Union Calendar No. 104

106TH CONGRESS

1ST SESSION H. R. 629

[Report No. 106–183]

A BILL

To amend the Community Development Banking

nancial institutions, and for other purposes.nity development, and community development fifectively promote economic revitalization, commuInstitutions Fund and to more efficiently and efthorize the Community Development Financialand Financial Institutions Act of 1994 to reauJUNE 14, 1999

Committed to the Committee of the Whole House on the

State of the Union and ordered to be printed
IB

Union Calendar No. 104

106TH CONGRESS

1ST SESSION H. R. 629

[Report No. 106–183]

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

JUNE 14, 1999

Additional sponsors: Mr. LAFALCE, Mr. WALSH, Mr. FROST, Mr. OLVER,

Mrs. JONES of Ohio, Ms. SCHAKOWSKY, Mr. MCGOVERN, Mr. HINCHEY,

Mr. BENTSEN, Mr. FARR of California, Mr. JEFFERSON, Mr. SANDLIN,

Mr. FRANK of Massachusetts, Mr. BARRETT of Wisconsin, Ms.

DEGETTE, Mr. BROWN of California, Mr. RUSH, Mr. CASTLE, Mr.

FATTAH, Ms. KILPATRICK, and Mr. GUTIERREZ

JUNE 14, 1999

Committed to the Committee of the Whole House on the State of the Union

and ordered to be printed

A BILL

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

7 (b) TABLE OF CONTENTS.—The table of contents for

8 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.

9 SEC. 2. CHANGE OF STATUS OF THE FUND; MISCELLA10 NEOUS TECHNICAL CORRECTIONS.

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

12 Development Banking and Financial Institutions Act of

13 1994 (12 U.S.C. 4701(b)) is amended to read as follows:

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

15 create a Community Development Financial Institutions

16 Fund to promote economic revitalization and community

17 development through investment in and assistance to com18 munity development financial institutions, including en19 hancing the liquidity of community development financial
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1 institutions, and through incentives to insured depository

2 institutions that increase lending and other assistance and

3 investment in both economically distressed communities

4 and community development financial institutions.’’.

5 (b) DEFINITIONS.—

6 (1) Section 103 of the Community Development

7 Banking and Financial Institutions Act of 1994 is

8 amended—

9 (A) by striking paragraph (1);

10 (B) by redesignating paragraphs (2)

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

12 respectively; and

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

14 so redesignated, the following new paragraph:

15 ‘‘(17) SECRETARY.—Except in the case of sec16 tion 104(d)(2), the term ‘Secretary’ means the Sec17 retary of the Treasury.’’.

18 (2) The Community Development Banking and

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

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

21 striking ‘‘Administrator’’ each place such term ap22 pears and inserting ‘‘Secretary’’.

23 (c) ESTABLISHMENT OF FUND WITHIN THE DE24 PARTMENT OF THE TREASURY.—
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1 (1) IN GENERAL.—Section 104(a) of the Com2 munity Development Banking and Financial Institu3 tions Act of 1994 (12 U.S.C. 4703(a)) is amended

4 to read as follows:

5 ‘‘(a) ESTABLISHMENT.—

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

7 Department of the Treasury a Community Develop8 ment Financial Institutions Fund that shall have the

9 functions specified by this subtitle and subtitle B of

10 Title II. The offices of the Fund shall be in Wash11 ington, D.C. The Fund shall not be affiliated with

12 any other agency or department of the Federal

13 Government.

14 ‘‘(2) WHOLLY OWNED GOVERNMENT CORPORA15 TION.—The Fund shall be a wholly owned govern16 ment corporation within the Department of the

17 Treasury and shall be treated in all respects as an

18 agency of the United States, except as otherwise

19 provided in this subtitle.’’.

20 (2) AUTHORITY OF THE SECRETARY OF THE

21 TREASURY.—Section 104(b) of the Community De22 velopment Banking and Financial Institutions Act of

23 1994 (12 U.S.C. 4703(b)) is amended to read as

24 follows:

25 ‘‘(b) MANAGEMENT OF FUND.—
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1 ‘‘(1) AUTHORITY OF SECRETARY OF THE

2 TREASURY.—All functions of the Fund shall be per3 formed by or under the supervision of the Secretary.

4 ‘‘(2) APPOINTMENT OF OFFICERS AND EMPLOY5 EES.—The Secretary may appoint such officers and

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

7 Secretary deems necessary or appropriate.’’.

8 (3) INSPECTOR GENERAL.—

9 (A) IN GENERAL.—Section 118 of the

10 Community Development Banking and Finan11 cial Institutions Act of 1994 is amended to read

12 as follows:

13 ‘‘SEC. 118. INSPECTOR GENERAL.

