recommendations it may have for additional legislative, administrative, and other action to achieve the purpose of this Act.

AUTHORIZATION OF APPROPRIATIONS FOR ADMINISTRATIVE EXPENSES

SEC. 9. There are authorized to be appropriated such sums as may be necessary for the administrative expenses incurred by the Corporation in carrying out this Act.

AMENDMENTS TO OTHER LAWS

SEC. 10. (a) Section 101 of the Government Corporation Control Act is amended by inserting "Home Owners Mortgage Loan Corporation;" after "Government National Mortgage Association ;".

(b) Section 5315 of title 5, United States Code, is amended by adding at the end thereof the following:

"(92) Members, Board of Directors of the Home Owners Mortgage Loan Corporation."

[H.R. 14639, 91st Cong., first sess.]

A BILL To establish a Development Bank to aid in financing low- and moderate-income housing, employment opportunities for unemployed and low-income citizens, and public facilities in certain urban and rural areas

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

§ 1. Short title

This Act may be cited as the "Development Bank Act”.

§ 2. Findings and purpose

The Congress finds that inflation and high interest-tight money policies are making it impossible to meet the national housing goals for low and moderate income families, and provide urgently needed public facilities and employment opportunities for those Americans trapped in depressed urban and rural areas by circumstances over which they have virtually no control. Accordingly, the Congress finds it necessary to establish a Development Bank to provide credit on reasonable terms and technical assistance for:

(1) Low- and moderate-income housing:

(2) Public facilities to meet social, health, and educational transportation, and other needs in depressed urban and rural areas;

(3) Improvement, expansion, and establishment of businesses and industries providing employment opportunities at adequate wage rates for unemployed and underemployed persons;

(4) Supporting public facilities required by such businesses and industries; and

(5) Promoting private investment in such projects and facilities.

§3. Definitions

(1) The term "low and moderate income" shall be identical to definitions made by the Secretary of Housing and Urban Development in establishing criteria by which families qualify for occupancy of dwellings supplied under the low- and moderate-income rental and home ownership programs of the National Housing Act.

(2) The term "public facility" means the structures and equipment owned and operated by State and local governments to provide medical, social, educational, transportation, and other services.

(3) The term "supporting public facilities" means those facilities which are usually publicly owned and are necessary for the operation of businesses and industries, such as roads and sewer and water systems.

(4) The term "depressed urban and rural areas" means those areas which may be designated without regard to political boundaries by the Secretary of Labor, the Secretary of Commerce, and the Director of the Office of Economic Opportunity on the basis of the most recent appropriate annual statistics for the most recent available calendar year, as having a rate of unemployment of at least 6 per centum for the preceding calendar year, or a high rate of underemployed persons whose income does not exceed the level of poverty as that level

has been established by the Department of Health, Education, and Welfare, or where pending loss of business or industry is expected to produce such conditions, or those areas characterized by substantial outmigration resulting from the lack of job opportunities, or those areas suffering from other conditions which in the judgment of the board of directors of the Bank qualify them for assistance under the provisions of this Act.

(5) The term "adequate wage" means a wage which shall not be lower than whichever is highest: (a) the minimum wage under the Fair Labor Standards Act of 1938, (b) the minimum wage set by State or local governments, (c) the prevailing rate of wages in the area for comparable work.

(6) The term "effective interest rate" means the total amounts paid on a loan for interest, commissions, bonuses, discounts, premiums, or other similar charges. § 4. Establishment

There is created a body corporate to be known as the Development Bank (referred to in this Act as the Bank). No loan may be made by the Bank unless the borrower is unable to obtain funds on reasonable terms from other sources. § 5. Board of Directors

The management of the Bank shall be vested in a Board of Directors consisting of the Secretary of the Treasury, the Secretary of Commerce, the Secretary of Housing and Urban Development, the Secretary of Labor, and ten other persons who shall be appointed by the President with the advice and consent of the Senate. Of the ten persons so appointed, one shall be an elected or an appointed official of a State government, one shall be an elected or appointed official of a local government. All of the other persons so appointed shall be from the private sector. Two shall be from among representatives of organized labor, two shall be from among representatives of business and finance, two from among representatives of social welfare organizations dealing with the problems of low-income urban residents and two shall be from among representatives of rural organizations dealing with economic and social problems of depressed rural areas. The terms of directors appointed by the President shall be two years, commencing with the date of enactment of this Act. Any director appointed to fill a vacancy shall be appointed only for the unexpired portion of the term. Any director may continue to serve as such after the expiration of the term for which he was appointed until his successor has been appointed and has qualified.

§ 6. Appointment of officers and employees

The Board of Directors of the Bank shall appoint a president of the Bank and such other officers and employees as it deems necessary to carry out the functions of the Bank. Such appointments may be made without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, and persons so appointed may be paid without regard to the provisions of chapter 51 of subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates. The president of the Bank shall be an ex officio member of the Board of Directors and may participate in meetings of the board except that he shall have no vote except in case of an equal division. No individual other than a citizen of the United States may be an officer of the Bank. No officer of the Bank shall receive any salary or other remuneration from any source other than the Bank during the period of his employment by the Bank.

