SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``American 
Infrastructure Investment Act of 2010''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Extension of Build America Bonds.
Sec. 3. Exempt-facility bonds for sewage and water supply facilities.
Sec. 4. Extension of exemption from alternative minimum tax treatment 
                            for certain tax-exempt bonds.
Sec. 5. Extension and additional allocations of recovery zone bond 
                            authority.
Sec. 6. Allowance of new markets tax credit against alternative minimum 
                            tax.
Sec. 7. Extension of tax-exempt eligibility for loans guaranteed by 
                            Federal home loan banks.
Sec. 8. Extension of temporary small issuer rules for allocation of 
                            tax-exempt interest expense by financial 
                            institutions.

SEC. 2. EXTENSION OF BUILD AMERICA BONDS.

    (a) In General.--Subparagraph (B) of section 54AA(d)(1) is amended 
by striking ``January 1, 2011'' and inserting ``January 1, 2013''.
    (b) Extension of Payments to Issuers.--
            (1) In general.--Section 6431 is amended--
                    (A) by striking ``January 1, 2011'' in subsection 
                (a) and inserting ``January 1, 2013''; and
                    (B) by striking ``January 1, 2011'' in subsection 
                (f)(1)(B) and inserting ``a particular date''.
            (2) Conforming amendments.--Subsection (g) of section 54AA 
        is amended--
                    (A) by striking ``January 1, 2011'' and inserting 
                ``January 1, 2013''; and
                    (B) by striking ``Qualified Bonds Issued Before 
                2011'' in the heading and inserting ``Certain Qualified 
                Bonds''.
    (c) Reduction in Percentage of Payments to Issuers.--Subsection (b) 
of section 6431 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:


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  ``In the case of a qualified bond issued during calendar
                           year:                                        The applicable percentage is:
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2009 or 2010...............................................  35 percent
2011.......................................................  32 percent
2012.......................................................  30 percent.''.
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    (d) Current Refundings Permitted.--Subsection (g) of section 54AA 
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).''.
    (e) Clarification Related to Levees and Flood Control Projects.--
Subparagraph (A) of section 54AA(g)(2) is amended by inserting 
``(including capital expenditures for levees and other flood control 
projects)'' after ``capital expenditures''.

SEC. 3. EXEMPT-FACILITY BONDS FOR SEWAGE AND WATER SUPPLY FACILITIES.

    (a) Bonds for Water and Sewage Facilities Exempt From Volume Cap on 
Private Activity Bonds.--
            (1) In general.--Paragraph (3) of section 146(g) is amended 
        by inserting ``(4), (5),'' after ``(2),''.
            (2) Conforming amendment.--Paragraphs (2) and (3)(B) of 
        section 146(k) are both amended by striking ``(4), (5), (6),'' 
        and inserting ``(6)''.
    (b) Tax-Exempt Issuance by Indian Tribal Governments.--
            (1) In general.--Subsection (c) of section 7871 is amended 
        by adding at the end the following new paragraph:
            ``(4) Exception for bonds for water and sewage 
        facilities.--Paragraph (2) shall not apply to an exempt 
        facility bond 95 percent or more of the net proceeds (as 
        defined in section 150(a)(3)) of which are to be used to 
        provide facilities described in paragraph (4) or (5) of section 
        142(a).''.
            (2) Conforming amendment.--Paragraph (2) of section 7871(c) 
        is amended by striking ``paragraph (3)'' and inserting 
        ``paragraphs (3) and (4)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 4. EXTENSION OF EXEMPTION FROM ALTERNATIVE MINIMUM TAX TREATMENT 
              FOR CERTAIN TAX-EXEMPT BONDS.

