H.R.1328 - Supply Chain Security and Growth Act of 2025 (119th Congress)
Summary
H.R.1328, the Supply Chain Security and Growth Act of 2025, aims to incentivize the reshoring of critical supply chains to the United States. It proposes a 40% tax credit for qualified investments in critical supply chain facilities, specifically targeting the manufacturing of pharmaceuticals, medical devices, semiconductors, aerospace equipment, and artificial nanomaterials. The bill also includes provisions to increase the deemed credit for taxes paid to possessions of the United States and allows for elective payments and transferability of the credit.
Expected Effects
The bill's primary effect would be to reduce reliance on foreign entities for critical goods by making domestic production more financially attractive. This could lead to increased investment in manufacturing facilities within the U.S. and its territories, particularly in economically distressed zones. The changes to tax credits related to US possessions are designed to further incentivize domestic production.
Potential Benefits
- Increased Domestic Manufacturing: The tax credit encourages companies to build or expand manufacturing facilities in the U.S.
- Job Creation: Reshoring supply chains can lead to new jobs in manufacturing, construction, and related industries.
- Reduced Reliance on Foreign Entities: By incentivizing domestic production, the bill aims to decrease dependence on potentially unreliable foreign suppliers.
- Economic Development in Distressed Zones: The bill targets investments in qualified opportunity zones with high poverty rates, potentially stimulating economic growth in these areas.
- Strengthened National Security: Reshoring critical supply chains can enhance national security by ensuring access to essential goods during times of crisis.
Potential Disadvantages
- Potential for Increased Costs: The tax credit could lead to higher prices for consumers if companies pass on the costs of reshoring.
- Complexity of Implementation: Defining "critical supply chain facilities" and "qualifying property" may lead to disputes and administrative challenges.
- Risk of Inefficient Allocation of Resources: The tax credit may incentivize investments that are not economically viable in the long term without government support.
- Potential for Abuse: The elective payment and transferability provisions could create opportunities for fraud or misuse of the tax credit.
- Limited Scope: The bill focuses on specific industries and geographic areas, potentially neglecting other important sectors of the economy.
Constitutional Alignment
The bill appears to align with the Commerce Clause (Article I, Section 8, Clause 3) by regulating interstate and international commerce through incentives for domestic production. The power to lay and collect taxes (Article I, Section 8, Clause 1) is also relevant, as the bill modifies the tax code to achieve its policy goals. The focus on promoting the general welfare, as stated in the Preamble, is also a consideration, as the bill aims to strengthen the economy and national security.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).