PlainBillCongress, translated.Legislation. Context. Public interest.Referred to the House Committee on Ways and Means.
Congressional Research Service
Version 00 · Introduced in House · Feb 13, 2025
Supply Chain Security and Growth Act of 2025
This bill establishes a tax credit for qualified investments made in certain facilities that are located in a U.S. possession and manufacture drugs, pharmaceuticals, semiconductors, or certain other items, subject to limitations. The bill also increases the deemed-paid foreign tax credit for taxes paid to a U.S. possession.
Specifically, under the bill, a taxpayer (other than a prohibited foreign entity) is allowed a tax credit for 40% of an investment in certain property that is
Showing the opening paragraphs of the official summary.
placed into service during the tax year;
integral to the operation of a critical supply chain facility; and
constructed, reconstructed, or erected by the taxpayer, or property acquired for original used by the taxpayer.
The bill defines critical supply chain facility as a facility that (1) manufactures active pharmaceutical ingredients, drugs, biologic products, medical countermeasures, medical diagnostic devices, semiconductors, semiconductor manufacturing equipment, aerospace equipment, or artificial nanomaterials; and (2) is located in Puerto Rico, Guam, American Samoa, the Northern Mariana Islands, or the Virgin Islands.
Under the bill, the tax credit is transferable and may be claimed as a direct cash payment (i.e., elective payment). (Limitations apply.)
Finally, the bill increases to 100% (from 80%) the deemed-paid foreign tax credit for income taxes paid or accrued by a controlled foreign corporation (CFC) to a U.S. possession. (Under current law, a U.S. shareholder of a CFC is allowed a tax credit for income taxes paid by a CFC on certain income attributable to the U.S. shareholder.)
People & committees
Rep. Malliotakis, Nicole [R-NY-11] · R–NY
Legislative record
A procedural vote is different from passage. Passage in one chamber does not establish enactment. Explore the glossary.
Referred to the House Committee on Ways and Means.
Introduced in House
Introduced in House
Primary sources
Text links open the official source. We also preserved the text version used in the PlainBill explanation below.
No related bills are listed in this snapshot. This does not establish whether the proposal has appeared in earlier Congresses.
Source last updated: May 1, 2026. Consult Congress.gov for the current record.
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PlainBill explanation
Based on the full Introduced in House · 2025-02-13 text. This explanation has not received human editorial review. This overview describes the proposal’s major provisions; it does not establish what its real-world effects would be.
The proposed Supply Chain Security and Growth Act of 2025 would create a 40% investment tax credit for eligible manufacturing facilities in Puerto Rico and specified U.S. possessions. It would cover selected medical, semiconductor, aerospace, and artificial nanomaterial manufacturing, while excluding taxpayers with specified foreign ownership or control. It would also increase the percentage used in a separate tax-credit calculation for certain taxes paid to U.S. possessions. These are proposed changes; the supplied history records introduction and committee referral, not enactment.
This Act may be cited as the Supply Chain Security and Growth Act of 2025.
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
The term qualifying taxpayer means a taxpayer that is not a prohibited foreign entity.
(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
(B) located in— (i) a specified possession within the meaning of section 937(c), (ii) or Puerto Rico.
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.
Source snapshot updated 2026-05-01T16:19:26Z. 2025-02-13: Referred to the House Committee on Ways and Means. 2025-02-13: Introduced in House
Section 2 would create a credit equal to 40% of qualified investment for a qualifying taxpayer's eligible facility placed in service during the tax year. Qualified investment would be measured by the tax basis—the value used for tax calculations—of qualified property placed in service that year as part of the facility.
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.
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.
Eligible facilities would have to be located in Puerto Rico or a U.S. possession covered by the bill's reference to Internal Revenue Code section 937(c).
(B) located in— (i) a specified possession within the meaning of section 937(c), (ii) or Puerto Rico.
A facility's primary purpose would have to be manufacturing one of the listed products: active drug ingredients, drugs, biological products, medical countermeasures, diagnostic medical devices, semiconductors or their manufacturing equipment, aerospace equipment, or artificial nanomaterials. Several categories depend on definitions in other laws or regulations.
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
Qualifying property would have to be physical property integral to operating the facility and eligible for depreciation or amortization, meaning tax deductions that spread its cost over time. The taxpayer would have to construct, reconstruct, or erect it, or acquire it with its original use beginning with that taxpayer.
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.
Property would count as reconstructed if its improvements satisfy the substantial-improvement test in Internal Revenue Code section 1400Z–2(d)(2)(D)(ii). The bill does not reproduce that test.
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).
The credit would exclude prohibited foreign entities. These include entities covered by an existing statutory definition of a foreign entity of concern, and entities whose covered officers can be appointed or approved, directly or indirectly, by a covered nation's government.
The term qualifying taxpayer means a taxpayer that is not a prohibited foreign entity.
