I

106TH CONGRESS

1ST SESSION H. R. 629

To amend the Community Development Banking and Financial Institutions

Act of 1994 to reauthorize the Community Development Financial Institutions Fund and to more efficiently and effectively promote economic

revitalization, community development, and community development financial institutions, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 8, 1999

Mr. VENTO (for himself and Mrs. ROUKEMA) introduced the following bill;

which was referred to the Committee on Banking and Financial Services

A BILL

To amend the Community Development Banking and Financial Institutions Act of 1994 to reauthorize the Community Development Financial Institutions Fund and to

more efficiently and effectively promote economic revitalization, community development, and community development financial institutions, and for other purposes.

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Community Development Financial Institutions Fund

6 Amendments Act of 1999’’.
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1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Change of status of the Fund; miscellaneous technical corrections.

Sec. 3. Amendments to programs administered by the Fund and the Bank

Enterprise Act of 1991.

Sec. 4. Extension of authorization.

Sec. 5. Amendments to Small Business Capital Enhancement Program.

Sec. 6. Additional safeguards.

3 SEC. 2. CHANGE OF STATUS OF THE FUND; MISCELLANE4 OUS TECHNICAL CORRECTIONS.

5 (a) PURPOSE.—Section 102(b) of the Community

6 Development Banking and Financial Institutions Act of

7 1994 (12 U.S.C. 4701(b)) is amended to read as follows:

8 ‘‘(b) PURPOSE.—The purpose of this subtitle is to

9 create a Community Development Financial Institutions

10 Fund to promote economic revitalization and community

11 development through investment in and assistance to com12 munity development financial institutions, including en13 hancing the liquidity of community development financial

14 institutions, and through incentives to insured depository

15 institutions that increase lending and other assistance and

16 investment in both economically distressed communities

17 and community development financial institutions.’’.

18 (b) DEFINITIONS.—

19 (1) Section 103 of the Community Development

20 Banking and Financial Institutions Act of 1994 is

21 amended—
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1 (A) by striking paragraph (1);

2 (B) by redesignating paragraphs (2)

3 through (17) as paragraphs (1) through (16),

4 respectively; and

5 (C) by inserting after paragraph (16), as

6 so redesignated, the following new paragraph:

7 ‘‘(17) SECRETARY.—Except in the case of sec8 tion 104(d)(2), the term ‘Secretary’ means the Sec9 retary of the Treasury.’’.

10 (2) The Community Development Banking and

11 Financial Institutions Act of 1994 (12 U.S.C. 4701

12 et seq.) is amended (other than in section 118) by

13 striking ‘‘Administrator’’ each place such term ap14 pears and inserting ‘‘Secretary’’.

15 (c) ESTABLISHMENT OF FUND WITHIN THE DE16 PARTMENT OF THE TREASURY.—

17 (1) IN GENERAL.—Section 104(a) of the Com18 munity Development Banking and Financial Institu19 tions Act of 1994 (12 U.S.C. 4703(a)) is amended

20 to read as follows:

21 ‘‘(a) ESTABLISHMENT.—

22 ‘‘(1) IN GENERAL.—There is established in the

23 Department of the Treasury a Community Develop24 ment Financial Institutions Fund that shall have the

25 functions specified by this subtitle and subtitle B of
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1 Title II. The offices of the Fund shall be in Wash2 ington, D.C. The Fund shall not be affiliated with

3 any other agency or department of the Federal

4 Government.

5 ‘‘(2) WHOLLY OWNED GOVERNMENT CORPORA6 TION.—The Fund shall be a wholly owned govern7 ment corporation within the Department of the

8 Treasury and shall be treated in all respects as an

9 agency of the United States, except as otherwise

10 provided in this subtitle.’’.

11 (2) AUTHORITY OF THE SECRETARY OF THE

12 TREASURY.—Section 104(b) of the Community De13 velopment Banking and Financial Institutions Act of

14 1994 (12 U.S.C. 4703(b)) is amended to read as

15 follows:

16 ‘‘(b) MANAGEMENT OF FUND.—

17 ‘‘(1) AUTHORITY OF SECRETARY OF THE

18 TREASURY.—All functions of the Fund shall be per19 formed by or under the supervision of the Secretary.

20 ‘‘(2) APPOINTMENT OF OFFICERS AND EMPLOY21 EES.—The Secretary may appoint such officers and

22 employees of the Fund, including a Director, as the

23 Secretary deems necessary or appropriate.’’.

24 (3) INSPECTOR GENERAL.—
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1 (A) IN GENERAL.—Section 118 of the

2 Community Development Banking and Finan3 cial Institutions Act of 1994 is amended to read

4 as follows:

5 ‘‘SEC. 118. INSPECTOR GENERAL.

