJECT. —

"(A) IN GENERAL. — The term 'qualifying medical personal protective equipment manufacturing project' means a project —

"(i) which re-equips, expands, establishes, or continues a manufacturing facility for the production of —

"(I) any item described in paragraph (6)(B) of section 319F-2(a) of the Public Health Service Act (42 U.S.C. 247d-6b(a)), or

"(II) any textile products for medical applications which are not described in subclause (I), as identified by the Secretary, in consultation with the Secretary of Health and Human Services, and

"(ii) any portion of the qualified investment of which is certified by the Secretary under subsection (d) as eligible for a credit under this section.

"(B) EXCEPTION. — Subclause (I) of subparagraph (A)(i) shall not include sensors, electronics, or other items added to, and not normally associated with, equipment or clothing described in such subclause.

"(2) ELIGIBLE PROPERTY. — The term 'eligible property' means any property —

"(A) which is necessary for the production of property described in paragraph (1)(A)(i),

"(B) which is —

"(i) tangible personal property, or

"(ii) other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the manufacturing facility described in such paragraph,

"(C) with respect to which depreciation (or amortization in lieu of depreciation) is allowable, and

"(D) which is part of a qualifying medical personal protective equipment manufacturing project.

"(d) QUALIFYING MEDICAL PERSONAL PROTECTIVE EQUIPMENT MANUFACTURING PROJECT PROGRAM. —

"(1) ESTABLISHMENT. —

"(A) IN GENERAL. — Not later than 90 days after the date of enactment of this section, the Secretary, in consultation with the Secretary of Health and Human Services, shall establish a qualifying medical personal protective equipment manufacturing project program to consider and award certifications for qualified investments eligible for credits under this section to qualifying medical personal protective equipment manufacturing project sponsors.

"(B) LIMITATION. — The total amount of credits that may be allocated under the program shall not exceed $7,500,000,000.

"(2) CERTIFICATION. —

"(A) APPLICATION PERIOD. — Each applicant for certification under this paragraph shall submit an application (containing such information as the Secretary may require) during the 1-year period beginning on the date the Secretary establishes the program under paragraph (1).

"(B) TIME TO MEET CRITERIA FOR CERTIFICATION. — Each applicant for certification shall have 1 year from the date of acceptance by the Secretary of the application during which to provide to the Secretary evidence that the requirements of the certification have been met.

"(C) PERIOD OF ISSUANCE. — An applicant which receives a certification shall have 2 years from the date of issuance of the certification in order to place the project in service and if such project is not placed in service by that time period, then the certification shall no longer be valid.

"(3) SELECTION CRITERIA. — In determining which qualifying medical personal protective equipment manufacturing projects to certify under this section, the Secretary shall take into consideration which projects —

"(A) will provide the greatest net increase in job creation (both direct and indirect) within the United States (as defined in section 4612(a)(4)) during the credit period,

"(B) will provide the largest net increase in the amount of medical personal protective equipment for which there is the greatest need for purposes of the Strategic National Stockpile (as described in section 319F-2(a) of the Public Health Service Act (42 U.S.C. 247d-6b(a))),

"(C) have the greatest potential to help achieve medical manufacturing independence for the United States, and

"(D) have the greatest potential to meet current demand or sudden surges in demand for personal protective equipment.

"(4) REVIEW AND REDISTRIBUTION. —

"(A) REVIEW. — Not later than 3 years after the date of enactment of this section, the Secretary shall review the credits allocated under this section as of such date.

"(B) REDISTRIBUTION. — The Secretary may reallocate credits awarded under this section if the Secretary determines that —

"(i) there is an insufficient quantity of qualifying applications for certification pending at the time of the review, or

"(ii) any certification made pursuant to paragraph (2) has been revoked pursuant to paragraph (2)(B) because the project subject to the certification has been delayed as a result of third party opposition or litigation to the proposed project.

"(C) REALLOCATION. — If the Secretary determines that credits under this section are available for reallocation pursuant to the requirements set forth in paragraph (2), the Secretary is authorized to conduct an additional program for applications for certification.

"(5) DISCLOSURE OF ALLOCATIONS. — The Secretary shall, upon making a certification under this subsection, publicly disclose the identity of the applicant and the amount of the credit with respect to such applicant.

"(e) DENIAL OF DOUBLE BENEFIT. — No credit shall be allowed under any provision of this chapter with respect to any amount taken in account in determining the credit allowed to a taxpayer under this section.".

(b) CONFORMING AMENDMENTS. —

(1) Section 46 of the Internal Revenue Code of 1986 is amended —

(A) by striking "and" at the end of paragraph (5);

(B) by striking the period at the end of paragraph (6) and inserting ", and"; and

(C) by adding at the end the following:

"(7) the qualifying medical personal protective equipment manufacturing project credit.".

(2) Section 49(a)(1)(C) of such Code is amended —

(A) by striking "and" at the end of clause (iv);

(B) by striking the period at the end of clause (v) and inserting ", and"; and

(C) by adding at the end the following:

"(vi) the basis of any property which is part of a qualifying medical personal protective equipment manufacturing project under section 48D.".

(3) Section 50(a)(2)(E) of such Code is amended by striking "or 48C(b)(2)" and inserting ", 48C(b)(2), or 48D(b)(2)".

(4) The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 48C the following new item:

"Sec. 48D. Qualifying medical personal protective equipment manufacturing project credit.".

(c) TREATMENT UNDER BASE EROSION TAX. — Section 59A(b)(1)(B)(ii) of the Internal Revenue Code of 1986 is amended by striking "plus" at the end of subclause (I), by redesignating subclause (II) as subclause (III), and by inserting after subclause (I) the following new subclause:

"(II) the credit allowed under section 38 for the taxable year which is properly allocable to the portion of the investment credit determined under section 46 that is properly allocable to section 48D(a), plus".

(d) EFFECTIVE DATE. — The amendments made by this section shall apply to projects certified after the date of enactment of this Act.

SEC. 104. SPECIAL RULES FOR TRANSFERS OF INTANGIBLE PROPERTY RELATING TO MEDICAL PERSONAL PROTECTIVE EQUIPMENT TO UNITED STATES SHAREHOLDERS.

(a) IN GENERAL. — Subpart F of part III of subchapter N of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

"SEC. 966. TRANSFERS OF INTANGIBLE PROPERTY RELATING TO MEDICAL PERSONAL PROTECTIVE EQUIPMENT TO UNITED STATES SHAREHOLDERS.

"(a) IN GENERAL. — Except as otherwise provided by the Secretary, if a controlled foreign corporation holds qualified intangible property on the date of the enactment of this section and thereafter distributes such property to a domestic corporation which is a United States shareholder with respect to such controlled foreign corporation —

"(1) for purposes of part I of subchapter C and any other provision of this title specified by the Secretary, the fair market value of such property on the date of such distribution shall be treated as not exceeding the adjusted basis of such property immediately before such distribution, and

"(2) if any portion of such distribution is not a dividend —

"(A) no gain shall be recognized by such United States shareholder with respect to such distribution, and

"(B) the adjusted basis of such property in the hands of such United States shareholder immediately after such distribution shall be the adjusted basis of such property in the hands of such controlled foreign corporation immediately before such distribution reduced by the amount (if any) of gain not recognized by reason of subparagraph (A) (determined after the application of paragraph (1)).

"(b) QUALIFIED INTANGIBLE PROPERTY. — For purposes of this section, the term 'qualified intangible property' means any property described in section 367(d)(4)(A) —

"(1) the principal purpose of which is use in connection with —

"(A) any eligible property, as defined in section 48D(c)(2), or

"(B) any item or product described in subclause (I) or (II) of section 48D(c)(1)(A)(i), or

"(2) substantially all of the income from which is derived in connection with any eligible property (as defined in section 48D(c)(2)) or any item or product described in paragraph (1)(B).

"(c) REGULATIONS AND GUIDANCE. — The Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including to prevent abuse by taxpayers related to distributions of qualified intangible property.".

(b) CONFORMING AMENDMENTS. —

(1) Section 197(f)(2)(B)(i) of the Internal Revenue Code of 1986 is amended by inserting "966(a)," after "731,".

(2) The table of sections for subpart F of part III of subchapter N of chapter 1 of such Code is amended by adding at the end the following new item:

"Sec. 966. Transfers of intangible property relating to medical personal protective equipment to United States shareholders.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to distributions made on or after the date of enactment of this Act.

* * *