II 

113TH CONGRESS 

2D SESSION S. 2203 

To amend the Internal Revenue Code of 1986 to permanently extend the 

tax treatment for certain build America bonds, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 3, 2014 

Mr. MARKEY 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 permanently 

extend the tax treatment for certain build America 

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 ‘‘Bolstering Our Na5 tion’s Deficient Structures Act of 2014’’ or the ‘‘BONDS 

6 Act’’. 

7 SEC. 2. BUILD AMERICA BONDS MADE PERMANENT. 

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

9 54AA(d)(1) of the Internal Revenue Code of 1986 is 

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


tjames on DSK6SPTVN1PROD with BILLS
2 

•S 2203 IS

1 or after the date of the enactment of the Bolstering Our 

2 Nation’s Deficient Structures Act of 2014,’’ after ‘‘Janu3 ary 1, 2011,’’. 

4 (b) REDUCTION IN CREDIT PERCENTAGE TO BOND5 HOLDERS.—Subsection (b) of section 54AA of such Code 

6 is amended to read as follows: 

7 ‘‘(b) AMOUNT OF CREDIT.— 

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

9 determined under this subsection with respect to any 

10 interest payment date for a build America bond is 

11 the applicable percentage of the amount of interest 

12 payable by the issuer with respect to such date. 

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

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

15 determined under the following table: 

‘‘In the case of a bond issued The applicable 

during calendar year: percentage is: 

2009 or 2010 ..................................................................................... 35

2014 ................................................................................................... 31

2015 ................................................................................................... 30

2016 ................................................................................................... 29

2017 and thereafter ........................................................................... 28.’’. 

16 (c) SPECIAL RULES.—Subsection (f) of section 54AA 

17 of such Code is amended by adding at the end the fol18 lowing new paragraph: 

19 ‘‘(3) APPLICATION OF OTHER RULES.— 

20 ‘‘(A) IN GENERAL.—Notwithstanding any 

21 other provision of law, a build America bond 

22 shall be considered a recovery zone economic 


tjames on DSK6SPTVN1PROD with BILLS
3 

•S 2203 IS

1 development bond (as defined in section 

2 1400U–2) for purposes of application of section 

3 1601 of title I of division B of Public Law 111– 

4 5 (26 U.S.C. 54C note). 

5 ‘‘(B) PUBLIC TRANSPORTATION

6 PROJECTS.—Recipients of any financial assist7 ance authorized under this section that funds 

8 public transportation projects, as defined in 

9 Title 49, United States Code, must comply with 

10 the grant requirements described under section 

11 5309 of such title.’’. 

12 (d) EXTENSION OF PAYMENTS TO ISSUERS.— 

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

14 is amended— 

15 (A) by inserting ‘‘or during a period begin16 ning on or after the date of the enactment of 

17 the Bolstering Our Nation’s Deficient Struc18 tures Act of 2014,’’ after ‘‘January 1, 2011,’’ 

19 in subsection (a), and 

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

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

22 particular period’’. 

23 (2) CONFORMING AMENDMENTS.—Subsection 

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


tjames on DSK6SPTVN1PROD with BILLS
4 

•S 2203 IS

1 (A) by inserting ‘‘or during a period begin2 ning on or after the date of the enactment of 

3 the Bolstering Our Nation’s Deficient Struc4 tures Act of 2014,’’ after ‘‘January 1, 2011,’’, 

5 and 

6 (B) by striking ‘‘QUALIFIED BONDS

7 ISSUED BEFORE 2011’’ in the heading and in8 serting ‘‘CERTAIN QUALIFIED BONDS’’. 

9 (e) REDUCTION IN PERCENTAGE OF PAYMENTS TO

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

11 is amended— 

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

13 the following: 

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

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

16 applicable percentage’’, and 

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

18 paragraph: 

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

20 of this subsection, the term ‘applicable percentage’ 

21 means the percentage determined in accordance with 

22 the following table: 

‘‘In the case of a qualified bond The applicable 

issued during calendar year: percentage is: 

2009 or 2010 ..................................................................................... 35

2014 ................................................................................................... 31

2015 ................................................................................................... 30

2016 ................................................................................................... 29

2017 and thereafter ........................................................................... 28.’’. 


tjames on DSK6SPTVN1PROD with BILLS
5 

•S 2203 IS

1 (f) CURRENT REFUNDINGS PERMITTED.—Sub2 section (g) of section 54AA of such Code is amended by 

3 adding at the end the following new paragraph: 

4 ‘‘(3) TREATMENT OF CURRENT REFUNDING

5 BONDS.— 

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

7 subsection, the term ‘qualified bond’ includes 

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

9 a qualified bond if— 

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

11 issue of which the refunding bond is a part 

12 is not later than the average maturity date 

13 of the bonds to be refunded by such issue, 

14 ‘‘(ii) the amount of the refunding 

15 bond does not exceed the outstanding 

16 amount of the refunded bond, and 

17 ‘‘(iii) the refunded bond is redeemed 

18 not later than 90 days after the date of the 

19 issuance of the refunding bond. 

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

21 case of a refunding bond referred to in subpara22 graph (A), the applicable percentage with re23 spect to such bond under section 6431(b) shall 

24 be the lowest percentage specified in paragraph 

25 (2) of such section. 


tjames on DSK6SPTVN1PROD with BILLS
6 

•S 2203 IS

1 ‘‘(C) DETERMINATION OF AVERAGE MATU2 RITY.—For purposes of subparagraph (A)(i), 

3 average maturity shall be determined in accord4 ance with section 147(b)(2)(A). 

5 ‘‘(D) ISSUANCE RESTRICTION NOT APPLI6 CABLE.—Subsection (d)(1)(B) shall not apply 

7 to a refunding bond referred to in subpara8 graph (A).’’. 

9 (g) CLARIFICATION RELATED TO LEVEES AND

10 FLOOD CONTROL PROJECTS.—Subparagraph (A) of sec11 tion 54AA(g)(2) of such Code is amended by inserting 

12 ‘‘(including capital expenditures for levees and other flood 

13 control projects)’’ after ‘‘capital expenditures’’. 

14 (h) GROSS-UP OF PAYMENT TO ISSUERS IN CASE OF

15 SEQUESTRATION.—In the case of any payment under sec16 tion 6431(b) of the Internal Revenue Code of 1986 made 

17 after the date of the enactment of this Act to which se18 questration applies, the amount of such payment shall be 

19 increased to an amount equal to— 

20 (1) such payment (determined before such se21 questration), multiplied by 

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

23 amount by which 1 exceeds the percentage reduction 

24 in such payment pursuant to such sequestration. 


tjames on DSK6SPTVN1PROD with BILLS
7 

•S 2203 IS

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 (i) 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. 

Æ 


tjames on DSK6SPTVN1PROD with BILLS