II 

116TH CONGRESS 

2D SESSION S. 4203 

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 

JULY 2, 2020 

Mr. WICKER (for himself and Mr. BENNET) 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. 

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 ‘‘American Infrastruc5 ture Bonds Act of 2020’’. 

6 SEC. 2. CREDIT FOR AMERICAN INFRASTRUCTURE BONDS 

7 ALLOWED TO ISSUERS. 

8 (a) IN GENERAL.—Subchapter B of chapter 65 of the 

9 Internal Revenue Code of 1986 is amended by inserting 

10 after section 6430 the following new section: 


pbinns on DSKJLVW7X2PROD with BILLS
2 

•S 4203 IS

1 ‘‘SEC. 6431. CREDIT TO ISSUER OF AMERICAN INFRASTRUC2 TURE BONDS. 

3 ‘‘(a) IN GENERAL.—The issuer of an American infra4 structure bond shall be allowed a credit with respect to 

5 each interest payment under such bond which shall be pay6 able by the Secretary as provided in subsection (b). 

7 ‘‘(b) PAYMENT OF CREDIT.— 

8 ‘‘(1) IN GENERAL.—The Secretary shall pay 

9 (contemporaneously with each interest payment date 

10 under such bond) to the issuer of such bond (or to 

11 any person who makes such interest payments on 

12 behalf of the issuer) the applicable percentage of the 

13 interest payable under such bond on such date. 

14 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 

15 of paragraph (1), the applicable percentage shall be 

16 equal to— 

17 ‘‘(A) in the case of any American infra18 structure bond issued before January 1, 2026, 

19 35 percent, and 

20 ‘‘(B) in the case of any American infra21 structure bond issued after December 31, 2025, 

22 28 percent. 

23 ‘‘(3) INTEREST PAYMENT DATE.—For purposes 

24 of this subsection, the term ‘interest payment date’ 

25 means each date on which the holder of record of 


pbinns on DSKJLVW7X2PROD with BILLS
3 

•S 4203 IS

1 the American infrastructure bond is entitled to a 

2 payment of interest under such bond. 

3 ‘‘(c) AMERICAN INFRASTRUCTURE BOND.— 

4 ‘‘(1) IN GENERAL.—For purposes of this sec5 tion, the term ‘American infrastructure bond’ means 

6 any obligation if— 

7 ‘‘(A) the interest on such obligation would 

8 (but for this section) be excludable from gross 

9 income under section 103, 

10 ‘‘(B) either— 

11 ‘‘(i) the obligation is not a private ac12 tivity bond, or 

13 ‘‘(ii) the obligation is a private activ14 ity bond, but it is issued as part of an 

15 issue 95 percent or more of the net pro16 ceeds of which are to be used to finance or 

17 refinance property that meets the owner18 ship test in section 145(a)(1), as applied 

19 by substituting ‘95 percent of the property’ 

20 for ‘all property’, and 

21 ‘‘(C) the issuer makes an irrevocable elec22 tion to have this section apply. 

23 ‘‘(2) APPLICABLE RULES.—For purposes of ap24 plying paragraph (1)— 


pbinns on DSKJLVW7X2PROD with BILLS
4 

•S 4203 IS

1 ‘‘(A) for purposes of section 149(b), a 

2 bond shall not be treated as federally guaran3 teed by reason of the credit allowed under this 

4 section, and 

5 ‘‘(B) a bond shall not be treated as an 

6 American infrastructure bond if the issue price 

7 has more than a de minimis amount (deter8 mined under rules similar to the rules of section 

9 1273(a)(3)) of premium over the stated prin10 cipal amount of the bond. 

11 ‘‘(d) SPECIAL RULES.— 

12 ‘‘(1) INTEREST ON AMERICAN INFRASTRUC13 TURE BONDS INCLUDIBLE IN GROSS INCOME FOR

14 FEDERAL INCOME TAX PURPOSES.—For purposes of 

15 this title, interest on any American infrastructure 

16 bond shall be includible in gross income. 

17 ‘‘(2) APPLICATION OF ARBITRAGE RULES.—For 

18 purposes of section 148, the yield on an issue of 

19 American infrastructure bonds shall be reduced by 

20 the credit allowed under this section, except that no 

21 such reduction shall apply with respect to deter22 mining the amount of gross proceeds of an issue 

23 that qualifies as a reasonably required reserve or re24 placement fund. 


pbinns on DSKJLVW7X2PROD with BILLS
5 

•S 4203 IS

1 ‘‘(e) REGULATIONS.—The Secretary may prescribe 

2 such regulations and other guidance as may be necessary 

3 or appropriate to carry out this section.’’. 

4 (b) CONFORMING AMENDMENTS.— 

5 (1) The table of sections for subchapter B of 

6 chapter 65 of subtitle F of the Internal Revenue 

7 Code of 1986 is amended by adding at the end the 

8 following new item: 

‘‘Sec. 6431. Credit to issuer of American infrastructure bonds.’’. 

9 (2) Subparagraph (A) of section 6211(b)(4) of 

10 such Code is amended by inserting ‘‘6431,’’after 

11 ‘‘36B,’’. 

12 (c) TRANSITIONAL COORDINATION WITH STATE

13 LAW.—Except as otherwise provided by a State after the 

14 date of the enactment of this Act, the interest on any 

15 American infrastructure bond (as defined in section 6431 

16 of the Internal Revenue Code of 1986 (as added by this 

17 Act)) and the amount of any credit determined under such 

18 section with respect to such bond shall be treated for pur19 poses of the income tax laws of such State as being exempt 

20 from Federal income tax. 

21 (d) ADJUSTMENT TO PAYMENT TO ISSUERS IN CASE

22 OF SEQUESTRATION.— 

23 (1) IN GENERAL.—In the case of any payment 

24 under subsection (b) of section 6431 of the Internal 

25 Revenue Code of 1986 (as added by this Act) made 


pbinns on DSKJLVW7X2PROD with BILLS
6 

•S 4203 IS

1 after the date of enactment of this Act to which se2 questration applies, the amount of such payment 

3 shall be increased to an amount equal to— 

4 (A) such payment (determined before such 

5 sequestration), multiplied by 

6 (B) the quotient obtained by dividing the 

7 number 1 by the amount by which the number 

8 1 exceeds the percentage reduction in such pay9 ment pursuant to such sequestration. 

10 (2) SEQUESTRATION.—For purposes of this 

11 subsection, the term ‘‘sequestration’’ means any re12 duction in direct spending ordered in accordance 

13 with a sequestration report prepared by the Director 

14 of the Office and Management and Budget pursuant 

15 to the Balanced Budget and Emergency Deficit Con16 trol Act of 1985 or the Statutory Pay-As-You-Go 

17 Act of 2010 or future legislation having similar ef18 fect. 

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

20 this section shall apply to obligations issued after the date 

21 of enactment of this Act. 

Æ 


pbinns on DSKJLVW7X2PROD with BILLS