14 ‘‘The Inspector General of the Department of the

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

16 (B) TECHNICAL AND CONFORMING AMEND17 MENT.—Section 11 of the Inspector General

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

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

20 Administrator of the Community Develop21 ment Financial Institutions Fund;’’; and

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

23 Community Development Financial Insti24 tutions Fund,’’.
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1 (4) TECHNICAL CORRECTION TO RULEMAKING

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

3 Development Banking and Financial Institutions Act

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

5 as follows:

6 ‘‘(1) IN GENERAL.—The Secretary may pre7 scribe such regulations and procedures as may be

8 necessary to carry out this subtitle.’’.

9 SEC. 3. AMENDMENTS TO PROGRAMS ADMINISTERED BY

10 THE FUND AND THE BANK ENTERPRISE ACT

11 OF 1991.

12 (a) AMENDMENTS TO COMMUNITY DEVELOPMENT

13 FINANCIAL INSTITUTIONS PROGRAM.—

14 (1) FORM OF ASSISTANCE PROVIDED.—Section

15 108(a)(1)(B)(iii) of the Community Development

16 Banking and Financial Institutions Act of 1994 (12

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

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

19 contracting’’.

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

21 the Community Development Banking and Financial

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

23 amended to read as follows:

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

25 training program described in this section—
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1 ‘‘(1) directly; or

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

3 agreements with other organizations that possess

4 special expertise in community development, without

5 regard to whether the organizations receive or are

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

7 (b) AMENDMENTS TO THE BANK ENTERPRISE ACT

8 AWARDS PROGRAM.—

9 (1) AWARDS FOR ASSISTANCE TO COMMUNITY

10 DEVELOPMENT FINANCIAL INSTITUTIONS.—Para11 graph (2) of section 233(a) of the Bank Enterprise

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

13 (A) in that portion of such paragraph

14 which precedes subparagraph (A), by striking

15 ‘‘for for’’ and inserting ‘‘for’’;

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

17 low- and moderate-income persons’’ and insert18 ing ‘‘to community development financial insti19 tutions, low- and moderate-income persons’’;

20 and

21 (C) in subparagraph (B)—

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

23 ‘‘the amount’’; and

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

25 such term appears.
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1 (2) INCREASE IN AWARD AMOUNTS FOR CER2 TAIN ACTIVITIES.—Section 114(b)(2) of the Commu3 nity Development Banking and Financial Institu4 tions Act of 1994 (12 U.S.C. 4713(b)(2)) is amend5 ed by amending the substitute text used to apply

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

7 1991—

8 (A) in subparagraph (A), by inserting ‘‘or

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

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

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

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

13 ‘‘each’’ before ‘‘such subparagraph’’.

14 (3) AWARDING CREDIT FOR ADDITIONAL QUALI15 FIED ACTIVITIES.—Paragraph (4) of section 233(a)

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

17 is amended—

18 (A) in the portion of such paragraph which

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

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

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

22 subparagraph:

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

24 Board determines to be appropriate.
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1 (4) EVALUATION OF TECHNICAL ASSISTANCE

2 PROVIDED.—Section 233(a)(7) of the Bank Enter3 prise Act (12 U.S.C. 1834a(a)(7)) is amended—

4 (A) by inserting ‘‘and other’’ after ‘‘tech5 nical’’; and

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

7 instead ‘‘(O), and (P)’’.

8 (5) ESTABLISHING ALTERNATIVE CRITERIA IN

9 DEFINING CERTAIN DISTRESSED COMMUNITIES.—

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

11 (12 U.S.C. 1834a(b)(4)(C)) is amended by inserting

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

13 SEC. 4. EXTENSION OF AUTHORIZATION.

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

15 Development Banking and Financial Institutions Act of

16 1994 (12 U.S.C. 4718(a)) is amended to read as follows:

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

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

19 appropriated to the Fund, to remain available until

20 expended—

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

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

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

24 and

25 ‘‘(D) $110,000,000 for fiscal year 2003.’’.
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1 SEC. 5. AMENDMENTS TO SMALL BUSINESS CAPITAL EN2 HANCEMENT PROGRAM.

3 (a) DEFINITION OF FINANCIAL INSTITUTION.—Sec4 tion 252(5) of the Riegle Community Development and

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

6 is amended by inserting ‘‘any community development fi7 nancial institution (as defined in section 103(5) of this

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

9 (b) ELIMINATION OF THRESHOLD APPROPRIA10 TION.—Section 253 of the Riegle Community Develop11 ment and Regulatory Improvement Act of 1994 (12

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

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

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

15 the Riegle Community Development and Regulatory Im16 provement Act of 1994 (12 U.S.C. 4744(a)) is amended

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

18 agency’’.

