12 U.S.C. § 4569 — Capital Magnet Fund

Page 1681 TITLE 12—BANKS AND BANKING § 4569 this section by States or State designated entities is audited not less than annually to ensure compliance with this section; (B) authority for the Secretary to audit, provide for an audit, or otherwise verify a State or State designated entity’s activities to ensure compliance with this section; (C) a requirement that, for the purposes of subparagraphs (A) and (B), any financial statement submitted by a grantee or recipi- ent to the Secretary shall be reviewed by an independent certified public accountant in accordance with Statements on Standards for Accounting and Review Services, issued by the American Institute of Certified Pub- lic Accountants; (D) requirements for a process for applica- tion to, and selection by, each State or State designated entity for activities meeting the State or State designated entity’s priority housing needs to be funded with grant amounts under this section, which shall pro- vide for priority in funding to be based upon— (i) geographic diversity; (ii) ability to obligate amounts and un- dertake activities so funded in a timely manner; (iii) in the case of rental housing projects under subsection (c)(7)(A), the ex- tent to which rents for units in the project funded are affordable, especially for ex- tremely low-income families; (iv) in the case of rental housing projects under subsection (c)(7)(A), the extent of the duration for which such rents will re- main affordable; (v) the extent to which the application makes use of other funding sources; and (vi) the merits of an applicant’s proposed eligible activity; (E) requirements to ensure that grant amounts provided to a State or State des- ignated entity under this section that are used for rental housing under subsection (c)(7)(A) are used only for the benefit of ex- tremely low- and very low-income families; and (F) requirements and standards for estab- lishment, by a State or State designated en- tity, for use of grant amounts in 2009 and subsequent years of performance goals, benchmarks, and timetables for the produc- tion, preservation, and rehabilitation of af- fordable rental and homeownership housing with such grant amounts. (h) Affordable housing trust fund If, after July 30, 2008, in any year, there is en- acted any provision of Federal law establishing an affordable housing trust fund other than under this chapter for use only for grants to pro- vide affordable rental housing and affordable homeownership opportunities, and the subse- quent year is a year referred to in subsection (c), the Secretary shall in such subsequent year and any remaining years referred to in subsection (c) transfer to such affordable housing trust fund the aggregate amount allocated pursuant to subsection (c) in such year. Notwithstanding any other provision of law, assistance provided using amounts transferred to such affordable housing trust fund pursuant to this subsection may not be used for any of the activities speci- fied in clauses (i) through (vi) of subsection (c)(9)(D). (i) Funding accountability and transparency Any grant under this section to a grantee by a State or State designated entity, any assist- ance provided to a recipient by a State or State designated entity, and any grant, award, or other assistance from an affordable housing trust fund referred to in subsection (h) shall be considered a Federal award for purposes of the Federal Funding Accountability and Trans- parency Act of 2006 (31 U.S.C. 6101 note). Upon the request of the Director of the Office of Man- agement and Budget, the Secretary shall obtain and provide such information regarding any such grants, assistance, and awards as the Direc- tor of the Office of Management and Budget con- siders necessary to comply with the require- ments of such Act, as applicable, pursuant to the preceding sentence. (Pub. L. 102–550, title XIII, § 1338, as added Pub. L. 110–289, div. A, title I, § 1131(b), July 30, 2008, 122 Stat. 2712.) Editorial Notes REFERENCES IN TEXT Section 4103 of title 25, referred to in subsec. (c)(2), was in the original ‘‘section 4 of the Native American Housing Assistance and Self-Determination Act of 1997 (25 U.S.C. 4103)’’, and was translated as meaning section 4 of the Native American Housing Assistance and Self- Determination Act of 1996, to reflect the probable in- tent of Congress. The Cranston-Gonzalez National Affordable Housing Act, referred to in subsec. (c)(7)(B)(i)(II), is Pub. L. 101–625, Nov. 28, 1990, 104 Stat. 4079. Title II of the Act, known as the HOME Investment Partnerships Act, is classified principally to subchapter II (§ 12721 et seq.) of chapter 130 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 12701 of Title 42 and Tables. Section 132 of the Federal Housing Finance Regu- latory Reform Act of 2008, referred to in subsec. (c)(7)(B)(iv), probably means section 1132 of Pub. L. 110–289, which is set out as a note under section 1701x of this title. This chapter, referred to in subsec. (h), was in the original ‘‘this title’’, meaning title XIII of Pub. L. 102–550, Oct. 28, 1992, 106 Stat. 3941, which is classified principally to this chapter. For complete classification of title XIII to the Code, see Short Title note set out under section 4501 of