Build America Bonds Act of 2015

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 2015 2. Build America Bonds made permanent (a) In general Section 54AA(d)(1)(B) or during a period beginning on or after the date of the enactment of the Build America Bonds Act of 2015 January 1, 2011, (b) Reduction in credit percentage to bondholders Section 54AA(b) 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 2015 32 2016 31 2017 30 2018 29 2019 and thereafter 28. . (c) Special rules Section 54AA(f) of such Code is amended by adding at the end the following new paragraph: (3) Application of other rules (A) In general Notwithstanding any other provision of law, a build America bond shall be considered a recovery zone economic development bond (as defined in section 1400U–2) for purposes of application of section 1601 of title I of division B of Public Law 111–5 26 U.S.C. 54C (B) Public transportation projects Recipients of any financial assistance authorized under this section that funds public transportation projects, as defined in Title 49, United States Code, must comply with the grant requirements described under section 5309 of such title. . (d) 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 2015 January 1, 2011, (B) by striking before January 1, 2011 during a particular period (2) Conforming amendments Section 54AA(g) 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 2015 January 1, 2011, (B) by striking qualified bonds issued before 2011 certain qualified bonds (e) Reduction in percentage of payments to issuers Section 6431(b) 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 2015 32 2016 31 2017 30 2018 29 2019 and thereafter 28. . (f) Current refundings permitted Section 54AA(g) 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). . (g) Clarification related to levees and flood control projects Section 54AA(g)(2)(A) of such Code is amended by inserting (including capital expenditures for levees and other flood control projects) capital expenditures (h) 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 (i) 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 2015 Amends the Internal Revenue Code, with respect to build America bonds, to: (1) make permanent the issuance authority for such bonds and the authority for payments to bond issuers, (2) make phased reductions in the credit percentage to bondholders and in the percentage of payments to issuers of such bonds, (3) make federal wage rate and other grant requirements applicable to such bonds, (4) allow refundings of currently-issued bonds, and (5) allow the use of such 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.