The central policy objective of a national infrastructure bank is to increase investment in infrastructure. Greater investment is desired because high-quality, well maintained infrastructure is believed to increase private-sector productivity and improve public health and welfare. The magnitude of the increased productivity, however, is not settled, as empirical analysis does not always support the conjecture that greater infrastructure investment uniformly generates productivity gains. The type of infrastructure and the type of investment are critical elements in such an assessment. National infrastructure bank proposals would support infrastructure development by providing relatively low-interest loans and other types of credit assistance in such a way as to stimulate investment by state and local governments and private funding sources. A national infrastructure bank, moreover, could be complementary to direct federal investment in infrastructure. Although no consensus definition exists, infrastructure is generally conceived of as the capital-intensive assets needed for the delivery of basic services. Both public and private entities own and operate infrastructure. Some infrastructure is provided by public-private partnerships which mix, in a myriad of different ways, public and private rights and responsibilities. Funding for these expensive and long-lived assets most often comes from money borrowed on the capital markets. In some cases, however, capital asset purchases are financed with current revenues, government grants, loans, and private equity. For debt-financed assets, investors seek a rate of return commensurate with the associated risk. Debt incurred on wholly owned government projects may be repaid with taxes, user fees, or a combination of the two. For privately owned infrastructure, user fees are the main option, although debt may be repaid in other ways such as property rents. Although the idea for a national infrastructure bank is not new, legislative proposals for creating a bank have drawn increased attention in the past few years. Proponents argue that an infrastructure bank offers three main advantages over traditional methods of federal support for infrastructure: A federal infrastructure bank could increase the total amount of investment in infrastructure by leveraging state, local, and private resources. It could accelerate construction of projects that may be slowed by the current need to await annual allocations of federal funds. It could promote the distribution of federal spending on the basis of anticipated returns to investment, rather than according to traditional allocation methods such as formulas, discretionary programs, and earmarking. This report begins with a discussion of the infrastructure bank concept and some examples of existing infrastructure financing mechanisms. The report then describes and analyzes selected legislative proposals for infrastructure banks, and concludes with an analysis of some advantages and disadvantages of creating a national infrastructure bank and alternative institutional structures. Appendix A describes the current federal role in financing infrastructure as context for the possible creation of a national infrastructure bank. Conceptually, an infrastructure bank is a government-established entity that provides credit assistance to sponsors of infrastructure projects. An infrastructure bank can take many different forms, such as an independent federal agency, a federal corporation, a government-sponsored enterprise, a state government entity, or a private-sector, nonprofit corporation, but is distinguished from a commercial bank or private-sector infrastructure fund by being government-established. Unlike government departments that mainly fund infrastructure through grants, an infrastructure bank would be expected mainly to provide credit assistance, typically loans, loan guarantees, and lines of credit. As with a traditional commercial bank, infrastructure bank borrowers would be expected to repay their loans with interest, and may have to pay other fees associated with the bank's credit instruments. But unlike a commercial bank, an infrastructure bank takes no deposits and conducts no other "over-the-counter" transactions. Examples of existing infrastructure banks are the European Investment Bank (EIB) and, in the United States, state infrastructure banks, and possibly the Export-Import Bank. The EIB was created by the European Union (EU) in 1957 to help finance infrastructure and other economic development projects. The bank is capitalized by funds from its 27 member countries, but most of its capital comes from issuing bonds. Member countries also agree to provide extra funds, known as "callable capital," if needed to cover loan defaults. The bank is overseen by a board of governors, comprised of the finance ministers of the member countries, and a board of directors that has a representative from each member country. Project appraisal reports, conducted by staff engineers, economists, and financial analysts, are provided to the board of directors for a financing decision. Most of the EIB's work involves low-interest, long-term loans to public and private entities within the EU, although it has provided support for projects outside the EU. According to the Congressional