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119-hr-2440119th CongressWALLET

SIFIA Act

Sponsored By: Representative Hudson, Richard [R-NC-9]

Introduced

Summary

Creates a new federal tax-credit bond program to fund net-zero K-12 school buildings built by private for-profit developers and transferred to public school districts. The bill would create “SIFIA” bonds whose holders get quarterly federal tax credits equal to 25% of a bond’s annual credit and would attach tight spending, eligibility, and reporting rules to each project.

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  • Families, students, and school districts would gain a new financing route to build or renovate net-zero school facilities. The program has a $10.0 billion total cap and a per-district limit of $1.5 billion with a $2.5 billion annual cap and a $1.0 billion rural set-aside.
  • Private for-profit developers would be able to deliver, operate briefly, and then transfer schools to districts at no additional charge. Developers must meet experience tests for net-zero projects and file periodic reports on costs, tax benefits, and outcomes like student performance.
  • Investors, nonprofit partners, and issuers face specific tax and oversight rules. Interest on SIFIA bonds is includible in income but is excluded from unrelated business taxable income rules, credits are treated as interest for tax rules, unsold bonds may be bought by the Treasury Secretary, and proceeds must be spent within six years or be redeemed.

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 2 benefits, 0 costs, 2 mixed.

Tax credits for school bond investors

If enacted, investors who hold qualifying school infrastructure bonds on set quarterly dates would get a federal tax credit. Each date would grant 25% of the bond’s annual credit, which equals the Secretary’s applicable credit rate times the bond’s face amount. Credit dates would be Mar 15, Jun 15, Sep 15, and Dec 15, including the last day the bond is outstanding. The credit could not exceed your regular tax plus section 55 tax minus other credits, but any extra could carry forward. Interest would be taxable, and special pass-through, REIT, and credit-stripping rules would apply.

Optional no-depreciation for school developers

If enacted, owners of school facilities financed with these bonds could elect not to claim depreciation while the bond issue is outstanding. The choice would be permanent and would bind future owners. If you skip depreciation on your first eligible return, the election would be treated as made. Your tax basis would not be reduced for depreciation you did not claim under this election.

School bond program with caps and deadlines

If enacted, a new school infrastructure bond program would allow up to $10 billion total, with $2.5 billion each year and $1 billion set aside for rural projects. No district could get more than $1.5 billion, and no more than $500 million could go to nonprofit charter‑operated facilities. The Secretary would allocate authority first‑come, first‑served, set a monthly max bond term so the present value of principal equals 20% of face value, and could buy unsold bonds as a backstop. Issuers would need to use all project proceeds within six years or redeem the nonqualified bonds within 90 days. The rules would apply to bonds issued after Dec 31, 2025, and new designations would end after Jan 1, 2031.

Net-zero rules and developer preferences

If enacted, all financed school buildings would be expected to be net‑zero energy. Private developers would need prior net‑zero school experience, including at least two projects meeting HVAC or solar and electric‑service tests for four years. Developers, with the district, would send periodic reports on financing costs, federal tax benefits, and any savings or performance gains. The bill would also define small, minority‑owned, and woman‑owned businesses and treat them as “preferred concerns” for program preference.

Sponsors & CoSponsors

Sponsor

Hudson, Richard [R-NC-9]

NC • R

Cosponsors

  • Rep. Sewell, Terri A. [D-AL-7]

    AL • D

    Sponsored 3/27/2025

Roll Call Votes

No roll call votes available for this bill.

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