LIFT Act
Sponsored By: Representative Sewell, Terri A. [D-AL-7]
Introduced
Summary
A refundable credit for American infrastructure bonds would try to mobilize private capital by subsidizing interest payments to issuers for federal and local infrastructure projects. It pairs a new subsidized bond structure with tighter refunding rules and project standards.
Show full summary
- Issuers would receive a refundable credit paid with each interest payment, subject to a cap set using a baseline interest rate fixed at the first binding sale contract. Interest on these bonds would be includible in investors' gross income.
- Projects financed with these bonds must use proceeds for capital or related operations and maintenance and must follow Davis–Bacon prevailing wage rules.
- The bill raises the small issuer exception for bank interest allocation from $10 million to $30 million and indexes the threshold after 2026, and it creates special rules to treat certain 501(c)(3) financings as exempt issuances.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 2 benefits, 0 costs, 2 mixed.
Refundable bond credit for local issuers
This bill would create a refundable interest credit for new “American infrastructure bonds” issued more than 30 days after enactment. The Treasury would pay a portion of each interest payment: 42% for bonds issued in 2026–2030, 38% in 2031, 34% in 2032, and 30% in 2033 and later (certain qualifying refundings would get 30%). Interest paid to investors would be taxable income, and the credit payment is capped using an interest rate estimated by the Treasury as of the first binding sale contract. Projects financed with these bonds would be subject to Davis‑Bacon prevailing wages.
Higher small-issuer threshold for bonds
If enacted, the bill would raise the small-issuer exception for certain bond rules from $10,000,000 to $30,000,000 for obligations issued after enactment. For calendar years after 2026, the $30,000,000 amount would be increased each year for inflation and rounded to the nearest $100,000. This change would make more small issues qualify for simplified tax allocation rules.
New limits on advance bond refundings
If enacted, the bill would change when a refunding bond counts as an advance refunding and which bonds qualify. It would allow some private activity refundings (except certain 501(c)(3) bonds) but limit the number of advance refundings based on the original issue date, add redemption timing and investment rules, and ban refundings that use arbitrage devices to gain extra profit. These rules apply to advance refunding bonds issued more than 30 days after enactment and include special rules for bonds issued before October 22, 1986.
Easier bond rules for 501(c)(3) nonprofits
The bill would treat a qualified 501(c)(3) bond as if the nonprofit beneficiary were the issuer for certain small‑issuer and allocation rules. For qualified financing issues, each qualifying portion could be treated as a separate issue issued by the borrower. These rules would apply to obligations issued after enactment and reduce technical barriers for many nonprofit financings.
Sponsors & CoSponsors
Sponsor
Sewell, Terri A. [D-AL-7]
AL • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov