[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3495 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 3495

  To amend the Internal Revenue Code of 1986 to provide market-based 
           manufacturing incentives, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 18, 2011

Mr. Honda (for himself, Ms. Schakowsky, Ms. Berkley, Mr. Grijalva, Ms. 
 Lee of California, Mr. Carson of Indiana, Ms. Wilson of Florida, Mr. 
Cicilline, Mr. Davis of Illinois, Mr. Conyers, Ms. Clarke of New York, 
 and Mr. Jackson of Illinois) introduced the following bill; which was 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to provide market-based 
           manufacturing incentives, 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 ``Market Based Manufacturing 
Incentives Act of 2011''.

SEC. 2. CREDIT FOR RETAIL PURCHASE OF CERTAIN DOMESTIC PRODUCTS.

    (a) In General.--Subpart B 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. 30E. DOMESTIC MANUFACTURING CONSUMER CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for any taxable year an amount 
equal to the applicable percentage of the aggregate amount paid or 
incurred by the taxpayer for specified products during any portion such 
taxable year which is part of the eligible period.
    ``(b) Applicable Percentage; Eligible Period.--For purposes of this 
section--
            ``(1) Applicable percentage.--The term `applicable 
        percentage' means, with respect to any specified product, the 
        percentage (not less than 5 percent nor more than 20 percent) 
        determined by the Commission under subsection (e)(4) with 
        respect to such product.
            ``(2) Eligible period.--The term `eligible period' means, 
        with respect to any specified product, the period (not less 
        than 5 years nor more than 10 years) determined by the 
        Commission under subsection (e)(5) with respect to such 
        product.
            ``(3) Separate application to each specified product.--
        Subsection (a) shall be applied separately with respect to each 
        of the specified products designated under subsection (e).
    ``(c) Specified Product.--For purposes of this section--
            ``(1) In general.--The term `specified product' means any 
        designated domestic product--
                    ``(A) the original use of which commences with the 
                taxpayer, and
                    ``(B) which is acquired by the taxpayer for use or 
                lease, but not for resale.
            ``(2) Designated domestic product.--The term `designated 
        domestic product' means any designated product which has been 
        certified by the Secretary as--
                    ``(A) having been assembled in the United States, 
                and
                    ``(B) consisting at least 60 percent of components 
                assembled or otherwise arising in the United States.
            ``(3) Designated product.--The term `designated product' 
        means the 10 products designated by the Secretary, in 
        consultation with the Commission, under subsection (e).
    ``(d) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--So much of the credit which would be allowed under 
        subsection (a) for any taxable year (determined without regard 
        to this subsection) that is attributable to property used by 
        the taxpayer in the conduct of a trade or business shall be 
        treated as a credit listed in section 38(b) for such taxable 
        year (and not allowed under subsection (a)).
            ``(2) Personal credit.--For purposes of this title, the 
        credit allowed under subsection (a) for any taxable year 
        (determined after application of paragraph (1)) shall be 
        treated as a credit allowable under subpart A for such taxable 
        year.
    ``(e) Selection of Designated Products.--
            ``(1) In general.--The Secretary, in consultation with the 
        Commission, shall designate 10 products for purposes of this 
        section.
            ``(2) Eligible products.--A product shall not be eligible 
        for designation under this section unless--
                    ``(A) such product represents a technological 
                innovation, and
                    ``(B) the designation of such product has the 
                potential to produce substantial long-term job 
                opportunities in the United States.
            ``(3) Criteria for designation.--In making designations of 
        products under this subsection, the Secretary shall take into 
        consideration--
                    ``(A) the number of jobs in the United States that 
                the Secretary estimates will result (directly and 
                indirectly) from the designation of such product, and
                    ``(B) the speed with which such jobs are likely to 
                be created.
            ``(4) Determination of credit percentage.--The Secretary, 
        in consultation with the Commission, shall determine the 
        applicable percentage which applies for purposes of subsection 
        (a) with respect to each product designated under this 
        subsection. Such percentage shall not be less than 5 percent 
        and shall not be more than 20 percent. Such percentage shall be 
        determined on the basis of the incentive needed with respect to 
        each such product taking into account the market factors with 
        respect to such product.
            ``(5) Determination of period during which credit 
        allowed.--The Secretary, in consultation with the Commission, 
        shall determine the eligible period which applies for purposes 
        of subsection (a) with respect to each product designated under 
        this subsection. Such period shall not be less than 5 years and 
        shall not be more than 10 years. Such period shall be 
        determined on the basis of the incentive needed with respect to 
        each such product taking into account the market factors with 
        respect to such product.
    ``(f) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Commission.--The term `Commission' means the 21st 
        Century American Manufacturing Commission established under 
        section 3 of the Market Based Manufacturing Incentives Act of 
        2011.
            ``(2) Reduction in basis.--For purposes of this subtitle, 
        the basis of any property for which a credit is allowable under 
        subsection (a) shall be reduced by the amount of such credit so 
        allowed (determined without regard to subsection (d)).
            ``(3) No double benefit.--The amount of any deduction or 
        other credit allowable under this chapter with respect to any 
        property shall be reduced by the amount of the credit allowed 
        under subsection (a) for such property (determined without 
        regard to subsection (d)).
            ``(4) Property used by tax-exempt entity.--In the case of 
        property whose use is described in paragraph (3) or (4) of 
        section 50(b) and which is not subject to a lease, the person 
        who sold such property to the person or entity using such 
        property shall be treated as the taxpayer that placed such 
        vehicle in service, but only if such person clearly discloses 
        to such person or entity in a document the amount of any credit 
        allowable under subsection (a) with respect to such property 
        (determined without regard to subsection (d)). For purposes of 
        subsection (d), property to which this paragraph applies shall 
        be treated as property used by the taxpayer in the conduct of a 
        trade or business.
            ``(5) Property used outside united states, etc., not 
        qualified.--No credit shall be allowable under subsection (a) 
        with respect to any property referred to in section 50(b)(1).
            ``(6) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any property which ceases 
        to be property eligible for such credit (including recapture in 
        the case of a lease period of less than the economic life of 
        the property).
            ``(7) Election to not take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such property.
    ``(g) Termination.--This section shall not apply to property 
acquired after the date which is 10 years after the date of the 
enactment of this section.''.
    (b) Conforming Amendments.--
            (1) Section 38(b) of such Code is amended by striking 
        ``plus'' at the end of paragraph (35), by striking the period 
        at the end of paragraph (36) and inserting ``, plus'', and by 
        adding at the end the following new paragraph:
            ``(37) the portion of the domestic manufacturing consumer 
        credit to which section 30E(d)(1) applies.''.
            (2) Section 1016(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (36), by striking the period at 
        the end of paragraph (37) and inserting ``, and'', and by 
        adding at the end the following new paragraph:
            ``(38) to the extent provided in section 30E(f)(2).''.
            (3) Section 6501(m) of such Code is amended by inserting 
        ``30E(f)(7),'' after ``30D(e)(4),''.
            (4) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

