I 

118TH CONGRESS 

2D SESSION H. R. 9698 

To amend the Internal Revenue Code of 1986 to provide for school 

infrastructure finance and innovation tax credit bonds. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 19, 2024 

Mr. HUDSON (for himself and Ms. SEWELL) introduced the following bill; 

which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for school infrastructure finance and innovation tax credit bonds. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘School Infrastructure 

5 Finance and Innovation Act’’ or the ‘‘SIFIA Act’’. 

6 SEC. 2. SIFIA BONDS. 

7 (a) IN GENERAL.—Part IV of subchapter A of chap8 ter 1 is amended by adding at the end the following new 

9 subpart: 


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1 ‘‘Subpart K—SIFIA Bonds 

‘‘Sec. 54BB. SIFIA bonds. 

2 ‘‘SEC. 54BB. SIFIA BONDS. 

3 ‘‘(a) IN GENERAL.—If a taxpayer holds a SIFIA 

4 bond on one or more credit allowance dates of the bond 

5 during any taxable year, there shall be allowed as a credit 

6 against the tax imposed by this chapter for the taxable 

7 year an amount equal to the sum of the credits determined 

8 under subsection (b) with respect to such dates. 

9 ‘‘(b) AMOUNT OF CREDIT.— 

10 ‘‘(1) IN GENERAL.—The amount of the credit 

11 determined under this subsection with respect to any 

12 credit allowance date for a SIFIA bond is 25 percent 

13 of the annual credit determined for such bond. 

14 ‘‘(2) ANNUAL CREDIT.—For purposes of this 

15 subsection, the term ‘annual credit’ means an 

16 amount equal to the product of— 

17 ‘‘(A) the applicable credit rate, multiplied 

18 by 

19 ‘‘(B) the face amount of the bond. 

20 ‘‘(3) APPLICABLE CREDIT RATE.—For purposes 

21 of paragraph (2), the term ‘applicable credit rate’ 

22 means the rate which the Secretary estimates will 

23 permit the issuance of each such bond with a speci24 fied maturity or redemption date without discount 

25 and without interest cost to the issuer. The applicaVerDate Sep 11 2014 19:45 Oct 07, 2024 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H9698.IH H9698

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1 ble credit rate with respect to any such bond shall 

2 be determined as of the first day on which there is 

3 a binding, written contract for the sale or exchange 

4 of the bond. 

5 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.— 

6 ‘‘(1) IN GENERAL.—The credit allowed under 

7 subsection (a) for any taxable year shall not exceed 

8 the excess of— 

9 ‘‘(A) the sum of the regular tax liability 

10 (as defined in section 26(b)) plus the tax im11 posed by section 55, over 

12 ‘‘(B) the sum of the credits allowable 

13 under this part (other than subpart C and this 

14 subpart). 

15 ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 

16 credit allowable under subsection (a) exceeds the 

17 limitation imposed by paragraph (1) for such taxable 

18 year, such excess shall be carried to the succeeding 

19 taxable year and added to the credit allowable under 

20 subsection (a) for such taxable year (determined be21 fore the application of paragraph (1) for such suc22 ceeding taxable year). 

23 ‘‘(d) CREDIT ALLOWANCE DATE.—For purposes of 

24 this section, the term ‘credit allowance date’ means, with 


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1 respect to a bond during the taxable year, any of the fol2 lowing dates: 

3 ‘‘(1) March 15. 

4 ‘‘(2) June 15. 

5 ‘‘(3) September 15. 

6 ‘‘(4) December 15. 

