IIA
103D CONGRESS
2D SESSION
H. R. 2442
IN THE SENATE OF THE UNITED STATES
MAY 16, 1994
Received; read twice and referred to the Committee on Environment and
Public Works
AN ACT
To reauthorize economic development programs under the
Public Works and Economic Development Act of 1965
and the Appalachian Regional Development Act of 1965
for fiscal years 1994 through 1996, and for other pur-
poses.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Economic Development Reauthorization Act of 1994’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title; table of contents.
TITLE I—ECONOMIC DEVELOPMENT PROGRAMS
Sec. 101. Grants for public works and development facilities.
Sec. 102. Projects constructed under projected cost.
Sec. 103. Changed project circumstances.
Sec. 104. Other financial assistance.
Sec. 105. Technical assistance, research, and information.
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Sec. 106. Business outreach center demonstration project.
Sec. 107. Office of Strategic Economic Development Planning and Policy.
Sec. 108. Office of Economic Development Information.
Sec. 109. Area eligibility.
Sec. 110. Investment strategy.
Sec. 111. Economic development districts.
Sec. 112. Administration.
Sec. 113. Expedited processing of applications.
Sec. 114. Uniform application form.
Sec. 115. Study of grant selection criteria.
Sec. 116. Performance evaluations of grant recipients.
Sec. 117. Study of guaranteed loan program.
Sec. 118. Miscellaneous.
Sec. 119. Acceptance of applicants’ certifications.
Sec. 120. Supervision of regional counsels.
Sec. 121. Economic recovery for disaster areas.
Sec. 122. Special economic development and adjustment assistance.
Sec. 123. Treatment of revolving loan funds.
Sec. 124. Outreach to communities adversely affected by defense base closures.
Sec. 125. Sale of financial instruments in revolving loan funds.
Sec. 126. Economic development challenge grants demonstration project.
Sec. 127. Authorization of appropriations.
Sec. 128. References to the Secretary.
Sec. 129. Compliance with Buy American Act.
Sec. 130. Regulatory relief.
TITLE II—APPALACHIAN REGIONAL DEVELOPMENT
Sec. 201. Findings and purposes.
Sec. 202. Meetings.
Sec. 203. Authorizations for administrative expenses.
Sec. 204. Extension of lease terms.
Sec. 205. Highway system.
Sec. 206. Supplements to Federal grant-in-aid programs.
Sec. 207. Program development criteria.
Sec. 208. Grants for administrative expenses and demonstration projects.
Sec. 209. Authorization of appropriations for general program.
Sec. 210. Definition of Appalachian region.
Sec. 211. Extension of termination date.
Sec. 212. Regional development task force.
Sec. 213. Compliance with Buy American Act.
TITLE III—BUSINESS DEVELOPMENT ASSISTANCE
Sec. 301. Short title.
Sec. 302. Findings, purposes, and definitions.
Sec. 303. Consolidation of information on technologies.
Sec. 304. Business Development and Technology Commercialization Corpora-
tion.
Sec. 305. Assistance to businesses in securing financing.
Sec. 306. Savings provision.
Sec. 307. Rule of construction.
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TITLE I—ECONOMIC
DEVELOPMENT PROGRAMS
SEC. 101. GRANTS FOR PUBLIC WORKS AND DEVELOPMENT
FACILITIES.
(a) DIRECT AND SUPPLEMENTARY GRANTS.—
(1) ELIGIBLE APPLICANTS.—Section 101(a) of
the Public Works and Economic Development Act of
1965 (42 U.S.C. 3131(a)) is amended in the matter
preceding paragraph (1) by striking ‘‘representing
any redevelopment area or part thereof’’ and insert-
ing ‘‘acting in cooperation with officials of local gov-
ernments’’.
(2) DIRECT
GRANTS.—Section 101(a)(1) of
such Act (42 U.S.C. 3131(a)(1)) is amended—
(A) in the matter preceding subparagraph
(A) by inserting ‘‘design and engineering,’’
after ‘‘acquisition,’’; and
(B) in subparagraph (A) by striking ‘‘or
otherwise substantially further the objectives of
the Economic Opportunity Act of 1964’’.
(b) AMOUNT OF SUPPLEMENTAL GRANTS.—The last
sentence of section 101(c) of such Act (42 U.S.C. 3131(c))
is amended—
(1) by striking ‘‘area,’’ and inserting ‘‘area
and’’; and
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(2) by striking ‘‘, and the amount of’’ and all
that follows before the period.
(c) AUTHORIZATION OF APPROPRIATIONS.—Section
105 of such Act (42 U.S.C. 3135) is amended to read as
follows:
‘‘SEC. 105. AUTHORIZATION OF APPROPRIATIONS.
‘‘(a) IN GENERAL.—There is authorized to be appro-
priated to carry out this title $160,000,000 for fiscal year
1994 and $175,000,000 per fiscal year for each of fiscal
years 1995 and 1996. Such sums shall remain available
until expended.
‘‘(b) LIMITATION ON EXPENDITURES IN CERTAIN
AREAS.—Not more than 35 percent of the amounts appro-
priated pursuant to subsection (a) in a fiscal year may
be expended for projects located in areas described in sec-
tion 401(a)(4).
‘‘(c) LIMITATION ON EXPENDITURES FOR DESIGN
AND ENGINEERING.—Not more than 20 percent of the
amounts appropriated pursuant to section (a) in a fiscal
year may be expended for design and engineering.’’.
(d) SEWER FACILITIES.—Title I of such Act (42
U.S.C. 3131–3137) is amended by striking section 106
and redesignating section 107 as section 106.
(e) CONSTRUCTION COST INCREASES.—Section 106
of such Act, as redesignated by subsection (d) of this sec-
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tion, is amended by inserting a period after ‘‘such costs’’
and striking all that follows.
SEC. 102. PROJECTS CONSTRUCTED UNDER PROJECTED
COST.
Title I of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3131–3137) is amended by
adding at the end the following:
‘‘SEC. 107. USE OF FUNDS IN PROJECTS CONSTRUCTED
UNDER PROJECTED COST.
‘‘In any case where a grant (including a supplemental
grant) has been made under this title for a project, and
after such grant has been made but before completion of
the project the cost of such project based upon the designs
and specifications which were the basis of the grant has
decreased because of decreases in costs, such underrun
funds may be used to improve the project either directly
or indirectly as determined by the Secretary.’’.
SEC. 103. CHANGED PROJECT CIRCUMSTANCES.
Title I of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3131–3137) is further
amended by adding at the end the following:
‘‘SEC. 108. CHANGED PROJECT CIRCUMSTANCES.
