LIFT Act

6436. Credit allowed to issuer for American infrastructure bonds

(a) In general. In the case of an American 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).

(b) Payment of credit

(1) In general. The Secretary shall pay (contemporaneously with each date on which interest is so payable) to the issuer of such bond (or to any person who makes such interest payments on behalf of such issuer) an amount equal to the applicable percentage of such interest so payable.

(2) Applicable percentage. 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 issuedThe applicable during calendar year:percentage is: 2026 through 2030 42% 2031 38% 203234% 2033 and thereafter30%.

(3) Limitation

(A) In general. 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 on such date if such interest were determined at the rate which the Secretary estimates will permit the issuance of American infrastructure bonds with a specified maturity or redemption date without discount and without additional interest cost.

(B) Date of rate determination with respect to bond. Such rate with respect to any American 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.

(c) American infrastructure bond

(1) In general. For purposes of this section, the term American infrastructure bond means any bond (other than a private activity bond) issued as part of an issue if—

(A) 100 percent of the available project proceeds of 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,

(B) the interest on such bond would (but for this section) be excludable from gross income under section 103,

(C) 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

(D) prior to the issuance of such bond, the issuer makes an irrevocable election to have this section apply.

(2) Applicable rules. For purposes of applying paragraph (1)—

(A) Not treated as federally guaranteed. For purposes of section 149(b), an American infrastructure bond shall not be treated as federally guaranteed by reason of the credit allowed under this section.

(B) Application of arbitrage rules. For purposes of section 148, the yield on an American infrastructure bond shall be reduced by the credit allowed under this section.

(d) Definition and special rules. For purposes of this section—

(1) Interest includible in gross income. For purposes of this title, interest on any American infrastructure bond shall be includible in gross income.

(2) Available project proceeds. The term available project proceeds means—

(A) the excess of—

(i) the proceeds from the sale of an issue, over

(ii) the sum of—

(I) issuance costs financed by the issue (the extent that such costs do not exceed 2 percent of such proceeds), and

(II) amounts in a reasonably required reserve (within the meaning of section 150(a)(3)) with respect to such issue), and

(B) the proceeds from any investment of the excess described in clause (i).

(3) Current refundings allowed

(A) In general. In the case of a bond issued to refund an American infrastructure bond, such refunding bond shall be treated as an American infrastructure bond for purposes of this section 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,

(iii) the refunded bond is redeemed not later than 90 days after the date of the issuance of the refunding bond, and

(iv) the refunded bond was issued more than 30 days after the date of the enactment of this section.

(B) Applicable percentage limitation. The applicable percentage with respect to any bond to which subparagraph (A) applies shall be 30 percent.

(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) Application of Davis-Bacon Act requirements with respect to American infrastructure bonds. Subchapter IV of chapter 31 of the title 40, United States Code, shall apply to projects financed with the proceeds of American infrastructure bonds.

(e) Regulations. The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section.

Sec. 6436. Credit allowed to issuer for American infrastructure bonds.