,,ii #aafth ,,congress #b;d ,session ,s4 #ddfg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,august #f1 #bjbj ,mr4 ,rubio introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to rescue domestic medical product manufacturing activity by providing incentives in economically distressed areas of the ,united ,states and its possessions4 #a4 ,short title ,this ,act may be cited as the ,medical ,manufacturing1 ,economic ,development1 and ,sustainability ,act of #bjbj or the ,,mmeds ,act of #bjbj4 #b4 ,economically distressed zones 7a7 ,in general ,chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subchapter3 ,,aa ,medical ,product ,manufacturing in ,economically ,distressed ,zones ,subchapter ,,aa--,medical ,product ,manufacturing in ,economically ,distressed ,zones ,sec4 #adjj;,,aa-#a4 ,medical product manufacturing in economically distressed zone credit4 ,sec4 #adjj;,,aa-#b4 ,credit for economically distressed zone products and services acquired by domestic medical product manufacturers4 ,sec4 #adjj;,,aa-#c4 ,special rules to secure the national supply chain4 ,sec4 #adjj;,,aa-#d4 ,designation of economically distressed zones4 #adjj;,,aa-#a4 ,medical product manufacturing in economically distressed zone credit 7a7 ,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 #dj percent of the sum of-- 7#a7 the aggregate amount of the taxpayer's medical product manufacturing economically distressed zone wages for such taxable year1 7#b7 the allocable employee fringe benefit expenses of the taxpayer for such taxable year1 and 7#c7 the depreciation and amortization allowances of the taxpayer for the taxable year with respect to qualified medical product manufacturing facility property4 7b7 ,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 #da1 and any other provision determined by the ,secretary to be substantially similar4 7c7 ,definitions and special rules ,for purposes of this section-- 7#a7 ,economically distressed zone wages 7,a7 ,in general ,the term economically distressed zone wages means amounts paid or incurred for wages during the taxable year which are-- 7i7 in connection with the active conduct of a trade or business of the taxpayer1 and 7ii7 paid or incurred for an employee the principal place of employment of whom is in a qualified medical product manufacturing facility of such taxpayer4 7,b7 ,limitation on amount of wages taken into account 7i7 ,in general ,the amount of wages which may be taken into account under subparagraph 7,a7 with respect to any employee for any taxable year shall not exceed the contribution and benefit base determined under section #bcj of the ,social ,security ,act for the calendar year in which such taxable year begins4 7ii7 ,treatment of part-time employees1 etc ,if-- 7,i7 any employee is not employed by the taxpayer on a substantially full-time basis at all times during the taxable year1 or 7,,ii7 the principal place of employment of any employee is not within an economically distressed zone at all times during the taxable year1 the limitation applicable under clause 7i7 with respect to such employee shall be the appropriate portion 7as determined by the ,secretary7 of the limitation which would otherwise be in effect under clause 7i74 7,c7 ,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 person1 unless the principal trade or business of the employer is to make employees available for temporary periods to other persons in return for compensation4 7#b7 ,allocable employee fringe benefit expenses 7,a7 ,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 product manufacturing facility3 7i7 ,employer contributions under a stock bonus1 pension1 profit-sharing1 or annuity plan4 7ii7 ,employer-provided coverage under any accident or health plan for employees4 7iii7 ,the cost of life or disability insurance provided to employees4 7,b7 ,allocation ,for purposes of subparagraph 7,a71 an amount shall be treated as allocable to a qualified medical product manufacturing facility only if such amount is with respect to employment of an individual for services provided1 and the principal place of employment of whom is1 in such facility4 7#c7 ,qualified medical product manufacturing facility ,the term qualified medical product manufacturing facility means any facility that-- 7,a7 researches and develops or produces medical products or essential components of medical products1 and 7,b7 is located within an economically distressed zone4 7#d7 ,qualified medical product manufacturing facility property ,the term qualified medical product manufacturing facility property means any property used in 7or consisting of7 a qualified medical product manufacturing facility if such property is directly connected to the research1 development1 or production of a medical product4 7#e7 ,medical product2 essential component 7,a7 ,medical product ,the term medical product means-- 7i7 a drug that-- 7,i7 is a prescription drug subject to regulation under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7 or section #cea of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb72 7,,ii7 is subject to regulation under section #hjb of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #chb72 or 7,,iii7 is described in section #bja7;jj7 of such ,act 7#ba ,u4,s4,c4 #cba7;jj772 or 7ii7 a device1 as defined in section #bja7;h7 of such ,act 7#ba ,u4,s4,c4 #cba7;h774 7,b7 ,essential component ,the term essential component means1 with respect to a medical product-- 7i7 an active pharmaceutical ingredient2 or 7ii7 a protein1 antibody1 enzyme1 hormone1 or other organic material that is an active ingredient in a biological product4 7#f7 ,aggregation rules 7,a7 ,in general ,for purposes of this section1 members of an affiliated group shall be treated as a single taxpayer4 7,b7 ,affiliated group ,the term affiliated group means an affiliated group 7as defined in section #aejd7;a71 determined without regard to section #aejd7;b77#c77 one or more members of which are engaged in the active conduct of a trade or business within an economically distressed zone4 #adjj;,,aa-#b4 ,credit for economically distressed zone products and services acquired by domestic medical product manufacturers 7a7 ,allowance of credit ,in the case of an eligible medical product manufacturer1 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 products or services4 7b7 ,applicable percentage ,for purposes of this section1 the term applicable percentage means-- 7#a7 #cj percent in the case of amounts paid or incurred to persons not described in paragraph 7#b7 or 7#c71 and 7#b7 #e percent in the case of amounts paid or incurred to a related person4 7c7 ,eligible medical product manufacturer ,for purposes of this section1 the term eligible medical product manufacturer means any person in the trade or business of producing medical products in the ,united ,states4 7d7 ,qualified product or service ,for purposes of this section1 the term qualified product or service means-- 7#a7 any product which is produced in an economically distressed zone