Partnership to Build America Act of 2014 - Establishes the American Infrastructure Fund (AIF) as a wholly-owned government corporation to provide bond guarantees and make loans to state and local governments, non-profit infrastructure providers, private parties, and public-private partnerships for state or local government sponsored transportation, energy, water, communications, or educational facility infrastructure projects (Qualified Infrastructure Projects [QIPs]). Authorizes AIF also to make equity investments in QIPs .
Directs the Secretary of the Treasury, acting through the AIF, to issue American Infrastructure Bonds with an aggregate face value of $50 billion. Requires proceeds from the sale of the bonds to be deposited into the AIF.
Amends the Internal Revenue Code to allow U.S. corporations to exclude from gross income qualified cash dividend amounts received during a taxable year from a foreign-controlled corporation equal to the face value of qualified infrastructure bonds the corporation has purchased.
Prohibits allowance of a foreign tax credit to the excluded portion of any dividend received by a U.S. corporation. Prohibits also the allowance of a deduction for expenses related to that excludable portion.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1957 Introduced in Senate (IS)]
113th CONGRESS
2d Session
S. 1957
To establish the American Infrastructure Fund, to provide bond
guarantees and make loans to States, local governments, and
infrastructure providers for investments in certain infrastructure
projects, and to provide equity investments in such projects, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 16, 2014
Mr. Bennet (for himself, Mr. Blunt, Mr. Warner, Ms. Ayotte, Ms.
Landrieu, Mr. King, Mr. Graham, Mr. Coats, Mr. Hoeven, Mr. Begich, and
Mr. Kirk) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To establish the American Infrastructure Fund, to provide bond
guarantees and make loans to States, local governments, and
infrastructure providers for investments in certain infrastructure
projects, and to provide equity investments in such projects, and for
other purposes.
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 ``Partnership to Build America Act of
2014''.
SEC. 2. AMERICAN INFRASTRUCTURE FUND.
(a) American Infrastructure Fund.--
(1) In general.--There is established a wholly owned
Government corporation--
(A) which shall be called the American
Infrastructure Fund (referred to in this Act as the
``AIF'');
(B) which shall be headed by the Board of Trustees
established under subsection (b);
(C) which may have separate subaccounts or
subsidiaries for funds used to make loans, bond
guarantees, and equity investments under this section;
(D) which shall be available to the AIF to pay for
the costs of carrying out this section, including the
compensation of the Board and other employees of the
AIF; and
(E) the funds of which may be invested by the Board
in such manner as the Board determines appropriate.
(2) Deposits to aif.--All funds received from bond
issuances, loan payments, bond guarantee fees, and any other
funds received in carrying out this section shall be held by
AIF.
(3) Limitations.--The charter of the AIF shall limit its
activities to those activities described as the mission of the
Board under subsection (b)(2).
(4) Oversight.--The AIF shall register with the Securities
and Exchange Commission and the Chairman shall report to
Congress annually as to whether the AIF is fulfilling the
mission of the Board under subsection (b)(2).
(5) Treatment of aif.--
(A) Accounts.--Title 31, United States Code, is
amended in each of sections 9107(c)(3) and 9108(d)(2)--
(i) by inserting ``the American
Infrastructure Fund,'' after ``the Regional
Banks for Cooperatives,''; and
(ii) by striking ``those banks'' and
inserting ``those entities''.
(B) Bonds.--Section 149(b)(3)(A)(i) of the Internal
Revenue Code of 1986 is amended by inserting ``American
Infrastructure Fund,'' after ``Federal Home Loan
Mortgage Corporation,''.
(b) Board of Trustees.--
(1) In general.--There is established a Board of Trustees
of the AIF (referred to in this subsection as the ``Board''),
which shall be composed of 9 members who--
(A) have substantial experience in bond guarantees
or municipal credit; and
(B) to the greatest extent practicable, have
extensive experience working with municipal credit,
risk management, and infrastructure finance.
(2) Mission.--The mission of the Board is--
(A) to operate the AIF and its subsidiaries to be a
low cost provider of bond guarantees, loans, and equity
investments to State and local governments and
infrastructure providers for urban and rural
infrastructure projects that--
(i) provide a positive economic impact; and
(ii) meet such other standards as the Board
may develop;
(B) to operate the AIF in a self-sustaining manner
so as to allow the AIF to repay its infrastructure
bonds when such bonds are due;
(C) to not have a profit motive, but to seek at all
times to pursue its mission of providing low cost bond
guarantees and loans while--
(i) covering its costs;
(ii) maintaining such reserves as may be
needed; and
(iii) applying prudent underwriting
standards;
(D) to only consider projects put forth by State
and local governments and not to seek projects
directly;
(E) to always make clear that no taxpayer money
supports the AIF or ever will support the AIF; and
(F) to engage in no other activities other than
those permitted under this section.
