What does Preamble of Modernizing Agricultural and Manufacturing Bonds Act do?

This bill proposes to amend the Internal Revenue Code of 1986. The proposed changes involve modifications to rules applicable to qualified small issue manufacturing bonds. The bill also aims to expand certain exceptions to the private activity bond rules for first-time farmers.

What does SHORT TITLE. of Modernizing Agricultural and Manufacturing Bonds Act do?

This bill is formally titled the Modernizing Agricultural and Manufacturing Bonds Act.

What does MODIFICATIONS TO QUALIFIED SMALL ISSUE BONDS. of Modernizing Agricultural and Manufacturing Bonds Act do?

This section modifies the definition of 'manufacturing facility' within section 144(a)(12) of the Internal Revenue Code of 1986 to include facilities used in the creation of intangible property and functionally related facilities. The definition of 'manufacturing facility' now includes facilities directly related and ancillary to a manufacturing facility, provided certain conditions are met, such as location on the same site and limited use of bond proceeds. Section 144(a)(4) of the Internal Revenue Code is amended to increase the limitation on qualified small issue bonds from $10,000,000 to $30,000,000. Section 144(a)(10)(A) of the Internal Revenue Code is amended to increase the aggregate limit per taxpayer from $40,000,000 to $120,000,000. The section introduces an inflation adjustment for the monetary amounts specified in paragraphs (4)(A), (4)(G), and (10)(A) of section 144(a), beginning after 2025, using the cost-of-living adjustment. The amendments apply to obligations issued after the date of enactment of this Act.

What does EXPANSION OF CERTAIN EXCEPTIONS TO THE PRIVATE ACTIVITY BOND of Modernizing Agricultural and Manufacturing Bonds Act do?

This section amends the Internal Revenue Code of 1986 to modify exceptions to private activity bond rules for first-time farmers. It increases the dollar limitation under Section 147(c)(2)(A) from $450,000 to $1,000,000. The section repeals a separate lower dollar limitation on used farm equipment. It also increases the qualified small issue bond limitation under Section 144(a)(11)(A) from $250,000 to $1,000,000. The inflation adjustment for these dollar amounts is modified, shifting the adjustment year from after 2008 to after 2026, and increasing the inflation factor from $100 to $10,000. The determination of substantial farmland under Section 147(c)(2)(E) is changed from using the median to the average farm size. These amendments apply to bonds issued after December 31, 2025.

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Modernizing Agricultural and Manufacturing Bonds Act

Last updated: 6/2/2026 · Introduced: 6/2/2026

Author: Darin LaHood (R-IL)

TL;DR (AI)

The bill increases the limit for qualified small issue manufacturing bonds from $10,000,000 to $30,000,000 and the aggregate limit per taxpayer from $40,000,000 to $120,000,000, with inflation adjustments beginning after 2025.
For first-time farmers, the bill raises the dollar limitation for private activity bonds from $450,000 to $1,000,000 and increases the qualified small issue bond limitation from $250,000 to $1,000,000.
The bill expands the definition of 'manufacturing facility' to include facilities used in the creation of intangible property and related facilities, subject to certain conditions.

119th Congressin committeeS. 2100(In Committee)Official page

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Other Sections

Includes provisions on preamble, short title., and 2 more.

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