II 114th CONGRESS 1st Session S. 1515 IN THE SENATE OF THE UNITED STATES June 4, 2015 Mr. Markey introduced the following bill; which was read twice and referred to the Committee on Finance A BILL 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 Bolstering Our Nation’s Deficient Structures Act of 2015 or the BONDS Act . 2. Build America Bonds made permanent (a) In general Subparagraph (B) of section 54AA(d)(1) of the Internal Revenue Code of 1986 is amended by inserting or during a period beginning on or after the date of the enactment of the Bolstering Our Nation’s Deficient Structures Act of 2015 , after 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 2015 32 2016 31 2017 30 2018 29 2019 and thereafter 28. . (c) Special rules Subsection (f) of section 54AA 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 note). (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 Bolstering Our Nation’s Deficient Structures Act of 2015 , after January 1, 2011, in subsection (a), and (B) by striking before January 1, 2011 in subsection (f)(1)(B) and inserting 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 Bolstering Our Nation’s Deficient Structures Act of 2015 , after January 1, 2011, , and (B) by striking qualified bonds issued before 2011 in the heading and inserting certain qualified bonds . (e) Reduction in percentage of payments to issuers Subsection (b) of section 6431 of such Code is amended— (1) by striking The Secretary and inserting the following: (1) In general The Secretary , (2) by striking 35 percent and inserting the applicable percentage , and (3) by adding at the end the following new paragraph: (2) Applicable percentage For purposes of this subsection, the term applicable percentage means the percentage determined in accordance with the following table: 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 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 includes any bond (or series of bonds) issued to refund a qualified bond if— (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 Subparagraph (A) of section 54AA(g)(2) of such Code is amended by inserting (including capital expenditures for levees and other flood control projects) after capital expenditures . (h) Gross-Up of payment to issuers in case of sequestration In the case of any payment under section 6431(b) of the Internal Revenue Code of 1986 made after the date of the enactment of this Act to which sequestration applies, the amount of such payment shall be increased to an amount equal to— (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 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. (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.