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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 244 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 244

 To stimulate enterprise development in economically distressed urban 
and rural areas through public and private partnerships facilitated by 
      community development corporations, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

             January 27 (legislative day, January 5), 1993

 Mr. Kennedy (for himself, Mr. Jeffords, Mr. Dodd, Mr. Metzenbaum, Mr. 
DeConcini, Mr. Simon, Mr. Harkin, Mr. Kerry, Mr. Bradley, Mr. Kohl, Mr. 
    Inouye, Mr. Wellstone, Ms. Mikulski, Mr. Pell, and Mr. McCain), 
introduced the following bill; which was read twice and referred to the 
                 Committee on Labor and Human Resources

_______________________________________________________________________

                                 A BILL

 
 To stimulate enterprise development in economically distressed urban 
and rural areas through public and private partnerships facilitated by 
      community development corporations, and for other purposes.

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

SECTION 1. SHORT TITLE; FINDINGS AND PURPOSE.

    (a) Short Title.--This Act may be cited as the ``National Community 
Economic Partnership Act of 1993''.
    (b) Findings.--Congress finds that--
            (1) the cities, towns, small communities and rural areas 
        throughout the United States face critical social and economic 
        problems arising in part from a lack of economic growth in 
        community based economies;
            (2) the crisis facing local economies has resulted in--
                    (A) a growing percentage of the workforce earning 
                poverty level wages, even though they work full time 
                and year round;
                    (B) the percentage of the labor force living below 
                the poverty line increasing from 25.7 percent in 1979 
                to 31.5 percent in 1987;
                    (C) population losses, rising unemployment and a 
                decline of the farm sector and of many other rural 
                industries (such as timber, oil, gas, and mining) 
                contribute to the decline of rural economies;
                    (D) with respect to rural areas, 31.9 percent of 
                the workforce falling below the poverty line in 1979, 
                with that percentage rising to 42.1 percent in 1987;
                    (E) with respect to urban areas, 23.4 percent of 
                the workforce falling below the poverty line in 1979, 
                with that percentage rising to 28.9 percent in 1987; 
                and
                    (F) the average wage and salary income of the 90 
                percent of the population with the lowest incomes, 
                between 1977 and 1988, falling 3.5 percent in contrast 
                to the richest 1 percent of the population whose 
                incomes more than doubled in that time period.
            (3) the future well-being of the United States and the 
        well-being of its citizens depends on the establishment and 
        maintenance of viable community development enterprises;
            (4) meeting the goal of establishing and maintaining viable 
        community development enterprises requires--
                    (A) increased public and private investment in 
                business development activities, especially in the 
                small business sector which generates the majority of 
                new jobs as evidenced by the fact that between 1980 and 
                1986, enterprises with less than 100 employees 
                accounted for more than 50 percent of the jobs created 
                in the United States;
                    (B) increased investment and technical assistance 
                to existing community based enterprises as evidenced by 
                the fact that during the first half of the 1980's, more 
                than 75 percent of the total net new jobs in the United 
                States came from the expansion of existing businesses;
                    (C) a substantial expansion and greater continuity 
                in the scope of Federal programs that support community 
                based economic development strategies;
                    (D) the continuing efforts at Federal, State and 
                local levels to coordinate the planning, implementation 
                and evaluation of community economic development 
                efforts; and
            (5) community development corporations, due to their proven 
        capacity and achievements in both the field of community based 
        housing and economic development, are appropriate vehicles 
        through which to advance a national community economic 
        development program because--
                    (A) there are currently over 2000 community 
                development corporations throughout the United States, 
                operating projects that promote community based housing 
                and economic development;
                    (B) community development corporations operate in 
                every State and in virtually every major city in the 
                United States, and account for many of the existing 
                efforts undertaken to meet the needs of low income 
                persons in both urban and rural communities;
                    (C) community development corporations have 
                developed some 300,000 units of housing, with over 90 
                percent of these units for use by low income occupants;
                    (D) community development corporations have 
                developed over 19,000,000 square feet of retail space, 
                offices, industrial parks and other industrial 
                developments in economically distressed communities;
                    (E) community development corporations have made 
                loans to over 3000 enterprises, equity investments in 
                242 ventures and own and operate 427 businesses; and
                    (F) community development corporations commercial, 
                industrial and business enterprise development 
                activities have accounted for the creation and 
                retention of nearly 90,000 jobs in the last five years.
    (c) Purpose.--It is the purpose of this Act to stimulate enterprise 
development in economically distressed urban and rural areas through 
public and private partnerships facilitated by community development 
corporations.

