I 

112TH CONGRESS 

1ST SESSION H. R. 3677 

To authorize the Secretary of Housing and Urban Development to establish 

a national program to create jobs and increase economic development 

in underserved areas by promoting cooperative development. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 15, 2011 

Mr. FATTAH (for himself, Mr. BRADY of Pennsylvania, Ms. LEE of California, 

and Mr. TIERNEY) introduced the following bill; which was referred to 

the Committee on Financial Services 

A BILL 

To authorize the Secretary of Housing and Urban Development to establish a national program to create jobs and 

increase economic development in underserved areas by 

promoting cooperative development. 

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 ‘‘National Cooperative 

5 Development Act’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—The Congress finds that Federal pol8 icy can promote cooperative development in underserved 


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1 areas, which demonstrably has the following benefits for 

2 communities located in such areas: 

3 (1) Advancement of local economic stability. 

4 (2) An increase of local circulation of capital, 

5 thereby increasing economic multipliers and the im6 pact of community investment to spur locally ori7 ented economic growth. 

8 (3) Developing, attracting, and anchoring new 

9 productive capital in low-income communities. 

10 (4) Expansion of investment opportunities and 

11 asset creation for low- and moderate-income Ameri12 cans. 

13 (b) PURPOSE.—The purpose of this Act is to estab14 lish a Federal program that will create jobs and increase 

15 economic development in underserved areas by promoting 

16 cooperative development in such areas. 

17 SEC. 3. DEFINITIONS. 

18 In this Act: 

19 (1) SECRETARY.—The term ‘‘Secretary’’ means 

20 the Secretary of Housing and Urban Development, 

21 or his or her designee. 

22 (2) NATIONAL COOPERATIVE DEVELOPMENT

23 PROGRAM.—The term ‘‘National Cooperative Devel24 opment Program’’ means the program established 

25 under section 4(a). 


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1 (3) NATIONAL COOPERATIVE DEVELOPMENT

2 CENTER.—The term ‘‘national cooperative develop3 ment center’’ means a nonprofit organization, col4 lege, or university, or a group of such organizations 

5 colleges, or universities, selected by the Secretary 

6 pursuant to section 4(b)(1) to award national center 

7 funds to local cooperative development centers and 

8 cooperative organizations, and carry out other duties 

9 and responsibilities in accordance with this Act. 

10 (4) LOCAL COOPERATIVE DEVELOPMENT CEN11 TER.—The term ‘‘local cooperative development cen12 ter’’ means a nonprofit organization, college, or uni13 versity, or a group of such organizations, colleges, or 

14 universities, with expertise in establishing and devel15 oping cooperative organizations. 

16 (5) COOPERATIVE ORGANIZATION.—The term 

17 ‘‘cooperative organization’’ means an autonomous 

18 association of persons united voluntarily to meet 

19 their common economic, social, and cultural needs 

20 and aspirations through a jointly owned and demo21 cratically controlled enterprise. 

22 (6) COOPERATIVE DEVELOPMENT.—The term 

23 ‘‘cooperative development’’ means technical assist24 ance provided for the purpose of— 


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1 (A) providing financial forecasting, feasi2 bility analysis, business planning, and other 

3 preparatory activity to ensure that a coopera4 tive organization, or organizations that are in 

5 the process of establishing such an organiza6 tion, are grounded in sound business practices; 

7 (B) assisting with establishing incorpora8 tion documents, bylaws, and policies that ensure 

9 that cooperative organizations— 

10 (i) adhere to legal obligations of a 

11 local or State government or the Federal 

12 Government; and 

13 (ii) are governed by transparent and 

14 agreed-upon rules; 

15 (C) educating, with respect to how cooper16 ative organizations function— 

17 (i) board members, management, and 

18 employees of cooperative organizations; 

19 (ii) local communities affected by such 

20 organizations and the general public; and 

21 (iii) professionals involved in coopera22 tive development; 

23 (D) providing organizational planning for 

24 cooperative organizations, including board meetVerDate Mar 15 2010 02:09 Dec 23, 2011 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3677.IH H3677

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1 ings and board development, and strategic plan2 ning; 

3 (E) hosting networking activities and con4 ferences involving cooperative organizations, en5 tities that work with such organizations, and 

6 professional organizations that engage in coop7 erative development; 

8 (F) providing professional development of 

9 professionals involved in cooperative develop10 ment by offering training focused on coopera11 tive development; and 

12 (G) providing administrative and oper13 ational set-up of cooperative organizations. 