7 Such term includes the last day on which the bond is out8 standing. 

9 ‘‘(e) SIFIA BONDS.— 

10 ‘‘(1) IN GENERAL.—For purposes of this sec11 tion, the term ‘SIFIA bond’ means any bond issued 

12 as part of an issue if— 

13 ‘‘(A) 100 percent of the available project 

14 proceeds of such issue are to be used for the de15 sign, construction, expansion, renovation, fur16 nishing, or equipping of qualified school facili17 ties (as defined in paragraph (7)(A) of this sub18 section) pursuant to an agreement under which 

19 a private, for-profit entity agrees with a State 

20 or local educational agency— 

21 ‘‘(i) to construct, expand, or renovate 

22 one or more buildings constituting the 

23 qualified school facilities (together with 

24 any related design, furnishing, and equip25 ping of such buildings), 


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1 ‘‘(ii) to operate the facilities at least 

2 until the date the facilities are first placed 

3 in service and operating substantially at 

4 their design level, and 

5 ‘‘(iii) at or before the end of the 

6 agreement, to transfer the facilities to such 

7 agency for no additional consideration, 

8 ‘‘(B) all buildings whose construction, ex9 pansion, or renovations is included in the quali10 fied school facilities being financed with pro11 ceeds of a SIFIA bond are reasonably expected 

12 to be net-zero energy buildings, 

13 ‘‘(C) the interest on such bond would (but 

14 for this section and section 141) be excludable 

15 from gross income under section 103, 

16 ‘‘(D) the issuer designates such bond as a 

17 SIFIA bond for purposes of this subsection, 

18 ‘‘(E) the bond is not issued with more than 

19 a de minimis amount of premium (determined 

20 under rules similar to the rules of section 

21 1273(a)(3)) over the stated principal amount of 

22 the bond, 

23 ‘‘(F) the issue of which such bond is a part 

24 satisfies the expenditure period requirements of 

25 paragraph (2), 


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1 ‘‘(G) the private, for-profit entity described 

2 in subparagraph (A) meets the allocation re3 quirements of paragraph (5) and the reporting 

4 requirements of paragraph (6), and 

5 ‘‘(H) the bond is issued before January 1, 

6 2030. 

7 ‘‘(2) 6-YEAR EXPENDITURE PERIOD.— 

8 ‘‘(A) IN GENERAL.—An issue shall be 

9 treated as meeting the requirements of this 

10 paragraph if, as of the date of issuance, the 

11 issuer reasonably expects 100 percent of the 

12 available project proceeds to be spent for pur13 poses described in subparagraphs (1)(A) and 

14 (1)(B) within the 6-year period beginning on 

15 such date of issuance. 

16 ‘‘(B) FAILURE TO SPEND REQUIRED

17 AMOUNT OF BOND PROCEEDS WITHIN 6

18 YEARS.—To the extent that less than 100 per19 cent of the available project proceeds of the 

20 issue are expended at the close of the period de21 scribed in subparagraph (A) with respect to 

22 such issue, the issuer shall redeem all of the 

23 nonqualified bonds within 90 days after the end 

24 of such period. For purposes of this paragraph, 

25 the amount of the nonqualified bonds required 


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1 to be redeemed shall be determined in the same 

2 manner as under section 141. 

3 ‘‘(3) LIMITATION ON AMOUNT OF SIFIA BONDS

4 DESIGNATED.— 

5 ‘‘(A) OVERALL LIMITATION.—The max6 imum aggregate face amount of SIFIA bonds 

7 issued under this subsection that may be des8 ignated under subparagraph (1)(D) is 

9 $10,000,000,000. 

10 ‘‘(B) ANNUAL LIMITATION.—The max11 imum aggregate face amount of SIFIA bonds 

12 issued under this subsection that may be des13 ignated under subparagraph (1)(D) in any cal14 endar year is $2,500,000,000. 

15 ‘‘(C) SET-ASIDE FOR RURAL AREAS.— 

16 ‘‘(i) $1,000,000,000 of the overall lim17 itation described in subparagraph (A) shall 

18 be set aside for projects located in rural 

19 areas. 

