‘‘(iii) subparagraph (A) or (B) of sub-
section (g)(3) (relating to prohibited trans-
actions and pledging account as security). 
‘‘(2) ADDITIONAL TAX.— 
‘‘(A) IN GENERAL.—The tax imposed by 
this chapter on the taxpayer for any taxable 
year in which there is a distribution from an 
MRA shall be increased by 10 percent of the 
amount of such distribution which is includible 
in gross income. 
‘‘(B) 
EXCEPTION.—Subparagraph 
(A) 
shall not apply to distributions during the tax-
able year to the extent necessary, under regula-
tions prescribed by the Secretary, to avoid 
bankruptcy. 
‘‘(3) REDUCED INCLUSION FOR AMOUNTS REIN-
VESTED.—Only 43 percent of the aggregate amount 
distributed from an MRA during the taxable year 
shall be includible in income under paragraph (1)(A) 
to the extent that such aggregate amount does not 
exceed the aggregate amount of qualified reinvest-
ment expenses paid or incurred by the taxpayer dur-
ing such year. 
‘‘(4) DISTRIBUTION
OF
EXCESS
CONTRIBU-
TIONS.—Paragraph (1) shall not apply to the dis-
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tribution of any contribution paid during a taxable 
year to an MRA to the extent that such contribution 
exceeds the limitation applicable under subsection 
(b) if requirements similar to the requirements of 
section 408(d)(4) are met. 
‘‘(f) DEFINITIONS.—For purposes of this section— 
‘‘(1) MANUFACTURING
BUSINESS.—The term 
‘manufacturing business’ means any trade or busi-
ness having domestic manufacturing gross receipts. 
‘‘(2) DOMESTIC
MANUFACTURING
GROSS
RE-
CEIPTS.—The term ‘domestic manufacturing gross 
receipts’ means gross receipts of the taxpayer which 
are derived from any lease, rental, license, sale, ex-
change, or other disposition of tangible personal 
property which was manufactured by the taxpayer in 
whole or in significant part within the United 
States. Rules similar to the rules of section 199 
shall apply in determining the gross receipts of the 
taxpayer for purposes of the preceding sentence. 
‘‘(3) QUALIFIED REINVESTMENT EXPENSES.— 
The term ‘qualified reinvestment expenses’ means— 
‘‘(A) expenses for property to be used by 
the taxpayer in a manufacturing business, and 
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‘‘(B) expenses for job training and work-
force development for employees of the tax-
payer. 
‘‘(4) ELIGIBLE INSTITUTION.— 
‘‘(A) IN GENERAL.—The term ‘eligible in-
stitution’ means— 
‘‘(i) any insured depository institu-
tion, which— 
‘‘(I) is not controlled by a bank 
holding company or savings and loan 
holding company that is also an eligi-
ble institution, 
‘‘(II) has total assets of equal to 
or less than $25,000,000,000, as re-
ported in the call report as of the end 
of the fourth quarter of calendar year 
2012, and 
‘‘(III) is not directly or indirectly 
controlled by any company or other 
entity that has total consolidated as-
sets of more than $25,000,000,000, 
as so reported; 
‘‘(ii) any bank holding company which 
has total consolidated assets of equal to or 
less than $25,000,000,000; 
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‘‘(iii) any savings and loan holding 
company which has total consolidated as-
sets 
of 
equal 
to 
or 
less 
than 
$25,000,000,000; 
‘‘(iv) any community development fi-
nancial institution loan fund which has 
total assets of equal to or less than 
$25,000,000,000; and 
‘‘(v) any small business lending com-
pany that has total assets of equal to or 
less than $25,000,000,000. 
‘‘(B) 
INSURED
DEPOSITORY
INSTITU-
TION.—The term ‘insured depository institu-
tion’ has the meaning given such term under 
section 3(c)(2) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1813(c)(2)). 
‘‘(C) 
BANK
HOLDING
COMPANY.—The 
term ‘bank holding company’ has the meaning 
given such term under section 2(a)(1) of the 
Bank Holding Company Act of 1956 (12 
U.S.C. 1841(2)(a)(1)). 
‘‘(D) CALL REPORT.—The term ‘call re-
port’ means— 
‘‘(i) reports of Condition and Income 
submitted to the Office of the Comptroller 
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of the Currency, the Board of Governors of 
the Federal Reserve System, and the Fed-
eral Deposit Insurance Corporation; 
‘‘(ii) the Office of Thrift Supervision 
Thrift Financial Report; 
‘‘(iii) any report that is designated by 
the Office of the Comptroller of the Cur-
rency, the Board of Governors of the Fed-
eral Reserve System, the Federal Deposit 
Insurance Corporation, or the Office of 
Thrift Supervision, as applicable, as a suc-
cessor to any report referred to in clause 
(i) or (ii); 
‘‘(iv) standard reports of Condition 
and Income submitted by Community De-
velopment Financial Institution loan funds 
to the Community Development Financial 
Institutions Fund; and 
‘‘(v) with respect to an eligible institu-
tion for which no report exists that is de-
scribed under clause (i), (ii), or (iii), such 
other report or set of information as the 
Secretary, in consultation with the Admin-
istrator of the Small Business Administra-
tion, may prescribe. 
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‘‘(g) SPECIAL RULES.— 
‘‘(1) TAX
ON
DEPOSITS
IN
ACCOUNT
WHICH 
ARE NOT DISTRIBUTED WITHIN 7 YEARS.— 
‘‘(A) IN GENERAL.—If, at the close of any 
taxable year, there is a nonqualified balance in 
any MRA— 
‘‘(i) there shall be deemed distributed 
from the MRA during such taxable year an 
amount equal to such balance, and 
‘‘(ii) the taxpayer’s tax imposed by 
this chapter for such taxable year shall be 
increased by 10 percent of such deemed 
distribution. 
