I 
119TH CONGRESS 
1ST SESSION H. R. 2440 
To amend the Internal Revenue Code of 1986 to provide for school 
infrastructure finance and innovation tax credit bonds. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 27, 2025 
Mr. HUDSON (for himself and 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 
for school infrastructure finance and innovation tax cred-
it bonds. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘School Infrastructure 
Finance and Innovation Act’’ or the ‘‘SIFIA Act’’. 
SEC. 2. SIFIA BONDS. 
(a) IN GENERAL.—Part IV of subchapter A of chap-
ter 1 is amended by adding at the end the following new 
subpart: 
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‘‘Subpart K—SIFIA Bonds 
‘‘Sec. 54BB. SIFIA bonds. 
‘‘SEC. 54BB. SIFIA BONDS. 
‘‘(a) IN GENERAL.—If a taxpayer holds a SIFIA 
bond on one or more credit allowance dates of the bond 
during any taxable year, there shall be allowed as a credit 
against the tax imposed by this chapter for the taxable 
year an amount equal to the sum of the credits determined 
under subsection (b) with respect to such dates. 
‘‘(b) AMOUNT OF CREDIT.— 
‘‘(1) IN GENERAL.—The amount of the credit 
determined under this subsection with respect to any 
credit allowance date for a SIFIA bond is 25 percent 
of the annual credit determined for such bond. 
‘‘(2) ANNUAL CREDIT.—For purposes of this 
subsection, the term ‘annual credit’ means an 
amount equal to the product of— 
‘‘(A) the applicable credit rate, multiplied 
by 
‘‘(B) the face amount of the bond. 
‘‘(3) APPLICABLE CREDIT RATE.—For purposes 
of paragraph (2), the term ‘applicable credit rate’ 
means the rate which the Secretary estimates will 
permit the issuance of each such bond with a speci-
fied maturity or redemption date without discount 
and without interest cost to the issuer. The applica-
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ble credit rate with respect to any such bond shall 
be determined as of the first day on which there is 
a binding, written contract for the sale or exchange 
of the bond. 
‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.— 
‘‘(1) IN GENERAL.—The credit allowed under 
subsection (a) for any taxable year shall not exceed 
the excess of— 
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under this part (other than subpart C and this 
subpart). 
‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) exceeds the 
limitation imposed by paragraph (1) for such taxable 
year, such excess shall be carried to the succeeding 
taxable year and added to the credit allowable under 
subsection (a) for such taxable year (determined be-
fore the application of paragraph (1) for such suc-
ceeding taxable year). 
‘‘(d) CREDIT ALLOWANCE DATE.—For purposes of 
this section, the term ‘credit allowance date’ means, with 
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respect to a bond during the taxable year, any of the fol-
lowing dates: 
‘‘(1) March 15. 
‘‘(2) June 15. 
‘‘(3) September 15. 
‘‘(4) December 15. 
Such term includes the last day on which the bond is out-
standing. 
‘‘(e) SIFIA BONDS.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘SIFIA bond’ means any bond issued 
as part of an issue if— 
‘‘(A) 100 percent of the available project 
proceeds of such issue are to be used for the de-
sign, construction, expansion, renovation, fur-
nishing, or equipping of qualified school facili-
ties (as defined in paragraph (7)(A) of this sub-
section) pursuant to an agreement under which 
a private, for-profit entity agrees with a State 
or local educational agency— 
‘‘(i) to construct, expand, or renovate 
one or more buildings constituting the 
qualified school facilities (together with 
any related design, furnishing, and equip-
ping of such buildings), 
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‘‘(ii) to operate the facilities at least 
until the date the facilities are first placed 
in service and operating substantially at 
their design level, and 
‘‘(iii) at or before the end of the 
agreement, to transfer the facilities to such 
agency for no additional consideration, 
‘‘(B) all buildings whose construction, ex-
pansion, or renovations is included in the quali-
fied school facilities being financed with pro-
ceeds of a SIFIA bond are reasonably expected 
to be net-zero energy buildings, 
‘‘(C) the interest on such bond would (but 
for this section and section 141) be excludable 
from gross income under section 103, 
‘‘(D) the issuer designates such bond as a 
SIFIA bond for purposes of this subsection, 
‘‘(E) the bond is not issued with more than 
a de minimis amount of premium (determined 
under rules similar to the rules of section 
1273(a)(3)) over the stated principal amount of 
the bond, 
‘‘(F) the issue of which such bond is a part 
satisfies the expenditure period requirements of 
paragraph (2), 
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‘‘(G) the private, for-profit entity described 
in subparagraph (A) meets the allocation re-
quirements of paragraph (5) and the reporting 
requirements of paragraph (6), and 
‘‘(H) the bond is issued before January 1, 
2031. 
