I
119THCONGRESS
1
STSESSION H. R. 2440
To amend the Internal Revenue Code of 1986 to provide for school
infrastructure finance and innovation tax credit bonds.
IN THE HOUSE OF REPRESENTATIVES
MARCH27, 2025
Mr. H
UDSON(for himself and Ms. SEWELL) introduced the following bill;
which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
for school infrastructure finance and innovation tax cred-
it bonds.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘School Infrastructure 4
Finance and Innovation Act’’ or the ‘‘SIFIA Act’’. 5
SEC. 2. SIFIA BONDS. 6
(a) I
NGENERAL.—Part IV of subchapter A of chap-7
ter 1 is amended by adding at the end the following new 8
subpart: 9
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‘‘Subpart K—SIFIA Bonds 1
‘‘Sec. 54BB. SIFIA bonds.
‘‘SEC. 54BB. SIFIA BONDS.
2
‘‘(a) I
NGENERAL.—If a taxpayer holds a SIFIA 3
bond on one or more credit allowance dates of the bond 4
during any taxable year, there shall be allowed as a credit 5
against the tax imposed by this chapter for the taxable 6
year an amount equal to the sum of the credits determined 7
under subsection (b) with respect to such dates. 8
‘‘(b) A
MOUNT OFCREDIT.— 9
‘‘(1) I
N GENERAL.—The amount of the credit 10
determined under this subsection with respect to any 11
credit allowance date for a SIFIA bond is 25 percent 12
of the annual credit determined for such bond. 13
‘‘(2) A
NNUAL CREDIT.—For purposes of this 14
subsection, the term ‘annual credit’ means an 15
amount equal to the product of— 16
‘‘(A) the applicable credit rate, multiplied 17
by 18
‘‘(B) the face amount of the bond. 19
‘‘(3) A
PPLICABLE CREDIT RATE .—For purposes 20
of paragraph (2), the term ‘applicable credit rate’ 21
means the rate which the Secretary estimates will 22
permit the issuance of each such bond with a speci-23
fied maturity or redemption date without discount 24
and without interest cost to the issuer. The applica-25
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ble credit rate with respect to any such bond shall 1
be determined as of the first day on which there is 2
a binding, written contract for the sale or exchange 3
of the bond. 4
‘‘(c) L
IMITATIONBASED ONAMOUNT OFTAX.— 5
‘‘(1) I
N GENERAL.—The credit allowed under 6
subsection (a) for any taxable year shall not exceed 7
the excess of— 8
‘‘(A) the sum of the regular tax liability 9
(as defined in section 26(b)) plus the tax im-10
posed by section 55, over 11
‘‘(B) the sum of the credits allowable 12
under this part (other than subpart C and this 13
subpart). 14
‘‘(2) C
ARRYOVER OF UNUSED CREDIT .—If the 15
credit allowable under subsection (a) exceeds the 16
limitation imposed by paragraph (1) for such taxable 17
year, such excess shall be carried to the succeeding 18
taxable year and added to the credit allowable under 19
subsection (a) for such taxable year (determined be-20
fore the application of paragraph (1) for such suc-21
ceeding taxable year). 22
‘‘(d) C
REDITALLOWANCEDATE.—For purposes of 23
this section, the term ‘credit allowance date’ means, with 24
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respect to a bond during the taxable year, any of the fol-1
lowing dates: 2
‘‘(1) March 15. 3
‘‘(2) June 15. 4
‘‘(3) September 15. 5
‘‘(4) December 15. 6
Such term includes the last day on which the bond is out-7
standing. 8
‘‘(e) SIFIA B
ONDS.— 9
‘‘(1) I
N GENERAL.—For purposes of this sec-10
tion, the term ‘SIFIA bond’ means any bond issued 11
as part of an issue if— 12
‘‘(A) 100 percent of the available project 13
proceeds of such issue are to be used for the de-14
sign, construction, expansion, renovation, fur-15
nishing, or equipping of qualified school facili-16
ties (as defined in paragraph (7)(A) of this sub-17
section) pursuant to an agreement under which 18
a private, for-profit entity agrees with a State 19
or local educational agency— 20
‘‘(i) to construct, expand, or renovate 21
one or more buildings constituting the 22
qualified school facilities (together with 23
any related design, furnishing, and equip-24
ping of such buildings), 25
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‘‘(ii) to operate the facilities at least 1
until the date the facilities are first placed 2
in service and operating substantially at 3
their design level, and 4
‘‘(iii) at or before the end of the 5
agreement, to transfer the facilities to such 6
agency for no additional consideration, 7
‘‘(B) all buildings whose construction, ex-8
pansion, or renovations is included in the quali-9
fied school facilities being financed with pro-10
ceeds of a SIFIA bond are reasonably expected 11
to be net-zero energy buildings, 12
‘‘(C) the interest on such bond would (but 13