and which is integrated into a medical product produced by the taxpayer1 and 7#b7 any service which is provided in an economically distressed zone and which is necessary to the production of a medical product by the taxpayer 7including packaging74 7e7 ,related persons ,for purposes of this section1 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 #eb7;b74 7f7 ,other terms ,terms used in this section which are also used in section #adjj;,,aa-#a shall have the same meaning as when used in such section4 #adjj;,,aa-#c4 ,special rules to secure the national supply chain 7a7 ,in general ,in the case of a qualified repatriated pharmaceutical manufacturing facility1 section #adjj;,,aa-#a7;a7 shall be applied by substituting #fj percent for #dj percent4 7b7 ,election ,to expense in lieu of tax credit for depreciation ,in the case of a taxpayer which elects 7at such time and in such manner as the ,secretary may provide7 the application of this subsection with respect to any qualified repatriated medical product manufacturing facility or qualified population health product manufacturing facility-- 7#a7 section #adjj;,,aa-#a7;a77#c7 shall not apply with respect to any qualified medical product manufacturing facility property with respect to such facility1 and 7#b7 for purposes of section #afh7k7-- 7,a7 such property shall be treated as qualified property1 and 7,b7 the applicable percentage with respect to such property shall be #ajj percent4 7c7 ,qualified repatriated medical product manufacturing facility ,for purposes of this section1 the term qualified repatriated medical product manufacturing facility means any qualified medical product manufacturing facility 7as defined in section #adjj;,,aa-#a7 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 factors4 #adjj;,,aa-#d4 ,designation of economically distressed zones 7a7 ,in general ,for purposes of this subchapter1 the term economically distressed zone means any population census tract within the ,united ,states which-- 7#a7 has a poverty rate of not less than #ce percent for each of the #e most recent calendar years for which information is available1 or 7#b7 satisfies each of the following requirements3 7,a7 ,the census tract has pervasive poverty1 unemployment1 low labor force participation1 and general distress measured as a prolonged period of economic decline measured by real gross national product4 7,b7 ,the census tract has a poverty rate of not less than #cj percent for each of the #e most recent calendar years for which information is available4 7,c7 ,the census tract has been designated as such by the ,secretary and the ,secretary of ,commerce pursuant to an application under subsection 7b74 7b7 ,application for designation 7#a7 ,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 located4 7#b7 ,requirements ,such application shall include a strategic plan for accomplishing the purposes of this subchapter1 which-- 7,a7 describes the coordinated economic1 human1 community1 and physical development plan and related activities proposed for the nominated area1 7,b7 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 process1 7,c7 identifies the amount of ,state1 local1 and private resources that will be available in the nominated area and the private_/public partnerships to be used1 which may include participation by1 and cooperation with1 universities1 medical centers1 and other private and public entities1 7,d7 identifies the funding requested under any ,federal program in support of the proposed economic1 human1 community1 and physical development and related activities1 7,e7 identifies baselines1 methods1 and benchmarks for measuring the success of carrying out the strategic plan1 including the extent to which poor persons and families will be empowered to become economically self-sufficient1 and 7,f7 does not include any action to assist any establishment in relocating from one area outside the nominated area to the nominated area1 except that assistance for the expansion of an existing business entity through the establishment of a new branch1 affiliate1 or subsidiary is permitted if-- 7i7 the establishment of the new branch1 affiliate1 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 operations1 7ii7 there is no reason to believe that the new branch1 affiliate1 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 operation1 and 7iii7 includes such other information as may be required by the ,secretary and the ,secretary of ,commerce4 7c7 ,period for which designations are in effect ,designation as an economically distressed zone may be made at any time during the #aj-year period beginning on the date of the enactment of this section1 and shall remain in effect with respect to such zone during the #ae-year period beginning on the date of such designation4 ,economically distressed zones described in subsection 7a77#a7 shall take effect on the date of the enactment of this ,act and shall remain in effect during the #ae-year period beginning on such date4 7d7 ,territories and possessions ,the term ,united ,states includes the #ej ,states1 the ,district of ,columbia1 and the territories and possessions of the ,united ,states4 7e7 ,regulations ,the ,secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section1 including-- 7#a7 not later than #cj days after the date of the enactment of this section1 a list of the population census tracts described in subsection 7a77#a71 and 7#b7 not later than #fj days after the date of the enactment of this section1 regulations or other guidance regarding the designation of population census tracts described in subsection 7a77#b74 4 7b7 ,clerical amendment ,the table of subchapters for chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,subchapter ,,aa--,medical ,product ,manufacturing in ,economically ,distressed ,zones 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjai4 #c4 ,report on need for incentivizing development of therapies ,not later than #ij days after the date of enactment of this ,act1 the ,secretary of ,health and ,human ,services shall examine and report to the ,congress on-- 7#a7 the extent to which the health of aging individuals in the ,united ,states1 ,african ,americans1 ,hispanics1 ,native ,americans1 veterans1 or other vulnerable populations in the ,united ,states has been disproportionately harmed by the ,,covid-#ai pandemic and prior epidemics and pandemics2 7#b7 the therapies currently available1 and whether there is a need for additional innovation and development to produce therapies1 to reduce the exposure of vulnerable populations in the ,united ,states to risk of disproportionate harm in epidemics and pandemics2 and 7#c7 whether the ,secretary recommends providing the same incentives for the development and marketing of therapies described in paragraph 7#b7 as is provided under the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cja et seq47 with respect to qualified infectious disease products designated under section #eje;,e7d7 of such ,act 7#ba ,u4,s4,c4 #cee;f7d774