‘‘(2) 6-YEAR EXPENDITURE PERIOD.— 
‘‘(A) IN
GENERAL.—An issue shall be 
treated as meeting the requirements of this 
paragraph if, as of the date of issuance, the 
issuer reasonably expects 100 percent of the 
available project proceeds to be spent for pur-
poses described in subparagraphs (1)(A) and 
(1)(B) within the 6-year period beginning on 
such date of issuance. 
‘‘(B) 
FAILURE
TO
SPEND
REQUIRED 
AMOUNT
OF
BOND
PROCEEDS
WITHIN
YEARS.—To the extent that less than 100 per-
cent of the available project proceeds of the 
issue are expended at the close of the period de-
scribed in subparagraph (A) with respect to 
such issue, the issuer shall redeem all of the 
nonqualified bonds within 90 days after the end 
of such period. For purposes of this paragraph, 
the amount of the nonqualified bonds required 
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to be redeemed shall be determined in the same 
manner as under section 141. 
‘‘(3) LIMITATION ON AMOUNT OF SIFIA BONDS 
DESIGNATED.— 
‘‘(A) OVERALL
LIMITATION.—The max-
imum aggregate face amount of SIFIA bonds 
issued under this subsection that may be des-
ignated 
under 
subparagraph 
(1)(D) 
is 
$10,000,000,000. 
‘‘(B) ANNUAL
LIMITATION.—The max-
imum aggregate face amount of SIFIA bonds 
issued under this subsection that may be des-
ignated under subparagraph (1)(D) in any cal-
endar year is $2,500,000,000. 
‘‘(C) SET-ASIDE FOR RURAL AREAS.— 
‘‘(i) $1,000,000,000 of the overall lim-
itation described in subparagraph (A) shall 
be set aside for projects located in rural 
areas. 
‘‘(ii) For purposes of this section, the 
term ‘rural area’ means any area which 
is— 
‘‘(I) outside of a metropolitan 
statistical area (as such area is de-
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fined by the Secretary of Commerce) 
or 
‘‘(II) determined by the Sec-
retary of Agriculture, after consulta-
tion with the Secretary of Commerce, 
to be a rural area. 
‘‘(4) ALLOCATION
OF
LIMITATION.—The au-
thority to issue SIFIA bonds within the limitations 
set forth in paragraph (3) shall be allocated by the 
Secretary to prospective issuers on a first come-first 
served basis, under rules to be prescribed by the 
Secretary, provided that— 
‘‘(A) no school district shall be allocated 
more than $1,500,000,000 in aggregate face 
amount of SIFIA bonds under this subsection, 
‘‘(B) no more than $500,000,000 in aggre-
gate face amount of SIFIA bonds shall be allo-
cated under this subsection for the construc-
tion, expansion, renovation, furnishing, or 
equipping of qualified school facilities that are 
operated by a nonprofit organization under a 
charter or other agreement between the applica-
ble school district and such nonprofit organiza-
tion, 
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‘‘(C) an issuer applying for an allocation 
shall certify (based on the certifications of any 
conduit borrower of bond proceeds where appli-
cable) that it reasonably expects to commence 
the project to be financed with proceeds of the 
bonds within 6 months of the issue date of the 
bonds, and to expend all of the available project 
proceeds within 6 years of the issue date of the 
bonds, and 
‘‘(D) in making such allocations, the Sec-
retary shall give preference to the financing of 
projects for which the private for-profit devel-
oper is a preferred concern. 