‘‘(B) NONQUALIFIED BALANCE.—For pur-
poses of subparagraph (A), the term ‘non-
qualified balance’ means any balance in the 
MRA on the last day of the taxable year which 
is attributable to amounts deposited in such ac-
count before the 6th preceding taxable year. 
‘‘(C) ORDERING RULE.—For purposes of 
this paragraph, distributions from an MRA 
shall be treated as made from deposits (and in-
come thereon) in the order in which such depos-
its were made, beginning with the earliest de-
posits. 
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‘‘(2) CESSATION
OF
MANUFACTURING
BUSI-
NESS.—If the taxpayer ceases to be engaged in a 
manufacturing business, there shall be deemed dis-
tributed from the MRA of the taxpayer at the close 
of the first taxable year beginning after such ces-
sation an amount equal to the balance in the MRA 
(if any) at such close. 
‘‘(3) CERTAIN RULES TO APPLY.—Rules similar 
to the following rules shall apply for purposes of this 
section: 
‘‘(A) Section 408(e)(2) (relating to loss of 
exemption of account where taxpayer engages 
in prohibited transaction). 
‘‘(B) Section 408(e)(4) (relating to effect 
of pledging account as security). 
‘‘(C) Section 408(h) (relating to custodial 
accounts). 
‘‘(4) TIME WHEN PAYMENTS DEEMED MADE.— 
For purposes of this section, a taxpayer shall be 
deemed to have made a payment to an MRA on the 
last day of a taxable year if such payment is made 
on account of such taxable year and is made on or 
before the due date (without regard to extensions) 
for filing the return of tax for such taxable year. 
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‘‘(5) DEDUCTION NOT ALLOWED FOR SELF-EM-
PLOYMENT TAX.—The deduction allowable by reason 
of subsection (a) shall not be taken into account in 
determining an individual’s net earnings from self- 
employment (within the meaning of section 1402(a)) 
for purposes of chapter 2. 
‘‘(h) REPORTS.—The trustee of an MRA shall make 
such reports regarding such account to the Secretary and 
to the person for whose benefit the account is maintained 
with respect to contributions, distributions, and such other 
matters as the Secretary may require under regulations. 
The reports required by this subsection shall be filed at 
such time and in such manner and furnished to such per-
sons at such time and in such manner as may be required 
by such regulations. 
‘‘(i) TERMINATION.—No deduction shall be allowed 
under this section for any taxable year beginning more 
than 10 years after the date of the enactment of this sec-
tion.’’. 
(b) TAX ON EXCESS CONTRIBUTIONS.— 
(1) IN
GENERAL.—Subsection (a) of section 
4973 of such Code (relating to tax on excess con-
tributions to certain tax-favored accounts and annu-
ities) is amended by striking ‘‘or’’ at the end of 
paragraph (4), by adding ‘‘or’’ at the end of para-
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graph (5), and by inserting after paragraph (5) the 
following new paragraph: 
‘‘(6) an MRA (within the meaning of section 
199A(c)),’’. 
(2) EXCESS CONTRIBUTION DEFINED.—Section 
4973 of such Code is amended by adding at the end 
the following new subsection: 
‘‘(h) EXCESS CONTRIBUTIONS TO MRAS.—For pur-
poses of this section, in the case of MRAs (within the 
meaning of section 199A(c)), the term ‘excess contribu-
tions’ means the amount by which the amount contributed 
for the taxable year to the MRAs of the taxpayer exceeds 
the amount which may be contributed to such MRAs 
under section 199A(b) for such taxable year. For purposes 
of this subsection, any contribution which is distributed 
out of an MRA in a distribution to which section 
199A(e)(3) applies shall be treated as an amount not con-
tributed.’’. 
(c) TAX ON PROHIBITED TRANSACTIONS.— 
(1) IN
GENERAL.—Paragraph (1) of section 
4975(e) of such Code is amended by striking ‘‘or’’ 
at the end of subparagraph (F), by redesignating 
subparagraph (G) as subparagraph (H), and by in-
serting after subparagraph (F) the following: 
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‘‘(F) 
an 
MRA 
described 
in 
section 
199A(c), or’’. 
(2) SPECIAL RULE.—Subsection (c) of section 
4975 of such Code (relating to tax on prohibited 
transactions) is amended by adding at the end the 
following: 
‘‘(7) SPECIAL RULE FOR MANUFACTURING RE-
INVESTMENT ACCOUNTS.—A person for whose ben-
efit an MRA (within the meaning of section 
199A(c)) is established shall be exempt from the tax 
imposed by this section with respect to any trans-
action concerning such account (which would other-
wise be taxable under this section) if, with respect 
to such transaction, the account ceases to be an 
MRA by reason of the application of section 
199A(g)(3)(A) to such account.’’. 
(d) FAILURE TO PROVIDE REPORTS ON MRAS.— 
Paragraph (2) of section 6693(a) of such Code (relating 
to failure to provide reports on certain tax-favored ac-
counts or annuities) is amended by redesignating subpara-
graphs (A) through (E) as subparagraphs (B) and (F), 
respectively, and by inserting before subparagraph (B), as 
so redesignated, the following new subparagraph: 
‘‘(A) section 199A(h) (relating to manufac-
turing reinvestment accounts),’’. 
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(e) CLERICAL AMENDMENT.—The table of sections 
for part VI of subchapter B of chapter 1 of such Code 
is amended by inserting after the item relating to section 
199 the following new item: 
‘‘Sec. 199A. Manufacturing reinvestment accounts.’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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