American Cities Investment Act of 1997

Summary: American Cities Investment Act of 1997 - Amends the Housing and Community Development Act of 1974 to:  (1) set limitations on maximum outstanding loan guarantees issued by the Secretary of Housing and Urban Development; (2) authorize the Secretary to guarantee advances from Federal Home Loan Banks; and (3) expand the community participation requirements to include major stakeholders (as defined by this Act). 
Amends the Federal Home Loan Bank Act to authorize advances to metropolitan cities, urban counties, or their public agencies for certain extraordinary, nonusual community development purposes pursuant to such loan guarantees.  Prohibits the use of such funds to supplant Federal or non-federal fund sources.  Sets forth amount limit and repayment provisions.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Cities Investment Act of 
1997''.

SEC. 2. COMMUNITY DEVELOPMENT LOAN GUARANTEES.

    (a) Advances From Federal Home Loan Banks.--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) Authority to Guarantee Advances From Federal Home Loan 
Banks.--
            ``(1) Limitation on maximum outstanding loan guarantees.--
        Notwithstanding any other provision of this section, 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. The 
        amount of an advance guaranteed under paragraph (2) shall be 
        included in the aggregate outstanding amount of notes and loans 
        for purposes of the limitation under this paragraph.
            ``(2) Security.--The Secretary may use any authority 
        provided for guaranteed loans authorized by this section to 
        guarantee advances made under section 10b(c) of the Federal 
        Home Loan Bank Act, but only if the unit of general local 
        government for the eligible public entity or designated public 
        agency to which the advance is made pledges any grants to which 
        it becomes eligible under this title as security for repayment 
        of the advance.''.
    (b) Stakeholder Participation.--Section 108 of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5308) is amended by adding 
after subsection (s), as added by subsection (a) of this section, the 
following new subsection:
    ``(t) Stakeholder Participation.--
            ``(1) Requirement.--For the purposes of the development of 
        activities to be funded under this section, the community 
        participation requirements of section 104(a) shall be expanded 
        to include participation of major stakeholders. Such 
        stakeholders may include, but not be limited to the 
        representatives of the following community interests:
                    ``(A) Business.
                    ``(B) Banking.
                    ``(C) Education.
                    ``(D) Public health and safety.
                    ``(E) Labor.
                    ``(F) Arts, cultural, religious, philanthropic, 
                professional, and civic organizations.
            ``(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.''.

SEC. 3. FEDERAL HOME LOAN BANK ADVANCES.

