II 

108TH CONGRESS 

1ST SESSION S. 1711

To increase the expertise and capacity of community-based organizations 

involved in economic development activities and key community development programs. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 3, 2003

Mr. CORZINE introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL

To increase the expertise and capacity of community-based 

organizations involved in economic development activities 

and key community development programs.

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 ‘‘Community Economic 

5 Development Expertise Enhancement Act of 2003’’. 

6 SEC. 2. FINDINGS AND PURPOSES. 

7 (a) CONGRESSIONAL FINDINGS.—Congress finds 

8 that—
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1 (1) there are a multitude of community eco2 nomic development programs that the Federal Gov3 ernment successfully administers that help many of 

4 the Nation’s most economically distressed areas revi5 talize their physical and economic structures and 

6 provide support to small and medium-sized busi7 nesses to help them grow and generate long-term 

8 jobs and economic opportunity; 

9 (2) there are many nonprofit, nongovernmental, 

10 community-based economic development organiza11 tions that have successfully operated community eco12 nomic development programs that create jobs, build 

13 homes, and revitalize local markets; 

14 (3) existing Federal community economic devel15 opment programs are intended to leverage private 

16 sector investment as part of an overall community 

17 development effort; 

18 (4) existing Federal community economic devel19 opment programs connect residents of distressed 

20 neighborhoods to jobs and opportunities of the re21 gional marketplace, thereby replacing economic dis22 tress with opportunity; 

23 (5) existing Federal community economic devel24 opment programs provide financial assistance, in25 cluding tax credits and loan guarantees, involve pri-
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1 vate investment institutions and universities, and 

2 provide technical expertise for small businesses; 

3 (6) existing Federal community economic devel4 opment programs build upon ongoing efforts to en5 courage economic growth in distressed communities, 

6 helping to create new affordable housing opportuni7 ties, allowing communities to address important pub8 lic safety, access to capital, infrastructure, and envi9 ronmental concerns, and providing social services in10 cluding affordable health care, transportation, child 

11 care, and youth development; 

12 (7) the continuing success of Federal commu13 nity economic development programs will depend in 

14 great measure upon the ability of community-based 

15 organizations and private sector institutions to form 

16 partnerships that connect residents of distressed 

17 neighborhoods to jobs and other opportunities; 

18 (8) the Federal Government administers various 

19 programs that employ the services and capabilities 

20 of community-based organizations to deliver a wide 

21 range of services to residents of distressed commu22 nities; 

23 (9) Federal community economic development 

24 programs help achieve lasting improvement and en25 hance domestic prosperity by the establishment of 
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1 stable and diversified local economies, sustainable 

2 development, and improved local conditions; 

3 (10) there is a need for greater cooperation be4 tween the Federal Government, States, and other 

5 entities to ensure that, consistent with national com6 munity economic development objectives, Federal 

7 programs are compatible with, and further the objec8 tives of, State, regional, and local economic develop9 ment plans and comprehensive economic develop10 ment strategies; 

11 (11) while economic development is an inher12 ently local process, the Federal Government should 

13 work in closer partnership with community-based 

14 economic development organizations to ensure that 

15 existing resources are fully utilized and all Ameri16 cans have an opportunity to participate in the eco17 nomic growth of the United States; and 

18 (12) extending technical assistance to commu19 nity-based economic development organizations may 

20 be necessary or desirable to—

21 (A) alleviate economic distress; 

22 (B) encourage and support public-private 

23 partnerships for the formation and improve24 ment of economic development strategies that 

25 promote the growth of the national economy;
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1 (C) stimulate modernization and techno2 logical advances in the generation and commer3 cialization of goods and services; and 

4 (D) enhance the effectiveness of United 

5 States companies in the global economy. 

6 (b) PURPOSES.—The purposes of this Act are—

7 (1) to provide a new source of Federal funding 

8 to enhance the capabilities of nonprofit, nongovern9 mental, community-based economic development or10 ganizations, or collaborations of such organizations, 