20 ‘‘(ii) For purposes of this section, the 

21 term ‘rural area’ means any area which 

22 is— 

23 ‘‘(I) outside of a metropolitan 

24 statistical area (as such area is deVerDate Sep 11 2014 19:45 Oct 07, 2024 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H9698.IH H9698

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1 fined by the Secretary of Commerce) 

2 or 

3 ‘‘(II) determined by the Sec4 retary of Agriculture, after consulta5 tion with the Secretary of Commerce, 

6 to be a rural area. 

7 ‘‘(4) ALLOCATION OF LIMITATION.—The au8 thority to issue SIFIA bonds within the limitations 

9 set forth in paragraph (3) shall be allocated by the 

10 Secretary to prospective issuers on a first come-first 

11 served basis, under rules to be prescribed by the 

12 Secretary, provided that— 

13 ‘‘(A) no school district shall be allocated 

14 more than $1,500,000,000 in aggregate face 

15 amount of SIFIA bonds under this subsection, 

16 ‘‘(B) no more than $500,000,000 in aggre17 gate face amount of SIFIA bonds shall be allo18 cated under this subsection for the construc19 tion, expansion, renovation, furnishing, or 

20 equipping of qualified school facilities that are 

21 operated by a nonprofit organization under a 

22 charter or other agreement between the applica23 ble school district and such nonprofit organiza24 tion, 


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1 ‘‘(C) an issuer applying for an allocation 

2 shall certify (based on the certifications of any 

3 conduit borrower of bond proceeds where appli4 cable) that it reasonably expects to commence 

5 the project to be financed with proceeds of the 

6 bonds within 6 months of the issue date of the 

7 bonds, and to expend all of the available project 

8 proceeds within 6 years of the issue date of the 

9 bonds, and 

10 ‘‘(D) in making such allocations, the Sec11 retary shall give preference to the financing of 

12 projects for which the private for-profit devel13 oper is a preferred concern. 

14 ‘‘(5) REQUIREMENTS RELATING TO PRIVATE, 

15 FOR-PROFIT ENTITIES.—A private, for-profit entity 

16 meets the requirements of this paragraph if such en17 tity— 

18 ‘‘(A) has experience developing, owning, 

19 and operating public schools leased to public 

20 school districts that are net-zero buildings, and 

21 ‘‘(B) demonstrates to the Secretary (in 

22 such manner as the Secretary may provide) 

23 that such entity has experience leasing public 

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1 cluding at least two projects with respect to 

2 which— 

3 ‘‘(i) such entity (or a related person) 

4 developed, owned, and was responsible 

5 for— 

6 ‘‘(I) maintenance of— 

7 ‘‘(aa) the heating, ventila8 tion, and air conditioning system, 

9 or 

10 ‘‘(bb) the solar photovoltaic 

11 system, and 

12 ‘‘(ii) the electrical service was in the 

13 name of such entity for a minimum of four 

14 years. 

15 ‘‘(6) REPORTING REQUIREMENTS.—A private 

16 entity meets the requirements of this paragraph if 

17 such entity, in cooperation with the applicable school 

18 district, periodically submits such reports as the Sec19 retary shall prescribe relating to the costs and bene20 fits of the financing, including— 

21 ‘‘(A) tax benefits to the Federal Govern22 ment and cost savings to the school district, 

23 and 


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1 ‘‘(B) information related to any improve2 ments in student performance or teacher reten3 tion. 

4 ‘‘(7) DEFINITIONS.—For purposes of this sub5 section— 

6 ‘‘(A) QUALIFIED SCHOOL FACILITIES.— 

7 The term ‘qualified school facilities’ means one 

8 or more school buildings for a public elementary 

9 school or public secondary school or for admin10 istrative or support facilities relating to such 

11 school facilities, together with related fur12 nishings and equipment. 

13 ‘‘(B) SCHOOL DISTRICT.—The term ‘school 

14 district’ means a public board of education or 

15 other public authority legally constituted within 

16 a State for administrative control or direction 

17 of public elementary or secondary schools in the 

18 State or political subdivision of a State. 

19 ‘‘(C) PREFERRED CONCERN.—The term 

20 ‘preferred concern’ means either a small busi21 ness concern, a minority owned concern, or a 

22 woman owned concern. 

