I 

108TH CONGRESS 

1ST SESSION H. R. 1480 

To increase the expertise and capacity of community-based organizations 

involved in economic development activities and key community development programs. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 27, 2003 

Mrs. JONES of Ohio (for herself, Mr. TIBERI, Ms. LEE, Mr. BLUMENAUER, 

Mr. ANDREWS, Mr. FATTAH, Ms. CARSON of Indiana, Mr. CLYBURN, Mr. 

BASS, Ms. CORRINE BROWN of Florida, Mr. HINOJOSA, Mr. LAMPSON, 

Mr. MEEKS of New York, Mr. DINGELL, Mr. DAVIS of Alabama, Ms. 

KAPTUR, Mr. KILDEE, Mr. RUSH, and Mr. WYNN) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To increase the expertise and capacity of community-based 

organizations involved in economic development activities 

and key community development programs. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Community Economic 

5 Development Expertise Enhancement Act of 2003’’. 


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1 SEC. 2. FINDINGS AND PURPOSES. 

2 (a) CONGRESSIONAL FINDINGS.—The Congress finds 

3 that— 

4 (1) there are a multitude of community eco5 nomic development programs that the Federal Gov6 ernment successfully administers that help many of 

7 the Nation’s most economically distressed areas revi8 talize their physical and economic structures and 

9 provide support to small and medium-sized busi10 nesses to help them grow and generate long-term 

11 jobs and economic opportunity; 

12 (2) there are many nonprofit, nongovernmental, 

13 community-based economic development organiza14 tions, including faith-based organizations, that have 

15 successfully operated community economic develop16 ment programs that create jobs, build homes, and 

17 revitalize local markets; 

18 (3) existing Federal community economic devel19 opment programs are intended to leverage private 

20 sector investment as part of an overall community 

21 development effort; 

22 (4) existing Federal community economic devel23 opment programs connect residents of distressed 

24 neighborhoods to jobs and opportunities of the re25 gional marketplace, thereby replacing economic dis26 tress with opportunity; 


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1 (5) existing Federal community economic devel2 opment programs provide financial assistance, in3 cluding tax credits and loan guarantees, involve pri4 vate investment institutions and universities, and 

5 provide technical expertise for small businesses; 

6 (6) existing Federal community economic devel7 opment programs build upon ongoing efforts to en8 courage economic growth in distressed communities, 

9 helping to create new affordable housing opportuni10 ties, allowing communities to address important pub11 lic safety, access to capital, infrastructure, and envi12 ronmental concerns, and providing social services in13 cluding affordable health care, transportation, child 

14 care, and youth development; 

15 (7) the continuing success of Federal commu16 nity economic development programs will depend in 

17 great measure upon the ability of community-based 

18 organizations and private sector institutions to form 

19 partnerships that connect residents of distressed 

20 neighborhoods to jobs and other opportunities; 

21 (8) the Federal Government administers various 

22 programs that employ the services and capabilities 

23 of community-based organizations to deliver a wide 

24 range of services to residents of distressed commu25 nities; 


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1 (9) Federal community economic development 

2 programs help achieve lasting improvement and en3 hance domestic prosperity by the establishment of 

4 stable and diversified local economies, sustainable 

5 development, and improved local conditions; 

6 (10) there is a need for greater cooperation be7 tween the Federal Government, States, and other 

8 entities to ensure that, consistent with national com9 munity economic development objectives, Federal 

10 programs are compatible with, and further the objec11 tives of, State, regional, and local economic develop12 ment plans and comprehensive economic develop13 ment strategies; 

14 (11) while economic development is an inher15 ently local process, the Federal Government should 

16 work in closer partnership with community-based 

17 economic development organizations to ensure that 

18 existing resources are fully utilized and all Ameri19 cans have an opportunity to participate in the eco20 nomic growth of the United States; and 

21 (12) extending technical assistance to commu22 nity-based economic development organizations may 

23 be necessary or desirable to— 

24 (A) alleviate economic distress; 


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1 (B) encourage and support public-private 

2 partnerships for the formation and improve3 ment of economic development strategies that 

