1. Short title
This Act may be cited as the “Market Based Manufacturing Incentives Act of 2013”.
Market Based Manufacturing Incentives Act of 2013
A BILL
To amend the Internal Revenue Code of 1986 to provide market-based manufacturing incentives, and for other purposes.
2. Credit for retail purchase of certain domestic products
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:
“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 2013.
“(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.”
Conforming amendments—
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.”
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).”
Section 6501(m) of such Code is amended by inserting “30E(f)(7),” after “30D(e)(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:
CBO report— The Congressional Budget 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.
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.
3. Establishment of 21st Century American Manufacturing Commission
In general— There is established a commission to be known as the 21st Century American Manufacturing Commission.
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.
Membership—
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.
Selection— In determining who to appoint to the Commission, the Secretary of Treasury shall consider a geographically diverse group of individuals with experience in the areas of—
managing manufacturing companies, including businesses with fewer than 100 employees,
conducting manufacturing-related research and development,
commercialization of scientific innovation,
managing supply chain providers,
finance, and
analyzing manufacturing policy and economic competitiveness.
Political affiliation— Not more than 5 members may be of the same political party.
Terms— Each member shall be appointed for the life of the Commission.
Vacancies— A vacancy in the Commission shall be filled in the manner in which the original appointment was made.
Pay of members—
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.
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.
Prevention of conflicts of interest and nepotism—
Agreement— The Secretary of the Treasury shall not appoint any individual to be a member of the Commission unless such individual has first signed an agreement with the Secretary to prevent conflicts of interest and nepotism. 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.
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.
Chairperson— The Chairperson of the Commission shall be designated by the Secretary of the Treasury (or his designee) at the time of appointment.
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.
Termination—
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).
Extension— At the request of the Secretary of the Treasury or his designee, the Commission shall continue in existence for such period as the Secretary may request but not later than 1 year after making such recommendations.