SenateS. 5513119th Congress
Domestic Manufacturing Revitalization Act of 2026
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 5513 Introduced in Senate (IS)]
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119th CONGRESS
2d Session
S. 5513
To amend title XVIII of the Social Security Program to establish a
pilot program to incentivize certain hospitals to purchase personal
protective equipment and medical consumables that are domestic
products, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 24, 2026
Mr. Cassidy introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Program to establish a
pilot program to incentivize certain hospitals to purchase personal
protective equipment and medical consumables that are domestic
products, and for other purposes.
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 ``Domestic Manufacturing
Revitalization Act of 2026''.
SEC. 2. DOMESTIC PURCHASING INCENTIVES FOR CERTAIN HOSPITALS.
Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is
amended by inserting the following after section 1866G:
``SEC. 1866H. PILOT PROGRAM INCENTIVIZING DOMESTIC PURCHASES OF
PERSONAL PROTECTIVE EQUIPMENT AND MEDICAL CONSUMABLES BY
CERTAIN HOSPITALS.
``(a) In General.--Not later than 2 years after the date of
enactment of this section, the Secretary shall establish a pilot
program (referred to in this section as the `Program') that meets the
requirements of this section to incentivize eligible hospitals (as
defined in subsection (b)) to meet the domestic purchasing requirements
(as described in subsection (c)).
``(b) Eligible Hospitals Defined.--
``(1) Eligible hospital.--In this section, subject to
paragraph (3), the term `eligible hospital' means a hospital--
``(A) identified by the Secretary under paragraph
(2); and
``(B) that agrees to meet the purchasing
requirements described in subsection (c).
``(2) Identification.--The Secretary shall identify each
hospital that, during the period beginning on the date that is
5 years prior to the date of enactment of this section and
ending on the date of such enactment, received payment under
this title in an amount greater than the average amount of
payment received by hospitals under this title during such
period.
``(c) Domestic Purchasing Requirement.--
``(1) In general.--Subject to paragraph (2), the domestic
purchasing requirement described in this subsection is a
requirement that not less than 40 percent of the personal
protective equipment and medical consumables purchased by an
eligible hospital that is participating in the Program shall be
domestic products.
``(2) Percentage adjustment.--The Secretary may adjust the
percentage described in paragraph (1) to account for instances
of supply chain disruptions, natural disasters, or national
emergencies, as determined by the Secretary.
``(3) Attestation for domestic products.--
``(A) Submission to eligible hospitals.--Each
eligible hospital participating in the Program shall
require the manufacturer of each medical consumable and
personal protective equipment that the hospital relies
on to meet the domestic purchase requirements described
in this subsection to annually submit to the hospital
an attestation form described in subparagraph (B) that
such consumable or equipment is a domestic product.
``(B) Development of form.--The Secretary shall
develop an attestation form in which a manufacturer
described in subparagraph (A) shall attest under
penalty of perjury that the medical consumable or
personal protective equipment purchased by an eligible
hospital is a domestic product.
``(4) Submission of data.--The Secretary shall require each
eligible hospital participating in the Program, to submit as
part of any cost report required under this title--
``(A) the total dollar amount and quantity of
personal protective equipment and medical consumables
purchased by such hospital during the cost reporting
period that are domestic products;
``(B) the percentage of the total amount of
personal protective equipment and medical consumables
purchased by such hospital during the cost reporting
period that are domestic products; and
``(C) each attestation form submitted to the
hospital under paragraph (3)(A).
``(d) Decreased Reimbursement Rate.--
``(1) In general.--For discharges occurring after the third
year of the Program, for each eligible hospital participating
in the Program, the Secretary shall--
``(A) determine, using the data submitted under
paragraph (4) of subsection (c), if such hospital met
the purchasing requirements described in such
subsection with respect to the preceding year; and
``(B) decrease the payment amount that would
otherwise be made under the applicable payment system
by the applicable percent (as defined in paragraph
(2)).
