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103D CONGRESS

1ST SESSION H. R. 183

To promote economic development in the Lower Mississippi Delta by establishing the Lower Mississippi Delta Development Financing Corporation,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1993

Mr. ESPY (for himself and Mr. EMERSON) introduced the following bill; which

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

A BILL

To promote economic development in the Lower Mississippi

Delta by establishing the Lower Mississippi Delta Development Financing Corporation, 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.

4 This Act may be cited as the ‘‘Lower Mississippi

5 Delta Development Financing Corporation Act’’.

6 SEC. 2. FINDINGS AND PURPOSES.

7 (a) FINDINGS.—The Congress finds the following:

8 (1) The income levels, employment levels, edu9 cational levels, and similar socioeconomic indicators
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1 are extremely low in the lower Mississippi delta re2 gion.

3 (2) The economic base in the region is under4 developed and the local capacity to strengthen the

5 economic base is inadequate.

6 (3) The region has significant economic

7 strengths upon which to build a strong and vibrant

8 economy.

9 (4) A regional institution is the most appro10 priate form for an economic development institution

11 which can efficiently address the economic situation

12 in the lower Mississippi delta region given the scope

13 of the economic problems confronting the region and

14 the common conditions which are apparent through15 out the region.

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

17 follows:

18 (1) To establish a multifaceted proactive re19 gional institution to develop entrepreneurs and en20 courage the creation of new ventures.

21 (2) To create a sustainable change in the eco22 nomic environment of the lower Mississippi delta re23 gion which is conducive to the growth and success

24 of new ventures by providing intensive technical
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1 assistance and guidance and appropriate forms of

2 capital.

3 (3) To provide a structure for designing and

4 implementing strategies for building the capacity of

5 new and existing institutions and organizations that

6 provide enterprise assistance.

7 (4) To create a culture of entrepreneurship

8 through role models and programs.

9 (5) To develop partnerships with lenders, gov10 ernment, community organizations, and private busi11 nesses for creating a continuum of credit and capital

12 products ranging from debt instruments for estab13 lished firms to equity investments for early-stage de14 velopment and new ventures.

15 (6) To target community development banking

16 activities and capacity building assistance to the

17 chronically-distressed communities of the lower Mis18 sissippi delta.

19 (c) DEFINITIONS.—For purposes of this Act—

20 (1) CORPORATION.—The term ‘‘Corporation’’

21 means the Lower Mississippi Delta Development Fi22 nancing Corporation.

23 (2) DIRECTOR.—The term ‘‘director’’ means a

24 member of the board of directors of the Corporation.
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1 (3) LOWER MISSISSIPPI DELTA REGION.—The

2 term ‘‘lower Mississippi delta region’’ means the 219

3 counties in the States of Arkansas, Illinois, Ken4 tucky, Louisiana, Mississippi, Missouri, and Ten5 nessee identified as the lower Mississippi delta area

6 in the final report of the Lower Mississippi Delta

7 Development Commission entitled ‘‘The Delta Initia8 tives’’ under date of May 14, 1990.

9 SEC. 3. ESTABLISHMENT OF CORPORATION.

10 (a) IN GENERAL.—There is hereby established the

11 Lower Mississippi Delta Development Financing Corpora12 tion as a federally chartered private corporation.

13 (b) MANAGEMENT.—

14 (1) IN GENERAL.—The Corporation shall be

15 under the management of a board of directors con16 sisting of 15 directors.

17 (2) QUALIFICATIONS OF APPOINTED DIREC18 TORS.—Directors who are appointed to the board of

19 directors pursuant to subsection (c) shall be ap20 pointed—

21 (A) from among individuals who—

22 (i) have expressed a strong commit23 ment to the economic development of the

24 lower Mississippi delta; and
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1 (ii) are especially qualified to serve as

2 directors by virtue of their education,

3 training, or experience; and

4 (B) after giving special consideration to

5 the public interest in the appointment of a

6 board of directors the membership of which is

7 fairly representative of the diverse interests in

8 the lower Mississippi delta region and the geo9 graphical subregions and political subdivisions

10 within the region.

11 (3) QUORUM.—8 directors shall constitute a

12 quorum.

13 (4) CHAIRPERSON.—The board of directors

14 shall elect 1 director to serve as the chairperson of

15 the board of directors for such term as the bylaws

16 of the Corporation shall provide.