‘‘In any case where a grant (including a supplemental
grant) has been made under this title for a project, and
after such grant has been made but before completion of
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the project the purpose or scope of such project based
upon the designs and specifications which were the basis
of the grant has changed, the Secretary may approve the
use of grant funds on such changed project if the Sec-
retary determines that such changed project meets the re-
quirements of this title and that such changes are nec-
essary to enhance economic development in the area.’’.
SEC. 104. OTHER FINANCIAL ASSISTANCE.
(a) PUBLIC WORKS AND DEVELOPMENT FACILITY
LOANS.—
(1) ELIGIBLE
APPLICANTS.—Section 201(a) of
the Public Works and Economic Development Act of
1965 (42 U.S.C. 3141(a)) is amended in the matter
preceding paragraph (1) by striking ‘‘representing
any redevelopment area or part thereof’’ and insert-
ing ‘‘acting in cooperation with officials of local gov-
ernments’’.
(2) CRITERIA.—Section 201(a)(1)(C) of such
Act (42 U.S.C. 3141(a)(1)(C)) is amended by strik-
ing ‘‘or otherwise substantially further the objectives
of the Economic Opportunity Act of 1964’’.
(b) TERMS
AND CONDITIONS.—Section 202(b) of
such Act (42 U.S.C. 3142(b)) is amended—
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(1) in paragraph (6) by striking ‘‘it is deter-
mined’’ and inserting ‘‘the Secretary determines’’;
and
(2) in paragraph (7) by striking ‘‘hereunder for
a period’’ and all that follows through ‘‘the foregoing
restrictions on maturities’’ and inserting ‘‘under this
section for a term of maturity of more than 25 years
and no evidences of indebtedness which matures
more than 25 years after the date of purchase may
be purchased under this section; except that this
paragraph’’.
(c) REDEVELOPMENT AREA LOAN PROGRAM.—Title
II of such Act (42 U.S.C. 3141–3144) is amended by
striking section 204.
SEC. 105. TECHNICAL ASSISTANCE, RESEARCH, AND INFOR-
MATION.
(a) TECHNICAL ASSISTANCE.—
(1) URBAN
AREAS
WITH
POPULATIONS
OF
400,000
OR
LESS.—Section 301(a) of the Public
Works and Economic Development Act of 1965 (42
U.S.C. 3151(a)) is amended by adding at the end
the following: ‘‘In providing assistance under this
subsection, the Secretary shall take into consider-
ation the unique development needs of urban areas
with populations of 400,000 or less.’’.
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(2) 
GRANTS
FOR
ADMINISTRATIVE
EX-
PENSES.—The last sentence of section 301(b) of
such Act (42 U.S.C. 3151(b)) is amended by strik-
ing ‘‘urban planning grants, authorized under the
Housing Act of 1954, as amended,’’ and inserting
‘‘planning activities described in section 105(a)(13)
of the Housing and Community Development Act of
1974’’.
(3) REPEALS.—Section 301 of such Act (42
U.S.C. 3151) is amended by striking subsections (c),
(e), and (f) and redesignating subsection (d) as sub-
section (c).
(b) ECONOMIC DEVELOPMENT PLANNING.—
(1) DIRECT GRANTS.—The 7th sentence of sec-
tion 302(a) of such Act (42 U.S.C. 3151a(a)) is
amended by striking ‘‘and shall be available’’ and all
that follows before the period at the end.
(2) TECHNICAL ASSISTANCE.—Section 302 of
such Act (42 U.S.C. 3151a) is amended by striking
subsection (b) and redesignating subsection (c) as
subsection (b).
(3) USE OF OTHER PLANNING ASSISTANCE.—
Section 302(b) of such Act, as redesignated by para-
graph (2) of this subsection, is amended by striking
‘‘shall be used in accordance with the review proce-
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dure required pursuant to title IV of the Intergov-
ernmental Cooperation Act of 1968 and’’.
(c) AUTHORIZATION OF APPROPRIATIONS.—Section
303 of such Act (42 U.S.C. 3152) is amended to read as
follows:
‘‘SEC. 303. AUTHORIZATION OF APPROPRIATIONS.
‘‘There is authorized to be appropriated to carry out
this title $37,100,000 for fiscal year 1994 and
$50,000,000 per fiscal year for each of fiscal years 1995
and 1996. Such sums shall remain available until ex-
pended.’’.
(d) SUPPLEMENTAL AND BASIC GRANTS.—Title III
of such Act (42 U.S.C. 3151–3153) is amended by strik-
ing section 304.
SEC. 106. BUSINESS OUTREACH CENTER DEMONSTRATION
PROJECT.
Title III of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3151–3153) is amended by
adding at the end the following:
‘‘SEC. 304. BUSINESS OUTREACH CENTER DEMONSTRATION
PROJECT.
‘‘(a) IN GENERAL.—The Secretary shall conduct a
project in each of fiscal years 1994 through 1996 with
funds made available under this title for the purpose of
demonstrating methods of assisting isolated small busi-
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nesses to access small business services provided by Fed-
eral, State, and local governments.
‘‘(b) ESTABLISHMENT OF CENTERS.—In conducting
the demonstration project under this section, the Sec-
retary shall establish 3 business outreach centers. At least
1 of the centers shall be located in a rural area.
‘‘(c) PURPOSE OF CENTERS.—It shall be the purpose
of each business outreach center established under this
section—
‘‘(1) to provide a one-stop clearinghouse to as-
sist isolated small businesses in accessing small busi-
ness services provided by Federal, State, and local
governments; and
‘‘(2) to improve efficiency in the delivery of
such services.
‘‘(d) SERVICES TO BE PROVIDED.—Each business
outreach center established under this section shall pro-
vide the following services:
‘‘(1) Outreach to isolated small businesses.
‘‘(2) Assessment of the need of isolated small
businesses for assistance services.
‘‘(3) Referral of isolated small businesses to
small business assistance agencies.
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‘‘(4) Preparation of materials required by iso-
lated small businesses for participation in small
business assistance programs.
‘‘(5) Case management to assure follow-up and
quality control of business services.
‘‘(6) Coordination of networking among isolated
small businesses.
‘‘(7) Quality control of small business assist-
ance services.
‘‘(e) ISOLATED SMALL BUSINESS DEFINED.—For
the purposes of this section, the term ‘isolated small busi-
ness’ means a small business that is unable to effectively
access small business services provided by Federal, State,
and local governments due to linguistic, cultural, or geo-
graphic barriers.’’.
SEC. 107. OFFICE OF STRATEGIC ECONOMIC DEVELOP-
MENT PLANNING AND POLICY.