6 ‘‘The Inspector General of the Department of the

7 Treasury shall be the Inspector General of the Fund.’’.

8 (B) TECHNICAL AND CONFORMING AMEND9 MENT.—Section 11 of the Inspector General

10 Act of 1978 (5 U.S.C. App. 3) is amended—

11 (i) in paragraph (1), by striking ‘‘; the

12 Administrator of the Community Develop13 ment Financial Institutions Fund;’’; and

14 (ii) in paragraph (2), by striking ‘‘the

15 Community Development Financial Insti16 tutions Fund,’’.

17 (4) TECHNICAL CORRECTION TO RULEMAKING

18 AUTHORITY.—Section 119(a)(1) of the Community

19 Development Banking and Financial Institutions Act

20 of 1994 (12 U.S.C. 4717(a)(1)) is amended to read

21 as follows:

22 ‘‘(1) IN GENERAL.—The Secretary may pre23 scribe such regulations and procedures as may be

24 necessary to carry out this subtitle.’’.
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1 SEC. 3. AMENDMENTS TO PROGRAMS ADMINISTERED BY

2 THE FUND AND THE BANK ENTERPRISE ACT

3 OF 1991.

4 (a) AMENDMENTS TO COMMUNITY DEVELOPMENT

5 FINANCIAL INSTITUTIONS PROGRAM.—

6 (1) FORM OF ASSISTANCE PROVIDED.—Section

7 108(a)(1)(B)(iii) of the Community Development

8 Banking and Financial Institutions Act of 1994 (12

9 U.S.C. 4707(a)(1)(B)(iii)) is amended by inserting

10 ‘‘through cooperative agreements or’’ before ‘‘by

11 contracting’’.

12 (2) TRAINING PROGRAMS.—Section 109(d) of

13 the Community Development Banking and Financial

14 Institutions Act of 1994 (12 U.S.C. 4708(d)) is

15 amended to read as follows:

16 ‘‘(d) FORM OF TRAINING.—The Fund may offer the

17 training program described in this section—

18 ‘‘(1) directly; or

19 ‘‘(2) through grants, contracts, or cooperative

20 agreements with other organizations that possess

21 special expertise in community development, without

22 regard to whether the organizations receive or are

23 eligible to receive assistance under this subtitle.’’.

24 (b) AMENDMENTS TO THE BANK ENTERPRISE ACT

25 AWARDS PROGRAM.—
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1 (1) AWARDS FOR ASSISTANCE TO COMMUNITY

2 DEVELOPMENT FINANCIAL INSTITUTIONS.—Para3 graph (2) of section 233(a) of the Bank Enterprise

4 Act (12 U.S.C. 1834a(a)) is amended—

5 (A) in that portion of such paragraph

6 which precedes subparagraph (A), by striking

7 ‘‘for for’’ and inserting ‘‘for’’;

8 (B) in subparagraph (A), by striking ‘‘for

9 low- and moderate-income persons’’ and insert10 ing ‘‘to community development financial insti11 tutions, low- and moderate-income persons’’;

12 and

13 (C) in subparagraph (B)—

14 (i) by inserting ‘‘of the increase’’ after

15 ‘‘the amount’’; and

16 (ii) by striking ‘‘financial’’ each place

17 such term appears.

18 (2) INCREASE IN AWARD AMOUNTS FOR CER19 TAIN ACTIVITIES.—Section 114(b)(2) of the Commu20 nity Development Banking and Financial Institu21 tions Act of 1994 (12 U.S.C. 4713(b)(2)) is amend22 ed by amending the substitute text used to apply

23 section 233(a)(3) of the Bank Enterprise Act of

24 1991—
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1 (A) in subparagraph (A), by inserting ‘‘or

2 (2)(B)’’ after ‘‘paragraph (2)(A)’’;

3 (B) in subparagraph (A)(i), by inserting

4 ‘‘each’’ before ‘‘such subparagraph’’; and

5 (C) in subparagraph (A)(ii), by inserting

6 ‘‘each’’ before ‘‘such subparagraph’’.

