[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 651 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 651

  To amend the Internal Revenue Code of 1986 to make improvements to 
                   assist young farmers and ranchers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 8, 2005

Mr. King of Iowa (for himself, Mr. Shimkus, Mr. Leach, Mr. Latham, and 
 Mr. Nussle) introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to make improvements to 
                   assist young farmers and ranchers.

    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 ``Agricultural Bond Improvement Act of 
2005''.

SEC. 2. EXEMPTION OF AGRICULTURAL BONDS FROM PRIVATE ACTIVITY BOND 
              VOLUME LIMITS.

    (a) In General.--Section 146(g) of the Internal Revenue Code of 
1986 (relating to exception for certain bonds) is amended by striking 
``and'' at the end of paragraph (3), by striking the period at the end 
of paragraph (4) and inserting ``, and'', and by inserting after 
paragraph (4) the following new paragraph:
            ``(5) any qualified small issue bond described in section 
        144(a)(12)(B)(ii).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

SEC. 3. FARM SERVICE AGENCY GUARANTEES EXEMPTED FROM FEDERAL GUARANTEE 
              PROHIBITION ON TAX-EXEMPT BONDS.

    (a) In General.--Subparagraph (A) of section 149(b)(3) of the 
Internal Revenue Code of 1986 (relating to certain insurance programs) 
is amended by striking ``or'' at the end of clause (ii), by striking 
the period at the end of clause (iii) and inserting ``, or'', and by 
inserting after clause (iii) the following new clause:
                            ``(iv) any guarantee of a loan under title 
                        III of the Consolidated Farm and Rural 
                        Development Act.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

SEC. 4. INCREASE IN LOAN LIMITS ON AGRICULTURAL BONDS.

    (a) In General.--Subparagraph (A) of section 147(c)(2) of the 
Internal Revenue Code of 1986 (relating to general rule for exception 
for first-time farmers) is amended to read as follows:
                    ``(A) In general.--
                            ``(i) If the requirements of subparagraph 
                        (B) are met with respect to any land, paragraph 
                        (1) shall not apply to such land, and 
                        subsection (d) shall not apply to property to 
                        be used thereon for farming purposes, but only 
                        to the extent of expenditures (financed with 
                        the proceeds of the issue) not in excess of 
                        $450,000.
                            ``(ii) In the case of any calendar year 
                        after 2005, the $450,000 amount contained in 
                        clause (i) shall be increased by an amount 
                        equal to such dollar amount multiplied by the 
                        inflation percentage determined under section 
                        305(c) of the Consolidated Farm and Rural 
                        Development Act (7 U.S.C. 1925(c)) for the 
                        calendar year, determined by substituting 
                        `calendar year' for `fiscal year' each place it 
                        appears and by substituting `2004' for `1996' 
                        in paragraph (2) thereof. Any increase 
                        determined under this clause shall be rounded 
                        to the nearest multiple of $100.''.
    (b) Conforming Amendment.--Section 147(c)(2)(C)(i)(II) of such Code 
is amended by striking ``$250,000'' and inserting ``the amount in 
effect under subparagraph (A)(i)''.
    (c) Effective Date.--The amendment made by this section shall apply 
to bonds issued after the date of the enactment of this Act.

SEC. 5. REPEAL OF DOLLAR AMOUNT IN DEFINITION OF SUBSTANTIAL FARMLAND.

    (a) In General.--Subparagraph (E) of section 147(c)(2) of the 
Internal Revenue Code of 1986 (defining substantial farmland) is 
amended to read as follows:
                    ``(E) Substantial farmland.--For purposes of this 
                paragraph, the term `substantial farmland' means any 
                parcel of land unless such parcel is smaller than 30 
                percent of the average size of a farm in the county in 
                which such parcel is located.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to bonds issued after the date of the enactment of this Act.
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