# Summary of H.R. 8864 — LIFT Act
The Local Infrastructure Financing Tools (LIFT) Act creates a new federal tax credit to help state and local governments finance infrastructure projects more affordably. Under the bill, when a state or local government issues a bond for infrastructure work, the federal government will reimburse the issuer for a portion of each interest payment made on that bond. The credit percentage starts at 42 percent for bonds issued between 2026 and 2030, then gradually decreases to 30 percent by 2033 and beyond. Eligible bonds must be used entirely for infrastructure capital projects or maintenance, and the interest on these bonds becomes taxable income to bondholders rather than tax-exempt as with traditional municipal bonds.
The bill also makes technical changes to advance refunding rules for municipal bonds and increases from $10 million to $30 million the threshold for certain small issuers' tax-exempt borrowing exemptions, with inflation adjustments after 2026. Additionally, the bill requires that any projects funded by these infrastructure bonds comply with prevailing wage requirements under the Davis-Bacon Act. The legislation takes effect 30 days after enactment, allowing states and localities to immediately begin issuing these new bonds to finance roads, bridges, utilities, and other public infrastructure with reduced interest costs.
Take Action
Your position
Add a comment
to comment on this bill.
Annotate the text
Highlight any passage on the Summary or Full Text tab to attach a note. Annotations appear on the Annotations tab.