I 

113TH CONGRESS 

2D SESSION H. R. 5330 

To amend the Internal Revenue Code of 1986 to make the tax treatment 

for certain build America bonds permanent and to provide for recovery 

zone economic development bonds for certain cities, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 31, 2014 

Mr. CONYERS (for himself, Mr. RANGEL, Ms. KAPTUR, Ms. NORTON, Ms. 

JACKSON LEE, Mr. MEEKS, Ms. WILSON of Florida, and Ms. LEE of 

California) 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 make 

the tax treatment for certain build America bonds permanent and to provide for recovery zone economic development bonds for certain cities, 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 ‘‘Bringing Urgent In5 vestment to Local Development Act’’ or the ‘‘BUILD 

6 Act’’. 

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1 SEC. 2. BUILD AMERICA BONDS MADE PERMANENT; RECOV2 ERY ZONE ECONOMIC DEVELOPMENT BONDS 

3 FOR CERTAIN CITIES. 

4 (a) IN GENERAL.—Subparagraph (B) of section 

5 54AA(d)(1) of the Internal Revenue Code of 1986 is 

6 amended by inserting ‘‘or during a period beginning on 

7 or after the date of the enactment of the Bringing Urgent 

8 Investment to Local Development Act,’’ after ‘‘January 1, 

9 2011,’’. 

10 (b) REDUCTION IN CREDIT PERCENTAGE TO BOND11 HOLDERS.—Subsection (b) of section 54AA of such Code 

12 is amended to read as follows: 

13 ‘‘(b) AMOUNT OF CREDIT.— 

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

15 determined under this subsection with respect to any 

16 interest payment date for a build America bond is 

17 the applicable percentage of the amount of interest 

18 payable by the issuer with respect to such date. 

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

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

21 determined under the following table: 

‘‘In the case of a bond issued The applicable 

during calendar year: percentage is: 

2014 ................................................................................................... 35

2015 ................................................................................................... 32

2016 ................................................................................................... 31

2017 ................................................................................................... 30

2018 ................................................................................................... 29

2019 and thereafter ........................................................................... 28.’’. 

22 (c) EXTENSION OF PAYMENTS TO ISSUERS.— 

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1 (1) IN GENERAL.—Section 6431 of such Code 

2 is amended— 

3 (A) by inserting ‘‘or during a period begin4 ning on or after the date of the enactment of 

5 the Bringing Urgent Investment to Local De6 velopment Act,’’ after ‘‘January 1, 2011,’’ in 

7 subsection (a), and 

8 (B) by striking ‘‘before January 1, 2011’’ 

9 in subsection (f)(1)(B) and inserting ‘‘during a 

10 particular period’’. 

11 (2) CONFORMING AMENDMENTS.—Subsection 

12 (g) of section 54AA of such Code is amended— 

13 (A) by inserting ‘‘or during a period begin14 ning on or after the date of the enactment of 

15 the Bringing Urgent Investment to Local De16 velopment Act,’’ after ‘‘January 1, 2011,’’, and 

17 (B) by striking ‘‘QUALIFIED BONDS

18 ISSUED BEFORE 2011’’ in the heading and in19 serting ‘‘CERTAIN QUALIFIED BONDS’’. 

20 (d) REDUCTION IN PERCENTAGE OF PAYMENTS TO

21 ISSUERS.—Subsection (b) of section 6431 of such Code 

22 is amended— 

23 (1) by striking ‘‘The Secretary’’ and inserting 

24 the following: 

25 ‘‘(1) IN GENERAL.—The Secretary’’, 

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1 (2) by striking ‘‘35 percent’’ and inserting ‘‘the 

2 applicable percentage’’, and 

3 (3) by adding at the end the following new 

4 paragraph: 

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

6 of this subsection, the term ‘applicable percentage’ 

7 means the percentage determined in accordance with 

8 the following table: 

‘‘In the case of a qualified bond The applicable 

issued during calendar year: percentage is: 

2014 ................................................................................................... 35

2015 ................................................................................................... 32

2016 ................................................................................................... 31

2017 ................................................................................................... 30

2018 ................................................................................................... 29

2019 and thereafter ........................................................................... 28.’’. 

9 (e) RECOVERY ZONE ECONOMIC DEVELOPMENT

10 BONDS FOR CERTAIN CITIES.— 

11 (1) IN GENERAL.—Section 54AA of such Code 

12 is amended by redesignating subsection (h) as sub13 section (i) and by inserting after subsection (g) the 

14 following: 

15 ‘‘(h) SPECIAL RULE FOR RECOVERY ZONE ECO16 NOMIC DEVELOPMENT BONDS FOR CERTAIN CITIES.—In 

17 the case of an economic development extension bond— 

18 ‘‘(1) ISSUER ALLOWED REFUNDABLE CRED19 IT.—In lieu of any credit allowed under this section 

20 with respect to such bond, the issuer of such bond 

21 shall be allowed a credit as provided in section 6431. 

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1 ‘‘(2) APPLICABLE PERCENTAGE.—The applica2 ble percentage under subsection (b) shall be 35 per3 cent. 

4 ‘‘(3) ECONOMIC DEVELOPMENT EXTENSION

5 BOND.—For purposes of this subsection— 

6 ‘‘(A) IN GENERAL.—The term ‘economic 

7 development extension bond’ means any build 

8 America bond issued as part of an issue if— 

9 ‘‘(i) 100 percent of the excess of— 

10 ‘‘(I) the available project pro11 ceeds (as defined in section 54A) of 

12 such issue, over 

13 ‘‘(II) the amounts in a reason14 ably required reserve (within the 

15 meaning of section 150(a)(3)) with re16 spect to such issue, 

17 are to be used for one or more qualified 

18 purposes, and 

19 ‘‘(ii) the issuer makes an irrevocable 

20 election to have this subsection apply and 

21 designates such bond for purposes of this 

22 section. 

23 ‘‘(B) QUALIFIED PURPOSES.—The term 

24 ‘qualified purposes’ means— 

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1 ‘‘(i) any qualified economic develop2 ment purpose (as defined in section 

3 1400U–2(c), applied by treating specified 

4 cities (and only specified cities) as recovery 

5 zones), and 

6 ‘‘(ii) any refinancing of indebtedness 

7 of a specified city which is outstanding on 

8 the date of the enactment of this sub9 section. 

10 ‘‘(C) SPECIFIED CITY.—The term ‘speci11 fied city’ means any principal city for a metro12 politan statistical area (as determined by the 

13 Office of Management and Budget) which— 

14 ‘‘(i) has an average unemployment 

15 rate of not less than 150 percent of the na16 tional average rate for the last calendar 

17 year ending before the date of the enact18 ment of this section, 

19 ‘‘(ii) has a poverty rate of not less 

20 that 150 percent of the national poverty 

21 rate for the last calendar year ending be22 fore the date of the enactment of this sec23 tion, or 

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1 ‘‘(iii) has lost at least 20 percent of 

2 its population between calendar year 2000 

3 and calendar year 2010. 

4 ‘‘(D) LIMITATION ON AMOUNT OF BONDS

5 DESIGNATED.— 

6 ‘‘(i) IN GENERAL.—The maximum ag7 gregate face amount of bonds which may 

8 be designated under subparagraph (A) 

9 with respect to any specified city shall not 

10 exceed the bond limitation allocated to 

11 such city under clause (ii). 

12 ‘‘(ii) ALLOCATION.—The Secretary 

13 shall allocate bond limitation to each speci14 fied city such that the bond limitation allo15 cated to such city bears the same propor16 tion to $1,000,000,000 as the population 

17 of such city (as determined for purposes of 

18 the 2010 census) bears to the total popu19 lation of all specified cities (as so deter20 mined).’’. 

21 (2) PAYMENTS TO ISSUERS.—Section 6431 of 

22 such Code is amended by adding at the end the fol23 lowing: 

24 ‘‘(g) APPLICATION OF SECTION TO CERTAIN ECO25 NOMIC DEVELOPMENT EXTENSION BONDS.— 

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1 ‘‘(1) IN GENERAL.—An economic development 

2 extension bond shall be treated as a qualified bond 

3 for purposes of this section. 

4 ‘‘(2) APPLICABLE PERCENTAGE.—The applica5 ble percentage under subsection (b) shall be 35 per6 cent.’’. 

7 (f) CURRENT REFUNDINGS PERMITTED.—Sub8 section (g) of section 54AA of such Code is amended by 

9 adding at the end the following new paragraph: 

10 ‘‘(3) TREATMENT OF CURRENT REFUNDING

11 BONDS.— 

12 ‘‘(A) IN GENERAL.—For purposes of this 

13 subsection, the term ‘qualified bond’ includes 

14 any bond (or series of bonds) issued to refund 

15 a qualified bond if— 

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

17 issue of which the refunding bond is a part 

18 is not later than the average maturity date 

19 of the bonds to be refunded by such issue, 

20 ‘‘(ii) the amount of the refunding 

21 bond does not exceed the outstanding 

22 amount of the refunded bond, and 

23 ‘‘(iii) the refunded bond is redeemed 

24 not later than 90 days after the date of the 

25 issuance of the refunding bond. 

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1 ‘‘(B) APPLICABLE PERCENTAGE.—In the 

2 case of a refunding bond referred to in subpara3 graph (A), the applicable percentage with re4 spect to such bond under section 6431(b) shall 

5 be the lowest percentage specified in paragraph 

6 (2) of such section. 

7 ‘‘(C) DETERMINATION OF AVERAGE MATU8 RITY.—For purposes of subparagraph (A)(i), 

9 average maturity shall be determined in accord10 ance with section 147(b)(2)(A). 

11 ‘‘(D) ISSUANCE RESTRICTION NOT APPLI12 CABLE.—Subsection (d)(1)(B) shall not apply 

13 to a refunding bond referred to in subpara14 graph (A).’’. 

15 (g) GROSS-UP OF PAYMENT TO ISSUERS IN CASE OF

16 SEQUESTRATION.—In the case of any payment under sec17 tion 6431(b) of the Internal Revenue Code of 1986 made 

18 after the date of the enactment of this Act to which se19 questration applies, the amount of such payment shall be 

20 increased to an amount equal to— 

21 (1) such payment (determined before such se22 questration), multiplied by 

23 (2) the quotient obtained by dividing 1 by the 

24 amount by which 1 exceeds the percentage reduction 

25 in such payment pursuant to such sequestration. 

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1 For purposes of this subsection, the term ‘‘sequestration’’ 

2 means any reduction in direct spending ordered in accord3 ance with a sequestration report prepared by the Director 

4 of the Office and Management and Budget pursuant to 

5 the Balanced Budget and Emergency Deficit Control Act 

6 of 1985 or the Statutory Pay-As-You-Go Act of 2010. 

7 (h) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to obligations issued on or after 

9 the date of the enactment of this Act. 

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