4 promote the growth of the national economy; 

5 (C) stimulate modernization and techno6 logical advances in the generation and commer7 cialization of goods and services; and 

8 (D) enhance the effectiveness of United 

9 States companies in the global economy. 

10 (b) PURPOSES.—The purposes of this Act are— 

11 (1) to provide a new source of Federal funding 

12 to enhance the capabilities of nonprofit, nongovern13 mental, community-based economic development or14 ganizations, or collaborations of such organizations, 

15 to leverage private sector investment as part of an 

16 overall community development strategy; 

17 (2) to establish educational programs for non18 profit, nongovernmental, community-based organiza19 tions to expand their project development capabili20 ties; 

21 (3) to increase the use of tax incentives to le22 verage private sector investment in community eco23 nomic development projects; 


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1 (4) to promote and facilitate investments in 

2 community-based economic development projects 

3 from traditional and nontraditional capital sources; 

4 (5) to encourage partnerships between commu5 nity-based organizations that will expand and en6 hance the expertise of emerging such nonprofit, non7 governmental organizations in utilizing private sec8 tor investment as part of their comprehensive com9 munity development strategies; and 

10 (6) to ensure that viable community economic 

11 development projects are successfully pursued 

12 throughout the United States in communities having 

13 a wide range of economic, geographic, and social 

14 characteristics. 

15 SEC. 3. GRANTS TO INCREASE CAPACITY AND EXPERTISE 

16 OF NONPROFIT, NONGOVERNMENTAL COM17 MUNITY-BASED ORGANIZATIONS INVOLVED 

18 IN COMMUNITY ECONOMIC DEVELOPMENT 

19 ACTIVITIES. 

20 (a) GRANT AUTHORITY.—The Secretary of Housing 

21 and Urban Development may make grants under this sec22 tion only to eligible community-based economic develop23 ment organizations only for the purposes under subsection 

24 (c). 


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1 (b) ELIGIBLE COMMUNITY-BASED ECONOMIC DE2 VELOPMENT ORGANIZATIONS.—For purposes of this sec3 tion, the term ‘‘eligible community-based economic devel4 opment organization’’ means a community-based economic 

5 development organization (as such term is defined under 

6 section 7), or a collaboration of such organizations (such 

7 as city or state community economic development associa8 tions), that demonstrates management capacity by meet9 ing, as determined by the Secretary, two or more of the 

10 following requirements: 

11 (1) AFFORDABLE HOUSING.—Having completed 

12 construction of 10 or more dwelling units of afford13 able housing. 

14 (2) FACILITIES.—Having completed construc15 tion of a commercial, industrial, retail, or commu16 nity facility project. 

17 (3) PARTNERING.—Partnering, or having a his18 tory of partnering, with community-based economic 

19 development organizations to provide training, edu20 cation, capacity, technical assistance, or other men21 toring services. 

22 (4) SUPPORT OF EMERGING ORGANIZATIONS.— 

23 Exhibiting willingness to form operational partner24 ships and execute contractual agreements with 


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1 emerging community-based economic development 

2 organizations. 

3 (5) OWNERSHIP OF ASSETS.—Having owner4 ship of tangible assets the value of which are equal 

5 to or exceed the value of the grant requested under 

6 this section. 

7 (c) USE OF FUNDS.— 

8 (1) PURPOSES.—Amounts from grants under 

9 this section may be used only for the following pur10 poses: 

11 (A) SALARIES AND ADMINISTRATIVE EX12 PENSES.—For salaries or administrative ex13 penses of the grantee or an emerging commu14 nity-based economic development organization 

15 that is undertaking a community economic de16 velopment project. 

17 (B) TECHNICAL ASSISTANCE.—To provide 

18 technical assistance to an emerging community19 based economic development organization that 

20 is undertaking a community economic develop21 ment project. 

22 (C) TRAINING AND RESEARCH.—Through 

23 subgrants pursuant to paragraph (2), for train24 ing, research, and technical assistance relating 

25 to community economic development, including 


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1 subgrants for program evaluation and economic 

2 impact analyses. 

