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Title II — Tax credit extensions

H.R. 3939 · 113th Congress · Jan 28, 2014 · Lineage

II Tax credit extensions

Sec. 201 Permanent extension of new markets tax credit

(a)
Extension—
(1)
In general— Subparagraph (G) of section 45D(f)(1) of the Internal Revenue Code of 1986 is amended by striking “, 2011, 2012, and 2013” and inserting “and each calendar year thereafter”.
(2)
Conforming amendment— Section 45D(f)(3) of such Code is amended by striking the last sentence.
(b)
Inflation adjustment— Subsection (f) of section 45D of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(4) Inflation adjustment

“(A) In general—In the case of any calendar year beginning after 2013, the dollar amount in paragraph (1)(G) shall be increased by an amount equal to—

“(i) such dollar amount, multiplied by

“(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting “calendar year 2000” for “calendar year 1992” in subparagraph (B) thereof.

“(B) Rounding rule—Any increase under subparagraph (A) which is not a multiple of $1,000,000 shall be rounded to the nearest multiple of $1,000,000.”

(c)
Alternative minimum tax relief— Subparagraph (B) of section 38(c)(4) of the Internal Revenue Code of 1986 is amended—
(1)
by redesignating clauses (v) through (ix) as clauses (vi) through (x), respectively, and
(2)
by inserting after clause (iv) the following new clause:

“(v) the credit determined under section 45D, but only with respect to credits determined with respect to qualified equity investments (as defined in section 45D(b)) initially made before January 1, 2014,”

(d)
Effective dates—
(1)
In general— Except as provided in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act.
(2)
Alternative minimum tax relief— The amendments made by subsection (c) shall apply to credits determined with respect to qualified equity investments (as defined in section 45D(b) of the Internal Revenue Code of 1986) initially made after the date of the enactment of this Act.

Sec. 202 Build America Bonds made permanent

(a)
Short title— This section may be cited as the “Build America Bonds Act of 2014”.
(b)
Build America Bonds made permanent—
(1)
In general— Subparagraph (B) of section 54AA(d)(1) of the Internal Revenue Code of 1986 is amended by inserting “or on or after the date of the enactment of the Build America Bonds Act of 2014,” after “January 1, 2011,”.
(2)
Reduction in credit percentage to bondholders— Subsection (b) of section 54AA of such Code is amended to read as follows:

“(b) Amount of credit

“(1) In general—The amount of the credit determined under this subsection with respect to any interest payment date for a build America bond is the applicable percentage of the amount of interest payable by the issuer with respect to such date.

“(2) Applicable percentage—For purposes of paragraph (1), the applicable percentage shall be determined under the following table:”

(3)
Extension of payments to issuers—
(A)
In general— Section 6431 of such Code is amended—
(i)
by inserting “or on or after the date of the enactment of the Build America Bonds Act of 2014,” after “January 1, 2011,” in subsection (a), and
(ii)
by striking “before January 1, 2011” in subsection (f)(1)(B) and inserting “during a particular period”.
(B)
Conforming amendments— Subsection (g) of section 54AA of such Code is amended—
(i)
by inserting “or during a period beginning on or after the date of the enactment of the Build America Bonds Act of 2014,” after “January 1, 2011,”, and
(ii)
by striking “qualified bonds issued before 2011” in the heading and inserting “certain qualified bonds”.
(4)
Reduction in percentage of payments to issuers— Subsection (b) of section 6431 of such Code is amended—
(A)
by striking “The Secretary” and inserting the following:

“(1) In general—The Secretary”

(B)
by striking “35 percent” and inserting “the applicable percentage”, and
(C)
by adding at the end the following new paragraph:

“(2) Applicable percentage—For purposes of this subsection, the term applicable percentage means the percentage determined in accordance with the following table:”

(5)
Current refundings permitted— Subsection (g) of section 54AA of such Code is amended by adding at the end the following new paragraph:

“(3) Treatment of current refunding bonds

“(A) In general—For purposes of this subsection, the term qualified bond includes any bond (or series of bonds) issued to refund a qualified bond 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, and

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

“(B) Applicable percentage—In the case of a refunding bond referred to in subparagraph (A), the applicable percentage with respect to such bond under section 6431(b) shall be the lowest percentage specified in paragraph (2) of such section.