        TITLE I--COMMUNITY ECONOMIC PARTNERSHIP INVESTMENT FUNDS

SEC. 101. PURPOSE.

    It is the purpose of this title to increase private investment in 
distressed local communities and to build and expand the capacity of 
local institutions to better serve the economic needs of local 
residents through the provision of financial and technical assistance 
to community development corporations.

SEC. 102. PROVISION OF ASSISTANCE.

    (a) Authority.--The Secretary of Health and Human Services 
(hereafter referred to in this Act as the ``Secretary'') is authorized, 
in accordance with this title, to provide nonrefundable lines of credit 
to community development corporations for the establishment, 
maintenance or expansion of revolving loan funds to be utilized to 
finance projects intended to provide business and employment 
opportunities for low-income, unemployed, or underemployed individuals 
and to improve the quality of life in urban and rural areas.
    (b) Revolving Loan Funds.--
            (1) Competitive assessment of applications.--In providing 
        assistance under subsection (a), the Secretary shall establish 
        and implement a competitive process for the solicitation and 
        consideration of applications from eligible entities for lines 
        of credit for the capitalization of revolving funds.
            (2) Eligible entities.--To be eligible to receive a line of 
        credit under this title an applicant shall--
                    (A) be a community development corporation;
                    (B) prepare and submit an application to the 
                Secretary that shall include a strategic investment 
                plan that identifies and describes the economic 
                characteristics of the target area to be served, the 
                types of business to be assisted and the impact of such 
                assistance on low-income, underemployed, and unemployed 
                individuals in the target area;
                    (C) demonstrate previous experience in the 
                development of low-income housing or community or 
                business development projects in a low-income community 
                and provide a record of achievement with respect to 
                such projects; and
                    (D) have secured one or more commitments from local 
                sources for contributions (either in cash or in kind, 
                letters of credit or letters of commitment) in an 
                amount that is at least equal to the amount requested 
                in the application submitted under subparagraph (B).
            (3) Exception.--Notwithstanding the provisions of paragraph 
        (2)(D), the Secretary may reduce local contributions to not 
        less than 25 percent of the amount of the line of credit 
        requested by the community development corporation if the 
        Secretary determines such to be appropriate in accordance with 
        section 106.

SEC. 103. APPROVAL OF APPLICATIONS.

    (a) In General.--In evaluating applications submitted under section 
102(b)(2)(B), the Secretary shall ensure that--
            (1) the residents of the target area to be served (as 
        identified under the strategic development plan) would have an 
        income that is less than the median income for the area (as 
        determined by the Secretary);
            (2) the applicant community development corporation 
        possesses the technical and managerial capability necessary to 
        administer a revolving loan fund and has past experience in the 
        development and management of housing, community and economic 
        development programs;
            (3) the applicant community development corporation has 
        provided sufficient evidence of the existence of good working 
        relationships with--
                    (A) local businesses and financial institutions, as 
                well as with the community the corporation proposes to 
                serve; and
                    (B) local and regional job training programs;
            (4) the applicant community development corporation will 
        target job opportunities that arise from revolving loan fund 
        investments under this title so that 75 percent of the jobs 
        retained or created under such investments are provided to--
                    (A) individuals with--
                            (i) incomes that do not exceed the Federal 
                        poverty line; or
                            (ii) incomes that do not exceed 80 percent 
                        of the median income of the area;
                    (B) individuals who are unemployed or 
                underemployed;
                    (C) individuals who are participating or have 
                participated in job training programs authorized under 
                the Job Training Partnership Act (29 U.S.C. 1501 et 
                seq.) or the Family Support Act of 1988 (Public Law 
                100-485);
                    (D) individuals whose jobs may be retained as a 
                result of the provision of financing available under 
                this title; or
                    (E) individuals who have historically been 
                underrepresented in the local economy; and
            (5) a representative cross section of applicants are 
        approved, including large and small community development 
        corporations, urban and rural community development 
        corporations and community development corporations 
        representing diverse populations.
    (b) Priority.--In determining which application to approve under 
this title the Secretary shall give priority to those applicants 
proposing to serve a target area--
            (1) with a median income that does not exceed 80 percent of 
        the median for the area (as determined by the Secretary); and
            (2) with a high rate of unemployment, as determined by the 
        Secretary or in which the population loss is at least 7 percent 
        from April 1, 1980, to April 1, 1990, as reported by the Bureau 
        of the Census.

SEC. 104. AVAILABILITY OF LINES OF CREDIT AND USE.

