Title: Partnership to Build America Act of 2017
Policy area: Transportation and Public Works

Summary:
Partnership to Build America Act of 2017
This bill establishes the American Infrastructure Fund (AIF) as a wholly-owned government corporation to provide bond guarantees and make loans to state and local governments, non-profit infrastructure providers, private parties, and public-private partnerships for state or local government sponsored transportation, energy, water, communications, or educational facility infrastructure projects (Qualified Infrastructure Projects [QIPs]). The AIF may also to make equity investments in QIPs.
The Department of the Treasury, acting through the AIF, shall issue American Infrastructure Bonds with an aggregate face value of $50 billion. The proceeds from the sale of the bonds shall be deposited into the AIF.
The bill amends the Internal Revenue Code to allow U.S. corporations to exclude from gross income qualified cash dividend amounts received during a taxable year from a foreign-controlled corporation equal to the face value of qualified infrastructure bonds the corporation has purchased.
The bill prohibits allowance of:

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1669 Introduced in House (IH)]

<DOC>






115th CONGRESS
  1st Session
                                H. R. 1669

    To establish the American Infrastructure Fund, to provide bond 
      guarantees and make loans to States, local governments, and 
  infrastructure providers for investments in certain infrastructure 
 projects, and to provide equity investments in such projects, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 22, 2017

 Mr. Delaney (for himself, Mr. Rodney Davis of Illinois, Mr. Aguilar, 
   Mr. Barr, Mr. Bera, Mrs. Bustos, Ms. Gabbard, Mr. Gottheimer, Ms. 
Hanabusa, Mr. Heck, Ms. Kelly of Illinois, Ms. Kuster of New Hampshire, 
 Mr. Loebsack, Mr. Sean Patrick Maloney of New York, Mr. McKinley, Mr. 
 Moulton, Mr. Norcross, Mr. Peters, Mr. Polis, Mr. Ruppersberger, Mr. 
   Schneider, Ms. Sinema, Mr. Soto, and Mrs. Torres) introduced the 
 following bill; which was referred to the Committee on Transportation 
and Infrastructure, and in addition to the Committee on Ways and Means, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of 
                        the committee concerned

_______________________________________________________________________

                                 A BILL


 
    To establish the American Infrastructure Fund, to provide bond 
      guarantees and make loans to States, local governments, and 
  infrastructure providers for investments in certain infrastructure 
 projects, and to provide equity investments in such projects, and for 
                            other purposes.

    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 ``Partnership to Build America Act of 
2017''.

SEC. 2. AMERICAN INFRASTRUCTURE FUND.

