I 

113TH CONGRESS 

1ST SESSION H. R. 615 

To amend the Internal Revenue Code of 1986 to provide market-based 

manufacturing incentives, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 12, 2013 

Mr. HONDA (for himself, Mr. CICILLINE, Mr. CONYERS, Mr. GRIJALVA, and 

Mr. MICHAUD) 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 2013’’. 

6 SEC. 2. CREDIT FOR RETAIL PURCHASE OF CERTAIN DO7 MESTIC PRODUCTS. 

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


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1 1986 is amended by adding at the end the following new 

2 section: 

3 ‘‘SEC. 30E. DOMESTIC MANUFACTURING CONSUMER CRED4 IT. 

5 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al6 lowed as a credit against the tax imposed by this chapter 

7 for any taxable year an amount equal to the applicable 

8 percentage of the aggregate amount paid or incurred by 

9 the taxpayer for specified products during any portion 

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

11 ‘‘(b) APPLICABLE PERCENTAGE; ELIGIBLE PE12 RIOD.—For purposes of this section— 

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

14 ‘applicable percentage’ means, with respect to any 

15 specified product, the percentage (not less than 5 

16 percent nor more than 20 percent) determined by 

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

18 to such product. 

19 ‘‘(2) ELIGIBLE PERIOD.—The term ‘eligible pe20 riod’ means, with respect to any specified product, 

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

22 years) determined by the Commission under sub23 section (e)(5) with respect to such product. 

24 ‘‘(3) SEPARATE APPLICATION TO EACH SPECI25 FIED PRODUCT.—Subsection (a) shall be applied 


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1 separately with respect to each of the specified prod2 ucts designated under subsection (e). 

3 ‘‘(c) SPECIFIED PRODUCT.—For purposes of this sec4 tion— 

5 ‘‘(1) IN GENERAL.—The term ‘specified prod6 uct’ means any designated domestic product— 

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

8 with the taxpayer, and 

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

10 use or lease, but not for resale. 

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

12 term ‘designated domestic product’ means any des13 ignated product which has been certified by the Sec14 retary as— 

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

16 States, and 

17 ‘‘(B) consisting at least 60 percent of com18 ponents assembled or otherwise arising in the 

19 United States. 

20 ‘‘(3) DESIGNATED PRODUCT.—The term ‘des21 ignated product’ means the 10 products designated 

22 by the Secretary, in consultation with the Commis23 sion, under subsection (e). 

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


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

2 GENERAL BUSINESS CREDIT.—So much of the credit 

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

4 taxable year (determined without regard to this sub5 section) that is attributable to property used by the 

6 taxpayer in the conduct of a trade or business shall 

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

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

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

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

11 taxable year (determined after application of para12 graph (1)) shall be treated as a credit allowable 

13 under subpart A for such taxable year. 

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

15 ‘‘(1) IN GENERAL.—The Secretary, in consulta16 tion with the Commission, shall designate 10 prod17 ucts for purposes of this section. 

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

19 not be eligible for designation under this section un20 less— 

21 ‘‘(A) such product represents a techno22 logical innovation, and 

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

24 the potential to produce substantial long-term 

25 job opportunities in the United States. 


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

2 designations of products under this subsection, the 

3 Secretary shall take into consideration— 

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

5 States that the Secretary estimates will result 

6 (directly and indirectly) from the designation of 

7 such product, and 

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

9 likely to be created. 

10 ‘‘(4) DETERMINATION OF CREDIT PERCENT11 AGE.—The Secretary, in consultation with the Com12 mission, shall determine the applicable percentage 

13 which applies for purposes of subsection (a) with re14 spect to each product designated under this sub15 section. Such percentage shall not be less than 5 

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

17 percentage shall be determined on the basis of the 

18 incentive needed with respect to each such product 

19 taking into account the market factors with respect 

20 to such product. 

