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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 2681 Introduced in Senate (IS)]

113th CONGRESS
  2d Session
                                S. 2681

 To amend the Internal Revenue Code of 1986 to provide incentives for 
             businesses to keep jobs in the United States.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 29, 2014

 Mr. Pryor (for himself and Mr. Walsh) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To amend the Internal Revenue Code of 1986 to provide incentives for 
             businesses to keep jobs in the United States.

    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 ``Keeping Jobs in America Act''.

SEC. 2. INBOUND INVESTMENT PROGRAM TO RECRUIT JOBS TO THE UNITED 
              STATES.

    (a) Definitions.--In this section:
            (1) Distressed.--The term ``distressed'', with respect to 
        an area, means an area in the United States that, on the date 
        on which the program is established under subsection (b)--
                    (A) is included in the most recent classification 
                of labor surplus areas by the Secretary of Labor; and
                    (B) has an unemployment rate equal to or greater 
                than 110 percent of the unemployment rate of the United 
                States.
            (2) Eligible entity.--The term ``eligible entity'' means an 
        entity that employs not fewer than 50 full-time equivalent 
        employees in high-value jobs.
            (3) Eligible facility.--The term ``eligible facility'' 
        means a facility at which--
                    (A) an eligible entity employs not fewer than 50 
                full-time equivalent employees in high-value jobs;
                    (B) with respect to a rural or distressed area, the 
                mean of the wages provided by the eligible entity to 
                individuals employed at such facility is greater than 
                the mean wage for the county in which the rural or 
                distressed area is located; and
                    (C) derives at least the majority of its revenues 
                from--
                            (i) goods production; or
                            (ii) providing product design, engineering, 
                        marketing, or information technology services.
            (4) High-value job defined.--The term ``high-value job'' 
        means a job that--
                    (A) exists within an eligible facility; and
                    (B) has a North American Industrial Classification 
                that corresponds with manufacturing, software 
                publishers, computer systems design, or related codes, 
                and is higher than the mean hourly wage in the country.
            (5) Rural.--The term ``rural'', with respect to an area, 
        means any area in the United States which, as confirmed by the 
        latest decennial census, is not located within--
                    (A) a city or town that has a population of greater 
                than 50,000 inhabitants; or
                    (B) an urbanized area contiguous and adjacent to a 
                city or town described in subparagraph (A).
    (b) Program Required.--Not later than 180 days after the date of 
the enactment of this Act, the Secretary of Commerce shall establish a 
program to award grants to States that are recruiting high-value jobs. 
Grants awarded under this section may be used to issue forgivable loans 
to eligible entities that are deciding whether to locate eligible 
facilities in the United States to assist such entities in locating 
such facilities in rural or distressed areas.
    (c) Federal Grants to States.--
            (1) In general.--The Secretary shall carry out the program 
        through the award of grants to States to provide loans and loan 
        guarantees described in subsection (d).
            (2) Application.--
                    (A) In general.--A State seeking a grant under the 
                program shall submit an application to the Secretary in 
                such manner and containing such information as the 
                Secretary may require. Once the program is operational, 
                any State may apply for a grant on an ongoing basis, 
                until funds are exhausted. The Secretary may also 
                establish a process for pre-clearing applications from 
                States. The Secretary shall notify all States of this 
                grant opportunity once the program is operational. All 
                information about the program and the State application 
                process must be online and must be in a format that is 
                easily understood and is widely accessible.
                    (B) Elements.--Each application submitted by a 
                State under subparagraph (A) shall include--
                            (i) a description of the eligible entity 
                        the State proposes to assist in locating an 
                        eligible facility in a rural or distressed area 
                        of the State;
                            (ii) a description of such facility, 
                        including the number of high-value jobs 
                        relating to such facility;
                            (iii) a description of such rural or 
                        distressed area;
                            (iv) a description of the resources of the 
                        State that the State has committed to assisting 
                        such corporation in locating such facility, 
                        including tax incentives provided, bonding 
                        authority exercised, and land granted; and
                            (v) such other elements as the Secretary 
                        considers appropriate.
                    (C) Notice.--As soon as practicable after 
                establishing the program under subsection (b), the 
                Secretary shall notify all States of the grants 
                available under the program and the process for 
