1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45S. MANUFACTURING FACILITY EXPENDITURES. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of an eligible business, the manufacturing facil-
ity expenditure credit for any taxable year is an amount 
equal to 25 percent of the qualified facility construction 
expenditures of the taxpayer for the taxable year. 
‘‘(b) ELIGIBLE BUSINESS.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘eligible business’ 
means any corporation or partnership— 
‘‘(A) which is engaged in an active trade or 
business, 
‘‘(B) which is headquartered in the United 
States, 
‘‘(C) substantially all of the management 
or administrative activities of which are per-
formed in the United States, 
‘‘(D) which has not (prior to placing into 
service the manufacturing facility designated 
for purposes of this section) placed in service a 
manufacturing facility, 
‘‘(E) which is a start-up company, and 
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‘‘(F) with respect to which all debt obliga-
tions issued by, and equity interests in, have a 
rating of B minus (or its substantial equivalent) 
or higher from a credit rating agency registered 
with the Securities and Exchange Commission 
as a nationally recognized statistical rating or-
ganization (as defined in section 3(a) of the Se-
curities Exchange Act of 1934). 
‘‘(2) START-UP COMPANY.—The term ‘start-up 
company’ means any corporation or partnership— 
‘‘(A) which first has both gross receipts 
and qualified research expenses (as defined in 
section 41(b)) in a taxable year beginning after 
December 31, 2012, or 
‘‘(B) which has both gross receipts and 
qualified research expenses (as so defined) in 
fewer than 3 taxable years beginning after De-
cember 31, 2012, and before January 1, 2018. 
‘‘(c) QUALIFIED FACILITY CONSTRUCTION EXPENDI-
TURES.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified facility 
construction expenditures’ means amounts paid or 
incurred by the taxpayer— 
‘‘(A) for the construction of a facility (des-
ignated for purposes of this section by the tax-
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payer at such time and in such form and man-
ner as the Secretary shall prescribe) in the 
United States to manufacture a qualified prod-
uct (including amounts for professional services 
necessary for the planning of such construc-
tion), and 
‘‘(B) for the purchase of specialized equip-
ment for use at such facility and required for 
the manufacture of such product. 
‘‘(2) QUALIFIED PRODUCT.—The term ‘quali-
fied product’ means any product which, prior to con-
struction of the facility with respect to which a cred-
it is allowed under this section, the taxpayer has 
produced and sold to a bona fide purchaser, and 
such purchaser has placed such product in service. 
‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) RECAPTURE.— 
‘‘(A) IN GENERAL.—If, as of the close of 
any taxable year, there is a recapture event 
with respect to any facility of the taxpayer with 
respect to which a credit was allowed under this 
section, then the tax of the taxpayer under this 
chapter for such taxable year shall be increased 
by an amount equal to the product of— 
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‘‘(i) the applicable recapture percent-
age, and 
‘‘(ii) the aggregate decrease in the 
credits allowed under section 38 for all 
prior taxable years which would have re-
sulted if the qualified facility construction 
expenditures of the taxpayer described in 
subsection (c)(1) with respect to such facil-
ity had been zero. 
‘‘(B) APPLICABLE RECAPTURE PERCENT-
AGE.— 
‘‘(i) IN
GENERAL.—For purposes of 
this subsection, the applicable recapture 
percentage shall be determined in accord-
ance with the following table: 
‘‘If the recapture event 
occurs in: 
The applicable recapture 
percentage is: 
Year 1 ..........................................................................................
100
Year 2 ..........................................................................................
Year 3 ..........................................................................................
Year 4 ..........................................................................................
Year 5 ..........................................................................................
Years 6 and thereafter .................................................................
0. 
‘‘(ii) YEARS.—For purposes of clause 
(i), year 1 shall begin on the first day of 
the taxable year in which the facility with 
respect to which a credit was allowed 
under this subsection was placed in service. 
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‘‘(C) RECAPTURE
EVENT.—For purposes 
of this paragraph— 
‘‘(i) IN GENERAL.—A recapture event 
occurs with respect to any facility if— 
‘‘(I) the taxpayer becomes insol-
vent, or 
‘‘(II) the taxpayer disposes of the 
facility to another person who, at this 
time of the disposition, is not an eligi-
ble business. 
‘‘(ii) SPECIAL RULE FOR FACILITIES 
NOT
PLACED
IN
SERVICE
WITHIN
YEARS.—In the case of a facility with re-
spect to which a credit is allowed under 
this section which is not placed in service 
before the close of the 5th taxable year be-
ginning after the first taxable year for 
which the credit was so allowed, a recap-
ture event shall be treated as having oc-
curred with respect to such facility in year 
1. 
‘‘(2) CREDIT MAY BE ASSIGNED.—The amount 
of qualified facility construction expenditures with 
respect to a facility which would (but for this para-
graph) be taken into account under subsection (a) 
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for any taxable year by any person (hereafter in this 
paragraph referred to as the ‘initial taxpayer’)— 
‘‘(A) may be taken into account by any 
other person to whom such expenditures are as-
signed by the initial taxpayer, and 
‘‘(B) shall not be taken into account by 
initial taxpayer. 
Any person to whom such expenditures are assigned 
under subparagraph (A) shall be treated for pur-
poses of this title as the taxpayer with respect to 
such expenditures. 
‘‘(3) CONTROLLED GROUP.—All members of the 
same controlled group of corporations (within the 
meaning of section 52(a)) and all persons under 
common control (within the meaning of section 
52(b)) shall be treated as 1 person for purposes of 
this section. 
‘‘(4) PREDECESSOR.—Any reference in this sec-
tion to a corporation or partnership shall include a 
reference to any predecessor of such corporation or 
partnership. 
‘‘(5) DENIAL OF DOUBLE BENEFIT.—For pur-
poses of this subtitle, if a credit is allowed under 
this section in connection with any expenditure for 
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