U.S. Senators Sherrod Brown (D-OH) and Joni Ernst (R-IA) introduced bipartisan legislation to expand financing opportunities for first-time farmers and small and mid-size manufacturers around the country. The Modernizing Agricultural and Manufacturing Bonds (MAMBA) Act will modernize the Internal Revenue Service’s (IRS) rules for Industrial Development Bonds (IDBs) and First-Time Farmer Bonds (Aggie Bonds) providing new financing opportunities available to first-time farmers and small and mid-size manufacturers to build new facilities. The rules for IDBs and Aggie bonds have not been updated in nearly 40 years.
“Ohio farmers and manufacturers are eager to grow and produce more Ohio-made products and food, and we can help them 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 will be a huge help to the next generation of farmers, manufacturers, and entrepreneurs as they work to hire Ohioans and grow our economy.”
- Improve the ability of aggie bond to support the next generation of farmers ability to acquire land by increasing, the limitation on small issue bond proceeds for first-time farmers.
- Triple the bond size limitation from $10 million to $30 million, indexed to inflation, for IDBs so qualified small issue bonds — the primary economic development tool for small and mid-size manufacturers — meet the demands of today’s manufacturers. This outdated limit is not indexed to inflation and losing value every year, so raising it will increase access to capital for manufacturers.
- Allow up to a quarter of bond proceeds to be used for facilities that are located on the same site or ancillary to a manufacturing facility.
- Align Aggie bond definitions with U.S. Department of Agriculture Farm Service Agency definitions making it easier for lending to provide affordable capital to first-time farmers.
- Expand the definition of manufacturing to reflect today’s advanced manufacturing environment, allowing more business to qualify for these financing opportunities.
The MAMBA Act is endorsed by Ohio Farmers Union, Council of Development Finance Agencies, National Young Farmers Coalition, and the Ohio Farm Bureau.