for this section and section 141) be excludable 14
from gross income under section 103, 15
‘‘(D) the issuer designates such bond as a 16
SIFIA bond for purposes of this subsection, 17
‘‘(E) the bond is not issued with more than 18
a de minimis amount of premium (determined 19
under rules similar to the rules of section 20
1273(a)(3)) over the stated principal amount of 21
the bond, 22
‘‘(F) the issue of which such bond is a part 23
satisfies the expenditure period requirements of 24
paragraph (2), 25
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‘‘(G) the private, for-profit entity described 1
in subparagraph (A) meets the allocation re-2
quirements of paragraph (5) and the reporting 3
requirements of paragraph (6), and 4
‘‘(H) the bond is issued before January 1, 5
2031. 6
‘‘(2) 6-
YEAR EXPENDITURE PERIOD .— 7
‘‘(A) I
N GENERAL.—An issue shall be 8
treated as meeting the requirements of this 9
paragraph if, as of the date of issuance, the 10
issuer reasonably expects 100 percent of the 11
available project proceeds to be spent for pur-12
poses described in subparagraphs (1)(A) and 13
(1)(B) within the 6-year period beginning on 14
such date of issuance. 15
‘‘(B) F
AILURE TO SPEND REQUIRED 16
AMOUNT OF BOND PROCEEDS WITHIN 6 17
YEARS.—To the extent that less than 100 per-18
cent of the available project proceeds of the 19
issue are expended at the close of the period de-20
scribed in subparagraph (A) with respect to 21
such issue, the issuer shall redeem all of the 22
nonqualified bonds within 90 days after the end 23
of such period. For purposes of this paragraph, 24
the amount of the nonqualified bonds required 25
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to be redeemed shall be determined in the same 1
manner as under section 141. 2
‘‘(3) L
IMITATION ON AMOUNT OF SIFIA BONDS 3
DESIGNATED.— 4
‘‘(A) O
VERALL LIMITATION .—The max-5
imum aggregate face amount of SIFIA bonds 6
issued under this subsection that may be des-7
ignated under subparagraph (1)(D) is 8
$10,000,000,000. 9
‘‘(B) A
NNUAL LIMITATION .—The max-10
imum aggregate face amount of SIFIA bonds 11
issued under this subsection that may be des-12
ignated under subparagraph (1)(D) in any cal-13
endar year is $2,500,000,000. 14
‘‘(C) S
ET-ASIDE FOR RURAL AREAS .— 15
‘‘(i) $1,000,000,000 of the overall lim-16
itation described in subparagraph (A) shall 17
be set aside for projects located in rural 18
areas. 19
‘‘(ii) For purposes of this section, the 20
term ‘rural area’ means any area which 21
is— 22
‘‘(I) outside of a metropolitan 23
statistical area (as such area is de-24
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fined by the Secretary of Commerce) 1
or 2
‘‘(II) determined by the Sec-3
retary of Agriculture, after consulta-4
tion with the Secretary of Commerce, 5
to be a rural area. 6
‘‘(4) A
LLOCATION OF LIMITATION .—The au-7
thority to issue SIFIA bonds within the limitations 8
set forth in paragraph (3) shall be allocated by the 9
Secretary to prospective issuers on a first come-first 10
served basis, under rules to be prescribed by the 11
Secretary, provided that— 12
‘‘(A) no school district shall be allocated 13
more than $1,500,000,000 in aggregate face 14
amount of SIFIA bonds under this subsection, 15
‘‘(B) no more than $500,000,000 in aggre-16
gate face amount of SIFIA bonds shall be allo-17
cated under this subsection for the construc-18
tion, expansion, renovation, furnishing, or 19
equipping of qualified school facilities that are 20
operated by a nonprofit organization under a 21
charter or other agreement between the applica-22
ble school district and such nonprofit organiza-23
tion, 24
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‘‘(C) an issuer applying for an allocation 1
shall certify (based on the certifications of any 2
conduit borrower of bond proceeds where appli-3
cable) that it reasonably expects to commence 4
the project to be financed with proceeds of the 5
bonds within 6 months of the issue date of the 6
bonds, and to expend all of the available project 7
proceeds within 6 years of the issue date of the 8
bonds, and 9
‘‘(D) in making such allocations, the Sec-10
retary shall give preference to the financing of 11
projects for which the private for-profit devel-12
oper is a preferred concern. 13
‘‘(5) R
EQUIREMENTS RELATING TO PRIVATE , 14
FOR-PROFIT ENTITIES.—A private, for-profit entity 15
meets the requirements of this paragraph if such en-16
tity— 17
‘‘(A) has experience developing, owning, 18
and operating public schools leased to public 19
school districts that are net-zero buildings, and 20
‘‘(B) demonstrates to the Secretary (in 21