    Section 10b of the Federal Home Loan Bank Act (12 U.S.C. 1430b) is 
amended by adding at the end the following new subsections:
    ``(c) Advances to Units of Local Government for Community 
Development Purposes.--A Federal Home Loan Bank may make advances to an 
metropolitan city or urban county (as such terms are defined in section 
102) of the Housing and Community Development Act of 1974) or a public 
agency designated by a metropolitan city or urban county in the same 
manner provided for advances to nonmember mortgagees under this 
section, except that advances under this subsection shall not be 
subject to the requirements under this section regarding security, but 
may be made only--
            ``(1) pursuant to a guarantee provided under section 
        108(s)(2) of the Housing and Community Development Act of 1974; 
        or
            ``(2) in accordance with subsection (d).
    ``(d) 3-Year Advances of CDBG Entitlement Grant Amounts.--
            ``(1) Authority.--An advance by a Federal Home Loan Bank 
        made in accordance with this subsection in any fiscal year may 
        be made only to a metropolitan city or urban county that--
                    ``(A) receives grant amounts under subsection (b) 
                or (d) of section 106 of the Housing and Community 
                Development Act of 1974 for such fiscal year;
                    ``(B) includes, in its statement under section 104 
                of such Act of community development objectives and 
                projected use of funds, the information required under 
                paragraph (3);
                    ``(C) agrees to use such funds only for 
                extraordinary or pressing community development needs, 
                in accordance with the statement under paragraph (3).
            ``(2) Use of advances.--
                    ``(A) In general.--Amounts from an advance under 
                this subsection may be used only for eligible 
                activities under section 105 of the Housing and 
                Community Development Act of 1974 to meet extraordinary 
                or pressing community development needs of a non- or 
                infrequently recurring nature that--
                            ``(i) require amounts greater than the 
                        annual block grant amounts provided under title 
                        I of the Housing and Community Development Act 
                        of 1974 to the metropolitan city or urban 
                        county; and
                            ``(ii) cannot be funded with other amounts 
                        available to the city or county.
                    ``(B) Prohibition of substitution of funds.--A 
                metropolitan city or urban county may use amounts 
                received from an advance under this subsection only to 
                supplement and, to the extent practical, increase the 
                level of funds that would, in the absence of the 
                advance, be available to the city or county from other 
                Federal and non-Federal sources for the activities for 
                which the advance is used, and in no case may such 
                funds be used so as to supplant funds from Federal or 
                non-Federal sources.
            ``(3) Statement of community development objectives.--The 
        information required under this paragraph is information that--
                    ``(A) describes the projected use of the funds 
                received in the advance under this subsection and the 
                proposed community development activities to be 
                conducted with such amounts;
                    ``(B) explains why such activities comply with the 
                requirements under paragraph (2)(A);
                    ``(C) sets forth a business plan for using such 
                funds and conducting such activities; and
                    ``(D) certifies that the metropolitan city or urban 
                county is not violating the prohibition under paragraph 
                (2)(B).
            ``(4) Amount.--The amount of an advance made under this 
        subsection in any fiscal year to any metropolitan city or urban 
        county may not exceed 3 times the amount of the grant under 
        subsection (b) or (d) (as applicable) of section 106 of the 
        Housing and Community Development Act of 1974 made to such city 
        or county for such fiscal year. Any advance shall be in 
        addition to the grant under section 106 of such Act for the 
        city or county for the fiscal year in which the advance is 
        made.
            ``(5) Repayment.--Notwithstanding any other provision of 
        title I of the Housing and Community Development Act of 1974, a 
        metropolitan city or urban county that receives an advance 
        under this subsection shall be subject to the following 
        provisions:
                    ``(A) Direct repayment of grant amounts to federal 
                home loan bank during period of ineligibility.--For 
                each fiscal year after the year in which the advance 
                was made, the Secretary of Housing and Urban 
                Development shall pay directly to the Federal Home Loan 
                Bank that made the advance (out of any amounts 
                appropriated for grants under section 106 of the 
                Housing and Community Development Act of 1974) any 
                grant amounts that are allocated under such section for 
                such city or county (and would otherwise be made 
                available to the city or county in the form of a grant 
                under title I of such Act) until the sum of the amounts 
                repaid to the Bank pursuant to this subparagraph for 
                the city or county is equal to the amount of the 
                advance.
                    ``(B) Ineligibility for entitlement grants.--Such 
                city or county may not be provided any grant under 
                section 106 of such Act from amounts allocated under 
                such section 106 for such city or county for any fiscal 
                year occurring after the fiscal year in which such 
                advance is made, until the first fiscal year that the 
                sum of the amounts repaid to the Bank pursuant to 
                subparagraph (A) is equal to the amount the advance.
                    ``(C) Grant amount during first year of renewed 
                eligibility.--For the first fiscal year after an 
                advance under this subsection is made that such city or 
                county is eligible under subparagraph (B) to receive 
                any grant amounts under section 106 of the Housing and 
                Community Development Act of 1974, the amount of a 
                grant under such section 106 for such city or county 
                shall not exceed the difference between--
                            ``(i) the total amount allocated under such 
                        section 106 for such city or county for such 
                        fiscal year; and
                            ``(ii) the amount by which the advance 
                        exceeds the sum of the amounts repaid pursuant 
                        to subparagraph (A) to the Bank for such city 
                        or county in preceding fiscal years occurring 
                        after the year in which the advance was made.
            ``(6) Ineligibility for advances.--A metropolitan city or 
        urban county that receives an advance under this subsection 
        shall not be eligible to receive a subsequent advance under 
        this subsection until the first fiscal year commencing after 
        the fiscal year in which the final payment to the Bank making 
        the advance is made pursuant to paragraph (5)(A) to repay the 
        advance for the city or county.''.