Title: Next Generation American Manufacturing Act of 2017
Policy area: Taxation

Summary:
Next Generation American Manufacturing Act of 2017
This bill amends the Internal Revenue Code to allow a tax credit for the purchase (during a specified period of between 5 and 10 years based on the incentive needed with respect to each product) of new products certified as assembled in the United States and consisting of at least 60% of components assembled or otherwise arising in the United States.
The bill also establishes the 21st Century American Manufacturing Commission to conduct research to designate products eligible for such tax credit.
The bill allows certain start-up companies that are headquartered in the United States a tax credit for up to 25% of their costs for the construction of a manufacturing facility and for the purchase of specialized equipment for use at such facility. A "start-up company" is defined as any corporation or partnership that: (1) first has both gross receipts and qualified research expenses in a taxable year beginning after December 31, 2016; or (2) has both gross receipts and qualified research expenses in fewer than three taxable years beginning after December 31, 2016, and before January 1, 2022.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 340 Introduced in House (IH)]

<DOC>






115th CONGRESS
  1st Session
                                H. R. 340

 To amend the Internal Revenue Code of 1986 to allow a credit against 
  tax for qualified manufacturing facility construction costs and to 
    allow a credit against tax for qualified manufacturing facility 
                          construction costs.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 2017

 Mr. Serrano 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 allow a credit against 
  tax for qualified manufacturing facility construction costs and to 
    allow a credit against tax for qualified manufacturing facility 
                          construction costs.

    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 ``Next Generation American 
Manufacturing Act of 2017''.

                        TITLE I--CONSUMER CREDIT

SEC. 101. CREDIT FOR RETAIL PURCHASE OF CERTAIN DOMESTIC PRODUCTS.

    (a) In General.--Subpart B of part IV of subchapter 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 CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed 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 Period.--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) 
        under subsection (e)(4) with respect to such product.
            ``(2) Eligible period.--The term `eligible period' means, 
        with respect to any specified product, the period (not less 
        than 5 years nor more than 10 years) under subsection (e)(5) 
        with respect to such product.
            ``(3) Separate application to each specified product.--
        Subsection (a) shall be applied separately with respect to each 
        of the specified products designated under subsection (e).
    ``(c) Specified Product.--For purposes of this section--
            ``(1) In general.--The term `specified product' 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 designated product which has been 
        certified by the Secretary as--
                    ``(A) having been assembled in the United States, 
                and
                    ``(B) consisting at least 60 percent of components 
                assembled or otherwise arising in the United States.
            ``(3) Designated product.--The term `designated product' 
        means the 10 products designated by the Secretary, in 
        consultation with the Commission, 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 subsection) 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 paragraph (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 consultation with the 
        Commission, shall designate 10 products for purposes of this 
        section.
            ``(2) Eligible products.--A product shall not be eligible 
        for designation under this section unless--
                    ``(A) such product represents an advancement in 
                science, technology, engineering, or math, and
                    ``(B) the designation of such product has the 
                potential to produce substantial long-term job 
                opportunities in the United States.
            ``(3) Criteria for designation.--In making designations of 
        products under this subsection, the Secretary shall take into 
        consideration--
                    ``(A) the number of jobs in the United States that 
                the Secretary estimates will result (directly and 
                indirectly) from the designation of such product, and
                    ``(B) the speed with which such jobs are likely to 
                be created.
            ``(4) Determination of credit percentage.--The Secretary, 
        in consultation with the Commission, shall determine the 
        applicable percentage which applies for purposes of subsection 
        (a) with respect to each product designated under this 
        subsection. Such percentage shall not be less than 5 percent 
        and shall not be more than 20 percent. Such percentage shall be 
        determined on the basis of the incentive needed with respect to 
        each such product taking into account the market factors with 
        respect to such product.
            ``(5) Determination of period during which credit 
        allowed.--The Secretary, in consultation with the Commission, 
        shall determine the eligible period which applies for purposes 
        of subsection (a) with respect to each product designated under 
        this subsection. Such period shall not be less than 5 years and 
        shall not be more than 10 years. Such period shall be 
        determined on the basis of the incentive needed with respect to 
        each such product taking into account the market factors with 
        respect to such product.
    ``(f) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Commission.--The term `Commission' means the 21st 
        Century American Manufacturing Commission established under 
        section 102 of the Next Generation American Manufacturing Act 
        of 2017.
            ``(2) Reduction in basis.--For purposes of this subtitle, 
        the basis of any property for which a credit is allowable under 
        subsection (a) shall be reduced by the amount of such credit so 
        allowed (determined without regard to subsection (d)).
            ``(3) No double benefit.--The amount of any deduction or 
        other credit allowable under this chapter with respect to any 
        property shall be reduced by the amount of the credit allowed 
        under subsection (a) for such property (determined without 
        regard to subsection (d)).
            ``(4) Property used by tax-exempt entity.--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 
        vehicle in service, but only if such person clearly discloses 
        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 regulations, 
        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 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 following new paragraph:
            ``(37) the portion of the domestic manufacturing 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 following new paragraph:
            ``(38) to the extent provided in section 30E(f)(2).''.
            (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) CBO Report.--The Congressional Budget 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 
include 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 recommendations to the Secretary of the Treasury under section 
102(b) of this Act.