“(C) Determination of average maturity—For purposes of subparagraph (A)(i), average maturity shall be determined in accordance with section 147(b)(2)(A).”

(6)
Clarification related to levees and flood control projects— Subparagraph (A) of section 54AA(g)(2) of such Code is amended by inserting “(including capital expenditures for levees and other flood control projects)” after “capital expenditures”.
(7)
Gross-Up of payment to issuers in case of sequestration— In the case of any payment under section 6431(b) 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—
(A)
such payment (determined before such sequestration), multiplied by
(B)
the quotient obtained by dividing one by the amount by which one exceeds the percentage reduction in such payment pursuant to such sequestration.
(c)
Effective date— The amendments made by this section shall apply to obligations issued on or after the date of the enactment of this Act.

Sec. 203 Permanent extension of research credit; increase in alternative simplified research credit

(a)
Permanent extension—
(1)
In general— Section 41 of the Internal Revenue Code of 1986 is amended by striking subsection (h).
(2)
Conforming amendments— Such Code is amended—
(A)
in section 41(c) by striking paragraph (4) and redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively;
(B)
in section 41(c)(4), as so redesignated, by striking the second sentence of subparagraph (C); and
(C)
in paragraph (1) of section 45C(b) by striking subparagraph (D).
(3)
Effective date— The amendments made by this subsection shall apply to amounts paid or incurred after December 31, 2013.
(b)
Increase in alternative simplified research credit—
(1)
In general— Subparagraph (A) of section 41(c)(4) of such Code, as redesignated by subsection (a), is amended by striking “14 percent (12 percent in the case of taxable years ending before January 1, 2009)” and inserting “17 percent”.
(2)
Effective date— The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.

Sec. 204 Exempt-facility bonds for sewage and water supply facilities

(a)
Bonds for water and sewage facilities exempt from volume cap on private activity bonds—
(1)
In general— Paragraph (3) of section 146(g) of the Internal Revenue Code of 1986 is amended by inserting “(4), (5),” after “(2),”.
(2)
Conforming amendment— Paragraphs (2) and (3)(B) of section 146(k) are both amended by striking “(4), (5), (6), or” and inserting “(6)”.
(b)
Tax-Exempt issuance by Indian tribal governments—
(1)
In general— Subsection (c) of section 7871 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(4) Exception for bonds for water and sewage facilities—Paragraph (2) shall not apply to an exempt facility bond 95 percent or more of the net proceeds (as defined in section 150(a)(3)) of which are to be used to provide facilities described in paragraph (4) or (5) of section 142(a).”

(2)
Conforming amendment— Paragraph (2) of section 7871(c) is amended by striking “paragraph (3)” and inserting “paragraphs (3) and (4)”.
(c)
Effective date— The amendments made by this section shall apply to obligations issued on or after the date of the enactment of this Act.

Sec. 205 Repeal of alternative minimum tax on private activity bonds

(a)
In general— Subsection (a) of section 57 of the Internal Revenue Code of 1986 is amended by striking paragraph (5).
(b)
Conforming amendments—
(1)
Subparagraph (B) of section 1(g)(7) of such Code is amended by adding “and” at the end of clause (i), by striking “, and” at the end of clause (ii) and inserting a period, and by striking clause (iii).
(2)
Subclause (II) of section 53(d)(1)(B)(ii) of such Code is amended by striking “, (5)”.
(3)
Subparagraph (C) of section 56(b)(1) of such Code is amended by striking clause (iii) and redesignating clauses (iv) and (v) as clauses (iii) and (iv), respectively.
(4)
Paragraph (3) of section 148(b) of such Code is amended to read as follows:

“(3) Exception for tax-exempt bonds—The term investment property does not include any tax-exempt bond.”

(5)
Subparagraph (B)(i) of section 149(g)(3) of such Code is amended to read as follows:

“(i) In general—Such term shall not include any bond issued as part of an issue 95 percent of the net proceeds of which are invested in bonds the interest on which is not includible in gross income under section 103.”

(6)
Paragraph (5) of section 1400L(d) of such Code is amended by striking subparagraph (E).
(7)
Paragraph (5) of section 1400N(a) of such Code is amended by striking subparagraph (G).
(c)
Effective date— The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.