The Modernizing Agricultural and Manufacturing Bonds Act modifies federal tax rules governing bonds used to finance manufacturing and agricultural projects. For manufacturing, the bill expands what qualifies as an eligible facility to include production of intangible property (such as patents) and related support facilities, while raising the maximum bond issuance limits from $10 million to $30 million per project and from $40 million to $120 million per taxpayer across all projects. For first-time farmers, the bill significantly increases the dollar limit on tax-exempt bonds for purchasing farm equipment and land from $450,000 to $1 million, eliminates a separate lower limit for used equipment, and changes how farmland size is calculated to use average rather than median farm size. Both sets of changes include automatic inflation adjustments starting in 2025 and 2026 respectively, making it easier for small manufacturers and beginning farmers to access tax-exempt financing for business expansion and equipment purchases.
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