I 
112TH CONGRESS 
2D SESSION 
H. R. 6487 
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 21, 2012 
Mr. MCKINLEY (for himself, Mr. CRITZ, Mr. RAHALL, and Mr. RUSH) intro-
duced 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. 
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 ‘‘Manufacturing Eco-
nomic Recovery Act of 2012’’. 
SEC. 2. CREDIT FOR ACQUISITION OF MANUFACTURING 
PROPERTY. 
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 (relating to Rules for computing credit for invest-
ment in certain depreciable property) is amended by in-
serting after section 48D the following new section: 
‘‘SEC. 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 serv-
ice 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 manu-
facturing real property, the applicable percentage 
is— 
‘‘(A) 10 percent in the case of property lo-
cated on existing manufacturing property, 
‘‘(B) 15 percent in the case property of lo-
cated on former manufacturing property, and 
‘‘(C) 20 percent in the case of property lo-
cated on future manufacturing property. 
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‘‘(C) 
ECONOMICALLY
DISADVANTAGED 
AREAS.—For purposes of this paragraph— 
‘‘(i) IN
GENERAL.—The term ‘eco-
nomically disadvantaged area’ means any 
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 DIS-
ADVANTAGED
AREAS.—The 
term 
‘ex-
tremely economically disadvantaged area’ 
means any area which would be described 
in clause (i) if ‘$32,000’ were substituted 
for ‘$40,000’ in subclause (II) thereof. 
‘‘(iii) HOUSEHOLD INCOME.—Median 
annual household income shall be deter-
mined 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, 
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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 ‘manufac-
turing property’ means tangible property used 
in the United States in the trade or business of 
manufacturing tangible personal property. 
‘‘(B) MANUFACTURING
OF
RESIDENTIAL 
REAL PROPERTY NOT INCLUDED.—Such term 
does not include property used to manufacture 
residential real property, including such prop-
erty used on a transient basis. 
‘‘(2) EXISTING MANUFACTURING PROPERTY.— 
The term ‘existing manufacturing property’ means 
any property which was a manufacturing facility, or 
a part of a manufacturing facility, at any time dur-
ing the period beginning 5 years before the date of 
the enactment of this section and ending on the day 
before its purchase by the taxpayer. 
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‘‘(3) FORMER
MANUFACTURING
PROPERTY.— 
The term ‘former manufacturing property’ means 
any property (other than an existing manufacturing 
property) which was a manufacturing facility, or a 
part of a manufacturing facility, at any time before 
the period described in paragraph (2). 
‘‘(4) FUTURE
MANUFACTURING
PROPERTY.— 
The term ‘future manufacturing property’ means 
any existing or former manufacturing property on 
which there are no permanent vertical structures. 
‘‘(5) MANUFACTURING REAL PROPERTY.—The 
term ‘manufacturing real property’ means manufac-
turing property which is land or section 1250 prop-
erty (as defined in section 1250(c)). 
‘‘(6) MANUFACTURING
TANGIBLE
PERSONAL 
PROPERTY.—The term ‘manufacturing tangible per-
sonal property’ means manufacturing property which 
is tangible property other than manufacturing real 
property. 
‘‘(d) CREDIT NOT ALLOWABLE FOR CERTAIN RELO-
CATIONS 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 loca-
tion, or 
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‘‘(2) is more than 100 miles from the prior lo-
cation. 
‘‘(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 sub-
section (m) or (o) of section 414 shall be treated as 
a single taxpayer.’’. 
(b) INCLUSION AS PART OF INVESTMENT CREDIT.— 
Section 46 of the Internal Revenue Code of 1986 is 
amended by striking ‘‘and’’ at the end of paragraph (5), 
by striking the period at the end of paragraph (6) and 
inserting ‘‘, and’’, and by adding at the end the following 
new paragraph: 
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‘‘(7) the manufacturing recovery credit.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 49(a)(1)(C) of such Code is amend-
ed— 
(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 sec-
tion 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 end-
ing after such date. 
SEC. 3. INCENTIVES FOR HIRING MANUFACTURING RECOV-
ERY EMPLOYEES. 
(a) IN GENERAL.—Paragraph (1) of section 51(d) of 
the Internal Revenue Code of 1986 is amended by striking 
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‘‘or’’ at the end of subparagraph (H), by striking the pe-
riod at the end of subparagraph (I) and inserting ‘‘, or’’, 
and by adding at the end the following new subparagraph: 
‘‘(J) a manufacturing recovery employee.’’. 
(b) MANUFACTURING RECOVERY EMPLOYEE.—Sub-
section (d) of section 51 of such Code is amended by re-
designating paragraphs (11) through (14) as paragraphs 
(12) through (15), respectively, and by inserting after 
paragraph (10) the following new paragraph: 
‘‘(11) 
MANUFACTURING
RECOVERY
EM-
PLOYEE.— 
‘‘(A) IN GENERAL.—The term ‘manufac-
turing recovery employee’ means any individual 
who is certified by the designated local agency 
as having a hiring date which is after the date 
of the enactment of the Manufacturing Eco-
nomic Recovery Act of 2012 and before the 
close of the 3-year period beginning on the date 
that the employer first operated the manufac-
turing facility at which the individual is em-
ployed. 
‘‘(B) INCREASED CREDIT FOR HIRING UN-
EMPLOYED.—In the case of a manufacturing 
recovery employee who is certified by the des-
ignated local agency as having received unem-
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