11 to leverage private sector investment as part of an 

12 overall community development strategy; 

13 (2) to establish educational programs for non14 profit, nongovernmental, community-based organiza15 tions to expand their project development capabili16 ties; 

17 (3) to increase the use of tax incentives to le18 verage private sector investment in community eco19 nomic development projects; 

20 (4) to promote and facilitate investments in 

21 community-based economic development projects 

22 from traditional and nontraditional capital sources; 

23 (5) to encourage partnerships between commu24 nity-based organizations that will expand and en25 hance the expertise of emerging nonprofit, non-
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1 governmental organizations in utilizing private sec2 tor investment as part of their comprehensive com3 munity development strategies; and 

4 (6) to ensure that viable community economic 

5 development projects are successfully pursued 

6 throughout the United States in communities having 

7 a wide range of economic, geographic, and social 

8 characteristics. 

9 SEC. 3. DEFINITIONS. 

10 In this Act: 

11 (1) COMMUNITY-BASED ECONOMIC DEVELOP12 MENT ORGANIZATION.—

13 (A) IN GENERAL.—The term ‘‘community14 based economic development organization’’ 

15 means a nonprofit, nongovernmental organiza16 tion that—

17 (i) has as its primary mission to 

18 serve, or provide investment capital for, 

19 low-income communities; and 

20 (ii) maintains accountability—

21 (I) to residents of low-income 

22 communities through their representa23 tion on any governing board of the or24 ganization or on any advisory board 

25 to the organization; or 
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1 (II) to low-income communities by 

2 having a board primarily consisting of 

3 leaders of community-based development 

4 organizations from its region or State on 

5 its governing board. 

6 (B) TREATMENT OF COMMUNITY DEVEL7 OPMENT FINANCIAL INSTITUTIONS.—The re8 quirements of subparagraph (A) shall be treat9 ed as met by any community development fi10 nancial institution (as such term is defined in 

11 section 103 of the Community Development 

12 Banking and Financial Institutions Act of 1994 

13 (12 U.S.C. 4702)). 

14 (2) COMMUNITY ECONOMIC DEVELOPMENT

15 PROJECT.—The term ‘‘community economic develop16 ment project’’ means a project that involves—

17 (A) investment in business enterprises, in18 cluding investments in the form of loan origina19 tion, equity investment, and monetary assist20 ance to home buyers or to business owners for 

21 business development projects; or 

22 (B) the construction or rehabilitation of fa23 cilities, including commercial or industrial facili24 ties, homes, apartment buildings, and commu25 nity parks. 
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1 (3) LOW-INCOME COMMUNITIES.—The term 

2 ‘‘low-income communities’’ shall have the meaning 

3 given to such term in section 45D of the Internal 

4 Revenue Code of 1986 (26 U.S.C. 45D). 

5 (4) SECRETARY.—The term ‘‘Secretary’’ means 

6 the Secretary of Housing and Urban Development. 

7 SEC. 4. GRANTS TO INCREASE CAPACITY AND EXPERTISE 

8 OF NONPROFIT, NONGOVERNMENTAL COM9 MUNITY-BASED ORGANIZATIONS INVOLVED 

10 IN COMMUNITY ECONOMIC DEVELOPMENT 

11 ACTIVITIES. 

12 (a) GRANT AUTHORITY.—The Secretary may make 

13 grants under this section to eligible community-based eco14 nomic development organizations for the purposes de15 scribed in subsection (c). 

16 (b) ELIGIBLE COMMUNITY-BASED ECONOMIC DE17 VELOPMENT ORGANIZATIONS.—For purposes of this sec18 tion, the term ‘‘eligible community-based economic devel19 opment organization’’ means a community-based economic 

20 development organization (as such term is defined under 

21 section 3), or a collaboration of such organizations (such 

22 as city or State community economic development associa23 tions), that demonstrates management capacity by meet24 ing, as determined by the Secretary, 2 or more of the fol25 lowing requirements:
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1 (1) AFFORDABLE HOUSING.—Having completed 

2 construction of 10 or more dwelling units of afford3 able housing. 

