ICBA expressed support for bipartisan legislation in the House and Senate to reform small-issue bond programs that support first-time farmers and manufacturing.

Background: The Modernizing Agricultural and Manufacturing Bonds Act (S. 2371/ H.R.3787) would modernize IRS rules for bonds for manufacturing facilities and for First-Time Farmer Bonds, known as aggie bonds. Under the aggie bond program, banks receive tax-exempt interest income on loans to beginning farmers to minimize rates to borrowers.

Legislative Details: The legislation would:

  • Raise the threshold amount which can be used for land and equipment acquisition by a first-time farmer from $450,000 to $1 million and index that amount to inflation.

  • Expand the types of manufacturing facilities that qualify for qualified small issue bonds.

  • Increase the maximum bond size limitation for manufacturing to $30 million.

Lead Sponsors: The bill was introduced by Sens. Sherrod Brown (D-Ohio) and Joni Ernst (R-Iowa) in the Senate and by Reps. Darin LaHood (R-Ill.), Dan Kildee (D-Mich.), Randy Feenstra (R-Iowa), and Dwight Evans (D-Pa.) in the House.