S 2100
Modernizing Agricultural and Manufacturing Bonds Act
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Bill overview
The Modernizing Agricultural and Manufacturing Bonds Act modifies rules related to qualified small issue manufacturing bonds and expands exceptions for first-time farmers. It increases the limits on bond issuance for manufacturing facilities, including those producing intangible property, and adjusts these limits for inflation. The bill also increases the dollar limitation for private activity bonds used by first-time farmers and changes the method for determining substantial farmland.
Key provisions
- Increases the maximum amount of qualified small issue manufacturing bonds that can be issued.
- Expands the definition of ‘manufacturing facility’ to include production of intangible property and functionally related facilities.
- Increases the dollar limitation for private activity bonds used by first-time farmers from $450,000 to $1,000,000.
- Adjusts the dollar limitations for bonds issued for manufacturing facilities and private activity bonds for inflation, starting in 2026.
- Replaces a lower dollar limitation for used farm equipment with a single, higher limit.
- Allows for the use of an average farm size instead of a median farm size when determining substantial farmland.
- Specifies that certain manufacturing facility expansions are not subject to the limitations on bond issuance before the bill's enactment date.
Who is affected
- Manufacturers
- Farmers (particularly first-time farmers)
- Bond investors
- Financial institutions
- The agricultural sector
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119th CONGRESS — 1st Session
S. 2100
IN THE SENATE OF THE UNITED STATES
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.
This Act may be cited as the Modernizing Agricultural and Manufacturing Bonds Act
.
Subparagraph (C) of section 144(a)(12) of the Internal Revenue Code of 1986 is amended to read as follows:
For purposes of this paragraph—
The term manufacturing facility means any facility which—
is used in the manufacturing or production of tangible personal property (including the processing resulting in a change in the condition of such property),
is used in the creation or production of intangible property which is described in section 197(d)(1)(C)(iii), or
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).
The term manufacturing facility
includes facilities that are directly related and ancillary to a manufacturing facility (determined without regard to this clause) if—
those facilities are located on the same site as the manufacturing facility, and
not more than 25 percent of the net proceeds of the issue are used to provide those facilities.
A rule similar to the rule of section 142(b)(2) shall apply for purposes of clause (i).
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 theModernizing Agricultural and Manufacturing Bonds Act
applies)), either directly or in a series of refundings.in subparagraph (A)(i), by striking $10,000,000
and inserting $30,000,000
, and
in the heading, by striking $10,000,000
and inserting $30,000,000
.
Section 144(a)(4)(G) of such Code is amended by inserting Modernizing Agricultural and Manufacturing Bonds Act$30,000,000, in the case of bonds issued after the date of the enactment of the
.
Section 144(a)(10)(A) of such Code is amended by striking $40,000,000
and inserting $120,000,000
.
Section 144(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
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—
such dollar amount, multiplied by
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.
The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.
$450,000and inserting
$1,000,000.
Section 144(a)(11)(A) of such Code is amended by striking $250,000
and inserting $1,000,000
.
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
,
2007and inserting
2025, and
in the last sentence, by striking $100
each place it appears and inserting $10,000
.
Section 144(a)(11) of such Code is amended by adding at the end the following new subparagraph:
Section 147(c)(2)(E) of such Code is amended by striking median
and inserting average
.
The amendments made by this section shall apply to bonds issued after December 31, 2025.