14 (7) ELIGIBLE PROJECT.—The term ‘‘eligible 

15 project’’ means a project that— 

16 (A) meets the eligibility criteria established 

17 by the national cooperative development center 

18 pursuant to section 5(a)(1)(E); and 

19 (B) serves an underserved area. 

20 (8) NATIONAL CENTER FUNDS.—The term ‘‘na21 tional center funds’’ means grant funds awarded to 

22 the national cooperative development center by the 

23 Secretary under the National Cooperative Develop24 ment Program. 

25 (9) UNDERSERVED AREA.— 


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1 (A) IN GENERAL.—The term ‘‘underserved 

2 area’’ means an area located within— 

3 (i) a census tract that is defined as 

4 low- or moderate-income by the Bureau of 

5 the Census of the Department of Com6 merce; 

7 (ii) a population census tract that is 

8 treated as a low-income community under 

9 section 45D(e) of the Internal Revenue 

10 Code of 1986; or 

11 (iii) subject to subparagraph (B), an 

12 area that— 

13 (I) is adjacent to an area that 

14 meets the requirements of either 

15 clause (i) or (ii); and 

16 (II) is given special approval by 

17 the national cooperative development 

18 center to be classified as an under19 served area. 

20 (B) LIMITATION.—The national coopera21 tive development center shall limit the number 

22 of projects funded under the National Coopera23 tive Development Program that are located in 

24 an area described in subparagraph (A)(iii). 


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1 (10) WOMEN- AND MINORITY-OWNED BUSI2 NESS.—The term ‘‘women- and minority-owned busi3 ness’’ shall have the meaning given such term in 

4 regulations prescribed by the Secretary. 

5 SEC. 4. ESTABLISHMENT OF NATIONAL COOPERATIVE DE6 VELOPMENT PROGRAM AND SELECTION OF 

7 THE NATIONAL CENTER. 

8 (a) ESTABLISHMENT OF PROGRAM.—The Secretary 

9 shall establish a program to be known as the ‘‘National 

10 Cooperative Development Program’’ to carry out the pur11 pose described in section 2(b). 

12 (b) SELECTION OF NATIONAL COOPERATIVE DEVEL13 OPMENT CENTER.— 

14 (1) IN GENERAL.—Not later than 1 year after 

15 the date of the enactment of this Act, the Secretary 

16 shall select, through a competitive process, and enter 

17 into a grant agreement with a national cooperative 

18 development center that shall carry out its duties 

19 and responsibilities in accordance with this Act. 

20 (2) CONSIDERATIONS.—In selecting the na21 tional cooperative development center under para22 graph (1), the Secretary shall take into consider23 ation the following: 


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1 (A) The extent that the national coopera2 tive development center has demonstrated ex3 pertise in cooperative development. 

4 (B) The experience that such national cen5 ter has in providing— 

6 (i) technical and financial assistance 

7 to cooperative organizations in underserved 

8 areas; and 

9 (ii) educational resources to such or10 ganizations. 

11 (c) SUBMITTAL OF STRATEGIC PLAN TO SECRETARY

12 BY THE NATIONAL CENTER.— 

13 (1) IN GENERAL.—Not later than 90 days after 

14 the Secretary has selected the national cooperative 

15 development center under subsection (b)(1), such 

16 national center shall submit to the Secretary a stra17 tegic plan that outlines how the national center in18 tends on utilizing national center funds, and such 

19 plan shall specifically include— 

20 (A) a proposed budget, including the pro21 posed administrative costs; 

22 (B) a detailed description of how the na23 tional center will use national center funds to 

24 promote, or engage in, cooperative development; 

25 and 


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1 (C) other pertinent information that the 

2 Secretary may require. 

3 (2) REVIEW OF PLAN.—The Secretary shall re4 view the strategic plan submitted under paragraph 

5 (1) and ensure that the administrative costs will not 

6 exceed the limitation provided under section 

7 5(a)(2)(B)(i). 