7 (3) AWARDING CREDIT FOR ADDITIONAL QUALI8 FIED ACTIVITIES.—Paragraph (4) of section 233(a)

9 of the Bank Enterprise Act (12 U.S.C. 1834a(a)(4))

10 is amended—

11 (A) in the portion of such paragraph which

12 precedes subparagraph (A), by inserting ‘‘and

13 (2)(B)’’ after ‘‘paragraph (2)(A)’’; and

14 (B) by adding at the end the following new

15 subparagraph:

16 ‘‘(P) Other forms of assistance that the

17 Board determines to be appropriate.

18 (4) EVALUATION OF TECHNICAL ASSISTANCE

19 PROVIDED.—Section 233(a)(7) of the Bank Enter20 prise Act (12 U.S.C. 1834a(a)(7)) is amended—

21 (A) by inserting ‘‘and other’’ after ‘‘tech22 nical’’; and

23 (B) by striking ‘‘and (O)’’ and inserting

24 instead ‘‘(O), and (P)’’.
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1 (5) ESTABLISHING ALTERNATIVE CRITERIA IN

2 DEFINING CERTAIN DISTRESSED COMMUNITIES.—

3 Section 233(b)(4)(C) of the Bank Enterprise Act

4 (12 U.S.C. 1834a(b)(4)(C)) is amended by inserting

5 ‘‘or alternative’’ before ‘‘eligibility requirements’’.

6 SEC. 4. EXTENSION OF AUTHORIZATION.

7 Paragraph (1) of section 121(a) of the Community

8 Development Banking and Financial Institutions Act of

9 1994 (12 U.S.C. 4718(a)) is amended to read as follows:

10 ‘‘(1) IN GENERAL.—To carry out this subtitle

11 and subtitle B of title II, there are authorized to be

12 appropriated to the Fund, to remain available until

13 expended—

14 ‘‘(A) $95,000,000 for fiscal year 2000;

15 ‘‘(B) $100,000,000 for fiscal year 2001;

16 ‘‘(C) $105,000,000 for fiscal year 2002;

17 and

18 ‘‘(D) $110,000,000 for fiscal year 2003.’’.

19 SEC. 5. AMENDMENTS TO SMALL BUSINESS CAPITAL EN20 HANCEMENT PROGRAM.

21 (a) DEFINITION OF FINANCIAL INSTITUTION.—Sec22 tion 252(5) of the Riegle Community Development and

23 Regulatory Improvement Act of 1994 (12 U.S.C. 4742(5))

24 is amended by inserting ‘‘any community development fi-
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1 nancial institution (as defined in section 103(5) of this

2 Act) and,’’ before ‘‘any federally chartered’’.

3 (b) ELIMINATION OF THRESHOLD APPROPRIA4 TION.—Section 253 of the Riegle Community Develop5 ment and Regulatory Improvement Act of 1994 (12

6 U.S.C. 4743) is amended by striking subsection (d) and

7 redesignating subsection (e) as subsection (d).

8 (c) CONFORMING AMENDMENT.—Section 254(a) of

9 the Riegle Community Development and Regulatory Im10 provement Act of 1994 (12 U.S.C. 4744(a)) is amended

11 by inserting ‘‘(if any)’’ after ‘‘appropriate Federal banking

12 agency’’.

13 (d) AMENDMENTS TO REIMBURSEMENT AUTHOR14 ITY.—Section 257(a) of the Riegle Community Develop15 ment and Regulatory Improvement Act of 1994 (12

16 U.S.C. 4747(a)) is amended to read as follows—

17 ‘‘(a) REIMBURSEMENTS.—

18 ‘‘(1) IN GENERAL.—The Fund shall reimburse

19 participating States according to criteria established

20 by the Fund.

21 ‘‘(2) EXAMPLES OF CRITERIA.—Criteria estab22 lished under paragraph (1) may include whether a

23 participating State is creating a new program, is ex24 panding in scope or scale an existing State program,

25 the need for Fund reimbursement, the availability of
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1 Fund resources, and other criteria established by the

2 Fund.

3 ‘‘(3) TIMING AND AMOUNT OF REIMBURSE4 MENT.—Not later than 30 calendar days after re5 ceiving a report filed in compliance with section 256,

6 the Fund shall reimburse a participating State meet7 ing such criteria in an amount equal to up to 50

8 percent of the amount of contributions by the par9 ticipating State to the reserve funds that are subject

10 to reimbursement by the Fund pursuant to section

11 256 and this section, until such sums made available

12 by the Fund for this purpose are expended.’’.

13 (e) CONFORMING AMENDMENT.—Section 260 of the

14 Riegle Community Development and Regulatory Improve15 ment Act of 1994 (12 U.S.C. 4750) is hereby repealed.

16 SEC. 6. ADDITIONAL SAFEGUARDS.

17 (a) NEUTRAL REVIEW REQUIREMENTS.—Section

18 107 of the Community Development Banking and Finan19 cial Institutions Act of 1994 (12 U.S.C. 4706) is amended

20 by adding at the end the following new subsections:

21 ‘‘(c) OBJECTIVE SCORING SYSTEM.—

22 ‘‘(1) IN GENERAL.—For purposes of making

23 any evaluation under subsection (a) of any applica24 tion, the Fund shall develop a scoring system which

25 assigns a relative point value to each factor required
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1 to be considered under paragraphs (1) through (14)

2 of subsection (a) in connection with the selection of

3 applicants.

