Build America Bonds Act of 2013

To amend the Internal Revenue Code of 1986 to permanently extend the tax treatment for certain build America bonds, and for other purposes. 1. Short title This Act may be cited as the Build America Bonds Act of 2013 2. Build America Bonds made permanent (a) In general Subparagraph (B) of section 54AA(d)(1) or during a period beginning on or after the date of the enactment of the Build America Bonds Act of 2013 January 1, 2011, (b) Reduction in credit percentage to bondholders Subsection (b) of section 54AA of such Code is amended to read as follows: (b) Amount of credit (1) In general The amount of the credit determined under this subsection with respect to any interest payment date for a build America bond is the applicable percentage of the amount of interest payable by the issuer with respect to such date. (2) Applicable percentage For purposes of paragraph (1), the applicable percentage shall be determined under the following table: In the case of a bond issued The applicable during calendar year: percentage is: 2009 or 2010 35 2013 32 2014 31 2015 30 2016 29 2017 and thereafter 28. . (c) Extension of payments to issuers (1) In general Section 6431 of such Code is amended— (A) by inserting or during a period beginning on or after the date of the enactment of the Build America Bonds Act of 2013 January 1, 2011, (B) by striking before January 1, 2011 during a particular period (2) Conforming amendments Subsection (g) of section 54AA of such Code is amended— (A) by inserting or during a period beginning on or after the date of the enactment of the Build America Bonds Act of 2013 January 1, 2011, (B) by striking qualified bonds issued before 2011 certain qualified bonds (d) Reduction in percentage of payments to issuers Subsection (b) of section 6431 of such Code is amended— (1) by striking The Secretary (1) In general The Secretary , (2) by striking 35 percent the applicable percentage (3) by adding at the end the following new paragraph: (2) Applicable percentage For purposes of this subsection, the term applicable percentage In the case of a qualified bond The applicable issued during calendar year: percentage is: 2009 or 2010 35 2013 32 2014 31 2015 30 2016 29 2017 and thereafter 28. . (e) Current refundings permitted Subsection (g) of section 54AA of such Code is amended by adding at the end the following new paragraph: (3) Treatment of current refunding bonds (A) In general For purposes of this subsection, the term qualified bond (i) the average maturity date of the issue of which the refunding bond is a part is not later than the average maturity date of the bonds to be refunded by such issue, (ii) the amount of the refunding bond does not exceed the outstanding amount of the refunded bond, and (iii) the refunded bond is redeemed not later than 90 days after the date of the issuance of the refunding bond. (B) Applicable percentage In the case of a refunding bond referred to in subparagraph (A), the applicable percentage with respect to such bond under section 6431(b) shall be the lowest percentage specified in paragraph (2) of such section. (C) Determination of average maturity For purposes of subparagraph (A)(i), average maturity shall be determined in accordance with section 147(b)(2)(A). (D) Issuance restriction not applicable Subsection (d)(1)(B) shall not apply to a refunding bond referred to in subparagraph (A). . (f) Clarification related to levees and flood control projects Subparagraph (A) of section 54AA(g)(2) of such Code is amended by inserting (including capital expenditures for levees and other flood control projects) capital expenditures (g) Gross-Up of payment to issuers in case of sequestration In the case of any payment under section 6431(b) (1) such payment (determined before such sequestration), multiplied by (2) the quotient obtained by dividing 1 by the amount by which 1 exceeds the percentage reduction in such payment pursuant to such sequestration. For purposes of this subsection, the term sequestration (h) Effective date The amendments made by this section shall apply to obligations issued on or after the date of the enactment of this Act.

Summary: Build America Bonds Act of 2013 - Amends the Internal Revenue Code to: (1) make permanent the issuance authority for Build America Bonds and the authority for payments to issuers of such bonds, (2) make phased reductions in the credit percentage to bondholders and the percentage of payments to issuers of such bonds, (3) allow refundings of currently issued bonds, and (4) allow the use of Build America bonds to fund capital expenditures for levees and flood control projects. Provides for an increase in payments to issuers of Build America bonds to compensate for reductions in the amount of such payments due to sequestration.