A bipartisan bill introduced in the U.S. House of Representatives seeks to modernize financial tools used by the manufacturing industry by expanding access to manufacturing bonds and increasing the size of the bonds manufacturers can get.
U.S. Rep. Randy Hultgren (R-IL), along with Reps. Richard Neal (D-MA) and Jim Renacci (R-OH) sponsored the Modernizing American Manufacturing Bonds Act (MAMBA) of 2017, H.R. 1115, which updates rules governing manufacturing bonds. The bill, they say, will enable manufacturing companies to expand their businesses, invest in new equipment and hire more workers.
The legislation would increase the manufacturing bond size limitation from $10 million to $30 million and bump up the manufacturing bonds’ 6-year capital expenditure limitation from $20 million to $40 million.
Further, it would expand the number of eligible projects using Qualified Small Issue Manufacturing Bonds, also called industrial development bonds (IDBs) or manufacturing bonds.
It would also broaden the definition of manufacturing facilities to include those that produce intangible property like software, patents and similar intellectual property. In addition, the bill removes the “functionally related and subordinate facility” restriction, which reduces some of the complexity of financing projects.
“Illinois’ manufacturers are ready for the challenge of increasing engagement in our global and technology-based economy. Unfortunately, decades-old policies governing a key tool that manufacturers use to expand operations no longer address today’s challenges, needlessly impeding growth and job creation in the Illinois manufacturing sector,” Hultgren said.
The legislation has the support of the Illinois Manufacturers’ Association and the state’s Council of Development Finance Agencies (CDFA), Hultgren said.
“It’s vitally important that Congress does all it can to support the American manufacturing industry. The Modernizing American Manufacturing Bonds Act is a commonsense, bipartisan proposal that will ensure struggling manufacturers in New England and across the country have access to the resources and capital they need to invest in their businesses and hire more workers in their local communities,” Neal said.
The United States needs to expand small and mid-sized manufacturing companies which create jobs as well as strengthen communities, said Eric Anderberg, vice president of Dial Machine in Rockford and volunteer board member of the Illinois Finance Authority, the state’s largest issuer of federally tax-exempt conduit bonds, which includes traditional industrial development bonds.
“I know first-hand the power of industrial development bonds, a proven private-public tool to encourage capital investment, create jobs and increase the competitiveness of American manufacturers,” Anderberg said. “Sadly, federal law regarding industrial development bonds remains stuck in 1986 and has not kept up with the needs of 21st century American manufacturing.”
“MAMBA will give small and mid-sized American manufacturers a capital financing tool to create jobs and compete in 2017, not 1986,” he added.