4 ‘‘(2) NOTICE OF SCORING SYSTEM.—A descrip5 tion of the scoring system shall be included in any

6 notice of funding availability issued by the Fund.

7 ‘‘(d) NEUTRAL MULTIPERSON REVIEW PANEL.—

8 ‘‘(1) IN GENERAL.—The Fund shall convene

9 multiperson review panels to—

10 ‘‘(A) review all applications for selection,

11 under subsection (a), on the basis of the factors

12 required to be considered under paragraphs (1)

13 through (14) of subsection (a) using the objec14 tive scoring system developed pursuant to sub15 section (c) before any selection is made by the

16 Fund under subsection (a) with respect to such

17 applications; and

18 ‘‘(B) make recommendations with regard

19 to such selections to the Fund on the basis of

20 such review.

21 ‘‘(2) COMPOSITION.—The multiperson review

22 panels shall each consist of such number of members

23 as the Fund determines to be appropriate, but not

24 less than 3, who shall be appointed from among in25 dividuals who, by virtue of their education, training,
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1 or experience, are specially qualified to carry out the

2 responsibilities of the panel and at least 1/3 of the

3 members of each panel shall be appointed from

4 among individuals with diverse experiences who are

5 not officers or employees of any government.’’.

6 (b) ADDITIONAL INFORMATION TO BE INCLUDED IN

7 ANNUAL REPORTS.—Section 117 of the Community De8 velopment Banking and Financial Institutions Act of 1994

9 (12 U.S.C. 4716) is amended by adding at the end the

10 following new subsections:

11 ‘‘(g) CONTRACT AND COMPLIANCE INFORMATION.—

12 The annual report submitted to the Congress by the Fund

13 pursuant to subsection (a) shall contain the following in14 formation:

15 ‘‘(1) SERVICES OF CONTRACTORS.—Information

16 on the use of contractors to carry out any function

17 of the Fund under this subtitle, including—

18 ‘‘(A) a description of the services provided

19 by contractors under this subtitle during the

20 period covered by the report;

21 ‘‘(B) a description of the procurement

22 process utilized to obtain such services;

23 ‘‘(C) the basis of the authority of the Fund

24 to contract for the services so obtained; and
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1 ‘‘(D) the total amount obligated by the

2 Fund for such contracts.

3 ‘‘(2) COMPLIANCE WITH OTHER REQUIRE4 MENTS.—An evaluation of the extent to which the

5 Fund is maintaining compliance, in connection with

6 the activities of the Fund under this subtitle and

7 subtitle B of title II, with the requirements of, and

8 regulations prescribed pursuant to subsections (b)

9 and (d) of section 3512 of title 31, United States

10 Code.

11 ‘‘(3) PLAN FOR ADDRESSING WEAKNESSES OF

12 INTERNAL CONTROLS.—A plan for addressing any

13 material weakness in internal controls identified in

14 the most recent external audit pursuant to sub15 section (f).’’.

16 (c) REPORT ON IMPLEMENTATION OF SCORING SYS17 TEM.—The 1st annual report submitted by the Fund to

18 the Congress under section 117(a) of the Community De19 velopment Banking and Financial Institutions Act of 1994

20 after the effective date of this Act shall include a complete

21 description of the implementation of the scoring system

22 required under subsection (c) of the amendment made by

23 subsection (a) of this section, including a description of

24 the methodology of the system.
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1 (d) GAO REPORT.—Before the end of the 18-month

2 period beginning on the date of the enactment of this Act,

3 the Comptroller General of the United States shall submit

4 a report to the Congress evaluating the structure, govern5 ance, and performance of the Community Development Fi6 nancial Institutions Fund.

7 (e) PRIOR NOTICE OF CONTRACTS.—For the purpose

8 of ensuring that the requirements of section 8(a) of the

9 Small Business Act are being met, and preventing eva10 sions of such requirements, with regard to contracts in11 volving the Fund and contractors under such section, the

12 Fund shall submit a notice of any such contract to the

13 Congress at least 15 days before any performance is due

14 under such contract.

15 (f) TECHNICAL AND CONFORMING AMENDMENT.—

16 That portion of section 107(a) of the Community Develop17 ment Banking and Financial Institutions Act of 1994 (12

18 U.S.C. 4706(a)) which appears before paragraph (1) of

19 such section is amended to read as follows:

20 ‘‘(a) SELECTION CRITERIA.—Except as provided in

21 section 113, the Fund shall, after considering the results

22 of the scoring system developed under subsection (c) and

23 the recommendations of the multiperson review panels

24 under subsection (d), select community development finan-
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1 cial institution applicants meeting the requirements of sec2 tion 105 for assistance based on—’’.

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