(3) Membership.--
(A) Initial members.--
(i) Appointment.--Not later than 150 days
after the date on which bonds are first issued
under subsection (d), the President shall
appoint, with the advice and consent of the
Senate, as members of the Board--
(I) 2 individuals from a list of at
least 5 individuals selected by the
Speaker of the House of
Representatives;
(II) 2 individuals from a list of
at least 5 individuals selected by the
Minority Leader of the House of
Representatives;
(III) 2 individuals from a list of
at least 5 individuals selected by the
Majority Leader of the Senate;
(IV) 2 individuals from a list of
at least 5 individuals selected by the
Minority Leader of the Senate; and
(V) 1 individual selected at will
by the President.
(ii) Submission of lists.--Each of the
lists described in clause (i) shall be
submitted to the President not later than 90
days after the date on which bonds are first
issued under subsection (d). If any of such
lists are submitted after the date required
under this clause, the President may appoint
the 2 members of the Board who were to be
selected from such list at will.
(B) Staggered terms.--The members of the Board
appointed pursuant to subparagraph (A)(i) shall serve
staggered terms, with 2 each of the initial members of
the Board serving for terms of 5, 6, 7, and 8 years,
respectively, and the initial Chair selected under
subparagraph (D) serving for 9 years. The decision of
which Board members, other than the Chair, serve for
which initial terms shall be made by the members of the
Board drawing lots.
(C) Additional members.--
(i) In general.--Except as provided in
subparagraph (A), if the term of a member of
the Board expires or otherwise becomes vacant,
the President shall appoint a replacement for
such member, with the advice and consent of the
Senate, from among a list of at least 5
individuals submitted by the Board.
(ii) Term of service.--
(I) In general.--Each member of the
Board appointed to replace a member
whose term is expiring shall serve for
a 7-year term.
(II) Vacancies.--Any member of the
Board appointed to fill a vacancy
occurring before the expiration of the
term to which that member's predecessor
was appointed shall be appointed only
for the remainder of the term.
(D) Chair.--The members of the Board shall choose 1
member to serve as the Chair of the Board for a term of
7 years, except that the initial Chair shall serve for
a term of 9 years, pursuant to subsection (B).
(E) Continuation of service.--Each member of the
Board may continue to serve after the expiration of the
term of office to which that member was appointed until
a successor has been appointed.
(F) Conflicts of interest.--No member of the Board
may have a financial interest in, or be employed by, a
Qualified Infrastructure Project (``QIP'') related to
assistance provided under this section or any entity
that has purchased bonds under subsection (d). Owning
municipal credit of any State or local government or
owning the securities of a diversified company that
engages in infrastructure activities, provided those
activities constitute less than 20 percent of the
company's revenues, or investing in broadly held
investment funds shall not be deemed to create a
conflict of interest. The Board may issue regulations
to define terms used under this subparagraph.
(4) Compensation.--The members of the Board shall be
compensated at an amount to be set by the Board, but under no
circumstances may such compensation be higher than the rate
prescribed for level IV of the Executive Schedule under section
5315 of title 5, United States Code.
(5) Staff.--The Board shall employ and set compensation for
such staff as the Board determines as is necessary to carry out
the activities and mission of the AIF, and such staff may be
paid without regard to the provisions of chapter 51 and
subchapter III of chapter 53, United States Code, relating to
classification and General Schedule pay rates.
(6) Procedures.--The Board shall establish such procedures
as are necessary to carry out this section.
(7) Corporate governance standards.--
(A) Board committees generally.--The Board shall
maintain all of the committees required to be
maintained by the board of directors of an issuer
listed on the New York Stock Exchange as of the date of
the enactment of this section.
(B) Risk management committee.--The Board shall
maintain a risk management committee, which shall--
(i) employ additional staff who are
certified by the Board as having significant
and relevant experience in insurance
underwriting and credit risk management; and
(ii) establish the risk management policies
used by the Board.
(C) Standards.--The Board shall, to the extent
practicable, follow all standards with respect to
corporate governance that are required to be followed
by the board of directors of an issuer listed on the
New York Stock Exchange as of the date of the enactment
of this section.
