42 U.S.C. § 1490s: Enforcement provisions

Summary

Makes it a crime for an owner, manager, agent, or anyone in control of a property that backs a federal loan to take or use the rents, income, or other funds from that property for anything other than the actual, reasonable, necessary expenses of the property. If someone does that on purpose, they can be fined under federal law, put in prison for up to 5 years, or both. Doing the same thing can also lead to a civil fine of up to $25,000 for each violation. Gives the Secretary the power, after giving notice and a chance for a hearing, to fine people or companies who knowingly and seriously break the rules for these loans. That covers things like giving false information or certifications, not turning in requested information on time, not keeping the property in good repair, not providing acceptable management, or breaking civil rights rules. The fine cannot be more than the larger of twice the damages caused or $50,000 per violation. When setting the fine, the Secretary must consider the seriousness of the offense, past violations, ability to pay, harm to tenants or the public, any benefit to the violator, deterrence, and other factors. Penalties cannot be paid with loan funds or project money. If someone won’t pay a final penalty, the Secretary can ask the Attorney General to sue in federal court to get a money judgment, and the court may include the United States’ legal costs. In that court action, the Secretary’s penalty decision cannot be challenged.

Title 42, §1490s

The Public Health and Welfare, Source: USLM XML via OLRC

(a)Equity skimming

(1)Criminal penalty

Whoever, as an owner, agent, employee, or manager, or is otherwise in custody, control, or possession of property that is security for a loan made or guaranteed under this subchapter, willfully uses, or authorizes the use, of any part of the rents, assets, proceeds, income, or other funds derived from such property, for any purpose other than to meet actual, reasonable, and necessary expenses of the property, or for any other purpose not authorized by this subchapter or the regulations adopted pursuant to this subchapter, shall be fined under title 18 or imprisoned not more than 5 years, or both.

(2)Civil sanctions

An entity or individual who as an owner, operator, employee, or manager, or who acts as an agent for a property that is security for a loan made or guaranteed under this subchapter where any part of the rents, assets, proceeds, income, or other funds derived from such property are used for any purpose other than to meet actual, reasonable, and necessary expenses of the property, or for any other purpose not authorized by this subchapter or the regulations adopted pursuant to this subchapter, shall be subject to a fine of not more than $25,000 per violation. The sanctions provided in this paragraph may be imposed in addition to any other civil sanctions or civil monetary penalties authorized by law.

(b)Civil monetary penalties

(1)In general

The Secretary may, after notice and opportunity for a hearing, impose a civil monetary penalty in accordance with this subsection against any individual or entity, including its owners, officers, directors, general partners, limited partners, or employees, who knowingly and materially violate, or participate in the violation of, the provisions of this subchapter, the regulations issued by the Secretary pursuant to this subchapter, or agreements made in accordance with this subchapter, by—

(A)submitting information to the Secretary that is false;

(B)providing the Secretary with false certifications;

(C)failing to submit information requested by the Secretary in a timely manner;

(D)failing to maintain the property subject to loans made or guaranteed under this subchapter in good repair and condition, as determined by the Secretary;

(E)failing to provide management for a project which received a loan made or guaranteed under this subchapter that is acceptable to the Secretary; or

(F)failing to comply with the provisions of applicable civil rights statutes and regulations.

(2)Conditions for renewal or extension

The Secretary may require that expiring loan or assistance agreements entered into under this subchapter shall not be renewed or extended unless the owner executes an agreement to comply with additional conditions prescribed by the Secretary, or executes a new loan or assistance agreement in the form prescribed by the Secretary.

(3)Amount

(A)In general

The amount of a civil monetary penalty imposed under this subsection shall not exceed the greater of— (i)

(ii)$50,000 per violation.

(B)Determination

In determining the amount of a civil monetary penalty under this subsection, the Secretary shall take into consideration—

(i)the gravity of the offense;

(ii)any history of prior offenses by the violator (including offenses occurring prior to the enactment of this section);

(iii)the ability of the violator to pay the penalty;

(iv)any injury to tenants;

(v)any injury to the public;

(vi)any benefits received by the violator as a result of the violation;

(vii)deterrence of future violations; and

(viii)such other factors as the Secretary may establish by regulation.

(4)Payment of penalties

No payment of a penalty assessed under this section may be made from funds provided under this subchapter or from funds of a project which serve as security for a loan made or guaranteed under this subchapter.

(5)Remedies for noncompliance

(A)Judicial intervention

If a person or entity fails to comply with a final determination by the Secretary imposing a civil monetary penalty under this subsection, 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 such individual or entity and such other relief as may be available. The monetary judgment may, in the court’s discretion, include the attorney’s fees and other expenses incurred by the United States in connection with the action.

(B)Reviewability of determination

In an action under this paragraph, the validity and appropriateness of a determination by the Secretary imposing the penalty shall not be subject to review.

Editorial Notes

References in Text

Enactment of this section, referred to in subsec. (b)(3)(B)(ii), means enactment of Pub. L. 106–569, which enacted this section and was approved Dec. 27, 2000.

§1490s Enforcement Provisions

Summary

Title 42, §1490s

Notes & Related Subsidiaries

Editorial Notes

References in Text

Citations & Metadata