Title III of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3151–3153) is further
amended by adding at the end the following:
‘‘SEC. 305. OFFICE OF STRATEGIC ECONOMIC DEVELOP-
MENT PLANNING AND POLICY.
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish an Office of Strategic Economic Development Plan-
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ning and Policy (hereafter in this section referred to as
‘the Office’).
‘‘(b) DUTIES.—The duties of the head of the Office
are as follows:
‘‘(1) RESEARCH, 
EVALUATION, 
AND
DEM-
ONSTRATION.—To support research, evaluation, and
demonstration projects to study and assess best
practices in economic development and to examine
trends and changes in economic conditions that af-
fect regional development.
‘‘(2) POLICY DEVELOPMENT.—To develop rec-
ommendations on both short- and long-term policies
regarding economic development issues and pro-
grams, to help foster the diffusion of innovative, best
practices in economic development throughout the
Department of Commerce.
‘‘(3) COORDINATION.—To take a leading role in
developing and promoting means for greater coordi-
nation among States, regions, and local communities
in the design and implementation of economic devel-
opment strategies, and to work in conjunction with
Federal agencies on developing and implementing
means for reducing fragmentation and increase co-
ordination among Federal programs that provide
economic development assistance.
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‘‘(c) RESEARCH IN CAUSES OF LONG-TERM ECO-
NOMIC DETERIORATION.—
‘‘(1) IN GENERAL.—To assist in the long-range
accomplishment of the purposes of this Act, the Sec-
retary, in cooperation with other agencies having
similar functions, shall establish and conduct a con-
tinuing program of study, training, and research—
‘‘(A) to assist in determining the causes
of unemployment, underemployment, under-
development, and chronic depression in the var-
ious areas and regions of the Nation;
‘‘(B) to assist in the formulation and im-
plementation of national, State, and local pro-
grams which will raise income levels and other-
wise produce solutions to the problems resulting
from these conditions; and
‘‘(C) to assist in providing the personnel
needed to conduct such programs.
‘‘(2) MANNER OF PROVIDING STUDY, ASSIST-
ANCE.—The program of study, training, and re-
search 
may 
be 
conducted 
by 
the 
Secretary
through—
‘‘(A) members of the Secretary’s staff;
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‘‘(B) the payment of funds authorized for
this section to other departments or agencies of
the Federal Government;
‘‘(C) the employment of private individ-
uals, partnerships, firms, corporations, or suit-
able institutions;
‘‘(D) contracts entered into for such pur-
poses;
‘‘(E) grants to such individuals, organiza-
tions, or institutions as the Secretary deter-
mines to be appropriate; or
‘‘(F) conferences and similar meetings or-
ganized for such purposes.
‘‘(3) AVAILABILITY
OF
RESULTS
OF
RE-
SEARCH.—The Secretary shall make available to in-
terested individuals and organizations the results of
such research.
‘‘(4) ANNUAL
REPORT
OF
SECRETARY.—The
Secretary shall include in the annual report under
section 705 a detailed statement concerning the
study and research conducted under this section, to-
gether with the Secretary’s findings and conclusions
and such recommendations for legislative and other
action as the Secretary may consider appropriate.
‘‘(d) GEOGRAPHIC ANALYSIS TOOL.—
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‘‘(1) IN GENERAL.—The Secretary shall, in co-
operation with other appropriate Federal agencies
develop a computerized geographic analysis tool that
all Federal departments and agencies and grant re-
cipients may use to evaluate the success of these
programs.
‘‘(2) REPORT.—Not later than 6 months after
the date of the enactment of the Economic Develop-
ment Reauthorization Act of 1994, the Secretary
shall transmit to Congress a report on use of the
computerized geographic analysis tool developed pur-
suant to paragraph (1) by Federal departments and
agencies.
‘‘(e) INDEPENDENT ADVISORY COMMITTEE.—The
Secretary shall establish an advisory committee made up
of representatives from major State, local, and nonprofit
economic development organizations as well as nationally
recognized experts on innovative approaches to economic
development to advise and make recommendations to the
Office.
‘‘(f) FEDERAL COORDINATING COUNCIL FOR ECO-
NOMIC DEVELOPMENT.—
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a Federal Coordinating Council for Economic
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Development (hereafter in this section referred to as
the ‘Council’).
‘‘(2) COMPOSITION OF COUNCIL.—The Council
shall be composed of representatives from Federal
agencies involved in matters that affect regional eco-
nomic development.
‘‘(3) DUTIES.—The Council shall assist in pro-
viding a unifying framework for economic and re-
gional development efforts and develop a govern-
mentwide strategic plan for economic development.
‘‘(g) GRANTS AND CONTRACTS FOR DEMONSTRATION
PROJECTS; PURPOSES.—The Secretary may make grants,
enter into contracts, or otherwise provide funds for any
demonstration project in an eligible area which the Sec-
retary determines is designed to foster regional productiv-
ity and growth, prevent outmigration, and otherwise carry
out the purposes of this Act.’’.
SEC. 108. OFFICE OF ECONOMIC DEVELOPMENT INFORMA-
TION.
Title III of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3151–3153) is further
amended by adding at the end the following:
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‘‘SEC. 306. OFFICE OF ECONOMIC DEVELOPMENT INFORMA-
TION.
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish the Office of Economic Development Information
(hereafter in this section referred to as the ‘Office’) within
the Office of Strategic Economic Development Planning
and Policy.
‘‘(b) DUTIES.—The duties of the head of the Office
shall be—
‘‘(1) to serve as a central information clearing-
house on matters relating to economic development,
economic adjustment, industrial retention, disaster
recovery, and defense conversion programs and ac-
tivities of the Federal and State governments, in-
cluding political subdivisions of the States; and
‘‘(2) to help potential and actual applicants for
economic development, economic adjustment, disas-
ter recovery, industrial retention, and defense con-
version assistance under Federal, State, and local
laws in locating and applying for such assistance, in-
cluding financial and technical assistance.
‘‘(c) INFORMATION DATA BASES.—
‘‘(1) USES.—The Office shall develop informa-
tion data bases for use by Federal departments and
agencies. State and local governmental agencies,
public and private entities, and individuals to assist
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such agencies, entities, and individuals in the proc-
ess of identifying and applying for assistance and re-
sources under economic development, economic
adjustment, disaster recovery, industrial retention,
and defense conversion programs and activities of
the Federal, State, and local governments.