8 (3) APPROVAL REQUIRED.—Not later than 60 

9 days after the submittal of the strategic plan under 

10 paragraph (1), the Secretary shall approve or reject 

11 such plan. In the case that the Secretary— 

12 (A) approves such plan, the Secretary shall 

13 disperse national center funds within 1 year 

14 after such approval; or 

15 (B) rejects such plan, not later than 60 

16 days after such rejection, such national center 

17 shall resubmit a revised plan. 

18 (d) ESTABLISHING PERFORMANCE TARGETS.— 

19 (1) HUD.—The Secretary shall establish per20 formance targets for the national cooperative devel21 opment center, which shall include, at a minimum, 

22 the following requirements: 

23 (A) FOCUS ON WOMEN- AND MINORITY24 OWNED COOPERATIVE ORGANIZATIONS.—A sig25 nificant percentage of projects funded with naVerDate Mar 15 2010 03:37 Dec 23, 2011 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3677.IH H3677

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1 tional center funds shall involve cooperative or2 ganizations that are women- or minority-owned. 

3 (B) FOCUS ON UNDERSERVED AREAS.—A 

4 substantial portion of the projects funded by 

5 local cooperative development centers with na6 tional center funds shall serve communities lo7 cated in an underserved area. 

8 (C) EFFECTIVENESS OF ASSISTANCE.—As9 sistance provided by the national cooperative 

10 development center to local cooperative develop11 ment centers shall be evaluated based on— 

12 (i) the level of responsiveness of the 

13 national cooperative development center to 

14 requests for assistance; 

15 (ii) the ability of the national coopera16 tive development center to craft programs 

17 that help local cooperative development 

18 centers establish new cooperative organiza19 tions; and 

20 (iii) measurable economic results in 

21 local communities that local cooperative de22 velopment centers serve. 

23 (2) LOCAL COOPERATIVE DEVELOPMENT CEN24 TERS.—Each local cooperative development center 

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1 ordination with the national cooperative development 

2 center, performance targets that must be met at the 

3 end of each year in which the entity receives grant 

4 funds. Such targets shall be approved by the na5 tional cooperative development center. 

6 SEC. 5. NATIONAL COOPERATIVE DEVELOPMENT CENTER. 

7 (a) DUTIES OF THE NATIONAL COOPERATIVE DE8 VELOPMENT CENTER.— 

9 (1) IN GENERAL.—The national cooperative de10 velopment center shall— 

11 (A) submit to the Secretary a strategic 

12 plan in accordance with section (4)(c)(1); 

13 (B) develop technical assistance, edu14 cational, and other materials to assist local co15 operative development centers that are receiving 

16 national center funds develop cooperative orga17 nizations; 

18 (C) monitor and evaluate the performance 

19 of such local centers; 

20 (D) provide guidance, information on best 

21 practices, and technical assistance to commu22 nities seeking to establish cooperative organiza23 tions; 


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1 (E) establish the eligibility criteria for 

2 projects to be carried out using national center 

3 funds; and 

4 (F) develop program and reporting guide5 lines, as approved by the Secretary. 

6 (2) USE OF NATIONAL CENTER FUNDS.— 

7 (A) IN GENERAL.—The national coopera8 tive development center may use national center 

9 funds to undertake activities that promote coop10 erative development, including— 

11 (i) distributing national center funds 

12 to local cooperative development centers, 

13 either selected under clause (i) of subpara14 graph (C) or established under subsection 

15 (b), in accordance with such subparagraph; 

16 (ii) partnering with a financial institu17 tion to— 

18 (I) establish a revolving loan pro19 gram, subject to the limitation under 

20 subparagraph (B)(ii)(II), that will 

21 provide loans to cooperative organiza22 tions; and 

23 (II) develop other loan programs 

24 and financial products that can be 

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1 ment centers to support the develop2 ment and retention of cooperative or3 ganizations; 