23 ‘‘(D) SMALL BUSINESS CONCERN.— 

24 ‘‘(i) IN GENERAL.—Subject to the 

25 provisions of clause (ii), the term ‘small 


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1 business concern’ means an entity which, 

2 together with any related person, has fewer 

3 than 500 employees. 

4 ‘‘(ii) SMALL BUSINESS SIZE STAND5 ARDS.—For purposes of clause (i), the de6 termination of number of employees shall 

7 be made in a manner consistent with— 

8 ‘‘(I) section 3 of the Small Busi9 ness Act (15 U.S.C. 632), and 

10 ‘‘(II) part 121 of title 13, Code 

11 of Federal Regulations. 

12 ‘‘(E) MINORITY OWNED.—The term ‘mi13 nority owned’ with respect to an entity means 

14 an entity not less than 51 percent of which is 

15 owned by 1 or more individuals who are citizens 

16 of the United States and who are Asian Amer17 ican, Native Hawaiian, Pacific Islander, African 

18 American, Hispanic, Puerto Rican, Native 

19 American, or Alaska Native. 

20 ‘‘(F) WOMAN OWNED.—The term ‘woman 

21 owned’ with respect to an entity means an enti22 ty not less than 51 percent of which is owned 

23 by 1 or more women. 

24 ‘‘(G) NONPROFIT ORGANIZATION.—The 

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1 zation described in section 501(c) and exempt 

2 from tax under section 501(a). 

3 ‘‘(H) NET-ZERO ENERGY BUILDING.—The 

4 term ‘net-zero building’ has the meaning given 

5 such term under section 410(20) of the Energy 

6 Independence and Security Act of 2007 (42 

7 U.S.C. 17061(20)), applied by substituting 

8 ‘school building’ for ‘commercial building’. 

9 ‘‘(I) RELATED PERSON.—The term ‘re10 lated person’ has the meaning given such term 

11 in section 144(a)(3). 

12 ‘‘(f) OTHER APPLICABLE RULES.— 

13 ‘‘(1) INTEREST INCLUDIBLE IN GROSS IN14 COME.—For purposes of this title, interest on any 

15 SIFIA bond shall be includible in gross income. 

16 ‘‘(2) CREDIT TREATED AS INTEREST.—For 

17 purposes of this subtitle, the credit determined 

18 under subsection (a) shall be treated as interest 

19 which is includible in gross income. 

20 ‘‘(3) S CORPORATIONS AND PARTNERSHIPS.—In 

21 the case of a tax credit bond held by an S corpora22 tion or partnership, the allocation of credit allowed 

23 by this section to the shareholders of such corpora24 tion or partners of such partnership shall be treated 

25 as a distribution. 


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1 ‘‘(4) BONDS HELD BY REAL ESTATE INVEST2 MENT TRUSTS.—If any qualified tax credit bond is 

3 held by a real estate investment trust the credit de4 termined under subsection (a) shall be allowed to 

5 beneficiaries of such trust (and any gross income in6 cluded under paragraph (2) with respect to such 

7 credit shall be distributed to such beneficiaries) 

8 under procedures prescribed by the Secretary (simi9 lar to the procedures prescribed by the Secretary 

10 under section 54A(h) (as in effect before its repeal 

11 by Public Law 115–97)). 

12 ‘‘(5) CREDITS MAY BE STRIPPED.—Under regu13 lations prescribed by the Secretary (similar to regu14 lations prescribed under section 54A(i) (as in effect 

15 before its repeal by Public Law 115–97)— 

16 ‘‘(A) IN GENERAL.—There may be a sepa17 ration (including at issuance) of the ownership 

18 of a qualified tax credit bond and the entitle19 ment to the credit under this section with re20 spect to such bond. In case of any such separa21 tion, the credit under this section shall be al22 lowed to the person who on the credit allowance 

23 date holds the instrument evidencing the enti24 tlement to the credit and not to the holder of 

25 the bond. 


