S2723-118

2. Modifications to qualified small issue bonds 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 the Modernizing Agricultural and Manufacturing Bonds Act applies)), either directly or in a series of refundings. Section 144(a)(4) of such Code is amended— 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 $30,000,000, in the case of bonds issued after the date of the enactment of the Modernizing Agricultural and Manufacturing Bonds Act. 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 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— 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 2022 for calendar year 2016 in subparagraph (A)(ii) thereof. The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act. (C)Manufacturing facilityFor purposes of this paragraph—(i)In generalThe 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 includedThe 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 spaceA rule similar to the rule of section 142(b)(2) shall apply for purposes of clause (i).(iv)Limitation on refundings for certain propertySubclauses (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.. (13)Adjustment for inflationIn 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..

3. Expansion of certain exceptions to the private activity bond rules for first-time farmers Section 147(c)(2)(A) of the Internal Revenue Code of 1986 is amended by striking $450,000 and inserting $1,000,000. 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. Section 144(a)(11)(A) of such Code is amended by striking $250,000 and inserting $1,000,000. Section 147(c)(2)(G) of such Code, as redesignated by paragraph (2), is amended— 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, in clause (ii), by striking 2007 and inserting 2023, 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: For inflation adjustment of dollar amount contained in subparagraph (A), see section 147(c)(2)(G). 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, 2023. (D)Inflation adjustmentFor inflation adjustment of dollar amount contained in subparagraph (A), see section 147(c)(2)(G)..