I 

118TH CONGRESS 

2D SESSION H. R. 8396 

To amend the Internal Revenue Code of 1986 to provide a credit for American 

infrastructure bonds, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 14, 2024 

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 

a credit for American infrastructure bonds, and for other 

purposes. 

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 ‘‘Local Infrastructure 

5 Financing Tools Act’’, or the ‘‘LIFT Act’’. 

6 SEC. 2. CREDIT TO ISSUER FOR CERTAIN INFRASTRUC7 TURE BONDS. 

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

9 Internal Revenue Code of 1986 is amended by adding at 

10 the end the following new section: 


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1 ‘‘SEC. 6431A. CREDIT ALLOWED TO ISSUER FOR AMERICAN 

2 INFRASTRUCTURE BONDS. 

3 ‘‘(a) IN GENERAL.—In the case of an American in4 frastructure bond, the issuer of such bond shall be allowed 

5 a credit with respect to each interest payment under such 

6 bond which shall be payable by the Secretary as provided 

7 in subsection (b). 

8 ‘‘(b) PAYMENT OF CREDIT.— 

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

10 (contemporaneously with each date on which interest 

11 is so payable) to the issuer of such bond (or to any 

12 person who makes such interest payments on behalf 

13 of such issuer) an amount equal to the applicable 

14 percentage of such interest so payable. 

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

16 of this subsection, except as provided in subsection 

17 (d), the applicable percentage with respect to any 

18 bond shall be determined under the following table: 

‘‘In the case of a bond issued The applicable 

during calendar year: percentage is: 

2024 through 2028 ...................................................................... 42%

2029 ............................................................................................. 38%

2030 ............................................................................................. 34%

2031 and thereafter ..................................................................... 30%. 

19 ‘‘(3) LIMITATION.— 

20 ‘‘(A) IN GENERAL.—The amount of any 

21 interest payment taken into account under 

22 paragraph (1) with respect to a bond for any 


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1 payment date shall not exceed the amount of 

2 interest which would have been payable under 

3 such bond on such date if such interest were 

4 determined at the rate which the Secretary esti5 mates will permit the issuance of American in6 frastructure bonds with a specified maturity or 

7 redemption date without discount and without 

8 additional interest cost. 

9 ‘‘(B) DATE OF RATE DETERMINATION

10 WITH RESPECT TO BOND.—Such rate with re11 spect to any American infrastructure bond shall 

12 be determined as of the first day on which there 

13 is a binding, written contract for the sale or ex14 change of the bond. 

15 ‘‘(c) AMERICAN INFRASTRUCTURE BOND.— 

16 ‘‘(1) IN GENERAL.—For purposes of this sec17 tion, the term ‘American infrastructure bond’ means 

18 any bond (other than a private activity bond) issued 

19 as part of an issue if— 

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

21 proceeds of such issue are to be used for capital 

22 expenditures or operations and maintenance ex23 penditures in connection with property the ac24 quisition, construction, or improvement of 

25 which would be a capital expenditure, 


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1 ‘‘(B) the interest on such bond would (but 

2 for this section) be excludable from gross in3 come under section 103, 

4 ‘‘(C) the issue price has not more than a 

5 de minimis amount (determined under rules 

6 similar to the rules of section 1273(a)(3)) of 

7 premium over the stated principal amount of 

8 the bond, and 

9 ‘‘(D) prior to the issuance of such bond, 

10 the issuer makes an irrevocable election to have 

11 this section apply. 

12 ‘‘(2) APPLICABLE RULES.—For purposes of ap13 plying paragraph (1)— 

14 ‘‘(A) NOT TREATED AS FEDERALLY GUAR15 ANTEED.—For purposes of section 149(b), an 

16 American infrastructure bond shall not be 

17 treated as federally guaranteed by reason of the 

18 credit allowed under this section. 

19 ‘‘(B) APPLICATION OF ARBITRAGE

20 RULES.—For purposes of section 148, the yield 

21 on an American infrastructure bond shall be re22 duced by the credit allowed under this section. 