‘‘(2) SPECIFIC
KINDS
OF
INFORMATION
RE-
QUIRED TO BE INCLUDED.—The data bases shall in-
clude the following kinds of information:
‘‘(A) A comprehensive compilation of all
relevant information concerning available eco-
nomic development, economic adjustment, disas-
ter recovery, industrial retention, and defense
conversion programs of the Federal Government
including key contact people, descriptions of the
application process, eligibility requirements and
criteria, selection and followup procedures, and
other such relevant information.
‘‘(B) A compilation of major State and
local governmental economic development, eco-
nomic adjustment, disaster relief, industrial re-
tention, and defense conversion assistance pro-
grams, including lists of appropriate offices, of-
ficers, and contact personnel connected with, or
involved in, such programs.
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‘‘(C) A compilation of relevant and avail-
able economic data and trends, including infor-
mation about the national, regional, and local
impacts of trade agreements, defense spending
and downsizing, technological change, and other
sources of substantial economic dislocation.
‘‘(D) A compilation of case studies and
‘best practices’ in economic development, ad-
justment, and conversion.
‘‘(E) A compilation of technology utiliza-
tion programs, assistance, and resources.
‘‘(F) A compilation of published works
(books, reports, articles, videos, and tapes), and
selected texts of such works, related to all fac-
ets of economic development, economic adjust-
ment and defense conversion.
‘‘(G) A compilation of information on case
studies on early warning and intervention ef-
forts.
‘‘(3) POINTS OF PUBLIC ACCESS.—
‘‘(A) IN GENERAL.—The Office shall es-
tablish several mechanisms to assure easy ac-
cess by the public and others to such data
bases, and to assure that the data bases be as
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accessible, user-friendly, culturally neutral, and
affordable as possible.
‘‘(B) MEANS OF ACCESS.—Access to the
Office’s data services shall include the following
means:
‘‘(i) A toll-free nationwide telephone
number to provide direct phone access to
the public.
‘‘(ii) On-line electronic access through
existing computer network services and
publicly available computer data base ac-
cess facilities, such as at repository librar-
ies and by direct call-in via modem.
‘‘(iii) Printed manuals and orientation
materials.
‘‘(iv) Periodic orientation workshops
available to the public.
‘‘(v) On-call information specialists to
address special problems requiring person-
to-person assistance.
‘‘(d) INTERAGENCY COORDINATION.—The Secretary
shall enter into such agreements and understandings as
may be necessary with other Federal departments and
agencies to coordinate the accomplishment of the objec-
tives of this section.’’.
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SEC. 109. AREA ELIGIBILITY.
(a) IN GENERAL.—Title IV of the Public Works and
Economic Development Act of 1965 (42 U.S.C. 3161–
3173) is amended by striking the heading to such title
and all that follows through section 401 and inserting the
following:
‘‘TITLE IV—ELIGIBILITY AND
INVESTMENT STRATEGIES
‘‘PART A—ELIGIBILITY
‘‘SEC. 401. AREA ELIGIBILITY.
‘‘(a) CERTIFICATION.—In order to be eligible for as-
sistance under title I or II, an applicant seeking assistance
to undertake a project in an area shall certify, as part
of an application for such assistance, that the area on the
date of submission of such application meets 1 or more
of the following criteria:
‘‘(1) The area has a per capita income of 80
percent or less of the national average.
‘‘(2) The area has an unemployment rate 1 per-
cent above the national average percentage for the
most recent 24-month period for which statistics are
available.
‘‘(3) The area has experienced or is about to
experience a sudden economic dislocation resulting
in job loss that is significant both in terms of the
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number of jobs eliminated and the effect upon the
employment rate of the area.
‘‘(4) The area is a community or neighborhood
(defined without regard to political or other subdivi-
sions or boundaries) which the Secretary determines
has 1 or more of the following conditions:
‘‘(A) A large concentration of low-income
persons.
‘‘(B) Rural areas having substantial out-
migration or substantial economic deterioration
and unemployment.
‘‘(C) Substantial unemployment.
‘‘(b) DOCUMENTATION.—A certification made under
subsection (a) shall be supported by Federal data, when
available, and in other cases by data available through the
State government. Such documentation shall be accepted
by the Secretary unless it is determined to be inaccurate.
The most recent statistics available shall be used.
‘‘(c) SPECIAL RULE.—An area which the Secretary
determines has 1 or more of the conditions described in
subsection (a)(4)—
‘‘(1) shall not be subject to the requirements of
subparagraphs (A) and (C) of section 101(a)(1); and
‘‘(2) shall not be eligible to meet the require-
ments of section 403(a)(1)(B).
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‘‘(d) PRIOR DESIGNATIONS.—Any designation of a
redevelopment area under this title made before the date
of the enactment of the Economic Development Reauthor-
ization Act of 1994 shall not be effective after such date
of enactment.
‘‘(e) DEFINITION.—For purposes of this Act, the
term ‘large concentration of low-income persons’ means an
area with a median family income of not more than 80
percent of the national median family income.’’.
(b) CONFORMING AMENDMENTS.—
(1) TITLE I.—Title I of such Act (42 U.S.C.
3131–3137) is amended—
(A) in section 101(a)(1) in the matter pre-
ceding subparagraph (A) by striking ‘‘within a
redevelopment area’’ and inserting ‘‘within an
area described in section 401(a)’’;
(B) in section 101(a)(1)(D) by striking ‘‘a
redevelopment area so designated under section
401(a)(6)’’ and inserting ‘‘an area described in
section 401(a)(4)’’;
(C) in section 101(a)(2) by striking ‘‘with-
in redevelopment areas’’ and inserting ‘‘within
areas described in section 401(a)’’;
(D) in each of the 2d and 3d sentences of
section 101(c) by striking ‘‘a redevelopment
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area designated as such under section 401(a)(6)
of this Act’’ and inserting ‘‘an area described in
section 401(a)(4)’’; and
(E) in the 5th sentence of section 101(c)
by striking ‘‘redevelopment areas’’ and inserting
‘‘areas described in section 401(a)’’.
(2) TITLE II.—Title II of such Act (42 U.S.C.
3141–3144) is amended—
(A) in section 201(a) in the matter preced-
ing paragraph (1) by striking ‘‘within a redevel-
opment area’’ and inserting ‘‘within an area de-
scribed in section 401(a)’’;
(B) in each of paragraphs (1) and (3) of
section 202(a) by striking ‘‘within a redevelop-
ment area’’ and inserting ‘‘within an area de-
scribed in section 401(a)’’; and
(C) in section 202(b)(3) by striking ‘‘rede-
velopment’’.
(3) TITLE III.—Title III of such Act (42 U.S.C.
