Title: Securing the National Supply Chain Act of 2020
Policy area: Taxation

Summary:
Securing the National Supply Chain Act of 2020
This bill provides various tax credits related to economically distressed zones, including a tax credit based on the amount of wages paid by an employer to employees in such a zone. The bill also establishes a procedure for state and local governments to apply for designation as an economically distressed zone.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6443 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 6443

  To secure the national supply chain by providing tax incentives in 
economically distressed areas of the United States and its possessions.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 3, 2020

Miss Gonzalez-Colon of Puerto Rico (for herself, Mr. Gallego, Mr. King 
of New York, Ms. Shalala, and Mr. Soto) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To secure the national supply chain by providing tax 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 ``Securing the National Supply Chain 
Act of 2020''.

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--Economically Distressed Zones

``Sec. 1400AA-1. Economically distressed zone credit.
``Sec. 1400AA-2. Designation of economically distressed zones.

``SEC. 1400AA-1. 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 the sum of--
            ``(1) an amount equal to 40 percent of the sum of--
                    ``(A) the aggregate amount of the taxpayer's 
                economically distressed zone wages for such taxable 
                year, plus
                    ``(B) the allocable employee fringe benefit 
                expenses of the taxpayer for such taxable year,
            ``(2) an amount equal to 40 percent of the depreciation and 
        amortization allowances for the taxable year with respect to 
        property of the taxpayer which are located and used in the 
        active conduct of a trade or business within an economically 
        distressed zone, and
            ``(3) an amount equal to 30 percent of the payments made by 
        the taxpayer in course of a trade or business for purchases of 
        services or tangible property from an unrelated person (40 
        percent in the case of such a purchase from an unrelated 
        minority business) located within an economically distressed 
        zone.
    ``(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) Qualified economically distressed zone wages.--
                    ``(A) In general.--The term `qualified economically 
                distressed zone wages' means amounts paid or incurred 
                by the taxpayer for the taxable year which are--
                            ``(i) in connection with the active conduct 
                        of a trade or business of the taxpayer within 
                        an economically distressed zone, and
                            ``(ii) for wages of an employee for 
                        services provided, and the principal place of 
                        employment of whom is, in such economically 
                        distressed zone.
                    ``(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 
                `qualified 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 an economically 
                distressed zone:
                            ``(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 an 
                economically distressed zone 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 zone.
            ``(3) Minority business.--
                    ``(A) In general.--The term `minority business' 
                means--
                            ``(i) a sole proprietorship carried on by a 
                        qualified individual, or
                            ``(ii) 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).
                    ``(B) Qualified individual.--The term `qualified 
                individual' means any individual who--
                            ``(i) is of Asian-Indian, Asian-Pacific, 
                        Black, Hispanic or Native American origin or 
                        descent, and
                            ``(ii) is a United States citizen or legal 
                        resident of the United States or any of its 
                        territories or possessions.
            ``(4) Aggregation rules.--
                    ``(A) In general.--Members of an affiliated group 
                shall be treated as a single taxpayer.
                    ``(B) Affiliated group.--The term `qualified 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.
                    ``(C) Related persons.--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).
    ``(d) Special Rules To Secure the National Supply Chain.--
            ``(1) In general.--In the case of a qualified manufacturing 
        facility, subsection (a) shall be applied--
                    ``(A) by substituting `50 percent' for `40 percent' 
                each place it appears therein, and
                    ``(B) by substituting `50 percent' for `30 percent' 
                in paragraph (3) therein.
            ``(2) Qualified manufacturing facility.--For purposes of 
        this subsection, the term `qualified manufacturing facility' 
        means any manufacturing facility if--
                    ``(A) such manufacturing facility produces property 
                required to be maintained in the strategic national 
                stockpile under section 319F-2 of the Public Health 
                Service Act, and
                    ``(B) the production of such manufacturing facility 
                is moved to the United States (including any possession 
                of the United States) 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-2. DESIGNATION OF ECONOMICALLY DISTRESSED ZONES.

    ``(a) In General.--For purposes of this subchapter, the term 
`economically distressed zone' means any population census tract 
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, 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 `State' includes 
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, 2019.
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