American Infrastructure Bonds Act of 2021
Bill: S.1308 | Sponsor: Sen. Wicker, Roger F. (R-MS)
Policy area: Taxation

Summary:
American Infrastructure Bonds Act of 2021
This bill allows the issuer of an American infrastructure bond a tax credit for 28% of the interest payable under such bond.

To amend the Internal Revenue Code of 1986 to provide a credit to 
               issuers of American infrastructure bonds.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Infrastructure Bonds Act of 
2021''.

SEC. 2. CREDIT FOR AMERICAN INFRASTRUCTURE BONDS ALLOWED TO ISSUERS.

    (a) In General.--Subchapter B of chapter 65 of the Internal Revenue 
Code of 1986 is amended by inserting after section 6430 the following 
new section:

``SEC. 6431. CREDIT TO ISSUER OF AMERICAN INFRASTRUCTURE BONDS.

    ``(a) In General.--The issuer of an American infrastructure bond 
shall be allowed a credit with respect to each interest payment under 
such bond which shall be payable by the Secretary as provided in 
subsection (b).
    ``(b) Payment of Credit.--
            ``(1) In general.--The Secretary shall pay 
        (contemporaneously with each interest payment date under such 
        bond) to the issuer of such bond (or to any person who makes 
        such interest payments on behalf of the issuer) 28 percent of 
        the interest payable under such bond on such date.
            ``(2) Interest payment date.--For purposes of this 
        subsection, the term `interest payment date' means each date on 
        which the holder of record of the American infrastructure bond 
        is entitled to a payment of interest under such bond.
    ``(c) American Infrastructure Bond.--
            ``(1) In general.--For purposes of this section, the term 
        `American infrastructure bond' means any obligation if--
                    ``(A) the interest on such obligation would (but 
                for this section) be excludable from gross income under 
                section 103,
                    ``(B) the obligation is not a private activity 
                bond, and
                    ``(C) the issuer makes an irrevocable election to 
                have this section apply.
            ``(2) Applicable rules.--For purposes of applying paragraph 
        (1)--
                    ``(A) for purposes of section 149(b), a bond shall 
                not be treated as federally guaranteed by reason of the 
                credit allowed under this section, and
                    ``(B) a bond shall not be treated as an American 
                infrastructure bond if the issue price has more than a 
                de minimis amount (determined under rules similar to 
                the rules of section 1273(a)(3)) of premium over the 
                stated principal amount of the bond.
    ``(d) Special Rules.--
            ``(1) Interest on american infrastructure bonds includible 
        in gross income for federal income tax purposes.--For purposes 
        of this title, interest on any American infrastructure bond 
        shall be includible in gross income.
            ``(2) Application of arbitrage rules.--For purposes of 
        section 148, the yield on an issue of American infrastructure 
        bonds shall be reduced by the credit allowed under this 
        section, except that no such reduction shall apply with respect 
        to determining the amount of gross proceeds of an issue that 
        qualifies as a reasonably required reserve or replacement fund.
    ``(e) Regulations.--The Secretary may prescribe such regulations 
and other guidance as may be necessary or appropriate to carry out this 
section.''.
    (b) Conforming Amendments.--
            (1) The table of sections for subchapter B of chapter 65 of 
        subtitle F of the Internal Revenue Code of 1986 is amended by 
        adding at the end the following new item:

``Sec. 6431. Credit to issuer of american infrastructure bonds.''.
            (2) Subparagraph (A) of section 6211(b)(4) of such Code is 
        amended by striking ``and 6428A'' and inserting ``6428A, and 
        6431''.
    (c) Transitional Coordination With State Law.--Except as otherwise 
provided by a State after the date of the enactment of this Act, the 
interest on any American infrastructure bond (as defined in section 
6431 of the Internal Revenue Code of 1986 (as added by this Act)) and 
the amount of any credit determined under such section with respect to 
such bond shall be treated for purposes of the income tax laws of such 
State as being exempt from Federal income tax.
    (d) Adjustment to Payment to Issuers in Case of Sequestration.--
            (1) In general.--In the case of any payment under 
        subsection (b) of section 6431 of the Internal Revenue Code of 
        1986 (as added by this Act) made after the date of enactment of 
        this Act to which sequestration applies, the amount of such 
        payment shall be increased to an amount equal to--
                    (A) such payment (determined before such 
                sequestration), multiplied by
                    (B) the quotient obtained by dividing the number 1 
                by the amount by which the number 1 exceeds the 
                percentage reduction in such payment pursuant to such 
                sequestration.
            (2) Sequestration.--For purposes of this subsection, the 
        term ``sequestration'' means any reduction in direct spending 
        ordered in accordance with a sequestration report prepared by 
        the Director of the Office and Management and Budget pursuant 
        to the Balanced Budget and Emergency Deficit Control Act of 
        1985 or the Statutory Pay-As-You-Go Act of 2010 or future 
        legislation having similar effect.
    (e) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of enactment of this Act.
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