U.S. Rep. Dwight Evans (D-PA-03) on June 2 proposed a bipartisan bill in Congress that aims to help small and medium manufacturers and farmers generate good-paying jobs by improving the federal rules for manufacturing and agricultural bonds.
The Modernizing Agricultural and Manufacturing Bonds Act (MAMBA), H.R. 9100, specifically would modify certain rules applicable to qualified small issue manufacturing bonds, to expand certain exceptions to the private activity bond rules for first-time farmers.
“Many Pennsylvania farmers and manufacturers are struggling, and this is one way we can help them,” Evans said. “In the Philadelphia region alone, there are more than 60 certified manufacturing businesses that could benefit from expanded eligibility to retain or create jobs.”
The congressman also pointed out that the farming sector is vital to Pennsylvania and the nation, “both because of its sizable role in the economy and because we all need food.”
Agricultural and manufacturing bonds, which are currently exempt from federal tax, are important tools used by state and local agencies to support small manufacturers and farmers and spur economic development. Over the last decade, use of these types of bonds has declined due to their outdated rules and regulations.
If enacted, H.R. 9100 would raise the maximum manufacturing bond size from $10 million to $30 million, updating this threshold for inflation and economic changes. The bill also would tie future bond size increases to inflation.
Additionally, the proposal would modernize the definition of a “manufacturing facility” to include high-tech manufacturing processes, including bio-technology, design, and formula development, according to a bill summary provided by Evans’ staff.
H.R. 9100 also would eliminate restrictions that prevented bond proceeds from being used toward office space, locker rooms, and cafeterias at small manufacturing facilities.
Likewise, the measure would increase the amount of bond proceeds that can go to first-time farmers from $450,000 to $1 million and allow new farmers to use bond proceeds to upgrade existing agricultural buildings and property and purchase farm equipment, among other provisions.
“We are thrilled that MAMBA has been reintroduced in the U.S. House with bipartisan support,” said Council of Development Finance Agencies President & CEO Toby Rittner. “With our country facing great economic opportunity, it has become clear that investments in farmers and manufacturers are necessary to strengthen the United States’ global competitiveness.”
Updating the 40-year-old rules around agricultural and manufacturing bonds will allow for the innovative financing tools necessary to invest in local communities by expanding and growing American manufacturing and farming, Rittner said.
H.R. 9100 — which is sponsored by U.S. Rep. Darin LaHood (R-IL) and Evans’ fellow cosponsors U.S. Reps. Randy Feenstra (R-IA) and Terri Sewell (D-AL) — is under consideration by the U.S. House Ways and Means Committee.