3 (2) EXPENDITURE.—Amounts from grants 

4 under this section may be used directly by the eligi5 ble community-based economic development organi6 zation receiving the grant or redistributed by such 

7 recipient to other nonprofit, nongovernmental enti8 ties in grants, loans, loan guarantees, payments to 

9 reduce interest on loan guarantees, or other appro10 priate assistance, except that a recipient may not 

11 provide any such assistance from grant amounts to 

12 a private, for-profit entity. 

13 (d) SELECTION CRITERIA.—The Secretary shall issue 

14 rules, guidelines, and procedures to provide for the selec15 tion of eligible community-based economic development or16 ganizations for grants under this section, based upon a 

17 determination of the relative effectiveness of such organi18 zations in carrying out the purposes of this Act. Such 

19 rules, guidelines, and procedures shall provide for consid20 eration of the following factors: 

21 (1) The number of such organizations eligible 

22 to receive assistance under existing programs other 

23 than this section. 

24 (2) The extent to which grant amounts pro25 vided under this section will enhance the capabilities 


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1 of community-based economic development organiza2 tions in underserved States and localities. 

3 (3) The extent to which an eligible community4 based economic development organization applying 

5 for a grant does not have access to other traditional 

6 local financial sources. 

7 (4) The extent to which such an organization 

8 represents nonprofit, nongovernmental organizations 

9 that serve low-income communities and persons. 

10 (5) The extent to which such an organization 

11 will implement a plan to become financially sustain12 able. 

13 (e) AMOUNT.—A grant under this section to a single 

14 grantee shall be in an amount that is not less than 

15 $250,000 and does not exceed $1,000,000. 

16 (f) PROHIBITION OF MATCHING FUNDS REQUIRE17 MENT.—The Secretary may not require a grantee under 

18 this section to provide amounts from sources other than 

19 this section to fund the specific activities to be carried out 

20 with grant amounts under this section. 

21 (g) ELIGIBILITY FOR COMMUNITY REINVESTMENT

22 ACT CREDITS.—In assessing and taking into account, 

23 under section 804(a) of the Community Reinvestment Act 

24 of 1977, the record of any regulated financial institution, 

25 the appropriate Federal financial supervisory agency (as 


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1 defined in section 803(1) of such Act) may consider as 

2 a factor investments in community economic development 

3 projects of eligible community-based economic develop4 ment organizations in determining whether the institution 

5 is meeting the credit needs of its community for purposes 

6 of such section 804(a). 

7 (h) AUTHORIZATION OF APPROPRIATIONS.— 

8 (1) IN GENERAL.—There are authorized to be 

9 appropriated for grants under this section 

10 $75,000,000 for each of fiscal years 2004, 2005, 

11 and 2006. 

12 (2) SET-ASIDE FOR TECHNICAL ASSISTANCE

13 AND TRAINING.—Of the amount made available 

14 under this Act for each fiscal year, $10,000,000 

15 shall be available only for technical assistance and 

16 training activities, to be conducted by national com17 munity development organizations, state community 

18 development associations, or city community develop19 ment associations, which have extensive nationwide 

20 partnerships and experience in working with commu21 nity-based economic development organizations, as 

22 authorized by section 4 of the HUD Demonstration 

23 Act of 1993 (42 U.S.C. 9816 note), as in effect im24 mediately before May 1, 2000. Of the amount re25 served for use under this paragraph, not less than 


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1 $4,000,000 shall be used for the support of develop2 ment organizations in rural areas. 

3 SEC. 4. ASSESSMENT OF COMMUNITY-BASED ECONOMIC 

4 DEVELOPMENT EXPERTISE. 

5 (a) CAPABILITY STUDY.—The Secretary shall con6 duct a study to assess the capability needs of community7 based economic development organizations, which shall— 

8 (1) analyze, evaluate, and recommend processes 

9 to improve the administrative and operational capa10 bilities of such organizations to acceptable levels of 

11 success in support of the role of the Federal Govern12 ment in community economic development; and 

13 (2) assess the extent to which federal agencies 

14 can incorporate such organizations into the formula15 tion of the strategic plans of funding agencies and, 

16 if the extent or quality of this type of involvement 

17 is satisfactory, can support the role of the federal 

18 government in community economic development. 

