,,ii #aacth ,,congress #ast ,session ,s4 #afea ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,november #e1 #bjac,mr4 ,blumenthal 7for himself and ,mr4 ,murphy7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to allow manufacturing businesses to establish tax-free manufacturing reinvestment accounts to assist them in providing for new equipment and facilities and workforce training4 #a4 ,short title ,this ,act may be cited as the ,manufacturing ,reinvestment ,account ,act of #bjac4 #b4 ,manufacturing reinvestment accounts 7a7 ,in general ,part ,,vi of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf 7relating to itemized deductions for individuals and corporations7 is amended by inserting after section #aii the following new section3 #aii;,a4 ,manufacturing reinvestment accounts 7a7 ,deduction allowed ,in the case of a taxpayer engaged in a manufacturing business1 there shall be allowed as a deduction for the taxable year the amount paid in cash by the taxpayer during the taxable year to a manufacturing reinvestment account 7hereinafter referred to as an ,,mra7 for the taxpayer's benefit4 7b7 ,limitation 7#a7 ,in general ,the amount which a taxpayer may pay into an ,,mra for the taxable year shall not exceed the lesser of-- 7,a7 the domestic manufacturing gross receipts of the taxpayer for the taxable year1 or 7,b7 #ejj1jjj4 7#b7 ,controlled groups 7,a7 ,in general ,for purposes of this subsection1 all persons treated as a single employer under subsection 7a7 or 7b7 of section #eb or subsection 7m7 or 7o7 of section #dad shall be treated as a single manufacturer4 7,b7 ,inclusion of foreign corporations ,for purposes of subparagraph 7,a71 in applying subsections 7a7 and 7b7 of section #eb to this section1 section #aefc shall be applied without regard to subsection 7b77#b77;,c7 thereof4 7c7 ,,mra ,for purposes of this section1 the term ,,mra means a trust created or organized in the ,united ,states for the exclusive benefit of the taxpayer1 but only if the written governing instrument creating the trust meets the following requirements3 7#a7 ,no contribution will be accepted for any taxable year unless it is in cash4 7#b7 ,contributions will not be accepted for any taxable year in excess of the amount allowed as a deduction under subsection 7a7 for such year4 7#c7 ,the trustee is an eligible institution4 7#d7 ,no part of the trust assets will be invested in life insurance contracts4 7#e7 ,no part of the trust assets will be invested in any collectible 7as defined in section #djh7m774 7#f7 ,the assets of the trust will not be commingled with other property except in a common trust fund or common investment fund4 7d7 ,tax treatment of accounts 7#a7 ,in general ,an ,,mra is exempt from taxation under this subtitle unless the account has ceased to be an ,,mra4 ,notwithstanding the preceding sentence1 an ,,mra is subject to the taxes imposed by section #eaa 7relating to imposition of tax on unrelated business income of charitable1 etc4 organizations74 7#b7 ,account terminations ,rules similar to the rules of paragraphs 7#b7 and 7#d7 of section #djh7;e7 shall apply to ,m,r,as1 and any amount treated as distributed under such rules shall be treated as not used to pay qualified reinvestment expenses4 7e7 ,treatment of distributions 7#a7 ,in general ,except as provided in paragraphs 7#c7 and 7#d71 there shall be includible in the gross income of the taxpayer for any taxable year-- 7,a7 any amount distributed from an ,,mra of the taxpayer during such taxable year1 and 7,b7 any deemed distribution under-- 7i7 subsection 7g77#a7 7relating to deposits not distributed within #g years71 7ii7 subsection 7g77#b7 7relating to cessation in manufacturing business71 and 7iii7 subparagraph 7,a7 or 7,b7 of subsection 7g77#c7 7relating to prohibited transactions and pledging account as security74 7#b7 ,additional tax 7,a7 ,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 #aj percent of the amount of such distribution which is includible in gross income4 7,b7 ,exception ,subparagraph 7,a7 shall not apply to distributions during the taxable year to the extent necessary1 under regulations prescribed by the ,secretary1 to avoid bankruptcy4 7#c7 ,reduced inclusion for amounts reinvested ,only #dc percent of the aggregate amount distributed from an ,,mra during the taxable year shall be includible in income under paragraph 7#a77;,a7 to the extent that such aggregate amount does not exceed the aggregate amount of qualified reinvestment expenses paid or incurred by the taxpayer during such year4 7#d7 ,distribution of excess