3151–3153) is amended—
(A) in section 301(a) by striking ‘‘(1) to
areas which he has designated as redevelopment
areas under this Act, and (2) to other areas
which he finds’’ and inserting ‘‘(1) to areas
which the Secretary determines are areas de-
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scribed in section 401(a), and (2) to other areas
which the Secretary finds’’;
(B) in section 301(c), as redesignated by
section 105(a) of this Act, by striking ‘‘redevel-
opment areas’’ both places it appears and in-
serting ‘‘areas described in section 401(a)’’;
(C) in the 1st sentence of section 302(a)
by striking ‘‘a redevelopment area’’ and insert-
ing ‘‘an area described in section 401(a)’’; and
(D) in the 2d sentence of section 302(a) by
striking ‘‘redevelopment areas’’ and inserting
‘‘areas described in section 401(a)’’.
(4) TITLE IV.—Title IV of such Act (42 U.S.C.
3161–3173) is amended—
(A) in each of subparagraphs (A) and (B)
of section 403(a)(1) by striking ‘‘redevelopment
area’’ and inserting ‘‘area described in section
401(a)’’;
(B) in section 403(a)(1)(C) by striking
‘‘redevelopment areas’’ and inserting ‘‘areas de-
scribed in section 401(a)’’;
(C) in section 403(a)(4) in the matter pre-
ceding subparagraph (A) by striking ‘‘redevel-
opment areas (designated under section 401)’’
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and inserting ‘‘areas described in section
401(a)’’;
(D) in section 403(a)(4)(A) by striking
‘‘redevelopment area’’ and inserting ‘‘area de-
scribed in section 401(a)’’; and
(E) in section 403(h), as redesignated by
section 111(c) of this Act, by striking ‘‘a rede-
velopment area’’ each place it appears and in-
serting ‘‘an area described in section 401(a)’’.
(5) TITLE IX.—Section 902 of such Act (42
U.S.C. 3242) is amended by striking ‘‘a redevelop-
ment area or economic development district estab-
lished under title IV of this Act’’ and inserting ‘‘an
area described in section 401(a) or an economic de-
velopment district designated under section 403’’.
SEC. 110 INVESTMENT STRATEGY.
(a) IN GENERAL.—Section 402 of the Public Works
and Economic Development Act of 1965 (42 U.S.C. 3162)
is amended to read as follows:
‘‘SEC. 402. INVESTMENT STRATEGY.
‘‘The Secretary may provide assistance under title I
or II to an applicant for a project to be undertaken in
an area described in section 401(a) only if the applicant
submits to the Secretary, as part of an application for
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such assistance, and the Secretary approves an investment
strategy which—
‘‘(1) identifies the economic development prob-
lems to be addressed using such assistance;
‘‘(2) identifies past, present, and projected fu-
ture economic development investments in such area
and public and private participants and sources of
funding for such investments;
‘‘(3) sets forth a strategy for addressing the
economic problems identified pursuant to paragraph
(1) and describes how the strategy will solve such
problems;
‘‘(4) provides a description of the project nec-
essary to implement the strategy, estimates of costs,
and timetables; and
‘‘(5) provides a summary of public and private
resources expected to be available for the project.’’.
(b) ELIMINATION OF OVERALL ECONOMIC DEVELOP-
MENT PROGRAM.—Section 202(b) of such Act (42 U.S.C.
3142(b)) is amended by striking paragraph (10).
(c) CONFORMING AMENDMENTS.—
(1) TITLE
I.—Subparagraph (C) of section
101(a)(1) of such Act (42 U.S.C. 3131(a)(1)) is
amended to read as follows:
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‘‘(C) the area for which the project is to be
undertaken has an approved investment strat-
egy as provided by section 402 and such project
is consistent with such strategy; and’’.
(2) TITLE II.—Paragraph (5) of section 201(a)
of such Act (42 U.S.C. 3141(a)) is amended to read
as follows:
‘‘(5) such area has an approved investment
strategy as provided by section 402 and the project
for which financial assistance is sought is consistent
with such strategy.’’.
(3) TITLE III.—Section 302(a) of such Act (42
U.S.C. 3151a(a)) is amended—
(A) in the 4th sentence by striking ‘‘overall
State economic development plan’’ and inserting
‘‘State investment strategy’’;
(B) in the 5th sentence—
(i) by striking ‘‘plan’’ each place it
appears and inserting ‘‘strategy’’; and
(ii) by striking ‘‘plans’’ each place it
appears and inserting ‘‘strategies’’; and
(C) in the 6th sentence by striking ‘‘Any
overall State economic development planning’’
and inserting ‘‘Development of any State in-
vestment strategy’’.
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(4) TITLE IV.—Section 403 of such Act (42
U.S.C. 3171) is amended—
(A) in each of subsections (a)(1)(C),
(a)(1)(D), (a)(2)(A), (a)(3)(A), (a)(4)(B), and
(e) by striking ‘‘overall economic development
program’’ and inserting ‘‘investment strategy’’;
(B) in subsection (a)(1)(D) by striking
‘‘program’’ the second place it appears and in-
serting ‘‘strategy’’; and
(C) in each of subsections (b) and
(b)(2)(B) by striking ‘‘overall economic develop-
ment programs’’ and inserting ‘‘investment
strategies’’.
SEC. 111. ECONOMIC DEVELOPMENT DISTRICTS.
(a) 
ECONOMIC
DEVELOPMENT
DISTRICT
DE-
FINED.—Section 403(d) of the Public Works and Eco-
nomic Development Act of 1965 (42 U.S.C. 3171(d)) is
amended by adding at the end the following: ‘‘Such term
includes any economic development district designated by
the Secretary under this section before the date of the en-
actment of the Economic Development Reauthorization
Act of 1994.’’.
(b) FUNDING.—Section 403(g) of such Act (42
U.S.C. 3171(g)) is amended to read as follows:
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‘‘(g) FUNDING.—Amounts authorized to be appro-
priated under other sections of this Act shall be available
for purposes of carrying out subsections (a)(3) and
(a)(4).’’.
(c) REPEAL.—Section 403 of such Act (42 U.S.C.
3162) is amended by striking subsections (h) and (i) and
redesignating subsection (j) as subsection (h).
(d) UNEMPLOYMENT
RATE
DETERMINATIONS.—
Title IV of such Act (42 U.S.C. 3161–3173) is amended
by striking part D.
SEC. 112. ADMINISTRATION.
(a) IN GENERAL.—Section 601 of the Public Works
and Economic Development Act of 1965 (42 U.S.C. 3201)
is amended to read as follows:
‘‘SEC. 601. APPOINTMENT OF ASSISTANT SECRETARY OF
COMMERCE FOR ECONOMIC DEVELOPMENT;
COMPENSATION.
‘‘(a) ADMINISTRATION OF ACT.—The Secretary shall,
with the assistance of an Assistant Secretary of Com-
merce, administer this Act.
‘‘(b) APPOINTMENT OF ASSISTANT SECRETARY.—
‘‘(1) IN
GENERAL.—The Assistant Secretary
whose position is established under subsection (a)
shall be appointed by the President, by and with the
advice and consent of the Senate.
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‘‘(2) DUTIES.—The Assistant Secretary ap-
pointed under paragraph (1) shall perform such
functions as the Secretary may prescribe.’’.
(b) ADVISORY COMMITTEE ON REGIONAL ECONOMIC
DEVELOPMENT.—Title VI of such Act (33 U.S.C. 3201–
3204) is amended by striking section 602 and redesignat-
ing sections 603 and 604 as sections 602 and 603, respec-
tively.
SEC. 113. EXPEDITED PROCESSING OF APPLICATIONS.
Title VI of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3201–3204) is amended by
adding at the end the following:
‘‘SEC. 604. EXPEDITED PROCESSING OF APPLICATIONS.
‘‘(a) GUIDELINES.—Not later than 60 days after the
date of the enactment of this section, the Assistant Sec-
retary for Economic Development shall—
‘‘(1) publish guidelines to expedite the process-
ing of applications for assistance under this Act; and
‘‘(2) transmit to Congress a report containing
such guidelines.
‘‘(b) CONTENTS.—Guidelines to be published under
subsection (a) shall, at a minimum, provide for the follow-
ing:
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‘‘(1) Increased reliance on self-certification by
applicants to establish compliance with other Fed-
eral laws.
‘‘(2) Greater use of uniform application forms
and procedures.
‘‘(3) Delegation of decisionmaking authority to
regional offices.
‘‘(4) Reduction in the time and number of re-
views conducted by other offices of the Department
of Commerce.’’.
SEC. 114. UNIFORM APPLICATION FORM.
Title VI of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3201–3204) is further
amended by adding at the end the following:
‘‘SEC. 605. UNIFORM APPLICATION FORM.
‘‘(a) DEVELOPMENT.—The Secretary shall, in co-
operation with the heads of appropriate Federal depart-
ments and agencies, develop a general, simplified applica-
tion form for grant assistance under this Act which may
be used by all Federal departments and agencies which
provide grant assistance.
‘‘(b) REPORT.—Not later than 6 months after the
date of the enactment of this section, the Secretary shall
transmit to Congress a report on use of the form devel-
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oped pursuant to subsection (a) by Federal departments
and agencies.’’.
SEC. 115. STUDY OF GRANT SELECTION CRITERIA.
Title VI of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3201–3204) is further
amended by adding at the end the following:
‘‘SEC. 606. STUDY OF GRANT SELECTION CRITERIA.
‘‘(a) DEVELOPMENT OF METHOD.—The Secretary
shall develop recommendations for prioritizing applica-
tions and awarding funding for projects under this Act
based on the relative needs of eligible areas and the capac-
ity of an applicant to carry out a project, including the
ability of the applicant to leverage or attract funding from
the private sector and to coordinate or create partnerships
with other eligible recipients.
‘‘(b) CONSIDERATION.—In developing a method
under subsection (a), the Secretary shall consider the dif-
ferent objectives of each title of this Act.
‘‘(c) REPORT TO CONGRESS.—Not later than 1 year
after the date of the enactment of this section, the Sec-
retary shall transmit to Congress a report containing rec-
ommendations developed under subsection (a).’’.
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SEC. 116. PERFORMANCE EVALUATIONS OF GRANT RECIPI-
ENTS.
Title VI of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3201–3204) is further
amended by adding at the end the following:
‘‘SEC. 607. PERFORMANCE EVALUATIONS OF GRANT RE-
CIPIENTS.
‘‘(a) IN GENERAL.—At least once every 2 years, the
Secretary shall conduct an evaluation of each university
center and economic development district receiving grant
assistance under this Act to assess the recipient’s perform-
ance and contribution toward job creation.
‘‘(b) CRITERIA.—
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish criteria for use in conducting evaluations
under subsection (a).
‘‘(2) CRITERIA
FOR
UNIVERSITY
CENTERS.—
The criteria for evaluation of a university center
shall, at a minimum, provide for an assessment of
the center’s contribution to providing technical as-
sistance, conducting applied research, and dissemi-
nating results of the center’s activities.
‘‘(3) CRITERIA FOR ECONOMIC DEVELOPMENT
DISTRICTS.—The criteria for evaluation of an eco-
nomic development district shall, at a minimum, pro-
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vide for an assessment of management standards, fi-
nancial accountability, and program performance.
‘‘(c) PEER REVIEW.—In conducting an evaluation of
a university center under subsection (a), the Secretary
shall provide for the participation of at least one other
university center on a cost-reimbursement basis.’’.
SEC. 117. STUDY OF GUARANTEED LOAN PROGRAM.
Title VI of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3241–3245) is further
amended by adding at the end the following:
‘‘SEC. 608. STUDY OF INNOVATIVE ECONOMIC DEVELOP-
MENT FINANCING TOOLS.
‘‘(a) STUDY.—The Secretary shall conduct a study
of innovative economic development financing tools, in-
cluding a guaranteed loan program and an equity financ-
ing program.
‘‘(b) CONDUCT.—In conducting the study under sub-
section (a), the Secretary shall identify the credit gap
which would be addressed by the programs referred to in
subsection (a), methods to avoid the mistakes of previous
guaranteed loan programs carried out by the Economic
Development Administration, and an expected subsidy
rate to be implemented under such programs.
‘‘(c) REPORT TO CONGRESS.—Not later than 1 year
after the date of the enactment of this section, the Sec-
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retary shall transmit to Congress a report on the results
of the study conducted under this section, together with
recommendations on whether the programs referred to in
subsection (a) should be authorized as part of this Act.’’.
SEC. 118. MISCELLANEOUS.
(a) POWERS OF THE SECRETARY.—Section 701 of
the Public Works and Economic Development Act of 1965
(42 U.S.C. 3211) is amended—
(1) in paragraph (4)—
(A) by striking ‘‘loans’’ the first place it
appears and inserting ‘‘grants or loans’’; and
(B) by striking ‘‘loans’’ the second place it
appears and inserting ‘‘grants, loans,’’;
(2) in paragraph (6) by striking ‘‘loans’’ and
inserting ‘‘grants or loans’’;
(3) in paragraph (7) by striking ‘‘loans’’ each
place it appears and inserting ‘‘grants or loans’’;
and
(4) in paragraph (10)—
(A) by striking ‘‘section 15 of the Adminis-
trative Expenses Act of 1946 (5 U.S.C. 55a).’’
and inserting ‘‘section 3109 of title 5, United
States Code,’’; and
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(B) by striking ‘‘section 5 of such Act (5
U.S.C. 73b–2)’’ and inserting ‘‘section 5703 of
title 5, United States Code,’’.