23 ‘‘(d) DEFINITION AND SPECIAL RULES.—For pur24 poses of this section— 


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1 ‘‘(1) INTEREST INCLUDIBLE IN GROSS IN2 COME.—For purposes of this title, interest on any 

3 American infrastructure bond shall be includible in 

4 gross income. 

5 ‘‘(2) AVAILABLE PROJECT PROCEEDS.—The 

6 term ‘available project proceeds’ means— 

7 ‘‘(A) the excess of— 

8 ‘‘(i) the proceeds from the sale of an 

9 issue, over 

10 ‘‘(ii) the sum of— 

11 ‘‘(I) issuance costs financed by 

12 the issue (the extent that such costs 

13 do not exceed 2 percent of such pro14 ceeds), and 

15 ‘‘(II) amounts in a reasonably re16 quired reserve (within the meaning of 

17 section 150(a)(3)) with respect to 

18 such issue), and 

19 ‘‘(B) the proceeds from any investment of 

20 the excess described in clause (i). 

21 ‘‘(3) CURRENT REFUNDINGS ALLOWED.— 

22 ‘‘(A) IN GENERAL.—In the case of a bond 

23 issued to refund an American infrastructure 

24 bond, such refunding bond shall be treated as 


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1 an American infrastructure bond for purposes 

2 of this section if— 

3 ‘‘(i) the average maturity date of the 

4 issue of which the refunding bond is a part 

5 is not later than the average maturity date 

6 of the bonds to be refunded by such issue, 

7 ‘‘(ii) the amount of the refunding 

8 bond does not exceed the outstanding 

9 amount of the refunded bond, 

10 ‘‘(iii) the refunded bond is redeemed 

11 not later than 90 days after the date of the 

12 issuance of the refunding bond, and 

13 ‘‘(iv) the refunded bond was issued 

14 more than 30 days after the date of the 

15 enactment of this section. 

16 ‘‘(B) APPLICABLE PERCENTAGE LIMITA17 TION.—The applicable percentage with respect 

18 to any bond to which subparagraph (A) applies 

19 shall be 30 percent. 

20 ‘‘(C) DETERMINATION OF AVERAGE MATU21 RITY.—For purposes of subparagraph (A)(i), 

22 average maturity shall be determined in accord23 ance with section 147(b)(2)(A). 

24 ‘‘(D) APPLICATION OF DAVIS-BACON ACT

25 REQUIREMENTS WITH RESPECT TO AMERICAN


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1 INFRASTRUCTURE BONDS.—Subchapter IV of 

2 chapter 31 of the title 40, United States Code, 

3 shall apply to projects financed with the pro4 ceeds of American infrastructure bonds. 

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) Section 1324(b)(2) of title 31, United 

10 States Code, is amended by striking ‘‘or 6431’’ and 

11 inserting ‘‘6431, or 6431A’’. 

12 (2) The table of sections for subchapter B of 

13 chapter 65 of the Internal Revenue Code of 1986 is 

14 amended by adding at the end the following new 

15 item: 

‘‘Sec. 6431A. Credit allowed to issuer for American infrastructure bonds.’’. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to bonds issued more than 30 days 

18 after the date of the enactment of this Act. 

19 SEC. 3. ADVANCE REFUNDING BONDS. 

20 (a) IN GENERAL.—Section 149(d) of the Internal 

21 Revenue Code of 1986 is amended— 

22 (1) by striking ‘‘to advance refund another 

23 bond.’’ in paragraph (1) and inserting ‘‘as part of 

24 an issue described in paragraph (2), (3), or (4).’’, 


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1 (2) by redesignating paragraphs (2) and (3) as 

2 paragraphs (5) and (7), respectively, 

3 (3) by inserting after paragraph (1) the fol4 lowing new paragraphs: 

5 ‘‘(2) CERTAIN PRIVATE ACTIVITY BONDS.—An 

6 issue is described in this paragraph if any bond 

7 (issued as part of such issue) is issued to advance 

8 refund a private activity bond (other than a qualified 

9 501(c)(3) bond). 