17 (5) MEETINGS.—Except as otherwise provided

18 in the bylaws of the Corporation, the board of direc19 tors shall meet at the call of the chairperson of the

20 board of directors or a majority of the directors.

21 (c) APPOINTMENT OF DIRECTORS.—

22 (1) INITIAL APPOINTMENT OF DIRECTORS FOR

23 1 YEAR TO ORGANIZE THE CORPORATION.—

24 (A) IN GENERAL.—The directors first ap25 pointed to the board of directors after the en-
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1 actment of this Act shall be appointed by the

2 President by and with the advice and consent of

3 the lower Mississippi delta region congressional

4 delegation in accordance with subparagraph (B)

5 for a term of 1 year.

6 (B) ADVICE AND CONSENT PROCEDURE.—

7 (i) SUBMISSION OF NOMINATION.—

8 The President shall submit the nomination

9 of a person as a director of the Corpora10 tion to the Speaker of the House of Rep11 resentatives and the president pro tempore

12 of the Senate.

13 (ii) MEETING OF THE LOWER MIS14 SISSIPPI DELTA REGION CONGRESSIONAL

15 DELEGATION.—Upon receipt of a nomina16 tion by the President in accordance with

17 clause (i), the Speaker of the House of

18 Representatives and the president pro tem19 pore of the Senate shall convene a meeting

20 of the lower Mississippi delta region con21 gressional delegation to consider the nomi22 nation in accordance with such procedures

23 as the delegation may adopt for such pur24 pose.
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1 (iii) ELECTION BY MAJORITY.—The

2 nomination of a director of the Corporation

3 under this paragraph may be confirmed

4 only by a majority of the members of the

5 lower Mississippi delta region congressional

6 delegation each of whom shall have 1 vote.

7 (C) LOWER MISSISSIPPI DELTA REGION

8 CONGRESSIONAL DELEGATION DEFINED.—For

9 purposes of this paragraph, the term ‘lower

10 Mississippi delta region congressional delega11 tion’ means—

12 (i) the Senators returned from the

13 States of Arkansas, Illinois, Kentucky,

14 Louisiana, Mississippi, Missouri, and Ten15 nessee; and

16 (ii) the representatives returned from

17 each congressional district within the

18 States of Arkansas, Illinois, Kentucky,

19 Louisiana, Mississippi, Missouri, and Ten20 nessee all or a portion of which lies within

21 the lower Mississippi delta region, as deter22 mined by the Speaker of the House of

23 Representatives.

24 (D) DECLARATION OF CONGRESS.—The

25 Congress hereby declares that the procedure es-
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1 tablished under this paragraph for the appoint2 ment of the initial directors on the board of di3 rectors is undertaken in connection with the es4 tablishment of a private corporation and shall

5 not be construed as the appointment of an offi6 cer of the United States within the meaning of

7 the second paragraph of section 2 of Article II

8 of the Constitution of the United States of

9 America.

10 (2) APPOINTMENT OF DIRECTORS AFTER FIRST

11 YEAR.—Except as provided in paragraph (1), any

12 position on the board of directors which is held by

13 an appointed director shall be filled, at the end of

14 such director’s term or in the case of a vacancy dur15 ing such term, by a person appointed by the board

16 of directors in accordance with procedures estab17 lished under the bylaws.

18 (3) TERMS OF APPOINTED DIRECTORS.—

19 (A) IN GENERAL.—The bylaws prescribed

20 under section 3(a)(1) shall establish the terms

21 of the directors appointed under paragraph (2).

22 (B) APPOINTMENTS TO FILL VACANCIES.—

23 A director appointed to the board of directors

24 to fill a vacancy occurring before the expiration

25 of the term for which such director’s prede-
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1 cessor was appointed shall be appointed only for

2 the remainder of such term.

3 (C) SERVICE AFTER EXPIRATION OF

4 TERM.—A director may serve after the expira5 tion of the term of such director until the suc6 cessor of the director has taken office.

7 (4) VACANCIES WITH RESPECT TO APPOINTED

8 DIRECTORS.—Any vacancy on the board of directors

9 which was held by an appointed director shall be

10 filled by a person appointed by the board of direc11 tors.

12 (d) PROVISIONS APPLICABLE TO DIRECTORS ELECT13 ED BY SHAREHOLDERS.—

14 (1) IN GENERAL.—The board of directors may

15 provide for the election of directors by stockholders

16 in the corporation and establish procedures for such

17 elections.