(8) Biennial reports.--Not less frequently than once every
2 years, the Board shall produce a report that describes, of
the materials, goods, and products that were used to construct,
or to support the construction of, qualified infrastructure
projects (as described in subsection (c)) and received
financing from the American Infrastructure Fund within the most
recent 2 calendar years, the percentage of such materials,
goods, and products that were created, sourced, or manufactured
in the United States.
(c) Infrastructure Investment.--
(1) Entities eligible for assistance.--The AIF may provide
assistance to State and local government entities, nonprofit
infrastructure providers, private parties, and public-private
partnerships (referred to in this section as ``eligible
entities'') to help finance qualified infrastructure projects
(referred to in this subsection as ``QIPs'').
(2) Forms of assistance.--The AIF may--
(A) provide bond guarantees to debt issued by
eligible entities;
(B) make loans, including subordinated loans, to
eligible entities; and
(C) make equity investments in QIPs.
(3) Qualified infrastructure projects.--A project qualifies
as a QIP under this section if--
(A) the project is sponsored by a State or local
government;
(B) the infrastructure is, or will be, owned by a
State or local government;
(C) the project involves the construction,
maintenance, improvement, or repair of a
transportation, energy, water, communications, or
educational facility; and
(D) the recipient of bond guarantees, loans, equity
investments, or any other financing technique
authorized under this Act provides written assurances
prescribed by the AIF that the project will be
performed in compliance with the requirements of all
Federal laws that would otherwise apply to similar
projects to which the United States is a party.
(4) Application for assistance.--
(A) In general.--A State or local government that
wishes to receive a loan or bond guarantee under this
section shall submit an application to the Board in
such form and manner and containing such information as
the Board may require.
(B) Requirement for public sponsorship of private
entities.--A private entity may only receive a bond
guarantee, loan, or equity investment under this
section if the State or local government for the
jurisdiction in which the nonprofit infrastructure
provider or private partner is located submits an
application pursuant to subparagraph (A) on behalf of
such nonprofit infrastructure provider or private
partner.
(5) Limitations on single state awards.--
(A) Annual limitation.--The Board shall set an
annual limit, as a percentage of total assistance
provided under this section during a year, on the
amount of assistance a single State (including local
governments and other infrastructure providers within
such State) may receive in assistance provided under
this section.
(B) Cumulative limitation.--The Board shall set a
limit, as a percentage of total assistance provided
under this section outstanding at any one time, on the
amount of assistance a single State (including local
governments and other infrastructure providers within
such State) may receive in assistance provided under
this section.
(6) Loan specifications.--Loans made under this section
shall have such maturity and carry such interest rate as the
Board determines appropriate.
(7) Bond guarantee.--The Board shall charge such fees for
Bond guarantees made under this section as the Board determines
appropriate.
(8) Equity investments.--With respect to a QIP, the amount
of an equity investment made by the AIF in such QIP may not
exceed 20 percent of the total cost of the QIP.
(9) Public-private partnership requirements.--At least 35
percent of the assistance provided under this section shall be
provided to QIPs for which at least 10 percent of the financing
for such QIPs comes from private debt or equity.
(10) Prohibition on principal forgiveness.--With respect to
a loan made under this section, the Board may not forgive any
amount of principal on such loan.
(d) American Infrastructure Bonds.--
(1) In general.--Not later than 90 days after the date of
the enactment of this Act, the Secretary, acting through the
AIF, shall issue bonds, which shall be called ``American
Infrastructure Bonds''. The proceeds from the American
Infrastructure Bonds shall be deposited into the AIF.
(2) Forms and denominations; interest.--American
Infrastructure Bonds shall--
(A) be in such forms and denominations as
determined by the Secretary, and shall have a 50-year
maturity; and
(B) bear interest of 1 percent.
(3) No full faith and credit.--Interest and principal
payments paid to holders of American Infrastructure Bonds shall
be paid from the AIF, to the extent funds are available, and
shall not be backed by the full faith and credit of the United
States.
(4) Amount of bonds.--The aggregate face amount of the
bonds issued under this subsection shall be $50,000,000,000.
(5) Sale of american infrastructure bonds.--
(A) Competitive bidding process.--The Secretary
shall sell $50,000,000,000 of American Infrastructure
Bonds--
(i) through a competitive bidding process
that encourages aggressive bidding;
(ii) with prospective purchasers bidding on
how low of a multiplier they will accept (for
purposes of subsection (b)(1) of section 966 of
the Internal Revenue Code of 1986) when
purchasing the American Infrastructure Bonds,
for purposes of applying the foreign earnings
exclusion described under that section; and
(iii) in a manner that ensures no entities
participating in the bidding may collude or
coordinate their bids.