                applying for such grants.
                    (D) Online submission of applications.--The 
                Secretary shall establish a mechanism for the 
                electronic submission of applications under 
                subparagraph (A). Such mechanism shall utilize an 
                Internet website and all information on such website 
                shall be in a format that is easily understood and 
                widely accessible.
                    (E) Confidentiality.--The Secretary may not make 
                public any information submitted by a State to the 
                Secretary under this paragraph regarding the efforts of 
                such State to assist an eligible entity in locating an 
                eligible facility in such State without the express 
                consent of the State.
            (3) Selection.--The Secretary shall award grants under the 
        program on a competitive basis to States that--
                    (A) the Secretary determines are most likely to 
                succeed with a grant under the program in assisting an 
                eligible entity in locating an eligible facility in a 
                rural or distressed area;
                    (B) if successful in assisting an eligible entity 
                as described in subparagraph (A), will create the 
                greatest number of high-value jobs in rural or 
                distressed areas;
                    (C) have committed significant resources, to the 
                extent of their ability as determined by the Secretary, 
                to assisting eligible entities in locating eligible 
                facilities in a rural or distressed areas; or
                    (D) meet such other criteria as the Secretary 
                considers appropriate, including criteria relating to 
                marketing plans, benefits to ongoing regional or State 
                strategies for economic development, and job growth.
            (4) Limitation on competition between states.--The 
        Secretary may not award a grant to a State under the program to 
        assist an eligible entity--
                    (A) in locating an eligible facility in such State 
                if another State is already seeking to assist such 
                eligible entity in locating such eligible facility in 
                such other State; or
                    (B) from relocating an eligible facility from one 
                State to another State.
            (5) Availability of grant amounts.--For each grant awarded 
        to a State under the program, the Secretary shall make 
        available to such State the amount of such grant not later than 
        30 days after the date on which the Secretary awarded the 
        grant. The total amount of grants awarded under this program 
        may not exceed $100,000,000.
    (d) Loans and Loan Guarantees From States to Corporations.--
            (1) In general.--Amounts received by a State under the 
        program shall be used to provide assistance to an eligible 
        entity to locate an eligible facility in a rural or distressed 
        area of the State.
            (2) Loans and loan guarantees.--A State receiving a grant 
        under the program may provide assistance under paragraph (1) in 
        the form of--
                    (A) a single loan to a single eligible entity as 
                described in paragraph (1) to cover the costs incurred 
                by the eligible entity in locating the eligible 
                facility as described in such paragraph; or
                    (B) a single loan guarantee to a financial 
                institution making a single loan to a single eligible 
                entity as described in paragraph (1) to cover the costs 
                incurred by the eligible entity in locating the 
                eligible facility as described in such paragraph.
            (3) Terms and conditions.--Each loan or loan guarantee 
        provided under paragraph (2) shall have a term of 5 years and 
        shall bear interest at rates equal to the Federal long-term 
        rate under section 1274(d)(1)(C) of the Internal Revenue Code 
        of 1986.
            (4) Amount.--The amount of a loan or loan guarantee issued 
        to an eligible entity under the program for the location of an 
        eligible facility shall be an amount equal to not more than 
        $5,000 per full-time equivalent employee to be employed at such 
        facility.
            (5) Repayment.--Repayment of a loan issued by a State to an 
        eligible entity under the program shall be repaid in accordance 
        with such schedule as the State shall establish in accordance 
        with such rules as the Secretary shall prescribe for purposes 
        of the program. Such rules shall provide for the following:
                    (A) Forgiveness of all or a portion of the loan, 
                the amount of such forgiveness depending upon the 
                following:
                            (i) The performance of the borrower.
                            (ii) The number or quality of the jobs at 
                        the facility located under the program.
                    (B) Repayment of principal or interest, if any, at 
                the end of the term of the loan.
    (e) Assessment and Recommendations.--
            (1) Ongoing assessment.--The Secretary shall conduct an 
        ongoing assessment of the program.
            (2) Recommendations.--The Secretary may submit to Congress 
        recommendations for such legislative action as the Secretary 
        considers appropriate to improve the program, including with 
        respect to any findings of the Secretary derived by comparing 
        the program established under subsection (b) with the programs 
        and policies of governments of other countries used to recruit 
        high-value jobs.

SEC. 3. CREDIT FOR INSOURCING EXPENSES.

    (a) In General.--Subpart D 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. 45S. CREDIT FOR INSOURCING EXPENSES.

