S. 2100

119 S2100 IS: Modernizing Agricultural and Manufacturing Bonds Act
 U.S. Senate
 2025-06-17
 text/xml
 EN
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 II  119th CONGRESS  1st Session  S. 2100  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.
1.
Short title
This Act may be cited as the   Modernizing Agricultural and Manufacturing Bonds Act  .
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.
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.