this title and Tables. The Federal Funding Accountability and Trans- parency Act of 2006, referred to in subsec. (i), is Pub. L. 109–282, Sept. 26, 2006, 120 Stat. 1186, which is set out as a note under section 6101 of Title 31, Money and Fi- nance. PRIOR PROVISIONS A prior section 1338 of Pub. L. 102–550, title XIII, Oct. 28, 1992, 106 Stat. 3964, was set out as a note under sec- tion 4562 of this title, prior to repeal by Pub. L. 110–289, div. A, title I, § 1122(a)(2), July 30, 2008, 122 Stat. 2689. § 4569. Capital Magnet Fund (a) Establishment There is established in the Treasury of the United States a trust fund to be known as the Page 1682 TITLE 12—BANKS AND BANKING § 4569 Capital Magnet Fund, which shall be a special account within the Community Development Fi- nancial Institutions Fund. (b) Deposits to Trust Fund The Capital Magnet Fund shall consist of— (1) any amounts transferred to the Fund pur- suant to section 4567 of this title; and (2) any amounts as are or may be appro- priated, transferred, or credited to such Fund under any other provisions of law. (c) Expenditures from Trust Fund Amounts in the Capital Magnet Fund shall be available to the Secretary of the Treasury to carry out a competitive grant program to at- tract private capital for and increase invest- ment in— (1) the development, preservation, rehabili- tation, or purchase of affordable housing for primarily extremely low-, very low-, and low- income families; and (2) economic development activities or com- munity service facilities, such as day care cen- ters, workforce development centers, and health care clinics, which in conjunction with affordable housing activities implement a con- certed strategy to stabilize or revitalize a low- income area or underserved rural area. (d) Federal assistance For purposes of the application of Federal civil rights laws, all assistance provided using amounts in the Capital Magnet Fund shall be considered Federal financial assistance. (e) Eligible grantees A grant under this section may be made, pur- suant to such requirements as the Secretary of the Treasury shall establish for experience and success in attracting private financing and car- rying out the types of activities proposed under the application of the grantee, only to— (1) a Treasury certified community develop- ment financial institution; or (2) a nonprofit organization having as 1 of its principal purposes the development or man- agement of affordable housing. (f) Eligible uses Grant amounts awarded from the Capital Mag- net Fund pursuant to this section may be used for the purposes described in paragraphs (1) and (2) of subsection (c), including for the following uses: (1) To provide loan loss reserves. (2) To capitalize a revolving loan fund. (3) To capitalize an affordable housing fund. (4) To capitalize a fund to support activities described in subsection (c)(2). (5) For risk-sharing loans. (g) Applications (1) In general The Secretary of the Treasury shall provide, in a competitive application process estab- lished by regulation, for eligible grantees under subsection (e) to submit applications for Capital Magnet Fund grants to the Secretary at such time and in such manner as the Sec- retary shall determine. (2) Content of application The application required under paragraph (1) shall include a detailed description of— (A) the types of affordable housing, eco- nomic, and community revitalization projects that support or sustain residents of an affordable housing project funded by a grant under this section for which such grant amounts would be used, including the proposed use of eligible grants as authorized under this section; (B) the types, sources, and amounts of other funding for such projects; and (C) the expected time frame of any grant used for such project. (h) Grant limitation (1) In general Any 1 eligible grantee and its subsidiaries and affiliates may not be awarded more than 15 percent of the aggregate funds available for grants during any year from the Capital Mag- net Fund. (2) Geographic diversity (A) Goal The Secretary of the Treasury shall seek to fund activities in geographically diverse areas of economic distress, including metro- politan and underserved rural areas in every State. (B) Diversity defined For purposes of this paragraph, geographic diversity includes those areas that meet ob- jective criteria of economic distress devel- oped by the Secretary of the Treasury, which may include— (i) the percentage of low-income families or the extent of poverty; (ii) the rate of unemployment or under- employment; (iii) extent of blight and disinvestment; (iv) projects that target extremely low-, very low-, and low-income families in or outside a designated economic distress area; or (v) any other criteria designated by the Secretary of the Treasury. (3) Leverage of funds Each grant from the Capital Magnet Fund awarded under this section shall be reasonably expected to result in eligible housing, or eco- nomic and community development projects that support or sustain an affordable housing project funded by a grant under this section whose aggregate costs total at least 10 times the grant amount. (4) Commitment for use deadline Amounts made available for grants under this section shall be committed for use within 2 years of