H.R. 1235 — Federal Infrastructure Bank Act of 2025

This section provides the short title of the Act as the “Federal Infrastructure Bank Act of 2025.”

This section establishes definitions for the Federal Infrastructure Bank Act, including “Bank” as the Federal Infrastructure Bank created under section 4 and “Holding Company” as the Federal Infrastructure Bank Holding Company created under section 3. It defines an “eligible entity” broadly to include corporations, limited liability companies, partnerships, public-private partnerships, joint ventures, trusts, States, other governmental entities, revolving funds, and State infrastructure banks. It defines an “infrastructure project” to include the construction, consolidation, alteration, operation, maintenance, or repair of public-benefit projects in 14 categories, including highways and bridges, ports, airports, pipelines, energy transmission and storage, rail, transit, inland waterways, intermodal facilities, water treatment and solid waste facilities, storm water systems, dams and levees, and other projects the Bank identifies as providing a public benefit. It defines “rural” as any area not in a metropolitan statistical area with a population of 50,000 or greater, and defines “State” to include the 50 States, the District of Columbia, Puerto Rico, American Samoa, Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and federally recognized Indian Tribes. It also defines “State infrastructure bank” to include banks established under section 350 of the National Highway System Designation Act of 1995, section 1511(l) of the Transportation Equity Act for the 21st Century, section 610 of title 23, United States Code, or State law.

This section directs the Secretary of the Treasury, in consultation with the Chairman of the Board of Governors of the Federal Reserve System, to select a Formation Agent within 60 days after enactment to organize the Federal Infrastructure Bank, including filing the bank’s organization certificate and establishing the Federal Infrastructure Bank Holding Company. It requires the Formation Agent, within 30 days after selection, to establish the Holding Company, prescribe its governing structure, and create a 7-member board of directors elected by shareholders to serve 4-year terms, with no more than 2 consecutive terms per member. It also authorizes the board to adopt, amend, and repeal bylaws, determine and sign the articles of association governing the Holding Company, and appoint the Chief Executive Officer of the Bank and other officers provided for in the bylaws. The section specifies that the Holding Company’s earnings and reserves are its sole property and are not Government funds or public funds, and it requires the Formation Agent to issue Holding Company equity securities to its shareholders in amounts determined to have equal value to the Formation Agent equity held by each shareholder at the time the Holding Company is established.

This section establishes the Federal Infrastructure Bank as a Delaware corporation and a wholly owned subsidiary of the Holding Company, and directs the Comptroller of the Currency to grant the Bank a national bank charter. It also requires the Bank to establish regional offices within 5 years of enactment to focus on infrastructure projects in different areas of the United States, makes the Holding Company’s Board of Directors the Bank’s initial board, and provides that the Bank’s earnings and reserves are not Government funds or public funds.

This section establishes the National Infrastructure Bank’s core authorities and restrictions. It authorizes the Bank to provide equity investments, direct loans, indirect loans, and loan guarantees to eligible entities for the planning, pre-development, design, construction, operation, and maintenance of revenue-producing infrastructure projects in the United States, and requires that those projects have sufficient revenue sources and guarantees to support interest and principal payments. It requires that not less than 10 percent of the dollar amount of Bank financing be provided for infrastructure projects in rural areas, and directs the Bank to attempt to cross-subsidize nonrevenue infrastructure projects with revenue-generating projects to diversify its loan portfolio. This section prohibits the Bank from accepting customer deposits or engaging in financial or investment banking activities, except with respect to the Bank’s own revenues. It authorizes the Bank to pledge its loans to the Federal Reserve System’s discount window and permits the Secretary of the Treasury to purchase Bank obligations under the same manner and requirements that apply to obligations under 12 U.S.C. 1455(c). It requires the Bank to maintain risk-based capital of not less than 10 percent, collectively for the Bank and the Holding Company, and directs the Bank to account for long-term operations, maintenance, and lifecycle costs to maximize the useful life of each asset. It also authorizes the Bank to provide implementation advisory assistance as a clearinghouse for infrastructure finance, requires the Bank to accept credit ratings consistent with typical infrastructure market practice, and prohibits the Bank from financing infrastructure projects located outside the United States or projects owned, directed, controlled, financed, or influenced by the Government of the People’s Republic of China, the Chinese Communist Party, or the People’s Liberation Army.

This section establishes the Holding Company’s authority to issue equity securities, pay dividends on those securities, and issue bonds, notes, and other marketable securities on terms the Board of Directors determines appropriate. It authorizes the Secretary of the Treasury and the Board of Governors of the Federal Reserve System to purchase bonds issued under this section, but limits Treasury’s purchases to 5 percent of the Holding Company’s total outstanding bonds. It also requires the Holding Company to maintain risk-based capital of at least 10 percent, collectively for the Bank and the Holding Company. In addition, it limits non-United States individuals and entities to holding no more than 25 percent of the Holding Company’s equity securities and bonds in the aggregate and bars the Formation Agent and Holding Company from issuing any bond, note, marketable security, or other financial instrument to persons or entities affiliated with, owned by, or controlled by the Government of the People’s Republic of China, the Chinese Communist Party, the People’s Liberation Army, or a State Sponsor of Terrorism. (Thus, foreign ownership and financing from specified adversarial entities are restricted.)

This section establishes the Board of Governors of the Federal Reserve System as the primary federal supervisor and regulator of the Holding Company and the Bank, directing it to oversee their safe and sound operation and to regulate Bank activities for compliance with this Act.

This section establishes an Infrastructure Guarantee Fund to cover specific loans or loan guarantees made by the Bank in the event of non-payment by a recipient. (Thus, the fund would serve as a backstop for the Bank’s infrastructure financing activities when borrowers or guarantee recipients default.)

This section exempts the Holding Company and the Bank, including their franchises, capital, reserves, surplus, advances, and income, from all Federal, State, county, municipal, and local taxation for taxable years ending on or after the date of enactment. It preserves taxation of the Holding Company’s and the Bank’s real property at the same rate and valuation as other real property.

This section establishes a new Federal Infrastructure Bank Holding Company credit under section 45BB of the Internal Revenue Code of 1986, equal to 10 percent of the amount paid at original issue for a qualified Holding Company equity investment, and makes the credit available for the taxable year of the initial investment and each of the 4 taxable years thereafter. As background, the credit is a general business credit under section 38 and applies to equity investments originally issued by the Federal Infrastructure Bank Holding Company under section 6(a)(1) of the Federal Infrastructure Bank Act of 2025, but only if issued not later than 3 years after formation of the Holding Company under section 3 of that Act. The section also adds the new credit to the section 38 general business credit list and applies the amendments to taxable years ending after the date of enactment.

This section limits the Act by providing that nothing in the Act may be construed as authorizing the Federal Government to guarantee the assets of the Bank or Holding Company.