I 

114TH CONGRESS 

1ST SESSION H. R. 3622 

To amend the Internal Revenue Code of 1986 to provide incentives for 

the expansion of manufacturing in the United States. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 28, 2015 

Mr. MCKINLEY (for himself and Mr. RUSH) 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 

incentives for the expansion of manufacturing in the 

United States. 

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 ‘‘Manufacturing Eco5 nomic Recovery Act of 2015’’. 

6 SEC. 2. CREDIT FOR ACQUISITION OF MANUFACTURING 

7 PROPERTY. 

8 (a) IN GENERAL.—Subpart E of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 

10 1986 (relating to rules for computing credit for investment 


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1 in certain depreciable property) is amended by inserting 

2 after section 48D the following new section: 

3 ‘‘SEC. 48E. ACQUISITION OF MANUFACTURING PROPERTY. 

4 ‘‘(a) IN GENERAL.—For purposes of section 46, the 

5 manufacturing recovery credit for any taxable year is an 

6 amount equal to— 

7 ‘‘(1) the applicable percentage of the taxpayer’s 

8 basis in manufacturing real property placed in serv9 ice by the taxpayer during the taxable year, and 

10 ‘‘(2) the applicable percentage of the taxpayer’s 

11 basis in manufacturing tangible personal property 

12 placed in service by the taxpayer during the taxable 

13 year. 

14 ‘‘(b) APPLICABLE PERCENTAGES.—For purposes of 

15 this section— 

16 ‘‘(1) REAL PROPERTY.—In the case of manu17 facturing real property, the applicable percentage 

18 is— 

19 ‘‘(A) 10 percent in the case of property lo20 cated on existing manufacturing property, 

21 ‘‘(B) 15 percent in the case property of lo22 cated on former manufacturing property, and 

23 ‘‘(C) 20 percent in the case of property lo24 cated on future manufacturing property. 


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1 ‘‘(2) TANGIBLE PERSONAL PROPERTY.—In the 

2 case of manufacturing tangible personal property, 

3 the applicable percentage shall be determined in ac4 cordance with the following table: 

‘‘If the aggregate 

manufacturing tangible 

personal property 

placed in service 

during the taxable 

year is: 

To the extent 

located on 

existing 

manufacturing 

property, 

the applicable 

percentage is: 

To the extent 

located on 

former 

manufacturing 

property, 

the applicable 

percentage is: 

To the extent 

located on 

future 

manufacturing 

property, 

the applicable 

percentage is: 

Not over $250,000 ............. 5 percent 10 percent 15 percent

Over $250,000 but not over 

$1,000,000 ...................... 7.5 percent 12.5 percent 17.5 percent

Over $1,000,000 ................. 10 percent 15 percent 20 percent. 

5 ‘‘(3) INCREASED CREDIT FOR PROPERTY LO6 CATED IN ECONOMICALLY DISADVANTAGED

7 AREAS.— 

8 ‘‘(A) IN GENERAL.—If the manufacturing 

9 property is located in an economically disadvan10 taged area, each of the percentages under para11 graphs (1) and (2) shall be increased by 5 per12 centage points. 

13 ‘‘(B) EXTREMELY ECONOMICALLY DIS14 ADVANTAGED AREAS.—If the manufacturing 

15 property is located in an extremely economically 

16 disadvantaged area, each of the percentages 

17 under paragraphs (1) and (2) shall, in lieu of 

18 an increase under subparagraph (A), be in19 creased by 10 percentage points. 


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1 ‘‘(C) ECONOMICALLY DISADVANTAGED

2 AREAS.—For purposes of this paragraph— 

3 ‘‘(i) IN GENERAL.—The term ‘eco4 nomically disadvantaged area’ means any 

5 area— 

6 ‘‘(I) for which there is a single 5- 

7 digit postal zip code, and 

8 ‘‘(II) which includes any portion 

9 of a census tract in which the median 

10 annual household income is less than 

11 $40,000 per year. 

12 ‘‘(ii) EXTREMELY ECONOMICALLY DIS13 ADVANTAGED AREAS.—The term ‘ex14 tremely economically disadvantaged area’ 

15 means any area which would be described 

16 in clause (i) if ‘$32,000’ were substituted 

17 for ‘$40,000’ in subclause (II) thereof. 

18 ‘‘(iii) HOUSEHOLD INCOME.—Median 

19 annual household income shall be deter20 mined using the 2010 census, as updated 

21 by the American Community Survey of the 

22 Bureau of the Census. 

23 ‘‘(iv) AREAS NOT WITHIN CENSUS

24 TRACTS.—In the case of an area which is 

25 not tracted for population census tracts, 


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1 the equivalent county divisions (as defined 

2 by the Bureau of the Census for purposes 

3 of defining poverty areas) shall be used for 

4 purposes of determining median annual 

5 household income. 

6 ‘‘(c) MANUFACTURING PROPERTY.—For purposes of 

7 this section— 

8 ‘‘(1) MANUFACTURING PROPERTY.— 

9 ‘‘(A) IN GENERAL.—The term ‘manufac10 turing property’ means tangible property used 

11 in the United States in the trade or business of 

12 manufacturing tangible personal property. 

13 ‘‘(B) MANUFACTURING OF RESIDENTIAL

14 REAL PROPERTY NOT INCLUDED.—Such term 

15 does not include property used to manufacture 

16 residential real property, including such prop17 erty used on a transient basis. 

18 ‘‘(2) EXISTING MANUFACTURING PROPERTY.— 

19 The term ‘existing manufacturing property’ means 

20 any property which was a manufacturing facility, or 

21 a part of a manufacturing facility, at any time dur22 ing the period beginning 5 years before the date of 

23 the enactment of this section and ending on the day 

24 before its purchase by the taxpayer. 


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1 ‘‘(3) FORMER MANUFACTURING PROPERTY.— 

2 The term ‘former manufacturing property’ means 

3 any property (other than an existing manufacturing 

4 property) which was a manufacturing facility, or a 

5 part of a manufacturing facility, at any time before 

6 the period described in paragraph (2). 

7 ‘‘(4) FUTURE MANUFACTURING PROPERTY.— 

8 The term ‘future manufacturing property’ means 

9 any existing or former manufacturing property on 

10 which there are no permanent vertical structures. 

11 ‘‘(5) MANUFACTURING REAL PROPERTY.—The 

12 term ‘manufacturing real property’ means manufac13 turing property which is land or section 1250 prop14 erty (as defined in section 1250(c)). 

15 ‘‘(6) MANUFACTURING TANGIBLE PERSONAL

16 PROPERTY.—The term ‘manufacturing tangible per17 sonal property’ means manufacturing property which 

18 is tangible property other than manufacturing real 

19 property. 

20 ‘‘(d) CREDIT NOT ALLOWABLE FOR CERTAIN RELO21 CATIONS OF MANUFACTURING FACILITIES.—This section 

22 shall not apply to property acquired as part of a relocation 

23 of a manufacturing facility unless the new location— 

24 ‘‘(1) is in a different State than the prior loca25 tion, or 


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1 ‘‘(2) is more than 100 miles from the prior lo2 cation. 

3 ‘‘(e) SPECIAL RULES.— 

4 ‘‘(1) CREDIT NOT ALLOWABLE IF REMEDIATION

5 DEDUCTION CLAIMED.—This section shall not apply 

6 to any property located on a site with respect to 

7 which the taxpayer (or a related party) is allowed a 

8 deduction under section 198 (relating to expensing 

9 of environmental remediation costs). 

10 ‘‘(2) BASIS ADJUSTMENT.—For purposes of 

11 this subtitle, if a credit is allowed under this section 

12 for an expenditure related to property, the basis of 

13 such property shall be reduced by the amount of 

14 such credit. 

15 ‘‘(3) CONTROLLED GROUPS.—For purposes of 

16 this section, all persons treated as a single employer 

17 under subsection (a) or (b) of section 52 or sub18 section (m) or (o) of section 414 shall be treated as 

19 a single taxpayer.’’. 