    (a) Approval of Application.--The Secretary shall provide a 
community development corporation that has an application approved 
under section 103 with a line of credit in an amount determined 
appropriate by the Secretary, subject to the limitations contained in 
subsection (b).
    (b) Limitations on Availability of Amounts.--
            (1) Maximum amount.--The Secretary shall not provide in 
        excess of $2,000,000 in lines of credit under this title to a 
        single applicant.
            (2) Period of availability.--A line of credit provided 
        under this title shall remain available over a period of time 
        established by the Secretary, but in no event shall any such 
        period of time be in excess of 3 years from the date on which 
        such line of credit is made available.
            (3) Exception.--Notwithstanding paragraphs (1) and (2), if 
        a recipient of a line of credit under this title has made full 
        and productive use of such line of credit, can demonstrate the 
        need and demand for additional assistance, and can meet the 
        requirements of section 102(b)(2), the amount of such line of 
        credit may be increased by not more than $1,500,000.
    (c) Amounts Drawn From Line of Credit.--Amounts drawn from each 
line of credit under this title shall be used solely for the purposes 
described in section 101 and shall only be drawn down as needed to 
provide loans, investments, or to defray administrative costs related 
to the establishment of a revolving loan fund.
    (d) Use of Revolving Loan Funds.--Revolving loan funds established 
with lines of credit provided under this title may be used to provide 
technical assistance to private business enterprises and to provide 
financial assistance in the form of loans, loan guarantees, interest 
reduction assistance, equity shares, and other such forms of assistance 
to business enterprises in target areas and who are in compliance with 
section 103(a)(4).

SEC. 105. LIMITATIONS ON USE OF FUNDS.

    (a) Matching Requirement.--Not to exceed 50 percent of the total 
amount to be invested by an entity under this title may be derived from 
funds made available from a line of credit under this title.
    (b) Technical Assistance and Administration.--Not to exceed 10 
percent of the amounts available from a line of credit under this title 
shall be used for the provision of training or technical assistance and 
for the planning, development, and management of economic development 
projects. Community development corporations shall be encouraged by the 
Secretary to seek technical assistance from other community development 
corporations, with expertise in the planning, development and 
management of economic development projects. The Secretary shall assist 
in the identification and facilitation of such technical assistance.
    (c) Local and Private Sector Contributions.--To receive funds 
available under a line of credit provided under this title, an entity, 
using procedures established by the Secretary, shall demonstrate to the 
community development corporation that such entity agrees to provide 
local and private sector contributions in accordance with section 
102(b)(2)(D), will participate with such community development 
corporation in a loan, guarantee or investment program for a designated 
business enterprise, and that the total financial commitment to be 
provided by such entity is at least equal to the amount to be drawn 
from the line of credit.
    (d) Use of Proceeds From Investments.--Proceeds derived from 
investments made using funds made available under this title may be 
used only for the purposes described in section 101 and shall be 
reinvested in the community in which they were generated.

SEC. 106. PROGRAM PRIORITY FOR SPECIAL EMPHASIS PROGRAMS.

    (a) In General.--The Secretary shall give priority in providing 
lines of credit under this title to community development corporations 
that propose to undertake economic development activities in distressed 
communities that target women, Native Americans, at risk youth, 
farmworkers, population-losing communities, very low-income 
communities, single mothers, veterans, and refugees; or that expand 
employee ownership of private enterprises and small businesses, and to 
programs providing loans of not more than $35,000 to very small 
business enterprises.
    (b) Reservation of Funds.--Not less than 5 percent of the amounts 
made available under section 403(a)(2)(A) may be reserved to carry out 
the activities described in subsection (a).

         TITLE II--EMERGING COMMUNITY DEVELOPMENT CORPORATIONS

SEC. 201. COMMUNITY DEVELOPMENT CORPORATION IMPROVEMENT GRANTS.