§ 7. Conflict of interest

(a) No director, officer, attorney, agent, or employee of the Bank shall in any manner, directly or indirectly, participate in the deliberations upon or the determination of any question affecting his personal interests, or the interests of any corporation, partnership, or association in which he is directly or indirectly personally interested.

(b) The Bank shall not engage in political activities nor provide financing for or assist in any manner any project or facility involving political parties, nor shall the directors, officers, employees, or agents of the Bank in any way use their connection with the Bank for the purpose of influencing the outcome of any election.

§ 8. General corporate powers

Except to the extent inconsistent with the provisions of this Act, the Bank shall have the general corporate powers of a corporation organized and existing under the laws of the District of Columbia.

§ 9. Principal office; branches

The principal office of the Bank shall be located in the District of Columbia, and it may establish agencies or branch offices in any city of the United States. $10. Capital stock

(a) The Bank shall have capital stock of $1,000,000,000, subscribed by the United States, payment for which shall be subject to call in whole or in part by the Board of Directors.

(b) The Secretary of the Treasury is authorized to, and upon request of the Board of Directors shall, purchase stock in amounts designated by the Board of Directors up to a total of $1,000,000,000.

§ 11. Borrowing authority

(a) The Bank may issue notes, debentures, bonds, and other evidences of indebtedness in such amounts and on such terms and conditions as the corporation may determine subject to the limitations prescribed in this Act.

(b) The aggregate outstanding indebtedness of the Bank under this section at any time may not exceed twenty times the paid-in capital stock of the Bank at that time.

(c) The obligations of the Bank under this section shall be fully and unconditionally guaranteed both as to interest and principal by the United States and such guarantee shall be expressed on the face thereof.

(d) In the event that the Bank is unable to pay upon demand, when due, any obligation under this section, the Secretary of the Treasury shall pay the amount thereof and thereupon to the extent of the amount so paid by the Secretary of the Treasury shall succeed to all the rights of the holder of the obligations. § 12. Purchase of assets by Treasury

The Secretary of the Treasury is authorized to purchase from the Bank any asset of the Bank at such price as may be agreed upon between the Secretary and the Bank.

§ 13. Discount by Federal Reserve banks

(a) The several Federal Reserve banks are authorized to purchase or discount any note, debenture, bond, or other obligation, secured or unsecured, held by the Bank.

(b) Obligations of the Bank are eligible for purchase by the Federal Reserve Open Market Committee.

§ 14. Investment status of obligations of Bank

All obligations issued by the Bank shall be lawful investments for, and may be accepted as security for, all fiduciary, trust, and public funds the investment or deposit of which is under the authority or control of the United States or of any officer or officers thereof.

§ 15. Loans for low- and moderate-income housing

(a) The Bank may make or guarantee loans for the purchase of low- and moderate-income housing under the insured and guaranteed loan programs of the Department of Housing and Urban Development, the Veterans' Administration, the Farmers Home Administration of the Department of Agriculture, and for military housing under sections 809 and 810 of title VIII of the National Housing Act.

(b) The Bank may make or guarantee loans to developers, contractors, subcontractors and other persons to finance the construction of low- and moderateincome housing under the insured and guaranteed loan programs of the Department of Housing and Urban Development, the Veterans Administration, and Farmers Home Administration of the Department of Agriculture, and for military housing under sections 809 and 810 of title VIII of the National Housing Act.

(c) Loans made under (b) of this section shall not exceed an effective rate of 6 per centum per annum or the discount rate of the Federal Reserve System, whichever is lowest, or a lesser rate of interest established by the Board of Directors of the Bank.

§ 16. Loans for community development

(a) The Bank may make or guarantee loans or purchase obligations to finance capital expenditures for public works, community facilities, land for

housing development, public transportation, and similar community facilities, such projects and facilities to be in keeping with comprehensive area land use plans where such plans exist, providing that such facilities and projects are of direct and substantial benefit to residents of urban slum and depressed rural areas, or provide other benefits specified by the Bank to carry out the purposes of this Act.

§ 17. Loans to commerce and industry

(a) The Bank may make or guarantee loans for the purchase of real and personal property, for working capital, and for training purposes to assure that existing businesses and industries have adequate funds and skilled manpower resources to compete in the market place for establishment of new businesses and industries providing that:

(1) borrowers agree to fill a specified number of job openings to be determined by the Bank with people who, prior to such employment, were unemployed and underemployed;

(2) or borrowers agree to conduct training courses for a specified number of unemployed and underemployed persons to be determined by the Bank with the result that these persons will, within a period of time to be determined by the Bank, be employed full time by the borrower.

(3) or borrowers agree to other requirements laid down by the Bank to carry out the purposes of this Act.