10 ‘‘(3) OTHER BONDS.— 

11 ‘‘(A) IN GENERAL.—An issue is described 

12 in this paragraph if any bond (issued as part of 

13 such issue), hereinafter in this paragraph re14 ferred to as the ‘refunding bond’, is issued to 

15 advance refund a bond unless— 

16 ‘‘(i) the refunding bond is only— 

17 ‘‘(I) the first advance refunding 

18 of the original bond if the original 

19 bond is issued after 1985, or 

20 ‘‘(II) the first or second advance 

21 refunding of the original bond if the 

22 original bond was issued before 1986, 

23 ‘‘(ii) in the case of refunded bonds 

24 issued before 1986, the refunded bond is 

25 redeemed not later than the earliest date 


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1 on which such bond may be redeemed at 

2 par or at a premium of 3 percent or less, 

3 ‘‘(iii) in the case of refunded bonds 

4 issued after 1985, the refunded bond is re5 deemed not later than the earliest date on 

6 which such bond may be redeemed, 

7 ‘‘(iv) the initial temporary period 

8 under section 148(c) ends— 

9 ‘‘(I) with respect to the proceeds 

10 of the refunding bond not later than 

11 30 days after the date of issue of such 

12 bond, and 

13 ‘‘(II) with respect to the proceeds 

14 of the refunded bond on the date of 

15 issue of the refunding bond, and 

16 ‘‘(v) in the case of refunded bonds to 

17 which section 148(e) did not apply, on and 

18 after the date of issue of the refunding 

19 bond, the amount of proceeds of the re20 funded bond invested in higher yielding in21 vestments (as defined in section 148(b)) 

22 which are nonpurpose investments (as de23 fined in section 148(f)(6)(A)) does not ex24 ceed— 


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1 ‘‘(I) the amount so invested as 

2 part of a reasonably required reserve 

3 or replacement fund or during an al4 lowable temporary period, and 

5 ‘‘(II) the amount which is equal 

6 to the lesser of 5 percent of the pro7 ceeds of the issue of which the re8 funded bond is a part or $100,000 (to 

9 the extent such amount is allocable to 

10 the refunded bond). 

11 ‘‘(B) SPECIAL RULES FOR REDEMP12 TIONS.— 

13 ‘‘(i) ISSUER MUST REDEEM ONLY IF

14 DEBT SERVICE SAVINGS.—Clause (ii) and 

15 (iii) of subparagraph (A) shall apply only 

16 if the issuer may realize present value debt 

17 service savings (determined without regard 

18 to administrative expenses) in connection 

19 with the issue of which the refunding bond 

20 is a part. 

21 ‘‘(ii) REDEMPTIONS NOT REQUIRED

22 BEFORE 90TH DAY.—For purposes of 

23 clauses (ii) and (iii) of subparagraph (A), 

24 the earliest date referred to in such clauses 


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1 shall not be earlier than the 90th day after 

2 the date of issuance of the refunding bond. 

3 ‘‘(4) ABUSIVE TRANSACTIONS PROHIBITED.— 

4 An issue is described in this paragraph if any bond 

5 (issued as part of such issue) is issued to advance 

6 refund another bond and a device is employed in 

7 connection with the issuance of such issue to obtain 

8 a material financial advantage (based on arbitrage) 

9 apart from savings attributable to lower interest 

10 rates.’’, and 

11 (4) by inserting after paragraph (5) (as so re12 designated) the following new paragraph: 

13 ‘‘(6) SPECIAL RULES FOR PURPOSES OF PARA14 GRAPH (3).—For purposes of paragraph (3), bonds 

15 issued before October 22, 1986, shall be taken into 

16 account under subparagraph (A)(i) thereof except— 

17 ‘‘(A) a refunding which occurred before 

18 1986 shall be treated as an advance refunding 

19 only if the refunding bond was issued more 

20 than 180 days before the redemption of the re21 funded bond, and 

22 ‘‘(B) a bond issued before 1986, shall be 

23 treated as advance refunded no more than once 

24 before March 15, 1986.’’. 