Budget Office (CBO), the EIB can offer low-interest loans because it is large, is nonprofit, has a AAA rating, and is backed by member governments. In addition to supporting transportation, energy, telecommunications, health and education, and environmental projects, the EIB has provided support to private industry, particularly small and medium-sized enterprises, and for research and development. Initially, the EIB aided projects which governments or private lenders could not or would not finance. However, today the EIB is "only one of a variety of providers" of funding for infrastructure in Europe. In 2010, the EIB loaned €72 billion (87.5% in EU countries and 12.5% outside the EU) or approximately $100 billion. As of the close of 2010, the EIB has total assets (mostly loans outstanding) of €420 billion ($583 billion). In 2010, the EIB financed 460 "large projects" in 72 countries. Many state governments have established infrastructure banks to support projects in surface transportation. Most of these were created in response to a federal state infrastructure bank (SIB) program originally established in surface transportation law in 1995 ( P.L. 104-59 ). According to the Federal Highway Administration (FHWA), 32 states and Puerto Rico had established federally authorized SIBs by December 2008. No more recent data are available. At least four states, Florida, Georgia, Kansas, and Ohio, also have SIBs that are unconnected to the federal program. As part of the federal transportation program, a state can use its allocation of federal surface transportation funds to capitalize an SIB. There are some requirements in federal law for SIBs connected with the federal program (23 U.S.C. 610), but for the most part their structure and administration are determined at the state level. Most SIBs are housed within a state department of transportation, but at least one (Missouri) was set up as a nonprofit corporation and another (South Carolina) is a separate state entity. A number of SIBs also provide assistance to non-transportation projects. Most SIBs function as revolving loan funds, in which money is directly loaned to project sponsors and its repayment with interest provides funds to make more loans. Some SIBs, such as those in Florida and South Carolina, have the authority to use their initial capital as security for issuing bonds to raise further capital as a source of loans. This is known as a leveraged SIB, and repayment of its loans is used to repay bondholders. SIBs also typically offer project sponsors other types of credit assistance, such as letters of credit, lines of credit, and loan guarantees. A third example is the Export-Import (Ex-Im) Bank. This mostly self-sustaining government agency uses direct loans, loan guarantees, working capital guarantees, and export credit insurance to assist overseas purchasers of U.S. goods, often in cooperation with domestic or foreign financing firms. Some Ex-Im transactions involve infrastructure-related technologies, such as power generating equipment (e.g., solar panels and wind turbines); passenger aircraft; and machinery used in the construction of roads, dams, and airports. Although the purpose of the Ex-Im Bank is to provide financing to support U.S. exports of manufactured goods and services with the objective of creating domestic jobs, it has the general authority to lend money and perform other banking functions. However, Congress may need to amend the bank's charter and would likely need to expand the bank's resources if it wants Ex-Im Bank to support public and private entities wishing to invest in domestic infrastructure. In keeping with recent history, several infrastructure bank bills are pending before the 112 th Congress. The three primary infrastructure bank bills discussed here are S. 652 , S. 936 , and H.R. 402 . Two, S. 652 and H.R. 402 , would create a wholly owned federal government corporation. In contrast, S. 936 would create a "fund" within the Department of Transportation (see Table 1 for a brief summary of the legislation). There are several additional infrastructure bank bills pending that are not separately addressed in this report as they are all very similar to the three analyzed. The discussion of S. 652 can generally be applied to S. 1549 and S. 1769 . And S. 1550 (and its House companion, H.R. 3259 ) would create an "independent establishment" called the "National Infrastructure Bank." The remainder of this section provides more detail on each of the infrastructure bank bills listed in Table 1 . Each bill is described focusing on the following topics: structure, eligible projects, project selection criteria, financing packages, and congressional funding (appropriations). Table B -1 lists the various infrastructure project types identified in S. 652 , S. 936 , and H.R. 402 . Introduced on March 17, 2011, by Senators Kerry, Hutchison, Warner, and Graham, S. 652 would create a relatively independent infrastructure bank. This legislation may have provided the foundation for the infrastructure bank component of the President's "American Jobs Act," which was introduced in the Senate as S. 1549 by Senator Reid. However, the front matter from S. 652 reproduced here is not in S. 1549 . Otherwise, the infrastructure bank proposal in S. 1549 is virtually identical to S. 652 .