I 112th CONGRESS 1st Session H. R. 278 IN THE HOUSE OF REPRESENTATIVES January 12, 2011 Mr. Fortenberry 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 provide for tax exempt qualified small issue bonds to finance agricultural processing property.

1.

Qualified small issue bonds for agricultural processing property

(a)

In General

Subparagraph (B) of section 144(a)(12) of the Internal Revenue Code of 1986 is amended by striking or at the end of clause (i), by redesignating clause (ii) as clause (iii), and by inserting after clause (i) the following new clause: (ii)any agricultural processing property, or . (b)

Agricultural Processing Property

Paragraph (12) of section 144(a) of such Code is amended by adding at the end the following new subparagraph: (D)

Agricultural processing property

(i)

In general

For purposes of this paragraph, the term agricultural processing property means any depreciable property or land, which is used primarily for the processing of agricultural products. (ii)

Processing

For purposes of this subparagraph, the term processing includes pasteurizing, slaughtering, washing, peeling, cutting, freezing, preserving, and packaging. Such term does not include planting, raising, harvesting, gathering, breeding, feeding, or milking. (iii)

Agricultural products

For purposes of this subparagraph, the term agricultural products includes plant and dairy products, meats, fish, and poultry. . (c)

Exception to Limitation on Acquisition of Depreciable Farm Property

Subparagraph (B) of section 144(a)(11) of such Code is amended by inserting (other than agricultural processing property, as defined in paragraph (12)(D)) after means property. (d)

Exception to Prohibition on Acquisition of Land for Farming Purposes

Subsection (c) of section 147 of such Code is amended by adding at the end the following new paragraph: (4)

Exception for agricultural processing property

Paragraph (1)(B) shall not apply with respect to any agricultural processing property (as defined in section 144(a)(12)(D)). . (e)

Exception to Prohibition on Acquisition of Existing Property

Subsection (d) of section 147 of such Code is amended by adding at the end the following new paragraph: (5)

Exception for agricultural processing property

Paragraph (1) shall not apply with respect to any agricultural processing property (as defined in section 144(a)(12)(D)). . (f)

Effective Date

The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.