4 (iii) providing technical assistance in 

5 areas where local cooperative development 

6 centers do not provide such assistance, es7 pecially assistance for cooperative organi8 zations at the national level; 

9 (iv) funding reasonable administrative 

10 costs approved by the Secretary in accord11 ance with section 4(c)(3); 

12 (v) providing funding for ongoing pro13 fessional training of providers of technical 

14 assistance and supporting existing profes15 sional development training for organiza16 tions engaged in cooperative development; 

17 (vi) establishing and developing local 

18 cooperative development centers pursuant 

19 to subsection (b); and 

20 (vii) carrying out any other activities 

21 that promote cooperative development, as 

22 determined by the Secretary. 

23 (B) ALLOCATION OF NATIONAL CENTER

24 FUNDS.—The national cooperative development 


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1 center shall allocate national center funds in the 

2 following manner: 

3 (i) Shall reserve not more than 10 

4 percent for administrative purposes. 

5 (ii) Of the national center funds not 

6 allocated for administrative costs under 

7 clause (i)— 

8 (I) 55 percent shall be awarded 

9 to local cooperative development cen10 ters; and 

11 (II) 45 percent shall be allocated 

12 to establish the revolving loan pro13 gram referred to clause (ii)(I) of sub14 paragraph (A) and undertake any 

15 other activity described under such 

16 subparagraph. 

17 (C) DISTRIBUTION OF NATIONAL CENTER

18 FUNDS TO LOCAL COOPERATIVE DEVELOPMENT

19 CENTERS.— 

20 (i) IN GENERAL.—The national coop21 erative development center shall select, 

22 through a competitive process, and enter 

23 into a grant agreement, for a period of no 

24 more than 3 years, with local cooperative 

25 development centers to promote, or engage 


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1 in, cooperative development in accordance 

2 with this Act. 

3 (ii) CRITERIA FOR SELECTION.—The 

4 national cooperative development center 

5 shall, in consultation with the Secretary, 

6 establish the criteria for selecting the local 

7 cooperative development centers under 

8 clause (i), taking into account the consid9 erations under clause (iii). 

10 (iii) CONSIDERATIONS.—In selecting 

11 local cooperative development centers 

12 under clause (ii), the national cooperative 

13 development center shall take into consid14 eration the following: 

15 (I) The technical capacity to 

16 carry out eligible projects. 

17 (II) The ability to deliver tech18 nical assistance in underserved areas. 

19 (III) The capacity and commit20 ment to offering cooperative develop21 ment in underserved areas. 

22 (IV) The ability to come up with 

23 the expected matching funding of not 

24 less than 15 percent of national funds 


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1 received by the local cooperative devel2 opment center. 

3 (V) The presence of eligible 

4 projects. 

5 (VI) The track record in devel6 oping successful cooperative organiza7 tions. 

8 (VII) The degree of community 

9 engagement and support. 

10 (VIII) The ability to have a posi11 tive economic impact on an area 

12 through job creation or retention, af13 fordable housing creation, or wealth 

14 creation. 

15 (IX) Such other qualities as the 

16 national cooperative development cen17 ter may determine. 

18 (D) MULTI-YEAR FUNDING PERMITTED.— 

19 The national cooperative development center 

20 may award national center funds to a local co21 operative development center for more than 1 

22 fiscal year. 

23 (E) VIOLATION OF GRANT AGREEMENT.— 

24 If the national cooperative development center 

25 determines that an entity awarded grant funds 


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1 under National Cooperative Development Pro2 gram has not met the performance targets es3 tablished pursuant to section 4(d), is not mak4 ing reasonable progress toward meeting such 

5 measures, or is otherwise in violation of the 

6 grant agreement, the national center may— 

7 (i) withhold financial assistance until 

8 the performance measures are met; or 

9 (ii) terminate the grant agreement es10 tablished under section 5(a)(2)(C)(i). 

11 (b) ESTABLISHMENT OF NEW LOCAL COOPERATIVE

12 DEVELOPMENT CENTERS.— 

13 (1) IN GENERAL.—The national cooperative de14 velopment center may establish up to 3 local cooper15 ative development centers in each fiscal year. 