4 (2) FACILITIES.—Having completed construc5 tion of a commercial, industrial, retail, or commu6 nity facility project. 

7 (3) PARTNERING.—Partnering, or having a his8 tory of partnering, with community-based economic 

9 development organizations to provide training, edu10 cation, capacity, technical assistance, or other men11 toring services. 

12 (4) SUPPORT OF EMERGING ORGANIZATIONS.—

13 Exhibiting willingness to form operational partner14 ships and execute contractual agreements with 

15 emerging community-based economic development 

16 organizations. 

17 (5) OWNERSHIP OF ASSETS.—Having owner18 ship of tangible assets the value of which are equal 

19 to or exceed the value of the grant requested under 

20 this section. 

21 (c) USE OF FUNDS.—

22 (1) PURPOSES.—Amounts from grants under 

23 this section may be used for the following purposes: 

24 (A) SALARIES AND ADMINISTRATIVE EX25 PENSES.—For salaries or administrative ex-
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1 penses of the grantee or an emerging commu2 nity-based economic development organization 

3 that is undertaking a community economic de4 velopment project. 

5 (B) TECHNICAL ASSISTANCE.—To provide 

6 technical assistance to an emerging community7 based economic development organization that 

8 is undertaking a community economic develop9 ment project. 

10 (C) TRAINING AND RESEARCH.—Through 

11 subgrants pursuant to paragraph (2), for train12 ing, research, and technical assistance relating 

13 to community economic development, including 

14 subgrants for program evaluation and economic 

15 impact analyses. 

16 (2) EXPENDITURE.—Amounts from grants 

17 under this section may be used directly by the eligi18 ble community-based economic development organi19 zation receiving the grant or redistributed by such 

20 recipient to other nonprofit, nongovernmental enti21 ties in grants, loans, loan guarantees, payments to 

22 reduce interest on loan guarantees, or other appro23 priate assistance, except that a recipient may not 

24 provide any such assistance from grant amounts to 

25 a private, for-profit entity. 
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1 (d) SELECTION CRITERIA.—

2 (1) IN GENERAL.—The Secretary shall issue 

3 rules, guidelines, and procedures to provide for the 

4 selection of eligible community-based economic devel5 opment organizations for grants under this section, 

6 based upon a determination of the relative effective7 ness of such organizations in carrying out the pur8 poses of this Act. 

9 (2) FACTORS.—The rules, guidelines, and pro10 cedures issued in accordance with paragraph (1) 

11 shall provide for consideration of—

12 (A) the number of such organizations eligi13 ble to receive assistance under existing pro14 grams other than this section; 

15 (B) the extent to which grant amounts 

16 provided under this section will enhance the ca17 pabilities of community-based economic develop18 ment organizations in underserved States and 

19 localities; 

20 (C) the extent to which an eligible commu21 nity-based economic development organization 

22 applying for a grant does not have access to 

23 other traditional local financial sources; 

24 (D) the extent to which such an organiza25 tion represents nonprofit, nongovernmental or-
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1 ganizations that serve low-income communities; 

2 and 

3 (E) the extent to which such an organiza4 tion will implement a plan to become financially 

5 sustainable. 

6 (e) AMOUNT.—A grant under this section to a single 

7 grantee shall be in an amount that is not less than 

8 $250,000 and does not exceed $1,000,000. 

9 (f) PROHIBITION OF MATCHING FUNDS REQUIRE10 MENT.—The Secretary may not require a grantee under 

11 this section to provide amounts from sources other than 

12 this section to fund the specific activities to be carried out 

13 with grant amounts under this section. 

