[Congressional Bills 103th Congress] [From the U.S. Government Publishing Office] [S. 244 Introduced in Senate (IS)] 103d CONGRESS 1st Session S. 244 To stimulate enterprise development in economically distressed urban and rural areas through public and private partnerships facilitated by community development corporations, and for other purposes. _______________________________________________________________________ IN THE SENATE OF THE UNITED STATES January 27 (legislative day, January 5), 1993 Mr. Kennedy (for himself, Mr. Jeffords, Mr. Dodd, Mr. Metzenbaum, Mr. DeConcini, Mr. Simon, Mr. Harkin, Mr. Kerry, Mr. Bradley, Mr. Kohl, Mr. Inouye, Mr. Wellstone, Ms. Mikulski, Mr. Pell, and Mr. McCain), introduced the following bill; which was read twice and referred to the Committee on Labor and Human Resources _______________________________________________________________________ A BILL To stimulate enterprise development in economically distressed urban and rural areas through public and private partnerships facilitated by community development corporations, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; FINDINGS AND PURPOSE. (a) Short Title.--This Act may be cited as the ``National Community Economic Partnership Act of 1993''. (b) Findings.--Congress finds that-- (1) the cities, towns, small communities and rural areas throughout the United States face critical social and economic problems arising in part from a lack of economic growth in community based economies; (2) the crisis facing local economies has resulted in-- (A) a growing percentage of the workforce earning poverty level wages, even though they work full time and year round; (B) the percentage of the labor force living below the poverty line increasing from 25.7 percent in 1979 to 31.5 percent in 1987; (C) population losses, rising unemployment and a decline of the farm sector and of many other rural industries (such as timber, oil, gas, and mining) contribute to the decline of rural economies; (D) with respect to rural areas, 31.9 percent of the workforce falling below the poverty line in 1979, with that percentage rising to 42.1 percent in 1987; (E) with respect to urban areas, 23.4 percent of the workforce falling below the poverty line in 1979, with that percentage rising to 28.9 percent in 1987; and (F) the average wage and salary income of the 90 percent of the population with the lowest incomes, between 1977 and 1988, falling 3.5 percent in contrast to the richest 1 percent of the population whose incomes more than doubled in that time period. (3) the future well-being of the United States and the well-being of its citizens depends on the establishment and maintenance of viable community development enterprises; (4) meeting the goal of establishing and maintaining viable community development enterprises requires-- (A) increased public and private investment in business development activities, especially in the small business sector which generates the majority of new jobs as evidenced by the fact that between 1980 and 1986, enterprises with less than 100 employees accounted for more than 50 percent of the jobs created in the United States; (B) increased investment and technical assistance to existing community based enterprises as evidenced by the fact that during the first half of the 1980's, more than 75 percent of the total net new jobs in the United States came from the expansion of existing businesses; (C) a substantial expansion and greater continuity in the scope of Federal programs that support community based economic development strategies; (D) the continuing efforts at Federal, State and local levels to coordinate the planning, implementation and evaluation of community economic development efforts; and (5) community development corporations, due to their proven capacity and achievements in both the field of community based housing and economic development, are appropriate vehicles through which to advance a national community economic development program because-- (A) there are currently over 2000 community development corporations throughout the United States, operating projects that promote community based housing and economic development; (B) community development corporations operate in every State and in virtually every major city in the United States, and account for many of the existing efforts undertaken to meet the needs of low income persons in both urban and rural communities; (C) community development corporations have developed some 300,000 units of housing, with over 90 percent of these units for use by low income occupants; (D) community development corporations have developed over 19,000,000 square feet of retail space, offices, industrial parks and other industrial developments in economically distressed communities; (E) community development corporations have made loans to over 3000 enterprises, equity investments in 242 ventures and own and operate 427 businesses; and (F) community development corporations commercial, industrial and business enterprise development activities have accounted for the creation and retention of nearly 90,000 jobs in the last five years. (c) Purpose.