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1 (b) CONFORMING AMENDMENT.—Section 

2 148(f)(4)(C) of such Code is amended by redesignating 

3 clauses (xiv) through (xvi) as clauses (xv) to (xvii), respec4 tively, and by inserting after clause (xiii) the following new 

5 clause: 

6 ‘‘(xiv) DETERMINATION OF INITIAL

7 TEMPORARY PERIOD.—For purposes of 

8 this subparagraph, the end of the initial 

9 section temporary period shall be deter10 mined without regard to section 

11 149(d)(3)(A)(iv).’’. 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to advance refunding bonds issued 

14 more than 30 days after the date of the enactment of this 

15 Act. 

16 SEC. 4. PERMANENT MODIFICATION OF SMALL ISSUER EX17 CEPTION TO TAX-EXEMPT INTEREST EX18 PENSE ALLOCATION RULES FOR FINANCIAL 

19 INSTITUTIONS. 

20 (a) PERMANENT INCREASE IN LIMITATION.—Sub21 paragraphs (C)(i), (D)(i), and (D)(iii)(II) of section 

22 265(b)(3) of the Internal Revenue Code of 1986 are each 

23 amended by striking ‘‘$10,000,000’’ and inserting 

24 ‘‘$30,000,000’’. 


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1 (b) PERMANENT MODIFICATION OF OTHER SPECIAL

2 RULES.—Section 265(b)(3) of such Code is amended— 

3 (1) by redesignating clauses (iv), (v), and (vi) 

4 of subparagraph (G) as clauses (ii), (iii), and (iv), 

5 respectively, and moving such clauses to the end of 

6 subparagraph (H) (as added by paragraph (2)), and 

7 (2) by striking so much of subparagraph (G) as 

8 precedes such clauses and inserting the following: 

9 ‘‘(G) QUALIFIED 501(c)(3) BONDS TREATED

10 AS ISSUED BY EXEMPT ORGANIZATION.—In the 

11 case of a qualified 501(c)(3) bond (as defined 

12 in section 145), this paragraph shall be applied 

13 by treating the 501(c)(3) organization for 

14 whose benefit such bond was issued as the 

15 issuer. 

16 ‘‘(H) SPECIAL RULE FOR QUALIFIED

17 FINANCINGS.— 

18 ‘‘(i) IN GENERAL.—In the case of a 

19 qualified financing issue— 

20 ‘‘(I) subparagraph (F) shall not 

21 apply, and 

22 ‘‘(II) any obligation issued as a 

23 part of such issue shall be treated as 

24 a qualified tax-exempt obligation if 

25 the requirements of this paragraph 


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1 are met with respect to each qualified 

2 portion of the issue (determined by 

3 treating each qualified portion as a 

4 separate issue which is issued by the 

5 qualified borrower with respect to 

6 which such portion relates).’’. 

7 (c) INFLATION ADJUSTMENT.—Section 265(b)(3) of 

8 such Code, as amended by subsection (b), is amended by 

9 adding at the end the following new subparagraph: 

10 ‘‘(I) INFLATION ADJUSTMENT.—In the 

11 case of any calendar year after 2024, the 

12 $30,000,000 amounts contained in subpara13 graphs (C)(i), (D)(i), and (D)(iii)(II) shall each 

14 be increased by an amount equal to— 

15 ‘‘(i) such dollar amount, multiplied by 

16 ‘‘(ii) the cost-of-living adjustment de17 termined under section 1(f)(3) for such 

18 calendar year, determined by substituting 

19 ‘calendar year 2023’ for ‘calendar year 

20 2016’ in subparagraph (A)(ii) thereof. 

21 Any increase determined under the preceding 

22 sentence shall be rounded to the nearest mul23 tiple of $100,000.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to obligations issued after the date 

3 of the enactment of this Act. 

Æ 


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