Puerto Rico’s Resident Commissioner leads bipartisan legislation that would secure the National Supply Chain

April 5, 2020
Press Release

Washington, D.C.- Puerto Rico's Resident Commissioner, Jenniffer González-Colón introduced bipartisan legislation to provide federal tax incentives for the manufacturing of vital medical supplies now made in foreign jurisdictions, which poses a risk to U.S. supply chain as evidenced by the pandemic caused by Covid-19.
 
H.R. 6443, Securing the National Supply Chain Act of 2020, would secure the national stockpile supply chain by providing incentives to economically depressed areas, also known as distressed zones, in the United States, including the territories.  This initiative would help drive the consolidation of the manufacturing industry in Puerto Rico, creating new jobs and boosting the Island’s local economy.
 
Joining Gonzalez-Colon in sponsoring the bill is former U.S. Health and Human Services Secretary Donna Shalala (D-FL) and Representatives Rob Bishop (R-UT), Darren Soto (D-FL), Ruben Gallego (D-AZ), and Peter King (R-NY). 
 
The bill would provide a dollar-for-dollar credit against Federal taxes to U.S. companies for fully 50% of wages, investments, purchases made in the areas for manufacturing the needed medical supplies and a credit of 40% of wages and investments and 30% to 40% of local purchases in the case of other products, with the 40% applying for purchases from minority businesses.
 
The bill works under the scope of the $2.2 trillion CARES Act signed into law March 27th. The law requires a U.S. Government study with recommendations on ensuring the domestic supply of essential medial products. 
 
"The coronavirus pandemic has clearly shown us how the United States’ dependence on foreign jurisdictions for raw materials and products necessary for medical products and the nation’s security can put us at risk.  This legislation would prevent the shortage of supplies we are experiencing for future events, while at the same time contributing to the economic development of U.S. jurisdictions in need", said González-Colón.
 
“I am proud to co-sponsor this vital legislation that will not only help rebuild our domestic supply of critical health care supplies, but also provide a much-needed boost to areas of the country that are economically underserved and full of untapped potential.  This bill, which allows us to capitalize on regions’ skills and expertise, such as Puerto Rico’s robust history as a pharmaceutical and medical device manufacturing base, is long overdue and I’m proud to support it” said Congresswoman Shalala.

“I commend Resident Commissioner Jenniffer Gonzalez-Colon for continuing to prioritize the well-being of her constituents and the economic recovery of Puerto Rico. This bill establishes incentives to manufacture products in local distressed zones, decreasing our reliance on international supply chains and providing an economic boost to struggling communities. I look forward to working with the Resident Commissioner on moving this important legislation”, said congressman Rob Bishop.

“Our Nation clearly must do more to jump start development and economic growth in distressed areas of the country that have experienced persistent poverty and unemployment.  This legislation would not only revitalize those communities, but also incentivize companies to relocate to the United States and produce medical supplies and protective equipment essential to maintaining a robust strategic national stockpile”, said Congressman Gallego.
 
“The Distressed Zone legislation is crucial for areas across our nation which struggle to end the cycle of immense poverty simply because of the difficulty of attracting businesses. This bill, which allows for a variety of incentives to businesses operating in designated distress zones, provides a pathway for prosperity in the areas that need it most. I am proud to work with Congresswoman Gonzalez Colon in aiding our fellow Americans!”, said Congressman Soto.

“It is essential to encourage manufacturers, especially those producing essential items for our recovery, to relocate to distressed economic areas. These areas will enjoy the benefits of supply and demand as a catalyst of growth. I commend Rep. Gonzalez-Colon for initiating this critical legislation”, said Congressman King.
 
Areas of the country that would qualify would have to have had pervasive poverty, high unemployment, low labor force participation, and a prolonged period of economic depression, as well as, a poverty rate of not less than 35%. They would also have to have an economic development plan. 
 
The legislation also provides a path for areas with a poverty level between 30% and 35% to apply for the benefits (“distressed zone” designation). The idea is to make it attractive for manufacturers of products necessary for the nation’s security to relocate to areas where there would also be the benefit of economic progress for locally left-behind economies.
  
“Economic solutions for Puerto Rico must always be developed looking towards the future, and not the past.  Every new economic incentive must be tied to companies investing in infrastructure and human capital, and must be within the federal tax system,” Gonzalez-Colon added.
 
This is not the first time the Resident Commissioner introduces this type economic development legislation for the Island, and other financially distressed jurisdictions. During the previous Congress, she introduced a bill very similar to this one. 
 
“The current global situation represents an opportunity to ensure Puerto Rico and other relatively poor jurisdictions across the nation are able to attract the necessary capital to improve economic growth opportunities, such as job creation, while at the same time reducing America’s dependence on foreign supplies when the entire world is in crisis,” the territory’s representative to the Federal government concluded.