I

103D CONGRESS

1ST SESSION H. R. 1003

To amend title I of the Housing and Community Development Act of 1974

to establish an economic development block grant program.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 18, 1993

Mr. SHAYS (for himself and Mr. MFUME) introduced the following bill; which

was referred to the Committee on Banking, Finance and Urban Affairs

A BILL

To amend title I of the Housing and Community Development Act of 1974 to establish an economic development

block grant program.

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 ‘‘Targeted Economic

5 Development Block Grant Program Act of 1993’’.

6 SEC. 2. ESTABLISHMENT OF TARGETED ECONOMIC DEVEL7 OPMENT BLOCK GRANT PROGRAM.

8 Title I of the Housing and Community Development

9 Act of 1974 (42 U.S.C. 5301 et seq.) is amended by add10 ing at the end the following new section:
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1 ‘‘SEC. 122. TARGETED ECONOMIC DEVELOPMENT BLOCK

2 GRANT PROGRAM.

3 ‘‘(a) ALLOCATION.—

4 ‘‘(1) IN GENERAL.—From amounts appro5 priated under subsection (g), the Secretary of Hous6 ing and Urban Development shall allocate to each

7 qualified city for a fiscal year the amount deter8 mined in accordance with the following formula:

A +

X

,

U

9 ‘‘(2) DETERMINATION OF ELIGIBILITY.—A city

10 is a qualified city if such city—

11 ‘‘(A) is a metropolitan city;

12 ‘‘(B) is, for any fiscal year, eligible to re13 ceive an allocation of funds under section

14 106(a)(3); and

15 ‘‘(C) has a need adjusted per capita in16 come factor (as determined under paragraph

17 (7)) is equal to or less than 0.55.

18 ‘‘(3) DETERMINATION OF TERM ‘A’.—For pur19 poses of paragraph (1), the term ‘A’ means the

20 amount appropriated under subsection (g) for the

21 fiscal year involved.

22 ‘‘(4) DETERMINATION OF TERM ‘U’.—For pur23 poses of paragraph (1), the term ‘U’ means the sum
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1 of the respective terms ‘X’ determined for the cities

2 under paragraph (5).

3 ‘‘(5) DETERMINATION OF TERM ‘X’.—For pur4 poses of paragraph (1), the term ‘X’ means the

5 product of—

6 ‘‘(A) the total population of the city in7 volved, as determined by the Secretary using

8 the most recent data that is available from the

9 Secretary of Commerce pursuant to the decen10 nial census and pursuant to reasonable esti11 mates by such Secretary of changes occurring

12 in the data in the ensuing period;

13 ‘‘(B) the need index of such city, as deter14 mined under paragraph (6); and

15 ‘‘(C) the need adjusted per capita income

16 factor of such city, as determined under para17 graph (7).

18 ‘‘(6) DETERMINATION OF NEED INDEX.—

19 ‘‘(A) For purposes of paragraph (5)(B),

20 the term ‘need index’ means the number equal

21 to the quotient of—

22 ‘‘(i) the term ‘N’, as determined

23 under subparagraph (B); divided by

24 ‘‘(ii) the term ‘P’, as determined

25 under subparagraph (C).
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1 ‘‘(B) For purposes of subparagraph (A)(i),

2 the term ‘N’ means the percentage constituted

3 by the ratio of—

4 ‘‘(i) the amount of funds allocated to

5 the city in the current fiscal year under

6 section 106(a)(3); to

7 ‘‘(ii) the sum of the amount of funds

8 received by all eligible cities in the current

9 fiscal year under section 106(a)(3).

10 ‘‘(C) For purposes of subparagraph (A)(ii),

11 the term ‘P’ means the percentage constituted

12 by the ratio of—

13 ‘‘(i) the amount equal to the total

14 population of the city, as determined by

15 the Secretary using the most recent data

16 that is available from the Secretary of

17 Commerce pursuant to the decennial cen18 sus and pursuant to reasonable estimates

19 by such Secretary of changes occurring in

20 the data in the ensuing period; to

21 ‘‘(ii) the amount equal to the total

22 population of all eligible cities in the cur23 rent fiscal year.

24 ‘‘(D) For purposes of this paragraph, the

25 term ‘eligible cities’ means those cities which
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1 meet the requirements of subparagraphs (A)

2 and (B) of paragraph (2).

