Modernizing Agricultural and Manufacturing Bonds Act

Expanded Manufacturing Definitions: Manufacturing facilities may now include the production of intangible property or facilities functionally related and subordinate to those used for tangible property (Section 2(a)). This could benefit those involved in the creation of specific intangible property described in section 197(d)(1)(C)(iii).

Increased Bond Limits for Manufacturing: The bill increases the dollar amount for certain small issue manufacturing bonds from $10,000,000 to $30,000,000 (Section 2(b)(1)(A)). It also increases the limit for additional capital expenditures to $30,000,000 (Section 2(b)(2)) and the aggregate limit per taxpayer to $120,000,000 (Section 2(b)(3)).

Inflation Protections: For manufacturing bond amounts, the bill introduces an adjustment for inflation for calendar years after 2025 (Section 2(b)(4)).

Increased Support for First-Time Farmers: The dollar limitation for certain private activity bond exceptions for first-time farmers is increased from $450,000 to $1,000,000 (Section 3(a)(1)). This also increases the qualified small issue bond limitation to $1,000,000 (Section 3(a)(3)).

Changes to Farmland Determination: The determination for substantial farmland will now be based on the "average" rather than the "median" farm size (Section 3(b)).

Limitations on Certain Property: The expansion of manufacturing facilities to include intangible property and related facilities will not apply to bonds issued on or before the date of the Act's enactment, nor to certain refundings of those bonds (Section 2(a)(ii)).

Office Space Restrictions: The definition of a manufacturing facility remains subject to a limitation on office space (Section 2(a)(ii)(iii)).