Building American Jobs Act of 2011

Building American Jobs Act of 2011 - Amends the Internal Revenue Code, with respect to the Build America Bond program, to: (1) extend until December 31, 2012, the authority to issue such bonds and the authority for payments to issuers of such bonds; (2) reduce the percentage rate of payments to issuers in 2011 and 2012; (3) allow refundings of currently issued bonds; and (4) allow the use of Build America bonds to fund capital expenditures for levees and flood control projects.

Extends through 2011 the authority to issue recovery zone economic development bonds. Requires the Secretary of the Treasury to allocate 2011 national limitations on such bonds based upon state unemployment statistics.

Exempts private activity bonds for sewage and water supply facilities from the state volume caps applicable to such bonds. Allows Indian tribal governments to issue tax-exempt private activity bonds to provide water or sewage facilities.

Extends through 2011: (1) the exemption from alternative minimum tax (AMT) treatment of interest on certain tax-exempt bonds, (2) the tax exemption allowed for interest on bonds guaranteed by a federal home loan bank, and (3) small issuer rules for the allocation of tax-exempt interest expense by financial institutions.

Allows a full offset against the AMT for new market tax credit amounts.

Allows taxpayers to elect payments in lieu of low-income housing tax credits in 2011 for low-income buildings financed by tax-exempt bonds.