18 (2) NUMBER OF ELECTED DIRECTORS.—The

19 number of directors who are elected by the holders

20 of common stock—

21 (A) may not exceed 10; and

22 (B) shall be determined by the board of di23 rectors in accordance with the bylaws.

24 (3) VACANCIES WITH RESPECT TO ELECTED DI25 RECTORS.—
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1 (A) APPOINTMENT.—Any vacancy on the

2 board of directors which was held by an elected

3 member and becomes vacant after the annual

4 election of the elected directors shall be filled by

5 a person appointed by the board of directors.

6 (B) TERM OF APPOINTEE.—A director ap7 pointed under subparagraph (A) to fill a va8 cancy occurring before the expiration of the

9 term for which such director’s predecessor was

10 elected shall be appointed only for the remain11 der of such term.

12 (4) TERMS OF ELECTED DIRECTORS.—Elected

13 directors shall be elected annually for a term ending

14 on the date of the next annual meeting of the com15 mon stockholders of the Corporation and shall serve

16 until such directors’ successors are elected.

17 (e) REPORT BY BOARD OF DIRECTORS AFTER 1

18 YEAR.—Before the end of the term of the directors first

19 appointed to the board of directors under subsection

20 (c)(1), the board of directors shall submit a report to the

21 President and the Congress on the organization and oper22 ation of the Corporation during the 1st year of the Cor23 poration’s existence, including—
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1 (1) an accounting of the stock issued and sold

2 by the Corporation during the year;

3 (2) any recommendation of the board of direc4 tors with respect to the establishment or acquisition

5 of any subsidiary of the Corporation and the activi6 ties of any such subsidiary; and

7 (3) any recommendation for legislative initia8 tives which the board of directors may determine to

9 be appropriate for further enhancing the economic

10 development of the lower Mississippi delta region.

11 (f) PROVISIONS RELATING DIRECTORS WHO ARE

12 FEDERAL OFFICERS OR EMPLOYEES.—

13 (1) LIMITATION ON NUMBER.—After the end of

14 the 1-year period beginning on the date on which the

15 board of directors first meets with a quorum

16 present, not more than 3 directors may serve at the

17 same time as an officer or employee of the United

18 States.

19 (2) RESTRICTION ON PAY FOR FEDERAL PER20 SONNEL.—Directors who are full-time officers or

21 employees of the United States shall receive no addi22 tional pay by reason of service on the board of direc23 tors.
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1 SEC. 4. POWERS AND DUTIES OF CORPORATION.

2 (a) GENERAL POWERS.—The Corporation shall have

3 the following powers:

4 (1) BYLAWS.—To prescribe, by the Board of

5 Directors, bylaws not inconsistent with law regulat6 ing the manner in which—

7 (A) stock of the corporation may be trans8 ferred;

9 (B) the directors of the corporation may be

10 appointed or elected;

11 (C) the officers and employees of the cor12 poration may be appointed;

13 (D) the property of the corporation may be

14 transferred;

15 (E) the general business of the corporation

16 may be conducted; and

17 (F) the privileges granted to the corpora18 tion by law may be exercised and enjoyed.

19 (2) CORPORATE SEAL.—To adopt, alter, and

20 use a corporate seal.

21 (3) CONTRACTS.—To enter into contracts.

22 (4) ISSUE OBLIGATIONS.—To issue debentures,

23 bonds, or other obligations, and to borrow, to give

24 security for any amount borrowed, and to pay inter25 est on (and any redemption premium with respect

26 to) any such obligation or amount.
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1 (5) STOCK.—To issue stock in accordance with

2 section 5.

3 (6) PROPERTY AND INVESTMENTS.—To ac4 quire, hold, lease, mortgage, maintain, or dispose of

5 real and personal property, including securities is6 sued by any other person.

7 (7) SUBSIDIARIES AND OTHER INVESTMENTS

8 AND ASSOCIATIONS.—To acquire or establish sub9 sidiaries, to enter into partnerships, associations,

10 joint ventures, and other business relationships, and

11 to make investments in any person.

12 (8) LITIGATION.—To sue and be sued in its

13 corporate capacity, and to complain and defend in

14 any action brought by or against the Corporation in

15 any State or Federal court of competent jurisdiction.

