[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2723 Introduced in Senate (IS)]

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118th CONGRESS
  1st Session
                                S. 2723

  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

                           September 5, 2023

 Mr. Brown (for himself and Ms. Ernst) 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 2023, 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 2022' 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 2024, 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 ``2023'', 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, 2023.
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