contributions ,paragraph 7#a7 shall not apply to the distribution of any contribution paid during a taxable year to an ,,mra to the extent that such contribution exceeds the limitation applicable under subsection 7b7 if requirements similar to the requirements of section #djh7;d77#d7 are met4 7f7 ,definitions ,for purposes of this section-- 7#a7 ,manufacturing business ,the term manufacturing business means any trade or business having domestic manufacturing gross receipts4 7#b7 ,domestic manufacturing gross receipts ,the term domestic manufacturing gross receipts means gross receipts of the taxpayer which are derived from any lease1 rental1 license1 sale1 exchange1 or other disposition of tangible personal property which was manufactured by the taxpayer in whole or in significant part within the ,united ,states4 ,rules similar to the rules of section #aii shall apply in determining the gross receipts of the taxpayer for purposes of the preceding sentence4 7#c7 ,qualified reinvestment expenses ,the term qualified reinvestment expenses means-- 7,a7 expenses for property to be used by the taxpayer in a manufacturing business1 and 7,b7 expenses for job training and workforce development for employees of the taxpayer4 7#d7 ,eligible institution 7,a7 ,in general ,the term eligible institution means-- 7i7 any insured depository institution1 which-- 7,i7 is not controlled by a bank holding company or savings and loan holding company that is also an eligible institution1 7,,ii7 has total assets of equal to or less than #be1jjj1jjj1jjj1 as reported in the call report as of the end of the fourth quarter of calendar year #bjab1 and 7,,iii7 is not directly or indirectly controlled by any company or other entity that has total consolidated assets of more than #be1jjj1jjj1jjj1 as so reported2 7ii7 any bank holding company which has total consolidated assets of equal to or less than #be1jjj1jjj1jjj2 7iii7 any savings and loan holding company which has total consolidated assets of equal to or less than #be1jjj1jjj1jjj2 7iv7 any community development financial institution loan fund which has total assets of equal to or less than #be1jjj1jjj1jjj2 and 7v7 any small business lending company that has total assets of equal to or less than #be1jjj1jjj1jjj4 7,b7 ,insured depository institution ,the term insured depository institution has the meaning given such term under section #c7;c77#b7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7;c77#b774 7,c7 ,bank holding company ,the term bank holding company has the meaning given such term under section #b7;a77#a7 of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahda7b77;a77#a774 7,d7 ,call report ,the term call report means-- 7i7 reports of ,condition and ,income submitted to the ,office of the ,comptroller of the ,currency1 the ,board of ,governors of the ,federal ,reserve ,system1 and the ,federal ,deposit ,insurance ,corporation2 7ii7 the ,office of ,thrift ,supervision ,thrift ,financial ,report2 7iii7 any report that is designated by the ,office of the ,comptroller of the ,currency1 the ,board of ,governors of the ,federal ,reserve ,system1 the ,federal ,deposit ,insurance ,corporation1 or the ,office of ,thrift ,supervision1 as applicable1 as a successor to any report referred to in clause 7i7 or 7ii72 7iv7 standard reports of ,condition and ,income submitted by ,community ,development ,financial ,institution loan funds to the ,community ,development ,financial ,institutions ,fund2 and 7v7 with respect to an eligible institution for which no report exists that is described under clause 7i71 7ii71 or 7iii71 such other report or set of information as the ,secretary1 in consultation with the ,administrator of the ,small ,business ,administration1 may prescribe4 7g7 ,special rules 7#a7 ,tax on deposits in account which are not distributed within #g years 7,a7 ,in general ,if1 at the close of any taxable year1 there is a nonqualified balance in any ,,mra-- 7i7 there shall be deemed distributed from the ,,mra during such taxable year an amount equal to such balance1 and 7ii7 the taxpayer's tax imposed by this chapter for such taxable year shall be increased by #aj percent of such deemed distribution4 7,b7 ,nonqualified balance ,for purposes of subparagraph 7,a71 the term nonqualified balance means any balance in the ,,mra on the last day of the taxable year which is attributable to amounts deposited in such account before the #fth preceding taxable year4 7,c7 ,ordering rule ,for purposes of this paragraph1 distributions from an ,,mra shall be treated as made from deposits 7and