19 (d) AMENDMENTS TO REIMBURSEMENT AUTHOR20 ITY.—Section 257(a) of the Riegle Community Develop21 ment and Regulatory Improvement Act of 1994 (12

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

23 ‘‘(a) REIMBURSEMENTS.—

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

25 participating States according to criteria established

26 by the Fund.
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1 ‘‘(2) EXAMPLES OF CRITERIA.—Criteria estab2 lished under paragraph (1) may include whether a

3 participating State is creating a new program, is ex4 panding in scope or scale an existing State program,

5 the need for Fund reimbursement, the availability of

6 Fund resources, and other criteria established by the

7 Fund.

8 ‘‘(3) TIMING AND AMOUNT OF REIMBURSE9 MENT.—Not later than 30 calendar days after re10 ceiving a report filed in compliance with section 256,

11 the Fund shall reimburse a participating State meet12 ing such criteria in an amount equal to up to 50

13 percent of the amount of contributions by the par14 ticipating State to the reserve funds that are subject

15 to reimbursement by the Fund pursuant to section

16 256 and this section, until such sums made available

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

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

19 Riegle Community Development and Regulatory Improve20 ment Act of 1994 (12 U.S.C. 4750) is hereby repealed.

21 SEC. 6. ADDITIONAL SAFEGUARDS.

22 (a) NEUTRAL REVIEW REQUIREMENTS.—Section

23 107 of the Community Development Banking and Finan24 cial Institutions Act of 1994 (12 U.S.C. 4706) is amended

25 by adding at the end the following new subsections:
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1 ‘‘(c) OBJECTIVE SCORING SYSTEM.—

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

3 any evaluation under subsection (a) of any applica4 tion, the Fund shall develop a scoring system which

5 assigns a relative point value to each factor required

6 to be considered under paragraphs (1) through (14)

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

8 applicants.

9 ‘‘(2) NOTICE OF SCORING SYSTEM.—A descrip10 tion of the scoring system shall be included in any

11 notice of funding availability issued by the Fund.

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

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

14 multiperson review panels to—

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

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

17 required to be considered under paragraphs (1)

18 through (14) of subsection (a) using the objec19 tive scoring system developed pursuant to sub20 section (c) before any selection is made by the

21 Fund under subsection (a) with respect to such

22 applications; and

23 ‘‘(B) make recommendations with regard

24 to such selections to the Fund on the basis of

25 such review.
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1 ‘‘(2) COMPOSITION.—The multiperson review

2 panels shall each consist of such number of members

3 as the Fund determines to be appropriate, but not

4 less than 3, who shall be appointed from among in5 dividuals who, by virtue of their education, training,

6 or experience, are specially qualified to carry out the

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

8 members of each panel shall be appointed from

9 among individuals with diverse experiences who are

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

11 (b) ADDITIONAL INFORMATION TO BE INCLUDED IN

12 ANNUAL REPORTS.—Section 117 of the Community De13 velopment Banking and Financial Institutions Act of 1994

14 (12 U.S.C. 4716) is amended by adding at the end the

15 following new subsections:

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

17 The annual report submitted to the Congress by the Fund

18 pursuant to subsection (a) shall contain the following in19 formation:

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

21 on the use of contractors to carry out any function

22 of the Fund under this subtitle, including—

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

24 by contractors under this subtitle during the

25 period covered by the report;
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1 ‘‘(B) a description of the procurement

2 process utilized to obtain such services;

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

4 to contract for the services so obtained; and

5 ‘‘(D) the total amount obligated by the

6 Fund for such contracts.

7 ‘‘(2) COMPLIANCE WITH OTHER REQUIRE8 MENTS.—An evaluation of the extent to which the

9 Fund is maintaining compliance, in connection with

10 the activities of the Fund under this subtitle and

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

12 regulations prescribed pursuant to subsections (b)

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

14 Code.

15 ‘‘(3) PLAN FOR ADDRESSING WEAKNESSES OF

16 INTERNAL CONTROLS.—A plan for addressing any

17 material weakness in internal controls identified in

18 the most recent external audit pursuant to sub19 section (f).’’.

20 (c) REPORT ON IMPLEMENTATION OF SCORING SYS21 TEM.—The 1st annual report submitted by the Fund to

22 the Congress under section 117(a) of the Community De23 velopment Banking and Financial Institutions Act of 1994

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

25 description of the implementation of the scoring system
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1 required under subsection (c) of the amendment made by

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

3 the methodology of the system.

4 (d) GAO REPORT.—Before the end of the 18-month

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

6 the Comptroller General of the United States shall submit

7 a report to the Congress evaluating the structure, govern8 ance, and performance of the Community Development Fi9 nancial Institutions Fund.

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

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

12 Small Business Act are being met, and preventing eva13 sions of such requirements, with regard to contracts in14 volving the Fund and contractors under such section, the

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

16 Congress at least 15 days before any performance is due

17 under such contract.

18 (f) TECHNICAL AND CONFORMING AMENDMENT.—

19 That portion of section 107(a) of the Community Develop20 ment Banking and Financial Institutions Act of 1994 (12

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

22 such section is amended to read as follows:

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

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

25 of the scoring system developed under subsection (c) and
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1 the recommendations of the multiperson review panels

2 under subsection (d), select community development finan3 cial institution applicants meeting the requirements of sec4 tion 105 for assistance based on—’’.