; 26 U.S.C. 54C note.). . (b) Clerical amendments (1) The table of subparts for part IV of subchapter A of chapter 1 of such Code is amended by amending the item related to subpart J to read as follows: Subpart J—Certain infrastructure bonds . (2) The table of chapters for subpart J of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 54BB. School infrastructure bonds. . (c) Transitional Coordination With State Law Except as otherwise provided by a State after the date of the enactment of this Act, the interest on any school infrastructure bond (as defined in section 54BB of the Internal Revenue Code of 1986, as added by this section) and the amount of any credit determined under such section with respect to such bond shall be treated for purposes of the income tax laws of such State as being exempt from Federal income tax. (d) Credit for qualified bonds allowed to issuer Paragraph (3) of section 6431(f) of such Code is amended by inserting any school infrastructure bond (as defined in section 54BB) or before any qualified tax credit bond . (e) Sequestration Subparagraph (A) of section 255(g)(1) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by adding before Postal Service Fund the following: Payments under section 54BB of the Internal Revenue Code of 1986. (f) Effective Date The amendments made by this section shall apply to obligations issued after December 31, 2017. 202. Expansion of qualified zone academy bonds (a) Construction of a public school facility Subparagraph (A) of section 54E(d)(3) of the Internal Revenue Code of 1986 is amended by striking rehabilitating or repairing and inserting constructing, rehabilitating, retrofitting, or repairing . (b) Removal of private business contribution requirement Section 54E of the Internal Revenue Code of 1986 is amended— (1) in subsection (a)(3)— (A) in subparagraph (A), by inserting and at the end; and (B) by striking subparagraph (B); (2) by striking subsection (b)