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1 ‘‘(B) CERTAIN RULES TO APPLY.—In the 

2 case of a separation described in subparagraph 

3 (A), the rules of section 1286 shall apply to the 

4 qualified tax credit bond as if it were a stripped 

5 bond and to the credit under this section as if 

6 it were a stripped coupon. 

7 ‘‘(6) NOT TREATED AS FEDERALLY GUARAN8 TEED.—For purposes of section 149(b), a SIFIA 

9 bond shall not be treated as federally guaranteed by 

10 reason of the credit allowed under subsection (g). 

11 ‘‘(7) YIELD DETERMINATION.—For purposes of 

12 section 148, the yield on a SIFIA bond shall be de13 termined without regard to the credit allowed under 

14 subsection (a). 

15 ‘‘(8) MATURITY LIMITATION.— 

16 ‘‘(A) IN GENERAL.—An issue shall be 

17 treated as meeting the requirements of this sec18 tion if the maturity of any bond which is part 

19 of such issue does not exceed the maximum 

20 term determined by the Secretary under sub21 paragraph (B). 

22 ‘‘(B) MAXIMUM TERM.—During each cal23 endar month, the Secretary shall determine the 

24 maximum term permitted under this paragraph 

25 for bonds issued during the following calendar 


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1 month. Such maximum term shall be the term 

2 which the Secretary estimates will result in the 

3 present value of the obligation to repay the 

4 principal on the bond being equal to 20 percent 

5 of the face amount of such bond. Such present 

6 value shall be determined using as a discount 

7 rate the average annual interest rate of tax-ex8 empt obligations having a term of 10 years or 

9 more which are issued during the month. If the 

10 term as so determined is not a multiple of a 

11 whole year, such term shall be rounded to the 

12 next highest whole year. 

13 ‘‘(9) DEPRECIATION.—If the school facilities fi14 nanced with proceeds of SIFIA bonds are owned by 

15 a person otherwise entitled to allowance for deprecia16 tion with respect to such facility, that person may 

17 make an irrevocable election (binding on any succes18 sors in interest) not to claim depreciation with re19 spect to the property financed with proceeds of the 

20 SIFIA bonds for so long as the issue of which such 

21 bonds are a part is outstanding. Such election shall 

22 be deemed to have been made if the person fails to 

23 claim depreciation with respect to the property in 

24 the first tax return filed by the person in which such 

25 depreciation could have been claimed. To the extent 


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1 the person elects not to claim depreciation under 

2 this paragraph, the basis of the financed property 

3 shall not be reduced under section 1016 or otherwise 

4 for the depreciation that could have been claimed.’’. 

5 (b) TREATMENT OF INTEREST AS UNRELATED BUSI6 NESS TAXABLE INCOME.—Section 512(b)(1) of such Code 

7 is amended by inserting ‘‘(other than interest of SIFIA 

8 bonds issued under section 54BB)’’ after ‘‘interest’’. 

9 (c) CLERICAL AMENDMENTS.—The table of subparts 

10 for part IV of subchapter A of chapter 1 is amended by 

11 adding at the end the following: 

‘‘SUBPART K—SIFIA BONDS’’. 

12 (d) DIRECT PURCHASES OF SIFIA BONDS.—The 

13 Secretary shall purchase SIFIA bonds that the issuer is 

14 otherwise unable to sell, subject to procedures and credit 

15 standards to be established by the Secretary, which stand16 ards and procedures shall be similar to those applicable 

17 to loans made under lines of credit under section 1503 

18 of the Transportation Infrastructure Finance and Innova19 tion Act of 1998 (23 U.S.C. 184). 

20 (e) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to obligations issued after Decem22 ber 31, 2024. 

Æ 


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