[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1328 Introduced in House (IH)]
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119th CONGRESS
1st Session
H. R. 1328
To amend the Internal Revenue Code of 1986 to establish the critical
supply chains reshoring investment tax credit.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 13, 2025
Ms. Malliotakis (for herself, Mr. Panetta, Mr. Buchanan, Ms. Velazquez,
Mr. Kelly of Pennsylvania, Mr. Hernandez, and Mr. Lawler) introduced
the following bill; which was referred to the Committee on Ways and
Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to establish the critical
supply chains reshoring investment tax credit.
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 ``Supply Chain Security and Growth Act
of 2025''.
SEC. 2. CRITICAL SUPPLY CHAINS RESHORING INVESTMENT CREDIT.
(a) In General.--Subpart E of part IV of subchapter A of the
Internal Revenue Code of 1986 is amended by inserting after section 48E
the following new section:
``SEC. 48F. CRITICAL SUPPLY CHAINS RESHORING INVESTMENT CREDIT.
``(a) In General.--For purposes of section 46, in the case of a
qualifying taxpayer, the critical supply chains reshoring investment
credit is an amount equal to 40 percent of the qualified investment
with respect to any critical supply chain facility placed in service
during such taxable year.
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Qualifying taxpayer.--
``(A) In general.--The term `qualifying taxpayer'
means a taxpayer that is not a prohibited foreign
entity.
``(B) Prohibited foreign entity.--For purposes of
this paragraph, the term `prohibited foreign entity'
means--
``(i) any foreign entity of concern (as
defined in section 40207(a)(5) of the
Infrastructure Investment and Jobs Act),
``(ii) any entity with respect to which the
government of a covered nation has the right or
power (directly or indirectly) to appoint or
approve the appointment of a covered officer,
or
``(iii) any entity 25 percent or more of
the capital or profits interests of which are
owned (directly or indirectly) in the aggregate
by 1 or more of the following:
``(I) A covered nation or an entity
described in clause (i) or (ii).
``(II) A citizen, national, or
resident of a covered nation.
``(III) An entity organized under
the laws of a covered nation.
``(C) Covered officer.--For purposes of this
paragraph, the term `covered officer' means--
``(i) any member of the board of directors,
board of supervisors, or an equivalent
governing body,
``(ii) the president, senior vice
president, chief executive officer, chief
operating officer, chief financial officer, or
general counsel, or
``(iii) any individual who performs duties
usually associated with a title listed in
clause (i) or (ii).
``(D) Covered nation.--For purposes of this
paragraph, the term `covered nation' has the meaning
given such term in section 4872(d) of title 10, United
States Code.
``(2) Qualified investment.--The qualified investment with
respect to any critical supply chain facility for any taxable
year is an amount equal to the basis of any qualified property
placed in service by the taxpayer during such taxable year
which is part of a such facility.
``(3) Qualifying property.--
``(A) In general.--The term `qualifying property'
means property--
``(i) that is integral to the operation of
a critical supply chain facility,
``(ii) that is tangible property,
``(iii) with respect to which depreciation
(or amortization in lieu of depreciation) is
allowable, and
``(iv) which is--
``(I) constructed, reconstructed,
or erected by the taxpayer, or
``(II) acquired by the taxpayer if
the original use of such property
commences with the taxpayer.
``(B) Reconstructed property.--Property shall be
treated as reconstructed for purposes of this paragraph
if improvements to such property satisfy the
substantial improvement test of section 1400Z-
2(d)(2)(D)(ii).
``(4) Critical supply chain facility.--The term `critical
supply chain facility' means a facility--
``(A) the primary purpose of which is the
manufacturing of--
``(i) An active pharmaceutical ingredient
(as defined in section 2017.1 of title 21, Code
of Federal Regulations (or any successor
regulations)),
``(ii) A drug (as defined in section 201(g)
of the Federal Food, Drug, and Cosmetic Act),
``(iii) A biological product (as defined in
section 351(i)(1) of the Public Health Service
Act),
``(iv) A medical countermeasure (as defined
in section 319F-3(i)(1) of the Public Health
Service Act),
``(v) A medical diagnostic device (as
defined in section 201(h) of the Federal Food,
Drug, and Cosmetic Act) intended for use in the
diagnosis of disease or other conditions,
``(vi) Semiconductors or semiconductor
manufacturing equipment,
``(vii) Aerospace equipment as defined
under North American Industry Classification
Code 3364, or
``(viii) Artificial nanomaterials, and
``(B) located in--
``(i) a `specified possession' within the
meaning of section 937(c),
``(ii) or Puerto Rico.
``(5) Aggregation rule.--
``(A) In general.--Members of a qualified
affiliated group shall be treated as a single taxpayer.
``(B) Qualified affiliated group.--
``(i) In general.--The term `qualified
affiliated group' means an affiliated group (as
defined in section 1504(a), determined without
regard to section 1504(b)(3)) at least 1 member
of which has made a qualified investment in a
critical supply chain facility located in an
economically distressed zone.
``(ii) Economically distressed zone.--For
purposes of this subparagraph, the term
`economically distressed zone' means a
population census tract that--
``(I) is a qualified opportunity
zone (as defined in section 1400z-
1(a)), and
``(II) has a poverty rate of not
less than 30 percent.
``(6) Exemption from certain special rules.--The credit
determined under subsection (a) shall be determined without
regard to paragraphs (1) and (4) of section 50(b).''.
(b) Coordination Between Critical Supply Chains Reshoring Credit
and Electricity Production Credit.--Section 45(e) of such Code is
amended by adding at the end the following new subsection:
``(e) Coordination With Critical Supply Chains Reshoring Investment
Credit.--The term `qualified facility' shall not include any facility
if a credit is allowed under section 48F with respect to such facility
for the taxable year or any prior taxable year.''.
(c) Elective Payment Allowed.--
(1) In general.--Section 6417(b) of such Code is amended by
adding at the end the following:
``(13) The critical supply chains reshoring investment
credit determined under section 48F.''.
(2) Election to be treated as applicable entity.--Section
6417(d)(1) is amended--
(A) by redesignating subparagraph (E) as
subparagraph (F), and
(B) by inserting after subparagraph (D) the
following new subparagraph:
``(E) Election with respect to critical supply
chains reshoring credit.--If a taxpayer other than an
entity described in subparagraph (A) makes an election
under this subparagraph with respect to any taxable
year in which such taxpayer has placed in service a
critical supply chain facility (as defined in section
48F(b)(4)), such taxpayer shall be treated as an
applicable entity for purposes of this section for such
taxable year, but only with respect to the credit
described in subsection (b)(13).''.
(d) Credit Made Transferable.--Section 6418(f)(1)(A) of such Code
is amended by adding at the end the following:
``(xii) The critical supply chains
reshoring investment credit determined under
section 48F.''.
(e) Credit Included in Investment Credit.--Section 46 of such Code
is amended by striking ``and'' at the end of paragraph (6), by striking
the period at the end of paragraph (7) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(8) the critical supply chains reshoring investment
credit.''.
(f) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2024.
SEC. 3. INCREASE IN DEEMED CREDIT FOR TAXES PAID TO POSSESSION OF THE
UNITED STATES.
(a) In General.--Section 960(d) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(4) Increase for taxes paid to possession of united
states.--In the case of tested foreign income taxes paid or
accrued to a possession of the United States, paragraph (1)
shall be applied by substituting `100 percent' for `80
percent'.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxes paid or accrued after December 31, 2024.
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