(B) Limitation.--The multiplier described in
subparagraph (A)(ii) may not be greater than 6.
(6) Reimbursement of costs.--The Board shall repay the
Secretary, from funds in the AIF, for the costs to the
Secretary in carrying out this subsection.
(e) Additional Bonds.--
(1) In general.--The Board may issue such other bonds as
the Board determines appropriate, the proceeds from which shall
be deposited into the AIF.
(2) No full faith and credit.--Interest and principal
payments paid to holders of bonds issued pursuant to paragraph
(1) shall be paid from the AIF, to the extent funds are
available, and shall not be backed by the full faith and credit
of the United States.
(f) Definitions.--For purposes of this section:
(1) Infrastructure provider.--The term ``infrastructure
provider'' means an entity that seeks to finance a QIP.
(2) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(3) State.--The term ``State'' means each of the several
States, the District of Columbia, any territory or possession
of the United States, and each Federally recognized Indian
tribe.
SEC. 3. FOREIGN EARNINGS EXCLUSION FOR PURCHASE OF INFRASTRUCTURE
BONDS.
(a) In General.--Subpart F of part III of subchapter N of chapter 1
of the Internal Revenue Code of 1986 is amended by adding at the end
the following new section:
``SEC. 966. FOREIGN EARNINGS EXCLUSION FOR PURCHASE OF INFRASTRUCTURE
BONDS.
``(a) Exclusion.--In the case of a corporation which is a United
States shareholder and for which the election under this section is in
effect for the taxable year, gross income does not include an amount
equal to the qualified cash dividend amount.
``(b) Qualified Cash Dividend Amount.--For purposes of this
section, the term `qualified cash dividend amount' means an amount of
the cash dividends which are received during a taxable year by such
shareholder from controlled foreign corporations equal to--
``(1) the multiplier determined under section 2(d)(5) of
the Partnership to Build America Act of 2014 for such
shareholder, multiplied by
``(2) the face amount of qualified infrastructure bonds
acquired at its original issue (directly or through an
underwriter) by such shareholder.
``(c) Limitations.--
``(1) In general.--The amount of dividends taken into
account under subsection (a) for a taxable year shall not
exceed the lesser of--
``(A) the cash dividends received by the taxpayer
for such taxable year, or
``(B) the amount shown on the applicable financial
statement as earnings permanently reinvested outside
the United States.
``(2) Dividends must be extraordinary.--The amount of
dividends taken into account under subsection (a) shall not
exceed the excess (if any) of--
``(A) the cash dividends received during the
taxable year by such shareholder from controlled
foreign corporations, over
``(B) the annual average for the base period years
of the cash dividends received during each base period
year by such shareholder from controlled foreign
corporations.
``(3) Reduction of benefit if increase in related party
indebtedness.--The amount of dividends which would (but for
this paragraph) be taken into account under subsection (a)
shall be reduced by the excess (if any) of--
``(A) the amount of indebtedness of the controlled
foreign corporation to any related person (as defined
in section 954(d)(3)) as of the close of the taxable
year for which the election under this section is in
effect, over
``(B) the amount of indebtedness of the controlled
foreign corporation to any related person (as so
defined) as of the close of the preceding taxable year.
``(4) Treatment of controlled foreign corporations.--All
controlled foreign corporations with respect to which the
taxpayer is a United States shareholder shall be treated as 1
controlled foreign corporation for purposes of this subsection.
The Secretary may prescribe such regulations as may be
necessary or appropriate to prevent the avoidance of the
purposes of this subsection, including regulations providing
that cash dividends shall not be taken into account under
subsection (a) to the extent such dividends are attributable to
the direct or indirect transfer (including through the use of
intervening entities or capital contributions) of cash or other
property from a related person (as so defined) to a controlled
foreign corporation.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Qualified infrastructure bonds.--The term `qualified
infrastructure bond' means a bond issued under section 2(d) of
the Partnership to Build America Act of 2014.
``(2) Applicable financial statement.--The term `applicable
financial statement' means, with respect to a taxable year--
``(A) with respect to a United States shareholder
which is required to file a financial statement with
the Securities and Exchange Commission (or which is
included in such a statement so filed by another
person), the most recent audited annual financial
statement (including the notes which form an integral
part of such statement) of such shareholder (or which
includes such shareholder)--
``(i) which was so filed for such taxable
year, and
``(ii) which is certified as being prepared
in accordance with generally accepted
accounting principles, and
``(B) with respect to any other United States
shareholder, the most recent audited financial
statement (including the notes which form an integral
part of such statement) of such shareholder (or which
includes such shareholder)--
``(i) which is certified as being prepared
in accordance with generally accepted
accounting principles, and
``(ii) which is used for the purposes of a
statement or report--
``(I) to creditors,
``(II) to shareholders, or
``(III) for any other substantial
nontax purpose.
