Market Based Manufacturing Incentives Act of 2011 - Amends the Internal Revenue Code to allow a tax credit for the purchase (during a specified period of between 5 and 10 years based on the incentive needed with respect to each product) of new products certified as assembled in the United States and consisting of at least 60% of components assembled or otherwise arising in the United States.
Establishes the 21st Century American Manufacturing Commission to conduct research to designate products eligible for the tax credit allowed by this Act.
[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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Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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