Title: Manufacturing Economic Recovery Act of 2017
Policy area: Taxation

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.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3702 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 3702

 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 7, 2017

Mr. McKinley (for himself and Mr. Rush) 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 incentives for 
          the expansion of manufacturing in the United States.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Manufacturing Economic Recovery Act 
of 2017''.

SEC. 2. CREDIT FOR ACQUISITION OF MANUFACTURING PROPERTY.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to rules for computing 
credit for investment in certain depreciable property) is amended by 
inserting 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 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:


----------------------------------------------------------------------------------------------------------------
                                                                   To the extent   To the extent   To the extent
                                                                    located on      located on      located on
                                                                     existing         former          future
  ``If the aggregate  manufacturing tangible  personal property    manufacturing   manufacturing   manufacturing
         placed in service  during the taxable  year is:          property,  the  property,  the  property,  the
                                                                    applicable      applicable      applicable
                                                                  percentage is:  percentage is:  percentage is:
----------------------------------------------------------------------------------------------------------------
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' 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 disadvantaged 
                        areas.--The term `extremely 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 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' 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 property 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 during 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.
            ``(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 manufacturing property which is land or 
        section 1250 property (as defined in section 1250(c)).
            ``(6) Manufacturing tangible personal property.--The term 
        `manufacturing tangible personal property' means manufacturing 
        property which is tangible property other than manufacturing 
        real 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'' 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:
            ``(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.

SEC. 3. INCENTIVES FOR HIRING MANUFACTURING RECOVERY EMPLOYEES.

    (a) In General.--Paragraph (1) of section 51(d) of the Internal 
Revenue Code of 1986 is amended by striking ``or'' at the end of 
subparagraph (I), by striking the period at the end of subparagraph (J) 
and inserting ``, or'', and by adding at the end the following new 
subparagraph:
                    ``(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' 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 
                Economic Recovery Act of 2017 and before the close of 
                the 3-year period beginning on the date that the 
                employer first operated the manufacturing facility at 
                which the individual is employed.
                    ``(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' for `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.
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