19 The Secretary shall submit a report regarding the results 

20 of the study under this subsection not later than the expi21 ration of the 6-month period beginning on the date of the 

22 enactment of this Act. 

23 (b) ANNUAL REPORTS TO CONGRESS.—Not later 

24 than the first March 1 occurring after the end of each 

25 fiscal year for which amounts are made available for 


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1 grants under section 3, the Secretary shall submit a report 

2 to the Congress, which shall include— 

3 (1) an evaluation of the progress made during 

4 such fiscal year to enhance the administrative and 

5 operational capabilities of community-based eco6 nomic development organizations in support of the 

7 role of the Federal Government in community eco8 nomic development; 

9 (2) an assessment of the extent to which Fed10 eral agencies have, during such fiscal year, involved 

11 community-based economic development organiza12 tions in responsibilities for carrying out community 

13 economic development programs administered by the 

14 agencies and delivering services under such pro15 grams that enhance the operational capabilities of 

16 the organizations; and 

17 (3) a plan for making recommendations for ac18 tions or measures to further involve community19 based economic development organizations in the 

20 strategic operations of Federal agencies in support 

21 of community economic development. 

22 (c) FINAL EVALUATION.—The Secretary shall select 

23 an independent entity that has experience with national 

24 community economic development activities, nonprofit 

25 community-based developers, and impact evaluation and 


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1 analysis to conduct an evaluation of the impact of the 

2 grant program under section 3. The evaluation shall be 

3 conducted upon the termination of the program. Not later 

4 than 6 months after the conclusion of the last fiscal year 

5 for which amounts are made available for grants under 

6 section 3, the entity conducting the evaluation shall sub7 mit to the Secretary and the Congress a final report re8 garding the evaluation. 

9 SEC. 5. ADVISORY COUNCIL. 

10 (a) ESTABLISHMENT AND DUTIES.—The Secretary 

11 shall establish an advisory council to be known as the Sec12 retary’s Advisory Council on Community Economic Devel13 opment (in this section referred to as the ‘‘Advisory Coun14 cil’’). The Advisory Council shall make recommendations 

15 to the Secretary on carrying out this Act, including rec16 ommendations on developing plans under section 4(b)(3) 

17 and reviewing and making recommendations on such plans 

18 that have been developed. 

19 (b) MEMBERSHIP.—The Advisory Council shall con20 sist of not less than 19 members, appointed by the Sec21 retary, as follows: 

22 (1) EX OFFICIO MEMBERS.—The following 

23 members, who shall serve as nonvoting members: 

24 (A) The Secretary of Housing and Urban 

25 Development, or the designee of such Secretary. 


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1 (B) The Secretary of Health and Human 

2 Services, or the designee of such Secretary. 

3 (C) The Assistant Secretary for Economic 

4 Development of the Department of Commerce, 

5 or the designee of the Assistant Secretary. 

6 (D) The Administrator of the Community 

7 Development Financial Institutions Fund, or 

8 the designee of the Administrator. 

9 (E) The Under Secretary of Agriculture 

10 for Rural Development, or the designee of the 

11 Under Secretary. 

12 (2) OTHER MEMBERS.—No fewer than 14 

13 members, who are not officers or employees of the 

14 Federal Government, who shall serve as voting mem15 bers: 

16 (A) No fewer than 2 individuals who con17 duct research on community economic develop18 ment activities. 

19 (B) No fewer than 2 individuals who are 

20 experts in community economic development fi21 nancing. 

22 (C) No fewer than 3 individuals who are 

23 publicly elected officials. 

24 (D) No fewer than 7 individuals who are 

25 representatives of community-based economic 


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1 development organizations that carry out com2 munity economic development activities. 

