The Modernizing American Manufacturing Bonds Act is a comprehensive reform package that will modernize and revolutionize Qualified Small Issue Manufacturing Bonds, more commonly known as Industrial Development Bonds (IDBs) or simply manufacturing bonds. Manufacturing bonds are a type of Private Activity Bond (PAB) that allow the public sector to pass considerable interest rate reductions on to private companies through the issuance of tax-exempt bonds.
This bedrock tools is the single most actively used bond tool for financing the small- to mid-sized manufacturing sector and are a key economic development tool for state and local economic development agencies. The four reforms will expand the capacity and usability of manufacturing bonds to help create American jobs immediately. The four reforms are as follows:
1. Expand the Definition of Manufacturing to Include both Tangible and Intangible Manufacturing Production for Manufacturing Bonds
2. Eliminate the Restrictions on “Functionally Related and Subordinate Facilities” for Manufacturing Bonds
3. Increase the Maximum Bond Size Limitation from $10M to $30M for Manufacturing Bonds
4. Increase the Capital Expenditure Limitation from $20M to $40M for Manufacturing Bonds