119-s2100

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2100 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 2100

 To amend the Internal Revenue Code of 1986 to modify certain rules 
 applicable to qualified small issue manufacturing bonds, to expand 
 certain exceptions to the private activity bond rules for first-time 
 farmers, and for other purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 June 17, 2025

Ms. Ernst (for herself, Mr. Warner, and Mrs. Hyde-Smith) introduced the 
 following bill; which was read twice and referred to the Committee on 
 Finance

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 to modify certain rules 
 applicable to qualified small issue manufacturing bonds, to expand 
 certain exceptions to the private activity bond rules for first-time 
 farmers, and for other purposes.

 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 ``Modernizing Agricultural and 
Manufacturing Bonds Act''.

SEC. 2. MODIFICATIONS TO QUALIFIED SMALL ISSUE BONDS.

    (a) Manufacturing Facilities To Include Production of Intangible 
Property and Functionally Related Facilities.--Subparagraph
            (C) of 

section 144

    (a)

    (12) of the Internal Revenue Code of 1986 is amended to 
read as follows:
 ``
            (C) Manufacturing facility.--For purposes of this 
 paragraph--
 ``
            (i) In general.--The term `manufacturing 
 facility' means any facility which--
 ``
            (I) is used in the manufacturing 
 or production of tangible personal 
 property (including the processing 
 resulting in a change in the condition 
 of such property),
 ``
            (II) is used in the creation or 
 production of intangible property which 
 is described in 

section 197
            (d) (1)
            (C) 
            (iii) , or
 ``
            (III) is functionally related and 
 subordinate to a facility described in 
 subclause
            (I) or
            (II) if such facility 
 is located on the same site as the 
 facility described in subclause
            (I) or
            (II) .
 ``
            (ii) Certain facilities included.--The 
 term `manufacturing facility' includes 
 facilities that are directly related and 
 ancillary to a manufacturing facility 
 (determined without regard to this clause) if--
 ``
            (I) those facilities are located 
 on the same site as the manufacturing 
 facility, and
 ``
            (II) not more than 25 percent of 
 the net proceeds of the issue are used 
 to provide those facilities.
 ``
            (iii) Limitation on office space.--A rule 
 similar to the rule of 

section 142

    (b)

    (2) shall 
 apply for purposes of clause
            (i) .
 ``
            (iv) Limitation on refundings for certain 
 property.--Subclauses
            (II) and
            (III) of clause
            (i) shall not apply to any bond issued on or 
 before the date of the enactment of the 
 Modernizing Agricultural and Manufacturing 
 Bonds Act, or to any bond issued to refund a 
 bond issued on or before such date (other than 
 a bond to which clause
            (iii) of this 
 subparagraph (as in effect before the date of 
 the enactment of the Modernizing Agricultural 
 and Manufacturing Bonds Act applies)), either 
 directly or in a series of refundings.''.

    (b) Increase in Limitations.--

    (1) In general.--

Section 144

    (a)

    (4) of such Code is 
 amended--
        (A) in subparagraph
        (A)
            (i) , by striking 
 ``$10,000,000'' and inserting ``$30,000,000'', and
        (B) in the heading, by striking ``$10,000,000'' and 
 inserting ``$30,000,000''.

    (2) Increase in additional capital expenditures not taken 
 into account.--

Section 144

    (a)

    (4)
        (G) of such Code is amended by 
 inserting ``$30,000,000, in the case of bonds issued after the 
 date of the enactment of the Modernizing Agricultural and 
 Manufacturing Bonds Act''.

    (3) Increase in aggregate limit per taxpayer.--

Section 144

    (a)

    (10)
        (A) of such Code is amended by striking 
 ``$40,000,000'' and inserting ``$120,000,000''.

    (4) Adjustment for inflation.--

Section 144

    (a) of the 
 Internal Revenue Code of 1986 is amended by adding at the end 
 the following new paragraph:
 ``

    (13) Adjustment for inflation.--In the case of any 
 calendar year after 2025, the $30,000,000 amounts in paragraph

    (4)
        (A) , the $30,000,000 amount in paragraph

    (4)
        (G) , and the 
 $120,000,000 amount in paragraph

    (10)
        (A) shall each be 
 increased by an amount equal to--
 ``
        (A) such dollar amount, multiplied by
 ``
        (B) the cost-of-living adjustment determined 
 under 

section 1

    (f)

    (3) for the calendar year, determined 
 by substituting `calendar year 2024' for `calendar year 
 2016' in subparagraph
        (A)
            (ii) thereof.
 If any amount as increased under the preceding sentence is not 
 a multiple of $100,000, such amount shall be rounded to the 
 nearest multiple of $100,000.''.
            (c) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 3. EXPANSION OF CERTAIN EXCEPTIONS TO THE PRIVATE ACTIVITY BOND 
 RULES FOR FIRST-TIME FARMERS.

    (a) Increase in Dollar Limitation.--

    (1) In general.--

Section 147
            (c) (2)
        (A) of the Internal 
 Revenue Code of 1986 is amended by striking ``$450,000'' and 
 inserting ``$1,000,000''.

    (2) Repeal of separate lower dollar limitation on used farm 
 equipment.--

Section 147
            (c) (2) of such Code is amended by 
 striking subparagraph
        (F) and by redesignating subparagraphs
        (G) and
        (H) as subparagraphs
        (F) and
        (G) , respectively.

    (3) Qualified small issue bond limitation conformed to 
 increased dollar limitation.--

Section 144

    (a)

    (11)
        (A) of such 
 Code is amended by striking ``$250,000'' and inserting 
 ``$1,000,000''.

    (4) Inflation adjustment.--
        (A) In general.--

Section 147
            (c) (2)
        (G) of such Code, 
 as redesignated by paragraph

    (2) , is amended--
            (i) by striking ``after 2008, the dollar 
 amount in subparagraph
        (A) shall be increased'' 
 and inserting ``after 2026, the dollar amounts 
 in subparagraph
        (A) and 

section 144

    (a)

    (11)
        (A) shall each be increased'',
            (ii) in clause
            (ii) , by striking ``2007'' 
 and inserting ``2025'', and
            (iii) in the last sentence, by striking 
 ``$100'' each place it appears and inserting 
 ``$10,000''.
        (B) Cross-reference.--

Section 144

    (a)

    (11) of such 
 Code is amended by adding at the end the following new 
 subparagraph:
 ``
            (D) Inflation adjustment.--For inflation 
 adjustment of dollar amount contained in subparagraph
        (A) , see 

section 147
            (c) (2)
        (G) .''.

    (b) Substantial Farmland Determined on Basis of Average Rather Than 
Median Farm Size.--

Section 147
            (c) (2)
        (E) of such Code is amended by 
striking ``median'' and inserting ``average''.
            (c) Effective Date.--The amendments made by this section shall 
apply to bonds issued after December 31, 2025.
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