I 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Market Based Manu5 facturing Incentives Act of 2011’’. 


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1 SEC. 2. CREDIT FOR RETAIL PURCHASE OF CERTAIN DO2 MESTIC PRODUCTS. 

3 (a) IN GENERAL.—Subpart B of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 is amended by adding at the end the following new 

6 section: 

7 ‘‘SEC. 30E. DOMESTIC MANUFACTURING CONSUMER CRED8 IT. 

9 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al10 lowed as a credit against the tax imposed by this chapter 

11 for any taxable year an amount equal to the applicable 

12 percentage of the aggregate amount paid or incurred by 

13 the taxpayer for specified products during any portion 

14 such taxable year which is part of the eligible period. 

15 ‘‘(b) APPLICABLE PERCENTAGE; ELIGIBLE PE16 RIOD.—For purposes of this section— 

17 ‘‘(1) APPLICABLE PERCENTAGE.—The term 

18 ‘applicable percentage’ means, with respect to any 

19 specified product, the percentage (not less than 5 

20 percent nor more than 20 percent) determined by 

21 the Commission under subsection (e)(4) with respect 

22 to such product. 

23 ‘‘(2) ELIGIBLE PERIOD.—The term ‘eligible pe24 riod’ means, with respect to any specified product, 

25 the period (not less than 5 years nor more than 10 


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1 years) determined by the Commission under sub2 section (e)(5) with respect to such product. 

3 ‘‘(3) SEPARATE APPLICATION TO EACH SPECI4 FIED PRODUCT.—Subsection (a) shall be applied 

5 separately with respect to each of the specified prod6 ucts designated under subsection (e). 

7 ‘‘(c) SPECIFIED PRODUCT.—For purposes of this sec8 tion— 

9 ‘‘(1) IN GENERAL.—The term ‘specified prod10 uct’ means any designated domestic product— 

11 ‘‘(A) the original use of which commences 

12 with the taxpayer, and 

13 ‘‘(B) which is acquired by the taxpayer for 

14 use or lease, but not for resale. 

15 ‘‘(2) DESIGNATED DOMESTIC PRODUCT.—The 

16 term ‘designated domestic product’ means any des17 ignated product which has been certified by the Sec18 retary as— 

19 ‘‘(A) having been assembled in the United 

20 States, and 

21 ‘‘(B) consisting at least 60 percent of com22 ponents assembled or otherwise arising in the 

23 United States. 

24 ‘‘(3) DESIGNATED PRODUCT.—The term ‘des25 ignated product’ means the 10 products designated 


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1 by the Secretary, in consultation with the Commis2 sion, under subsection (e). 

3 ‘‘(d) APPLICATION WITH OTHER CREDITS.— 

4 ‘‘(1) BUSINESS CREDIT TREATED AS PART OF

5 GENERAL BUSINESS CREDIT.—So much of the credit 

6 which would be allowed under subsection (a) for any 

7 taxable year (determined without regard to this sub8 section) that is attributable to property used by the 

9 taxpayer in the conduct of a trade or business shall 

10 be treated as a credit listed in section 38(b) for such 

11 taxable year (and not allowed under subsection (a)). 

12 ‘‘(2) PERSONAL CREDIT.—For purposes of this 

13 title, the credit allowed under subsection (a) for any 

14 taxable year (determined after application of para15 graph (1)) shall be treated as a credit allowable 

16 under subpart A for such taxable year. 

17 ‘‘(e) SELECTION OF DESIGNATED PRODUCTS.— 

18 ‘‘(1) IN GENERAL.—The Secretary, in consulta19 tion with the Commission, shall designate 10 prod20 ucts for purposes of this section. 

21 ‘‘(2) ELIGIBLE PRODUCTS.—A product shall 

22 not be eligible for designation under this section un23 less— 

24 ‘‘(A) such product represents a techno25 logical innovation, and 


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1 ‘‘(B) the designation of such product has 

2 the potential to produce substantial long-term 

3 job opportunities in the United States. 

4 ‘‘(3) CRITERIA FOR DESIGNATION.—In making 

5 designations of products under this subsection, the 

6 Secretary shall take into consideration— 

7 ‘‘(A) the number of jobs in the United 

8 States that the Secretary estimates will result 

9 (directly and indirectly) from the designation of 

10 such product, and 

11 ‘‘(B) the speed with which such jobs are 

12 likely to be created. 

13 ‘‘(4) DETERMINATION OF CREDIT PERCENT14 AGE.—The Secretary, in consultation with the Com15 mission, shall determine the applicable percentage 

16 which applies for purposes of subsection (a) with re17 spect to each product designated under this sub18 section. Such percentage shall not be less than 5 

19 percent and shall not be more than 20 percent. Such 

20 percentage shall be determined on the basis of the 

21 incentive needed with respect to each such product 

22 taking into account the market factors with respect 

23 to such product. 

