article: SECTION 1. SHORT TITLE. This Act may be cited as the ``American Communities Investment Act of 1999''. SEC. 2. COMMUNITY DEVELOPMENT LOAN GUARANTEES. (a) Maximum Amount of Outstanding Guarantees for a Single Issuer.-- Section 108 of the Housing and Community Development Act of 1974 (42 U.S.C. 5308) is amended by striking subsection (b) and inserting the following new subsection: ``(b) Maximum Amount of Outstanding Guarantees.--The maximum aggregate outstanding amount of notes and obligations of a single issuer guaranteed under this section shall be an amount determined by the Secretary based on the amount of the grant approval for the issuer under section 106 or 107, the fiscal condition of the issuer, and the potential return on investment of the projects to be undertaken with the proceeds of such notes and obligations, but may not in any case exceed the discounted present value of the grants that the issuer would receive over a period not to exceed 20 years if the issuer's annual grant amount over such period were equal to 80 percent of the current grant approval for the issuer.''. (b) Stakeholder Participation.--Section 108 of the Housing and Community Development Act of 1974 (42 U.S.C. 5308) is amended by adding at the end the following new subsection: ``(s) Stakeholder Participation.-- ``(1) Requirement.--The Secretary shall provide that an issuer of notes or obligations under this section shall, in complying with any community participation requirements (including the requirements under section 104(a)) applicable to the development of activities to be funded with the proceeds of such notes or obligations guaranteed under this section, include participation of major stakeholders in the community in which such activities will be carried out. ``(2) Definition.--For purposes of this subsection, the term `stakeholder' means a public or private organizational entity whose future well-being depends upon the applicant's continued social and economic viability, and includes the representatives of the following community interests: ``(A) Business. ``(B) Banking. ``(C) Education. ``(D) Public health and safety. ``(E) Labor. ``(F) Community-based development organizations. ``(G) Arts, cultural, religious, philanthropic, professional, and civic organizations.''. SEC. 3. COLLATERAL FOR FHLB ADVANCES. Section 10(a)(4) of the Federal Home Loan Bank Act (12 U.S.C. 1430(a)(4)) is amended by striking the second sentence. SEC. 4. AUTHORITY TO MAKE ADVANCES TO NONMEMBER MORTGAGEES. Section 10b of the Federal Home Loan Bank Act (12 U.S.C. 1430b) is amended to read as follows: ``SEC. 10B. ADVANCES TO NONMEMBER MORTGAGEES. ``(a) Authority.--Each Federal home loan bank may make advances to a nonmember mortgagee, except that such advances may be used only for community lending (as such term is defined in section 10(k)). ``(b) Nonmember Mortgagee Defined.--For purposes of subsection (a), the term `nonmember mortgagee' means any entity-- ``(1) that is-- ``(A) a State or local housing finance agency or Indian housing authority (including any subsidiary of such agency or authority) approved under title II of the National Housing Act, which-- ``(i) is a chartered institution having succession; and ``(ii) is subject to the inspection and supervision of a governmental agency; ``(B) a community development financial institution that-- ``(i) is not an insured depository institution or a subsidiary of an insured depository institution; and ``(ii) at the time an advance under this section is made, is certified as a community development financial institution under the Community Development Banking and Financial Institutions Act of 1994; and ``(iii) is a chartered institution having succession; or ``(C) a State or local economic development agency that-- ``(i) is chartered under State law; and ``(ii) is an institution having succession; and ``(2) whose principal activity in the mortgage field consists of lending the institution's own funds. ``(c) Security.--Advances under subsection (a) shall be secured in accordance with the requirements of section 10. ``(d) Terms and Conditions.--Advances made under this section shall be made at the same rates of interest and upon the same terms and conditions as are comparable extensions of credit to member institutions.''. SEC. 5. COMMUNITY LENDING FUND. Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430) is amended by adding at the end the following new subsection: ``(k) Community Lending Fund.-- ``(1) In general.--Subject to regulations prescribed by the Board to carry out this subsection, each Federal home loan bank shall establish a Community Lending Fund, which the bank shall use to facilitate community lending by its members and nonmember mortgagees. ``(2) Use of assets of community lending funds.