42 U.S.C. § 1437z–1 (THE PUBLIC HEALTH AND WELFARE)
§ 1437z–1. Civil money penalties against section 1437f owners
(a) In general
(1) Effect on other remedies
The penalties set forth in this section shall be in addition to any other available civil remedy or any available criminal penalty, and may be imposed regardless of whether the Secretary imposes other administrative sanctions.
(2) Failure of Secretary
The Secretary may not impose penalties under this section for a violation, if a material cause of the violation is the failure of the Secretary, an agent of the Secretary, or a public housing agency to comply with an existing agreement.
(b) Violations of housing assistance payment contracts for which penalty may be imposed
(1) Liable parties
The Secretary may impose a civil money penalty under this section on—
(A) any owner of a property receiving project-based assistance under section 8 [42 U.S.C. 1437f];
(B) any general partner of a partnership owner of that property; and
(C) any agent employed to manage the property that has an identity of interest with the owner or the general partner of a partnership owner of the property.
(2) Violations
A penalty may be imposed under this section for a knowing and material breach of a housing assistance payments contract, including the following—
(A) failure to provide decent, safe, and sanitary housing pursuant to section 8 [42 U.S.C. 1437f]; or
(B) knowing or willful submission of false, fictitious, or fraudulent statements or requests for housing assistance payments to the Secretary or to any department or agency of the United States.
(3) Amount of penalty
The amount of a penalty imposed for a violation under this subsection, as determined by the Secretary, may not exceed $25,000 per violation.
(c) Agency procedures
(1) Establishment
The Secretary shall issue regulations establishing standards and procedures governing the imposition of civil money penalties under subsection (b) of this section. These standards and procedures—
(A) shall provide for the Secretary or other department official to make the determination to impose the penalty;
(B) shall provide for the imposition of a penalty only after the liable party has received notice and the opportunity for a hearing on the record; and
(C) may provide for review by the Secretary of any determination or order, or interlocutory ruling, arising from a hearing and judicial review, as provided under subsection (d) of this section.
(2) Final orders
(A) In general
If a hearing is not requested before the expiration of the 15-day period beginning on the date on which the notice of opportunity for hearing is received, the imposition of a penalty under subsection (b) of this section shall constitute a final and unappealable determination.
(B) Effect of review
If the Secretary reviews the determination or order, the Secretary may affirm, modify, or reverse that determination or order.
(C) Failure to review
If the Secretary does not review that determination or order before the expiration of the 90-day period beginning on the date on which the determination or order is issued, the determination or order shall be final.
(3) Factors in determining amount of penalty
In determining the amount of a penalty under subsection (b) of this section, the Secretary shall take into consideration—
(A) the gravity of the offense;
(B) any history of prior offenses by the violator (including offenses occurring before the enactment of this section);
(C) the ability of the violator to pay the penalty;
(D) any injury to tenants;
(E) any injury to the public;
(F) any benefits received by the violator as a result of the violation;
(G) deterrence of future violations; and
(H) such other factors as the Secretary may establish by regulation.
(4) Payment of penalty
No payment of a civil money penalty levied under this section shall be payable out of project income.
(d) Judicial review of agency determination
Judicial review of determinations made under this section shall be carried out in accordance with section 1735f–15(e) of title 12.
(e) Remedies for noncompliance
(1) Judicial intervention
(A) In general
If a person or entity fails to comply with the determination or order of the Secretary imposing a civil money penalty under subsection (b) of this section, after the determination or order is no longer subject to review as provided by subsections (c) and (d) of this section, the Secretary may request the Attorney General of the United States to bring an action in an appropriate United States district court to obtain a monetary judgment against that person or entity and such other relief as may be available.
(B) Fees and expenses
Any monetary judgment awarded in an action brought under this paragraph may, in the discretion of the court, include the attorney’s fees and other expenses incurred by the United States in connection with the action.
(2) Nonreviewability of determination or order
In an action under this subsection, the validity and appropriateness of the determination or order of the Secretary imposing the penalty shall not be subject to review.
(f) Settlement by Secretary
The Secretary may compromise, modify, or remit any civil money penalty which may be, or has been, imposed under this section.
(g) Deposit of penalties
(1) In general
Notwithstanding any other provision of law, if the mortgage covering the property receiving assistance under section 8 [42 U.S.C. 1437f] is insured or was formerly insured by the Secretary, the Secretary shall apply all civil money penalties collected under this section to the appropriate insurance fund or funds established under this chapter, as determined by the Secretary.
(2) Exception
Notwithstanding any other provision of law, if the mortgage covering the property receiving assistance under section 8 [42 U.S.C. 1437f] is neither insured nor formerly insured by the Secretary, the Secretary shall make all civil money penalties collected under this section available for use by the appropriate office within the Department for administrative costs related to enforcement of the requirements of the various programs administered by the Secretary.
(h) Definitions
In this section—
(1) the term “agent employed to manage the property that has an identity of interest” means an entity—
(A) that has management responsibility for a project;
(B) in which the ownership entity, including its general partner or partners (if applicable), has an ownership interest; and
(C) over which such ownership entity exerts effective control; and
(2) the term “knowing” means having actual knowledge of or acting with deliberate ignorance of or reckless disregard for the prohibitions under this section.
(Sept. 1, 1937, ch. 896, title I, § 29, as added Pub. L. 105–65, title V, § 562(a)(2), Oct. 27, 1997, 111 Stat. 1416.)
heading: Effective Date
text: Pub. L. 105–65, title V, § 562(b), Oct. 27, 1997, 111 Stat. 1419, provided that:
“The amendments made by subsection (a) [enacting this section and amending section 1437z of this title] shall apply only with respect to—
“(1) violations that occur on or after the effective date of final regulations implementing the amendments made by this section; and
“(2) in the case of a continuing violation (as determined by the Secretary of Housing and Urban Development), any portion of a violation that occurs on or after such date.”
heading: Regulations
text: Pub. L. 105–65, title V, § 562(c), Oct. 27, 1997, 111 Stat. 1419, provided that:
“(1) Regulations.—
“(A) In general.—
The Secretary shall implement the amendments made by this section [enacting this section and amending section 1437z of this title] by regulation issued after notice and opportunity for public comment.
“(B) Comments sought.—
The notice under subparagraph (A) shall seek comments as to the definitions of the terms ‘ownership interest in’ and ‘effective control’, as such terms are used in the definition of the term ‘agent employed to manage such property that has an identity of interest’.
“(2) Timing.—
A proposed rule implementing the amendments made by this section shall be published not later than 1 year after the date of enactment of this Act [Oct. 27, 1997].”