American Infrastructure Bonds Act of 2023

II 118TH CONGRESS 1ST SESSION S. 1695 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 MAY 18, 2023 Mr. WICKER (for himself, Mr. BENNET, Mrs. BRITT, Mr. COONS, Ms. CORTEZ MASTO, Mr. KAINE, Mr. KELLY, and Ms. STABENOW) introduced the fol- lowing bill; which was read twice and referred to the Committee on Fi- nance 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 2023’’. 5 VerDate Sep 11 2014 04:08 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1695.IS S1695 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1695 IS SEC. 2. CREDIT FOR AMERICAN INFRASTRUCTURE BONDS 1 ALLOWED TO ISSUERS. 2 (a) IN GENERAL.—Subchapter B of chapter 65 of the 3 Internal Revenue Code of 1986 is amended by inserting 4 after section 6430 the following new section: 5 ‘‘SEC. 6431. CREDIT TO ISSUER OF AMERICAN INFRASTRUC- 6 TURE BONDS. 7 ‘‘(a) IN GENERAL.—The issuer of an American infra- 8 structure bond shall be allowed a credit with respect to 9 each interest payment under such bond which shall be pay- 10 able by the Secretary as provided in subsection (b). 11 ‘‘(b) PAYMENT OF CREDIT.— 12 ‘‘(1) IN GENERAL.—The Secretary shall pay 13 (contemporaneously with each interest payment date 14 under such bond) to the issuer of such bond (or to 15 any person who makes such interest payments on 16 behalf of the issuer) 28 percent of the interest pay- 17 able under such bond on such date. 18 ‘‘(2) INTEREST PAYMENT DATE.—For purposes 19 of this subsection, the term ‘interest payment date’ 20 means each date on which the holder of record of 21 the American infrastructure bond is entitled to a 22 payment of interest under such bond. 23 ‘‘(c) AMERICAN INFRASTRUCTURE BOND.— 24 VerDate Sep 11 2014 04:08 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1695.IS S1695 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1695 IS ‘‘(1) IN GENERAL.—For purposes of this sec- 1 tion, the term ‘American infrastructure bond’ means 2 any obligation if— 3 ‘‘(A) the interest on such obligation would 4 (but for this section) be excludable from gross 5 income under section 103, 6 ‘‘(B) the obligation is not a private activity 7 bond, and 8 ‘‘(C) the issuer makes an irrevocable elec- 9 tion to have this section apply. 10 ‘‘(2) APPLICABLE RULES.—For purposes of ap- 11 plying paragraph (1)— 12 ‘‘(A) for purposes of section 149(b), a 13 bond shall not be treated as federally guaran- 14 teed by reason of the credit allowed under this 15 section, and 16 ‘‘(B) a bond shall not be treated as an 17 American infrastructure bond if the issue price 18 has more than a de minimis amount (deter- 19 mined under rules similar to the rules of section 20 1273(a)(3)) of premium over the stated prin- 21 cipal amount of the bond. 22 ‘‘(d) SPECIAL RULES.— 23 ‘‘(1) INTEREST ON AMERICAN INFRASTRUC- 24 TURE BONDS INCLUDIBLE IN GROSS INCOME FOR 25 VerDate Sep 11 2014 04:08 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1695.IS S1695 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1695 IS FEDERAL INCOME TAX PURPOSES.—For purposes of 1 this title, interest on any American infrastructure 2 bond shall be includible in gross income. 3 ‘‘(2) APPLICATION OF ARBITRAGE RULES.—For 4 purposes of section 148, the yield on an issue of 5 American infrastructure bonds shall be reduced by 6 the credit allowed under this section, except that no 7 such reduction shall apply with respect to deter- 8 mining the amount of gross proceeds of an issue 9 that qualifies as a reasonably required reserve or re- 10 placement fund. 11 ‘‘(e) REGULATIONS.—The Secretary may prescribe 12 such regulations and other guidance as may be necessary 13 or appropriate to carry out this section.’’. 14 (b) CONFORMING AMENDMENTS.— 15 (1) The table of sections for subchapter B of 16 chapter 65 of subtitle F of the Internal Revenue 17 Code of 1986 is amended by adding at the end the 18 following new item: 19 ‘‘Sec. 6431. Credit to issuer of american infrastructure bonds.’’. (2) Subparagraph (A) of section 6211(b)(4) of 20 such Code is amended by inserting ‘‘6431,’’ after 21 ‘‘6428B,’’. 22 (c) TRANSITIONAL COORDINATION WITH STATE 23 LAW.—Except as otherwise provided by a State after the 24 date of the enactment of this Act, the interest on any 25 VerDate Sep 11 2014 04:08 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1695.IS S1695 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1695 IS American infrastructure bond (as defined in section 6431 1 of the Internal Revenue Code of 1986 (as added by this 2 Act)) and the amount of any credit determined under such 3 section with respect to such bond shall be treated for pur- 4 poses of the income tax laws of such State as being exempt 5 from Federal income tax. 6 (d) ADJUSTMENT TO PAYMENT TO ISSUERS IN CASE 7 OF SEQUESTRATION.— 8 (1) IN GENERAL.—In the case of any payment 9 under subsection (b) of section 6431 of the Internal 10 Revenue Code of 1986 (as added by this Act) made 11 after the date of enactment of this Act to which se- 12 questration applies, the amount of such payment 13 shall be increased to an amount equal to— 14 (A) such payment (determined before such 15 sequestration), multiplied by 16 (B) the quotient obtained by dividing the 17 number 1 by the amount by which the number 18 1 exceeds the percentage reduction in such pay- 19 ment pursuant to such sequestration. 20 (2) SEQUESTRATION.—For purposes of this 21 subsection, the term ‘‘sequestration’’ means any re- 22 duction in direct spending ordered in accordance 23 with a sequestration report prepared by the Director 24 of the Office and Management and Budget pursuant 25 VerDate Sep 11 2014 04:08 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1695.IS S1695 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1695 IS to the Balanced Budget and Emergency Deficit Con- 1 trol Act of 1985 or the Statutory Pay-As-You-Go 2 Act of 2010 or future legislation having similar ef- 3 fect. 4 (e) EFFECTIVE DATE.—The amendments made by 5 this section shall apply to obligations issued after the date 6 of enactment of this Act. 7 Æ VerDate Sep 11 2014 04:08 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S1695.IS S1695 kjohnson on DSK79L0C42PROD with BILLS