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

This bill, formally titled 'A BILL To amend the Internal Revenue Code of 1986 to modify certain rules applicable to qualified small issue manufacturing bonds, to expand certain exceptions to the private activity bond rules for first-time farmers, and for other purposes.' The bill proposes modifications to rules concerning qualified small issue manufacturing bonds. It also aims to expand exceptions to private activity bond rules specifically 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. The definition now includes facilities used in the creation of intangible property and functionally related facilities located on the same site. It also includes directly related and ancillary facilities if not more than 25% of bond proceeds are used for them. Section 144(a)(4) of the Internal Revenue Code is amended to increase the limitation 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 adjustments for inflation will apply to the $30,000,000 and $120,000,000 amounts starting in calendar year 2026. 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. The dollar limitation in Section 147(c)(2)(A) is increased from $450,000 to $1,000,000. A separate lower dollar limitation is repealed. The qualified small issue bond limitation in Section 144(a)(11)(A) is increased from $250,000 to $1,000,000. Inflation adjustments to the dollar amounts in subparagraph (A) and section 144(a)(11)(A) are modified, with increases occurring after 2026. The inflation adjustment clause (ii) is updated, changing the year from 2007 to 2025. The dollar amount for inflation adjustment is increased from $100 to $10,000. The definition of 'substantial farmland' in Section 147(c)(2)(E) is changed from 'median' to '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: 1/14/2026 · Introduced: 6/17/2025

Author: Joni Ernst (R-IA)

TL;DR (AI)

The bill expands eligibility for qualified small issue manufacturing bonds by broadening the definition of 'manufacturing facility' and increasing bond limits from $10 million to $30 million per project and $40 million to $120 million per taxpayer, adjusted for inflation starting in 2026.
For first-time farmers, the bill increases the dollar limitation for private activity bonds from $450,000 to $1,000,000 and modifies inflation adjustments related to these bonds, effective after December 31, 2025.
The bill revises the definition of 'substantial farmland' to use 'average' farm size instead of 'median' and increases the qualified small issue bond limitation for first-time farmers from $250,000 to $1,000,000.

119th Congressin committeeHR. 9100(In Committee)Official page

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Other Sections

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

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