24 ‘‘(5) DETERMINATION OF PERIOD DURING

25 WHICH CREDIT ALLOWED.—The Secretary, in conVerDate Mar 15 2010 04:18 Nov 22, 2011 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3495.IH H3495

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1 sultation with the Commission, shall determine the 

2 eligible period which applies for purposes of sub3 section (a) with respect to each product designated 

4 under this subsection. Such period shall not be less 

5 than 5 years and shall not be more than 10 years. 

6 Such period shall be determined on the basis of the 

7 incentive needed with respect to each such product 

8 taking into account the market factors with respect 

9 to such product. 

10 ‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.— 

11 For purposes of this section— 

12 ‘‘(1) COMMISSION.—The term ‘Commission’ 

13 means the 21st Century American Manufacturing 

14 Commission established under section 3 of the Mar15 ket Based Manufacturing Incentives Act of 2011. 

16 ‘‘(2) REDUCTION IN BASIS.—For purposes of 

17 this subtitle, the basis of any property for which a 

18 credit is allowable under subsection (a) shall be re19 duced by the amount of such credit so allowed (de20 termined without regard to subsection (d)). 

21 ‘‘(3) NO DOUBLE BENEFIT.—The amount of 

22 any deduction or other credit allowable under this 

23 chapter with respect to any property shall be re24 duced by the amount of the credit allowed under 


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1 subsection (a) for such property (determined without 

2 regard to subsection (d)). 

3 ‘‘(4) PROPERTY USED BY TAX-EXEMPT ENTI4 TY.—In the case of property whose use is described 

5 in paragraph (3) or (4) of section 50(b) and which 

6 is not subject to a lease, the person who sold such 

7 property to the person or entity using such property 

8 shall be treated as the taxpayer that placed such ve9 hicle in service, but only if such person clearly dis10 closes to such person or entity in a document the 

11 amount of any credit allowable under subsection (a) 

12 with respect to such property (determined without 

13 regard to subsection (d)). For purposes of subsection 

14 (d), property to which this paragraph applies shall 

15 be treated as property used by the taxpayer in the 

16 conduct of a trade or business. 

17 ‘‘(5) PROPERTY USED OUTSIDE UNITED

18 STATES, ETC., NOT QUALIFIED.—No credit shall be 

19 allowable under subsection (a) with respect to any 

20 property referred to in section 50(b)(1). 

21 ‘‘(6) RECAPTURE.—The Secretary shall, by reg22 ulations, provide for recapturing the benefit of any 

23 credit allowable under subsection (a) with respect to 

24 any property which ceases to be property eligible for 

25 such credit (including recapture in the case of a 


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1 lease period of less than the economic life of the 

2 property). 

3 ‘‘(7) ELECTION TO NOT TAKE CREDIT.—No 

4 credit shall be allowed under subsection (a) for any 

5 vehicle if the taxpayer elects to not have this section 

6 apply to such property. 

7 ‘‘(g) TERMINATION.—This section shall not apply to 

8 property acquired after the date which is 10 years after 

9 the date of the enactment of this section.’’. 

10 (b) CONFORMING AMENDMENTS.— 

11 (1) Section 38(b) of such Code is amended by 

12 striking ‘‘plus’’ at the end of paragraph (35), by 

13 striking the period at the end of paragraph (36) and 

14 inserting ‘‘, plus’’, and by adding at the end the fol15 lowing new paragraph: 

16 ‘‘(37) the portion of the domestic manufac17 turing consumer credit to which section 30E(d)(1) 

18 applies.’’. 

19 (2) Section 1016(a) of such Code is amended 

20 by striking ‘‘and’’ at the end of paragraph (36), by 

21 striking the period at the end of paragraph (37) and 

22 inserting ‘‘, and’’, and by adding at the end the fol23 lowing new paragraph: 

24 ‘‘(38) to the extent provided in section 

25 30E(f)(2).’’. 


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1 (3) Section 6501(m) of such Code is amended 

2 by inserting ‘‘30E(f)(7),’’ after ‘‘30D(e)(4),’’. 

3 (4) The table of sections for subpart B of part 

4 IV of subchapter A of chapter 1 of such Code is 

5 amended by adding at the end the following new 

6 item: 

‘‘Sec. 30E. Domestic manufacturing consumer credit.’’. 