    (a) American Infrastructure Fund.--
            (1) In general.--There is established a wholly owned 
        Government corporation--
                    (A) which shall be called the American 
                Infrastructure Fund (referred to in this Act as the 
                ``AIF'');
                    (B) which shall be headed by the Board of Trustees 
                established under subsection (b);
                    (C) which may have separate subaccounts or 
                subsidiaries for funds used to make loans, bond 
                guarantees, and equity investments under this section;
                    (D) which shall be available to the AIF to pay for 
                the costs of carrying out this section, including the 
                compensation of the Board and other employees of the 
                AIF; and
                    (E) the funds of which may be invested by the Board 
                in such manner as the Board determines appropriate.
            (2) Deposits to aif.--All funds received from bond 
        issuances, loan payments, bond guarantee fees, and any other 
        funds received in carrying out this section shall be held by 
        AIF.
            (3) Limitations.--The charter of the AIF shall limit its 
        activities to those activities described as the mission of the 
        Board under subsection (b)(2).
            (4) Oversight.--The AIF shall register with the Securities 
        and Exchange Commission and the Chairman shall report to 
        Congress annually as to whether the AIF is fulfilling the 
        mission of the Board under subsection (b)(2).
            (5) Treatment of aif.--
                    (A) Accounts.--Title 31, United States Code, is 
                amended in each of sections 9107(c)(3) and 9108(d)(2)--
                            (i) by inserting ``the American 
                        Infrastructure Fund,'' after ``the Regional 
                        Banks for Cooperatives,''; and
                            (ii) by striking ``those banks'' and 
                        inserting ``those entities''.
                    (B) Bonds.--Section 149(b)(3)(A)(i) of the Internal 
                Revenue Code of 1986 is amended by inserting ``American 
                Infrastructure Fund,'' after ``Federal Home Loan 
                Mortgage Corporation,''.
    (b) Board of Trustees.--
            (1) In general.--There is established a Board of Trustees 
        of the AIF (referred to in this subsection as the ``Board''), 
        which shall be composed of 9 members who--
                    (A) have substantial experience in bond guarantees 
                or municipal credit; and
                    (B) to the greatest extent practicable, have 
                extensive experience working with municipal credit, 
                risk management, and infrastructure finance.
            (2) Mission.--The mission of the Board is--
                    (A) to operate the AIF and its subsidiaries to be a 
                low cost provider of bond guarantees, loans, and equity 
                investments to State and local governments and 
                infrastructure providers for urban and rural 
                infrastructure projects that--
                            (i) provide a positive economic impact; and
                            (ii) meet such other standards as the Board 
                        may develop;
                    (B) to operate the AIF in a self-sustaining manner 
                so as to allow the AIF to repay its infrastructure 
                bonds when such bonds are due;
                    (C) to not have a profit motive, but to seek at all 
                times to pursue its mission of providing low cost bond 
                guarantees and loans while--
                            (i) covering its costs;
                            (ii) maintaining such reserves as may be 
                        needed; and
                            (iii) applying prudent underwriting 
                        standards;
                    (D) to only consider projects put forth by State 
                and local governments and not to seek projects 
                directly;
                    (E) to always make clear that no taxpayer money 
                supports the AIF or ever will support the AIF; and
                    (F) to engage in no other activities other than 
                those permitted under this section.
            (3) Membership.--
                    (A) Initial members.--
                            (i) Appointment.--Not later than 150 days 
                        after the date on which bonds are first issued 
                        under subsection (d), the President shall 
                        appoint, with the advice and consent of the 
                        Senate, as members of the Board--
                                    (I) 2 individuals from a list of at 
                                least 5 individuals selected by the 
                                Speaker of the House of 
                                Representatives;
                                    (II) 2 individuals from a list of 
                                at least 5 individuals selected by the 
                                Minority Leader of the House of 
                                Representatives;
                                    (III) 2 individuals from a list of 
                                at least 5 individuals selected by the 
                                Majority Leader of the Senate;
                                    (IV) 2 individuals from a list of 
                                at least 5 individuals selected by the 
                                Minority Leader of the Senate; and
                                    (V) 1 individual selected at will 
                                by the President.
                            (ii) Submission of lists.--Each of the 
                        lists described in clause (i) shall be 
                        submitted to the President not later than 90 
                        days after the date on which bonds are first 
                        issued under subsection (d). If any of such 
                        lists are submitted after the date required 
                        under this clause, the President may appoint 
                        the 2 members of the Board who were to be 
                        selected from such list at will.
                    (B) Staggered terms.--The members of the Board 
                appointed pursuant to subparagraph (A)(i) shall serve 
                staggered terms, with 2 each of the initial members of 
                the Board serving for terms of 5, 6, 7, and 8 years, 
                respectively, and the initial Chair selected under 
                subparagraph (D) serving for 9 years. The decision of 
                which Board members, other than the Chair, serve for 
