American Communities Investment Act of 1999

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.