I

103D CONGRESS

2D SESSION H. R. 3793

To provide for the Secretary of Housing and Urban Development to make

grants for economic development activities in connection with loan guarantees under section 108 of the Housing and Community Development

Act of 1974 to enhance the security of such loans and improve the

viability of projects financed with such loans, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 3, 1994

Mr. RIDGE introduced the following bill; which was referred to the Committee

on Banking, Finance and Urban Affairs

A BILL

To provide for the Secretary of Housing and Urban Development to make grants for economic development activities

in connection with loan guarantees under section 108

of the Housing and Community Development Act of

1974 to enhance the security of such loans and improve

the viability of projects financed with such loans, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Community Enterprise

5 Revitalization Amendments Act’’.
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1 SEC. 2. SECTION 108 ELIGIBLE ACTIVITIES.

2 (a) IN GENERAL.—Section 108(a) of the Housing

3 and Community Development Act of 1974 (42 U.S.C.

4 5308(a)) is amended—

5 (1) in the first sentence—

6 (A) by striking ‘‘or’’ after ‘‘section

7 105(a);’’; and

8 (B) by inserting before the period the fol9 lowing: ‘‘; (5) the acquisition, construction, re10 construction, or installation of public facilities

11 (except for buildings for the general conduct of

12 government); or (6) in the case of colonias, pub13 lic works and site or other improvements’’; and

14 (2) by striking the second sentence and insert15 ing the following: ‘‘A guarantee under this section

16 (including a guarantee combined with a grant under

17 subsection (q)) may be used to assist a grantee in

18 obtaining financing only if the grantee has made ef19 forts to obtain the financing without the use of the

20 guarantee (and, if applicable, the grant) and cannot

21 complete the financing consistent with the timely

22 execution of the proposed activities and projects

23 without the guarantee (or, if applicable, the

24 grant).’’.

25 (b) DEFINITION.—Section 102(a) of the Housing and

26 Community Development Act of 1974 (42 U.S.C.
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1 5302(a)) is amended by adding at the end the following

2 new paragraph:

3 ‘‘(24) The term ‘colonia’ means any identifiable

4 community that—

5 ‘‘(A) is in the State of Arizona, California,

6 New Mexico, or Texas;

7 ‘‘(B) is in the United States-Mexico border

8 region;

9 ‘‘(C) is determined to be a colonia on the

10 basis of objective criteria, including lack of po11 table water supply, lack of adequate sewage sys12 tems, and lack of decent, safe, and sanitary

13 housing; and

14 ‘‘(D) was in existence as a colonia before

15 the date of the enactment of the Cranston-Gon16 zalez National Affordable Housing Act.’’.

17 SEC. 3. ECONOMIC DEVELOPMENT GRANTS.

18 (a) IN GENERAL.—Section 108 of the Housing and

19 Community Development Act of 1974 (42 U.S.C. 5308)

20 is amended by adding at the end the following new sub21 section:

22 ‘‘(q) ECONOMIC DEVELOPMENT GRANTS.—

23 ‘‘(1) AUTHORIZATION.—The Secretary may

24 make grants in connection with notes or other obli25 gations guaranteed under this section to eligible
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1 public entities for the purpose of enhancing the secu2 rity of loans guaranteed under this section or im3 proving the viability of projects financed with loans

4 guaranteed under this section.

5 ‘‘(2) ELIGIBLE ACTIVITIES.—Assistance under

6 this subsection may be used for the purposes of and

7 in conjunction with projects and activities assisted

8 under subsection (a).

9 ‘‘(3) APPLICATIONS.—Applications for assist10 ance under this subsection shall be submitted by eli11 gible public entities in the form and in accordance

12 with the procedures established by the Secretary. El13 igible public entities may apply for grants only in

14 conjunction with a request for guarantee under sub15 section (a).

16 ‘‘(4) SELECTION CRITERIA.—The Secretary

17 shall establish criteria for awarding assistance under

18 this subsection. Such criteria shall include—

19 ‘‘(A) the extent of need for such assist20 ance;

21 ‘‘(B) the level of distress in the community

22 to be served and in the jurisdiction applying for

23 assistance;
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1 ‘‘(C) the quality of the plan proposed and

2 the capacity or potential capacity of the appli3 cant to successfully carry out the plan; and

4 ‘‘(D) such other factors as the Secretary

5 determines to be appropriate.’’.

6 (b) CONFORMING AMENDMENT.—Title I of the Hous7 ing and Community Development Act of 1974 (42 U.S.C.

8 5301 et seq.) is amended—

9 (1) in section 101(c) in the second sentence, by

10 inserting ‘‘or a grant’’ after ‘‘guarantee’’; and

11 (2) in section 104(b)(3), by inserting ‘‘or a

12 grant’’ after ‘‘guarantee’’.

13 SEC. 4. USE OF UDAG RECAPTURES.

14 Section 119(o) of the Housing and Community De15 velopment Act of 1974 (42 U.S.C. 5318(o)) is amended

16 by inserting before the period the following: ‘‘, except that

17 amounts available to the Secretary for use under this sub18 section as of October 1, 1993, and amounts released to

19 the Secretary pursuant to subsection (t) may, to the extent

20 or in such amounts as are or have been provided in appro21 priation Acts, be used to provide grants under section

22 108(q).’’.

