Congress creates tax-exempt private bank, hands profits to investors
H.R. 1235 — Federal Infrastructure Bank Act of 2025 · Filed by Daniel Webster (R-FL) · 3 cosponsors · Introduced Feb 12, 2025 · Referred to committee
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What it does
This bill creates a new Federal Infrastructure Bank—a private corporation chartered by the federal government to lend money to states, cities, and private companies for infrastructure projects like roads, bridges, airports, and water systems. The bank will be owned by shareholders (initially the 'Formation Agent' and its investors), issue its own bonds, and operate with a 10% capital reserve. Investors in the bank get a 10% annual tax credit for five years on their equity stakes, and the bank itself is exempt from all federal, state, and local taxes except property tax.
Why we flagged it
The bill establishes a privately owned bank that finances infrastructure but operates as a tax-exempt entity with private shareholders. The core mechanism is financial—creating a new lending vehicle—not a public-interest infrastructure program. The tax exemptions and investor credits are the substantive policy levers.
What the text implies
- The bank's earnings and reserves are explicitly 'not Government funds or public funds,' meaning profits from infrastructure projects (tolls, fees, user charges) flow entirely to private shareholders, not back to the public treasury or to reduce user costs.
- The 10% annual tax credit for investors (Section 10, IRC 45BB) is a direct federal subsidy to equity holders, effectively transferring public tax revenue to private investors for five years per investment.
The full analysis lists 5 implications of this text.
Who stands to gain
private equity firms; investment banks; institutional investors