MADE in America Act

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 protective equipment in the United States, and for other purposes. 1. Short title This Act may be cited as the Manufacturing API, Drugs, and Excipients in America Act MADE in America Act 2. Credit for pharmaceutical and medical device production activities in distressed zones (a) In general Subpart D of part IV of subchapter A of chapter 1 45BB. Distressed zone pharmaceutical and medical device production credit (a) In general For purposes of section 38, the distressed zone pharmaceutical and medical device production credit for the taxable year shall be an amount equal to the applicable percentage of the qualified production activity expenditures of the taxpayer for the taxable year. (b) Applicable percentage For purposes of this section— (1) In general Except as provided in paragraph (2), the term applicable percentage (2) Increased amount where employees reside in distressed zone In the case of any qualified pharmaceutical or medical device production business a substantial portion of the employees of which reside in a distressed zone, the applicable percentage shall be 30 percent. (c) Qualified production activity expenditures For purposes of this section— (1) In general The term qualified production activity expenditures (A) wages paid or incurred to an employee of the taxpayer for services performed by such employee in the conduct of a qualified pharmaceutical or diagnostic medical device production business in a distressed zone (but only if the employee’s principal place of employment is in a distressed zone), and (B) qualified pharmaceutical or medical device production expenditures. (2) Qualified pharmaceutical or medical device production business (A) In general The term qualified pharmaceutical or medical device production business (B) Qualified pharmaceuticals (i) In general The term qualified pharmaceuticals (ii) Pharmaceutical The term pharmaceuticals (I) means any drug (as defined in section 201 of the Federal Food, Drug, and Cosmetic Act), and (II) includes a biological product (as defined in section 351 of the Public Health Service Act). (iii) Active pharmaceutical ingredient The term active pharmaceutical ingredients (iv) Excipient The term excipient (I) means any inactive ingredient that is intentionally added to a pharmaceutical that is not intended to exert therapeutic effects at the intended dosage, other than by acting to improve product delivery, and (II) includes any such filler, extenders, diluent, wetting agent, solvent, emulsifier, preservative, flavor, absorption enhancer, sustained release matrix, and coloring agent. (v) Medical diagnostic device The term medical diagnostic device (vi) Personal protective equipment The term personal protective equipment (I) any device (as defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act) that is a face mask, filtering facepiece respirator, face shield, surgical mask, gown, other apparel, or glove that is intended for a medical purpose, and (II) any particulate filtering air purifying respiratory protective device that is approved by the National Institute for Occupational Safety and Health under part 84 of title 42, Code of Federal Regulations (or successor regulations). (3) Certain health plan expenses treated as wages (A) In general The term wages (B) Qualified health plan expenses For purposes of this paragraph, the term qualified health plan expenses (C) Allocation rules For purposes of this paragraph, qualified health plan expenses shall be allocated to qualified wages in such manner as the Secretary may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among employees and pro rata on the basis of periods of coverage (relative to the periods to which such wages relate). (4) Qualified pharmaceutical or medical device production expenditures (A) Definition The term qualified pharmaceutical or medical device production expenditures (B) Qualified property (i) In general The term qualified property (ii) Exception Such term shall not include any property described in section 50(b) (determined as if the United States included Puerto Rico). (d) Distressed zone For purposes of this section, the term distressed zone (1) has been designated as a qualified opportunity zone under section 1400Z–1, and (2) has a poverty rate in excess of 30 percent for the calendar year prior to the calendar year that includes the date of enactment of this section. (e) Special rules (1) Application to United States shareholders of controlled foreign corporations (A) In general In the case of a domestic corporation that is a United States shareholder of a qualified controlled foreign corporation, the credit under subsection (a) (determined without regard to this paragraph) shall be increased by an amount equal to 30 percent of the corporation’s pro rata share (determined under rules similar to the rules of section 951(a)(2)) of qualified production activity expenditures of such controlled foreign corporation for the taxable year of the qualified controlled foreign corporation ending with or within the taxable year of the domestic corporation. (B) Qualified corporation For purposes of subparagraph (A), the term qualified controlled foreign corporation (2) Reduction in basis If a credit is determined under this section with respect to any property by reason of any qualified production activity expenditures described in subsection (b)(1)(B), the basis of such property shall be reduced by the amount of the credit so determined. (3) Coordination with other credits Any qualified production activity expenditures taken into account in determining the amount of the credit under subsection (a) shall not be taken into account in determining a credit under any other provision of this chapter. (f) Recapture (1) In general If, during any taxable year, property taken into account under subsection (c)(1)(B) is disposed of, or otherwise ceases to be used by the taxpayer in the active trade or business of producing qualified pharmaceuticals in commercial quantities, before the close of the recapture period, then the tax under this chapter for such taxable year shall be increased by the recapture percentage of the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero any credit determined under this section with respect to such property. (2) Recapture percentage For purposes of subparagraph (A), the recapture percentage shall be determined in the same manner as under section 50(a)(1)(B). (3) Application to United States shareholders In the case of any taxpayer to whom a credit is allowed by reason of subsection (e)(1), paragraph (1) shall be applied by substituting the controlled foreign corporation with respect to which the taxpayer is a United States shareholder the taxpayer (4) Application of other rules For purposes of this paragraph, rules similar to the rules of paragraphs (3), (4), and (5) (other than subparagraph (A) thereof) of section 50(a)(1) shall apply. . (b) Credit allowed against alternative minimum tax Section 38(c)(4)(B) of such Code is amended by redesignating clauses (x), (xi), and (xii) as clauses (xi), (xii), and (xiii), respectively, and by inserting after clause (ix) the following new clause: (x) the credit determined under section 45BB, . (c) Credit allowed against base erosion anti-Abuse tax Section 59A(b)(1)(B)(ii) of such Code is amended by striking plus (II) the credit allowed under section 38 for the taxable year which is properly allocable to the distressed zone pharmaceutical and medical device production credit determined under section 45BB(a), plus . (d) Denial of deduction Section 280C of such Code is amended by adding at the end the following new subsection: (i) Distressed zone pharmaceutical and medical device production credit No deduction shall be allowed for that portion of the qualified production activity expenditures (as defined in section 45BB(b)) otherwise allowable as a deduction for the taxable year which is equal to the amount of the distressed zone pharmaceutical and medical device production credit determined for such taxable year under section 45BB(a). . (e) Part of general business credit Section 38(b) of such Code is amended by striking plus , plus (42) the distressed zone pharmaceutical and medical device production credit determined under section 45BB(a). . (f) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item: Sec. 45BB. Distressed zone pharmaceutical and medical device production credit. . (g) Effective date The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.

Summary: Manufacturing API, Drugs, and Excipients in America Act or the MADE in America Act This bill establishes a tax credit for certain manufacturers of pharmaceuticals or medical products. Specifically, the bill establishes a tax credit for manufacturers of pharmaceuticals, active pharmaceutical ingredients, excipients (i.e., inactive ingredients), medical diagnostic devices, or personal protective equipment, if they are located in a designated distressed zone. The tax credit is equal to 25% of the manufacturer's production expenditures; the credit increases to 30% of expenditures if a substantial portion of the manufacturer's employees reside in a distressed zone. The bill defines distressed zone as an area that has been designated as a qualified opportunity zone by the Internal Revenue Service (i.e., an economically distressed community in which certain new investments may be eligible for preferential tax treatment) and that has a poverty rate of over 30%.