Overview
Title
To amend the Internal Revenue Code of 1986 to disallow companies associated with foreign adversaries from receiving the advanced manufacturing production credit.
ELI5 AI
The bill wants to stop companies that are friends with countries who might not like the U.S. from getting a special money-saving bonus for making things, by checking how much those companies are controlled by those countries.
Summary AI
The bill H.R. 6762, titled the “Protecting American Advanced Manufacturing Act,” proposes changes to the Internal Revenue Code to prevent companies linked to foreign adversaries from getting a tax credit meant for advanced manufacturing. It specifies that companies considered "disqualified entities"—those controlled or influenced by foreign governments or organizations—would be ineligible for this credit. The bill outlines certain types of control or influence that would qualify a company as disqualified, including direct ownership, contractual arrangements, or substantial operational influence. These changes would apply to taxable years beginning after the act is passed.
Published
Keywords AI
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Bill Statistics
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AnalysisAI
General Summary of the Bill
The bill titled Protecting American Advanced Manufacturing Act seeks to amend the Internal Revenue Code of 1986. Its primary objective is to prevent companies associated with foreign adversaries from receiving tax credits for their involvement in producing advanced manufacturing components. The legislation introduces a detailed set of criteria that define which entities are considered "disqualified" due to their ties with foreign adversaries. These criteria revolve around ownership, influence, and the nature of financial arrangements with entities linked to foreign adversaries.
Summary of Significant Issues
The complexity of defining what constitutes a "disqualified entity" is a significant issue within the bill. The definitions are elaborate, encompassing various forms of ownership, control, and financial ties, potentially leading to confusion and the need for clarification. The bill introduces the term "foreign adversary," which is cited from another piece of legislation, potentially creating accessibility challenges for those without immediate access to or understanding of external legal texts. Moreover, the bill's intricacy requires stakeholders to interpret whether their relationships or transactions might be considered disqualifying, especially where substantial benefits or influences are concerned.
Impact on the Public Broadly
The public's interest in promoting fair and secure business practices may view this bill positively as it aims to protect national manufacturing capabilities from foreign influence. However, the intricate definitions and cross-references to other legal documents complicate understanding and compliance for the general public, potentially fostering uncertainty among smaller businesses or individuals trying to understand its implications firsthand.
Impact on Specific Stakeholders
Businesses and Manufacturers: The bill could create challenges for businesses by complicating the eligibility assessment for tax credits. Companies may have to expend significant resources, both in time and finances, to verify their compliance with the bill’s provisions. Those inadvertently caught in these definitions may lose beneficial credits, impacting their financial operations.
Legal and Financial Experts: These professionals might see an increase in demand for their services as companies navigate the intricacies of the bill to assess their association with foreign adversaries. This could prompt greater engagement with compliance and advisory roles.
Foreign Entities: Companies with foreign ties may feel the negative impact of heightened scrutiny and potential loss of access to tax incentives, prompting them to reevaluate their operations and partnerships within the U.S. market.
Overall, while the bill aims to protect domestic advanced manufacturing, its implications are wide-ranging and complex, necessitating careful interpretation and application to avoid unintended consequences for businesses and the broader economy.
Issues
The definition of 'disqualified entity' in Section 2 is extensive and complex, potentially leading to confusion and requiring further clarification. This complexity could make it challenging for companies to determine their eligibility for credits, impacting business decisions and international relations.
The bill uses the term 'foreign adversary,' which is tied to another piece of legislation, requiring cross-referencing with section 4872(d)(2) of title 10, United States Code. This could pose accessibility issues for the general public and smaller entities without legal support, leading to misunderstandings or non-compliance.
The determination of 'substantial benefit' in Section 2, particularly in the context of exceptions for arm's-length transactions, is subjective and could be open to interpretation. This ambiguity might result in inconsistent application or enforcement, affecting companies accused of improper associations.
The language used in Section 2 describing entities influenced by foreign adversaries is highly complex and may necessitate legal or financial expertise to fully comprehend, potentially increasing the compliance burden on businesses.
Section 1 only contains a short title and lacks details about the substance of the Act, making it impossible to evaluate for potential issues or assess whom it might favor or disadvantage.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The Act, titled the “Protecting American Advanced Manufacturing Act,” is identified by this short title and outlines its focus on safeguarding and promoting advanced manufacturing in the United States.
2. Prohibition on allowance of advanced manufacturing production credit for eligible components produced by companies associated with foreign adversaries Read Opens in new tab
Summary AI
The bill section prohibits giving tax credits for producing advanced manufacturing components to companies linked with foreign adversaries. It defines which entities are disqualified, mainly those controlled or significantly influenced by such adversaries, and outlines the types of influence, such as ownership or certain financial arrangements.