American Infrastructure Bonds Act of 2021

II 117TH CONGRESS 1ST SESSION S. 1308 To amend the Internal Revenue Code of 1986 to provide a credit to issuers of American infrastructure bonds. IN THE SENATE OF THE UNITED STATES APRIL 22, 2021 Mr. WICKER (for himself, Mr. BENNET, Mr. BLUNT, Ms. STABENOW, Mrs. CAPITO, Mr. KAINE, and Ms. LUMMIS) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide a credit to issuers of American infrastructure bonds. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘American Infrastruc- 4 ture Bonds Act of 2021’’. 5 SEC. 2. CREDIT FOR AMERICAN INFRASTRUCTURE BONDS 6 ALLOWED TO ISSUERS. 7 (a) IN GENERAL.—Subchapter B of chapter 65 of the 8 Internal Revenue Code of 1986 is amended by inserting 9 after section 6430 the following new section: 10 VerDate Sep 11 2014 16:24 May 19, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1308.IS S1308 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 1308 IS ‘‘SEC. 6431. CREDIT TO ISSUER OF AMERICAN INFRASTRUC- 1 TURE BONDS. 2 ‘‘(a) IN GENERAL.—The issuer of an American infra- 3 structure bond shall be allowed a credit with respect to 4 each interest payment under such bond which shall be pay- 5 able by the Secretary as provided in subsection (b). 6 ‘‘(b) PAYMENT OF CREDIT.— 7 ‘‘(1) IN GENERAL.—The Secretary shall pay 8 (contemporaneously with each interest payment date 9 under such bond) to the issuer of such bond (or to 10 any person who makes such interest payments on 11 behalf of the issuer) 28 percent of the interest pay- 12 able under such bond on such date. 13 ‘‘(2) INTEREST PAYMENT DATE.—For purposes 14 of this subsection, the term ‘interest payment date’ 15 means each date on which the holder of record of 16 the American infrastructure bond is entitled to a 17 payment of interest under such bond. 18 ‘‘(c) AMERICAN INFRASTRUCTURE BOND.— 19 ‘‘(1) IN GENERAL.—For purposes of this sec- 20 tion, the term ‘American infrastructure bond’ means 21 any obligation if— 22 ‘‘(A) the interest on such obligation would 23 (but for this section) be excludable from gross 24 income under section 103, 25 VerDate Sep 11 2014 16:24 May 19, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1308.IS S1308 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 1308 IS ‘‘(B) the obligation is not a private activity 1 bond, and 2 ‘‘(C) the issuer makes an irrevocable elec- 3 tion to have this section apply. 4 ‘‘(2) APPLICABLE RULES.—For purposes of ap- 5 plying paragraph (1)— 6 ‘‘(A) for purposes of section 149(b), a 7 bond shall not be treated as federally guaran- 8 teed by reason of the credit allowed under this 9 section, and 10 ‘‘(B) a bond shall not be treated as an 11 American infrastructure bond if the issue price 12 has more than a de minimis amount (deter- 13 mined under rules similar to the rules of section 14 1273(a)(3)) of premium over the stated prin- 15 cipal amount of the bond. 16 ‘‘(d) SPECIAL RULES.— 17 ‘‘(1) INTEREST ON AMERICAN INFRASTRUC- 18 TURE BONDS INCLUDIBLE IN GROSS INCOME FOR 19 FEDERAL INCOME TAX PURPOSES.—For purposes of 20 this title, interest on any American infrastructure 21 bond shall be includible in gross income. 22 ‘‘(2) APPLICATION OF ARBITRAGE RULES.—For 23 purposes of section 148, the yield on an issue of 24 American infrastructure bonds shall be reduced by 25 VerDate Sep 11 2014 16:24 May 19, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1308.IS S1308 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 1308 IS the credit allowed under this section, except that no 1 such reduction shall apply with respect to deter- 2 mining the amount of gross proceeds of an issue 3 that qualifies as a reasonably required reserve or re- 4 placement fund. 5 ‘‘(e) REGULATIONS.—The Secretary may prescribe 6 such regulations and other guidance as may be necessary 7 or appropriate to carry out this section.’’. 8 (b) CONFORMING AMENDMENTS.— 9 (1) The table of sections for subchapter B of 10 chapter 65 of subtitle F of the Internal Revenue 11 Code of 1986 is amended by adding at the end the 12 following new item: 13 ‘‘Sec. 6431. Credit to issuer of american infrastructure bonds.’’. (2) Subparagraph (A) of section 6211(b)(4) of 14 such Code is amended by striking ‘‘and 6428A’’ and 15 inserting ‘‘6428A, and 6431’’. 16 (c) TRANSITIONAL COORDINATION WITH STATE 17 LAW.—Except as otherwise provided by a State after the 18 date of the enactment of this Act, the interest on any 19 American infrastructure bond (as defined in section 6431 20 of the Internal Revenue Code of 1986 (as added by this 21 Act)) and the amount of any credit determined under such 22 section with respect to such bond shall be treated for pur- 23 poses of the income tax laws of such State as being exempt 24 from Federal income tax. 25 VerDate Sep 11 2014 16:24 May 19, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1308.IS S1308 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 1308 IS (d) ADJUSTMENT TO PAYMENT TO ISSUERS IN CASE 1 OF SEQUESTRATION.— 2 (1) IN GENERAL.—In the case of any payment 3 under subsection (b) of section 6431 of the Internal 4 Revenue Code of 1986 (as added by this Act) made 5 after the date of enactment of this Act to which se- 6 questration applies, the amount of such payment 7 shall be increased to an amount equal to— 8 (A) such payment (determined before such 9 sequestration), multiplied by 10 (B) the quotient obtained by dividing the 11 number 1 by the amount by which the number 12 1 exceeds the percentage reduction in such pay- 13 ment pursuant to such sequestration. 14 (2) SEQUESTRATION.—For purposes of this 15 subsection, the term ‘‘sequestration’’ means any re- 16 duction in direct spending ordered in accordance 17 with a sequestration report prepared by the Director 18 of the Office and Management and Budget pursuant 19 to the Balanced Budget and Emergency Deficit Con- 20 trol Act of 1985 or the Statutory Pay-As-You-Go 21 Act of 2010 or future legislation having similar ef- 22 fect. 23 VerDate Sep 11 2014 16:24 May 19, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1308.IS S1308 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 1308 IS (e) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to obligations issued after the date 2 of enactment of this Act. 3 Æ VerDate Sep 11 2014 16:24 May 19, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S1308.IS S1308 pamtmann on DSKBC07HB2PROD with BILLS