3 (c) TRAVEL EXPENSES.—Members of the Advisory 

4 Council shall not receive any pay by reason of their service 

5 on the Advisory Council, but shall receive travel expenses, 

6 including per diem in lieu of subsistence, in accordance 

7 with sections 5702 and 5703 of title 5, United States 

8 Code. 

9 SEC. 6. COORDINATION WITH PRESIDENT’S ANNUAL BUDG10 ET REQUEST. 

11 The President of the United States shall include, to12 gether with each annual budget of the United States Gov13 ernment required to be submitted under section 1105(a) 

14 of title 31, United States Code, a report regarding Federal 

15 financial support for community economic development 

16 that includes— 

17 (1) a detailed summary of the total level of 

18 funding committed to community-based economic de19 velopment organizations throughout all Federal 

20 agencies; 

21 (2) a statement of projected funding levels for 

22 the grant program under section 3 of this Act for 

23 the upcoming fiscal year and each fiscal year there24 after until 2010, and projected funding levels for fi25 nancial assistance for economic development activiVerDate Aug 31 2005 08:47 Apr 11, 2006 Jkt 049200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\PICKUP\H1480.IH H1480

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1 ties for each Federal agency that provides such as2 sistance; 

3 (3) an identification and analysis of the method 

4 (including grant agreements, procurement contracts, 

5 and cooperative agreements (as such terms are used 

6 in chapter 63 of title 31, United States Code) by 

7 which such financial assistance is provided for each 

8 such economic development activity; and 

9 (4) Recommendations for specific activities and 

10 measures to enhance community-based economic de11 velopment capacity building in states having less 

12 concentrated economic and infrastructure resources 

13 and to strengthen nationwide community-based eco14 nomic development. 

15 SEC. 7. DEFINITIONS. 

16 For purposes of this Act, the following definitions 

17 shall apply: 

18 (1) COMMUNITY-BASED ECONOMIC DEVELOP19 MENT ORGANIZATION.— 

20 (A) IN GENERAL.—For purposes of this 

21 section, the term ‘‘community-based economic 

22 development organization’’ means a nonprofit, 

23 nongovernmental organization that— 

24 (i) has as its primary mission to 

25 serve, or provide investment capital for, 


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1 low-income communities and low-income 

2 persons; and 

3 (ii)(I) maintains accountability to resi4 dents of low-income communities through 

5 their representation on any governing 

6 board of the organization or on any advi7 sory board to the organization; or 

8 (II) maintains accountability to low9 income communities by having a board pri10 marily consisting of leaders of community11 based development organizations from its 

12 region or State on its governing board. 

13 (B) NONDISCRIMINATION AGAINST FAITH14 BASED ORGANIZATIONS.—Such term shall in15 clude any faith-based organization that complies 

16 with the requirements under clauses (i) and (ii) 

17 of subparagraph (A). 

18 (C) TREATMENT OF COMMUNITY DEVEL19 OPMENT FINANCIAL INSTITUTIONS.—The re20 quirements of subparagraph (A) shall be treat21 ed as met by any community development fi22 nancial institution (as such term is defined in 

23 section 103 of the Community Development 

24 Banking and Financial Institutions Act of 1994 

25 (12 U.S.C. 4702). 


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1 (2) COMMUNITY ECONOMIC DEVELOPMENT

2 PROJECT.—The term ‘‘community economic develop3 ment project’’ means a project that involves— 

4 (A) investment in business enterprises, in5 cluding investments in the form of loan origina6 tion, equity investment, and monetary assist7 ance to home buyers or to business owners for 

8 business development projects; or 

9 (B) the construction or rehabilitation of fa10 cilities, including commercial or industrial facili11 ties, homes, apartment buildings, and commu12 nity parks. 

13 (3) LOW-INCOME COMMUNITIES AND PER14 SONS.—The terms ‘‘low-income communities’’ and 

15 ‘‘low-income persons’’ shall have the meanings given 

16 such terms in section 45D of the Internal Revenue 

17 Code of 1986 (26 U.S.C. 45D). 

18 (4) SECRETARY.—The term ‘‘Secretary’’ means 

19 the Secretary of Housing and Urban Development. 

Æ 


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