7 (c) GAO REPORT.—The Government Accountability 

8 Office shall, during the 3d, 5th, and 7th years after the 

9 effective date of the domestic manufacturing consumer 

10 credit (described in subsection (d)), report to Congress on 

11 the economic effects of such credit. Such report shall in12 clude the aggregate value of the domestic manufacturing 

13 consumer credits determined with respect to taxpayers 

14 under section 30E of the Internal Revenue Code of 1986 

15 and an estimate of the economic activity stimulated by 

16 such credits. 

17 (d) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to property acquired after the date 

19 which is 1 year after the date on which the 21st Century 

20 American Manufacturing Commission makes its rec21 ommendations to the Secretary of the Treasury under sec22 tion 3(b) of this Act. 


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1 SEC. 3. ESTABLISHMENT OF 21ST CENTURY AMERICAN 

2 MANUFACTURING COMMISSION. 

3 (a) IN GENERAL.—There is established a commission 

4 to be known as the 21st Century American Manufacturing 

5 Commission. 

6 (b) DUTIES.—The Commission shall conduct re7 search regarding appropriate products to make eligible for 

8 the tax credit provided by section 30E of the Internal Rev9 enue Code of 1986 and shall make recommendations to 

10 the Secretary of the Treasury regarding which products 

11 should be designated for purposes of such section and the 

12 applicable percentage and eligible period which should be 

13 determined with respect to each such product. The com14 mission shall make such recommendations to the Sec15 retary of the Treasury not later than 6 months after the 

16 date of the enactment of this Act. 

17 (c) MEMBERSHIP.— 

18 (1) IN GENERAL.—The Commission shall be 

19 composed of 10 members who shall be appointed by 

20 the Secretary of the Treasury or his designee not 

21 later than 30 days after the enactment of this Act. 

22 (2) POLITICAL AFFILIATION.—Not more than 5 

23 members may be of the same political party. 

24 (3) TERMS.—Each member shall be appointed 

25 for the life of the Commission. 


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1 (4) VACANCIES.—A vacancy in the Commission 

2 shall be filled in the manner in which the original 

3 appointment was made. 

4 (5) PAY OF MEMBERS.— 

5 (A) IN GENERAL.—Members shall each be 

6 entitled to receive the daily equivalent of the 

7 maximum annual rate of basic pay for grade 

8 GS–11 of the General Schedule for each day 

9 (including travel time) during which they are 

10 engaged in the actual performance of duties 

11 vested in the Commission. 

12 (B) TRAVEL EXPENSES.—Each member 

13 shall receive travel expenses, including per diem 

14 in lieu of subsistence, in accordance with appli15 cable provisions under subchapter I of chapter 

16 57 of title 5, United States Code. 

17 (6) PREVENTION OF CONFLICT OF INTEREST.— 

18 (A) AGREEMENT.—The Secretary of the 

19 Treasury shall not appoint any individual to be 

20 a member of the Commission unless such indi21 vidual has first sign an agreement with the Sec22 retary to prevent conflicts of interest. Such 

23 agreement shall include a requirement that the 

24 individual comply with the provisions of sub25 paragraph (B) and shall include such penalties 


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1 for failure to so comply as the Secretary deter2 mines appropriate. 

3 (B) REQUIREMENTS.—A member of the 

4 Commission shall not, during the 5-year period 

5 beginning on the effective date of the domestic 

6 manufacturing consumer credit (described in 

7 section 2(d)), hold, directly or indirectly, any 

8 interest in any person associated with any des9 ignated product, any component of any des10 ignated product, or any equipment to manufac11 ture any such product or component. An inter12 est held in any fund held by such member shall 

13 be taken into account under the preceding sen14 tence unless such fund is a broad-based index 

15 fund. Any interest held by such member prior 

16 to the beginning of such 5-year period which is 

17 not (consistent with the requirements of this 

18 subparagraph) permitted to be held during such 

19 period, shall be disposed of prior to such period. 

20 (d) CHAIRPERSON.—The Chairperson of the Com21 mission shall be designated by the Secretary of the Treas22 ury (or his designee) at the time of appointment. 

23 (e) STAFF.—Any staff of the Commission shall be ap24 pointed subject to the provisions of title 5, United States 

25 Code, governing appointments in the competitive service, 


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1 and shall be paid in accordance with the provisions of 

2 chapter 51 and subchapter III of chapter 53 of that title 

3 relating to classification and General Schedule pay rates. 

4 (f) TERMINATION.— 

5 (1) IN GENERAL.—Except as provided in para6 graph (2), the Commission shall terminate 30 days 

7 after making recommendations to the Secretary of 

8 the Treasury described in subsection (b). 

9 (2) EXTENSION.—At the request of the Sec10 retary of the Treasury or his designee, the Commis11 sion shall continue in existence for such period at 

12 the Secretary may request but not later than 1 year 

13 after making such recommendations. 

Æ 


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