MMEDS Act of 2021
Bill: H.R.2653 | Sponsor: Resident Commissioner González-Colón, Jenniffer (R-PR)
Policy area: Taxation

Summary:
Medical Manufacturing, Economic Development, and Sustainability Act of 2021 or the MMEDS Act of 2021
This bill provides incentives for relocating medical manufacturing facilities in the United States and for manufacturing medical products (i.e., drugs and devices) in economically distressed zones. Specifically, the bill allows a income tax credit for 40% of the sum of wages paid in a medical manufacturing economically distressed zone, employee fringe benefit expenses, and depreciation and amortization allowances with respect to qualified medical manufacturing facility property, and a credit for economically distressed zone products and services acquired by domestic medical manufacturers. The bill increases the credit rate for minority businesses.

To rescue domestic medical manufacturing activity by providing 
 incentives in economically distressed areas of the United States and 
                            its possessions.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medical Manufacturing, Economic 
Development, and Sustainability Act of 2021'' or the ``MMEDS Act of 
2021''.

SEC. 2. ECONOMICALLY DISTRESSED ZONES.

    (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 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 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 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 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 
        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 of an employee by the taxpayer for 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 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.
                    ``(D) Wages.--For purposes of this paragraph, 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 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 manufacturing 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 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 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 manufacturing facility.--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 distressed 
                zone.
            ``(4) Qualified medical manufacturing facility property.--
        The term `qualified medical manufacturing facility property' 
        means any property used in (or consisting of) a qualified 
        medical 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 MANUFACTURERS.

    ``(a) Allowance of Credit.--In the case of an eligible 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 during such taxable year for qualified economically distressed 
zone 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),
            ``(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 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 necessary to the production of a 
        medical product by the taxpayer (including packaging).
    ``(e) Minority Business.--For purposes of this section--
            ``(1) In general.--The term `minority business' means--
                    ``(A) a sole proprietorship carried on by a 
                qualified individual, or
                    ``(B) a corporation or partnership--
                            ``(i) at least 50 percent of the ownership 
                        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 `qualified 
        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 territories or 
                possessions.
    ``(f) 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).
    ``(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 repatriated medical 
manufacturing facility or a qualified population 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 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 manufacturing facility or 
qualified population health product manufacturing facility--
            ``(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 Manufacturing Facility.--For 
purposes of this section, the term `qualified repatriated medical 
manufacturing facility' means any qualified medical 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.
    ``(d) Qualified Population Health Product Manufacturing Facility.--
For purposes of this section, the term `qualified population health 
product manufacturing facility' means any qualified medical 
manufacturing facility (as defined in section 1400AA-1) that produces 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 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 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) 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) 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 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) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2020.

SEC. 3. AUTHORITY TO SUPPORT DEVELOPMENT OF POPULATION HEALTH PRODUCTS.

    (a) Definitions.--
            (1) Qualified countermeasure.--Subparagraph (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 U.S.C. 262(i))), or device (as 
                that term is defined 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 (including 
                        organisms that cause an infectious disease), 
                        toxin, chemical, radiological, or nuclear agent 
                        that may cause a public health emergency 
                        affecting national security; or
                            ``(ii) 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 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 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 adverse health 
        consequences or a serious threat to one or more vulnerable 
        American populations in an epidemic or pandemic.
            ``(12) Vulnerable american populations.--The term 
        `vulnerable American populations' means children, pregnant 
        women, older adults, minority populations, and other at-risk 
        individuals 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 infectious 
                        diseases in combination with underlying non-
                        communicable diseases, which may include the 
                        advanced research and development, 
                        manufacturing, and appropriate stockpiling of 
                        qualified pandemic or epidemic products, and 
                        products, technologies, or processes to support 
                        the advanced research and development of such 
                        countermeasures (including multiuse platform 
                        technologies for diagnostics, vaccines, and 
                        therapeutics; virus seeds; clinical trial lots; 
                        novel virus strains; and antigen and adjuvant 
                        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 development of--
                    ``(A) qualified countermeasures and qualified 
                pandemic or epidemic products likely to be safe and 
                effective with respect to vulnerable American 
                populations; and
                    ``(B) population health products likely to protect 
                vulnerable American populations with underlying non-
                communicable diseases from disproportionate 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 Affairs, 
        the Commissioner of Food and Drugs, and the heads of other 
        Federal agencies involved with approval and distribution of 
        health products to assure that such Federal agencies distribute 
        approved population health products as promptly and effectively 
        as possible, and as continuously as possible, to protect 
        vulnerable American populations from harm in epidemics and 
        pandemics.
            ``(9) Report on need for incentivizing development of 
        population health products.--Not later than 90 days after the 
        date of enactment of the Medical Manufacturing, Economic 
        Development, and Sustainability Act of 2021, the Secretary 
        shall examine and report to the Congress on--
                    ``(A) the extent to which the health of aging 
                Americans, African Americans, Hispanics, Native 
                Americans, veterans, or other vulnerable American 
                populations has been disproportionately harmed by the 
                COVID-19 pandemic and prior epidemics and pandemics;
                    ``(B) the population health products currently 
                available and whether there is a need for additional 
                innovation and development to produce population health 
                products to reduce the exposure of vulnerable American 
                populations to risk of disproportionate harm in 
                epidemics and pandemics; and
                    ``(C) whether the Secretary recommends providing 
                the same incentives for the development and marketing 
                of population health products as is given with respect 
                to covered infectious disease products under the 
                Federal Food, Drug, and Cosmetic Act, including under 
                section 505E of such Act.''.
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