I
105TH CONGRESS
1ST SESSION
H. R. 1555
To amend the Housing and Community Development Act of 1974 and the
Federal Home Loan Bank Act to authorize Federal Home Loan Banks
to make guaranteed advances for community development activities to
units of general local government and advances of future community
development block grant entitlement amounts, and to expand the commu-
nity participation requirements relating to community development loan
guarantees to include participation of major community stakeholders,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 8, 1997
Mr. FATTAH (for himself, Mr. CONYERS, Ms. JACKSON-LEE of Texas, Mrs.
MEEK of Florida, Ms. MCKINNEY, Ms. EDDIE BERNICE JOHNSON of
Texas, Ms. NORTON, Mr. PAYNE, Mr. FROST, Mr. RUSH, Mr. CLAY, Mr.
DAVIS of Illinois, Mrs. CLAYTON, Mr. BARRETT of Wisconsin, Mr.
THOMPSON, 
Mr. 
FORD, 
Mr. 
JEFFERSON, 
Ms. 
CARSON, 
Mr.
BLUMENAUER, Mr. GEPHARDT, Mr. CLYBURN, Mr. SHAYS, Mr. HAST-
INGS of Florida, Ms. DEGETTE, Mr. DELLUMS, Mr. FILNER, Mr. MAR-
TINEZ, Mr. EVANS, Mr. BORSKI, Mr. HILLIARD, Mr. MASCARA, Mr.
FALEOMAVAEGA, Mr. WAXMAN, Ms. KILPATRICK, Mr. FOGLIETTA, Mr.
COYNE, Mr. BROWN of California, Mr. LEWIS of Georgia, Ms. CHRIS-
TIAN-GREEN, Mr. FLAKE, Ms. KAPTUR, Mr. ALLEN, Mr. TOWNS, Ms.
WATERS, Mr. SNYDER, and Mr. RANGEL) introduced the following bill;
which was referred to the Committee on Banking and Financial Services
A BILL
To amend the Housing and Community Development Act
of 1974 and the Federal Home Loan Bank Act to au-
thorize Federal Home Loan Banks to make guaranteed
advances for community development activities to units
of general local government and advances of future com-
munity development block grant entitlement amounts,
and to expand the community participation requirements
relating to community development loan guarantees to
include participation of major community stakeholders,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘American Cities In-
vestment Act of 1997’’.
SEC. 2. COMMUNITY DEVELOPMENT LOAN GUARANTEES.
(a) ADVANCES
FROM
FEDERAL
HOME
LOAN
BANKS.—Section 108 of the Housing and Community De-
velopment 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 ex-
ceed 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 ad-
vance guaranteed under paragraph (2) shall be in-
cluded 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 follow-
ing 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 partici-
pation 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, philan-
thropic, professional, and civic organizations.
‘‘(2) DEFINITION.—For purposes of this sub-
section, the term ‘stakeholder’ means a public or pri-
vate 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 follow-
ing 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 sub-
section in any fiscal year may be made only to a
metropolitan city or urban county that—
‘‘(A) receives grant amounts under sub-
section (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 sec-
tion 104 of such Act of community development
objectives and projected use of funds, the infor-
mation required under paragraph (3);
‘‘(C) agrees to use such funds only for ex-
traordinary or pressing community development
needs, in accordance with the statement under
paragraph (3).
‘‘(2) USE OF ADVANCES.—
‘‘(A) IN GENERAL.—Amounts from an ad-
vance 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 commu-
nity development needs of a non- or infre-
quently recurring nature that—
‘‘(i) require amounts greater than the
annual block grant amounts provided
under title I of the Housing and Commu-
nity Development Act of 1974 to the met-
ropolitan 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 ad-
vance, 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 sup-
plant funds from Federal or non-Federal
sources.
‘‘(3) STATEMENT
OF
COMMUNITY
DEVELOP-
MENT
OBJECTIVES.—The 
information 
required
under this paragraph is information that—
‘‘(A) describes the projected use of the
funds received in the advance under this sub-
section and the proposed community develop-
ment 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 provi-
sions:
‘‘(A) DIRECT
REPAYMENT
OF
GRANT
AMOUNTS TO FEDERAL HOME LOAN BANK DUR-
ING PERIOD OF INELIGIBILITY.—For each fiscal
year after the year in which the advance was
made, the Secretary of Housing and Urban De-
velopment 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 De-
velopment 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 pro-
vided any grant under section 106 of such Act
from amounts allocated under such section 106
for such city or county for any fiscal year oc-
curring after the fiscal year in which such ad-
vance 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 Commu-
nity Development Act of 1974, the amount of
a grant under such section 106 for such city or
county shall not exceed the difference be-
tween—
‘‘(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 metro-
politan city or urban county that receives an ad-
vance 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.’’.
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