WASHINGTON, D.C. – This week, Representatives Chrissy Houlahan (D-PA) and Zach Nunn (R-IA) introduced bipartisan legislation to prevent another infant formula shortage. The Investing in New Families and Newborns Through (INFANT) Tax Credit Act will diversify the formula supply chain by supporting small-sized manufacturers based in the United States like ByHeart in Berks County.

“It wasn't long ago that the infant formula crisis had parents across America worried about meeting their babies' nutritional needs,” said Houlahan. “While that immediate concern has abated, we must address weaknesses in our supply chain to ensure we never find ourselves with empty shelves and hungry babies again. One way we do that is by supporting small, domestic infant formula manufacturers like those in my community in Pennsylvania. Creating tax credits for these manufacturers would promote competition, sustain production growth, and ensure greater access to infant formula options for families nationwide. The INFANT Tax Credit Act is a crucial step toward improving supply chain resiliency, and I'm proud to work with Rep. Nunn on this bipartisan effort.”

“Just two years ago, millions of parents were scrambling to feed their babies – some even traveling miles or paying out-of-this-world prices just to get the formula their child needed,” said Rep. Nunn. “We may be past that crisis now, but we should work to stop this from ever happening again. By supporting small-sized American manufacturers, we can prevent another shortage and keep children fed and happy.”

“ByHeart is proud to support the INFANT Tax Credit Act—an important step in fortifying our country’s supply chain to help prevent future infant formula shortages and ensure that families never have to worry about finding formula for their babies again,” said Ron Belldegrun, ByHeart Co-Founder and CEO. “As the first new U.S. formula manufacturer in decades, with facilities in Iowa, Pennsylvania, and Oregon, ByHeart is committed to making the highest quality infant formula in the world, with a mission of helping all parents feel confident about how they feed their babies. But we’re also working to encourage more companies to join us in innovating on behalf of babies and doing better for their health. This bill will support more companies in building manufacturing facilities and offering parents more options. This is a critical step in building a stronger infant nutrition industry and creating healthier futures for our babies. We applaud Representative Nunn’s and Rep. Houlahan’s leadership on this critical issue.”

In 2022, Rep. Chrissy Houlahan and a host of state and local leaders, including former Governor Tom Wolf, PA State Senator Judy Schwank, and PA State Rep. Mark Gillen, gathered at the ByHeart infant formula manufacturing plant in Berks County. The occasion celebrated ByHeart’s new state funding, which Houlahan advocated for. Since then, Houlahan has led efforts to create new grant opportunities at the federal level through the U.S. Department of Agriculture – those efforts are ongoing. In addition, Houlahan called on the Food and Drug Administration (FDA) to modernize the way it regulates food, including infant nutrition, following a report about its outdated policies.

Background:

In May 2022, the infant formula shortage hit critical levels as nationwide out-of-stock rates reached 70%, with just two brands accounting for 60% of the shortfall. This shortage was the result of not only the pandemic but also a February 2022 recall from a facility estimated to produce 43% of the total consumption of formula in the U.S. The shutdown immediately skyrocketed out-of-stock levels of infant formula to 25%, up from 11% in December 2021, and continued to increase into the summer.

Infant formula is the most highly regulated food. In the U.S., oversight and regulation of infant formula is akin to pharmaceuticals rather than food products. As a result of the high and costly barriers to entry, until 2022 there had not been a single new manufacturer registered with the FDA in 15 years.

The bipartisan INFANT Tax Credit Act would create a transferrable tax credit for small, domestic infant formula manufacturers across the nation. For any taxable year, manufacturers may receive a credit equal to 25% of their qualified investment, including manufacturers impacted during the height of the infant formula shortage crisis in 2022. Additionally, this bill provides a production tax credit to allow companies to receive $1.50 per pound of infant formula produced.

The INFANT Tax Credit Act would also require the Secretary of Agriculture to develop a plan to ensure existing business development programs at the Department of Agriculture encourage competition in the infant formula supply chain.

Text of the bill can be found here.

Houlahan is an Air Force veteran, an engineer, a serial entrepreneur, an educator, and a nonprofit leader. She represents Pennsylvania’s 6th Congressional District, which encompasses Chester County and southern Berks County. She serves on the House Armed Services Committee and the House Permanent Select Committee on Intelligence. She is the recipient of the U.S. Chamber of Commerce’s Abraham Lincoln Leadership for America Award which “recognizes members who demonstrate the bipartisan leadership and constructive governing necessary to move our country forward” and the Congressional Management Foundation’s 2022 Democracy Award for best Constituent Services in Congress.

###