This bill changes rules for certain tax-exempt bonds used by small manufacturers and first-time farmers. For manufacturing bonds, it expands the definition of "manufacturing facility" to include places that create certain intangible property and facilities that are functionally related and on the same site. It allows up to 25 percent of bond proceeds to be used for ancillary facilities on the same site and keeps a limit on office space. It raises several dollar limits for qualified small issue manufacturing bonds from $10,000,000 to $30,000,000 and raises an aggregate limit per taxpayer from $40,000,000 to $120,000,000. Those dollar amounts will be adjusted for inflation after 2025. For first-time farmers, the bill raises the dollar exception in the private activity bond rules from $450,000 to $1,000,000, removes a separate lower limit for used farm equipment, and makes the qualified small issue bond limit $1,000,000. It changes how "substantial farmland" is measured from the median farm size to the average farm size. The manufacturing changes apply to obligations issued after enactment; the farmer-related changes apply to bonds issued after December 31, 2025.
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