April 10, 2025
Mr. Wicker (for himself, Mr. Bennet, Mrs. Britt, and Mrs. Hyde-Smith) introduced the following bill; which was read twice and referred to the Committee on Finance
To amend the Internal Revenue Code of 1986 to provide a credit to issuers of American infrastructure bonds.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
Section 1. Short title
This Act may be cited as the American Infrastructure Bonds Act of 2025
.
Sec. 2. Credit for American infrastructure bonds allowed to issuers
(a) In general
Subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by inserting after section 6430 the following new section:
6431. Credit to issuer of american infrastructure bonds
(a) In general
The issuer of an American infrastructure 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 interest payment date under such bond) to the issuer of such bond (or to any person who makes such interest payments on behalf of the issuer) 28 percent of the interest payable under such bond on such date.
(2) Interest payment date
For purposes of this subsection, the term interest payment date means each date on which the holder of record of the American infrastructure bond is entitled to a payment of interest under such bond.
(c) American infrastructure bond
(1) In general
For purposes of this section, the term American infrastructure bond means any obligation if—
(A)
the interest on such obligation would (but for this section) be excludable from gross income under section 103,
(B)
the obligation is not a private activity bond, and
(C)
the issuer makes an irrevocable election to have this section apply.
(2) Applicable rules
For purposes of applying paragraph (1)—
(A)
for purposes of section 149(b), a bond shall not be treated as federally guaranteed by reason of the credit allowed under this section, and
(B)
a bond shall not be treated as an American 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.
(d) Special rules
(1) Interest on American infrastructure bonds includible in gross income for Federal income tax purposes
For purposes of this title, interest on any American infrastructure bond shall be includible in gross income.
(2) Application of arbitrage rules
For purposes of section 148, the yield on an issue of American infrastructure bonds shall be reduced by the credit allowed under this section, except that no such reduction shall apply with respect to determining the amount of gross proceeds of an issue that qualifies as a reasonably required reserve or replacement fund.
(e) Regulations
The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section.
(b) Conforming amendments
(1)
The table of sections for subchapter B of chapter 65 of subtitle F of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
(2)
Subparagraph (A) of section 6211(b)(4) of such Code is amended by inserting 6431,
after 6428B,
.
(c) Transitional coordination with state law
Except as otherwise provided by a State after the date of the enactment of this Act, the interest on any American infrastructure bond (as defined in section 6431 of the Internal Revenue Code of 1986 (as added by this Act)) 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.
(d) Adjustment to payment to issuers in case of sequestration
(1) In general
In the case of any payment under subsection (b) of section 6431 of the Internal Revenue Code of 1986 (as added by this Act) made after the date of enactment of this Act to which sequestration applies, the amount of such payment shall be increased to an amount equal to—
(A)
such payment (determined before such sequestration), multiplied by
(B)
the quotient obtained by dividing the number 1 by the amount by which the number 1 exceeds the percentage reduction in such payment pursuant to such sequestration.
(2) 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 or future legislation having similar effect.
(e) Effective date
The amendments made by this section shall apply to obligations issued after the date of enactment of this Act.