I 
118TH CONGRESS 
1ST SESSION 
H. R. 447 
To rescue domestic medical manufacturing activity by providing incentives 
in economically distressed areas of the United States and its possessions. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 24, 2023 
Mrs. GONZA´LEZ-COLO´N (for herself and Ms. SALAZAR) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committee on Energy and Commerce, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To rescue domestic medical manufacturing activity by pro-
viding incentives in economically distressed areas of the 
United States and its possessions. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Medical Manufac-
turing, Economic Development, and Sustainability Act of 
2023’’ or the ‘‘MMEDS Act of 2023’’. 
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SEC. 2. ECONOMICALLY DISTRESSED ZONES. 
(a) IN GENERAL.—Chapter 1 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subchapter: 
‘‘Subchapter AA—Medical Manufacturing in 
Economically Distressed Zones 
‘‘SUBCHAPTER AA—MEDICAL MANUFACTURING IN ECONOMICALLY DISTRESSED 
ZONES 
‘‘Sec. 1400AA–1. Medical manufacturing in economically distressed zone credit. 
‘‘Sec. 1400AA–2. Credit for economically distressed zone products and services 
acquired by domestic medical manufacturers. 
‘‘Sec. 1400AA–3. Special rules to secure the national supply chain and for the 
production of population health products. 
‘‘Sec. 1400AA–4. Designation of economically distressed zones. 
‘‘SEC. 1400AA–1. MEDICAL MANUFACTURING IN ECONOMI-
CALLY DISTRESSED ZONE CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by subtitle A 
for the taxable year an amount equal 40 percent of the 
sum of— 
‘‘(1) the aggregate amount of the taxpayer’s 
medical manufacturing economically distressed zone 
wages for such taxable year, 
‘‘(2) the allocable employee fringe benefit ex-
penses of the taxpayer for such taxable year, and 
‘‘(3) the depreciation and amortization allow-
ances of the taxpayer for the taxable year with re-
spect to qualified medical manufacturing facility 
property. 
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‘‘(b) DENIAL OF DOUBLE BENEFIT.—Any wages or 
other expenses taken into account in determining the cred-
it under this section may not be taken into account in de-
termining the credit under sections 41, and any other pro-
vision determined by the Secretary to be substantially 
similar. 
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) 
ECONOMICALLY
DISTRESSED
ZONE 
WAGES.— 
‘‘(A) IN
GENERAL.—The term ‘economi-
cally distressed zone wages’ means amounts 
paid or incurred for wages of an employee by 
the taxpayer for the taxable year which are— 
‘‘(i) in connection with the active con-
duct 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 manufacturing fa-
cility 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 
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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 EM-
PLOYEES, ETC.—If— 
‘‘(I) any employee is not em-
ployed by the taxpayer on a substan-
tially full-time basis at all times dur-
ing the taxable year, or 
‘‘(II) the principal place of em-
ployment of any employee is not with-
in 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
EMPLOY-
EES.—The term ‘economically distressed zone 
wages’ shall not include any wages paid to em-
ployees who are assigned by the employer to 
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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. 
‘‘(D) WAGES.—For purposes of this para-
graph, the term ‘wages’ shall not include any 
amounts which are allocable employee fringe 
benefit expenses. 
‘‘(2) ALLOCABLE EMPLOYEE FRINGE BENEFIT 
EXPENSES.— 
‘‘(A) IN
GENERAL.—The term ‘allocable 
employee fringe benefit expenses’ means the ag-
gregate 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 manufac-
turing facility and which are not included as 
economically distressed zone wages pursuant to 
this subsection: 
‘‘(i) Employer contributions under a 
stock bonus, pension, profit-sharing, or an-
nuity plan. 
‘‘(ii) 
Employer-provided 
coverage 
under any accident or health plan for em-
ployees. 
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‘‘(iii) The cost of life or disability in-
surance provided to employees. 
‘‘(B) ALLOCATION.—For purposes of sub-
paragraph (A), an amount shall be treated as 
allocable to a qualified medical manufacturing 
facility only if such amount is with respect to 
employment of an individual for services pro-
vided, and the principal place of employment of 
whom is, in such facility. 
