I

104TH CONGRESS

1ST SESSION H. R. 722

To authorize the Secretary of the Treasury to issue guarantee commitments

for debt securities issued by the Community Development Financial Institutions Fund, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 27, 1995

Ms. WATERS introduced the following bill; which was referred to the

Committee on Banking and Financial Service

A BILL

To authorize the Secretary of the Treasury to issue guarantee commitments for debt securities issued by the Community Development Financial Institutions Fund, 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 Develop5 ment Financial Institutions Fund Securities Guarantee

6 Act of 1995’’.
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1 SEC. 2. DEBT SECURITIES GUARANTEES AUTHORIZED.

2 (a) IN GENERAL.—Section 104 of the Community

3 Development Banking and Financial Institutions Act of

4 1994 (12 U.S.C. 4703(h)) is amended—

5 (1) by redesignating subsections (i), (j), and (k)

6 as subsections (j), (k), and (l), respectively; and

7 (2) by inserting after subsection (h) the follow8 ing new subsection:

9 ‘‘(i) GUARANTEES FOR DEBT SECURITIES ISSUED BY

10 FUND.—

11 ‘‘(1) IN GENERAL.—Subject to paragraph (2)

12 and under such terms and conditions as the Sec13 retary of the Treasury may determine to be appro14 priate, the Secretary may issue, in fiscal years 1996,

15 1997, and 1998, guarantees assuring against losses

16 of principal, interest, or principal and interest in17 curred in connection with debt securities issued by

18 the Fund in support of the financial assistance pro19 vided by the Fund pursuant to section 108.

20 ‘‘(2) MAXIMUM AMOUNT LIMITATIONS.—The

21 total amount of principal of debt securities for which

22 guarantees may be issued under paragraph (1) shall

23 not exceed the following amount with respect to each

24 of the following fiscal years:

Maximum

‘‘Fiscal year: amount:

1996 .......................................................................... $2,000,000,000

1997 .......................................................................... $2,000,000,000
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1998 .......................................................................... $2,000,000,000.

1 ‘‘(3) MAXIMUM TERM TO MATURITY LIMITA2 TION.—No guarantee issued under this subsection

3 may be effective for a period exceeding 20 years.

4 ‘‘(4) FULL FAITH AND CREDIT.—Guarantees is5 sued under this section shall constitute obligations,

6 in accordance with the terms of such guarantees, of

7 the United States of America and the full faith and

8 credit of the United States of America is hereby

9 pledged for the full payment and performance of

10 such obligations.

11 ‘‘(5) PROVISIONS RELATING TO BUDGET ACT

12 REQUIREMENT.—

13 ‘‘(A) CREDIT AUTHORITY.—Guarantees

14 may be issued under this subsection for any fis15 cal year only to such extent and in such

16 amounts as are provided in advance in appro17 priation Acts.

18 ‘‘(B) BUDGET AUTHORITY TO COVER

19 COST.—Guarantees may be issued under this

20 subsection for any fiscal year only to the extent

21 that appropriations of budget authority to cover

22 the costs (as defined in section 502(5) of the

23 Congressional Budget Act of 1974) of such

24 guarantees are made in advance.’’.
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1 (b) EXCEPTION TO PROHIBITION ON ISSUANCE OF

2 DEBT SECURITIES FOR GUARANTEED SECURITIES.—Sub3 section (h) of section 104 of the Community Development

4 Banking and Financial Institutions Act of 1994 (12

5 U.S.C. 4703(h)) is amended to read as follows:

6 ‘‘(h) PROHIBITION ON ISSUANCE OF SECURITIES.—

7 ‘‘(1) IN GENERAL.—Except as provided in para8 graph (2), the Fund may not issue stocks, bonds,

9 debentures, notes or other securities.

10 ‘‘(2) EXCEPTION FOR GUARANTEED DEBT IN11 STRUMENTS.—Paragraph (1) shall not apply with

12 respect to any debt instrument issued by the

13 Fund—

14 ‘‘(A) for which a guarantee has been is15 sued by the Secretary of the Treasury in ac16 cordance with subsection (i) so long as such

17 guarantee remains in effect for such debt in18 strument; and

19 ‘‘(B) the period to maturity of which does

20 not exceed the effective period of such guaran21 tee.’’.

22 (c) LIMITATION ON USES OF PROCEEDS OF GUARAN23 TEED DEBT SECURITIES.—Section 108(a) of the Commu24 nity Development Banking and Financial Institutions Act
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1 of 1994 (12 U.S.C. 4707(a)) is amended by adding at the

2 end the following new paragraph:

3 ‘‘(5) LIMITATION ON USES OF PROCEEDS OF

4 GUARANTEED DEBT SECURITIES.—In the case of

5 any debt security issued by the Fund for which a

6 guarantee has been issued by the Secretary of the

7 Treasury under section 104(i), the proceeds from

8 the issuance of such security may not be used by the

9 Fund to provide financial assistance under this sec10 tion, including equity investment, with respect to

11 any community development financial institution

12 which has total assets of more than $50,000,000.’’.

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