such manner as the Secretary may provide) 22
that such entity has experience leasing public 23
school buildings to a local education agency, in-24
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cluding at least two projects with respect to 1
which— 2
‘‘(i) such entity (or a related person) 3
developed, owned, and was responsible 4
for— 5
‘‘(I) maintenance of— 6
‘‘(aa) the heating, ventila-7
tion, and air conditioning system, 8
or 9
‘‘(bb) the solar photovoltaic 10
system, and 11
‘‘(ii) the electrical service was in the 12
name of such entity for a minimum of four 13
years. 14
‘‘(6) R
EPORTING REQUIREMENTS .—A private 15
entity meets the requirements of this paragraph if 16
such entity, in cooperation with the applicable school 17
district, periodically submits such reports as the Sec-18
retary shall prescribe relating to the costs and bene-19
fits of the financing, including— 20
‘‘(A) tax benefits to the Federal Govern-21
ment and cost savings to the school district, 22
and 23
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‘‘(B) information related to any improve-1
ments in student performance or teacher reten-2
tion. 3
‘‘(7) D
EFINITIONS.—For purposes of this sub-4
section— 5
‘‘(A) Q
UALIFIED SCHOOL FACILITIES .— 6
The term ‘qualified school facilities’ means one 7
or more school buildings for a public elementary 8
school or public secondary school or for admin-9
istrative or support facilities relating to such 10
school facilities, together with related fur-11
nishings and equipment. 12
‘‘(B) S
CHOOL DISTRICT.—The term ‘school 13
district’ means a public board of education or 14
other public authority legally constituted within 15
a State for administrative control or direction 16
of public elementary or secondary schools in the 17
State or political subdivision of a State. 18
‘‘(C) P
REFERRED CONCERN .—The term 19
‘preferred concern’ means either a small busi-20
ness concern, a minority owned concern, or a 21
woman owned concern. 22
‘‘(D) S
MALL BUSINESS CONCERN .— 23
‘‘(i) I
N GENERAL.—Subject to the 24
provisions of clause (ii), the term ‘small 25
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business concern’ means an entity which, 1
together with any related person, has fewer 2
than 500 employees. 3
‘‘(ii) S
MALL BUSINESS SIZE STAND -4
ARDS.—For purposes of clause (i), the de-5
termination of number of employees shall 6
be made in a manner consistent with— 7
‘‘(I) section 3 of the Small Busi-8
ness Act (15 U.S.C. 632), and 9
‘‘(II) part 121 of title 13, Code 10
of Federal Regulations. 11
‘‘(E) M
INORITY OWNED.—The term ‘mi-12
nority owned’ with respect to an entity means 13
an entity not less than 51 percent of which is 14
owned by 1 or more individuals who are citizens 15
of the United States and who are Asian Amer-16
ican, Native Hawaiian, Pacific Islander, African 17
American, Hispanic, Puerto Rican, Native 18
American, or Alaska Native. 19
‘‘(F) W
OMAN OWNED.—The term ‘woman 20
owned’ with respect to an entity means an enti-21
ty not less than 51 percent of which is owned 22
by 1 or more women. 23
‘‘(G) N
ONPROFIT ORGANIZATION .—The 24
term ‘nonprofit organization’ means an organi-25
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zation described in section 501(c) and exempt 1
from tax under section 501(a). 2
‘‘(H) N
ET-ZERO ENERGY BUILDING .—The 3
term ‘net-zero building’ has the meaning given 4
such term under section 410(20) of the Energy 5
Independence and Security Act of 2007 (42 6
U.S.C. 17061(20)), applied by substituting 7
‘school building’ for ‘commercial building’. 8
‘‘(I) R
ELATED PERSON .—The term ‘re-9
lated person’ has the meaning given such term 10
in section 144(a)(3). 11
‘‘(f) O
THERAPPLICABLERULES.— 12
‘‘(1) I
NTEREST INCLUDIBLE IN GROSS IN -13
COME.—For purposes of this title, interest on any 14
SIFIA bond shall be includible in gross income. 15
‘‘(2) C
REDIT TREATED AS INTEREST .—For 16
purposes of this subtitle, the credit determined 17
under subsection (a) shall be treated as interest 18
which is includible in gross income. 19
‘‘(3) S
CORPORATIONS AND PARTNERSHIPS .—In 20
the case of a tax credit bond held by an S corpora-21
tion or partnership, the allocation of credit allowed 22
by this section to the shareholders of such corpora-23
tion or partners of such partnership shall be treated 24
as a distribution. 25
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‘‘(4) BONDS HELD BY REAL ESTATE INVEST -1
MENT TRUSTS.—If any qualified tax credit bond is 2
held by a real estate investment trust the credit de-3
termined under subsection (a) shall be allowed to 4
beneficiaries of such trust (and any gross income in-5
cluded under paragraph (2) with respect to such 6