16 (9) OFFICERS AND EMPLOYEES.—By the Board

17 of Directors—

18 (A) to appoint an executive director, a sec19 retary, and a treasurer and such other officers

20 and employees as the Board of Directors may

21 provide for in the bylaws;

22 (B) to define the duties of the officers and

23 employees;

24 (C) to fix the compensation of such officers

25 and employees and provide such other employ-
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1 ment benefits as the Board of Directors may

2 provide for in the bylaws;

3 (D) to require bonds of officers and em4 ployees; and

5 (E) to dismiss at pleasure any officer or

6 employee.

7 (10) STANDARDS.—To establish such standards

8 as may be appropriate to carry out the requirements

9 of this Act, including underwriting standards.

10 (11) OTHER POWERS.—To exercise such inci11 dental powers as may be appropriate to carry out

12 the purposes of this Act.

13 (12) SUCCESSION.—To have succession until

14 dissolved.

15 (b) DUTIES.—

16 (1) IN GENERAL.—The Corporation shall de17 velop strategies and provide financial and technical

18 assistance for building and expanding the economic

19 base of the lower Mississippi delta region and com20 munities within the region.

21 (2) DEVELOPMENT STRATEGIES AUTHOR22 IZED.—In carrying out the purposes of this Act with

23 respect to the lower Mississippi delta region, the

24 Corporation may—
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1 (A) initiate or participate in community

2 strategic planning for economic development;

3 (B) provide, or participate in the provision

4 of, technical training programs or technical

5 services which the Corporation determines are

6 appropriate for local capacity building, develop7 ing economic opportunities for businesses, in8 cluding microenterprises, in the region or within

9 any community in the region;

10 (C) provide, or participate in the provision

11 of, regional economic research and analysis and

12 sectoral development services;

13 (D) raise funds for regional and local eco14 nomic development and other purposes of this

15 Act from the Federal Government, State gov16 ernments within the region, foundations, cor17 porations, and other persons;

18 (E) provide support through incentives and

19 other forms of economic enhancement, including

20 investments and grants, for the development of

21 local financial institutions, including microloan

22 funds, seed capital and venture capital funds,

23 revolving loan funds, in order to make develop24 ment banking and related financial services
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1 more available in the lower Mississippi delta re2 gion;

3 (F) make or guarantee loans and provide

4 grants (including matching grants) in connec5 tion with providing technical training programs

6 or technical services and strategies for expand7 ing existing businesses, including micro-enter8 prises and other economic development within

9 the region; and

10 (G) establish terms for any loan under this

11 paragraph which provide that the principal of

12 the loan, or any portion of any such principal,

13 may be forgiven if the program or project for

14 which such loan has been made meets or ex15 ceeds such performance goals as may be estab16 lished under the terms of the loan.

17 (c) PASSIVE INVESTMENTS IN LOCAL BANKS.—

18 (1) IN GENERAL.—The Corporation may ac19 quire and retain shares of insured depository institu20 tions and depository institution holding companies

21 which are located in the lower Mississippi delta re22 gion and which are part of the development strategy

23 and mission adopted by the Corporation.

24 (2) PASSIVE INVESTMENT RULE.—If—
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1 (A) the amount of the shares held by the

2 Corporation in any insured depository institu3 tion or depository institution holding company

4 at any time does not exceed 50 percent of the

5 total number of the outstanding shares issued

6 by such institution or holding company; and

7 (B) the acquisition and retention of such

8 shares by the Corporation is made for purposes

9 of investment and is not made for the purpose

10 of acquiring, exercising, or transferring control

11 of any such depository institution or depository

12 institution holding company,

13 the Corporation shall not be deemed to control the

14 depository institution or depository institution hold15 ing company for purposes of sections 2, 3, and 4 of

16 the Bank Holding Company Act of 1956 or section

17 10 of the Home Owners’ Loan Act.

18 (3) DEFINITIONS.—For purposes of this sub19 section, the terms ‘‘insured depository institution’’

20 and ‘‘depository institution holding company’’ have

21 the meaning given to such terms in section 3 of the

22 Federal Deposit Insurance Act.

23 SEC. 5. STOCK ISSUANCE.

24 (a) COMMON STOCK ISSUANCE.—
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1 (1) IN GENERAL.—The Corporation may issue

2 common stock having par value fixed by the board

3 of directors.

4 (2) VOTING RIGHTS.—Each share of common

5 stock shall be entitled to 1 vote with rights of cumu6 lative voting in elections of directors.

7 (3) DIVIDENDS.—The Corporation may pay to

8 holders of common stock issued under this sub9 section such dividends on that stock as may be de10 termined by the board of directors.