                which initial terms shall be made by the members of the 
                Board drawing lots.
                    (C) Additional members.--
                            (i) In general.--Except as provided in 
                        subparagraph (A), if the term of a member of 
                        the Board expires or otherwise becomes vacant, 
                        the President shall appoint a replacement for 
                        such member, with the advice and consent of the 
                        Senate, from among a list of at least 5 
                        individuals submitted by the Board.
                            (ii) Term of service.--
                                    (I) In general.--Each member of the 
                                Board appointed to replace a member 
                                whose term is expiring shall serve for 
                                a 7-year term.
                                    (II) Vacancies.--Any member of the 
                                Board appointed to fill a vacancy 
                                occurring before the expiration of the 
                                term to which that member's predecessor 
                                was appointed shall be appointed only 
                                for the remainder of the term.
                    (D) Chair.--The members of the Board shall choose 1 
                member to serve as the Chair of the Board for a term of 
                7 years, except that the initial Chair shall serve for 
                a term of 9 years, pursuant to subsection (B).
                    (E) Continuation of service.--Each member of the 
                Board may continue to serve after the expiration of the 
                term of office to which that member was appointed until 
                a successor has been appointed.
                    (F) Conflicts of interest.--No member of the Board 
                may have a financial interest in, or be employed by, a 
                Qualified Infrastructure Project (``QIP'') related to 
                assistance provided under this section or any entity 
                that has purchased bonds under subsection (d). Owning 
                municipal credit of any State or local government or 
                owning the securities of a diversified company that 
                engages in infrastructure activities, provided those 
                activities constitute less than 20 percent of the 
                company's revenues, or investing in broadly held 
                investment funds shall not be deemed to create a 
                conflict of interest. The Board may issue regulations 
                to define terms used under this subparagraph.
            (4) Compensation.--The members of the Board shall be 
        compensated at an amount to be set by the Board, but under no 
        circumstances may such compensation be higher than the rate 
        prescribed for level IV of the Executive Schedule under section 
        5315 of title 5, United States Code.
            (5) Staff.--The Board shall employ and set compensation for 
        such staff as the Board determines as is necessary to carry out 
        the activities and mission of the AIF, and such staff may be 
        paid without regard to the provisions of chapter 51 and 
        subchapter III of chapter 53, United States Code, relating to 
        classification and General Schedule pay rates.
            (6) Procedures.--The Board shall establish such procedures 
        as are necessary to carry out this section.
            (7) Corporate governance standards.--
                    (A) Board committees generally.--The Board shall 
                maintain all of the committees required to be 
                maintained by the board of directors of an issuer 
                listed on the New York Stock Exchange as of the date of 
                the enactment of this section.
                    (B) Risk management committee.--The Board shall 
                maintain a risk management committee, which shall--
                            (i) employ additional staff who are 
                        certified by the Board as having significant 
                        and relevant experience in insurance 
                        underwriting and credit risk management; and
                            (ii) establish the risk management policies 
                        used by the Board.
                    (C) Standards.--The Board shall, to the extent 
                practicable, follow all standards with respect to 
                corporate governance that are required to be followed 
                by the board of directors of an issuer listed on the 
                New York Stock Exchange as of the date of the enactment 
                of this section.
            (8) Biennial reports.--Not less frequently than once every 
        2 years, the Board shall produce a report that describes, of 
        the materials, goods, and products that were used to construct, 
        or to support the construction of, qualified infrastructure 
        projects (as described in subsection (c)) and received 
        financing from the American Infrastructure Fund within the most 
        recent 2 calendar years, the percentage of such materials, 
        goods, and products that were created, sourced, or manufactured 
        in the United States.
    (c) Infrastructure Investment.--
            (1) Entities eligible for assistance.--The AIF may provide 
        assistance to State and local government entities, nonprofit 
        infrastructure providers, private parties, and public-private 
        partnerships (referred to in this section as ``eligible 
        entities'') to help finance qualified infrastructure projects 
        (referred to in this subsection as ``QIPs'').
            (2) Forms of assistance.--The AIF may--
                    (A) provide bond guarantees to debt issued by 
                eligible entities;
                    (B) make loans, including subordinated loans, to 
                eligible entities; and
                    (C) make equity investments in QIPs.
            (3) Qualified infrastructure projects.--A project qualifies 
        as a QIP under this section if--
                    (A) the project is sponsored by a State or local 
                government;
                    (B) the infrastructure is, or will be, owned by a 
                State or local government;
                    (C) the project involves the construction, 
                maintenance, improvement, or repair of a 
                transportation, energy, water, communications, or 
                educational facility;
                    (D) the recipient of bond guarantees, loans, equity 
                investments, or any other innovative financing 
                technique authorized under this Act provides written 