3 ‘‘(7) DETERMINATION OF NEED ADJUSTED PER

4 CAPITA INCOME FACTOR.—

5 ‘‘(A) For purposes of paragraphs (2)(C)

6 and (5)(C) (and subject to subparagraph (D)),

7 the term ‘need adjusted per capita income fac8 tor’ means the amount equal to the percentage

9 determined for the city in accordance with the

10 following formula:

1¥.15 +

I , Q

11 ‘‘(B) For purposes of subparagraph (A),

12 the term ‘I’ means the per capita income of the

13 city for the most recent year for which data is

14 available, as determined by the Secretary of

15 Commerce.

16 ‘‘(C) For purposes of subparagraph (A),

17 the term ‘Q’ means the product of—

18 ‘‘(i) the need index of such city, as de19 termined under paragraph (6); and

20 ‘‘(ii) the amount equal to the per cap21 ita income of the United States for the

22 most recent year for which data is avail-
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1 able, as determined by the Secretary of

2 Commerce.

3 ‘‘(D) In the case of a city for which the

4 quotient of the term ‘I’ (as determined under

5 subparagraph (B)) divided by the term ‘Q’ (as

6 determined under subparagraph (C)) is less

7 than 0.2, then such quotient shall be deemed to

8 be equal to 0.2 for such city for purposes of the

9 formula under subparagraph (A).

10 ‘‘(b) APPLICATION.—

11 ‘‘(1) IN GENERAL.—The Secretary may not

12 make a grant under subsection (a) in a fiscal year

13 to a city unless the city submits to the Secretary an

14 application in such form and containing such infor15 mation as the Secretary may require, including the

16 certifications required under paragraph (2).

17 ‘‘(2) CERTIFICATIONS.—Each application shall

18 include certifications by the chief executive official of

19 the city and the Governor of the State in which the

20 city is located that—

21 ‘‘(A) the city will use amounts from a

22 grant received under subsection (a) only for the

23 purpose of carrying out the eligible activities

24 under subsection (e) and will not use amounts
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1 from such grant for any of the prohibited ac2 tivities under subsection (f);

3 ‘‘(B) the city will provide matching

4 amounts in accordance with the formula in sub5 section (c) for the purpose of carrying out such

6 eligible activities;

7 ‘‘(C) the State in which the city is located

8 will provide matching amounts to the city in ac9 cordance with the formula in subsection (d) for

10 the purpose of carrying out such eligible activi11 ties;

12 ‘‘(D) the city will maintain all amounts re13 ceived from a grant under subsection (a) and

14 all matching amounts described in subpara15 graphs (B) and (C) in an account separate

16 from the account in which the general funds of

17 the city are maintained;

18 ‘‘(E) both the city and the State will main19 tain their aggregate expenditures from all other

20 sources for such eligible activities at or above

21 the average level of such expenditures in the 2

22 fiscal years preceding the date on which the city

23 receives amounts from a grant under subsection

24 (a);
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1 ‘‘(F) the city will reserve not less than 5

2 percent of amounts received from a grant under

3 subsection (a) to enter into contracts with mi4 nority-owned businesses for the purpose of car5 rying out such eligible activities; and

6 ‘‘(G) not later than 180 days after the

7 date on which the city receives amounts from a

8 grant under subsection (a), the city will submit

9 to the Secretary a report containing a descrip10 tion of the use of amounts received from a

11 grant under subsection (a) and an evaluation of

12 the effectiveness of the grant program in the

13 city, including the extent to which the taxable

14 value of the local property tax base and related

15 revenue sources allocated to the city’s general

16 fund have been increased.

17 ‘‘(3) NOTIFICATION OF DISAPPROVAL.—

18 ‘‘(A) IN GENERAL.—The Secretary shall

19 provide notification to a city of a proposed dis20 approval of such city’s application not later

21 than 20 days after the date on which the Sec22 retary receives such application under para23 graph (1).

24 ‘‘(B) APPEAL.—A city may appeal the pro25 posed disapproval of an application under sub-
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1 paragraph (A). Such appeal, including review

2 by the Secretary, shall be completed not later

3 than 45 days after the date on which the city

4 provides notice to the Secretary of such appeal.

5 ‘‘(c) CITY MATCHING FUNDS.—

6 ‘‘(1) IN GENERAL.—Subject to paragraph (3),

7 each city receiving amounts from a grant under sub8 section (a) shall provide amounts for each dollar al9 located under such subsection at a rate in accord10 ance with the following formula:

.15 )

I

*

Q

————————

1¥.15 )

I

*

Q

11 ‘‘(2) DETERMINATION OF TERMS ‘I’ AND ‘Q’.—

12 For purposes of paragraph (1) (and subject to sub13 section (a)(7)(D)), the quotient of the term ‘I’ di14 vided by the term ‘Q’ is equal to the term ‘I’ deter15 mined under subsection (a)(7)(B) divided by the

16 term ‘Q’ determined under subsection (a)(7)(C).

17 ‘‘(3) SPECIAL RULE.—

18 ‘‘(A) In the case of a city for which the

19 rate determined under paragraph (1) is less

20 than 5 cents per dollar of amounts allocated

21 under subsection (a), then such rate shall be

22 deemed to be equal to 5 cents per dollar.
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1 ‘‘(B) In the case of a city for which the

2 rate determined under paragraph (1) is more

3 than 25 cents per dollar of amounts allocated

4 under subsection (a), then such rate shall be

5 deemed to be equal to 25 cents per dollar.

