U.S. Senator Cindy Hyde-Smith has announced her support for a legislative initiative aimed at assisting beginning farmers and small-scale manufacturers by updating outdated regulations that currently limit access to affordable capital. Hyde-Smith is an original cosponsor of the Modernizing Agricultural and Manufacturing Bonds Act (MAMBA), also known as S.2100, which was reintroduced by U.S. Senator Joni Ernst.
The proposed legislation seeks to amend the Internal Revenue Code rules for Industrial Development Bonds (IDBs) and First-Time Farmer Bonds (Aggie Bonds). These tax-exempt financing tools are designed to facilitate access to affordable capital for small- to mid-sized manufacturers and first-time farmers.
“Amid all the challenges facing American agriculture, we can’t downplay just how hard it is for new farmers to get started. It’s important to our future that these young producers, as well as small-scale manufacturers, have access to vital and necessary capital,” stated Senator Hyde-Smith. “It’s time to update these IRS rules so they fit today’s business and financing realities.”
Senator Ernst emphasized the need for reform: “It’s time to cut the red tape and give our farmers, small manufacturers, and rural lenders room to grow. My bipartisan MAMBA legislation’s commonsense updates will do that by driving new investment and making it easier for beginning farmers and manufacturers to access capital and grow their businesses.”
The MAMBA proposal includes updates to private activity bond provisions related to IDBs and Aggie Bonds by increasing the maximum bond size and modernizing eligibility rules. The current regulations have not been revised in over 30 years, resulting in a decline in IDB and Aggie Bond issuances over the past decade.
S.2100 has garnered additional support from U.S. Senator Mark Warner (D-Va.) and various organizations including the National Young Farmers Coalition, Independent Community Banks of America, Council of Development Finance Agencies, and Bond Dealers of America.
In related efforts, earlier this month Hyde-Smith introduced the Helping Ensure Rural Inheritance Transfers Are Generationally Enduring Act (HERITAGE Act). This act aims to preserve family-owned agricultural land by amending current tax code provisions that compel families to sell farmland due to federal estate tax liabilities. Hyde-Smith has also shown support for Senate Majority Leader John Thune’s permanent death tax repeal bill.