‘‘(3) QUALIFIED MEDICAL MANUFACTURING FA-
CILITY.—The term ‘qualified medical 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 dis-
tressed zone. 
‘‘(4) QUALIFIED MEDICAL MANUFACTURING FA-
CILITY
PROPERTY.—The term ‘qualified medical 
manufacturing facility property’ means any property 
used in (or consisting of) a qualified medical manu-
facturing facility if such property is directly con-
nected to the research, development, or production 
of a medical product. 
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‘‘(5) MEDICAL
PRODUCT; ESSENTIAL
COMPO-
NENT.— 
‘‘(A) MEDICAL PRODUCT.—The term ‘med-
ical product’ means— 
‘‘(i) a drug that— 
‘‘(I) is a prescription drug sub-
ject to regulation under section 505 of 
the Federal Food, Drug, and Cos-
metic 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 ingre-
dient, or 
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‘‘(ii) a protein, antibody, enzyme, hor-
mone, 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 ‘af-
filiated group’ means an affiliated group (as de-
fined in section 1504(a), determined without re-
gard to section 1504(b)(3)) one or more mem-
bers 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 MANUFACTURERS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli-
gible medical 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 dur-
ing such taxable year for qualified economically distressed 
zone products or services. 
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‘‘(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), 
‘‘(2) 40 percent in the case of amounts paid or 
incurred to an unrelated minority business, and 
‘‘(3) 5 percent in the case of amounts paid or 
incurred to a related person. 
‘‘(c) ELIGIBLE
MEDICAL
MANUFACTURER.—For 
purposes of this section, the term ‘eligible medical manu-
facturer’ means any person in the trade or business of pro-
ducing medical products in the United States. 
‘‘(d) QUALIFIED PRODUCT OR SERVICE.—For pur-
poses of this section, the term ‘qualified product or service’ 
means— 
‘‘(1) any product which is produced in an eco-
nomically distressed zone and which is integrated 
into a medical product produced by the taxpayer, 
and 
‘‘(2) any service which is provided in an eco-
nomically distressed zone and which is necessary to 
the production of a medical product by the taxpayer 
(including packaging). 
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‘‘(e) MINORITY BUSINESS.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘minority busi-
ness’ means— 
‘‘(A) a sole proprietorship carried on by a 
qualified individual, or 
‘‘(B) a corporation or partnership— 
‘‘(i) at least 50 percent of the owner-
ship interests in which are held by one or 
more qualified individuals, and 
‘‘(ii) of which a qualified individual is 
the president or chief executive officer (or 
a substantially equivalent position). 
‘‘(2) QUALIFIED INDIVIDUAL.—The term ‘quali-
fied individual’ means any individual who— 
‘‘(A) is of Asian-Indian, Asian-Pacific, 
Black, Hispanic, or Native American origin or 
descent, and 
‘‘(B) is a United States citizen or legal 
resident of the United States or any of its terri-
tories or possessions. 
‘‘(f) RELATED PERSONS.—For purposes of this sec-
tion, 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). 
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‘‘(g) 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 AND FOR THE PRODUCTION 
OF POPULATION HEALTH PRODUCTS. 
‘‘(a) IN GENERAL.—In the case of a qualified repatri-
ated medical manufacturing facility or a qualified popu-
lation health product manufacturing facility— 
‘‘(1) section 1400AA–1(a) shall be applied by 
substituting ‘60 percent’ for ‘40 percent’, and 
‘‘(2) section 1400AA–2(a) shall be applied— 
‘‘(A) by substituting ‘50 percent’ for ‘30 
percent’, and 
‘‘(B) by substituting ‘60 percent’ for ‘40 
percent’. 
‘‘(b) ELECTION TO EXPENSE IN LIEU OF TAX CRED-
IT 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 re-
spect to any qualified repatriated medical manufacturing 
facility or qualified population health product manufac-
turing facility— 
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‘‘(1) section 1400AA–1(a)(3) shall not apply 
with respect to any qualified medical 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 MANUFAC-
TURING FACILITY.—For purposes of this section, the term 
‘qualified repatriated medical manufacturing facility’ 
means any qualified medical manufacturing facility (as de-
fined 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. 