``(3) Base period years.--
``(A) In general.--The base period years are the 3
taxable years--
``(i) which are among the 5 most recent
preceding taxable years ending before the
taxable year, and
``(ii) which are determined by
disregarding--
``(I) 1 taxable year for which the
amount described in subsection
(c)(2)(B) is the largest, and
``(II) 1 taxable year for which
such amount is the smallest.
``(B) Shorter period.--If the taxpayer has fewer
than 5 taxable years ending before the taxable year,
then in lieu of applying subparagraph (A), the base
period years shall include all the taxable years of the
taxpayer ending before such taxable year.
``(C) Mergers, acquisitions, etc.--
``(i) In general.--Rules similar to the
rules of subparagraphs (A) and (B) of section
41(f)(3) shall apply for purposes of this
paragraph.
``(ii) Spin-offs, etc.--If there is a
distribution to which section 355 (or so much
of section 356 as relates to section 355)
applies during the 5-year period referred to in
subparagraph (A)(i) and the controlled
corporation (within the meaning of section 355)
is a United States shareholder--
``(I) the controlled corporation
shall be treated as being in existence
during the period that the distributing
corporation (within the meaning of
section 355) is in existence, and
``(II) for purposes of applying
subsection (c)(2) to the controlled
corporation and the distributing
corporation, amounts described in
subsection (c)(2)(B) which are received
or includable by the distributing
corporation or controlled corporation
(as the case may be) before the
distribution referred to in subclause
(I) from a controlled foreign
corporation shall be allocated between
such corporations in proportion to
their respective interests as United
States shareholders of such controlled
foreign corporation immediately after
such distribution.
``(iii) Exception.--Subclause (II) of
clause (ii) shall not apply if neither the
controlled corporation nor the distributing
corporation is a United States shareholder of
such controlled foreign corporation immediately
after such distribution.
``(4) Dividend.--The term `dividend' shall not include
amounts includable in gross income as a dividend under section
78, 367, or 1248. In the case of a liquidation under section
332 to which section 367(b) applies, the preceding sentence
shall not apply to the extent the United States shareholder
actually receives cash as part of the liquidation.
``(5) Coordination with dividend received deduction.--No
deduction shall be allowed under section 243 or 245 for any
dividend which is excluded from income by subsection (a).
``(6) Controlled groups.--All United States shareholders
which are members of an affiliated group filing a consolidated
return under section 1501 shall be treated as one United States
shareholder.
``(7) Reporting.--The Secretary shall require by regulation
or other guidance the reporting of such information as the
Secretary may require to carry out this section.
``(e) Denial of Foreign Tax Credit; Denial of Certain Expenses.--
``(1) Foreign tax credit.--
``(A) In general.--No credit shall be allowed under
section 901 for any taxes paid or accrued (or treated
as paid or accrued) with respect to the excluded
portion of any dividend.
``(B) Denial of deduction of related tax.--No
deduction shall be allowed under this chapter for any
tax for which credit is not allowable by reason of the
preceding sentence.
``(2) Expenses.--No deduction shall be allowed for expenses
directly allocable to the excludable portion described in
paragraph (1).
``(3) Excludable portion.--For purposes of paragraph (1),
unless the taxpayer otherwise specifies, the excludable portion
of any dividend or other amount is the amount which bears the
same ratio to the amount of such dividend or other amount as
the amount excluded from income under subsection (a) for the
taxable year bears to the amount described in subsection
(c)(2)(A) for such year.
``(4) Coordination with section 78.--Section 78 shall not
apply to any tax which is not allowable as a credit under
section 901 by reason of this subsection.
``(f) Election To Have Section Apply.--A taxpayer may elect to have
this section apply for any taxable year.''.
(b) Clerical Amendment.--The table of sections for subpart F of
part III of subchapter N of chapter 1 of such Code is amended by adding
at the end the following new item:
``966. Foreign earnings exclusion for purchase of infrastructure
bonds.''.
(c) Effective Date.--The amendments made by this section shall
apply to dividends received for taxable years ending after the date of
the enactment of this Act.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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