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
An entity would also be excluded if at least 25% of its capital or profit interests were owned, directly or indirectly and in total, by the listed covered nations, entities, or people. The list includes citizens, nationals, or residents of a covered nation and entities organized under that nation's laws.
(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.
The foreign-government appointment restriction would cover governing-board members, specified senior executives and legal officers, and people performing equivalent duties. The bill uses the definition of covered nation in title 10, section 4872(d), without listing the nations.
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).
the term covered nation has the meaning given such term in section 4872(d) of title 10, United States Code.
Members of a qualifying affiliated group of companies would be treated as one taxpayer. At least one member would have to invest in an eligible facility in a census tract that is both a qualified opportunity zone under the referenced law and has a poverty rate of at least 30%.
Members of a qualified affiliated group shall be treated as a single taxpayer.
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.
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.
The new credit would be calculated without applying paragraphs (1) and (4) of Internal Revenue Code section 50(b). The supplied text does not reproduce those rules, so it does not establish the full practical scope of this exemption.
The credit determined under subsection (a) shall be determined without regard to paragraphs (1) and (4) of section 50(b).
The bill would exclude a facility from the section 45 electricity-production credit's definition of qualified facility if the new investment credit were allowed for that facility in the same tax year or any earlier tax year.
Coordination between critical supply chains reshoring credit and electricity production 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.
The bill would make the new credit eligible for section 6417's elective-payment mechanism, which provides a payment route for a tax credit. Taxpayers outside the existing entity category referenced in section 6417(d)(1)(A) could elect to be treated as eligible entities for a year when they place an eligible facility in service, solely for this credit.
(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.
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).
The new credit would be transferable under section 6418, allowing it to be transferred to another taxpayer under that section's rules. The bill would also add it to the investment credits listed in section 46.
(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.
Section 2's changes would apply to property placed in service after December 31, 2024.
The amendments made by this section shall apply to property placed in service after December 31, 2024.
Section 3 would change the percentage used in section 960(d)(1)'s deemed tax-credit calculation from 80% to 100% for tested foreign income taxes paid or accrued to a U.S. possession. This concerns taxes treated as paid for a credit calculation; the source does not reproduce the underlying calculation or define tested foreign income taxes.
3. Increase in deemed credit for taxes paid to possession of the United States
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.
Section 3's percentage change would apply to taxes paid or accrued after December 31, 2024.
The amendments made by this section shall apply to taxes paid or accrued after December 31, 2024.
The supplied official-actions snapshot, updated May 1, 2026, records introduction in the House and referral to the House Committee on Ways and Means on February 13, 2025. It supplies no later action and does not establish whether the bill subsequently advanced or became law.
Source snapshot updated 2026-05-01T16:19:26Z. 2025-02-13: Referred to the House Committee on Ways and Means. 2025-02-13: Introduced in House 2025-02-13: Introduced in House
A closer look
Reviewed version: Introduced in House · 2025-02-13. These findings describe provisions and who may benefit; they are not judgments of waste, corruption, or motive.
This review covers the supplied bill text. “None identified” does not rule out provisions in later versions or accompanying reports and disclosures.
Provisions outside the bill’s main subject, or policy changes attached to appropriations.
None identified in the reviewed text
No unrelated provision or policy attached to appropriations was identified in the complete supplied introduced text. This conclusion is limited to that version and does not establish the contents or attachment history of other versions or accompanying materials.
Spending directed to particular recipients or places outside ordinary competitive or formula-based allocation.
None identified in the reviewed text
No congressionally directed spending allocation to a particular recipient or place was identified in the complete supplied introduced text. Tax preferences are addressed separately below. This conclusion is limited to this version; absent disclosure and committee materials, it is not a formal earmark determination.
Narrow exceptions, exemptions, or preferential treatment that warrant a closer look.
Findings to examine
The supplied introduced text contains geographically and sectorally limited tax preferences and a narrower affiliated-group rule. These are classifications of special treatment, not judgments about its justification.
The proposed 40% investment credit would favor qualifying taxpayers investing in specified manufacturing sectors in Puerto Rico and covered U.S. possessions. This geographic and industry preference is central to the bill's policy.
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
The term qualifying taxpayer means a taxpayer that is not a prohibited foreign entity.
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.
Within the proposed investment-credit rules, affiliated groups with at least one member investing in an eligible facility in a qualified opportunity zone with poverty of at least 30% would receive special single-taxpayer treatment. Its financial effect depends on the existing tax rules not reproduced here.
Members of a qualified affiliated group shall be treated as a single taxpayer.
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.
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.
Taxpayers covered by section 960(d)(1) with tested foreign income taxes paid or accrued to U.S. possessions would receive a 100% calculation percentage instead of 80%. This is a separate geographic tax preference related to the bill's territorial investment policy; the supplied text does not establish each taxpayer's resulting credit.
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.
Full text preserved for this analysis. Legislative record snapshot: May 1, 2026. How PlainBill uses AI