‘‘(d) QUALIFIED POPULATION HEALTH PRODUCT 
MANUFACTURING FACILITY.—For purposes of this sec-
tion, the term ‘qualified population health product manu-
facturing facility’ means any qualified medical manufac-
turing facility (as defined in section 1400AA–1) that pro-
duces a population health product (as defined in section 
319L(a)(11) of the Public Health Service Act) which the 
Secretary of Health and Human Services has identified 
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for support through a strategic initiative under section 
319L(c)(4)(F)(ii) of the Public Health Service Act. 
‘‘SEC. 1400AA–4. DESIGNATION OF ECONOMICALLY DIS-
TRESSED ZONES. 
‘‘(a) IN GENERAL.—For purposes of this subchapter, 
the term ‘economically distressed zone’ means any popu-
lation census tract within the United States which— 
‘‘(1) has a poverty rate of not less than 35 per-
cent for each of the 5 most recent calendar years for 
which information is available, or 
‘‘(2) satisfies each of the following require-
ments: 
‘‘(A) has pervasive poverty, unemployment, 
low labor force participation, and general dis-
tress measured as a prolonged period of eco-
nomic decline measured by real gross national 
product, 
‘‘(B) has a poverty rate of not less than 30 
percent for each of the 5 most recent calendar 
years for which information is available, and 
‘‘(C) has been designated as such by the 
Secretary and the Secretary of Commerce pur-
suant to an application under subsection (b). 
‘‘(b) APPLICATION FOR DESIGNATION.— 
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‘‘(1) IN GENERAL.—An application for designa-
tion as an economically distressed zone may be filed 
by a State or local government in which the popu-
lation census tract to which the application applies 
is located. 
‘‘(2) REQUIREMENTS.—Such application shall 
include a strategic plan for accomplishing the pur-
poses 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 af-
fected community is a full partner in the proc-
ess 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 part-
nerships to be used, which may include partici-
pation by, and cooperation with, universities, 
medical centers, and other private and public 
entities, 
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‘‘(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 car-
rying out the strategic plan, including the ex-
tent to which poor persons and families will be 
empowered to become economically self-suffi-
cient, 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 estab-
lishment of a new branch, affiliate, or sub-
sidiary is permitted if— 
‘‘(i) the establishment of the new 
branch, affiliate, or subsidiary will not re-
sult 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 
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being established with the intention of clos-
ing down the operations of the existing 
business entity in the area of its original 
location or in any other area where the ex-
isting business entity conducts business op-
eration, 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 EF-
FECT.—Designation as an economically distressed zone 
may be made at any time during the 10-year period begin-
ning 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 pe-
riod beginning on such date. 
‘‘(d) TERRITORIES
AND POSSESSIONS.—The term 
‘United States’ includes the 50 States, the District of Co-
lumbia, 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 ap-
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propriate to carry out the purposes of this section, includ-
ing— 
‘‘(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) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2022. 
SEC. 3. AUTHORITY TO SUPPORT DEVELOPMENT OF POPU-
LATION HEALTH PRODUCTS. 
(a) DEFINITIONS.— 
(1) QUALIFIED
COUNTERMEASURE.—Subpara-
graph (A) of section 319F–1(a)(2) of the Public 
Health Service Act (42 U.S.C. 247d–6a(a)(2)) is 
amended to read as follows: 
‘‘(A) QUALIFIED COUNTERMEASURE.—The 
term ‘qualified countermeasure’ means a drug 
(as that term is defined by section 201(g)(1) of 
the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 321(g)(1))), biological product (as that 
term is defined by section 351(i) of this Act (42 
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U.S.C. 262(i))), or device (as that term is de-
fined by section 201(h) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 321(h))), 
that the Secretary determines to be a priority 
consistent with sections 302(2) and 304(a) of 
the Homeland Security Act of 2002— 
‘‘(i) to diagnose, mitigate, prevent, or 
treat harm from any biological agent (in-
cluding organisms that cause an infectious 
disease), toxin, chemical, radiological, or 
nuclear agent that may cause a public 
health emergency affecting national secu-
rity; or 
‘‘(ii) to diagnose, mitigate, prevent, or 
treat harm from an underlying non-com-
municable disease which, combined with 
pandemic influenza or an emerging infec-
tious disease, may result in adverse health 
consequences or serious threat to one or 
more vulnerable American populations (as 
defined in section 319L(a)) in an epidemic 
or pandemic.’’. 
