This legislation, titled the "American Infrastructure Bonds Act of 2025," amends the Internal Revenue Code to introduce a new financing mechanism for infrastructure projects. It allows issuers of qualifying American infrastructure bonds to receive a direct federal credit equal to 28% of the interest payable on these bonds, paid by the Secretary of the Treasury contemporaneously with each interest payment date. To qualify, bonds must typically have tax-exempt interest under current law, not be private activity bonds, and the issuer must make an irrevocable election. A significant change is that interest on these American infrastructure bonds will be includible in gross income for federal income tax purposes, unlike traditional municipal bonds. The bill also includes provisions for coordinating with state tax laws and adjusting payments in case of federal sequestration, aiming to provide a direct subsidy to infrastructure projects while potentially expanding the pool of investors.