§ 18. Loans for supporting public facilities

(a) To carry out the purposes of this Act, the Bank may make or guarantee loans or purchase obligations to finance the purchase or construction of roads, sewer and water systems, power and similar facilities necessary for the operation of businesses and industries or the operation of public facilities providing social, health, welfare, educational and other services to residents of urban slum and depressed rural areas.

(b) The effective interest rate for such loans shall not exceed 6 per centum or the Federal Reserve discount rate, whichever is lower, or a lesser rate estab lished by the board of directors of the Bank.

§ 19. Technical and other assistance

(a) The Bank may provide to borrowers whatever assistance, technical or otherwise, it considers necessary to protect its investment and to carry out the purposes of this Ac.t

(b) The Bank shall assign an adequate number of staff members. (c) To assure fulfilling the purposes of this Act, the Bank shall direct an adequate number of staff members to seek out and confer with representatives of State and local governments, public agencies, nonprofit private organizations, companies, corporations, partnerships and individuals, in order to provide information about the services furnished by the Bank and to provide whatever assistance is necessary for utilization of such services.

(d) To meet other requirements laid down by the Bank to carry out the purposes of this Act.

§ 20. Security required

The board of directors of the Bank shall make whatever arrangement it considers adequate to secure loans made by the Bank.

§ 21. Maximum security

(a) Each loan made by the Bank to a lending institution may be made for a period not exceeding five years, and the bank may from time to time extend the time of payment of any such loan, through renewal, substitution of new obligations, or otherwise.

(b) Each loan made by the Bank to any State or local government may be made for a period of not exceeding twenty years, and the Bank may from time to time extend the period of payment.

(c) Each loan made by the Bank to any private corporation, company or individual may be made for a period not exceeding ten years, and the Bank may from time to time extend the period of payment until the loan is retired or until the loan is refinanced through another lending institution and the borrower's obligation to the Bank is erased.

§ 22. Guaranteed loans

The Bank may fully guarantee the entire principal of any loan made by any bank, savings bank, trust company, building and loan or savings and loan asso

ciation, insurance company, mortgage loan company or credit union, provided that:

(1) such loans are made to carry out the purposes of this Act;

(2) the effective interest rate for Federally insured and guaranteed housing shall not exceed the maximum permanent interest rate ceiling established by law for such loans or the temporary rates set for such loans by the Secretary of Housing and Urban Development, the Administrator of the Veterans Affairs and the Secretary of Agriculture, whichever are highest.

(3) the effective interest rate for all other loans shall not exceed 6 per centum per annum or the Federal Reserve discount rate, whichever is lower, or a lesser rate established by the board of directors of the Bank. § 23. Direct loans

To carry out the purposes of this Act, the Bank may make direct loans to State and local governments, public agencies, non-profit private organizations, corporations, companies, partnerships and individuals providing that the effective interest rate does not exceed 6 percentum per annum or the Federal Reserve discount rate, whichever is lowest, or a lesser rate established by the board of directors of the Bank, provided that borrowers have presented evidence they are unable to obtain funds on reasonable terms from any other source to carry out the purposes of this Act.

§ 24. Taxable status

The Bank, its property, its franchise, capital, reserves, surplus, security holdings, and other funds, and its income shall be exempt from all taxation now or hereafter imposed by the United States or by any State or local taxing authority; except that (1) any real property and any tangible personal property of the Bank shall be subject to Federal, State, and local taxation to the same extent according to its value as other such property is taxed, and (2) any and all obligations issued by the Bank shall be subject both as to principal and interest to Federal, State, and local taxation to the same extent as the obligations of private corporations are taxed.

$25. Audit by General Accounting Office

The General Accounting Office shall audit the financial transactions of the Bank, and for this purpose shall have access to all its books, records, and accounts.

§ 26. Authorization of appropriations

(a) There is hereby authorized to be appropriated, to remain available without fiscal year limitation, the sum of $1,000,000,000 for subscription to the capital stock of the Bank.

(b) There are authorized to be appropriated such sums as may be necessary to pay the difference, if any, between the interest paid by the Bank on its obligations and interest received by the Bank on its loans, and to reimburse the capital of the Bank to the extent of any defaults.

(c) There are authorized to be appropriated such sums as may be necessary for payment of $125 a day to members of the board of directors for each day they are engaged in the performance of their duties to the Bank together with such sums required for travel expenses by members of the board of directors when the performance of their duties requires them to be away from home.

[H.R. 15402, 91st Cong., first sess.]

A BILL To amend the National Housing Act and the Federal Reserve Act to help meet the national housing goals, including the goals for low- and moderate-income families through the purchase of mortgages with private pension fund and Federal Reserve assets. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Mortgage Investment Act".

TITLE I

PENSION FUND MORTGAGE INVESTMENTS

SEC. 101. Title V of the National Housing Act is amended by adding at the end thereof the following new section: