II 

114TH CONGRESS 

2D SESSION S. 3416 

To amend the Internal Revenue Code of 1986 to modify certain rules 

applicable to qualified small issue manufacturing bonds. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 28, 2016 

Mr. BROWN (for himself and Mr. PERDUE) 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Modernizing American 

5 Manufacturing Bonds Act’’. 

6 SEC. 2. MODIFICATIONS TO QUALIFIED SMALL ISSUE 

7 BONDS. 

8 (a) MANUFACTURING FACILITIES TO INCLUDE PRO9 DUCTION OF INTANGIBLE PROPERTY AND FUNCTIONALLY

10 RELATED FACILITIES.—Section 144(a)(12)(C) of the InVerDate Sep 11 2014 03:10 Oct 01, 2016 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3416.IS S3416

SSpencer on DSK4SPTVN1PROD with BILLS
2 

•S 3416 IS

1 ternal Revenue Code of 1986 is amended to read as fol2 lows: 

3 ‘‘(C) MANUFACTURING FACILITY.—For 

4 purposes of this paragraph— 

5 ‘‘(i) IN GENERAL.—The term ‘manu6 facturing facility’ means any facility 

7 which— 

8 ‘‘(I) is used in the manufacturing 

9 or production of tangible personal 

10 property (including the processing re11 sulting in a change in the condition of 

12 such property), 

13 ‘‘(II) is used in the creation or 

14 production of intangible property 

15 which is described in section 

16 197(d)(1)(C)(iii), or 

17 ‘‘(III) is functionally related and 

18 subordinate to a facility described in 

19 subclause (I) or (II) if such facility is 

20 located on the same site as the facility 

21 described in subclause (I) or (II). 

22 ‘‘(ii) CERTAIN FACILITIES IN23 CLUDED.—The term ‘manufacturing facil24 ity’ includes facilities that are directly re25 lated and ancillary to a manufacturing faVerDate Sep 11 2014 03:10 Oct 01, 2016 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3416.IS S3416

SSpencer on DSK4SPTVN1PROD with BILLS
3 

•S 3416 IS

1 cility (determined without regard to this 

2 clause) if— 

3 ‘‘(I) those facilities are located on 

4 the same site as the manufacturing 

5 facility, and 

6 ‘‘(II) not more than 25 percent 

7 of the net proceeds of the issue are 

8 used to provide those facilities. 

9 ‘‘(iii) LIMITATION ON OFFICE

10 SPACE.—A rule similar to the rule of sec11 tion 142(b)(2) shall apply for purposes of 

12 clause (i). 

13 ‘‘(iv) LIMITATION ON REFUNDINGS

14 FOR CERTAIN PROPERTY.—Subclauses (II) 

15 and (III) of clause (i) shall not apply to 

16 any bond issued on or before the date of 

17 the enactment of the Modernizing Amer18 ican Manufacturing Bonds Act, or to any 

19 bond issued to refund a bond issued on or 

20 before such date (other than a bond to 

21 which clause (iii) of this subparagraph (as 

22 in effect before the date of the enactment 

23 of the Modernizing American Manufac24 turing Bonds Act applies)), either directly 

25 or in a series of refundings.’’. 


SSpencer on DSK4SPTVN1PROD with BILLS
4 

•S 3416 IS

1 (b) INCREASE IN LIMITATIONS.—Section 144(a)(4) 

2 of such Code is amended— 

3 (1) by striking ‘‘$10,000,000’’ in subparagraph 

4 (A)(i) and inserting ‘‘$30,000,000’’, and 

5 (2) by striking ‘‘$10,000,000’’ in the heading 

6 and inserting ‘‘$30,000,000’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to obligations issued after the date 

9 of the enactment of this Act. 

Æ 


SSpencer on DSK4SPTVN1PROD with BILLS