11 (b) PREFERRED STOCK.—

12 (1) ISSUANCE.—The Corporation may issue

13 nonvoting preferred stock having such par value as

14 the board of directors may determine.

15 (2) PREFERENCE ON TERMINATION OF BUSI16 NESS.—In the event of any liquidation, dissolution,

17 or completion of the business of the Corporation,

18 holders of the preferred shares of stock of the Cor19 poration, shall be paid in full at the par value of

20 those shares, plus all accrued dividends, before the

21 holders of shares of common stock of the Corpora22 tion may receive any payment.

23 SEC. 6. GRANTS TO CORPORATION.

24 (a) AUTHORIZATION OF APPROPRIATIONS.—There is

25 authorized to be appropriated to the President the sum
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1 of $100,000,000 for fiscal years 1994, 1995, 1996, 1997,

2 and 1998 for grants to the Corporation to carry out the

3 purposes of this Act.

4 (b) GRANTS TO CORPORATION.—The President may

5 make such grants to the Corporation as the President de6 termines to be appropriate to carry out the purposes of

7 this Act, including the use of such funds by the Corpora8 tion to secure obligations issued by the Corporation.

9 (c) RECEIPT OF FUNDS NOT TO AFFECT PRIVATE

10 STATUS OF CORPORATION.—The Corporation shall not be

11 treated as a Government corporation for purposes of chap12 ter 91 of title 31, United States Code, or any other provi13 sion of law by virtue of any grant to the Corporation under

14 this section.

15 (d) TREATMENT OF CORPORATION FUNDS.—No con16 tribution or investment made by the Corporation with re17 spect to any other person shall be treated as a contribution

18 or investment involving any funds other than private funds

19 because of any grant made to the Corporation under this

20 section, for purposes of the Small Business Investment

21 Act of 1958 or any other provision of law.

22 SEC. 7. RESOURCE COMMITTEE.

23 (a) IN GENERAL.—The Corporation shall establish

24 an advisory committee consisting of lll members ap25 pointed by the board of directors from among individuals
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1 especially qualified to advise the Corporation by virtue of

2 their education, training, and experience.

3 (b) DESIGNEE OF FEDERAL RESERVE BOARD.—Not4 withstanding the appointment authority of the board of

5 directors of the Corporation under subsection (a), the

6 Board of Governors of the Federal Reserve System may

7 designate 1 officer or employee of such Board to serve as

8 a member of the advisory committee established pursuant

9 to subsection (a).

10 SEC. 8. ANNUAL REPORT.

11 The Corporation shall submit an annual report on the

12 operations of the Corporation and a financial statement

13 to the Congress.

14 SEC. 9. ANNUAL GAO EXAMINATION.

15 (a) IN GENERAL.—Notwithstanding any other provi16 sion of law and in accordance with such regulations as

17 the Comptroller General of the United States may pre18 scribe, the Comptroller General shall perform an annual

19 examination and a financial audit of the Corporation on

20 whatever basis the Comptroller General determines to be

21 appropriate.

22 (b) ACCESS TO RECORDS.—The Corporation shall—

23 (1) make available to the Comptroller General

24 for audit all records and property, used, or managed

25 by the Corporation;
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1 (2) provide the Comptroller General with facili2 ties for verifying transactions with the balances or

3 securities held by depositaries, fiscal agents, or

4 custodians; and

5 (3) provide the Comptroller General with suit6 able and lockable offices, access to copying facilities,

7 and furniture and telephones.

8 (c) ANNUAL REPORT.—The Comptroller General

9 shall make an annual report to the Congress on the exam10 ination and financial audit of the Corporation under this

11 section.

12 SEC. 10. FEDERAL AGENCY ASSISTANCE.

13 Each agency, department, or other instrumentality of

14 the Federal Government may provide funds, services, and

15 facilities, on a reimbursable basis, which are appropriate

16 to assist the Corporation to carry out the purposes of this

17 Act.

18 SEC. 11. REORGANIZATION AS A STATE CHARTERED COR19 PORATION.

20 (a) IN GENERAL.—The board of directors of the Cor21 poration shall recharter and reorganize the Corporation as

22 a State-chartered corporation during the 6-month period

23 beginning at the end of fiscal year 1999.

24 (b) APPLICABILITY OF ACT.—This Act shall cease to

25 apply with respect to the Corporation as of the effective
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1 date of the chartering of the Corporation as a State-char2 tered corporation pursuant to subsection (a).

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