Short title

This Act may be cited as the

Partnership to Build America Act of 2013

American Infrastructure Fund

(a)

American Infrastructure Fund

(1)

In general

There is established a wholly owned Government corporation to be called the American Infrastructure Fund (AIF)— (A)which shall be headed by the Board of Trustees established under subsection (b); (B)which may have separate sub-accounts or subsidiaries for funds used to make loans, bond guarantees, and equity investments under this section and funds used to make bond guarantees under this section; (C)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 (D)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 Secretary 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

Title 31, United States Code, is amended in each of sections 9107(c)(3) and 9108(d)(2)— (A)by inserting the American Infrastructure Fund, after the Regional Banks for Cooperatives,; and (B)by striking those banks and inserting those entities. (b)

Board of Trustees

(1)

In general

There is established a Board of Trustees of the AIF (the Board), which shall be composed of 11 members, of which at least 4 must be risk management experts, as certified by the Board, having substantial experience in bond guarantees or municipal credit. (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 non-profit infrastructure providers for both urban and rural non-profit infrastructure projects that provide a positive economic impact and to 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 due; (C)to not have a profit motive, but seek at all times to pursue its mission of providing low cost bond guarantees and loans while covering its costs, reserves as may be needed, and applying prudent underwriting standards; (D)to only consider projects put forth by State and local governments and not to seek projects directly; (E)to at all times make clear that no taxpayer money supports the AIF or ever will; and (F)to engage in no other activities other than those permitted under this section. (3)

Membership

(A)

Presidentially-appointed members

Except as provided under subparagraph (C), 4 members of the Board shall be appointed by the President, by and with the advice and consent of the Senate, and serve for a term of 7 years. (B)

Additional members

Except as provided under subparagraph (C), 7 members of the Board shall be appointed by the current members of the Board appointed pursuant to this subparagraph or subparagraph (C)(ii), and serve for a term of 7 years. (C)

Initial members

The Board shall initially consist of the following members, who shall be appointed not later than the end of the 60-day period beginning on the date that bonds are issued under subsection (e): (i)Four members, appointed by the President, by and with the advice and consent of the Senate. (ii)Seven additional members, appointed one each by the seven entities purchasing the largest amount of bonds (by aggregate face amount of bonds purchased) under subsection (e). (D)

Staggered terms

The members of the Board shall serve staggered terms, with 2 each of the initial members of the Board serving for terms of 4, 5, 6, 7, and 8 years, respectively, and the initial Chair selected under subparagraph (E) 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. (E)

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 7 years, as described under subparagraph (D). (F)

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. (G)

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. (H)

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 (e). 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)consist of 4 members of the Board, with the initial 4 members consisting of 2 members appointed under paragraph (3)(C)(i) and 2 members appointed under paragraph (3)(C)(ii); (ii)employ additional staff who are certified by the Board as having significant and relevant experience in insurance underwriting and credit risk management; and (iii)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. (c)

Infrastructure investment

(1)

In general

The AIF shall provide bond guarantees to debt issued by State and local governments and non-profit infrastructure providers, make loans to States, local governments, and non-profit infrastructure providers, and make equity investments in projects sponsored by State and local governments and non-profit infrastructure provider to help Qualified Infrastructure Projects (QIPs). The AIF may not make any loans or provide bond guaranties to for-profit entities. (2)

Qualified Infrastructure Projects

A project qualifies as a QIP under this section if— (A)the project involves the construction, maintenance, improvement, or repair of a transportation, energy, water, communications, or educational facility; and (B)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. (3)

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 non-profit infrastructure providers to apply through State or local governments

A non-profit infrastructure provider 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 non-profit infrastructure provider is located submits an application pursuant to subparagraph (A) on behalf of such non-profit infrastructure provider. (4)

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 non-profit 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 non-profit infrastructure providers within such State) may receive in assistance provided under this section. (5)

Loan specifications

Loans made under this section shall have such maturity and carry such interest rate as the Board determines appropriate. (6)

Bond guarantee

The Board shall charge such fees for Bond guarantees made under this section as the Board determines appropriate. (7)

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. (8)

Public-private partnership requirements

At least 25 percent of the assistance provided under this section shall be provided to QIPs for which at least 20 percent of the financing for such QIPs comes from private debt or equity. (9)

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

The Secretary shall, not later than the end of the 90-day period following the date of the enactment of this section and acting through the AIF, issue bonds, to be called American Infrastructure Bonds, the proceeds from which 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 the $50,000,000,000 of American Infrastructure Bonds— (i)through a competitive bidding process that encourages aggressive bidding; (ii)in a manner so as to ensure that there are at least 7 different un-affiliated purchasers; and (iii)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. (B)

Limitation

The multiplier described under subparagraph (A)(iii) 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)

Bond guarantee

The term bond guarantee has the meaning given the term loan guarantee under section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a). (2)

Cost

With respect to a loan or a bond guarantee, the term cost has the meaning given such term under section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a). (3)

Non-profit infrastructure provider

The term non-profit infrastructure provider means a non-profit entity that seeks to finance a QIP. (4)

Loan

The term loan has the meaning given the term direct loan under section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a). (5)

Secretary

The term Secretary means the Secretary of the Treasury. (6)

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.

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:

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 2013 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.

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 which provide 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 2013. (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 includible 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.

Subclause (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 includible 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:

Sec. 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.