                assurances prescribed by the AIF that the project will 
                be performed in compliance with the requirements of all 
                Federal laws that would otherwise apply to similar 
                projects to which the United States is a party; and
                    (E) in the case of a public transportation capital 
                project as defined in section 5302 of title 49, United 
                States Code, the recipient of bond guarantees, loans, 
                equity investments, or any other innovative financing 
                technique authorized under this Act complies with the 
                grant requirements applicable to grants made under 
                section 5309 of such title.
            (4) Application for assistance.--
                    (A) In general.--A State or local government that 
                wishes to receive a loan or bond guarantee under this 
                section shall submit an application to the Board in 
                such form and manner and containing such information as 
                the Board may require.
                    (B) Requirement for public sponsorship of private 
                entities.--A private entity may only receive a bond 
                guarantee, loan, or equity investment under this 
                section if the State or local government for the 
                jurisdiction in which the nonprofit infrastructure 
                provider or private partner is located submits an 
                application pursuant to subparagraph (A) on behalf of 
                such nonprofit infrastructure provider or private 
                partner.
            (5) Limitations on single state awards.--
                    (A) Annual limitation.--The Board shall set an 
                annual limit, as a percentage of total assistance 
                provided under this section during a year, on the 
                amount of assistance a single State (including local 
                governments and other infrastructure providers within 
                such State) may receive in assistance provided under 
                this section.
                    (B) Cumulative limitation.--The Board shall set a 
                limit, as a percentage of total assistance provided 
                under this section outstanding at any one time, on the 
                amount of assistance a single State (including local 
                governments and other infrastructure providers within 
                such State) may receive in assistance provided under 
                this section.
            (6) Loan specifications.--Loans made under this section 
        shall have such maturity and carry such interest rate as the 
        Board determines appropriate.
            (7) Bond guarantee.--The Board shall charge such fees for 
        Bond guarantees made under this section as the Board determines 
        appropriate.
            (8) Equity investments.--With respect to a QIP, the amount 
        of an equity investment made by the AIF in such QIP may not 
        exceed 20 percent of the total cost of the QIP.
            (9) Public-private partnership requirements.--At least 35 
        percent of the assistance provided under this section shall be 
        provided to QIPs for which at least 10 percent of the financing 
        for such QIPs comes from private debt or equity.
            (10) Prohibition on principal forgiveness.--With respect to 
        a loan made under this section, the Board may not forgive any 
        amount of principal on such loan.
    (d) American Infrastructure Bonds.--
            (1) In general.--Not later than 90 days after the date of 
        the enactment of this Act, the Secretary, acting through the 
        AIF, shall issue bonds, which shall be called ``American 
        Infrastructure Bonds''. The proceeds from the American 
        Infrastructure Bonds shall be deposited into the AIF.
            (2) Forms and denominations; interest.--American 
        Infrastructure Bonds shall--
                    (A) be in such forms and denominations as 
                determined by the Secretary, and shall have a 50-year 
                maturity; and
                    (B) bear interest of 1 percent.
            (3) No full faith and credit.--Interest and principal 
        payments paid to holders of American Infrastructure Bonds shall 
        be paid from the AIF, to the extent funds are available, and 
        shall not be backed by the full faith and credit of the United 
        States.
            (4) Amount of bonds.--The aggregate face amount of the 
        bonds issued under this subsection shall be $50,000,000,000.
            (5) Sale of american infrastructure bonds.--
                    (A) Competitive bidding process.--The Secretary 
                shall sell $50,000,000,000 of American Infrastructure 
                Bonds--
                            (i) through a competitive bidding process 
                        that encourages aggressive bidding;
                            (ii) with prospective purchasers bidding on 
                        how low of a multiplier they will accept (for 
                        purposes of subsection (b)(1) of section 966 of 
                        the Internal Revenue Code of 1986) when 
                        purchasing the American Infrastructure Bonds, 
                        for purposes of applying the foreign earnings 
                        exclusion described under that section; and
                            (iii) in a manner that ensures no entities 
                        participating in the bidding may collude or 
                        coordinate their bids.
                    (B) Limitation.--The multiplier described in 
                subparagraph (A)(ii) may not be greater than 6.
            (6) Reimbursement of costs.--The Board shall repay the 
        Secretary, from funds in the AIF, for the costs to the 
        Secretary in carrying out this subsection.
    (e) Additional Bonds.--
            (1) In general.--The Board may issue such other bonds as 
        the Board determines appropriate, the proceeds from which shall 
        be deposited into the AIF.
            (2) No full faith and credit.--Interest and principal 
        payments paid to holders of bonds issued pursuant to paragraph 
        (1) shall be paid from the AIF, to the extent funds are 
        available, and shall not be backed by the full faith and credit 
        of the United States.
    (f) Definitions.--For purposes of this section:
            (1) Infrastructure provider.--The term ``infrastructure 
        provider'' means an entity that seeks to finance a QIP.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (3) State.--The term ``State'' means each of the several 
        States, the District of Columbia, any territory or possession 
        of the United States, and each Federally recognized Indian 
        tribe.

