,,ii #aagth ,,congress #b;d ,session ,s4 #dfhj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #bh1 #bjbb,ms4 ,cortez ,masto 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 establish a credit for the domestic production of rare earth magnets1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,rare ,earth ,magnet ,manufacturing ,production ,tax ,credit ,act of #bjbb4 #b4 ,credit for production of rare earth magnets 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #de,u4 ,credit for production of rare earth magnets 7a7 ,in general ,for the purposes of section #ch1 the credit for production of rare earth magnets determined under this section for any taxable year is an amount equal to the sum of-- 7#a7 #bj per kilogram of rare earth magnets manufactured in the ,united ,states by the taxpayer during the taxable year which are not described in paragraph 7#b71 plus 7#b7 #cj per kilogram of rare earth magnets manufactured in the ,united ,states by the taxpayer during the taxable year if not less than #ij percent of the component rare earth material of such magnets are manufactured within the ,united ,states4 7b7 ,phase-,out 7#a7 ,in general ,in the case of any rare earth magnet manufactured after ,december #ca1 #bjcj1 the amount determined under this section with respect to such rare earth magnet shall be equal to the product of-- 7,a7 the amount determined under subsection 7a7 with respect to such rare earth magnet1 as determined without regard to this subsection1 multiplied by 7,b7 the phase-out percentage described in paragraph 7#b74 7#b7 ,phase-out percentage ,the phase-out percentage described in this paragraph is-- 7,a7 in the case of any rare earth magnet manufactured in calendar year #bjca1 #gj percent1 7,b7 in the case of any rare earth magnet manufactured in calendar year #bjcb1 #ce percent1 and 7,c7 in the case of any rare earth magnet manufactured after ,december #ca1 #bjcc1 #j percent4 7c7 ,restriction on component sourcing ,the credit determined under subsection 7a7 shall not apply with respect to any rare earth magnet if any component rare earth material used to manufacture such magnet was manufactured in a non-allied foreign nation4 7d7 ,definitions ,for the purposes of this section-- 7#a7 ,rare earth magnet ,the term rare earth magnet means a permanent magnet comprised of-- 7,a7 an alloy of neodymium1 iron1 and boron1 which may also include praseodymium1 terbium1 or dysprosium1 or 7,b7 an alloy of samarium and cobalt1 which may also include gadolinium or any associated host mineral of a component rare earth material4 7#b7 ,component rare earth material ,the term component rare earth material means neodymium1 praseodymium1 dysprosium1 terbium1 samarium1 gadolinium1 or cobalt4 7#c7 ,united ,states and possession of the ,united ,states ,the terms ,united ,states and possession of the ,united ,states have the meaning given such terms in section #fch4 7#d7 ,manufactured ,the term manufactured means the manufacturing of a rare earth magnet1 including the alloying1 reduction1 strip casting1 and metallization of component rare earth material4 7#e7 ,non-allied foreign nation ,the term non-allied foreign nation has the meaning given to the term covered nation in section #dhgb7;d77#b7 of title #aj1 ,united ,states ,code4 7e7 ,trade or business requirement ,no credit shall be allowed under this section with respect to any property unless such property is manufactured in the ordinary course of a trade or business of the taxpayer4 7f7 ,election for direct payment 7#a7 ,in general ,in the case of any rare earth magnets manufactured in the ,united ,states by the taxpayer during the taxable year1 the amount of any credit determined under subsection 7a7 with respect to such property for such taxable year shall1 at the election of the taxpayer1 be treated as a payment equal to such amount which is made by the taxpayer against the tax imposed by chapter #a for such taxable year 7regardless of whether such tax would have been on such taxpayer74 7#b7 ,form and effect of election ,an election under paragraph 7#a7 shall be made at such time and in such manner as the ,secretary may prescribe4 ,such election1 once made1 shall-- 7,a7 be irrevocable with respect to the property to which such election applies1 and 7,b7 reduce the amount of the credit which would 7but for this subsection7 be allowable under this section with respect to such property for the taxable year in which such property is manufactured to zero4 7#c7 ,application to partnerships and ,s corporations ,in the case of a partnership or ,s corporation which makes an election under paragraph 7#a7-- 7,a7 such paragraph shall apply with respect to such partnership or corporation without regard to the fact that no tax is imposed by chapter #a on such partnership or corporation1 and 7,b7 7i7 in the case of a partnership1 each partner's distributive share of the credit determined under subsection 7a7 with respect to the rare earth magnets shall be deemed to be zero1 and 7ii7 in the case of an ,s corporation1 each shareholder's pro rata share of the credit determined under subsection 7a7 with respect to such property shall be deemed to be zero4 4 7b7 ,credit ,to be part of general business credit ,section #ch7;b7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking plus at the end of paragraph 7#cb71 7#b7 by striking the period at the end of paragraph 7#cc7 and inserting 1 plus1 and 7#c7 by adding at the end the following new paragraph3 7#cd7 the credit for production of rare earth magnets determined under section #de,u7a74 4 7c7 ,conforming amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,sec4 #de,u4 ,credit for production of rare earth magnets4 4 7d7 ,effective date ,the amendments made by this ,act shall apply to taxable years beginning after ,december #ca1 #bjba4