‘‘(5) REQUIREMENTS
RELATING
TO
PRIVATE, 
FOR-PROFIT ENTITIES.—A private, for-profit entity 
meets the requirements of this paragraph if such en-
tity— 
‘‘(A) has experience developing, owning, 
and operating public schools leased to public 
school districts that are net-zero buildings, and 
‘‘(B) demonstrates to the Secretary (in 
such manner as the Secretary may provide) 
that such entity has experience leasing public 
school buildings to a local education agency, in-
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cluding at least two projects with respect to 
which— 
‘‘(i) such entity (or a related person) 
developed, owned, and was responsible 
for— 
‘‘(I) maintenance of— 
‘‘(aa) the heating, ventila-
tion, and air conditioning system, 
or 
‘‘(bb) the solar photovoltaic 
system, and 
‘‘(ii) the electrical service was in the 
name of such entity for a minimum of four 
years. 
‘‘(6) REPORTING
REQUIREMENTS.—A private 
entity meets the requirements of this paragraph if 
such entity, in cooperation with the applicable school 
district, periodically submits such reports as the Sec-
retary shall prescribe relating to the costs and bene-
fits of the financing, including— 
‘‘(A) tax benefits to the Federal Govern-
ment and cost savings to the school district, 
and 
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‘‘(B) information related to any improve-
ments in student performance or teacher reten-
tion. 
‘‘(7) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) QUALIFIED
SCHOOL
FACILITIES.— 
The term ‘qualified school facilities’ means one 
or more school buildings for a public elementary 
school or public secondary school or for admin-
istrative or support facilities relating to such 
school facilities, together with related fur-
nishings and equipment. 
‘‘(B) SCHOOL DISTRICT.—The term ‘school 
district’ means a public board of education or 
other public authority legally constituted within 
a State for administrative control or direction 
of public elementary or secondary schools in the 
State or political subdivision of a State. 
‘‘(C) PREFERRED
CONCERN.—The term 
‘preferred concern’ means either a small busi-
ness concern, a minority owned concern, or a 
woman owned concern. 
‘‘(D) SMALL BUSINESS CONCERN.— 
‘‘(i) IN
GENERAL.—Subject to the 
provisions of clause (ii), the term ‘small 
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business concern’ means an entity which, 
together with any related person, has fewer 
than 500 employees. 
‘‘(ii) SMALL
BUSINESS
SIZE
STAND-
ARDS.—For purposes of clause (i), the de-
termination of number of employees shall 
be made in a manner consistent with— 
‘‘(I) section 3 of the Small Busi-
ness Act (15 U.S.C. 632), and 
‘‘(II) part 121 of title 13, Code 
of Federal Regulations. 
‘‘(E) MINORITY OWNED.—The term ‘mi-
nority owned’ with respect to an entity means 
an entity not less than 51 percent of which is 
owned by 1 or more individuals who are citizens 
of the United States and who are Asian Amer-
ican, Native Hawaiian, Pacific Islander, African 
American, Hispanic, Puerto Rican, Native 
American, or Alaska Native. 
‘‘(F) WOMAN OWNED.—The term ‘woman 
owned’ with respect to an entity means an enti-
ty not less than 51 percent of which is owned 
by 1 or more women. 
‘‘(G) 
NONPROFIT
ORGANIZATION.—The 
term ‘nonprofit organization’ means an organi-
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zation described in section 501(c) and exempt 
from tax under section 501(a). 
‘‘(H) NET-ZERO ENERGY BUILDING.—The 
term ‘net-zero building’ has the meaning given 
such term under section 410(20) of the Energy 
Independence and Security Act of 2007 (42 
U.S.C. 17061(20)), applied by substituting 
‘school building’ for ‘commercial building’. 
‘‘(I) RELATED
PERSON.—The term ‘re-
lated person’ has the meaning given such term 
in section 144(a)(3). 
