119-hr3042

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3042 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 3042

 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

 April 28, 2025

Ms. Malliotakis (for herself, Mr. Torres of New York, Ms. Salazar, Mr. 
 Soto, and Mr. Hurd of Colorado) introduced the following 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 consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

 A BILL

 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 2025'' or the ``MMEDS Act of 
2025''.

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) , and
 ``

    (2) 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) 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) .
 ``

    (f) 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 30 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 25 
 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, 2024.

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 2025, 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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