``Sec. 30E. Domestic manufacturing consumer credit.''.
    (c) GAO Report.--The Government Accountability Office shall, during 
the 3d, 5th, and 7th years after the effective date of the domestic 
manufacturing consumer credit (described in subsection (d)), report to 
Congress on the economic effects of such credit. Such report shall 
include the aggregate value of the domestic manufacturing consumer 
credits determined with respect to taxpayers under section 30E of the 
Internal Revenue Code of 1986 and an estimate of the economic activity 
stimulated by such credits.
    (d) Effective Date.--The amendments made by this section shall 
apply to property acquired after the date which is 1 year after the 
date on which the 21st Century American Manufacturing Commission makes 
its recommendations to the Secretary of the Treasury under section 3(b) 
of this Act.

SEC. 3. ESTABLISHMENT OF 21ST CENTURY AMERICAN MANUFACTURING 
              COMMISSION.

    (a) In General.--There is established a commission to be known as 
the 21st Century American Manufacturing Commission.
    (b) Duties.--The Commission shall conduct research regarding 
appropriate products to make eligible for the tax credit provided by 
section 30E of the Internal Revenue Code of 1986 and shall make 
recommendations to the Secretary of the Treasury regarding which 
products should be designated for purposes of such section and the 
applicable percentage and eligible period which should be determined 
with respect to each such product. The commission shall make such 
recommendations to the Secretary of the Treasury not later than 6 
months after the date of the enactment of this Act.
    (c) Membership.--
            (1) In general.--The Commission shall be composed of 10 
        members who shall be appointed by the Secretary of the Treasury 
        or his designee not later than 30 days after the enactment of 
        this Act.
            (2) Political affiliation.--Not more than 5 members may be 
        of the same political party.
            (3) Terms.--Each member shall be appointed for the life of 
        the Commission.
            (4) Vacancies.--A vacancy in the Commission shall be filled 
        in the manner in which the original appointment was made.
            (5) Pay of members.--
                    (A) In general.--Members shall each be entitled to 
                receive the daily equivalent of the maximum annual rate 
                of basic pay for grade GS-11 of the General Schedule 
                for each day (including travel time) during which they 
                are engaged in the actual performance of duties vested 
                in the Commission.
                    (B) Travel expenses.--Each member shall receive 
                travel expenses, including per diem in lieu of 
                subsistence, in accordance with applicable provisions 
                under subchapter I of chapter 57 of title 5, United 
                States Code.
            (6) Prevention of conflict of interest.--
                    (A) Agreement.--The Secretary of the Treasury shall 
                not appoint any individual to be a member of the 
                Commission unless such individual has first sign an 
                agreement with the Secretary to prevent conflicts of 
                interest. Such agreement shall include a requirement 
                that the individual comply with the provisions of 
                subparagraph (B) and shall include such penalties for 
                failure to so comply as the Secretary determines 
                appropriate.
                    (B) Requirements.--A member of the Commission shall 
                not, during the 5-year period beginning on the 
                effective date of the domestic manufacturing consumer 
                credit (described in section 2(d)), hold, directly or 
                indirectly, any interest in any person associated with 
                any designated product, any component of any designated 
                product, or any equipment to manufacture any such 
                product or component. An interest held in any fund held 
                by such member shall be taken into account under the 
                preceding sentence unless such fund is a broad-based 
                index fund. Any interest held by such member prior to 
                the beginning of such 5-year period which is not 
                (consistent with the requirements of this subparagraph) 
                permitted to be held during such period, shall be 
                disposed of prior to such period.
    (d) Chairperson.--The Chairperson of the Commission shall be 
designated by the Secretary of the Treasury (or his designee) at the 
time of appointment.
    (e) Staff.--Any staff of the Commission shall be appointed subject 
to the provisions of title 5, United States Code, governing 
appointments in the competitive service, and shall be paid in 
accordance with the provisions of chapter 51 and subchapter III of 
chapter 53 of that title relating to classification and General 
Schedule pay rates.
    (f) Termination.--
            (1) In general.--Except as provided in paragraph (2), the 
        Commission shall terminate 30 days after making recommendations 
        to the Secretary of the Treasury described in subsection (b).
            (2) Extension.--At the request of the Secretary of the 
        Treasury or his designee, the Commission shall continue in 
        existence for such period at the Secretary may request but not 
        later than 1 year after making such recommendations.
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