‘‘(f) OTHER APPLICABLE RULES.— 
‘‘(1) INTEREST
INCLUDIBLE
IN
GROSS
IN-
COME.—For purposes of this title, interest on any 
SIFIA bond shall be includible in gross income. 
‘‘(2) CREDIT
TREATED
AS
INTEREST.—For 
purposes of this subtitle, the credit determined 
under subsection (a) shall be treated as interest 
which is includible in gross income. 
‘‘(3) S CORPORATIONS AND PARTNERSHIPS.—In 
the case of a tax credit bond held by an S corpora-
tion or partnership, the allocation of credit allowed 
by this section to the shareholders of such corpora-
tion or partners of such partnership shall be treated 
as a distribution. 
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‘‘(4) BONDS HELD BY REAL ESTATE INVEST-
MENT TRUSTS.—If any qualified tax credit bond is 
held by a real estate investment trust the credit de-
termined under subsection (a) shall be allowed to 
beneficiaries of such trust (and any gross income in-
cluded under paragraph (2) with respect to such 
credit shall be distributed to such beneficiaries) 
under procedures prescribed by the Secretary (simi-
lar to the procedures prescribed by the Secretary 
under section 54A(h) (as in effect before its repeal 
by Public Law 115–97)). 
‘‘(5) CREDITS MAY BE STRIPPED.—Under regu-
lations prescribed by the Secretary (similar to regu-
lations prescribed under section 54A(i) (as in effect 
before its repeal by Public Law 115–97)— 
‘‘(A) IN GENERAL.—There may be a sepa-
ration (including at issuance) of the ownership 
of a qualified tax credit bond and the entitle-
ment to the credit under this section with re-
spect to such bond. In case of any such separa-
tion, the credit under this section shall be al-
lowed to the person who on the credit allowance 
date holds the instrument evidencing the enti-
tlement to the credit and not to the holder of 
the bond. 
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‘‘(B) CERTAIN RULES TO APPLY.—In the 
case of a separation described in subparagraph 
(A), the rules of section 1286 shall apply to the 
qualified tax credit bond as if it were a stripped 
bond and to the credit under this section as if 
it were a stripped coupon. 
‘‘(6) NOT TREATED AS FEDERALLY GUARAN-
TEED.—For purposes of section 149(b), a SIFIA 
bond shall not be treated as federally guaranteed by 
reason of the credit allowed under subsection (g). 
‘‘(7) YIELD DETERMINATION.—For purposes of 
section 148, the yield on a SIFIA bond shall be de-
termined without regard to the credit allowed under 
subsection (a). 
‘‘(8) MATURITY LIMITATION.— 
‘‘(A) IN
GENERAL.—An issue shall be 
treated as meeting the requirements of this sec-
tion if the maturity of any bond which is part 
of such issue does not exceed the maximum 
term determined by the Secretary under sub-
paragraph (B). 
‘‘(B) MAXIMUM TERM.—During each cal-
endar month, the Secretary shall determine the 
maximum term permitted under this paragraph 
for bonds issued during the following calendar 
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month. Such maximum term shall be the term 
which the Secretary estimates will result in the 
present value of the obligation to repay the 
principal on the bond being equal to 20 percent 
of the face amount of such bond. Such present 
value shall be determined using as a discount 
rate the average annual interest rate of tax-ex-
empt obligations having a term of 10 years or 
more which are issued during the month. If the 
term as so determined is not a multiple of a 
whole year, such term shall be rounded to the 
next highest whole year. 
‘‘(9) DEPRECIATION.—If the school facilities fi-
nanced with proceeds of SIFIA bonds are owned by 
a person otherwise entitled to allowance for deprecia-
tion with respect to such facility, that person may 
make an irrevocable election (binding on any succes-
sors in interest) not to claim depreciation with re-
spect to the property financed with proceeds of the 
SIFIA bonds for so long as the issue of which such 
bonds are a part is outstanding. Such election shall 
be deemed to have been made if the person fails to 
claim depreciation with respect to the property in 
the first tax return filed by the person in which such 
depreciation could have been claimed. To the extent 
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