Section 1 Short title
This Act may be cited as the “Bolstering Our Nation’s Deficient Structures Act of 2014” or the “BONDS Act”.
Bolstering Our Nation’s Deficient Structures Act of 2014
A BILL
To amend the Internal Revenue Code of 1986 to permanently extend the tax treatment for certain build America bonds, and for other purposes.
Sec. 2 Build America Bonds made permanent
In general— Subparagraph (B) of section 54AA(d)(1) of the Internal Revenue Code of 1986 is amended by inserting “or during a period beginning on or after the date of the enactment of the Bolstering Our Nation’s Deficient Structures Act of 2014,” after “January 1, 2011,”.
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:”
Special rules— Subsection (f) of section 54AA of such Code is amended by adding at the end the following new paragraph:
“(3) Application of other rules
“(A) In general—Notwithstanding any other provision of law, a build America bond shall be considered a recovery zone economic development bond (as defined in section 1400U–2) for purposes of application of section 1601 of title I of division B of Public Law 111–5 (26 U.S.C. 54C note).
“(B) Public transportation projects—Recipients of any financial assistance authorized under this section that funds public transportation projects, as defined in Title 49, United States Code, must comply with the grant requirements described under section 5309 of such title.”
Extension of payments to issuers—
In general— Section 6431 of such Code is amended—
by inserting “or during a period beginning on or after the date of the enactment of the Bolstering Our Nation’s Deficient Structures Act of 2014,” after “January 1, 2011,” in subsection (a), and
by striking “before January 1, 2011” in subsection (f)(1)(B) and inserting “during a particular period”.
Conforming amendments— Subsection (g) of section 54AA of such Code is amended—
by inserting “or during a period beginning on or after the date of the enactment of the Bolstering Our Nation’s Deficient Structures Act of 2014,” after “January 1, 2011,”, and
by striking “qualified bonds issued before 2011” in the heading and inserting “certain qualified bonds”.
Reduction in percentage of payments to issuers— Subsection (b) of section 6431 of such Code is amended—
by striking “The Secretary” and inserting the following:
“(1) In general—The Secretary”
by striking “35 percent” and inserting “the applicable percentage”, and
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:”
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).
“(D) Issuance restriction not applicable—Subsection (d)(1)(B) shall not apply to a refunding bond referred to in subparagraph (A).”
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”.
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—
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.
Effective date— The amendments made by this section shall apply to obligations issued on or after the date of the enactment of this Act.