I

104TH CONGRESS

1ST SESSION H. R. 494

To authorize the Secretary of Housing and Urban Development to carry

out a demonstration program to make grants to community development

corporations for reducing interest rates on loans for economic development activities in 5 federally designated enterprise communities.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 11, 1995

Mr. TRAFICANT introduced the following bill; which was referred to the

Committee on Banking and Financial Services

A BILL

To authorize the Secretary of Housing and Urban Development to carry out a demonstration program to make

grants to community development corporations for reducing interest rates on loans for economic development

activities in 5 federally designated enterprise communities.

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 ‘‘Economic Development

5 Loan Assistance Demonstration Program Act of 1995’’.
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1 SEC. 2. ESTABLISHMENT AND SCOPE OF DEMONSTRATION

2 PROGRAM.

3 (a) ESTABLISHMENT.—The Secretary of Housing

4 and Urban Development shall carry out a program to

5 demonstrate the effectiveness of encouraging economic de6 velopment in enterprise communities by making grants to

7 community development corporations for reducing interest

8 rates on loans for economic development activities in the

9 enterprise communities.

10 (b) SELECTION OF ENTERPRISE COMMUNITIES.—

11 (1) NUMBER.—The Secretary shall carry out

12 the demonstration program under this Act with re13 spect to 5 enterprise communities, which the Sec14 retary shall select not later than the expiration of

15 the 30-day period beginning on the date of the en16 actment of this Act.

17 (2) DIVERSITY.—Of the enterprise communities

18 selected under this subsection, not less than 2 shall

19 be located in rural areas (as defined in section

20 1393(a) of the Internal Revenue Code of 1986) and

21 not less than 2 shall be located in metropolitan sta22 tistical areas (within the meaning of section

23 143(k)(2)(B) of such Code). In selecting the enter24 prise communities, the Secretary shall provide for

25 national geographic diversity among enterprise com-
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1 munities participating in the demonstration pro2 gram.

3 SEC. 3. GRANTS FOR ECONOMIC DEVELOPMENT LOAN AS4 SISTANCE.

5 (a) AUTHORITY.—Under the demonstration program

6 under this Act, the Secretary may make grants to any

7 community development corporation sponsored by a bank

8 or thrift institution, by a nonbank economic development

9 corporation, or by residents of an enterprise community

10 selected under section 2(b).

11 (b) USE.—Each community development corporation

12 receiving a grant under the demonstration program under

13 this Act shall use the grant amounts to assist businesses

14 and nonprofit organizations by reducing interest rates on

15 loans for economic development activities carried out in

16 an enterprise community selected under section 2(b).

17 (c) OTHER REQUIREMENTS.—The Secretary shall re18 quire each community development corporation receiving

19 a grant under the demonstration program under this Act

20 to—

21 (1) use the grant amounts to reduce the inter22 est rate on a loan described in subsection (b) by an

23 amount not to exceed 60 percent of the market rate

24 of interest on such loan; and
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1 (2) take any actions necessary to inform busi2 nesses and nonprofit organizations of the availability

3 of such loans, including holding informational meet4 ings, making public announcements, and placing no5 tices in newspapers and other publications.

6 SEC. 4. MONITORING.

7 The Secretary shall monitor the use of grants made

8 under this Act and the costs of administering such grants.

9 SEC. 5. REPORTS AND STUDY.

10 (a) ANNUAL REPORT.—The Secretary shall submit

11 to the Congress, not later than 1 year after the date that

12 amounts to carry out this Act are first made available

13 under appropriations Acts and for each year thereafter in

14 which amounts are available to carry out the demonstra15 tion program, a report containing an evaluation of the

16 effectiveness of grants made under the demonstration

17 program.

18 (b) STUDY AND REPORT ON EXPANDED PROGRAM.—

19 (1) STUDY.—The Secretary shall conduct a

20 study regarding the effects and costs of carrying out

21 a long-term and expanded program of making grants

22 for the purposes under this Act. The study shall de23 termine the need for such grants and the amount of

24 funds necessary to carry out an effective program of

25 national scope.
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1 (2) REPORT.—The Secretary shall submit to

2 the Congress, not later than September 30, 1998, a

3 report regarding the results of the study under para4 graph (1) and any recommendations for carrying out

5 a program as described in paragraph (1).

6 SEC. 6. DEFINITIONS.

7 For the purposes of this Act:

8 (1) ECONOMIC DEVELOPMENT ACTIVITIES.—

9 The term ‘‘economic development activities’’ means

10 the construction and rehabilitation of housing, down11 town and neighborhood commercial revitalization, in12 dustrial development and redevelopment, small and

13 minority business assistance, neighborhood market14 ing, training, and technical assistance, research and

15 planning for nonprofit development groups, and

16 other activities which create permanent private sec17 tor jobs.

18 (2) ENTERPRISE COMMUNITY.—The term ‘‘en19 terprise community’’ means an area that is des20 ignated as an enterprise community under section

21 1391 of the Internal Revenue Code of 1986.

22 (3) SECRETARY.—The term ‘‘Secretary’’ means

23 the Secretary of Housing and Urban Development.
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1 SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

2 There is authorized to be appropriated to carry out

3 this Act in fiscal years 1996, 1997, and 1998 a total of

4 $100,000,000.

5 SEC. 8. REGULATIONS.

6 The Secretary may issue any regulations necessary

7 to carry out this Act.

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