CDFA is the voice of development finance on Capitol Hill and with the federal Administration, providing leadership on policy decisions that impact the industry. CDFA is a bipartisan organization that supports sound public policy and the leadership involved in making important decisions affecting development finance.
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CDFA's Modernizing Agricultural and Manufacturing Bonds Act Introduced in the U.S. Senate
The Council of Development Finance Agencies
(CDFA) is pleased to announce that Senators Sherrod Brown (D-OH) and Joni Ernst (R-IA) have introduced the Modernizing Agricultural and Manufacturing Bonds Act
(MAMBA) in the U.S. Senate as S. 2723
. CDFA has worked closely with the offices of Senators Brown and Ernst over the past several months to secure the introduction of MAMBA in the U.S. Senate.
MAMBA modernizes the Internal Revenue Code (IRC) as it relates to small issue bonds, specifically the private activity bond rules for first-time farmers and manufacturing bonds, by making six key changes to the tax code that include:
- Expanding the definition of “manufacturing facility”
- Eliminating restrictions on “directly related and ancillary facilities"
- Increasing the maximum IDB size limitation from $10 million to $30 million, indexed to inflation
- Increasing the maximum on small issue bond proceeds for first-time farmers to $1 million
- Repealing the separate dollar limitation on the use of bond proceeds for depreciable property
- Modifying the definition of “substantial farmland”
“We are thrilled that MAMBA has been introduced in the U.S. Senate with bipartisan support. In the wake of the COVID-19 pandemic and amid increased global economic competition, it has become clear that investments in farmers and manufacturers are necessary to shore up the United States’ supply chains. By updating the 40-year-old rules around agricultural and manufacturing bonds, MAMBA allows for the innovative financing tools necessary to invest in local communities and provide a bulwark against future food and supply chain disruptions,” said CDFA President & CEO Toby Rittner. "Senators Brown and Ernst have been great champions of private activity bonds and the development finance industry as a whole, and I'm thankful for their commitment to manufacturing and farming—key pillars of the U.S. economy.”
"Ohio farmers and manufacturers are eager to grow and produce more Ohio-made products and food, and we can help achieve that goal by connecting them with the capital they need to grow," said Senator Brown
. "A simple update to the way manufacturers can use private activity bonds that will be a huge help to the next generation of farmers, manufacturers, and entrepreneurs as they work to hire Ohioans and grow our economy."
"Farming and manufacturing are critical to the success of Iowa's economy," said Senator Ernst
. "By modernizing and clarifying the rules for Aggie Bonds and Industrial Development Bonds for the first time in over 30 years, we can ensure that first-time farmers and entrepreneurs can access the capital they need to get started, create jobs, and fuel our communities.
MAMBA is currently endorsed by hundreds of development finance agencies, private sector participants, and key industry stakeholders including the National Council of State Agricultural Finance Programs
. “The Iowa Finance Authority and National Council of State Agricultural Finance Programs are in full support of the MAMBA legislation. The enhancements to Aggie Bonds in the MAMBA legislation will allow more beginning farmers to qualify for the program as well as allow more bond dollars to be utilized when purchasing or constructing facilities,” said Tammy Nebola of the Iowa Finance Authority. “With historically high land prices and increasing interest rates, beginning farmers need as many financing opportunities as possible. Aggie bonds provide low-interest rate financing opportunities to help beginning farmers realize their dreams of farm ownership.”
CDFA wishes to thank Senators Brown and Ernst and their staff for their efforts and time spent working to introduce this bill. CDFA will be working with its members and partners across the country to encourage Congress to pass S. 2723.
Development finance agencies are encouraged to let their voices be heard on Capitol Hill by supporting MAMBA. To learn more about MAMBA, visit CDFA's MAMBA
page and complete CDFA's survey
to register your support for its passage. To get engaged, contact Mitchell Smith