21 ‘‘(5) DETERMINATION OF PERIOD DURING

22 WHICH CREDIT ALLOWED.—The Secretary, in con23 sultation with the Commission, shall determine the 

24 eligible period which applies for purposes of sub25 section (a) with respect to each product designated 


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1 under this subsection. Such period shall not be less 

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

3 Such period shall be determined on the basis of the 

4 incentive needed with respect to each such product 

5 taking into account the market factors with respect 

6 to such product. 

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

8 For purposes of this section— 

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

10 means the 21st Century American Manufacturing 

11 Commission established under section 3 of the Mar12 ket Based Manufacturing Incentives Act of 2013. 

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

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

15 credit is allowable under subsection (a) shall be re16 duced by the amount of such credit so allowed (de17 termined without regard to subsection (d)). 

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

19 any deduction or other credit allowable under this 

20 chapter with respect to any property shall be re21 duced by the amount of the credit allowed under 

22 subsection (a) for such property (determined without 

23 regard to subsection (d)). 

24 ‘‘(4) PROPERTY USED BY TAX-EXEMPT ENTI25 TY.—In the case of property whose use is described 


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

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

3 property to the person or entity using such property 

4 shall be treated as the taxpayer that placed such ve5 hicle in service, but only if such person clearly dis6 closes to such person or entity in a document the 

7 amount of any credit allowable under subsection (a) 

8 with respect to such property (determined without 

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

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

11 be treated as property used by the taxpayer in the 

12 conduct of a trade or business. 

13 ‘‘(5) PROPERTY USED OUTSIDE UNITED

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

15 allowable under subsection (a) with respect to any 

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

17 ‘‘(6) RECAPTURE.—The Secretary shall, by reg18 ulations, provide for recapturing the benefit of any 

19 credit allowable under subsection (a) with respect to 

20 any property which ceases to be property eligible for 

21 such credit (including recapture in the case of a 

22 lease period of less than the economic life of the 

23 property). 

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

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


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1 vehicle if the taxpayer elects to not have this section 

2 apply to such property. 

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

4 property acquired after the date which is 10 years after 

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

6 (b) CONFORMING AMENDMENTS.— 

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

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

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

10 inserting ‘‘, plus’’, and by adding at the end the fol11 lowing new paragraph: 

12 ‘‘(37) the portion of the domestic manufac13 turing consumer credit to which section 30E(d)(1) 

14 applies.’’. 

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

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

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

18 inserting ‘‘, and’’, and by adding at the end the fol19 lowing new paragraph: 

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

21 30E(f)(2).’’. 

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

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

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

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


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1 amended by adding at the end the following new 

2 item: 

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

3 (c) CBO REPORT.—The Congressional Budget Office 

4 shall, during the 3d, 5th, and 7th years after the effective 

5 date of the domestic manufacturing consumer credit (de6 scribed in subsection (d)), report to Congress on the eco7 nomic effects of such credit. Such report shall include the 

8 aggregate value of the domestic manufacturing consumer 

9 credits determined with respect to taxpayers under section 

10 30E of the Internal Revenue Code of 1986 and an esti11 mate of the economic activity stimulated by such credits. 

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

13 this section shall apply to property acquired after the date 

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

15 American Manufacturing Commission makes its rec16 ommendations to the Secretary of the Treasury under sec17 tion 3(b) of this Act. 

18 SEC. 3. ESTABLISHMENT OF 21ST CENTURY AMERICAN 

19 MANUFACTURING COMMISSION. 

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

21 to be known as the 21st Century American Manufacturing 

22 Commission. 

23 (b) DUTIES.—The Commission shall conduct re24 search regarding appropriate products to make eligible for 

25 the tax credit provided by section 30E of the Internal RevVerDate Mar 15 2010 02:13 Feb 20, 2013 Jkt 029200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H615.IH H615

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1 enue Code of 1986 and shall make recommendations to 

2 the Secretary of the Treasury regarding which products 

3 should be designated for purposes of such section and the 

4 applicable percentage and eligible period which should be 

5 determined with respect to each such product. The com6 mission shall make such recommendations to the Sec7 retary of the Treasury not later than 6 months after the 

8 date of the enactment of this Act. 