14 (g) ELIGIBILITY FOR COMMUNITY REINVESTMENT

15 ACT CREDITS.—In assessing and taking into account, 

16 under section 804(a) of the Community Reinvestment Act 

17 of 1977 (12 U.S.C. 2903(a), the record of any regulated 

18 financial institution, the appropriate Federal financial su19 pervisory agency (as defined in section 803(1) of such Act 

20 (12 U.S.C. 2902(1)) may consider as a factor investments 

21 in community economic development projects of eligible 

22 community-based economic development organizations in 

23 determining whether the institution is meeting the credit 

24 needs of its community for purposes of such section 

25 804(a). 
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1 (h) AUTHORIZATION OF APPROPRIATIONS.—

2 (1) IN GENERAL.—There are authorized to be 

3 appropriated for grants under this section 

4 $75,000,000 for each of fiscal years 2004, 2005, 

5 and 2006. 

6 (2) SET-ASIDE FOR TECHNICAL ASSISTANCE

7 AND TRAINING.—Of the amount made available 

8 under this Act for each fiscal year, $10,000,000 

9 shall be available only for technical assistance and 

10 training activities, to be conducted by national com11 munity development organizations, State community 

12 development associations, or city community develop13 ment associations, which have extensive nationwide 

14 partnerships and experience in working with commu15 nity-based economic development organizations, as 

16 authorized by section 4 of the HUD Demonstration 

17 Act of 1993 (42 U.S.C. 9816 note), as in effect im18 mediately before May 1, 2000. Of the amount re19 served for use under this paragraph, not less than 

20 $4,000,000 shall be used for the support of develop21 ment organizations in rural areas. 

22 SEC. 5. ASSESSMENT OF COMMUNITY-BASED ECONOMIC 

23 DEVELOPMENT EXPERTISE. 

24 (a) CAPABILITY STUDY.—
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1 (1) IN GENERAL.—The Secretary shall conduct 

2 a study to assess the capability needs of community3 based economic development organizations, which 

4 shall—

5 (A) analyze, evaluate, and recommend 

6 processes to improve the administrative and 

7 operational capabilities of such organizations to 

8 acceptable levels of success in support of the 

9 role of the Federal Government in community 

10 economic development; and 

11 (B) assess the extent to which Federal 

12 agencies can incorporate such organizations 

13 into the formulation of the strategic plans of 

14 funding agencies and, if the extent or quality of 

15 this type of involvement is satisfactory, can sup16 port the role of the Federal government in com17 munity economic development. 

18 (2) REPORT.—Not later than the expiration of 

19 the 6-month period beginning on the date of enact20 ment of this Act, the Secretary shall submit a report 

21 regarding the results of the study under this para22 graph (1). 

23 (b) ANNUAL REPORTS TO CONGRESS.—Not later 

24 than the first March 1 occurring after the end of each 

25 fiscal year for which amounts are made available for 
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1 grants under section 4, the Secretary shall submit a report 

2 to Congress, which shall include—

3 (1) an evaluation of the progress made during 

4 such fiscal year to enhance the administrative and 

5 operational capabilities of community-based eco6 nomic development organizations in support of the 

7 role of the Federal Government in community eco8 nomic development; 

9 (2) an assessment of the extent to which Fed10 eral agencies have, during such fiscal year, involved 

11 community-based economic development organiza12 tions in responsibilities for carrying out community 

13 economic development programs administered by the 

14 agencies and delivering services under such pro15 grams that enhance the operational capabilities of 

16 the organizations; and 

17 (3) a plan for making recommendations for ac18 tions or measures to further involve community19 based economic development organizations in the 

20 strategic operations of Federal agencies in support 

21 of community economic development. 

22 (c) FINAL EVALUATION.—

23 (1) IN GENERAL.—The Secretary shall select an 

24 independent entity that has experience with national 

25 community economic development activities, non-
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1 profit community-based developers, and impact eval2 uation and analysis to conduct an evaluation of the 

3 impact of the grant program under section 4. 

4 (2) TIMING OF EVALUATION.—The evaluation 

5 referred to in paragraph (1) shall be conducted upon 

6 the termination of the grant program under section 

7 4. 

