Generic drugs and biosimilars investment credit

(a) In general Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 48E the following new section: 48F. Generic drugs and biosimilars investment credit (a) Establishment of credit For purposes of section 46, the generic drugs and biosimilars investment credit for any taxable year is an amount equal to 25 percent of the qualified investment for such taxable year with respect to any qualified facility of an eligible taxpayer. (b) Qualified investment For purposes of this section— (1) In general The qualified investment for any taxable year is the basis of any qualified property placed in service by the taxpayer during such taxable year which is part of a qualified facility. (2) Qualified property (A) In general The term qualified property means property— (i) which is tangible property, (ii) with respect to which depreciation (or amortization in lieu of depreciation) is allowable, (iii) 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, and (iv) which is used as an integral part of the qualified facility to produce eligible components. (B) Buildings and structural components (i) In general The term qualified property includes any building or its structural components which otherwise satisfies the requirements of subparagraph (A). (ii) Exception Clause (i) shall not apply with respect to a building or portion of a building used for offices, administrative services, or other functions unrelated to the production of eligible components. (3) Qualified facility The term qualified facility means a facility— (A) which is owned (in whole or in part) by the taxpayer, (B) which is located in the United States or any territory of the United States, and (C) the primary purpose of which is the production of eligible components. (4) Coordination with rehabilitation credit The qualified investment with respect to any qualified facility for any taxable year shall not include that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)). (5) Certain progress expenditure rules made applicable Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply. (c) Definitions For purposes of this section— (1) Eligible taxpayer The term eligible taxpayer means any taxpayer which is not a foreign entity of concern (as defined in section 9901(8) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (15 U.S.C. 4651)). (2) Eligible component The term eligible component has the meaning given such term in section 45BB(c)(1). (3) Production The term production has the meaning given such term in section 45BB(c)(6). (d) Termination of credit The credit allowed under this section shall not apply to property the construction of which begins after December 31, 2028. (e) Regulatory authority The Secretary shall prescribe such regulations and other guidance as are appropriate or necessary to carry out the purposes of this section.. (b) Elective payment (1) In general Section 6417(b) of the Internal Revenue Code of 1986, as amended by section 2(b) of this Act, is further amended by adding at the end the following new paragraph: (14) The generic drugs and biosimilars investment credit determined under section 48F.. (2) Election with respect to other entities Paragraph (1) of section 6417(d) of such Code, as amended by this Act, is further amended— (A) by redesignating subparagraph (F) as subparagraph (G), (B) by striking or (E) each place it appears in subparagraph (G), as so redesignated, and inserting (E), or (F), and (C) by inserting after subparagraph (E) the following new subparagraph: (F) Election with respect to generic drugs and biosimilars investment credit 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 qualified facility (as defined in section 48F(b)(3)), 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)(14).. (c) Transfer of credits Section 6418(f)(1)(A) of the Internal Revenue Code of 1986, as amended by this Act, is further amended by adding at the end the following new clause: (xiii) The generic drugs and biosimilars investment credit determined under section 48F.. (d) Conforming amendments (1) Section 46 of the Internal Revenue Code of 1986 is amended— (A) by striking and at the end of paragraph (6), (B) by striking the period at the end of paragraph (7) and inserting, and, and (C) by adding at the end the following new paragraph: (8) the generic drugs and biosimilars investment credit.. (2) Section 49(a)(1)(C) of such Code is amended— (A) by striking and at the end of clause (vii), (B) by striking the period at the end of clause (viii) and inserting, and, and (C) by adding at the end the following new clause: (ix) the basis of any qualified property which is part of a qualified facility under section 48F.. (3) The table of sections for subpart E of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 48E the following new item: 48F. Generic drugs and biosimilars investment credit.. (e) Effective date The amendments made by this section shall apply to property placed in service after December 31, 2026.