    ``(a) In General.--For purposes of section 38, the insourcing 
expenses credit for any taxable year is an amount equal to 20 percent 
of the eligible insourcing expenses of the taxpayer which are taken 
into account in such taxable year under subsection (d).
    ``(b) Eligible Insourcing Expenses.--For purposes of this section--
            ``(1) In general.--The term `eligible insourcing expenses' 
        means--
                    ``(A) eligible expenses paid or incurred by the 
                taxpayer in connection with the elimination of any 
                business unit of the taxpayer (or of any member of any 
                expanded affiliated group in which the taxpayer is also 
                a member) located outside the United States, and
                    ``(B) eligible expenses paid or incurred by the 
                taxpayer in connection with the establishment of any 
                business unit of the taxpayer (or of any member of any 
                expanded affiliated group in which the taxpayer is also 
                a member) located within the United States,
        if such establishment constitutes the relocation of the 
        business unit so eliminated. For purposes of the preceding 
        sentence, a relocation shall not be treated as failing to occur 
        merely because such elimination occurs in a different taxable 
        year than such establishment.
            ``(2) Eligible expenses.--The term `eligible expenses' 
        means--
                    ``(A) any amount for which a deduction is allowed 
                to the taxpayer under section 162, and
                    ``(B) permit and license fees, lease brokerage 
                fees, equipment installation costs, and, to the extent 
                provided by the Secretary, other similar expenses.
        Such term does not include any compensation which is paid or 
        incurred in connection with severance from employment and, to 
        the extent provided by the Secretary, any similar amount.
            ``(3) Business unit.--The term `business unit' means--
                    ``(A) any trade or business, and
                    ``(B) any line of business, or functional unit, 
                which is part of any trade or business.
            ``(4) Expanded affiliated group.--The term `expanded 
        affiliated group' means an affiliated group as defined in 
        section 1504(a), determined without regard to section 
        1504(b)(3) and by substituting `more than 50 percent' for `at 
        least 80 percent' each place it appears in section 1504(a). A 
        partnership or any other entity (other than a corporation) 
        shall be treated as a member of an expanded affiliated group if 
        such entity is controlled (within the meaning of section 
        954(d)(3)) by members of such group (including any entity 
        treated as a member of such group by reason of this paragraph).
            ``(5) Expenses must be pursuant to insourcing plan.--
        Amounts shall be taken into account under paragraph (1) only to 
        the extent that such amounts are paid or incurred pursuant to a 
        written plan to carry out the relocation described in paragraph 
        (1).
            ``(6) Operating expenses not taken into account.--Any 
        amount paid or incurred in connection with the on-going 
        operation of a business unit shall not be treated as an amount 
        paid or incurred in connection with the establishment or 
        elimination of such business unit.
    ``(c) Increased Domestic Employment Requirement.--No credit shall 
be allowed under this section unless the number of full-time equivalent 
employees of the taxpayer for the taxable year for which the credit is 
claimed exceeds the number of full-time equivalent employees of the 
taxpayer for the last taxable year ending before the first taxable year 
in which such eligible insourcing expenses were paid or incurred. For 
purposes of this subsection, full-time equivalent employees has the 
meaning given such term under section 45R(d) (and the applicable rules 
of section 45R(e)). All employers treated as a single employer under 
subsection (b), (c), (m), or (o) of section 414 shall be treated as a 
single employer for purposes of this subsection.
    ``(d) Credit Allowed Upon Completion of Insourcing Plan.--
            ``(1) In general.--Except as provided in paragraph (2), 
        eligible insourcing expenses shall be taken into account under 
        subsection (a) in the taxable year during which the plan 
        described in subsection (b)(5) has been completed and all 
        eligible insourcing expenses pursuant to such plan have been 
        paid or incurred.
            ``(2) Election to apply employment test and claim credit in 
        first full taxable year after completion of plan.--If the 
        taxpayer elects the application of this paragraph, eligible 
        insourcing expenses shall be taken into account under 
        subsection (a) in the first taxable year after the taxable year 
        described in paragraph (1).
    ``(e) Possessions Treated as Part of the United States.--For 
purposes of this section, the term `United States' shall be treated as 
including each possession of the United States (including the 
Commonwealth of Puerto Rico and the Commonwealth of the Northern 
Mariana Islands).
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
or other guidance as may be necessary or appropriate to carry out the 
purposes of this section.''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38 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 insourcing expenses credit determined under 
        section 45S(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