--A bank may use amounts in its Community Lending Fund only to provide grants, subsidies, and subsidized advances to its members and nonmember mortgagees for use for community lending activities. ``(3) Low- and moderate-income targeting.--Not less than 70 percent of the aggregate amount of assistance provided by a bank from a Community Lending Fund shall be used for the support of community lending activities that benefit low- and moderate-income persons. ``(4) Local priorities.--Each bank-- ``(A) shall give priority for assistance from the Community Lending Fund of the bank for projects located in empowerment zones and enterprise communities designated under part I of subchapter U of chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et seq.); and ``(B) may establish such other priorities for the types of projects to receive assistance from the Community Lending Fund of the bank as the bank considers appropriate, and to which the Board shall defer, if such priorities are consistent with the safety and soundness of the bank and the provisions of this subsection. . ``(5) Coordination of activities.--The Board shall require the banks, to the extent practicable, to coordinate their activities pursuant to this subsection with any other State or Federal programs intended to facilitate community lending. ``(6) Report.--Each member and nonmember mortgagee receiving advances or assistance from a Community Lending Fund established by a bank shall report annually to the bank regarding the use of such advances or assistance. ``(7) Contribution to fund.--Each bank shall annually contribute 10 percent of the net earnings of that bank (after deducting expenses related to section 10(j) and operating expenses) to its Community Lending Fund. Each bank may contribute additional moneys to the Fund, and may accept for deposit into the Fund moneys from other parties. ``(8) Suspension of contributions.-- ``(A) In general.-- If a bank finds that the payments required under paragraph (7) are contributing to the financial instability of such bank, it may apply to the Board for a temporary suspension of such payments. The Board shall make a determination of whether the bank is financially unstable and whether such payments are contributing to such instability, and [may/shall] suspend such bank's payments to its Community Lending Fund if finds in the affirmative with respect to both such questions. ``(B) Factors to be considered.--In determining the financial stability of a bank for purposes of this paragraph, the Board shall consider such factors as-- ``(i) whether the bank's earnings are severely depressed; ``(ii) whether there has been a substantial decline in membership capital; and ``(iii) whether there has been a substantial reduction in advances outstanding. ``(C) Review of applications.--The Board shall review any application under this paragraph and any supporting financial data and issue a written decision approving or disapproving such application. The Board's decision shall be accompanied by specific findings and reasons for its action. ``(D) Designation of suspension period.--If the Board grants a suspension, it shall specify the period of time that such suspension shall remain in effect and shall continue to monitor the bank's financial condition during such suspension. ``(E) Suspensions prohibited under certain circumstances.--The Board shall not suspend payment to the Community Lending Fund of a bank if the bank's reduction in earnings is a result of-- ``(i) a change in the terms for advances to members which is not justified by market conditions; ``(ii) inordinate operating and administrative expenses; or ``(iii) mismanagement. ``(9) Regulations.-- ``(A) In general.--Not later than 1 year after the date of the enactment of this Act, the Board shall prescribe regulations to implement this subsection. ``(B) Limitations, restrictions, and other requirements.--Subject to the requirements of this subsection, such regulations-- ``(i) may specify activities, restrictions, and limitations for the use by the banks of amounts from Community Lending Funds; ``(ii) may specify priorities for the use of such advances; ``(iii) shall ensure that assistance provided from a Community Lending Fund will be used only for community lending to assist projects for which adequate long-term monitoring is available to guarantee requirements established pursuant to this subsection are satisfied; ``(iv) shall ensure that any subsidies provided under this subsection by Banks to member institutions and nonmember mortgagees are passed on to the ultimate borrower; ``(v) shall specify standards for determining benefit for low- and moderate- income persons, for purposes of paragraph (3); and ``(vi) shall establish uniform standards for assistance from Community Lending Funds and community lending by member institutions and nonmember mortgagees supported by such assistance. ``(10) Advisory council.