    (a) In General.--Clause (vi) of section 57(a)(5)(C) is amended--
            (1) by striking ``January 1, 2011'' in subclause (I) and 
        inserting ``January 1, 2012''; and
            (2) by striking ``and 2010'' in the heading and inserting 
        ``, 2010, and 2011''.
    (b) Adjusted Current Earnings.--Clause (iv) of section 56(g)(4)(B) 
is amended--
            (1) by striking ``January 1, 2011'' in subclause (I) and 
        inserting ``January 1, 2012''; and
            (2) by striking ``and 2010'' in the heading and inserting 
        ``, 2010, and 2011''.
    (c) Effective Date.--The amendments made by this section shall 
apply to obligations issued after December 31, 2010.

SEC. 5. EXTENSION AND ADDITIONAL ALLOCATIONS OF RECOVERY ZONE BOND 
              AUTHORITY.

    (a) Extension of Recovery Zone Bond Authority.--Section 1400U-
2(b)(1) and section 1400U-3(b)(1)(B) are each amended by striking 
``January 1, 2011'' and inserting ``January 1, 2012''.
    (b) Additional Allocations of Recovery Zone Bond Authority Based on 
Unemployment.--Section 1400U-1 is amended by adding at the end the 
following new subsection:
    ``(c) Allocation of 2010 Recovery Zone Bond Limitations Based on 
Unemployment.--
            ``(1) In general.--The Secretary shall allocate the 2010 
        national recovery zone economic development bond limitation and 
        the 2010 national recovery zone facility bond limitation among 
        the States in the proportion that each such State's 2009 
        unemployment number bears to the aggregate of the 2009 
        unemployment numbers for all of the States.
            ``(2) Minimum allocation.--The Secretary shall adjust the 
        allocations under paragraph (1) for each State to the extent 
        necessary to ensure that no State (prior to any reduction under 
        paragraph (3)) receives less than 0.9 percent of the 2010 
        national recovery zone economic development bond limitation and 
        0.9 percent of the 2010 national recovery zone facility bond 
        limitation.
            ``(3) Allocations by states.--
                    ``(A) In general.--Each State with respect to which 
                an allocation is made under paragraph (1) shall 
                reallocate such allocation among the counties and large 
                municipalities (as defined in subsection (a)(3)(B)) in 
                such State in the proportion that each such county's or 
                municipality's 2009 unemployment number bears to the 
                aggregate of the 2009 unemployment numbers for all the 
                counties and large municipalities (as so defined) in 
                such State.
                    ``(B) 2010 allocation reduced by amount of previous 
                allocation.--Each State shall reduce (but not below 
                zero)--
                            ``(i) the amount of the 2010 national 
                        recovery zone economic development bond 
                        limitation allocated to each county or large 
                        municipality (as so defined) in such State by 
                        the amount of the national recovery zone 
                        economic development bond limitation allocated 
                        to such county or large municipality under 
                        subsection (a)(3)(A) (determined without regard 
                        to any waiver thereof), and
                            ``(ii) the amount of the 2010 national 
                        recovery zone facility bond limitation 
                        allocated to each county or large municipality 
                        (as so defined) in such State by the amount of 
                        the national recovery zone facility bond 
                        limitation allocated to such county or large 
                        municipality under subsection (a)(3)(A) 
                        (determined without regard to any waiver 
                        thereof).
                    ``(C) Waiver of suballocations.--A county or 
                municipality may waive any portion of an allocation 
                made under this paragraph. A county or municipality 
                shall be treated as having waived any portion of an 
                allocation made under this paragraph which has not been 
                allocated to a bond issued before May 1, 2011. Any 
                allocation waived (or treated as waived) under this 
                subparagraph may be used or reallocated by the State.
                    ``(D) Special rule for a municipality in a 
                county.--In the case of any large municipality any 
                portion of which is in a county, such portion shall be 
                treated as part of such municipality and not part of 
                such county.
            ``(4) 2009 unemployment number.--For purposes of this 
        subsection, the term `2009 unemployment number' means, with 
        respect to any State, county or municipality, the number of 
        individuals in such State, county, or municipality who were 
        determined to be unemployed by the Bureau of Labor Statistics 
        for December 2009.
            ``(5) 2010 national limitations.--
                    ``(A) Recovery zone economic development bonds.--
                The 2010 national recovery zone economic development 
                bond limitation is $10,000,000,000. Any allocation of 
                such limitation under this subsection shall be treated 
                for purposes of section 1400U-2 in the same manner as 
                an allocation of national recovery zone economic 
                development bond limitation.
                    ``(B) Recovery zone facility bonds.--The 2010 
                national recovery zone facility bond limitation is 
                $15,000,000,000. Any allocation of such limitation 
                under this subsection shall be treated for purposes of 
                section 1400U-3 in the same manner as an allocation of 
                national recovery zone facility bond limitation.''.
    (c) Authority of State To Waive Certain 2009 Allocations.--
Subparagraph (A) of section 1400U-1(a)(3) is amended by adding at the 
end the following: ``A county or municipality shall be treated as 
having waived any portion of an allocation made under this subparagraph 
which has not been allocated to a bond issued before May 1, 2011. Any 
allocation waived (or treated as waived) under this subparagraph may be 
used or reallocated by the State.''.