16 (2) SELECTION CRITERIA.—The national coop17 erative development center shall establish the criteria 

18 for the selection of organizations that form the local 

19 cooperative development centers established under 

20 subparagraph (1). 

21 (3) LOCATION.—In addition to the criteria es22 tablished pursuant to subparagraph (2), a local co23 operative development center established under sub24 paragraph (1) shall be located in a region of the 


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1 United States or economic sector where no other 

2 local cooperative development centers are located. 

3 (4) LIMITATIONS ON FUNDING.—A local cooper4 ative development center established under subpara5 graph (1) may be awarded national center funds for 

6 no more than 3 years. After the expiration of such 

7 3-year period, in order to be eligible for a grant 

8 under the National Cooperative Development Pro9 gram, such local center would be required to com10 pete for such funds in accordance with subsection 

11 (a)(2)(C). 

12 SEC. 6. LOCAL COOPERATIVE DEVELOPMENT CENTERS. 

13 (a) USE OF FUNDS BY LOCAL COOPERATIVE DEVEL14 OPMENT CENTERS.—A local cooperative development cen15 ter selected under section 5(a)(2)(C)(i) may use national 

16 center funds to undertake activities that promote coopera17 tive development. 

18 (b) AVAILABILITY OF FUNDS.— 

19 (1) IN GENERAL.—A local cooperative develop20 ment center awarded national center funds shall— 

21 (A) obligate any such funds not later than 

22 3 years after the date on which the such funds 

23 were awarded to such local center; and 

24 (B) expend any such funds not later than 

25 4 years after such date. 


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1 (2) UNOBLIGATED AMOUNTS.—If national cen2 ter funds awarded to a local cooperative development 

3 center are not obligated by the period described in 

4 paragraph (1)(A), the national cooperative develop5 ment center may rescind and award such funds to 

6 another local cooperative development center in ac7 cordance with this Act. 

8 (3) REPORT.—Not later than 1 year after re9 ceiving national center funds, and annually there10 after, a local cooperative development center selected 

11 under section 5(a)(2)(C)(i) or established under sec12 tion 5(b) shall submit to the national cooperative de13 velopment center a report that includes— 

14 (A) the total amount of grant funds that 

15 have been expended; 

16 (B) a description of the activities under17 taken by such local center; 

18 (C) an evaluation of each project funded 

19 with national center funds; 

20 (D) an assessment of the economic impact 

21 of the projects funded with national center 

22 funds; and 

23 (E) other information as the Secretary or 

24 the national cooperative development center 

25 may require. 


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1 SEC. 7. REPORT TO CONGRESS. 

2 Not later than 3 years after the date of the enact3 ment of this Act, and annually thereafter, the Secretary, 

4 in collaboration with the national cooperative development 

5 center, shall submit to Congress a report includes— 

6 (1) information on the number of cooperatives 

7 created; 

8 (2) best practices from the local cooperative de9 velopment centers that are awarded national center 

10 funds and the economic benefits to the local commu11 nity in which such center serves resulting from such 

12 use of funds; 

13 (3) an evaluation of performance targets estab14 lished pursuant to section 4(d); 

15 (4) case studies featuring select cooperative or16 ganizations that benefitted from the National Coop17 erative Development Program; and 

18 (5) any additional information, including statis19 tics, that would help promote future cooperative de20 velopment. 

21 SEC. 8. REGULATIONS. 

22 Not later than 180 days after the date of the enact23 ment of this Act, the Secretary shall issue regulations nec24 essary to carry out its provisions. 


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1 SEC. 9. AUTHORIZATION OF APPROPRIATIONS. 

2 There are authorized to be appropriated to the Sec3 retary for the award of grants under the National Cooper4 ative Development Program, to remain available until ex5 pended— 

6 (1) $25,000,000 for fiscal year 2012; 

7 (2) $25,000,000 for fiscal year 2013; 

8 (3) $25,000,000 for fiscal year 2014; 

9 (4) $25,000,000 for fiscal year 2015; and 

10 (5) $25,000,000 for fiscal year 2016. 

Æ 


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