8 (3) FINAL REPORT.—Not later than 6 months 

9 after the conclusion of the last fiscal year for which 

10 amounts are made available for grants under section 

11 4, the entity conducting the evaluation shall submit 

12 to the Secretary and Congress a final report regard13 ing the evaluation referred to in paragraph (1). 

14 SEC. 6. ADVISORY COUNCIL. 

15 (a) ESTABLISHMENT.—The Secretary shall establish 

16 an advisory council to be known as the Secretary’s Advi17 sory Council on Community Economic Development (in 

18 this section referred to as the ‘‘Advisory Council’’). 

19 (b) DUTIES.—The Advisory Council shall make rec20 ommendations to the Secretary on carrying out this Act, 

21 including recommendations on developing plans under sec22 tion 5(b)(3) and reviewing and making recommendations 

23 on such plans that have been developed. 

24 (c) MEMBERSHIP.—The Advisory Council shall con25 sist of not less than 19 members, comprised as follows: 
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1 (1) EX OFFICIO MEMBERS.—The following 

2 members shall serve as nonvoting members: 

3 (A) The Secretary of Housing and Urban 

4 Development, or the designee of such Secretary. 

5 (B) The Secretary of Health and Human 

6 Services, or the designee of such Secretary. 

7 (C) The Assistant Secretary for Economic 

8 Development of the Department of Commerce, 

9 or the designee of the Assistant Secretary. 

10 (D) The Administrator of the Community 

11 Development Financial Institutions Fund, or 

12 the designee of the Administrator. 

13 (E) The Under Secretary of Agriculture 

14 for Rural Development, or the designee of the 

15 Under Secretary. 

16 (2) OTHER MEMBERS.—Not less than 14 mem17 bers, appointed by the Secretary, who are not offi18 cers or employees of the Federal Government, shall 

19 serve as voting members as follows: 

20 (A) Not less than 2 individuals who con21 duct research on community economic develop22 ment activities. 

23 (B) Not less than 2 individuals who are ex24 perts in community economic development fi25 nancing. 
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1 (C) Not less than 3 individuals who are 

2 publicly elected officials. 

3 (D) Not less than 7 individuals who are 

4 representatives of community-based economic 

5 development organizations that carry out com6 munity economic development activities. 

7 (d) TRAVEL EXPENSES.—Members of the Advisory 

8 Council shall not receive any pay by reason of their service 

9 on the Advisory Council, but shall receive travel expenses, 

10 including per diem in lieu of subsistence, in accordance 

11 with sections 5702 and 5703 of title 5, United States 

12 Code. 

13 SEC. 7. COORDINATION WITH PRESIDENT’S ANNUAL BUDG14 ET REQUEST. 

15 The President of the United States shall include, to16 gether with each annual budget of the United States Gov17 ernment required to be submitted under section 1105(a) 

18 of title 31, United States Code, a report regarding Federal 

19 financial support for community economic development 

20 that includes—

21 (1) a detailed summary of the total level of 

22 funding committed to community-based economic de23 velopment organizations throughout all Federal 

24 agencies; 

25 (2) a statement of— 
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1 (A) projected funding levels for the grant 

2 program under section 4 of this Act for the up3 coming fiscal year and each fiscal year there4 after until 2010; and 

5 (B) projected funding levels for financial 

6 assistance for economic development activities 

7 for each Federal agency that provides such as8 sistance; 

9 (3) an identification and analysis of the method 

10 (including grant agreements, procurement contracts, 

11 and cooperative agreements, as such terms are used 

12 in chapter 63 of title 31, United States Code) by 

13 which such financial assistance is provided for each 

14 such economic development activity; and 

15 (4) recommendations for specific activities and 

16 measures to—

17 (A) enhance community-based economic 

18 development capacity building in States having 

19 less concentrated economic and infrastructure 

20 resources; and 

21 (B) strengthen nationwide community22 based economic development.

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