--Each bank shall appoint an Advisory Council of 7 to 15 persons drawn from stakeholders (as such term is defined in section 108(s) of the Housing and Community Development Act of 1974 (42 U.S.C. 5308(s)) in its district. The Advisory Council shall meet with representatives of the board of directors of the Bank quarterly to advise the Bank on community lending needs in the district and on the utilization of the Community Lending Fund of the bank for meeting such needs. Each Advisory Council established under this paragraph shall submit to the Board at least annually its analysis of the community lending activities carried out with amounts from the Community Lending Fund of the bank by which the Committee is appointed. ``(11) Reports to congress.-- ``(A) The Board shall monitor and annually submit a report to the Congress and the Advisory Council for each bank the support of community lending by the banks and the utilization of amounts from Community Lending Funds. ``(B) The analyses submitted by the Advisory Councils to the Board under paragraph (10) shall be included as part of the reports required by this paragraph. ``(C) The Comptroller General of the United States shall audit and evaluate the program under this subsection after such program has been operating for 2 years. The Comptroller General shall submit a report to the Congress on the conclusions of the audit and recommend improvements or modifications to the program. ``(12) Definitions.--For purposes of this subsection, the following definitions shall apply: ``(A) Community lending.--The term `community lending' means providing financing for activities that meet the requirements for eligibility, under section 105 of the Housing and Community Development Act of 1974 (42 U.S.C. 5305), for assistance with amounts for grants under title I of such Act. ``(B) Low- and moderate-income persons.--The term `low- and moderate-income persons has the meaning given such term in section 102 of the Housing and Community Development Act of 1974 (42 U.S.C. 5302). ``(C) Nonmember mortgage.--The term `nonmember mortgagee' has the meaning given such term in section 10B(b) of this Act.''. (b) Funding for Community Lending Funds.--Section 21B(f)(2)(C) of the Federal Home Loan Bank Act (12 U.S.C. 1441b(f)(2)(C)) is amended to read as follows: ``(C) Payments by federal home loan banks.-- ``(i) Refcorp funding.--To the extent that the amounts available pursuant to subparagraphs (A) and (B) are insufficient to cover the amount of interest payments, each Federal home loan bank shall pay to the Funding Corporation in each calendar year, 10 percent of the net earnings of that bank (after deducting expenses relating to section 10(j) and operating expenses). ``(ii) Annuity value.--The Board shall annually determine the extent to which the value of the aggregate amounts paid by the banks exceeds or falls short of the value of an annuity of $300,000,000 per year that commences on the issuance date and ends on the final scheduled maturity date of the obligations, and shall select appropriate present value factors for making such determinations. ``(iii) Adjustment of period of banks' obligations.--The Board shall extend or shorten the term of the banks' payment obligations under this subparagraph, as necessary to ensure that the value of all payments made by the banks under this paragraph is equivalent to the value of such an annuity. ``(iv) Extension of period beyond maturity dates of underlying obligations.--If the Board extends the term of payments beyond the final scheduled maturity date for the obligations, each bank shall continue to pay 10 percent of its net earnings (after deducting expenses relating to section 10(j) and operating expenses) to the general fund of the Treasury until the value of all such payments by the banks is equivalent to the value of such an annuity. ``(v) Final year adjustment.--In the final year in which the banks are required to make any payment to the general fund of the Treasury under clause (iv), if the dollar amount represented by 10 percent of the net earnings of the banks exceeds the remaining obligation of the banks to the Treasury, the Finance Board shall reduce the percentage pro rata to a level sufficient to pay the remaining obligation.''. (c) Effective Date.--The amendments made by subsections (a) and (b) shall become effective on January 1, 2000.
summary: Amends the Federal Home Loan Bank Act to set forth parameters within which: (1) Federal home loan banks may make advances to a nonmember mortgagee for community lending purposes; and (2) each Federal home loan bank shall establish a Community Lending Fund to facilitate community lending by its members and nonmember mortgagees.