9 (c) MEMBERSHIP.— 

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

11 composed of 10 members who shall be appointed by 

12 the Secretary of the Treasury or his designee not 

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

14 (2) SELECTION.—In determining who to ap15 point to the Commission, the Secretary of Treasury 

16 shall consider a geographically diverse group of indi17 viduals with experience in the areas of— 

18 (A) managing manufacturing companies, 

19 including businesses with fewer than 100 em20 ployees, 

21 (B) conducting manufacturing-related re22 search and development, 

23 (C) commercialization of scientific innova24 tion, 

25 (D) managing supply chain providers, 


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1 (E) finance, and 

2 (F) analyzing manufacturing policy and 

3 economic competitiveness. 

4 (3) POLITICAL AFFILIATION.—Not more than 5 

5 members may be of the same political party. 

6 (4) TERMS.—Each member shall be appointed 

7 for the life of the Commission. 

8 (5) VACANCIES.—A vacancy in the Commission 

9 shall be filled in the manner in which the original 

10 appointment was made. 

11 (6) PAY OF MEMBERS.— 

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

13 entitled to receive the daily equivalent of the 

14 maximum annual rate of basic pay for grade 

15 GS–11 of the General Schedule for each day 

16 (including travel time) during which they are 

17 engaged in the actual performance of duties 

18 vested in the Commission. 

19 (B) TRAVEL EXPENSES.—Each member 

20 shall receive travel expenses, including per diem 

21 in lieu of subsistence, in accordance with appli22 cable provisions under subchapter I of chapter 

23 57 of title 5, United States Code. 

24 (7) PREVENTION OF CONFLICTS OF INTEREST

25 AND NEPOTISM.— 


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1 (A) AGREEMENT.—The Secretary of the 

2 Treasury shall not appoint any individual to be 

3 a member of the Commission unless such indi4 vidual has first signed an agreement with the 

5 Secretary to prevent conflicts of interest and 

6 nepotism. Such agreement shall include a re7 quirement that the individual comply with the 

8 provisions of subparagraph (B) and shall in9 clude such penalties for failure to so comply as 

10 the Secretary determines appropriate. 

11 (B) REQUIREMENTS.—A member of the 

12 Commission shall not, during the 5-year period 

13 beginning on the effective date of the domestic 

14 manufacturing consumer credit (described in 

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

16 interest in any person associated with any des17 ignated product, any component of any des18 ignated product, or any equipment to manufac19 ture any such product or component. An inter20 est held in any fund held by such member shall 

21 be taken into account under the preceding sen22 tence unless such fund is a broad-based index 

23 fund. Any interest held by such member prior 

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

25 not (consistent with the requirements of this 


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1 subparagraph) permitted to be held during such 

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

3 (d) CHAIRPERSON.—The Chairperson of the Com4 mission shall be designated by the Secretary of the Treas5 ury (or his designee) at the time of appointment. 

6 (e) STAFF.—Any staff of the Commission shall be ap7 pointed subject to the provisions of title 5, United States 

8 Code, governing appointments in the competitive service, 

9 and shall be paid in accordance with the provisions of 

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

11 relating to classification and General Schedule pay rates. 

12 (f) TERMINATION.— 

13 (1) IN GENERAL.—Except as provided in para14 graph (2), the Commission shall terminate 30 days 

15 after making recommendations to the Secretary of 

16 the Treasury described in subsection (b). 

17 (2) EXTENSION.—At the request of the Sec18 retary of the Treasury or his designee, the Commis19 sion shall continue in existence for such period as 

20 the Secretary may request but not later than 1 year 

21 after making such recommendations. 

Æ 


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