23 SEC. 5. UDAG AMNESTY PROGRAM.

24 (a) AMENDMENT.—Section 119 of the Housing and

25 Community Development Act of 1974 (42 U.S.C. 5318)
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1 is amended by adding at the end the following new sub2 section:

3 ‘‘(t) UDAG AMNESTY PROGRAM.—If a grant or a

4 portion of a grant under this section remains unexpended

5 as of the issuance of a notice implementing this sub6 section, the grantee may enter into an agreement, as pro7 vided under this subsection, with the Secretary to receive

8 a percentage of the grant amount and relinquish all claims

9 to the balance of the grant within 90 days of the issuance

10 of notice implementing this subsection (or such later date

11 as the Secretary may approve). The Secretary shall not

12 recapture any funds obligated pursuant to this section

13 during a period beginning on the date of enactment of the

14 Housing and Community Development Act of 1993 until

15 90 days after the issuance of a notice implementing this

16 subsection. A grantee may receive as a grant under this

17 subsection—

18 ‘‘(1) 33 percent of such unexpended amounts

19 if—

20 ‘‘(A) the grantee agrees to expend not less

21 than one-half of the amount received for activi22 ties authorized pursuant to section 108(q) and

23 to expend such funds in conjunction with a loan

24 guarantee made under section 108 at least
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1 equal to twice the amount of the funds received;

2 and

3 ‘‘(B)(i) the remainder of the amount re4 ceived is used for economic development activi5 ties eligible under title I of this Act; and

6 ‘‘(ii) except when waived by the Secretary

7 in the case of a severely distressed jurisdiction,

8 not more than one-half of the costs of activities

9 under subparagraph (B) are derived from such

10 unexpended amounts; or

11 ‘‘(2) 25 percent of such unexpended amounts

12 if—

13 ‘‘(A) the grantee agrees to expend such

14 funds for economic development activities eligi15 ble under title I of this Act; and

16 ‘‘(B) except when waived by the Secretary

17 in the case of a severely distressed jurisdiction,

18 not more than one-half of the costs of such ac19 tivities are derived from such unexpended

20 amount.’’.

21 (b) IMPLEMENTATION.—Notwithstanding section 7,

22 not later than 10 days after the date of enactment of this

23 Act, the Secretary shall, by notice published in the Federal

24 Register, which shall take effect upon publication, estab-
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1 lish such requirements as may be necessary to implement

2 the amendments made by this section.

3 SEC. 6. GUARANTEE OF OBLIGATIONS BACKED BY SECTION

4 108 LOANS.

5 Section 108 of the Housing and Community Develop6 ment Act of 1974 (42 U.S.C. 5308), as amended by sec7 tion 3, is amended by adding at the end the following new

8 subsection:

9 ‘‘(r) GUARANTEE OF OBLIGATIONS BACKED BY SEC10 TION 108 LOANS.—

11 ‘‘(1) AUTHORIZATION.—The Secretary may,

12 upon such terms and conditions as the Secretary

13 deems appropriate, guarantee the timely payment of

14 the principal of and interest on trust certificates or

15 other obligations that—

16 ‘‘(A) are offered by the Secretary, or by

17 any other offeror approved for purposes of this

18 subsection by the Secretary; and

19 ‘‘(B) are based on and backed by a trust

20 or pool composed of notes or other obligations

21 guaranteed by the Secretary under this section.

22 ‘‘(2) FULL FAITH AND CREDIT OF THE UNITED

23 STATES.—Subsection (f) shall apply to any guaran24 tee under this subsection.
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1 ‘‘(3) SUBROGATION.—If the Secretary pays a

2 claim under a guarantee issued under this section,

3 the Secretary shall be subrogated fully to the rights

4 satisfied by such payment.

5 ‘‘(4) POWERS OF THE SECRETARY.—No Fed6 eral, State, or local law shall preclude or limit the

7 exercise by the Secretary of—

8 ‘‘(A) the power to contract with respect to

9 public offerings and other sales of notes, trust

10 certificates, and other obligations guaranteed

11 under this section upon such terms and condi12 tions as the Secretary deems appropriate;

13 ‘‘(B) the right to enforce by any means

14 deemed appropriate by the Secretary any such

15 contract; and

16 ‘‘(C) the Secretary’s ownership rights, as

17 applicable, in notes, certificates, or other obliga18 tions guaranteed under this section, or con19 stituting the trust or pool against which trust

20 certificates or other obligations guaranteed

21 under this section are offered.’’.

22 SEC. 7. EFFECTIVE DATE.

23 The Secretary shall, by notice published in the Fed24 eral Register, which shall take effect upon publication, es25 tablish such requirements as may be necessary to imple-
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1 ment the amendments made by this Act. The notice shall

2 invite public comments and, not later than 12 months

3 after the date on which the notice is published, the Sec4 retary shall issue final regulations based on the initial no5 tice, taking into account any public comments received.

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