Budget & Taxes (Agriculture)

This bill modifies tax rules for bonds used to fund agricultural and manufacturing facilities. It expands what counts as a "manufacturing facility" to include production of intangible property (like software) and related on-site facilities, while raising the dollar limit for qualified small issue bonds from $10 million to $30 million (with annual inflation adjustments). It also increases the annual bond limit for first-time farmers from $450,000 to $1 million and changes how farmland size is measured for eligibility. The changes apply to bonds issued after the bill's enactment date for manufacturing and after December 31, 2025, for farm-related bonds. These adjustments primarily affect agricultural businesses and manufacturers seeking tax-exempt financing for facility projects.

This is a non-binding resolution (HRES 206), not a legislative bill. It expresses the House's support for preserving the "stepped-up basis" tax provision (Section 1014 of the Internal Revenue Code), which allows heirs to reset the tax cost basis of inherited assets like farmland or business equipment to their current market value. The resolution cites that 98% of farms and 19% of businesses are family-owned, noting that eliminating this provision could increase taxes for 66% of midsized farms. It specifically urges opposition to new taxes on family farms and small businesses but does not change any tax law or policy.

This bill provides one-time payments to eligible farmers and ranchers who experienced revenue or production losses from covered commodities, specialty crops, livestock, or poultry. Funded by $20 billion in tariff revenues collected after January 20, 2025, payments must be issued within 90 days of enactment to cover necessary expenses related to these losses. To qualify, producers must be actively engaged in farming as defined by existing law. The bill directly affects agricultural producers who meet the eligibility criteria for these targeted financial assistance payments.

This bill prohibits federal funding for ground-mounted solar projects that convert prime farmland (defined as the most productive agricultural land under existing law) and excludes such projects from key tax credits like the residential clean energy credit (Section 25D), production tax credits (Sections 45, 45Y), and investment tax credits (Sections 48, 48E). It directly affects solar developers and property owners seeking to install solar facilities on prime farmland, blocking both federal financial support and tax incentives for these projects. The bill uses the existing definition of "prime farmland" from the Farmland Protection Policy Act to prevent agricultural land from being repurposed for solar energy generation. Its core mechanism is a dual restriction: no federal funds for covered projects and exclusion from tax credits for solar installations on protected farmland.

This bill ensures uninterrupted support for farmers by providing emergency funding during government funding gaps. It authorizes the Treasury to cover Farm Service Agency (FSA) program costs - including farm loans - if Congress hasn’t passed full fiscal year 2026 appropriations by September 30, 2025. The funding also covers retroactive costs for services missed from September 30, 2025, through the bill’s enactment date. It ends automatically once regular appropriations for the Department of Agriculture are enacted. The bill directly affects farmers relying on FSA programs during fiscal year 2026 funding delays.