SEC. 102. 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 research regarding 
appropriate products to make eligible for the tax credit provided by 
section 30E of the Internal Revenue 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 commission shall make such 
recommendations to the Secretary 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) Selection.--In determining who to appoint to the 
        Commission, the Secretary of the Treasury shall consider a 
        geographically diverse group of individuals with experience in 
        the areas of--
                    (A) managing manufacturing companies, including 
                businesses with fewer than 100 employees,
                    (B) conducting manufacturing-related research and 
                development,
                    (C) commercialization of scientific innovation,
                    (D) managing supply chain providers,
                    (E) finance, and
                    (F) analyzing manufacturing policy and economic 
                competitiveness.
            (3) Political affiliation.--Not more than 5 members may be 
        of the same political party.
            (4) Terms.--Each member shall be appointed for the life of 
        the Commission.
            (5) Vacancies.--A vacancy in the Commission shall be filled 
        in the manner in which the original appointment was made.
            (6) 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 applicable provisions 
                under subchapter I of chapter 57 of title 5, United 
                States Code.
            (7) Prevention of conflicts of interest and nepotism.--
                    (A) Agreement.--The Secretary of the Treasury shall 
                not appoint any individual to be a member of the 
                Commission unless such individual has first signed an 
                agreement with the Secretary to prevent conflicts of 
                interest and nepotism. Such agreement shall include a 
                requirement that the individual comply with the 
                provisions of subparagraph (B) and shall include such 
                penalties for failure to so comply as the Secretary 
                determines 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 101(d)), hold, directly or 
                indirectly, any interest in any person associated with 
                any designated product, any component of any designated 
                product, or any equipment to manufacture any such 
                product or component. An interest held in any fund held 
                by such member shall be taken into account under the 
                preceding sentence 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 Commission shall be 
designated by the Secretary of the Treasury (or his designee) at the 
time of appointment.
    (e) Staff.--Any staff of the Commission shall be appointed subject 
to the provisions of title 5, United States Code, governing 
appointments in the competitive service, and shall be paid in 
accordance with the provisions of chapter 51 and subchapter III of 
chapter 53 of that title relating to classification and General 
Schedule pay rates.
    (f) Termination.--
            (1) In general.--Except as provided in paragraph (2), the 
        Commission shall terminate 30 days after making recommendations 
        to the Secretary of the Treasury described in subsection (b).
            (2) Extension.--At the request of the Secretary of the 
        Treasury or his designee, the Commission shall continue in 
        existence for such period at the Secretary may request but not 
        later than 1 year after making such recommendations.

