S. 2100

119th CONGRESS 1st Session

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 · June 17, 2025 · Sponsor: Ms. Ernst · Committee: Committee on Finance

Table of contents

• S. 2100
  • SEC. 1. Short title
  • SEC. 2. Modifications to qualified small issue bonds
  • SEC. 3. Expansion of certain exceptions to the private activity bond rules for first-time farmers

SEC. 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 of the Internal Revenue Code of 1986 is amended to read as follows: section 144(a)(12)
    • (C) Manufacturing facility
      • For purposes of this paragraph—
        • (i) 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).
        • (ii) The term 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.
        • (iii) A rule similar to the rule of section 142(b)(2) shall apply for purposes of clause (i).
        • (iv) Subclauses (II) and (III) of clause (i) shall not apply to any bond issued on or before the date of the enactment of the , 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 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—
      • in subparagraph (A)(i), by striking striking0,000,000and inserting $30,000,000, and
      • in the heading, by striking and inserting .
  • (2) Increase in additional capital expenditures not taken into account
    • Section 144(a)(4)(G) of such Code is amended by inserting 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 $40,000,000and inserting inserting20,000,000.
  • (4) Adjustment for inflation
    • of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: Section 144(a)
      • (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—
          • such dollar amount, multiplied by
          • the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting for in subparagraph (A)(ii) thereof. calendar year 2024 calendar year 2016
        • 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
    • of the Internal Revenue Code of 1986 is amended by striking $450,000and inserting inserting,000,000. Section 147(c)(2)(A)
  • (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 50,000and inserting inserting,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 increasedand 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 and inserting , and
        • (iii) in the last sentence, by striking each place it appears and inserting inserting0,000.
    • (B) Cross-reference
      • (D) Inflation adjustment
        • For inflation adjustment of dollar amount contained in subparagraph (A), see section 147(c)(2)(G).
      • Section 144(a)(11) of such Code is amended by adding at the end the following new subparagraph:
• (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 medianand inserting average.
• (c) Effective date
  • The amendments made by this section shall apply to bonds issued after December 31, 2025.