``(2) Applicable percent defined.--In this subsection, the
term `applicable percent' means with respect to an eligible
hospital that failed to meet the purchasing requirements--
``(A) for 1 year, 2 percent;
``(B) for 2 years, 3 percent;
``(C) for 3 years, 4 percent;
``(D) for 4 years, 5 percent;
``(E) for 5 years, 6 percent;
``(F) for 6 years, 7 percent; and
``(G) for 7 years, 8 percent.
``(3) Length of decreased rate.--Any deduction in payment
made pursuant to this subsection shall remain in effect after
the termination of the Program.
``(e) Reimbursement of Domestic Products.--
``(1) In general.--For discharges occurring in each year of
the Program, for each eligible hospital participating in the
Program, the Secretary shall, from amounts transferred to the
Secretary under section 3(c) of the Domestic Manufacturing
Revitalization Act of 2026, annually reimburse such hospital
the dollar amount submitted by such hospital pursuant to
subsection (c)(4)(A).
``(2) Transfer to federal hospital insurance trust fund.--
After the Secretary reimburses each hospital under paragraph
(1), the Secretary shall transfer any remaining amounts
transferred to the Secretary under section 3(c) of the Domestic
Manufacturing Revitalization Act of 2026, to the Federal
Insurance Trust Fund under section 1817.
``(f) Voluntary Participation by Certain Other Hospitals.--The
Secretary shall establish a process under which a hospital not
identified by the Secretary under subsection (b)(2) may elect to
participate in the Program. In the case where a hospital makes an
election under the preceding sentence, the hospital shall be deemed to
be an eligible hospital under this section.
``(g) Trade Agreements and Buy American Act.--
``(1) In general.--The requirements of this section shall
apply notwithstanding any requirements under the Government
Procurement Agreement, any trade agreement to which the United
States is a party, or waiver under chapter 83 of title 41,
United States Code (commonly known as the `Buy American Act').
``(2) Government procurement agreement defined.--For
purposes of this subsection, the term `Government Procurement
Agreement' means the Agreement on Government Procurement
referred to in section 101(d)(17) of the Uruguay Round
Agreements Act (19 U.S.C. 3511(d)(17)).
``(h) Additional Definitions.--In this section:
``(1) Domestic product.--
``(A) In general.--
``(i) Definition.--Except as described in
subparagraph (B), the term `domestic product',
with respect to a medical consumable or
personal protective equipment, means such a
consumable or equipment that meets the
following requirements:
``(I) The final assembly or
processing of such consumable or
equipment occurs in the United States.
``(II) Not less than the applicable
percent of the total cost of components
(as defined in subparagraph (C)) of
such consumable or equipment is from
domestic content.
``(ii) Applicable percent.--For purposes of
clause (i)(II), the term `applicable percent'
means--
``(I) with respect to a year of the
Program occurring before the fourth
year of the Program, 60 percent; and
``(II) with respect to the fourth
year and subsequent years of the
Program, 75 percent.
``(B) Textile-based personal protective
equipment.--With respect to textile-based personal
protective equipment, such as masks, gowns, gloves, and
other equipment determined appropriate by the
Secretary, the term `domestic product' means such
equipment that meets the following requirements:
``(i) Each stage of production of the
textile-based personal protective equipment
occurs in the United States.
``(ii) Each textile, fabric, or fiber that
comprises such equipment is grown, reprocessed,
reused, or produced in the United States.
``(C) Total cost of components.--For purposes of
subparagraph (A), the term `total cost of components'
means--
``(i) with respect to a component of a
medical consumable or personal protective
equipment purchased by the manufacturer of such
consumable or equipment, the acquisition costs
of such component, including transportation
costs and any tariff or duty applicable to such
component; and
``(ii) with respect to a component of such
consumable or equipment manufactured by the
manufacturer of such consumable or equipment,
the manufacturing costs of such component,
including transportation and overhead costs
attributable to the component, minus any profit
and final assembly cost attributable to the
component.
``(2) Medical consumable.--The term `medical consumable'
means--
``(A) a medical or surgical instrument such as a
syringe, needle, infusion pump, forcep, and scalpel;
``(B) a medical or surgical supply, such as an
intravenous bag, catheter, tracheostomy tube,
anesthesia equipment, gauze, bandage, suture, and any
diagnostic or laboratory reagent; and
``(C) any related part or component determined
appropriate by the Secretary.
``(3) Personal protective equipment.--The term `personal
protective equipment' means equipment used for the protection
of individuals in a health care setting and includes a surgical
mask, N95 respirator, glove, gown, and any other related
medical part or component determined appropriate by the
Secretary.
``(i) Implementation.--This section shall be implemented through
notice and comment rulemaking.
``(j) Termination.--The Program shall terminate on the date that is
9 years after the date on which the Secretary implements the
Program.''.
SEC. 3. MODIFICATIONS TO RATES OF DUTY TO ADDRESS DOMESTIC PRODUCTION
OF PERSONAL PROTECTIVE EQUIPMENT AND MEDICAL CONSUMABLES.
(a) In General.--The President, by proclamation, shall revise the
Harmonized Tariff Schedule of the United States (in this section
referred to as the ``HTS'') to establish rates of duty for covered
articles that are equivalent to 300 percent ad valorem.
(b) Phase-In of Duty Increases.--The President, by proclamation,
shall phase-in the application of the duty increases required by
subsection (a) as follows:
(1) On and after the date that is 180 days after the date
of the enactment of this Act, 10 percent of the total duty
increase with respect to an article shall apply.
(2) On and after the date that is 2 years after such date
of enactment, 25 percent of the total duty increase with
respect to an article shall apply.
(3) On and after the date that is 4 years after such date
of enactment, 50 percent of the total duty increase with
respect to an article shall apply.
(4) On and after the date that is 5 years after such date
of enactment, 100 percent of the total duty increase with
respect to an article shall apply.
(c) Transfer of Amounts.--Not less frequently than annually, the
Secretary of the Treasury shall transfer to the Secretary of Health and
Human Services an amount equal to the amount of any additional duties
collected pursuant to the increased duty rates under this section
during the previous year.
(d) Covered Article Defined.--In this section, the term ``covered
article'' means an article under any of the following subheadings of
the HTS:
(1) 3005.10.50.
(2) 3005.90.10.
(3) 3005.90.50.
(4) 3006.10.00.
(5) 3822.11.00.
(6) 3822.19.00.
(7) 3923.29.00.
(8) 3926.20.10.
(9) 4015.12.00.
(10) 6210.10.50.
(11) 6307.90.98.
(12) 9018.31.00.
(13) 9018.32.00.
(14) 9018.39.00.
(15) 9018.90.30.
(16) 9018.90.75.
(17) 9018.90.80.
(18) 9019.20.00.
(19) 9020.00.60.
(20) 9020.00.90.
SEC. 4. CREDITS FOR PRODUCTION OF QUALIFIED PERSONAL PROTECTIVE
EQUIPMENT AND INVESTMENTS IN PERSONAL PROTECTIVE
EQUIPMENT MANUFACTURING PROPERTY.
(a) Production of Qualified Personal Protective Equipment.--
(1) In general.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:
``SEC. 45BB. CREDIT FOR PRODUCTION OF QUALIFIED PERSONAL PROTECTIVE
EQUIPMENT.
``(a) In General.--For purposes of section 38, the personal
protective equipment production credit for any taxable year is an
amount equal to the sum of the credit amounts determined under
subsection (b) with respect to each item of qualified personal
protective equipment which is--
``(1) produced by the taxpayer, and
``(2) during the taxable year, sold by such taxpayer to an
unrelated person.
``(b) Credit Amount.--The amount determined under this subsection
with respect to any item of qualified personal protective equipment
shall be equal to--
``(1) in the case of an N95 respirator mask, $0.25,
``(2) in the case of a surgical mask, $0.10,
``(3) in the case of a medical glove, $0.05,
``(4) in the case of a surgical gown, $0.50, and
``(5) in the case of a ventilator or any other major
equipment which has been designated by the Secretary of Health
and Human Services for purposes of this section, $250.
``(c) Qualified Personal Protective Equipment.--For purposes of
this section, the term `qualified personal protective equipment' means
any tangible personal property which--
``(1) is described in subsection (b),
``(2) is produced in the United States,
``(3) consists of--
``(A) in the case of any equipment produced during
calendar year 2026 or 2027, not less than 60 percent
domestic content, and
``(B) in the case of any equipment produced after
December 31, 2027, not less than 75 percent domestic
content, and
``(4) has been certified by the Secretary of Health and
Human Services as satisfying applicable Federal safety
standards.
``(d) Termination.--This section shall not apply to any qualified
personal protective equipment produced after December 31, 2035.''.
(2) Credit to be part of general business credit.--
Subsection (b) of section 38 of such Code is amended by
striking ``plus'' at the end of paragraph (40), by striking the
period at the end of paragraph (41) and inserting ``, plus'',
and by adding at the end the following new paragraph:
``(42) the personal protective equipment production credit
determined under section 45BB(a).''.
(b) Investment Credit in Lieu of Production Credit.--
(1) In general.--Section 46 of the Internal Revenue Code of
1986 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 personal protective equipment investment
credit.''.
(2) Personal protective equipment investment credit.--
Subpart E of part IV of subchapter A of chapter 1 of such Code
is amended by inserting after section 48E the following:
``SEC. 48F. INVESTMENT CREDIT FOR PERSONAL PROTECTIVE EQUIPMENT
MANUFACTURING PROPERTY.
``(a) In General.--For purposes of section 46, the personal
protective equipment investment credit for any taxable year is an
amount equal to 20 percent of the qualified investment for such taxable
year with respect to any PPE manufacturing facility of a taxpayer.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment with respect to any PPE manufacturing
facility for any taxable year is the basis of any personal
protective equipment manufacturing property placed in service
by the taxpayer during such taxable year which is part of a PPE
manufacturing facility.
``(2) Personal protective equipment manufacturing
property.--
``(A) In general.--For purposes of this section,
the term `personal protective equipment manufacturing
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,
``(iv) which consists of--
``(I) in the case of any property
placed in service during calendar year
2026 or 2027, not less than 60 percent
domestic content, and
``(II) in the case of any property
placed in service after December 31,
2027, not less than 75 percent domestic
content, and
``(v) which is integral to the operation of
the PPE manufacturing facility.
``(B) Buildings and structural components.--Rules
similar to the rules under section 48D(b)(2)(B) shall
apply for purposes of this paragraph.
``(3) PPE manufacturing facility.--For purposes of this
section, the term `PPE manufacturing facility' means a facility
located in the United States which is used predominately in the
production of qualified personal protective equipment (as
defined in section 45BB(c)).
``(c) Coordination With Personal Protective Equipment Production
Credit.--If a credit is allowed under this section for any taxable year
with respect to any personal protective equipment manufacturing
property placed in service by the taxpayer during such taxable year
which is part of a PPE manufacturing facility, no credit shall be
allowed under section 45BB for any qualified personal protective
equipment (as defined in section 45BB(c)) which is produced at such PPE
manufacturing facility.
``(d) Termination.--This section shall not apply to any personal
protective equipment manufacturing property which is placed in service
after December 31, 2035.''.
(c) Clerical Amendments.--
(1) The table of sections for subpart D of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by adding at the end the following new item:
``Sec. 45BB. Credit for production of qualified personal protective
equipment.''.
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1 of such Code is amended by adding at
the end the following new item:
``Sec. 48F. Investment credit for personal protective equipment
manufacturing property.''.
(d) Effective Dates.--The amendments made by this section shall
apply to qualified personal protective equipment produced, and personal
protective equipment manufacturing property placed in service, after
December 31, 2025.
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