                     TITLE II--MANUFACTURER CREDIT

SEC. 201. CREDIT FOR MANUFACTURING FACILITY COSTS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 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 facility 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 section--
            ``(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 performed 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
                    ``(F) with respect to which all debt obligations 
                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 organization (as defined in section 
                3(a) of the Securities 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, 
                2016, or
                    ``(B) which both gross receipts and qualified 
                research expenses (as so defined) in fewer than 3 
                taxable years beginning after December 31, 2016, and 
                before January 1, 2022.
    ``(c) Qualified Facility Construction Expenditures.--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 
                (designated for purposes of this section by the 
                taxpayer at such time and in such form and manner as 
                the Secretary shall prescribe) in the United States to 
                manufacture a qualified product (including amounts for 
                professional services necessary for the planning of 
                such construction), and
                    ``(B) for the purchase of specialized equipment for 
                use at such facility and required for the manufacture 
                of such product.
            ``(2) Qualified product.--The term `qualified product' 
        means any product which, prior to construction of the facility 
        with respect to which a credit 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 section--
            ``(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--
                            ``(i) the applicable recapture percentage, 
                        and
                            ``(ii) the aggregate decrease in the 
                        credits allowed under section 38 for all prior 
                        taxable years which would have resulted if the 
                        qualified facility construction expenditures of 
                        the taxpayer described in subsection (c)(1) 
                        with respect to such facility had been zero.
                    ``(B) Applicable recapture percentage.--
                            ``(i) In general.--For purposes of this 
                        subsection, the applicable recapture percentage 
                        shall be determined in accordance with the 
                        following table:

``If the recapture event            The applicable recapture percentage 
   occurs in:                                                       is:
        Year 1.............................................        100 
        Year 2.............................................         80 
        Year 3.............................................         60 
        Year 4.............................................         40 
        Year 5.............................................         20 
        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.
                    ``(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 
                                insolvent, or
                                    ``(II) the taxpayer disposes of the 
                                facility to another person who, at this 
                                time of the disposition, is not an 
                                eligible business.
                            ``(ii) Special rule for facilities not 
                        placed in service within 5 years.--In the case 
                        of a facility with respect to which a credit is 
                        allowed under this section which is not placed 
                        in service before the close of the 5th taxable 
                        year beginning after the first taxable year for 
                        which the credit was so allowed, a recapture 
                        event shall be treated as having occurred 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 paragraph) be taken into account 
        under subsection (a) 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 assigned by the initial 
                taxpayer, and
                    ``(B) shall not be taken to account by initial 
                taxpayer.
        Any person to whom such expenditures are assigned under 
        subparagraph (A) shall be treated for purposes 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 section to a 
        corporation or partnership shall include a reference to any 
        predecessor of such corporation or partnership.
            ``(5) Denial of double benefit.--For purposes of this 
        subtitle, if a credit is allowed under this section in 
        connection with any expenditure for any property, the basis of 
        such property shall be reduced by the amount of the credit so 
        allowed.''.
    (b) Denial of Double Benefit.--Section 280C of such Code is amended 
by adding at the end the following new subsection:
    ``(i) Manufacturing Facility Expenditures.--No deduction shall be 
allowed for that portion of the expenses otherwise allowable as a 
deduction taken into account in determining the credit under section 
45S for the taxable year which is equal to the amount of the credit 
determined for such taxable year under section 45S(a).''.
    (c) Credit To Be Part of General Business Credit.--Section 38(b) of 
the such Code, as amended by this Act, is amended by striking ``plus'' 
at the end of paragraph (36), by striking the period at the end of 
paragraph (37) and inserting ``, plus'', and by inserting after 
paragraph (37) the following:
            ``(38) manufacturing facility expenditure credit determined 
        under section 45S(a).''.
    (d) Conforming Amendment.--Section 1016(a) of such Code, as amended 
by this Act, is amended by striking ``and'' at the end of paragraph 
(37), by striking the period at the end of paragraph (38) and inserting 
``, and'', and by adding at the end the following new paragraph:
            ``(39) to the extent provided in section 45S(d)(2).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act.
                                 <all>