the date of such allocation. The Sec- retary of the Treasury shall recapture into the Capital Magnet Fund any amounts not so used or committed for use and allocate such amounts in the first year after such recapture. (5) Prohibited uses The Secretary shall, by regulation, set forth prohibited uses of grant amounts awarded under this section, which shall include use for— (A) political activities; Page 1683 TITLE 12—BANKS AND BANKING § 4569 (B) advocacy; (C) lobbying, whether directly or through other parties; (D) counseling services; (E) travel expenses; and (F) preparing or providing advice on tax returns; and for the purposes of this paragraph, the prohibited use of funds for political activities includes influencing the selection, nomina- tion, election, or appointment of one or more candidates to any Federal, State or local of- fice as codified in section 501 of title 26. (6) Additional lobbying restrictions No assistance or amounts made available under this section may be expended by an eli- gible grantee to pay any person to influence or attempt to influence any agency, elected offi- cial, officer or employee of a State or local government in connection with the making, award, extension, continuation, renewal, amendment, or modification of any State or local government contract, grant, loan, or co- operative agreement as such terms are defined in section 1352 of title 31. (7) Prohibition of consideration of use for meeting housing goals or duty to serve In determining the compliance of the enter- prises with the housing goals under this sec- tion and the duty to serve underserved mar- kets under section 4565 of this title, the Direc- tor of the Federal Housing Finance Agency may not consider any Capital Magnet Fund amounts used under this section for eligible activities under subsection (f). The Director of the Federal Housing Finance Agency shall give credit toward the achievement of such housing goals and such duty to serve under- served markets to purchases by the enter- prises of mortgages for housing that receives funding from Capital Magnet Fund grant amounts, but only to the extent that such pur- chases by the enterprises are funded other than with such grant amounts. (8) Accountability of recipients and grantees (A) Tracking of funds The Secretary of the Treasury shall— (i) require each grantee to develop and maintain a system to ensure that each re- cipient of assistance from the Capital Mag- net Fund uses such amounts in accordance with this section, the regulations issued under this section, and any requirements or conditions under which such amounts were provided; and (ii) establish minimum requirements for agreements, between the grantee and the Capital Magnet Fund, regarding assistance from the Capital Magnet Fund, which shall include— (I) appropriate periodic financial and project reporting, record retention, and audit requirements for the duration of the grant to the recipient to ensure com- pliance with the limitations and require- ments of this section and the regulations under this section; and (II) any other requirements that the Secretary determines are necessary to ensure appropriate grant administration and compliance. (B) Misuse of funds If the Secretary of the Treasury deter- mines, after reasonable notice and oppor- tunity for hearing, that a grantee has failed to comply substantially with any provision of this section and until the Secretary is sat- isfied that there is no longer any such fail- ure to comply, the Secretary shall— (i) reduce the amount of assistance under this section to the grantee by an amount equal to the amount of Capital Magnet Fund grant amounts which were not used in accordance with this section; (ii) require the grantee to repay the Sec- retary any amount of the Capital Magnet Fund grant amounts which were not used in accordance with this section; (iii) limit the availability of assistance under this section to the grantee to activi- ties or recipients not affected by such fail- ure to comply; or (iv) terminate any assistance under this section to the grantee. (i) Periodic reports (1) In general The Secretary of the Treasury shall submit a report, on a periodic basis, to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Serv- ices of the House of Representatives describing the activities to be funded under this section. (2) Reports available to public The Secretary of the Treasury shall make the reports required under paragraph (1) pub- licly available. (j) Regulations (1) In general The Secretary of the Treasury shall issue regulations to carry out this section. (2) Required contents The regulations issued under this subsection shall include— (A) authority for the Secretary to audit, provide for an audit, or otherwise verify an enterprise’s activities, to ensure compliance with this section; (B) a requirement that the Secretary en- sure that the allocation of each enterprise is audited not less than annually to ensure compliance with this section; (C) a requirement that, for the purposes of subparagraphs (A) and (B), any financial statement submitted by a grantee to the Secretary shall be reviewed by an inde- pendent certified public accountant in ac- cordance with Statements on Standards for Accounting and Review Services, issued by the American Institute