H. R. 3002
IN THE HOUSE OF REPRESENTATIVES
July 11, 2007
Mr. Pearce (for himself, Mr. Boren, Mr. Frank of Massachusetts, Mr. Kildee, and Mr. Renzi) introduced the following bill; which was referred to the Committee on Financial Services
To establish a demonstration program to authorize the Secretary of Housing and Urban Development to guarantee obligations issued by Indian tribes to finance community and economic development activities.
This Act may be cited as the
Native American Economic Development
and Infrastructure for Housing Act of 2007.
Demonstration program for guaranteed loans to finance tribal community and economic development activities
To the extent or in such amounts as are
provided in appropriation Acts, the Secretary of Housing and Urban Development
(in this section referred to as the
Secretary) may, subject to
the limitations of this section and upon such terms and conditions as the
Secretary may prescribe, guarantee and make commitments to guarantee, the notes
and obligations issued by Indian tribes or tribally designated housing entities
(as such term is defined in section 4 of the Native American Housing Assistance
and Self-Determination Act of 1996 (25 U.S.C. 4103)) with tribal approval, for
the purposes of financing activities, carried out on Indian reservations and in
other Indian areas, that under the first sentence of section 108(a) of the
Housing and Community Development Act of 1974 are eligible for financing with
notes and other obligations guaranteed pursuant to such section 108.
Low-income benefit requirement
Not less than 70 percent of the aggregate funds received by an Indian tribe or tribally designated housing entity as a result of a guarantee under this section shall be used for the support of activities that benefit low-income Indian families (as such term is defined for purposes of the Native American Housing Assistance and Self-Determination Act of 1996) on Indian reservations and other Indian areas.
The Secretary shall establish underwriting criteria for guarantees under this section, including fees for such guarantees, as may be necessary to ensure that the program under this section for such guarantees is financially sound. Such fees shall be established in amounts that are sufficient, but do not exceed the minimum amounts necessary, to maintain a negative credit subsidy for such program, as determined based upon risk to the Federal Government under such underwriting requirements.
Terms of obligations
Notes or other obligations guaranteed pursuant to this section shall be in such form and denominations, have such maturities, and be subject to such conditions as may be prescribed by regulations issued by the Secretary. The Secretary may not deny a guarantee under this section on the basis of the proposed repayment period for the note or other obligation, unless the period is more than 20 years or the Secretary determines that the period causes the guarantee to constitute an unacceptable financial risk.
Limitation on percentage
A guarantee made under this section shall guarantee repayment of 95 percent of the unpaid principal and interest due on the notes or other obligations guaranteed.
Security and repayment
Requirements on issuer
To ensure the repayment of notes or other obligations and charges incurred under this section and as a condition for receiving such guarantees, the Secretary shall require the Indian tribe or housing entity issuing such notes or obligations to—
enter into a contract, in a form acceptable to the Secretary, for repayment of notes or other obligations guaranteed under this section;
demonstrate that the extent of such issuance and guarantee under this section is within the financial capacity of the tribe; and
furnish, at the discretion of the Secretary, such security as may be deemed appropriate by the Secretary in making such guarantees, including increments in local tax receipts generated by the activities assisted by a guarantee under this section or disposition proceeds from the sale of land or rehabilitated property, except that such security may not include any grant amounts received or for which the issuer may be eligible under title I of the Native American Housing Assistance and Self-Determination Act of 1996.
Full faith and credit
The full faith and credit of the United States is pledged to the payment of all guarantees made under this section. Any such guarantee made by the Secretary shall be conclusive evidence of the eligibility of the obligations for such guarantee with respect to principal and interest, and the validity of any such guarantee so made shall be incontestable in the hands of a holder of the guaranteed obligations.
Training and information
The Secretary, in cooperation with Indian tribes and tribally designated housing entities, shall carry out training and information activities with respect to the guarantee program under this section.
Limitations on amount of guarantees
Aggregate fiscal year limitation
Notwithstanding any other provision of law and subject only to the absence of qualified applicants or proposed activities and to the authority provided in this section, to the extent approved or provided in appropriations Acts, the Secretary may enter into commitments to guarantee notes and obligations under this section with an aggregate principal amount not to exceed $200,000,000 for each of fiscal years 2008 through 2012.
Authorization of appropriations for credit subsidy
There are authorized to be appropriated to cover the costs (as such term is defined in section 502 of the Congressional Budget Act of 1974) of guarantees under this section such sums as may be necessary for each of fiscal years 2008 through 2012.
Aggregate outstanding limitation
The total amount of outstanding obligations guaranteed on a cumulative basis by the Secretary pursuant to this section shall not at any time exceed $1,000,000,000 or such higher amount as may be authorized to be appropriated for this section for any fiscal year.
Fiscal year limitations on tribes
The Secretary shall monitor the use of guarantees under this section by Indian tribes. If the Secretary finds that 50 percent of the aggregate guarantee authority under paragraph (3) has been committed, the Secretary may—
impose limitations on the amount of guarantees pursuant to this section that any one Indian tribe may receive in any fiscal year of $25,000,000; or
request the enactment of legislation increasing the aggregate outstanding limitation on guarantees under this section.
Not later than the expiration of the 4-year period beginning on the date of the enactment of this Act, the Secretary shall submit a report to the Congress regarding the utilization of the authority under this section by Indian tribes and tribally designated housing entities, identifying the extent of such utilization and the types of projects and activities financed using such authority and analyzing the effectiveness of such utilization in carrying out the purposes of this section.
The authority of the Secretary under this section to make new guarantees for notes and obligations shall terminate on October 1, 2012.