Sec. 203. 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, to be held in the form of Treasury securities. 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 maintain risk-based capital of no less than 10.0 percent. 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 or to convert the proceeds of cash purchases of the Bank’s preferred stock into Treasury securities. The Bank’s accumulation of capital stock shall be limited— to no more than $150,000,000,000 by the end of its first full fiscal year of operations, following the end of which fiscal year the Board of Governors of the Federal Reserve System shall conduct an assessment of the Bank’s operations and report to Congress and the Bank’s Board concerning the ways in which the Bank is succeeding or falling short in fulfilling the purposes of this Act; to no more than $300,000,000,000 by the end of its third full fiscal year, following the end of which fiscal year the Board of Governors of the Federal Reserve System shall conduct another assessment of the Bank’s operations and submit similar reports to those specified in subparagraph (A), noting in particular the adequacy of the Bank’s response to criticisms and recommendations included in the assessment conducted pursuant to subparagraph (A); to no more than $500,000,000,000 by the end of its fifth full fiscal year, following the end of which fiscal year the Board of Governors of the Federal Reserve System shall conduct another assessment of the Bank’s operations and submit similar reports to those specified in subparagraphs
(A)and (B), noting in particular the adequacy of the Bank’s response to criticisms and recommendations included in the assessments conducted pursuant to subparagraphs
(A)and (B); and thereafter to the full amount set forth in paragraph (1), with the Board of Governors of the Federal Reserve System conducting periodic assessments of the Bank’s operations and submitting similar reports to those specified in subparagraphs
(A)through
(C)following the end of each fifth fiscal year beginning with the Bank’s tenth full fiscal year. All subscribed capital shall be exchanged for an equivalent in preferred stock, or shares, in the Bank, callable only by the Bank at the current market value of the shares during a period of 20 years following finalization of a stock purchase agreement. Notwithstanding any other provision of law, a guarantee of redemption at the then current market price of the shares shall be included in the stock purchase agreement along with a contractual obligation by the United States Treasury to fund the redemption. Preferred shareholders shall have no voting rights in the Bank. The Bank shall pay dividends on its preferred stock semiannually at the following rates: For stock acquired in exchange for Treasury securities by an individual, by an entity that is not exempt from tax under section 501 of the Internal Revenue Code of 1986, or by the United States Treasury, the same annual rate as the Treasury security exchanged for the stock. For stock acquired in exchange for securities by an organization that is exempt from tax under section 501 of the Internal Revenue Code of 1986, the same annual rate as the Treasury security exchanged for the stock plus one half of one percent (0.5%). For stock purchased in exchange for cash by an individual or an entity that is not exempt from tax under section 501 of the Internal Revenue Code of 1986 and for stock acquired in exchange for municipal bonds, the same annual rate payable on Treasury bonds with a 30-year maturity purchased from the Treasury on the day the stock purchase agreement is finalized. For stock purchased in exchange for cash by an organization that is exempt from tax under section 501 of the Internal Revenue Code of 1986, the same annual rate payable on Treasury bonds with a 30-year maturity on the day the stock purchase agreement is finalized plus one half of one percent (0.5%). For stock acquired in exchange for non-cash assets other than Treasury securities, the assets shall be liquidated by the Bank and the proceeds treated as a cash purchase of stock. If the dividends provided for in paragraph
(2)generate either more or less investment in the Bank’s preferred stock than is needed to achieve and maintain the Bank’s desired capitalization, the Directors may reduce or increase the dividends provided for new acquisitions of preferred stock in one or more of subparagraphs
(A)through
(D)of paragraph
(2)for such periods of time as the Directors determine appropriate. Dividend payments on the Bank’s preferred stock shall have priority over other uses of interest payments received by the Bank on its capital stock holdings of Treasury securities, and any such dividends owed in excess of the amount covered by these interest payments shall be guaranteed by the United States in the stock purchase agreement. The Bank is further authorized to raise borrowed capital for projects needs, or to meet its cash flow (liquidity) needs, by— issuing Bonds, with a fixed 5 to 10 year maturity; maintaining a permanent, revolving discount line of credit account with the Board of Governors of the Federal Reserve System; and borrowing from other banks or wholesale capital markets, under repurchase or other agreements, on a short- or medium-term basis, as determined by the Bank’s Chief Financial and Risk Officers, with approval by the Bank’s Board. Once chartered as a national bank, the Bank— shall accept deposits from individuals, corporations, public entities, or any other source, into transaction deposit accounts on its books, and pay interest on those deposits, in an amount deemed appropriate by the Board; may deposit its funds in any bank or other financial institution; and may utilize the services of electronic transfer systems to transfer funds among any deposit accounts. 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 $5,000,000,000,000. 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 1.6 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; current and expected future economic conditions, including expected improvements in the economy and the borrowing entity’s finances resulting from the Bank’s overall lending operations; 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 otherwise, 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 provide any other loans not described under this Act; or engage in investment banking activities such as underwriting securities or trust management for customers. Once chartered as a deposit-taking bank, the Bank is authorized to create funds in a deposit account in a borrowers name, in accordance with the loan agreement, as each scheduled loan disbursement as it is made. The Bank shall draw up an Aggregate Loan Disbursement Plan, for the information of 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 Bank’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.