Modernizing Agricultural and Manufacturing Bonds Act

This bill updates tax-exempt bonds to better support small manufacturers and first-time farmers. It widens what counts as a “manufacturing facility” so bonds can help not just factories making physical goods, but also places that create certain kinds of intangible products, plus related on-site facilities (up to a quarter of the bond funds) . It also raises key dollar limits for small manufacturing bonds, including lifting the per-project cap to $30 million and the overall cap per taxpayer to $120 million, with automatic inflation increases after 2025 .

For first-time farmers, it increases the maximum bond amount above the old $450,000 limit, removes the separate lower cap on used equipment, and ties limits to inflation after 2026. It also changes how “substantial farmland” is measured, using the average farm size instead of the median. These farmer-focused changes apply to bonds issued after December 31, 2025 .

Key points

• Who is affected: Small manufacturers; first-time farmers
• What changes:
  • Manufacturing bonds: broader facility definition; per-project cap set at $30 million; overall cap per taxpayer set at $120 million; future inflation adjustments
  • First-time farmer bonds: higher overall cap than the prior $450,000; no separate lower cap for used equipment; “substantial farmland” based on average size; future inflation adjustments after 2026
• When:
  • Manufacturing bond changes start on enactment
  • Farmer bond changes apply to bonds issued after December 31, 2025