20 (b) INCLUSION AS PART OF INVESTMENT CREDIT.— 

21 Section 46 of such Code is amended by striking ‘‘and’’ 

22 at the end of paragraph (5), by striking the period at the 

23 end of paragraph (6) and inserting ‘‘, and’’, and by adding 

24 at the end the following new paragraph: 

25 ‘‘(7) the manufacturing recovery credit.’’. 


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1 (c) CONFORMING AMENDMENTS.— 

2 (1) Section 49(a)(1)(C) of such Code is amend3 ed— 

4 (A) by striking ‘‘and’’ at the end of clause 

5 (v), 

6 (B) by striking the period at the end of 

7 clause (vi) and inserting ‘‘, and’’, and 

8 (C) by adding at the end the following new 

9 clause: 

10 ‘‘(vii) the basis of any property which 

11 is manufacturing property under section 

12 48E.’’. 

13 (2) The table of sections for subpart E of part 

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

15 amended by inserting after the item relating to sec16 tion 48D the following new item: 

‘‘Sec. 48E. Acquisition of manufacturing property.’’. 

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

18 this section shall apply to property placed in service after 

19 the date of the enactment of this Act in taxable years end20 ing after such date. 

21 SEC. 3. INCENTIVES FOR HIRING MANUFACTURING RECOV22 ERY EMPLOYEES. 

23 (a) IN GENERAL.—Paragraph (1) of section 51(d) of 

24 the Internal Revenue Code of 1986 is amended by striking 

25 ‘‘or’’ at the end of subparagraph (H), by striking the peVerDate Sep 11 2014 03:47 Sep 29, 2015 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3622.IH H3622

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1 riod at the end of subparagraph (I) and inserting ‘‘, or’’, 

2 and by adding at the end the following new subparagraph: 

3 ‘‘(J) a manufacturing recovery employee.’’. 

4 (b) MANUFACTURING RECOVERY EMPLOYEE.—Sub5 section (d) of section 51 of such Code is amended by re6 designating paragraphs (11) through (14) as paragraphs 

7 (12) through (15), respectively, and by inserting after 

8 paragraph (10) the following new paragraph: 

9 ‘‘(11) MANUFACTURING RECOVERY EM10 PLOYEE.— 

11 ‘‘(A) IN GENERAL.—The term ‘manufac12 turing recovery employee’ means any individual 

13 who is certified by the designated local agency 

14 as having a hiring date which is after the date 

15 of the enactment of the Manufacturing Eco16 nomic Recovery Act of 2015 and before the 

17 close of the 3-year period beginning on the date 

18 that the employer first operated the manufac19 turing facility at which the individual is em20 ployed. 

21 ‘‘(B) INCREASED CREDIT FOR HIRING UN22 EMPLOYED.—In the case of a manufacturing 

23 recovery employee who is certified by the des24 ignated local agency as having received unem25 ployment compensation under State or Federal 


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1 law for not less than 4 weeks during the 3-year 

2 period ending on the hiring date, subsection (a) 

3 shall be applied by substituting ‘50 percent’ for 

4 ‘40 percent’. 

5 ‘‘(C) NO CREDIT FOR LESS THAN FULL6 TIME EMPLOYMENT.—An individual shall not be 

7 treated as a manufacturing recovery employee 

8 for any week during which— 

9 ‘‘(i) the individual is employed by the 

10 employer for less than 35 hours at a man11 ufacturing facility of the employer, or 

12 ‘‘(ii) the individual performs less than 

13 90 percent of individual’s services for the 

14 employer at the manufacturing facility. 

15 ‘‘(D) MANUFACTURING FACILITY MUST BE

16 IN UNITED STATES.—No credit shall be allow17 able by reason of this paragraph unless the 

18 manufacturing facility is located in the United 

19 States.’’. 

20 (c) PERMANENT CREDIT FOR MANUFACTURING RE21 COVERY EMPLOYEES.—Paragraph (4) of section 51(c) of 

22 such Code (relating to termination) is amended by adding 

23 at the end the following: 

24 ‘‘The preceding sentence shall not apply to any man25 ufacturing recovery employee.’’. 


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

2 this section shall apply to individuals who first begin work 

3 for the employer after the date of the enactment of this 

4 Act. 

Æ 


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