Sec. 135101. Credit to issuer for certain infrastructure bonds
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Subchapter B of chapter 65 is amended by inserting before section 6432 the following new section: In the case of a qualified infrastructure bond, the issuer of such 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). The Secretary shall pay (contemporaneously with each date on which interest is paid, including any interest paid after the originally scheduled payment date) to the issuer of such bond (or, at the direction of the issuer, to any person who makes such interest payments on behalf of such issuer) an amount equal to the applicable percentage of such interest so paid.
For purposes of this subsection, except as provided in subsection (d), the applicable percentage with respect to any bond shall be determined under the following table: In the case of a bond issued during calendar year: The applicable percentage is: 2022 through 2024 35% 2025 32% 2026 30% 2027 and thereafter 28% The amount of any interest payment taken into account under paragraph
(1)with respect to a bond for any payment date shall not exceed the amount of interest which would have been payable under such bond for such payment date if interest were determined at the applicable credit rate multiplied by the applicable amount for such bond for such payment date. For purposes of subparagraph (A)— The applicable credit rate is the rate which the Secretary estimates will permit the issuance of qualified infrastructure bonds with a specified maturity or redemption date without discount and without additional interest cost to the issuer. The applicable credit rate with respect to any qualified infrastructure bond shall be determined as of the first day on which there is a binding, written contract for the sale or exchange of the bond. In the case of any bond that has more than a de minimis amount of original issue discount (determined under the rules of section 1273(a)(3)), the applicable amount for a payment date is the issue price of such bond (within the meaning of section 148), as adjusted for any principal payments made prior to such date. In the case of any other bond, the applicable amount for a payment date is the outstanding principal amount of such bond on such payment date (determined without taking into account any principal payment on such bond on such date). For purposes of this section, the term qualified infrastructure bond means any bond (other than a private activity bond) issued as part of an issue if— 100 percent of the excess of available project proceeds of such issue over the amounts in a reasonably required reserve (within the meaning of section 150(a)(3)) with respect to such issue are to be used for— capital expenditures or operations and maintenance expenditures in connection with property the acquisition, construction, or improvement of which would be a capital expenditure, or payments made by a State or political subdivision of a State to a custodian of a rail corridor for purposes of the transfer, lease, sale, or acquisition of an established railroad right-of-way consistent with section 8(d) of the National Trails Act of 1968, but only if the Surface Transportation Board has issued a certificate of interim trail use or notice of interim trail use for purposes of authorizing such transfer, lease, sale, or acquisition, the interest on such bond would (but for this section) be excludable from gross income under section 103, the issue price has not 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, and prior to the issuance of such bond, the issuer makes an irrevocable election to have this section apply. For purposes of applying paragraph (1)— For purposes of section 149(b), a qualified infrastructure bond shall not be treated as federally guaranteed by reason of the credit allowed under this section. For purposes of section 148, the yield on a qualified infrastructure bond shall be reduced by the credit allowed under this section, except that no such reduction shall apply in determining the amount of gross proceeds of an issue that qualifies as a reasonably required reserve or replacement fund. For purposes of this section— For purposes of this title, interest on any qualified infrastructure bond shall be includible in gross income. The term available project proceeds means— the excess of— the proceeds from the sale of an issue, over issuance costs financed by the issue (to the extent that such costs do not exceed 2 percent of such proceeds), and the proceeds from any investment of the excess described in subparagraph (A). In the case of a bond issued to refund a qualified infrastructure bond, such refunding bond shall not be treated as a qualified infrastructure bond for purposes of this section unless— 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, the amount of the refunding bond does not exceed the outstanding amount of the refunded bond, the refunded bond is redeemed not later than 90 days after the date of the issuance of the refunding bond, and the refunded bond was issued more than 30 days after the date of the enactment of this section. The applicable percentage with respect to any bond to which subparagraph
(A)applies shall be 28 percent. For purposes of subparagraph (A)(i), average maturity shall be determined in accordance with section 147(b)(2)(A). Subchapter IV of chapter 31 of title 40, United States Code, shall apply to projects financed with the proceeds of qualified infrastructure bonds. The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section. . In the case of any payment under section 6431A 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— such payment (determined before such sequestration), multiplied by 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. Section 1324(b)(2) of title 31, United States Code, is amended by striking or 6431 and inserting 6431, or 6431A . The table of sections for subchapter B of chapter 65 is amended by inserting before the item relating to section 6432 the following new item: Sec. 6431A. Credit allowed to issuer for qualified infrastructure bonds. . The amendments made by this section shall apply to bonds issued after December 31, 2021.