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Updated February 5, 2024
National Infrastructure Bank: Proposals in the 118th Congress
Introduction
Assuming a 10% subsidy cost, every $1 appropriated for
The term infrastructure generally refers to long-lived,
purposes other than administrative costs would enable the
capital-intensive systems and facilities in the areas of
bank to lend $10 to projects. Loan repayments would go to
transportation, energy, water, and telecommunications.
the Treasury, not the bank. Alternatively, a bank could
Some broader definitions also include facilities for
operate as a revolving fund, such that credit assistance and
education, recreation, and health. Although the condition
administrative costs are limited to the size of the
and performance of these systems are generally thought to
appropriation or other funds, but borrower repayments
be important for the nation’s well-being, there is less
could be used to make new loans. In some formulations, an
agreement on the optimal level of infrastructure investment,
infrastructure bank would raise its own capital through
how to maximize the effectiveness of spending, and the
bond issuance or other borrowing.
appropriate role of the federal government.
Advantages and Disadvantages
State and local governments and the private sector provide
Advantages of a national infrastructure bank potentially
the bulk of infrastructure investment. The federal role in
include the leveraging of state, local, and private-sector
infrastructure investment is important but limited in size
investment, data-driven project selection, and a highly
and scope. For example, the federal government was
skilled staff with expertise in infrastructure financing.
responsible for 21% of total government highway outlays in
Drawbacks might include the limited number of suitable
2021. The federal government supports infrastructure
projects for support, the duplication of existing programs,
investment in four ways: (1) direct investment in federally
and pressure to allocate loans according to political criteria.
owned infrastructure; (2) grants to nonfederal entities,
A bank may also not be the lowest-cost means of increasing
especially state and local governments; (3) tax preferences
infrastructure spending. The Congressional Budget Office
that forgo federal revenue to provide incentives for
notes that a special entity issuing its own debt would not be
nonfederal investment in infrastructure; and (4) loans and
able to offer the low interest and issuance costs of the U.S.
other types of credit assistance to nonfederal entities.
Treasury. Some see a larger federal role in infrastructure as
a drawback and suggest that Congress might enhance the
National Infrastructure Bank
operation of state infrastructure banks as an alternative.
A national infrastructure bank is typically seen as a way for
the federal government to provide loans, loan guarantees,
Legislative Proposals in the 118th Congress
and lines of credit to support infrastructure projects carried
Legislative proposals for a national infrastructure bank date
out by nonfederal entities. Many different formulations
back to at least 1983 (S. 532, 98th Congress), and many bills
have been proposed over the years, but policy choices
have been introduced since then. No proposal has been
typically include the following:
enacted on its own or as part of broader legislation, such as
the Infrastructure Investment and Jobs Act (P.L. 117-58).
Infrastructure type. Some proposals focus on one type,
National infrastructure bank bills introduced in the 118th
such as transportation or energy, but most would support a
Congress include the Federal Infrastructure Bank Act of
wider spectrum of sectors.
2023 (H.R. 490); the National Infrastructure Investment
Corporation Act of 2023 (H.R. 3360); and the National
Institutional form and governance. Most current
Infrastructure Bank Act of 2023 (H.R. 4052). Details of
proposals would create a wholly owned government
these three bills can be seen in Table 1.
corporation overseen by a board whose members are
selected by the President or Congress. Other models include
The National Infrastructure Investment Corporation Act of
placing the bank inside an existing federal agency and
2023, for example, would create the National Infrastructure
creating a government-sponsored enterprise with an
Investment Corporation, a wholly owned government
independent board.
corporation, governed by a seven-member board of
directors. Three of these directors would be appointed by
Funding source. Under the Federal Credit Reform Act of
the President with advice and consent of the Senate, and
1990 (FCRA; 2 U.S.C. §661(a)), credit assistance by the
four would be appointed by congressional leaders. The
bank would be supported by an appropriation that pays the
corporation would be authorized to provide loans and loan
subsidy cost and federal administrative cost. According to
guarantees to sponsors of infrastructure, including the
FCRA, the subsidy cost is “the estimated long-term cost to
transportation, energy, environmental, and
the government of a direct loan or a loan guarantee ...
telecommunications sectors. The bill does not authorize an
calculated on a net present value basis.” An appropriation
appropriation. Instead, the corporation would be authorized
would leverage larger loan amounts from the U.S. Treasury.
to accept loans from pension funds.
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link to page 2 National Infrastructure Bank: Proposals in the 118th Congress
Table 1. Infrastructure Bank Bills Introduced in the 118th Congress
H.R. 4052
H.R. 490
H.R. 3360
(Rep. D. Davis)
(Rep. Webster)
(Rep. Carbajal)
Name of bill
National
Federal Infrastructure
National
Infrastructure Bank
Bank Act of 2023
Infrastructure
Act of 2023
Investment
Corporation Act of
2023
Name of
National
Federal Infrastructure
National
entity
Infrastructure Bank
Bank
Infrastructure
Investment
Corporation
Organization
Whol y owned
Government-
Whol y owned
type
government
Sponsored Enterprise
government
corporation
(GSE)
corporation
Governance
Twenty-five-member
Seven-member board
Seven-member board
board of directors
elected by
of directors; three
appointed by
shareholders
appointed by
President with advice
President with advice
and consent of Senate
and consent of
Senate; four
appointed by
congressional leaders
Eligible
Transportation,
Transportation,
Transportation,
infrastructure
energy,
energy, water, other
energy,
projects
environmental,a
infrastructure
environmental,
telecommunications,
identified by the bank
telecommunications
affordable housing,
schools, public
recreation, libraries,
worker training
facilities
Types of
Direct loans, loan
Equity investments,
Direct loans, loan
credit
guarantees, credit
direct loans, indirect
guarantees
assistance
insurance
loans, and loan
guarantees
Funding
Sale of capital stock,
Sale of capital stock;
Loans from pension
callable capital; may
may issues own bonds funds
issue own bonds,
bank deposits, fees,
$100 mil ion
appropriation for
start-up costs
Type of bank
Revolving fund
Revolving fund
Revolving fund
Source: Congressional Research Service based on H.R. 4052 (as introduced), H.R. 490 (as introduced), H.R. 3360 (as introduced), 118th
Congress.
a. “Environmental” includes drinking water and wastewater treatment facilities, stormwater management systems, open-space management
systems, wetland restoration, solid waste disposal facilities, hazardous waste facilities, and industrial site cleanup projects.
William J. Mallett, Specialist in Transportation Policy
IF12585
https://crsreports.congress.gov
National Infrastructure Bank: Proposals in the 118th Congress
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