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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Market Based Manu-
facturing Incentives Act of 2011’’. 
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SEC. 2. CREDIT FOR RETAIL PURCHASE OF CERTAIN DO-
MESTIC PRODUCTS. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 30E. DOMESTIC MANUFACTURING CONSUMER CRED-
IT. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for any taxable year an amount equal to the applicable 
percentage of the aggregate amount paid or incurred by 
the taxpayer for specified products during any portion 
such taxable year which is part of the eligible period. 
‘‘(b) APPLICABLE
PERCENTAGE; ELIGIBLE
PE-
RIOD.—For purposes of this section— 
‘‘(1) APPLICABLE
PERCENTAGE.—The term 
‘applicable percentage’ means, with respect to any 
specified product, the percentage (not less than 5 
percent nor more than 20 percent) determined by 
the Commission under subsection (e)(4) with respect 
to such product. 
‘‘(2) ELIGIBLE PERIOD.—The term ‘eligible pe-
riod’ means, with respect to any specified product, 
the period (not less than 5 years nor more than 10 
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years) determined by the Commission under sub-
section (e)(5) with respect to such product. 
‘‘(3) SEPARATE APPLICATION TO EACH SPECI-
FIED
PRODUCT.—Subsection (a) shall be applied 
separately with respect to each of the specified prod-
ucts designated under subsection (e). 
‘‘(c) SPECIFIED PRODUCT.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘specified prod-
uct’ means any designated domestic product— 
‘‘(A) the original use of which commences 
with the taxpayer, and 
‘‘(B) which is acquired by the taxpayer for 
use or lease, but not for resale. 
‘‘(2) DESIGNATED
DOMESTIC
PRODUCT.—The 
term ‘designated domestic product’ means any des-
ignated product which has been certified by the Sec-
retary as— 
‘‘(A) having been assembled in the United 
States, and 
‘‘(B) consisting at least 60 percent of com-
ponents assembled or otherwise arising in the 
United States. 
‘‘(3) DESIGNATED PRODUCT.—The term ‘des-
ignated product’ means the 10 products designated 
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by the Secretary, in consultation with the Commis-
sion, under subsection (e). 
‘‘(d) APPLICATION WITH OTHER CREDITS.— 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—So much of the credit 
which would be allowed under subsection (a) for any 
taxable year (determined without regard to this sub-
section) that is attributable to property used by the 
taxpayer in the conduct of a trade or business shall 
be treated as a credit listed in section 38(b) for such 
taxable year (and not allowed under subsection (a)). 
‘‘(2) PERSONAL CREDIT.—For purposes of this 
title, the credit allowed under subsection (a) for any 
taxable year (determined after application of para-
graph (1)) shall be treated as a credit allowable 
under subpart A for such taxable year. 
‘‘(e) SELECTION OF DESIGNATED PRODUCTS.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the Commission, shall designate 10 prod-
ucts for purposes of this section. 
‘‘(2) ELIGIBLE
PRODUCTS.—A product shall 
not be eligible for designation under this section un-
less— 
‘‘(A) such product represents a techno-
logical innovation, and 
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subsection (a) for such property (determined without 
regard to subsection (d)). 
‘‘(4) PROPERTY USED BY TAX-EXEMPT ENTI-
TY.—In the case of property whose use is described 
in paragraph (3) or (4) of section 50(b) and which 
is not subject to a lease, the person who sold such 
property to the person or entity using such property 
shall be treated as the taxpayer that placed such ve-
hicle in service, but only if such person clearly dis-
closes to such person or entity in a document the 
amount of any credit allowable under subsection (a) 
with respect to such property (determined without 
regard to subsection (d)). For purposes of subsection 
(d), property to which this paragraph applies shall 
be treated as property used by the taxpayer in the 
conduct of a trade or business. 
‘‘(5) 
PROPERTY
USED
OUTSIDE
UNITED 
STATES, ETC., NOT QUALIFIED.—No credit shall be 
allowable under subsection (a) with respect to any 
property referred to in section 50(b)(1). 
‘‘(6) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any property which ceases to be property eligible for 
such credit (including recapture in the case of a 
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lease period of less than the economic life of the 
property). 
‘‘(7) ELECTION
TO
NOT
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
vehicle if the taxpayer elects to not have this section 
apply to such property. 
‘‘(g) TERMINATION.—This section shall not apply to 
property acquired after the date which is 10 years after 
the date of the enactment of this section.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b) 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 fol-
lowing new paragraph: 
‘‘(37) the portion of the domestic manufac-
turing consumer credit to which section 30E(d)(1) 
applies.’’. 
