Sec. 201. School infrastructure bonds
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Subpart J of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding after section 54AA the following new section: If a taxpayer holds a school infrastructure bond on one or more interest payment 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. The amount of the credit determined under this subsection with respect to any interest payment date for a school infrastructure bond is 100 percent of the amount of interest payable by the issuer with respect to such date. The credit allowed under subsection
(a)for any taxable year shall not exceed the excess of— the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over the sum of the credits allowable under this part (other than subpart C and this subpart). 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 before the application of paragraph
(1)for such succeeding taxable year). For purposes of this section, the term school infrastructure bond means any bond issued as part of an issue if— 100 percent of the available project proceeds of such issue are to be used for the purposes described in section 101(c)(1) of the School Building Improvement Act of 2017 , the interest on such obligation would (but for this section) be excludable from gross income under section 103, the issue meets the requirements of paragraph (3), and the issuer designates such bond for purposes of this section. For purposes of applying paragraph (1)— for purposes of section 149(b), a school infrastructure bond shall not be treated as federally guaranteed by reason of the credit allowed under subsection
(a)or section 6431, for purposes of section 148, the yield on a school infrastructure bond shall be determined without regard to the credit allowed under subsection (a), and a bond shall not be treated as a school 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. 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 purposes described in section 101(c)(1) of the School Building Improvement Act of 2017 within the 6-year period beginning on such date of issuance. To the extent that less than 100 percent of the available project proceeds of the issue are expended at the close of the period described 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 to be redeemed shall be determined in the same manner as under section 142. The maximum aggregate face amount of bonds issued during any calendar year which may be designated under subsection
(d)by any issuer shall not exceed the limitation amount allocated under subsection
(g)for such calendar year to such issuer. The national qualified school construction bond limitation for each calendar year is— $10,000,000,000 for 2018, $10,000,000,000 for 2019, and $10,000,000,000 for 2020. Except as otherwise provided in this subsection, the limitation applicable under subsection
(f)for any calendar year shall be allocated by the Secretary among the States in proportion to the respective amounts received by each State under part A of title I of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 6311 et seq.) for the fiscal year ending in the preceding calendar year relative to the total such amount received by all States for such fiscal year. The limitation amount allocated to a State under the preceding sentence shall be allocated by the State education agency (or such other agency as is authorized under State law to make such allocation) to issuers within such State in accordance with the criteria described in subparagraphs
(B)and
(C)of section 101(b)(2) of the School Building Improvement Act of 2017 (as in effect on the date of the enactment of this section). No State receiving an allocation under paragraph
(1)for a calendar year shall receive less than 1/2 of 1 percent of the total amount so allocated for such calendar year. The amount allocated under paragraph
(1)to the Commonwealth of Puerto Rico for any calendar year shall not exceed 1/2 of 1 percent of the total amount so allocated for such calendar year. From the limitation under subsection
(f)for any calendar year, the Secretary shall reserve 1/2 of 1 percent to be allocated to possessions of the United States other than Puerto Rico for such calendar year, and no allocation shall be made to such possessions under paragraph (1). The amount to be allocated under paragraphs (1), (2), and
(3)shall be reduced by the aggregate amount allocated under this paragraph and paragraph (5). From the limitation under subsection
(f)for any calendar year, the Secretary shall reserve 1/2 of 1 percent to be allocated to the Secretary of the Interior for schools funded by the Bureau of Indian Education for such calendar year, and no allocation shall be made with respect to such schools under paragraph (1). For purposes of this section, the term interest payment date means any date on which the holder of record of the school infrastructure bond is entitled to a payment of interest under such bond. For purposes of this title, interest on any school infrastructure bond shall be includible in gross income. Rules similar to the rules of subsections (f), (g), (h), and
(i)of section 54A shall apply for purposes of the credit allowed under subsection (a). Notwithstanding any other provision of law, a school infrastructure bond shall be treated as a qualified school construction bond for purposes of the application of section 1601 of the American Recovery and Reinvestment Act of 2009 ( Public Law 111–5 ; 26 U.S.C. 54C note.). . The table of subparts for part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by amending the item related to subpart J to read as follows: Subpart J—Certain infrastructure bonds . The table of sections for subpart J of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 54BB. School infrastructure bonds. . Except as otherwise provided by a State after the date of the enactment of this Act, the interest on any school infrastructure bond (as defined in section 54BB of the Internal Revenue Code of 1986, as added by this section) 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. Paragraph
(3)of section 6431(f) of the Internal Revenue Code of 1986 is amended by inserting any school infrastructure bond (as defined in section 54BB) or before any qualified tax credit bond . Subparagraph
(A)of section 255(g)(1) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by adding before Postal Service Fund the following: Payments under . section 54BB of the Internal Revenue Code of 1986. The amendments made by this section shall apply to obligations issued after December 31, 2017.
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U.S. Code
2 references not yet in our index
- Pub. L. 111-5
- 26 USC 54C
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