credit shall be distributed to such beneficiaries) 7
under procedures prescribed by the Secretary (simi-8
lar to the procedures prescribed by the Secretary 9
under section 54A(h) (as in effect before its repeal 10
by Public Law 115–97)). 11
‘‘(5) C
REDITS MAY BE STRIPPED .—Under regu-12
lations prescribed by the Secretary (similar to regu-13
lations prescribed under section 54A(i) (as in effect 14
before its repeal by Public Law 115–97)— 15
‘‘(A) I
N GENERAL.—There may be a sepa-16
ration (including at issuance) of the ownership 17
of a qualified tax credit bond and the entitle-18
ment to the credit under this section with re-19
spect to such bond. In case of any such separa-20
tion, the credit under this section shall be al-21
lowed to the person who on the credit allowance 22
date holds the instrument evidencing the enti-23
tlement to the credit and not to the holder of 24
the bond. 25
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‘‘(B) CERTAIN RULES TO APPLY .—In the 1
case of a separation described in subparagraph 2
(A), the rules of section 1286 shall apply to the 3
qualified tax credit bond as if it were a stripped 4
bond and to the credit under this section as if 5
it were a stripped coupon. 6
‘‘(6) N
OT TREATED AS FEDERALLY GUARAN -7
TEED.—For purposes of section 149(b), a SIFIA 8
bond shall not be treated as federally guaranteed by 9
reason of the credit allowed under subsection (g). 10
‘‘(7) Y
IELD DETERMINATION .—For purposes of 11
section 148, the yield on a SIFIA bond shall be de-12
termined without regard to the credit allowed under 13
subsection (a). 14
‘‘(8) M
ATURITY LIMITATION.— 15
‘‘(A) I
N GENERAL.—An issue shall be 16
treated as meeting the requirements of this sec-17
tion if the maturity of any bond which is part 18
of such issue does not exceed the maximum 19
term determined by the Secretary under sub-20
paragraph (B). 21
‘‘(B) M
AXIMUM TERM.—During each cal-22
endar month, the Secretary shall determine the 23
maximum term permitted under this paragraph 24
for bonds issued during the following calendar 25
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month. Such maximum term shall be the term 1
which the Secretary estimates will result in the 2
present value of the obligation to repay the 3
principal on the bond being equal to 20 percent 4
of the face amount of such bond. Such present 5
value shall be determined using as a discount 6
rate the average annual interest rate of tax-ex-7
empt obligations having a term of 10 years or 8
more which are issued during the month. If the 9
term as so determined is not a multiple of a 10
whole year, such term shall be rounded to the 11
next highest whole year. 12
‘‘(9) D
EPRECIATION.—If the school facilities fi-13
nanced with proceeds of SIFIA bonds are owned by 14
a person otherwise entitled to allowance for deprecia-15
tion with respect to such facility, that person may 16
make an irrevocable election (binding on any succes-17
sors in interest) not to claim depreciation with re-18
spect to the property financed with proceeds of the 19
SIFIA bonds for so long as the issue of which such 20
bonds are a part is outstanding. Such election shall 21
be deemed to have been made if the person fails to 22
claim depreciation with respect to the property in 23
the first tax return filed by the person in which such 24
depreciation could have been claimed. To the extent 25
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the person elects not to claim depreciation under 1
this paragraph, the basis of the financed property 2
shall not be reduced under section 1016 or otherwise 3
for the depreciation that could have been claimed.’’. 4
(b) T
REATMENT OFINTEREST ASUNRELATEDBUSI-5
NESSTAXABLEINCOME.—Section 512(b)(1) of such Code 6
is amended by inserting ‘‘(other than interest of SIFIA 7
bonds issued under section 54BB)’’ after ‘‘interest’’. 8
(c) C
LERICALAMENDMENTS.—The table of subparts 9
for part IV of subchapter A of chapter 1 is amended by 10
adding at the end the following: 11
‘‘SUBPART K—SIFIA BONDS’’.
(d) DIRECTPURCHASES OF SIFIA BONDS.—The 12
Secretary shall purchase SIFIA bonds that the issuer is 13
otherwise unable to sell, subject to procedures and credit 14
standards to be established by the Secretary, which stand-15
ards and procedures shall be similar to those applicable 16
to loans made under lines of credit under section 1503 17
of the Transportation Infrastructure Finance and Innova-18
tion Act of 1998 (23 U.S.C. 184). 19
(e) E
FFECTIVEDATE.—The amendments made by 20
this section shall apply to obligations issued after Decem-21
ber 31, 2025. 22
Æ
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