Modernizing Agricultural and Manufacturing Bonds Act
Sponsored By: Representative LaHood, Darin [R-IL-16]
Introduced
Summary
This bill would modernize and expand tax-exempt bond rules to let more manufacturers and first-time farmers use low-cost financing. It would broaden which manufacturing activities qualify and raise the dollar limits for qualified small issue bonds while adding an inflation-adjustment mechanism.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
Bigger small-issue bond limits
If enacted, the bill would raise the per-issue qualified small-issue bond limit to $30 million. It would raise the aggregate per-taxpayer cap to $120 million. The bill would set a $30 million additional capital-expenditure exclusion for applicable bonds issued after enactment. After 2025, the $30 million and $120 million amounts would be increased each year for inflation using the cost-of-living adjustment (with calendar year 2024 as the baseline) and any adjusted amount would be rounded to the nearest $100,000. These rules would apply to obligations issued after the date of enactment.
Higher bond limits for first-time farmers
If enacted, the bill would raise dollar limits used in the first-time farmer private-activity bond exceptions. A $250,000 test amount would become $1,000,000 and a separate $450,000 limit would become $1,000,000. The bill would repeal the separate lower dollar limit on used farm equipment. The farmland-size test would use average farm size instead of median. These changes would apply to bonds issued after December 31, 2025, and after 2026 the statutory amounts would increase annually for inflation and be rounded to the nearest $10,000.
Broader manufacturing bond definition
If enacted, the bill would expand what counts as a manufacturing facility for qualified small-issue bonds. It would include facilities that produce certain intangible property described in the tax code (section 197(d)(1)(C)(iii)). It would also include functionally related and subordinate facilities on the same site, and allow ancillary facilities on the same site only if they use no more than 25 percent of the issue's net proceeds. An office-space limit like current law would apply. The intangible-property and subordinate-facility additions would not apply to bonds issued on or before the date of enactment except for certain refundings. These changes would apply to obligations issued after enactment.
Sponsors & CoSponsors
Sponsor
LaHood, Darin [R-IL-16]
IL • R
Cosponsors
Rep. Evans, Dwight [D-PA-3]
PA • D
Sponsored 6/2/2026
Rep. Feenstra, Randy [R-IA-4]
IA • R
Sponsored 6/2/2026
Rep. Sewell, Terri A. [D-AL-7]
AL • D
Sponsored 6/2/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov