The Council of Development Finance Agencies (CFDA) has unveiled proposed legislation to update the definition of manufacturing for industrial development bonds (IDBs). The new legislation would revise the tax code to allow IDBs to be used for both traditional manufacturers and new economy industries such as software and biotechnology. CFDA members and staff are meeting with members of Congress to discuss the proposed change, and are seeking sponsors and authors for the legislation, which the group hopes to have introduced to House of Representatives and Senate committees as soon as possible. IDBs provide low-cost debt to small and mid-size companies that do not have access to credit markets. Expanding the use of IDBs would allow these types of businesses to finance expansion in ways that would not be possible through higher-cost means. Current U.S. tax regulations do not extend to "knowledge-based" industries.
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