    (a) Purpose.--It is the purpose of this section to provide 
assistance to community development corporations to upgrade the 
management and operating capacity of such corporations and to enhance 
the resources available to enable such corporations to increase their 
community economic development activities.
    (b) Skill Enhancement Grants.--
            (1) In general.--The Secretary shall award grants to 
        community development corporations to enable such corporations 
        to attain or enhance the business management and development 
        skills of the individuals that manage such corporations to 
        enable such corporations to seek the public and private 
        resources necessary to develop community economic development 
        projects.
            (2) Use of funds.--A recipient of a grant under paragraph 
        (1) may use amounts received under such grant--
                    (A) to acquire training and technical assistance 
                from agencies or institutions that have extensive 
                experience in the development and management of low-
                income community economic development projects; or
                    (B) to acquire such assistance from other highly 
                successful community development corporations.
    (c) Operating Grants.--
            (1) In general.--The Secretary shall award grants to 
        community development corporations to enable such corporations 
        to support an administrative capacity for the planning, 
        development, and management of low-income community economic 
        development projects.
            (2) Use of funds.--A recipient of a grant under paragraph 
        (1) may use amounts received under such grant--
                    (A) to conduct evaluations of the feasibility of 
                potential low-income community economic development 
                projects that address identified needs in the low-
                income community and that conform to those projects and 
                activities permitted under title I;
                    (B) to develop a business plan related to such a 
                potential project; or
                    (C) to mobilize resources to be contributed to a 
                planned low-income community economic development 
                project or strategy.
    (d) Applications.--A community development corporation that desires 
to receive a grant under this section shall prepare and submit to the 
Secretary an application at such time, in such manner, and containing 
such information as the Secretary may require.
    (e) Amount Available for a Community Development Corporation.--
Amounts provided under this section to a community development 
corporation shall not exceed $75,000 per year. Such corporations may 
apply for grants under this section for up to 3 consecutive years, 
except that such corporations shall be required to submit a new 
application for each grant for which such corporation desires to 
receive and compete on the basis of such applications in the selection 
process.

SEC. 202. EMERGING COMMUNITY DEVELOPMENT CORPORATION REVOLVING LOAN 
              FUNDS.

    (a) Authority.--The Secretary is authorized to award grants to 
emerging community development corporations to enable such corporations 
to establish, maintain or expand revolving loan funds, to make or 
guarantee loans, or to make capital investments in new or expanding 
local businesses.
    (b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity shall--
            (1) be a community development corporation;
            (2) have completed not less than one nor more than two 
        community economic development projects or related projects 
        that improve or provide job and employment opportunities to 
        low-income individuals;
            (3) prepare and submit to the Secretary an application at 
        such time, in such manner, and containing such information as 
        the Secretary may require, including a strategic investment 
        plan that identifies and describes the economic characteristics 
        of the target area to be served, the types of business to be 
        assisted using amounts received under the grant and the impact 
        of such assistance on low-income individuals; and
            (4) have secured one or more commitments from local sources 
        for contributions (either in cash or in kind, letters of 
        credit, or letters of commitment) in an amount that is equal to 
        at least 10 percent of the amounts requested in the application 
        submitted under paragraph (2).
    (c) Use of the Revolving Loan Fund.--
            (1) In general.--A revolving loan fund established or 
        maintained with amounts received under this section may be 
        utilized to provide financial and technical assistance, loans, 
        loan guarantees or investments to private business enterprises 
        to--
                    (A) finance projects intended to provide business 
                and employment opportunities for low-income individuals 
                and to improve the quality of life in urban and rural 
                areas; and
                    (B) build and expand the capacity of emerging 
                community development corporations and serve the 
                economic needs of local residents.
            (2) Technical assistance.--The Secretary shall encourage 
        emerging community development corporations that receive grants 
        under this section to seek technical assistance from 
        established community development corporations, with expertise 
        in the planning, development and management of economic 
        development projects and shall facilitate the receipt of such 
        assistance.
            (3) Limitation.--Not to exceed 10 percent of the amounts 
        received under this section by a grantee shall be used for 
        training, technical assistance and administrative purposes.
    (d) Use of Proceeds From Investments.--Proceeds derived from 
investments made with amounts provided under this section may be 
utilized only for the purposes described in this title and shall be 
reinvested in the community in which they were generated.
    (e) Amounts Available.--Amounts provided under this section to a 
community development corporation shall not exceed $500,000 per year.

                 TITLE III--RESEARCH AND DEMONSTRATION

SEC. 301. RESEARCH AND DEMONSTRATION.

    (a) Grants.--The Secretary shall award grants to organizations to 
enable such organizations to undertake programs involving research, 
testing, studies or demonstrations related to community economic 
development.
    (b) Eligible Organizations.--To be eligible to receive a grant 
under this section, an entity shall--
            (1) be a community development corporation, university, 
        fiscal intermediary or a nonprofit organization involved in 
        community-based economic development activities; and
            (2) prepare and submit to the Secretary an application at 
        such time, in such manner and containing such information as 
        the Secretary determines appropriate.
    (c) Use of Funds.--Amounts received under a grant awarded under 
this section shall be made available for studies, reports, tests or 
demonstration projects that--
            (1) identify current problems facing both urban and rural 
        low-income communities or specific population groups within 
        low-income communities and population-losing communities;
            (2) identify solutions to the problems facing both urban 
        and rural low-income communities or specific population groups 
        within low-income communities;
            (3) examine or critique current strategies being 
        implemented to address economic issues facing low-income 
        communities; and
            (4) relate to any other matters determined appropriate by 
        the Secretary.
    (d) Maximum Amount of Grant.--A grant awarded under this section 
shall not exceed $50,000.

