Manufacturing Economic Recovery Act of 2017

To amend the Internal Revenue Code of 1986 to provide incentives for the expansion of manufacturing in the United States. 1. Short title This Act may be cited as the Manufacturing Economic Recovery Act of 2017 2. Credit for acquisition of manufacturing property (a) In general Subpart E of part IV of subchapter A of chapter 1 48E. Acquisition of manufacturing property (a) In general For purposes of section 46, the manufacturing recovery credit for any taxable year is an amount equal to— (1) the applicable percentage of the taxpayer’s basis in manufacturing real property placed in service by the taxpayer during the taxable year, and (2) the applicable percentage of the taxpayer’s basis in manufacturing tangible personal property placed in service by the taxpayer during the taxable year. (b) Applicable percentages For purposes of this section— (1) Real property In the case of manufacturing real property, the applicable percentage is— (A) 10 percent in the case of property located on existing manufacturing property, (B) 15 percent in the case property of located on former manufacturing property, and (C) 20 percent in the case of property located on future manufacturing property. (2) Tangible personal property In the case of manufacturing tangible personal property, the applicable percentage shall be determined in accordance with the following table: If the aggregate To the extent To the extent To the extent 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. (3) Increased credit for property located in economically disadvantaged areas (A) In general If the manufacturing property is located in an economically disadvantaged area, each of the percentages under paragraphs (1) and (2) shall be increased by 5 percentage points. (B) Extremely economically disadvantaged areas If the manufacturing property is located in an extremely economically disadvantaged area, each of the percentages under paragraphs (1) and (2) shall, in lieu of an increase under subparagraph (A), be increased by 10 percentage points. (C) Economically disadvantaged areas For purposes of this paragraph— (i) In general The term economically disadvantaged area (I) for which there is a single 5-digit postal zip code, and (II) which includes any portion of a census tract in which the median annual household income is less than $40,000 per year. (ii) Extremely economically disadvantaged areas The term extremely economically disadvantaged area $32,000 $40,000 (iii) Household income Median annual household income shall be determined using the 2010 census, as updated by the American Community Survey of the Bureau of the Census. (iv) Areas not within census tracts In the case of an area which is not tracted for population census tracts, the equivalent county divisions (as defined by the Bureau of the Census for purposes of defining poverty areas) shall be used for purposes of determining median annual household income. (c) Manufacturing property For purposes of this section— (1) Manufacturing property (A) In general The term manufacturing property (B) Manufacturing of residential real property not included Such term does not include property used to manufacture residential real property, including such property used on a transient basis. (2) Existing manufacturing property The term existing manufacturing property (3) Former manufacturing property The term former manufacturing property (4) Future manufacturing property The term future manufacturing property (5) Manufacturing real property The term manufacturing real property (6) Manufacturing tangible personal property The term manufacturing tangible personal property (d) Credit not allowable for certain relocations of manufacturing facilities This section shall not apply to property acquired as part of a relocation of a manufacturing facility unless the new location— (1) is in a different State than the prior location, or (2) is more than 100 miles from the prior location. (e) Special rules (1) Credit not allowable if remediation deduction claimed This section shall not apply to any property located on a site with respect to which the taxpayer (or a related party) is allowed a deduction under section 198 (relating to expensing of environmental remediation costs). (2) Basis adjustment For purposes of this subtitle, if a credit is allowed under this section for an expenditure related to property, the basis of such property shall be reduced by the amount of such credit. (3) Controlled groups For purposes of this section, all persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as a single taxpayer. . (b) Inclusion as part of investment credit Section 46 of such Code is amended by striking and , and (7) the manufacturing recovery credit. . (c) Conforming amendments (1) Section 49(a)(1)(C) of such Code is amended— (A) by striking ‘‘and’’ at the end of clause (v), (B) by striking the period at the end of clause (vi) and inserting ‘‘, and’’, and (C) by adding at the end the following new clause: (vii) the basis of any property which is manufacturing property under section 48E. . (2) The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 48D the following new item: Sec. 48E. Acquisition of manufacturing property. (d) Effective date The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act in taxable years ending after such date. 3. Incentives for hiring manufacturing recovery employees (a) In general Paragraph (1) of section 51(d) or , or (K) a manufacturing recovery employee. . (b) Manufacturing recovery employee Subsection (d) of section 51 of such Code is amended by adding at the end the following new paragraph: (16) Manufacturing recovery employee (A) In general The term manufacturing recovery employee Manufacturing Economic Recovery Act of 2017 (B) Increased credit for hiring unemployed In the case of a manufacturing recovery employee who is certified by the designated local agency as having received unemployment compensation under State or Federal law for not less than 4 weeks during the 3-year period ending on the hiring date, subsection (a) shall be applied by substituting 50 percent 40 percent (C) No credit for less than full-time employment An individual shall not be treated as a manufacturing recovery employee for any week during which— (i) the individual is employed by the employer for less than 35 hours at a manufacturing facility of the employer, or (ii) the individual performs less than 90 percent of individual’s services for the employer at the manufacturing facility. (D) Manufacturing facility must be in united states No credit shall be allowable by reason of this paragraph unless the manufacturing facility is located in the United States. . (c) Permanent credit for manufacturing recovery employees Paragraph (4) of section 51(c) of such Code (relating to termination) is amended by adding at the end the following: The preceding sentence shall not apply to any manufacturing recovery employee. . (d) Effective date The amendments made by this section shall apply to individuals who first begin work for the employer after the date of the enactment of this Act.

Summary: Manufacturing Economic Recovery Act of 2017 This bill amends the Internal Revenue Code to allow: (1) a manufacturing recovery tax credit for investment in manufacturing real and tangible personal property used in the United States, including an increased credit for manufacturing property located in an economically disadvantaged area or an extremely economically disadvantaged area; (2) an additional investment tax credit for manufacturing property; and (3) a permanent work opportunity tax credit for hiring a full-time employee in a manufacturing facility located in the United States (manufacturing recovery employee), including an increased credit for hiring individuals receiving unemployment compensation.