Competitive Communities Demonstration Act of 1994

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Competitive Communities 
Demonstration Act of 1994''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (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 
        remains 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 network of 
        programs, the Economic Development Administration should 
        institute a Competitive Communities 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 Administration to 
        become a more active partner in bringing community leadership 
        together with competitive growth businesses to build a new 
        competitive economic base in communities outside the mainstream 
        of economic growth.
            (2) To raise the economic aspirations of such communities 
        beyond the retention of the existing economic base to building 
        a new competitive economic base for the future.

SEC. 3. COMPETITIVE COMMUNITIES DEMONSTRATION PROGRAM.

    Title IX of the Public Works and Economic Development 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 establish and carry out a 
Competitive Communities Demonstration Program (hereinafter in this 
section referred to as the `program') under which the Secretary may 
make grants to eligible intermediaries in accordance with the 
requirements of this section.
    ``(b) Eligible Intermediary Defined.--In this section, the term 
`eligible intermediary' means an economic 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 consortium of any of such entities which demonstrate 
the financial expertise, ability, and legal authority to make 
investments under the program, as well as the ability to develop 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 eligible intermediary to provide 
financial assistance to high growth businesses in a distressed 
community. Such financial 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 submit 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 program will be used for 
        purposes which are consistent with the purposes of the program; 
        and
            ``(5) is in such form and contains such additional 
        information as the Secretary may prescribe.
    ``(e) Panel of Experts.--
            ``(1) Establishment.--The Secretary shall establish a panel 
        of experts to review grant applications 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 Economic 
                Development.
                    ``(C) 1 Regional Director of the Economic 
                Development Administration appointed by the Secretary.
                    ``(D) 1 Economic Development Representative of the 
                Economic Development Administration appointed by the 
                Secretary.
                    ``(E) 3 private citizens with economic development 
                and business expertise appointed by the Secretary.
            ``(2) Diversity of members.-- In making appointments under 
        paragraph (1), the Secretary shall seek to appoint members with 
        diverse ethnic, cultural, 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 experts 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 recommendations 
        pursuant to paragraph (1), the panel shall rank the proposed 
        projects by priority using a scoring system based on criteria 
        described in subsection (g).
            ``(3) Geographic balance.--The project scoring 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.--
            ``(1) Criteria.--In recommending grant recipients under the 
        program, the panel shall consider the following:
                    ``(A) The role of the intermediary in the 
                community, including the extent to which the 
                intermediary has a clearly articulated role in the 
                economic development strategy of the community and the 
                extent to which such role is supported by both private 
                sector and public sector leaders in the community.
                    ``(B) The capacity of the eligible intermediary to 
                participate in the program.
                    ``(C) The business plans and prospects of the 
                businesses which would receive assistance from the 
                grant amounts.
                    ``(D) The quantity and quality of jobs to be 
                created or retained by the projects.
                    ``(E) The commitment of the businesses to remain in 
                the community.
                    ``(F) The level of economic distress in the 
                community involved.
                    ``(G) The leveraging of non-Federal funds committed 
                to the projects.
            ``(2) Special considerations.--In recommending grant 
        recipients under the program, the panel shall give special 
        consideration to the following applicants:
                    ``(A) Applicants who operate existing revolving 
                loan funds.
                    ``(B) Applicants who have applied for designation 
                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 communities 
                adversely affected by the closure or realignment of a 
                military installation or by defense industry cutbacks.
    ``(h) Deadlines.--
            ``(1) Submission of applications.--The Secretary shall 
        publish in the Federal Register deadlines for the submission of 
        grant applications under the program.
            ``(2) Approval or disapproval of applications.--The 
        Secretary shall approve or disapprove each grant application 
        received by the Secretary under the program on or before the 
        60th day following the deadline for submission of such grant 
        application established pursuant to paragraph (1).
            ``(3) Use of grant amounts.--Any grant agreement entered 
        into by the Secretary and an eligible 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 financial institutions, and other lenders.
    ``(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, 
conversion, or enlargement of existing buildings) and the provision 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 interests 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 established under this section on a 
preferred lenders basis and shall authorize lenders, in accordance with 
agreements entered 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 eligibility and credit 
worthiness and loan monitoring, collections, 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 investment in 
        competitive businesses located in distressed areas outside the 
        mainstream of economic growth;
            ``(3) the success of the Competitiveness Communities 
        Demonstration Program authorized by section 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 leveraged using 
        such grants, and the quantity and quality 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.''.

Summary: Competitive Communities Demonstration Act of 1994 - Amends the Public Works and Economic Development Act of 1965 (the Act) to direct the Secretary of Commerce to establish and carry out a Competitive Communities Demonstration Program under which the Secretary makes grants to eligible intermediaries to provide financial assistance to high growth businesses in distressed communities.  Outlines grant application requirements and directs the Secretary to establish a panel of experts to review grant applications.  Requires the panel to use specified criteria in its review and to give special consideration to applicants who:  (1) operate existing revolving loan funds; (2) have applied for but failed to receive designation as empowerment zones or enterprise communities under the Internal Revenue Code; and (3) represent communities adversely affected by the closure or realignment of military installations or defense cutbacks.  Provides funding from amounts appropriated under the Act.  Authorizes the Secretary to guarantee loans made to private borrowers by private lending institutions, community development financial institutions, and other lenders as considered appropriate to carry out the economic adjustment purposes of the Act.  Includes as eligible activities for such loans the development of land and facilities for industrial or commercial usage and the provision of working capital.  Provides funding from amounts appropriated under the Act. 
Directs the Secretary to include in an annual report required under the Act an assessment of the competitiveness of the economic base of the Nation's distressed areas, the progress made in encouraging investment in such areas, and the success of the demonstration and guaranteed loan programs established under this Act.