                   TITLE IV--MISCELLANEOUS PROVISIONS

SEC. 401. JOINT PROGRAMS.

    The Secretary shall develop and promulgate, in consultation with 
the heads of other Federal agencies, regulations designed to permit, 
where appropriate, the operation of joint programs under which 
activities supported with assistance provided under this Act are 
coordinated with community development activities supported with 
assistance provided under other programs administered by the Secretary 
and those administered by the heads of such agencies.

SEC. 402. REPORTS.

    (a) Community Development Corporations.--Not later than 2 years 
after the date on which assistance is provided to a community 
development corporation under title I or II, every 2 years thereafter, 
the community development corporation shall prepare and submit to the 
Secretary a report under this section. Such report shall include--
            (1) the amount of funds received by the community 
        development corporation;
            (2) a summary of the uses of such funds;
            (3) the number of jobs created or retained by the 
        corporation;
            (4) the number and type of new businesses started, 
        including micro-businesses;
            (5) the number of jobs created or retained for individuals 
        identified in section 103(a)(4);
            (6) in the case of funds made available under title I, the 
        source and amount of matching funds;
            (7) in the case of revolving loan funds made available 
        under title II, the amount of funds leveraged; and
            (8) related human services and facilities provided as 
        result of assistance provided under this Act.
    (b) Secretary.--Not later than 3 years after the date on which 
assistance is first provided under title I or II, and annually 
thereafter, the Secretary shall prepare and submit to the Committee on 
Labor and Human Resources of the Senate and the Committee on Education 
and Labor of the House of Representatives a report containing a summary 
of the reports received by the Secretary under subsection (a) for the 
period in which the report of the Secretary is submitted.

SEC. 403. DEFINITIONS.

    As used in this Act:
            (1) Community development corporation.--The term 
        ``community development corporation'' means a private, 
        nonprofit corporation whose board of directors is comprised of 
        business, civic and community leaders, and whose principal 
        purpose includes the provision of low-income housing or 
        community economic development projects that primarily benefit 
        low-income individuals and communities.
            (2) Local and private sector contribution.--The term 
        ``local and private sector contribution'' means the funds 
        available at the local level (by private financial 
        institutions, State and local governments) or by any private 
        philanthropic organization and private, nonprofit organizations 
        that will be committed and used solely for the purpose of 
        financing private business enterprises in conjunction with 
        amounts provided under this Act.
            (3) Population-losing community.--The term ``population-
        losing community'' means any county in which the net population 
        loss is at least 7 percent from April 1, 1980 to April 1, 1990, 
        as reported by the Bureau of the Census.
            (4) Private business enterprise.--The term ``private 
        business enterprise'' means any business enterprise that is 
        engaged in the manufacture of a product, provision of a 
        service, construction or development of a facility, or that is 
        involved in some other commercial, manufacturing or industrial 
        activity, and that agrees to target job opportunities stemming 
        from investments authorized under this Act to certain 
        individuals.
            (5) Target area.--The term ``target area'' means any area 
        defined in an application for assistance under this Act that 
        has a population whose income does not exceed the median for 
        the area within which the target area is located.
            (6) Very low-income community.--The term ``very low-income 
        community'' means a community in which the median income of the 
        residents of such community does not exceed 50 percent of the 
        median income of the area.

SEC. 404. AUTHORIZATION OF APPROPRIATIONS.

    (a) Community Economic Partnership Investment Funds and Emerging 
Community Development Corporations.--
            (1) In general.--There are authorized to be appropriated to 
        carry out titles I and II, $40,000,000 for fiscal year 1994, 
        $100,000,000 for fiscal year 1995, and $125,000,000 for fiscal 
        year 1996.
            (2) Earmarks.--Of the aggregate amount appropriated under 
        paragraph (1) for each fiscal year--
                    (A) 60 percent shall be available to carry out 
                title I; and
                    (B) 40 percent shall be available to carry out 
                title II.
            (3) Amounts.--Amounts appropriated under paragraph (1) 
        shall remain available for expenditure without fiscal year 
        limitation.
    (b) Research and Demonstration.--There are authorized to be 
appropriated to carry out title III such sums as may be necessary for 
each of the fiscal years 1994 through 1996.

SEC. 405. PROHIBITION.

    None of the funds authorized under this Act shall be used to 
finance the construction of housing.

SEC. 406. EFFECTIVE DATE.

    This Act shall take effect as if included in the Omnibus Budget 
Reconciliation Act of 1990.

                                 <all>

S 244 IS----2
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