Sec. 5. Purposes and authorizations
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The purpose of National Infrastructure Bank shall be to facilitate efficient, long-term financing of infrastructure projects, business and economic growth, and new job creation in the United States. The National Infrastructure Bank shall raise capital stock, in an amount approved by the Board, but not to exceed to $500,000,000,000. The capital stock shall be subscribed by— public holders of outstanding Treasury securities of 3 years or greater maturity, or outstanding municipal bonds of States or municipalities of 5 years or greater maturity, who transfer such securities or bonds to the Bank in exchange for the capital stock; paid-in share capital, paid in cash; and the United States Treasury, as on-call subscriber to the Bank, in an amount up to $100,000,000,000 in 30-year United States Treasury Bonds.
The Bank shall not purchase public debt of the United States, as newly issued, except for the purpose of rolling over the existing Treasury holdings of the Bank. All subscribed capital shall be exchanged for an equivalent in preferred stock, or shares, in the Bank, callable only by the Bank during a period of 20 years following finalization of a stock purchase agreement. Notwithstanding any other provision of law, a guarantee of redemption, to be included in the stock purchase agreement, shall impose upon the United States a contractual obligation to fund the redemption.
Preferred shareholders shall have no voting rights in the Bank. The Bank shall pay dividends, semiannually, at a rate of 2 percent per annum plus the annual rate of the Treasury security exchanged for the stock or 2 percent per annum for paid-in capital. The stock purchase agreement shall impose upon the United States a contractual obligation to fund the 2 percent portion of the dividend payment. The Bank is further authorized to raise medium- to long-term, borrowed capital for projects needs, and short-term capital to meet its cash flow needs, by, respectively— issuing Bonds, with a fixed 5 to 10 year maturity; and maintaining a discount line of credit account with the Board of Governors of the Federal Reserve System.
Once chartered as a national bank, the Bank shall accept deposits from individuals, corporations, or public entities, into transaction deposit accounts on its books, and pay interest on those deposits, in an amount deemed appropriate by the Board. The Bank shall provide loans, in accordance with this Act, to entities, or enter into blended financing credit, for the financing, development, or operation of infrastructure projects. The maturity of loans should match, to the extent possible, the maturity periods of anticipated profitability, economic stimulus, and projected useful life of projects financed by such loans.
Total loans contracted by the Bank shall not exceed $4,000,000,000,000. The Bank shall maintain a total capital to loan adequacy ratio of no less than 12.5 percent. The Bank— shall charge fixed-rate-interest, fees, premiums, or discounts based on the risk associated with a loan made by the Bank, taking into consideration— the price of Treasury obligations of a similar maturity or 2 percent per annum, whichever is greater; the credit rating of the borrowing entity if expressly published, or an assessment of the overall finances of the borrowing entity indicating an ability to service the loan; and whether or not the borrowing entity qualifies as a disadvantaged community, and an interest rate subsidy, subject to availability of funds; may, in connection with a loan extended by the Bank, issue guarantees, insurance, coinsurance, and reinsurance to borrowing entities, insurance companies, financial institutions, or others, or groups thereof, and charge fees based on a similar risk analysis; and may charge for the review of any project proposal in such amount as may be approved by the Board to cover the costs of such review.
Subject to a full audit of the project and borrower, and subject to Board review, the Bank may extend the time limit for repayment of a loan, through renewal, substitution of new obligations, or other wise, with the maximum time for such renewal to be approved by the Board. The Bank may make such further loans as necessary for project completion, or to assure loan repayment. The Bank may not provide loans to consumers or any other loans not described under this Act. Once chartered as a national bank, the Bank is authorized to create funds in a deposit account in a borrowers name, in accordance with the loan agreement, and each scheduled loan disbursement as it is made.
The Bank shall draw up an Aggregate Loan Disbursement Plan, in consultation with the Comptroller of the Currency and the Board of Governors of the Federal Reserve System. After meeting current obligations, the Bank is authorized to use its earnings, and all moneys which have been or may hereafter be allocated to or borrowed by it, in the exercise of its functions. From those monies, the Bank shall set aside loan loss provisions equal to a proportion of loan book value, as determined appropriate by the Board.
Net earnings of the Bank, after setting aside loan loss provisions and estimated forward cash flow needs, shall be used for the payment of dividends to the United States Treasury, in an annual amount to be determined by the Board. Any residual net earnings shall be deposited into a Trust Fund to subsidize loans for disadvantaged communities that are not able to repay infrastructure loans on normal loan terms, in a manner to be determined by the Board. Any direct Federal contributions from the budget for the purpose of subsidizing disadvantaged communities may also be added and utilized via the Trust Fund.
In the event of any losses, as determined by the Board, incurred on loans, guarantees, and insurance extended under this Act, they shall be borne by the Bank out of its loan loss provisions. Any losses in excess thereof shall be borne by the Secretary of the Treasury. That excess shall be considered a contingent obligation backed by the full faith and credit of the Government of the United States of America. The Bank shall maintain reserves against the Bank’s transaction accounts in such amount as the Board may determine appropriate, but not greater than 14 percent of the Banks’s total transaction accounts in excess of $25,000,000.
The Bank shall establish an office of lending and deposit in each city that has a Federal reserve bank, via the internet, and in any other location where the Board determines it appropriate.