(2) Section 1016(a) of such Code is amended 
by striking ‘‘and’’ at the end of paragraph (36), by 
striking the period at the end of paragraph (37) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(38) to the extent provided in section 
30E(f)(2).’’. 
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(3) Section 6501(m) of such Code is amended 
by inserting ‘‘30E(f)(7),’’ after ‘‘30D(e)(4),’’. 
(4) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 of such Code is 
amended by adding at the end the following new 
item: 
‘‘Sec. 30E. Domestic manufacturing consumer credit.’’. 
(c) GAO REPORT.—The Government Accountability 
Office shall, during the 3d, 5th, and 7th years after the 
effective date of the domestic manufacturing consumer 
credit (described in subsection (d)), report to Congress on 
the economic effects of such credit. Such report shall in-
clude the aggregate value of the domestic manufacturing 
consumer credits determined with respect to taxpayers 
under section 30E of the Internal Revenue Code of 1986 
and an estimate of the economic activity stimulated by 
such credits. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property acquired after the date 
which is 1 year after the date on which the 21st Century 
American Manufacturing Commission makes its rec-
ommendations to the Secretary of the Treasury under sec-
tion 3(b) of this Act. 
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SEC. 3. ESTABLISHMENT OF 21ST CENTURY AMERICAN 
MANUFACTURING COMMISSION. 
(a) IN GENERAL.—There is established a commission 
to be known as the 21st Century American Manufacturing 
Commission. 
(b) DUTIES.—The Commission shall conduct re-
search regarding appropriate products to make eligible for 
the tax credit provided by section 30E of the Internal Rev-
enue Code of 1986 and shall make recommendations to 
the Secretary of the Treasury regarding which products 
should be designated for purposes of such section and the 
applicable percentage and eligible period which should be 
determined with respect to each such product. The com-
mission shall make such recommendations to the Sec-
retary of the Treasury not later than 6 months after the 
date of the enactment of this Act. 
(c) MEMBERSHIP.— 
(1) IN
GENERAL.—The Commission shall be 
composed of 10 members who shall be appointed by 
the Secretary of the Treasury or his designee not 
later than 30 days after the enactment of this Act. 
(2) POLITICAL AFFILIATION.—Not more than 5 
members may be of the same political party. 
(3) TERMS.—Each member shall be appointed 
for the life of the Commission. 
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(4) VACANCIES.—A vacancy in the Commission 
shall be filled in the manner in which the original 
appointment was made. 
(5) PAY OF MEMBERS.— 
(A) IN GENERAL.—Members shall each be 
entitled to receive the daily equivalent of the 
maximum annual rate of basic pay for grade 
GS–11 of the General Schedule for each day 
(including travel time) during which they are 
engaged in the actual performance of duties 
vested in the Commission. 
(B) TRAVEL
EXPENSES.—Each member 
shall receive travel expenses, including per diem 
in lieu of subsistence, in accordance with appli-
cable provisions under subchapter I of chapter 
57 of title 5, United States Code. 
(6) PREVENTION OF CONFLICT OF INTEREST.— 
(A) AGREEMENT.—The Secretary of the 
Treasury shall not appoint any individual to be 
a member of the Commission unless such indi-
vidual has first sign an agreement with the Sec-
retary to prevent conflicts of interest. Such 
agreement shall include a requirement that the 
individual comply with the provisions of sub-
paragraph (B) and shall include such penalties 
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for failure to so comply as the Secretary deter-
mines appropriate. 
(B) REQUIREMENTS.—A member of the 
Commission shall not, during the 5-year period 
beginning on the effective date of the domestic 
manufacturing consumer credit (described in 
section 2(d)), hold, directly or indirectly, any 
interest in any person associated with any des-
ignated product, any component of any des-
ignated product, or any equipment to manufac-
ture any such product or component. An inter-
est held in any fund held by such member shall 
be taken into account under the preceding sen-
tence unless such fund is a broad-based index 
fund. Any interest held by such member prior 
to the beginning of such 5-year period which is 
not (consistent with the requirements of this 
subparagraph) permitted to be held during such 
period, shall be disposed of prior to such period. 
(d) CHAIRPERSON.—The Chairperson of the Com-
mission shall be designated by the Secretary of the Treas-
ury (or his designee) at the time of appointment. 
(e) STAFF.—Any staff of the Commission shall be ap-
pointed subject to the provisions of title 5, United States 
Code, governing appointments in the competitive service, 
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