SEC. 6. ALLOWANCE OF NEW MARKETS TAX CREDIT AGAINST ALTERNATIVE MINIMUM 
              TAX.

    (a) In General.--Subparagraph (B) of section 38(c)(4) is amended by 
redesignating clauses (v) through (ix) as clauses (vi) through (x), 
respectively, and by inserting after clause (iv) the following new 
clause:
                            ``(v) the credit determined under section 
                        45D, but only with respect to credits 
                        determined with respect to qualified equity 
                        investments (as defined in section 45D(b)) 
                        initially made before January 1, 2012,''.
    (b) Effective Date.--The amendments made by this section shall 
apply to credits determined with respect to qualified equity 
investments (as defined in section 45D(b) of the Internal Revenue Code 
of 1986) initially made after March 15, 2010.

SEC. 7. EXTENSION OF TAX-EXEMPT ELIGIBILITY FOR LOANS GUARANTEED BY 
              FEDERAL HOME LOAN BANKS.

    Clause (iv) of section 149(b)(3)(A) is amended by striking 
``December 31, 2010'' and inserting ``December 31, 2011''.

SEC. 8. EXTENSION OF TEMPORARY SMALL ISSUER RULES FOR ALLOCATION OF 
              TAX-EXEMPT INTEREST EXPENSE BY FINANCIAL INSTITUTIONS.

    (a) In General.--Clauses (i), (ii), and (iii) of section 
265(b)(3)(G) are each amended by striking ``or 2010'' and inserting ``, 
2010, or 2011''.
    (b) Conforming Amendment.--Subparagraph (G) of section 265(b)(3) is 
amended by striking ``and 2010'' in the heading and inserting ``, 2010, 
and 2011''.
    (c) Effective Date.--The amendments made by this section shall 
apply to obligations issued after December 31, 2010.
Output: American Infrastructure Investment Act of 2010 - Amends the Internal Revenue Code to extend until January 1, 2013, the period for issuing Build America Bonds and for credits allowable to issuers of such bonds. Allows funding through such bonds for capital expenditures for levees and flood control projects.

Exempts private activity bonds for sewage and water supply facilities from the state volume caps applicable to such bonds. Allows Indian tribal governments to issue tax-exempt private activity bonds to provide water or sewage facilities.

Extends through 2011 the exemption from alternative minimum tax (AMT) treatment of interest on certain tax-exempt bonds.

Extends through 2011 the period for issuing recovery zone economic development bonds and recovery zone facility bonds. Requires the Secretary of the Treasury to allocate 2010 national limitations on recovery bonds based upon state unemployment statistics.

Allows a full offset against the AMT for new market tax credit amounts.

Extends through 2011: (1) the tax exemption allowed for interest on bonds guaranteed by a federal home loan bank; and (2) small issuer rules for the allocation of tax-exempt interest expense by financial institutions.