income thereon7 in the order in which such deposits were made1 beginning with the earliest deposits4 7#b7 ,cessation of manufacturing business ,if the taxpayer ceases to be engaged in a manufacturing business1 there shall be deemed distributed from the ,,mra of the taxpayer at the close of the first taxable year beginning after such cessation an amount equal to the balance in the ,,mra 7if any7 at such close4 7#c7 ,certain rules to apply ,rules similar to the following rules shall apply for purposes of this section3 7,a7 ,section #djh7;e77#b7 7relating to loss of exemption of account where taxpayer engages in prohibited transaction74 7,b7 ,section #djh7;e77#d7 7relating to effect of pledging account as security74 7,c7 ,section #djh7;h7 7relating to custodial accounts74 7#d7 ,time when payments deemed made ,for purposes of this section1 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 7without regard to extensions7 for filing the return of tax for such taxable year4 7#e7 ,deduction not allowed for self-employment tax ,the deduction allowable by reason of subsection 7a7 shall not be taken into account in determining an individual's net earnings from self-employment 7within the meaning of section #adjb7;a77 for purposes of chapter #b4 7h7 ,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 contributions1 distributions1 and such other matters as the ,secretary may require under regulations4 ,the reports required by this subsection shall be filed at such time and in such manner and furnished to such persons at such time and in such manner as may be required by such regulations4 7i7 ,termination ,no deduction shall be allowed under this section for any taxable year beginning more than #aj years after the date of the enactment of this section4 4 7b7 ,tax on excess contributions 7#a7 ,in general ,subsection 7a7 of section #digc of such ,code 7relating to tax on excess contributions to certain tax-favored accounts and annuities7 is amended by striking or at the end of paragraph 7#d71 by adding or at the end of paragraph 7#e71 and by inserting after paragraph 7#e7 the following new paragraph3 7#f7 an ,,mra 7within the meaning of section #aii;,a7c771 4 7#b7 ,excess contribution defined ,section #digc of such ,code is amended by adding at the end the following new subsection3 7h7 ,excess contributions to ,m,r,as ,for purposes of this section1 in the case of ,m,r,as 7within the meaning of section #aii;,a7c771 the term excess contributions means the amount by which the amount contributed for the taxable year to the ,m,r,as of the taxpayer exceeds the amount which may be contributed to such ,m,r,as under section #aii;,a7b7 for such taxable year4 ,for purposes of this subsection1 any contribution which is distributed out of an ,,mra in a distribution to which section #aii;,a7e77#c7 applies shall be treated as an amount not contributed4 4 7c7 ,tax on prohibited transactions 7#a7 ,in general ,paragraph 7#a7 of section #dige7;e7 of such ,code is amended by striking or at the end of subparagraph 7,f71 by redesignating subparagraph 7,g7 as subparagraph 7,h71 and by inserting after subparagraph 7,f7 the following3 7,g7 an ,,mra described in section #aii;,a7c71 or 4 7#b7 ,special rule ,subsection 7c7 of section #dige of such ,code 7relating to tax on prohibited transactions7 is amended by adding at the end the following3 7#g7 ,special rule for manufacturing reinvestment accounts ,a person for whose benefit an ,,mra 7within the meaning of section #aii;,a7c77 is established shall be exempt from the tax imposed by this section with respect to any transaction concerning such account 7which would otherwise be taxable under this section7 if1 with respect to such transaction1 the account ceases to be an ,,mra by reason of the application of section #aii;,a7g77#c77;,a7 to such account4 4 7d7 ,failure ,to provide reports on ,m,r,as ,paragraph 7#b7 of section #ffic7;a7 of such ,code 7relating to failure to provide reports on certain tax-favored accounts or annuities7 is amended by redesignating subparagraphs 7,a7 through 7,e7 as subparagraphs 7,b7 and 7,f71 respectively1 and by inserting before subparagraph 7,b71 as so redesignated1 the following new subparagraph3 7,a7 section #aii;,a7h7 7relating to manufacturing reinvestment accounts71 4 7e7 ,clerical amendment ,the table of sections for part ,,vi of subchapter ,b of chapter #a of such ,code is amended by inserting after the item relating to section #aii the following new item3 ,sec4 #aii;,a4 ,manufacturing reinvestment accounts44 7f7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4