SEC. 3. FOREIGN EARNINGS EXCLUSION FOR PURCHASE OF INFRASTRUCTURE 
              BONDS.

    (a) In General.--Subpart F of part III of subchapter N of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 966. FOREIGN EARNINGS EXCLUSION FOR PURCHASE OF INFRASTRUCTURE 
              BONDS.

    ``(a) Exclusion.--In the case of a corporation which is a United 
States shareholder and for which the election under this section is in 
effect for the taxable year, gross income does not include an amount 
equal to the qualified cash dividend amount.
    ``(b) Qualified Cash Dividend Amount.--For purposes of this 
section, the term `qualified cash dividend amount' means an amount of 
the cash dividends which are received during a taxable year by such 
shareholder from controlled foreign corporations equal to--
            ``(1) the multiplier determined under section 2(d)(5) of 
        the Partnership to Build America Act of 2017 for such 
        shareholder, multiplied by
            ``(2) the face amount of qualified infrastructure bonds 
        acquired at its original issue (directly or through an 
        underwriter) by such shareholder.
    ``(c) Limitations.--
            ``(1) In general.--The amount of dividends taken into 
        account under subsection (a) for a taxable year shall not 
        exceed the lesser of--
                    ``(A) the cash dividends received by the taxpayer 
                for such taxable year, or
                    ``(B) the amount shown on the applicable financial 
                statement as earnings permanently reinvested outside 
                the United States.
            ``(2) Dividends must be extraordinary.--The amount of 
        dividends taken into account under subsection (a) shall not 
        exceed the excess (if any) of--
                    ``(A) the cash dividends received during the 
                taxable year by such shareholder from controlled 
                foreign corporations, over
                    ``(B) the annual average for the base period years 
                of the cash dividends received during each base period 
                year by such shareholder from controlled foreign 
                corporations.
            ``(3) Reduction of benefit if increase in related party 
        indebtedness.--The amount of dividends which would (but for 
        this paragraph) be taken into account under subsection (a) 
        shall be reduced by the excess (if any) of--
                    ``(A) the amount of indebtedness of the controlled 
                foreign corporation to any related person (as defined 
                in section 954(d)(3)) as of the close of the taxable 
                year for which the election under this section is in 
                effect, over
                    ``(B) the amount of indebtedness of the controlled 
                foreign corporation to any related person (as so 
                defined) as of the close of the preceding taxable year.
            ``(4) Treatment of controlled foreign corporations.--All 
        controlled foreign corporations with respect to which the 
        taxpayer is a United States shareholder shall be treated as 1 
        controlled foreign corporation for purposes of this subsection. 
        The Secretary may prescribe such regulations as may be 
        necessary or appropriate to prevent the avoidance of the 
        purposes of this subsection, including regulations providing 
        that cash dividends shall not be taken into account under 
        subsection (a) to the extent such dividends are attributable to 
        the direct or indirect transfer (including through the use of 
        intervening entities or capital contributions) of cash or other 
        property from a related person (as so defined) to a controlled 
        foreign corporation.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified infrastructure bonds.--The term `qualified 
        infrastructure bond' means a bond issued under section 2(d) of 
        the Partnership to Build America Act of 2017.
            ``(2) Applicable financial statement.--The term `applicable 
        financial statement' means, with respect to a taxable year--
                    ``(A) with respect to a United States shareholder 
                which is required to file a financial statement with 
                the Securities and Exchange Commission (or which is 
                included in such a statement so filed by another 
                person), the most recent audited annual financial 
                statement (including the notes which form an integral 
                part of such statement) of such shareholder (or which 
                includes such shareholder)--
                            ``(i) which was so filed for such taxable 
                        year, and
                            ``(ii) which is certified as being prepared 
                        in accordance with generally accepted 
                        accounting principles, and
                    ``(B) with respect to any other United States 
                shareholder, the most recent audited financial 
                statement (including the notes which form an integral 
                part of such statement) of such shareholder (or which 
                includes such shareholder)--
                            ``(i) which is certified as being prepared 
                        in accordance with generally accepted 
                        accounting principles, and
                            ``(ii) which is used for the purposes of a 
                        statement or report--
                                    ``(I) to creditors,
                                    ``(II) to shareholders, or
                                    ``(III) for any other substantial 
                                nontax purpose.
            ``(3) Base period years.--
                    ``(A) In general.--The base period years are the 3 
                taxable years--
                            ``(i) which are among the 5 most recent 
                        preceding taxable years ending before the 
                        taxable year, and
                            ``(ii) which are determined by 
                        disregarding--
                                    ``(I) 1 taxable year for which the 
                                amount described in subsection 
                                (c)(2)(B) is the largest, and
                                    ``(II) 1 taxable year for which 
                                such amount is the smallest.
                    ``(B) Shorter period.--If the taxpayer has fewer 
                than 5 taxable years ending before the taxable year, 
                then in lieu of applying subparagraph (A), the base 
                period years shall include all the taxable years of the 
                taxpayer ending before such taxable year.
                    ``(C) Mergers, acquisitions, etc.--
                            ``(i) In general.--Rules similar to the 
                        rules of subparagraphs (A) and (B) of section 
                        41(f)(3) shall apply for purposes of this 
                        paragraph.
                            ``(ii) Spin-offs, etc.--If there is a 
                        distribution to which section 355 (or so much 
                        of section 356 as relates to section 355) 
                        applies during the 5-year period referred to in 
                        subparagraph (A)(i) and the controlled 
                        corporation (within the meaning of section 355) 
                        is a United States shareholder--
                                    ``(I) the controlled corporation 
                                shall be treated as being in existence 
                                during the period that the distributing 
                                corporation (within the meaning of 
                                section 355) is in existence, and
                                    ``(II) for purposes of applying 
                                subsection (c)(2) to the controlled 
                                corporation and the distributing 
                                corporation, amounts described in 
                                subsection (c)(2)(B) which are received 
                                or includable by the distributing 
                                corporation or controlled corporation 
                                (as the case may be) before the 
                                distribution referred to in subclause 
                                (I) from a controlled foreign 
                                corporation shall be allocated between 
                                such corporations in proportion to 
                                their respective interests as United 
                                States shareholders of such controlled 
                                foreign corporation immediately after 
                                such distribution.
                            ``(iii) Exception.--Subclause (II) of 
                        clause (ii) shall not apply if neither the 
                        controlled corporation nor the distributing 
                        corporation is a United States shareholder of 
                        such controlled foreign corporation immediately 
                        after such distribution.
            ``(4) Dividend.--The term `dividend' shall not include 
        amounts includable in gross income as a dividend under section 
        78, 367, or 1248. In the case of a liquidation under section 
        332 to which section 367(b) applies, the preceding sentence 
        shall not apply to the extent the United States shareholder 
        actually receives cash as part of the liquidation.
            ``(5) Coordination with dividend received deduction.--No 
        deduction shall be allowed under section 243 or 245 for any 
        dividend which is excluded from income by subsection (a).
            ``(6) Controlled groups.--All United States shareholders 
        which are members of an affiliated group filing a consolidated 
        return under section 1501 shall be treated as one United States 
        shareholder.
            ``(7) Reporting.--The Secretary shall require by regulation 
        or other guidance the reporting of such information as the 
        Secretary may require to carry out this section.
    ``(e) Denial of Foreign Tax Credit; Denial of Certain Expenses.--
            ``(1) Foreign tax credit.--
                    ``(A) In general.--No credit shall be allowed under 
                section 901 for any taxes paid or accrued (or treated 
                as paid or accrued) with respect to the excluded 
                portion of any dividend.
                    ``(B) Denial of deduction of related tax.--No 
                deduction shall be allowed under this chapter for any 
                tax for which credit is not allowable by reason of the 
                preceding sentence.
            ``(2) Expenses.--No deduction shall be allowed for expenses 
        directly allocable to the excludable portion described in 
        paragraph (1).
            ``(3) Excludable portion.--For purposes of paragraph (1), 
        unless the taxpayer otherwise specifies, the excludable portion 
        of any dividend or other amount is the amount which bears the 
        same ratio to the amount of such dividend or other amount as 
        the amount excluded from income under subsection (a) for the 
        taxable year bears to the amount described in subsection 
        (c)(2)(A) for such year.
            ``(4) Coordination with section 78.--Section 78 shall not 
        apply to any tax which is not allowable as a credit under 
        section 901 by reason of this subsection.
    ``(f) Application of Section.--This section shall apply with 
respect to the taxable year of the taxpayer in which the taxpayer 
acquires qualified infrastructure bonds at its original issue (directly 
or through an underwriter) under section 2(d)(5) of the Partnership to 
Build America Act of 2017.''.
    (b) Clerical Amendment.--The table of sections for subpart F of 
part III of subchapter N of chapter 1 of such Code is amended by adding 
at the end the following new item:

``966. Foreign earnings exclusion for purchase of infrastructure 
                            bonds.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to dividends received for taxable years ending after the date of 
the enactment of this Act.
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