BASIC ACT

Bill Number

H.R. 3204

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-05-05: Referred to the House Committee on Ways and Means.

Last Updated

2025-08-16T08:05:24Z

AI-Generated Summary

Purpose

The "Building Advanced Semiconductors Investment Credit Act" (BASIC ACT) aims to encourage investment in advanced manufacturing facilities, particularly for semiconductors, by enhancing a tax credit under the Internal Revenue Code (IRC). This is intended to strengthen domestic production capabilities in critical technologies.

Key Provisions

• Increased Tax Credit Rate: The advanced manufacturing investment credit is raised from 25% to 35% of qualified investments in eligible facilities.
• Extended Eligibility Period: The credit is available for facilities placed in service (i.e., operational and ready for use) through December 31, 2030, extending the previous deadline of December 31, 2026.
• Effective Date: Changes apply to property placed in service after the bill's enactment.

Significant Changes to Existing Law

• Amends Section 48D(a) of the IRC to boost the credit percentage from 25% to 35%, directly increasing the financial incentive for investments.
• Modifies Section 48D(e) to extend the program's timeframe by four years, allowing more time for companies to qualify and claim the credit.

These updates build on the existing framework established by the CHIPS and Science Act of 2022, which introduced the original 25% credit to promote U.S. semiconductor manufacturing.

Potential Impacts

• On Government Agencies: The U.S. Department of the Treasury and Internal Revenue Service will administer higher credits, potentially reducing federal tax revenue in the short term but supporting long-term economic goals like supply chain resilience.
• On Citizens: Could lead to job creation and economic growth in manufacturing sectors, benefiting workers in regions with new facilities; however, it may indirectly increase the federal deficit if not offset by other revenues.
• On International Relations: Enhances U.S. competitiveness in global semiconductor markets, potentially reducing reliance on foreign suppliers (e.g., from Asia) and bolstering national security by onshore production of critical components.

Main Stakeholders Affected

• Semiconductor and Advanced Manufacturing Companies: Primary beneficiaries, as they can claim larger tax credits for building or expanding facilities, lowering costs for investments.
• Investors and Taxpayers: Eligible entities investing in qualified property gain financial advantages, while the broader public may see indirect benefits from industry growth.
• U.S. Government: Faces revenue trade-offs but advances policy objectives in technology and manufacturing.
• Workers and Local Communities: Potential for increased employment and economic development in areas hosting new manufacturing sites.

Notable Legal, Constitutional, or Political Implications

• Legal: The bill operates within the IRC's established tax incentive structure, requiring no major reinterpretation of tax law; it promotes compliance through standard IRS oversight of credits.
• Constitutional: Aligns with Congress's authority under Article I, Section 8 to levy taxes and regulate commerce, with no apparent challenges to federal powers or individual rights.
• Political: Demonstrates bipartisan support (introduced by a diverse group of House members from both parties), signaling consensus on bolstering domestic tech manufacturing amid global supply chain concerns; could influence future industrial policy debates.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Tenney, Claudia [R-NY-24]

Cosponsors (23)

Rep. Suozzi, Thomas R. [D-NY-3], Rep. Malliotakis, Nicole [R-NY-11], Rep. Langworthy, Nicholas A. [R-NY-23], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Morelle, Joseph D. [D-NY-25], Rep. Mannion, John W. [D-NY-22], Rep. Tonko, Paul [D-NY-20], Rep. Carey, Mike [R-OH-15], Rep. Kennedy, Timothy M. [D-NY-26], Rep. Riley, Josh [D-NY-19], Rep. Horsford, Steven [D-NV-4], Rep. Balint, Becca [D-VT-At Large], Rep. Simpson, Michael K. [R-ID-2], Rep. Subramanyam, Suhas [D-VA-10], Rep. Kiggans, Jennifer A. [R-VA-2], Rep. Kim, Young [R-CA-40], Rep. Lawler, Michael [R-NY-17], Rep. Khanna, Ro [D-CA-17], Rep. Stefanik, Elise M. [R-NY-21], Rep. Neguse, Joe [D-CO-2], Rep. Kelly, Mike [R-PA-16], Rep. Vindman, Eugene Simon [D-VA-7], Rep. Lee, Susie [D-NV-3]

Recent Actions

• 2025-05-05: Referred to the House Committee on Ways and Means.
• 2025-05-05: Introduced in House
• 2025-05-05: Introduced in House

Bill Versions

• Building Advanced Semiconductors Investment Credit Act — issued 2025-05-05 — PDF (2 pages)