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103D CONGRESS
2D SESSION
H. R. ll
IN THE HOUSE OF REPRESENTATIVES
Mr. WISE introduced the following bill; which was referred to the Committee
on lllllllllllllll
A BILL
To amend the Public Works and Economic Development
Act of 1965 to establish a Competitive Communities
Demonstration Program to assist distressed communities
in developing a competitive economic base, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Competitive Commu-
nities Demonstration Act of 1994’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—Congress finds the following:
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(1) Traditionally, the Economic Development
Administration has primarily helped communities
develop the necessary public infrastructure to enable
such communities to foster private sector investment
and in many communities public infrastructure re-
mains a critical enabler to economic development.
(2) However, in many distressed communities
the primary economic development challenge is not
a lack of public infrastructure but rather a lack of
supporting high growth, globally competitive private
sector activities as a generator of quality jobs.
(3) Therefore, building upon its existing net-
work of programs, the Economic Development Ad-
ministration should institute a Competitive Commu-
nities Demonstration Program to assist distressed
communities develop the necessary economic base to
compete in the global marketplace.
(b) PURPOSES.—The purposes of this Act include the
following:
(1) To enable the Economic Development Ad-
ministration to become a more active partner in
bringing community leadership together with com-
petitive growth businesses to build a new competitive
economic base in communities outside the main-
stream of economic growth.
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(2) To raise the economic aspirations of such
communities beyond the retention of the existing
economic base to building a new competitive eco-
nomic base for the future.
SEC. 3. COMPETITIVE COMMUNITIES DEMONSTRATION
PROGRAM.
Title IX of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3241–3245) is amended—
(1) by redesignating section 905 as section 908;
and
(2) by inserting after section 904 the following:
‘‘SEC. 905. COMPETITIVE COMMUNITIES DEMONSTRATION
PROGRAM.
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish and carry out a Competitive Communities Demonstra-
tion Program (hereinafter in this section referred to as
the ‘program’) under which the Secretary may make
grants to eligible intermediaries in accordance with the re-
quirements of this section.
‘‘(b) ELIGIBLE INTERMEDIARY DEFINED.—In this
section, the term ‘eligible intermediary’ means an eco-
nomic development district established under title IV of
this Act, an Indian tribe, a State, a city or other political
subdivision of a State, a nonprofit organization, or a con-
sortium of any of such entities which demonstrate the fi-
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nancial expertise, ability, and legal authority to make in-
vestments under the program, as well as the ability to de-
velop and implement a community investment strategy.
‘‘(c) USE OF GRANTS.—A grant made to an eligible
intermediary under the program shall be used by the eligi-
ble intermediary to provide financial assistance to high
growth businesses in a distressed community. Such finan-
cial assistance may include loans, loan guarantees, and
payments to reduce interest on loan guarantees.
‘‘(d) 
GRANT
APPLICATIONS.—An 
eligible
intermediary seeking a grant under the program shall sub-
mit to the Secretary a grant application which—
‘‘(1) identifies proposed uses of the grant
amounts;
‘‘(2) demonstrates that receipt of the grant
amounts would be a determining factor in a business
decision to proceed with an investment in a high
growth business in a distressed community;
‘‘(3) demonstrates that the proposed uses of the
grant amounts are part of a community investment
strategy for economic development;
‘‘(4) contains assurances satisfactory to the
Secretary that the proceeds from the repayment of
loans made by the eligible intermediary under the
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program will be used for purposes which are consist-
ent with the purposes of the program; and
‘‘(5) is in such form and contains such addi-
tional information as the Secretary may prescribe.
‘‘(e) PANEL OF EXPERTS.—
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a panel of experts to review grant applica-
tions submitted to the Secretary under the program.
Such panel shall consist of 7 members as follows:
‘‘(A) The Secretary (or the Secretary’s
designee).
‘‘(B) The Assistant Secretary for Eco-
nomic Development.
‘‘(C) 1 Regional Director of the Economic
Development Administration appointed by the
Secretary.
‘‘(D) 1 Economic Development Represent-
ative of the Economic Development Administra-
tion appointed by the Secretary.
‘‘(E) 3 private citizens with economic de-
velopment and business expertise appointed by
the Secretary.
‘‘(2) DIVERSITY OF MEMBERS.— In making ap-
pointments under paragraph (1), the Secretary shall
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seek to appoint members with diverse ethnic, cul-
tural, and geographic backgrounds.
‘‘(f) SELECTION OF GRANT RECIPIENTS.—
‘‘(1) IN GENERAL.—Grant recipients under the
program will be selected by the Secretary on the
basis of recommendations made by the panel of ex-
perts established pursuant to subsection (e) after a
merit-based comparative evaluation of proposed
projects conducted as part of a national competition.
The national competition shall be held on a periodic
basis.
‘‘(2) SCORING SYSTEM.—In order to make rec-
ommendations pursuant to paragraph (1), the panel
shall rank the proposed projects by priority using a
scoring system based on criteria described in sub-
section (g).
‘‘(3) GEOGRAPHIC BALANCE.—The project scor-
ing system used pursuant to paragraph (2) shall be
weighted to promote a balance among the regions of
the United States and a balance among urban and
rural areas; except that no specific formula may be
used to apportion the projects between urban and
rural areas.
‘‘(g) CRITERIA TO BE USED BY PANEL.—
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panel shall give special consideration to the following
applicants:
‘‘(A) Applicants who operate existing re-
volving loan funds.
‘‘(B) Applicants who have applied for des-
ignation as empowerment zones or enterprise
communities under subchapter U of chapter 1
of the Internal Revenue Code of 1986 but have
not received such designation because of the
limited number of communities that may receive
such designation.
‘‘(C) Applicants who represent commu-
nities adversely affected by the closure or re-
alignment of a military installation or by de-
fense industry cutbacks.
‘‘(h) DEADLINES.—
‘‘(1) SUBMISSION OF APPLICATIONS.—The Sec-
retary shall publish in the Federal Register dead-
lines for the submission of grant applications under
the program.
‘‘(2) APPROVAL OR DISAPPROVAL OF APPLICA-
TIONS.—The Secretary shall approve or disapprove
each grant application received by the Secretary
under the program on or before the 60th day follow-
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ing the deadline for submission of such grant appli-
cation established pursuant to paragraph (1).
‘‘(3) USE
OF
GRANT
AMOUNTS.—Any grant
agreement entered into by the Secretary and an eli-
gible intermediary under the program shall require
that the eligible intermediary provide assistance to
businesses using the grant amounts on or before the
90th day after the date of receipt of such grant
amounts or shall return any remaining portion of
such grant amounts to the Secretary for subsequent
grant awards under the program.
‘‘(i) FUNDING.—Of the amounts appropriated to
carry out this title for fiscal year 1995 $20,000,000 shall
be available to carry out this section.’’.
SEC. 4. LOAN GUARANTEE DEMONSTRATION PROGRAM.
Title IX of such Act is further amended by inserting
after section 905, as added by section 3 of this Act, the
following:
‘‘SEC. 906. LOAN GUARANTEE DEMONSTRATION PROGRAM.
‘‘(a) AUTHORITY TO GUARANTEE LOANS.—To the
extent the Secretary considers appropriate to carry out the
economic adjustment purposes of this title, the Secretary
is authorized to guarantee loans made to private borrowers
by private lending institutions, community development fi-
nancial institutions, and other lenders.
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‘‘(b) ELIGIBLE ACTIVITIES.—Activities for which
loans may be guaranteed under this section include the
development of land and facilities (including machinery
and equipment) for industrial or commercial usage (such
as the construction of new buildings, the rehabilitation of
abandoned or unoccupied buildings, and alterations, con-
version, or enlargement of existing buildings) and the pro-
vision of working capital.
‘‘(c) TERMS AND CONDITIONS.—The Secretary may
make loan guarantees under this section upon application
of the lenders and upon such terms and conditions as the
Secretary may prescribe; except that—
‘‘(1) no such guarantee shall at any time exceed
90 percent of the outstanding unpaid balance of
such loans; and
‘‘(2) no such guarantee shall be provided unless
the lender or the lender’s designee is responsible and
makes adequate provision for servicing the loan on
reasonable terms and for protecting the financial in-
terests of the United States.
‘‘(d) FULL FAITH AND CREDIT.—Loan guarantees
provided under this section shall have the full faith and
credit of the United States.
‘‘(e) PREFERRED LENDERS.—To the extent feasible,
the Secretary shall conduct the guarantee program estab-
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lished under this section on a preferred lenders basis and
shall authorize lenders, in accordance with agreements en-
tered into between the Secretary and such lenders, to take
such actions on the Secretary’s behalf as the Secretary
considers appropriate, including the determination of eligi-
bility and credit worthiness and loan monitoring, collec-
tions, and liquidation.
‘‘(f) FUNDING.—Of the amounts appropriated to
carry out this title for fiscal year 1995 $10,000,000 shall
be available to carry out this section.’’.
SEC. 5. REPORTING REQUIREMENT.
Title IX of such Act is further amended by inserting
after section 906, as added by section 4 of this Act, the
following:
‘‘SEC. 907. REPORTING REQUIREMENT.
‘‘As part of the annual report to be transmitted to
Congress under section 707 of this Act, the Secretary shall
include an assessment of—
‘‘(1) the competitiveness of the economic base
of the Nation’s distressed areas;
‘‘(2) the Nation’s progress in encouraging in-
vestment in competitive businesses located in dis-
tressed areas outside the mainstream of economic
growth;
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‘‘(3) the success of the Competitiveness Com-
munities Demonstration Program authorized by sec-
tion 905, including the number of grants provided
under the program, the distribution of such grants
among geographic regions and among urban and
rural areas, the amount of non-Federal funds lever-
aged using such grants, and the quantity and qual-
ity of jobs created; and
‘‘(4) the success of the loan guarantee program
authorized by section 906, including the subsidy cost
of loan guarantees made under the program.’’.