(2) OTHER
DEFINITIONS.—Subsection (a) of 
section 319L of the Public Health Service Act (42 
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U.S.C. 247d–7e) is amended by adding at the end 
the following new paragraphs: 
‘‘(11) POPULATION
HEALTH
PRODUCT.—The 
term ‘population health product’ means a widely 
available drug to diagnose, mitigate, prevent, or 
treat harm from an underlying non-communicable 
disease which, combined with pandemic influenza or 
an emerging infectious disease, may result in ad-
verse health consequences or a serious threat to one 
or more vulnerable American populations in an epi-
demic or pandemic. 
‘‘(12) 
VULNERABLE
AMERICAN
POPU-
LATIONS.—The term ‘vulnerable American popu-
lations’ means children, pregnant women, older 
adults, minority populations, and other at-risk indi-
viduals with relevant characteristics that warrant 
consideration during the process of researching and 
developing such countermeasures and products.’’. 
(b) STRATEGIC INITIATIVES.—Clause (ii) of section 
319L(c)(4)(F) of the Public Health Service Act (42 
U.S.C. 247d–7e(c)(4)(F)) is amended to read as follows: 
‘‘(ii) threats that consistently exist or 
continually circulate and have a significant 
potential to become a pandemic, such as 
pandemic influenza and emerging infec-
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tious diseases in combination with under-
lying non-communicable diseases, which 
may include the advanced research and de-
velopment, manufacturing, and appropriate 
stockpiling of qualified pandemic or epi-
demic products, and products, technologies, 
or processes to support the advanced re-
search and development of such counter-
measures (including multiuse platform 
technologies for diagnostics, vaccines, and 
therapeutics; virus seeds; clinical trial lots; 
novel virus strains; and antigen and adju-
vant material); and’’. 
(c) AT-RISK INDIVIDUALS.—Paragraph (6) of section 
319L(c) of the Public Health Service Act (42 U.S.C. 
247d–7e(c)) is amended to read as follows: 
‘‘(6) AT-RISK
INDIVIDUALS.—In carrying out 
the functions under this section, the Secretary may 
give a priority to advanced research and develop-
ment of— 
‘‘(A) qualified countermeasures and quali-
fied pandemic or epidemic products likely to be 
safe and effective with respect to vulnerable 
American populations; and 
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‘‘(B) population health products likely to 
protect vulnerable American populations with 
underlying non-communicable diseases from dis-
proportionate 
harm 
in 
epidemics 
and 
pandemics.’’. 
(d) OTHER AUTHORITIES.—Section 319L(c) of the 
Public Health Service Act (42 U.S.C. 247d–7e(c)) is 
amended by adding at the end the following: 
‘‘(8) 
TIMELY
DELIVERY
OF
POPULATION 
HEALTH PRODUCTS TO AT-RISK INDIVIDUALS.—The 
Secretary shall collaborate with the Administrator of 
the Centers for Medicare & Medicaid Services, the 
Secretary of Defense, the Secretary of Veterans Af-
fairs, the Commissioner of Food and Drugs, and the 
heads of other Federal agencies involved with ap-
proval and distribution of health products to assure 
that such Federal agencies distribute approved pop-
ulation health products as promptly and effectively 
as possible, and as continuously as possible, to pro-
tect vulnerable American populations from harm in 
epidemics and pandemics. 
‘‘(9) REPORT ON NEED FOR INCENTIVIZING DE-
VELOPMENT OF POPULATION HEALTH PRODUCTS.— 
Not later than 90 days after the date of enactment 
of the Medical Manufacturing, Economic Develop-
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H447
kjohnson on DSK79L0C42PROD with BILLS