6 ‘‘(d) STATE MATCHING FUNDS.—

7 ‘‘(1) IN GENERAL.—Each State in which a city

8 receiving amounts from a grant under subsection (a)

9 is located shall provide amounts for each dollar allo10 cated under subsection (a) at a rate in accordance

11 with the following formula:

.15(R)

1¥.15(R)

12 ‘‘(2) DETERMINATION OF TERM ‘R’.—For pur13 poses of paragraph (1) (and subject to paragraph

14 (5)), the term ‘R’ (referred to as the ‘State resource

15 index’) means the number equal to the quotient of—

16 ‘‘(A) the term ‘F’, as determined under

17 paragraph (3); divided by

18 ‘‘(B) the term ‘V’, as determined under

19 paragraph (4).

20 ‘‘(3) DETERMINATION OF TERM ‘F’.—

21 ‘‘(A) For purposes of paragraph (2)(A),

22 the term ‘F’ means the amount equal to the
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1 amount determined in accordance with the fol2 lowing formula:

Y

G

3 ‘‘(B) For purposes of subparagraph (A),

4 the term ‘G’ means the sum of the respective

5 terms ‘Y’ determined for the States under sub6 paragraph (C).

7 ‘‘(C) For purposes of subparagraph (A),

8 the term ‘Y’ means the amount equal to the

9 quotient of—

10 ‘‘(i) an amount equal to the most re11 cent 3-year average of the total taxable re12 sources of the State, as determined by the

13 Secretary of the Treasury; divided by

14 ‘‘(ii) the State cost index, as deter15 mined for such State under subparagraph

16 (D).

17 ‘‘(D) For purposes of subparagraph

18 (C)(ii), the term ‘State cost index’ means the

19 number equal to the number determined in ac20 cordance with the following formula:

.5 + .5(W)

21 ‘‘(E) For purposes of subparagraph (D),

22 the term ‘W’ (referred to as the ‘State wage
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1 index’) means the amount equal to the quotient

2 of—

3 ‘‘(i) an amount equal to the most re4 cent 3-year average of the annual private

5 industry wages per employee of the State,

6 as determined by the Secretary of Labor;

7 divided by

8 ‘‘(ii) an amount equal to the most re9 cent 3-year average of the annual private

10 industry wages per employee for the Unit11 ed States, as determined by the Secretary

12 of Labor.

13 ‘‘(4) DETERMINATION OF TERM ‘V’.—For pur14 poses of paragraph (2)(B), the term ‘V’ means the

15 amount equal to the quotient of—

16 ‘‘(A) the term ‘Z’, which is equal to the

17 total population of the State, as determined by

18 the Secretary using the most recent data that

19 is available from the Secretary of Commerce

20 pursuant to the decennial census and pursuant

21 to reasonable estimates by such Secretary of

22 changes occurring in the data in the ensuing

23 period; divided by
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1 ‘‘(B) an amount equal to the sum of the

2 respective terms ‘Z’ determined for each of the

3 States under subparagraph (A).

4 ‘‘(5) SPECIAL RULE.—In the case of a State for

5 which the rate determined under paragraph 1 is

6 more than 25¢ per dollar of amounts allocated under

7 subsection (a), then such rate shall be deemed to be

8 equal to 25¢ per dollar.

9 ‘‘(e) ELIGIBLE ACTIVITIES.—A city shall use

10 amounts from a grant under subsection (a) only to—

11 ‘‘(1) provide financial incentives for business

12 creation, retention, and expansion in such city;

13 ‘‘(2) provide technical assistance to individuals

14 seeking to establish small businesses in such city;

15 and

16 ‘‘(3) make improvements to the infrastructure

17 of such city, including—

18 ‘‘(A) land clearing activities;

19 ‘‘(B) the establishment of access roads,

20 parking lots, and industrial parks;

21 ‘‘(C) assistance to demolish or renovate

22 abandoned buildings;

23 ‘‘(D) improvements to sewage treatment

24 plants; and
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1 ‘‘(E) environmental cleanup of contami2 nated sites with significant potential for eco3 nomic development for commercial, residential,

4 industrial, or recreational purposes.

5 ‘‘(f) PROHIBITED ACTIVITIES.—A city may not use

6 amounts from a grant under subsection (a) to—

7 ‘‘(1) provide loans of any kind;

8 ‘‘(2) provide compensation to a city employee;

9 ‘‘(3) pay interest on a debt incurred by the city;

10 ‘‘(4) establish, promote, or retain a gambling

11 activity;

12 ‘‘(5) repair, maintain, or construct residential

13 housing;

14 ‘‘(6) provide transportation, meals, accommoda15 tions, petty cash, personal items, and entertainment

16 expenses to any individual; and

17 ‘‘(7) provide for any other activity incompatible

18 with the grant program established under this sec19 tion, as determined by the Secretary.

20 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There

21 are authorized to be appropriated $2,500,000,000 for fis22 cal year 1994, $4,000,000,000 for fiscal year 1995, and

23 $5,000,000,000 for each of the fiscal years 1996 through

24 1998, for the purpose of making allocations to eligible

25 cities under subsection (a).’’.
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