of Certified Public Accountants; and (D) requirements for a process for applica- tion to, and selection by, the Secretary for activities to be funded with amounts from the Capital Magnet Fund, which shall pro- vide that— (i) funds be fairly distributed to urban, suburban, and rural areas; and Page 1684 TITLE 12—BANKS AND BANKING § 4581 1 See References in Text note below. (ii) selection shall be based upon specific criteria, including a prioritization of fund- ing based upon— (I) the ability to use such funds to gen- erate additional investments; (II) affordable housing need (taking into account the distinct needs of dif- ferent regions of the country); and (III) ability to obligate amounts and undertake activities so funded in a time- ly manner. (Pub. L. 102–550, title XIII, § 1339, as added Pub. L. 110–289, div. A, title I, § 1131(b), July 30, 2008, 122 Stat. 2723.) SUBPART 3—ENFORCEMENT § 4581. Cease and desist proceedings (a) Grounds for issuance The Director may issue and serve a notice of charges under this section upon an enterprise if the Director determines that— (1) the enterprise has failed to submit a re- port under section 4547 1 of this title, following a notice of such failure, an opportunity for comment by the enterprise, and a final deter- mination by the Director; (2) the enterprise has failed to submit the in- formation required under subsection (m) or (n) of section 1723a of this title, or subsection (e) or (f) of section 1456 of this title; (3) solely with respect to the housing goals established under sections 4562(a) and 4563(a)(1) of this title, the enterprise has failed to submit a housing plan that complies with section 4566(c) of this title within the applica- ble period; or (4) solely with respect to the housing goals established under sections 4562(a) and 4563(a)(1) of this title, the enterprise has failed to comply with a housing plan under section 4566(c) of this title. (b) Procedure (1) Notice of charges Each notice of charges issued under this sec- tion shall contain a statement of the facts constituting the alleged conduct and shall fix a time and place at which a hearing will be held to determine on the record whether an order to cease and desist from such conduct should issue. (2) Issuance of order If the Director finds on the record made at a hearing described in paragraph (1) that any conduct specified in the notice of charges has been established (or the enterprise consents pursuant to section 4582(a)(4) of this title), the Director may issue and serve upon the enter- prise an order requiring the enterprise to— (A) submit a report under section 4547 1 of this title; (B) solely with respect to the housing goals established under sections 4562(a) and 4563(a)(1) of this title, submit a housing plan in compliance with section 4566(c) of this title; (C) solely with respect to the housing goals established under sections 4562(a) and 4563(a)(1) of this title, comply with the hous- ing plan in compliance with section 4566(c) of this title; or (D) provide the information required under subsection (m) or (n) of section 1723a of this title, or subsection (e) or (f) of section 1456 of this title. (c) Effective date An order under this section shall become effec- tive upon the expiration of the 30-day period be- ginning on the date of service of the order upon the enterprise (except in the case of an order issued upon consent, which shall become effec- tive at the time specified therein), and shall re- main effective and enforceable as provided in the order, except to the extent that the order is stayed, modified, terminated, or set aside by ac- tion of the Director or otherwise, as provided in this subpart. (Pub. L. 102–550, title XIII, § 1341, as added Pub. L. 110–289, div. A, title I, § 1130(c)(2), July 30, 2008, 122 Stat. 2708.) Editorial Notes REFERENCES IN TEXT Section 4547 of this title, referred to in subsecs. (a)(1) and (b)(2)(A), was repealed by Pub. L. 110–289, div. A, title I, § 1104(b), July 30, 2008, 122 Stat. 2667. PRIOR PROVISIONS A prior section 4581, Pub. L. 102–550, title XIII, § 1341, Oct. 28, 1992, 106 Stat. 3964, related to cease-and-desist proceedings, prior to repeal by Pub. L. 110–289, div. A, title I, § 1130(c)(1), July 30, 2008, 122 Stat. 2708. § 4582. Hearings (a) Requirements (1) Venue and record Any hearing under section 4581 or 4585 of this title shall be held on the record and in the Dis- trict of Columbia. (2) Timing Any such hearing shall be fixed for a date not earlier than 30 days nor later than 60 days after service of the notice of charges under section 4581(b)(1) of this title or determination to impose a penalty under section 4585(c)(1) of this title, unless an earlier or a later date is set by the hearing officer at the request of the enterprise served. (3) Procedure Any such hearing shall be conducted in ac- cordance with chapter 5 of title 5. (4) Failure to appear If the enterprise served fails to appear at the hearing through a duly authorized representa- tive, such enterprise shall be deemed to have consented to the issuance of the cease-and-de- sist order or the imposition of the penalty for which the hearing is held. (b) Issuance of order (1) In general After any such hearing, and within 90 days after the enterprise has been notified that the