“A bill to amend the Internal Revenue Code of 1986 to provide a credit to issuers of American infrastructure bonds.”
No CRS summary available for this bill.
This section establishes a new direct-pay tax credit under new IRC §6431 for issuers of American infrastructure bonds equal to 28% of interest payable under such bonds, with payments made by the Treasury contemporaneously with each interest payment date. American infrastructure bonds are qualified tax-exempt obligations under IRC §103 (i.e., municipal bonds not classified as private activity bonds) for which the issuer makes an irrevocable election to apply this provision, resulting in interest being includible in holders' gross income; the bond's yield for arbitrage purposes under §148 is reduced by the credit amount (except for reasonably required reserves). (Thus, the credit subsidizes issuers'—typically state and local governments'—borrowing costs for infrastructure projects, akin to the expired Build America Bonds program.) The provision includes conforming amendments to the Code's table of sections and overpayment rules; requires states (absent opt-out) to exempt bond interest and credits from state income tax; adjusts credit payments upward to fully offset any sequestration reductions; and applies to obligations issued after enactment.