``Sec. 45S. Credit for insourcing expenses.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act.
    (e) Application to United States Possessions.--
            (1) Payments to possessions.--
                    (A) Mirror code possessions.--The Secretary of the 
                Treasury shall make periodic payments to each 
                possession of the United States with a mirror code tax 
                system in an amount equal to the loss to that 
                possession by reason of section 45S of the Internal 
                Revenue Code of 1986. Such amount shall be determined 
                by the Secretary of the Treasury based on information 
                provided by the government of the respective 
                possession.
                    (B) Other possessions.--The Secretary of the 
                Treasury shall make annual payments to each possession 
                of the United States which does not have a mirror code 
                tax system in an amount estimated by the Secretary of 
                the Treasury as being equal to the aggregate benefits 
                that would have been provided to residents of such 
                possession by reason of section 45S of such Code if a 
                mirror code tax system had been in effect in such 
                possession. The preceding sentence shall not apply with 
                respect to any possession of the United States unless 
                such possession has a plan, which has been approved by 
                the Secretary of the Treasury, under which such 
                possession will promptly distribute such payment to the 
                residents of such possession.
            (2) Coordination with credit allowed against united states 
        income taxes.--No credit shall be allowed against United States 
        income taxes under section 45S of such Code to any person--
                    (A) to whom a credit is allowed against taxes 
                imposed by the possession by reason of such section, or
                    (B) who is eligible for a payment under a plan 
                described in paragraph (1)(B).
            (3) Definitions and special rules.--
                    (A) Possessions of the united states.--For purposes 
                of this section, the term ``possession of the United 
                States'' includes the Commonwealth of Puerto Rico and 
                the Commonwealth of the Northern Mariana Islands.
                    (B) Mirror code tax system.--For purposes of this 
                section, the term ``mirror code tax system'' means, 
                with respect to any possession of the United States, 
                the income tax system of such possession if the income 
                tax liability of the residents of such possession under 
                such system is determined by reference to the income 
                tax laws of the United States as if such possession 
                were the United States.
                    (C) Treatment of payments.--For purposes of section 
                1324(b)(2) of title 31, United States Code, the 
                payments under this section shall be treated in the 
                same manner as a refund due from sections referred to 
                in such section 1324(b)(2).

SEC. 4. DENIAL OF DEDUCTION FOR OUTSOURCING EXPENSES.

    (a) In General.--Part IX of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 280I. OUTSOURCING EXPENSES.

    ``(a) In General.--No deduction otherwise allowable under this 
chapter shall be allowed for any specified outsourcing expense.
    ``(b) Specified Outsourcing Expense.--For purposes of this 
section--
            ``(1) In general.--The term `specified outsourcing expense' 
        means--
                    ``(A) any eligible expense paid or incurred by the 
                taxpayer in connection with the elimination of any 
                business unit of the taxpayer (or of any member of any 
                expanded affiliated group in which the taxpayer is also 
                a member) located within the United States, and
                    ``(B) any eligible expense paid or incurred by the 
                taxpayer in connection with the establishment of any 
                business unit of the taxpayer (or of any member of any 
                expanded affiliated group in which the taxpayer is also 
                a member) located outside the United States,
        if such establishment constitutes the relocation of the 
        business unit so eliminated. For purposes of the preceding 
        sentence, a relocation shall not be treated as failing to occur 
        merely because such elimination occurs in a different taxable 
        year than such establishment.
            ``(2) Application of certain definitions and rules.--
                    ``(A) Definitions.--For purposes of this section, 
                the terms `eligible expenses', `business unit', and 
                `expanded affiliated group' shall have the respective 
                meanings given such terms by section 45S(b).
                    ``(B) Operating expenses not taken into account.--A 
                rule similar to the rule of section 45S(b)(6) shall 
                apply for purposes of this section.
    ``(c) Special Rules.--
            ``(1) Application to deductions for depreciation and 
        amortization.--In the case of any portion of a specified 
        outsourcing expense which is not deductible in the taxable year 
        in which paid or incurred, such portion shall neither be 
        chargeable to capital account nor amortizable.
            ``(2) Possessions treated as part of the united states.--
        For purposes of this section, the term `United States' shall be 
        treated as including each possession of the United States 
        (including the Commonwealth of Puerto Rico and the Commonwealth 
        of the Northern Mariana Islands).
    ``(d) Regulations.--The Secretary shall prescribe such regulations 
or other guidance as may be necessary or appropriate to carry out the 
purposes of this section, including regulations which provide (or 
create a rebuttable presumption) that certain establishments of 
business units outside the United States will be treated as relocations 
(based on timing or such other factors as the Secretary may provide) of 
business units eliminated within the United States.''.
    (b) Limitation on Subpart F Income of Controlled Foreign 
Corporations Determined Without Regard to Specified Outsourcing 
Expenses.--Subsection (c) of section 952 of such Code is amended by 
adding at the end the following new paragraph:
            ``(4) Earnings and profits determined without regard to 
        specified outsourcing expenses.--For purposes of this 
        subsection, earnings and profits of any controlled foreign 
        corporation shall be determined without regard to any specified 
        outsourcing expense (as defined in section 280I(b)).''.
    (c) Clerical Amendment.--The table of sections for part IX of 
subchapter B of chapter 1 of such Code is amended by adding at the end 
the following new item:

``Sec. 280I. Outsourcing expenses.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act.

SEC. 5. EXTENSION OF BONUS DEPRECIATION.

    (a) In General.--Paragraph (2) of section 168(k) of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``January 1, 2015'' in subparagraph (A)(iv) 
        and inserting ``January 1, 2019'', and
            (2) by striking ``January 1, 2014'' each place it appears 
        and inserting ``January 1, 2018''.
    (b) Special Rule for Federal Long-Term Contracts.--Clause (ii) of 
section 460(c)(6)(B) of such Code is amended by striking ``January 1, 
2014 (January 1, 2015'' and inserting ``January 1, 2018 (January 1, 
2019''.
    (c) Extension of Election To Accelerate the AMT Credit in Lieu of 
Bonus Depreciation.--
            (1) In general.--Subclause (II) of section 
        168(k)(4)(D)(iii) of such Code is amended by striking ``2014'' 
        and inserting ``2018''.
            (2) Round 4 extension property.--Paragraph (4) of section 
        168(k) of such Code is amended by adding at the end the 
        following new subparagraph:
                    ``(K) Special rules for round 4 extension 
                property.--
                            ``(i) In general.--In the case of round 4 
                        extension property, in applying this paragraph 
                        to any taxpayer--
                                    ``(I) the limitation described in 
                                subparagraph (B)(i) and the business 
                                credit increase amount under 
                                subparagraph (E)(iii) thereof shall not 
                                apply, and
                                    ``(II) the bonus depreciation 
                                amount, maximum amount, and maximum 
                                increase amount shall be computed 
                                separately from amounts computed with 
                                respect to eligible qualified property 
                                which is not round 4 extension 
                                property.
                            ``(ii) Election.--
                                    ``(I) A taxpayer who has an 
                                election in effect under this paragraph 
                                for round 3 extension property shall be 
                                treated as having an election in effect 
                                for round 4 extension property unless 
                                the taxpayer elects to not have this 
                                paragraph apply to round 4 extension 
                                property.
                                    ``(II) A taxpayer who does not have 
                                an election in effect under this 
                                paragraph for round 3 extension 
                                property may elect to have this 
                                paragraph apply to round 4 extension 
                                property.
                            ``(iii) Round 4 extension property.--For 
                        purposes of this subparagraph, the term `round 
                        4 extension property' means property which is 
                        eligible qualified property solely by reason of 
                        the extension of the application of the special 
                        allowance under paragraph (1) pursuant to the 
                        amendments made by section 5(a) of the Keeping 
                        Jobs in America Act (and the application of 
                        such extension to this paragraph pursuant to 
                        the amendment made by section 5(c) of such 
                        Act).''.
    (d) Conforming Amendments.--
            (1) The heading for subsection (k) of section 168 of such 
        Code is amended by striking ``January 1, 2014'' and inserting 
        ``January 1, 2018''.
            (2) The heading for clause (ii) of section 168(k)(2)(B) of 
        such Code is amended by striking ``pre-january 1, 2014'' and 
        inserting ``pre-january 1, 2018''.
            (3) Subparagraph (C) of section 168(n)(2) of such Code is 
        amended by striking ``January 1, 2014'' and inserting ``January 
        1, 2018''.
            (4) Subparagraph (D) of section 1400L(b)(2) of such Code is 
        amended by striking ``January 1, 2014'' and inserting ``January 
        1, 2018''.
            (5) Subparagraph (B) of section 1400N(d)(3) of such Code is 
        amended by striking ``January 1, 2014'' and inserting ``January 
        1, 2018''.
    (e) Technical Amendment Relating to Section 331 of the American 
Taxpayer Relief Act of 2012.--
            (1) In general.--Clause (iii) of section 168(k)(4)(J) of 
        such Code is amended by striking ``any taxable year'' and 
        inserting ``its first taxable year''.
            (2) Effective date.--The amendment made by this subsection 
        shall take effect as if included in the provision of the 
        American Taxpayer Relief Act of 2012 to which it relates.
    (f) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2013, in taxable 
years ending after such date.

