
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC1437z-1]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                      CHAPTER 8--LOW-INCOME HOUSING
 
            SUBCHAPTER I--GENERAL PROGRAM OF ASSISTED HOUSING
 
Sec. 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, Sec. 29, as added Pub. L. 105-65, 
title V, Sec. 562(a)(2), Oct. 27, 1997, 111 Stat. 1416.)


                             Effective Date

    Section 562(b) of Pub. L. 105-65 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.''


                               Regulations

    Section 562(c) of Pub. L. 105-65 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].''