(b) UNFAIR COMPETITION; SAVINGS PROVISIONS.—
Title VII of such Act (42 U.S.C. 3211–3225) is amended
by striking sections 702 and 703 and redesignating sec-
tions 704 through 714 as sections 702 through 712, re-
spectively.
(c) TRANSFER OF FUNCTIONS.—Section 702 of such
Act, as redesignated by subsection (b) of this section, is
amended—
(1) in the heading to such section by striking
‘‘,EFFECTIVE DATE, AND LIMITATIONS ON AS-
SISTANCE’’ and inserting ‘‘OF AREA REDEVELOP-
MENT ADMINISTRATION’’;
(2) by striking ‘‘(a) The’’ and inserting ‘‘The’’;
and
(3) by striking subsections (b) through (e).
(d) USE OF OTHER FACILITIES.—Section 706 of
such Act, as redesignated by subsection (b) of this section,
is amended by adding at the end the following new sub-
section:
‘‘(d) FUNDS TRANSFERRED FROM OTHER DEPART-
MENTS AND AGENCIES.—In order to carry out the objec-
tives of this Act, the Secretary may accept transfers of
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funds from other departments and agencies of the Federal
Government if the funds are used for the purposes for
which (and in accordance with the terms under which) the
funds are specifically authorized and appropriated. Such
transferred funds shall remain available until expended
and may be transferred to and merged with the appropria-
tions under the heading ‘salaries and expenses’ by the Sec-
retary to the extent necessary to administer the pro-
gram.’’.
(f) AUTHORIZATION OF APPROPRIATIONS.—Section
707 of such Act, as redesignated by subsection (b) of this
section, is amended by striking ‘‘$25,000,000 for the fiscal
year ending September 30, 1992’’ and inserting
‘‘$36,000,000 for the fiscal year ending September 30,
1995’’.
(g) PENALTIES.—Section 708 of such Act, as redes-
ignated by subsection (b) of this section, is amended—
(1) in subsection (a)—
(A) by striking ‘‘himself’’ and inserting
‘‘such person’’; and
(B) by striking ‘‘shall be punished by’’ and
all that follows before the period and inserting
‘‘shall be fined under title 18, United States
Code, imprisoned for not more than 5 years, or
both’’; and
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(2) in subsection (b)—
(A) by striking ‘‘him’’ both places it ap-
pears and inserting ‘‘such person’’; and
(B) by striking ‘‘shall be punished by’’ and
all that follows before the period and inserting
‘‘shall be fined under title 18, United States
Code, imprisoned for not more than 5 years, or
both’’.
(h) RATE OF WAGES.—Section 710 of such Act, as
redesignated by subsection (b) of this section, is amend-
ed—
(1) in the 1st sentence by striking ‘‘the Davis-
Bacon Act, as amended (40 U.S.C. 276a–276a–5)’’
and inserting ‘‘the Act of March 3, 1931, known as
the Davis-Bacon Act’’; and
(2) in the 3d sentence by striking ‘‘Reorganiza-
tion Plan’’ and all that follows before the period and
inserting ‘‘Reorganization Plan Numbered 14 of
1950 and section 2 of the Act of June 13, 1934
(Chapter 482; 48 Stat. 948)’’.
(i) AREA REDEVELOPMENT ACT.—Title VII of such
Act (42 U.S.C. 3211–3225) is amended by striking section
715 and redesignating section 716 as section 713.
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SEC. 119. ACCEPTANCE OF APPLICANTS’ CERTIFICATIONS.
Title VII of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3211–3226) is further
amended by adding at the end the following:
‘‘SEC. 714. ACCEPTANCE OF APPLICANTS’ CERTIFICATIONS.
‘‘The Secretary may accept, when deemed appro-
priate, the applicants’ certifications to meet the require-
ments of this Act.’’.
SEC. 120. SUPERVISION OF REGIONAL COUNSELS.
Title VII of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3211–3226) is further
amended by adding at the end the following:
‘‘SEC. 715. SUPERVISION OF REGIONAL COUNSELS.
‘‘The Secretary shall take such actions as may be
necessary to ensure that individuals serving as Regional
Counsels of the Economic Development Administration re-
port directly to their respective Regional Director.’’.
SEC. 121. ECONOMIC RECOVERY FOR DISASTER AREAS.
Title VIII of the Public Works and Economic Devel-
opment Act of 1965 (42 U.S.C. 3231–3236) is repealed.
SEC. 122. SPECIAL ECONOMIC DEVELOPMENT AND ADJUST-
MENT ASSISTANCE.
(a) ELIGIBLE RECIPIENT DEFINED.—Section 902 of
the Public Works and Economic Development Act of 1965
(42 U.S.C. 3242) is amended—
(1) by striking ‘‘, or’’ and inserting ‘‘or’’; and
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(2) by inserting before the period at the end the
following: ‘‘, or at the discretion of the Secretary a
public or private nonprofit organization or associa-
tion’’.
(b) GRANT AUTHORITY.—Section 903(a)(1) of such
Act (42 U.S.C. 3243(a)(1)) is amended by striking ‘‘un-
employment compensation (in accordance with subsection
(d) of this section), rent supplements, mortgage payment
assistance, research, technical assistance,’’ and inserting
‘‘administrative expenses, industrial retention,’’.
(c) GRANTS
FOR
UNEMPLOYMENT
COMPENSA-
TION.—Section 903(a)(2) of such Act (42 U.S.C.
3243(a)(2)) is amended—
(1) by striking ‘‘(2)(A) Such grants’’ and in-
serting ‘‘(2) Such grants’’; and
(2) by striking subparagraph (B).
(d) COORDINATION OF ACTIVITIES.—Section 903(c)
of such Act (42 U.S.C. 3243(c)) is amended by striking
‘‘regional commissions’’ and inserting ‘‘other Federal pro-
grams’’.
(e) TRANSFER
OF
FUNDS
TO
SECRETARY
OF
LABOR.—Section 903 of such Act (42 U.S.C. 3243) is
amended by striking subsection (d).
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(f) BASE CLOSINGS AND REALIGNMENTS.—Section
903 of such Act (42 U.S.C. 3243) is amended by adding
at the end the following new subsection:
‘‘(d) BASE CLOSINGS AND REALIGNMENTS.—
‘‘(1) LOCATION OF PROJECTS.—In any case in
which the Secretary determines a need for assistance
under subsection (a) due to the closure or realign-
ment of a military installation, the Secretary may
make such assistance available for projects to be
carried out on the military installation and for
projects to be carried out in communities adversely
affected by the closure or realignment.
‘‘(2) INTEREST IN PROPERTY.—Notwithstand-
ing any other provision of law, the Secretary may
provide to an eligible recipient any assistance avail-
able under this Act for a project to be carried out
on a military installation that is closed or scheduled
for closure or realignment without requiring that the
eligible recipient have title to the property or a lease-
hold interest in the property for any specified
term.’’.
SEC. 123. TREATMENT OF REVOLVING LOAN FUNDS.
Title IX of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3241–3245) is amended—
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(1) by redesignating section 905 as section 909;
and
(2) by inserting after section 904 the following:
‘‘SEC. 905. TREATMENT OF REVOLVING LOAN FUNDS.
‘‘(a) IN GENERAL.—Amounts from grants under this
title which are used by an eligible recipient to establish
a revolving loan fund shall not be treated, except as pro-
vided by subsection (b), as amounts derived from Federal
funds for the purposes of any Federal law after such
amounts are loaned from the fund to a borrower and re-
paid to the fund.
‘‘(b) EXCEPTIONS.—Amounts described in subsection
(a) which are loaned from a revolving loan fund to a bor-
rower and repaid to the fund—
‘‘(1) may only be used for projects which are
consistent with the purposes of this title; and
‘‘(2) shall be subject to the financial manage-
ment, accounting, reporting, and auditing standards
which were originally applicable to such amounts.
‘‘(c) REGULATIONS.—Not later than 30 days after
the date of the enactment of this section, the Secretary
shall issue regulations to carry out subsection (a).
‘‘(d) PUBLIC REVIEW AND COMMENT.—Before issu-
ing any final guidelines or administrative manuals govern-
ing the operation of revolving loan funds established using
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amounts from grants under this title, the Secretary shall
provide reasonable opportunity for public review of and
comment on such guidelines and administrative manu-
als.’’.
SEC. 124. OUTREACH TO COMMUNITIES ADVERSELY AF-
FECTED BY DEFENSE BASE CLOSURES.
Title IX of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3241–3245) is further
amended by adding at the end the following:
‘‘SEC. 906. OUTREACH TO COMMUNITIES ADVERSELY AF-
FECTED BY DEFENSE BASE CLOSURES.
‘‘(a) DESIGNATION
OF
AGENCY
REPRESENTA-
TIVES.—The Assistant Secretary for Economic Develop-
ment shall designate for each State in which communities
are adversely affected by defense base closures an individ-
ual to serve as a representative of the Economic Develop-
ment Administration. Such individual may be the State
Economic Development Agency Representative or another
qualified individual.
‘‘(b) RESPONSIBILITIES.—Individuals appointed as
agency representatives under subsection (a) shall provide
outreach and technical assistance to communities ad-
versely affected by defense base closures on obtaining as-
sistance from the Economic Development Administra-
tion.’’.
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SEC. 125. SALE OF FINANCIAL INSTRUMENTS IN REVOLV-
ING LOAN FUNDS.
Title IX of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3241–3245) is further
amended by adding at the end the following:
‘‘SEC. 907. SALE OF FINANCIAL INSTRUMENTS IN REVOLV-
ING LOAN FUNDS.
‘‘Any loan, loan guarantee, equity, or other financial
instrument in the portfolio of a Revolving Loan Fund may
be sold, at the discretion of the grantee of the Fund, to
a third party provided that the proceeds of the sale—
‘‘(1) shall be deposited in the Fund and only
used for projects which are consistent with the pur-
poses of this title, and
‘‘(2) shall be subject to the financial manage-
ment, accounting, reporting, and auditing standards
which were originally applicable to the financial in-
strument.’’.
SEC. 126. ECONOMIC DEVELOPMENT CHALLENGE GRANTS
DEMONSTRATION PROJECT.
Title IX of the Public Works and Economic Develop-
ment Act of 1965 (42 U.S.C. 3241–3245) is further
amended by adding at the end the following:
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‘‘SEC. 908. ECONOMIC DEVELOPMENT CHALLENGE GRANTS
DEMONSTRATION PROJECT.
‘‘(a) IN GENERAL.—In order to study the feasibility
and desirability of using challenge grants to generate new
pools of investment capital in areas suffering from long-
term economic deterioration, the Secretary shall establish
a 2-year demonstration project under which the Secretary
shall provide grants to selected recipients, to be matched
by the recipients 1 dollar for every 2 Federal dollars, for
the purpose of establishing substantially leveraged financ-
ing for business development and other innovative eco-
nomic development efforts.
‘‘(b) FEDERAL AND COMMUNITY CONTRIBUTIONS.—
‘‘(1) IN GENERAL.—The Secretary shall grant 2
dollars for every 1 dollar raised by each selected re-
cipient, up to $10,000,000 per year per selected re-
cipient.
‘‘(2) USE OF OTHER FEDERAL FUNDS IN CON-
JUNCTION WITH CHALLENGE GRANT.—Funds from
other Federal programs may be used in conjunction
or merged with the challenge grant and matching
funds to form a larger investment fund.
‘‘(c) ESTABLISHMENT AND USE OF FUNDS.—
‘‘(1) ESTABLISHMENT.—For purposes of this
Act, an investment fund established by a selected re-
cipient consists of—
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‘‘(A) the economic development challenge
grant received by the selected recipient;
‘‘(B) the matching funds required under
subsection (b); and
‘‘(C) any such other funds that may be de-
rived from other sources, including other Fed-
eral funds.
‘‘(2) USE.—An investment fund shall be used
by the selected recipients for the purposes of gener-
ating long-term sustainable economic development
and job growth in areas identified by the selected re-
cipients, pursuant to the requirements and limita-
tions of eligibility and performance in subsections
(d), (e), (f), (g) and (h).
‘‘(d) ELIGIBLE RECIPIENTS.—The Secretary shall
make grants to any eligible recipients for use in an area
which must meet 1 or more of the following criteria:
‘‘(1) The area has a per capita income of 80
percent or less of the national average.
‘‘(2) The area has an unemployment rate 1 per-
cent above the national average percentage for the
more recent 24-month period for which statistics are
available.
‘‘(3) The area has been determined by the Sec-
retary to have at least 1 of the following conditions: