The bill would create a federal credit for issuers of certain infrastructure bonds. For each interest payment, the Treasury would pay the issuer or the party making the payment an amount equal to 28% of the interest. Eligible bonds must qualify for tax-exempt interest under current law, cannot be private activity bonds, and must be issued with an irrevocable election to use the credit. The bill would make interest on these bonds taxable for federal income tax purposes. It also sets rules for bond premiums, arbitrage, state tax treatment, and payments affected by sequestration. The changes would apply to bonds issued after enactment.
Eligible public bond issuers could receive federal payments tied to interest owed on their bonds. Bond interest would be included in holders’ federal taxable income. The bill does not describe specific projects or identify who would issue bonds.
The bill provides federal payments equal to 28% of qualifying bond interest. It does not state the total expected cost or provide an estimate of how many bonds would qualify.
No publicly available information.
No publicly available information.