SEC. 6. INCREASED EXPENSING LIMITATIONS AND TREATMENT OF CERTAIN REAL 
              PROPERTY AS SECTION 179 PROPERTY.

    (a) In General.--
            (1) Dollar limitation.--Paragraph (1) of section 179(b) of 
        the Internal Revenue Code of 1986 is amended by striking 
        ``shall not exceed--'' and all that follows and inserting 
        ``shall not exceed $500,000.''.
            (2) Reduction in limitation.--Paragraph (2) of section 
        179(b) of such Code is amended by striking ``exceeds--'' and 
        all that follows and inserting ``exceeds $2,000,000.''.
    (b) Computer Software.--Clause (ii) of section 179(d)(1)(A) of such 
Code is amended by striking ``, to which section 167 applies, and which 
is placed in service in a taxable year beginning after 2002 and before 
2014'' and inserting ``and to which section 167 applies''.
    (c) Election.--Paragraph (2) of section 179(c) of such Code is 
amended--
            (1) by striking ``may not be revoked'' and all that follows 
        through ``and before 2014'', and
            (2) by striking ``irrevocable'' in the heading thereof.
    (d) Air Conditioning and Heating Units.--Paragraph (1) of section 
179(d) of such Code is amended by striking ``and shall not include air 
conditioning or heating units''.
    (e) Qualified Real Property.--Subsection (f) of section 179 of such 
Code is amended--
            (1) by striking ``beginning in 2010, 2011, 2012, or 2013'' 
        in paragraph (1), and
            (2) by striking paragraphs (3) and (4).
    (f) Inflation Adjustment.--Subsection (b) of section 179 of such 
Code is amended by adding at the end the following new paragraph:
            ``(6) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after 2014, the dollar amounts in paragraphs 
                (1) and (2) shall each be increased by an amount equal 
                to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(c)(2)(A) for such 
                        calendar year, determined by substituting 
                        calendar year 2013 for calendar year 2012 in 
                        clause (ii) thereof.
                    ``(B) Rounding.--The amount of any increase under 
                subparagraph (A) shall be rounded to the nearest 
                multiple of $10,000.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

SEC. 7. PERMANENT EXTENSION OF NEW MARKETS TAX CREDIT.

    (a) Extension.--
            (1) In general.--Subparagraph (G) of section 45D(f)(1) of 
        the Internal Revenue Code of 1986 is amended by striking ``, 
        2011, 2012, and 2013'' and inserting ``and each calendar year 
        thereafter''.
            (2) Conforming amendment.--Section 45D(f)(3) of such Code 
        is amended by striking the last sentence.
    (b) Inflation Adjustment.--Subsection (f) of section 45D of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new paragraph:
            ``(4) Inflation adjustment.--
                    ``(A) In general.--In the case of any calendar year 
                beginning after 2013, the dollar amount in paragraph 
                (1)(G) shall be increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year, determined by substituting 
                        `calendar year 2000' for `calendar year 1992' 
                        in subparagraph (B) thereof.
                    ``(B) Rounding rule.--Any increase under 
                subparagraph (A) which is not a multiple of $1,000,000 
                shall be rounded to the nearest multiple of 
                $1,000,000.''.
    (c) Alternative Minimum Tax Relief.--Subparagraph (B) of section 
38(c)(4) of the Internal Revenue Code of 1986 is amended--
            (1) by redesignating clauses (v) through (ix) as clauses 
        (vi) through (x), respectively, and
            (2) by inserting after clause (iv) the following new 
        clause:
                            ``(v) the credit determined under section 
                        45D, but only with respect to credits 
                        determined with respect to qualified equity 
                        investments (as defined in section 45D(b)) 
                        initially made before January 1, 2014,''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on the date 
        of the enactment of this Act.
            (2) Alternative minimum tax relief.--The amendments made by 
        subsection (c) shall apply to credits determined with respect 
        to qualified equity investments (as defined in section 45D(b) 
        of the Internal Revenue Code of 1986) initially made after the 
        date of the enactment of this Act.
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