--It is the purpose of this Act to stimulate enterprise development in economically distressed urban and rural areas through public and private partnerships facilitated by community development corporations. TITLE I--COMMUNITY ECONOMIC PARTNERSHIP INVESTMENT FUNDS SEC. 101. PURPOSE. It is the purpose of this title to increase private investment in distressed local communities and to build and expand the capacity of local institutions to better serve the economic needs of local residents through the provision of financial and technical assistance to community development corporations. SEC. 102. PROVISION OF ASSISTANCE. (a) Authority.--The Secretary of Health and Human Services (hereafter referred to in this Act as the ``Secretary'') is authorized, in accordance with this title, to provide nonrefundable lines of credit to community development corporations for the establishment, maintenance or expansion of revolving loan funds to be utilized to finance projects intended to provide business and employment opportunities for low-income, unemployed, or underemployed individuals and to improve the quality of life in urban and rural areas. (b) Revolving Loan Funds.-- (1) Competitive assessment of applications.--In providing assistance under subsection (a), the Secretary shall establish and implement a competitive process for the solicitation and consideration of applications from eligible entities for lines of credit for the capitalization of revolving funds. (2) Eligible entities.--To be eligible to receive a line of credit under this title an applicant shall-- (A) be a community development corporation; (B) prepare and submit an application to the Secretary that shall include a strategic investment plan that identifies and describes the economic characteristics of the target area to be served, the types of business to be assisted and the impact of such assistance on low-income, underemployed, and unemployed individuals in the target area; (C) demonstrate previous experience in the development of low-income housing or community or business development projects in a low-income community and provide a record of achievement with respect to such projects; and (D) have secured one or more commitments from local sources for contributions (either in cash or in kind, letters of credit or letters of commitment) in an amount that is at least equal to the amount requested in the application submitted under subparagraph (B). (3) Exception.--Notwithstanding the provisions of paragraph (2)(D), the Secretary may reduce local contributions to not less than 25 percent of the amount of the line of credit requested by the community development corporation if the Secretary determines such to be appropriate in accordance with section 106. SEC. 103. APPROVAL OF APPLICATIONS. (a) In General.--In evaluating applications submitted under section 102(b)(2)(B), the Secretary shall ensure that-- (1) the residents of the target area to be served (as identified under the strategic development plan) would have an income that is less than the median income for the area (as determined by the Secretary); (2) the applicant community development corporation possesses the technical and managerial capability necessary to administer a revolving loan fund and has past experience in the development and management of housing, community and economic development programs; (3) the applicant community development corporation has provided sufficient evidence of the existence of good working relationships with-- (A) local businesses and financial institutions, as well as with the community the corporation proposes to serve; and (B) local and regional job training programs; (4) the applicant community development corporation will target job opportunities that arise from revolving loan fund investments under this title so that 75 percent of the jobs retained or created under such investments are provided to-- (A) individuals with-- (i) incomes that do not exceed the Federal poverty line; or (ii) incomes that do not exceed 80 percent of the median income of the area; (B) individuals who are unemployed or underemployed; (C) individuals who are participating or have participated in job training programs authorized under the Job Training Partnership Act (29 U.S.C. 1501 et seq.) or the Family Support Act of 1988 (Public Law 100-485); (D) individuals whose jobs may be retained as a result of the provision of financing available under this title; or (E) individuals who have historically been underrepresented in the local economy; and (5) a representative cross section of applicants are approved, including large and small community development corporations, urban and rural community development corporations and community development corporations representing diverse populations. (b) Priority.--In determining which application to approve under this title the Secretary shall give priority to those applicants proposing to serve a target area-- (1) with a median income that does not exceed 80 percent of the median for the area (as determined by the Secretary); and (2) with a high rate of unemployment, as determined by the Secretary or in which the population loss is at least 7 percent from April 1, 1980, to April 1, 1990, as reported by the Bureau of the Census. SEC. 104. AVAILABILITY OF LINES OF CREDIT AND USE. (a) Approval of Application.--The Secretary shall provide a community development corporation that has an application approved under section 103 with a line of credit in an amount determined appropriate by the Secretary, subject to the limitations contained in subsection (b). (b) Limitations on Availability of Amounts.-- (1) Maximum amount.--The Secretary shall not provide in excess of $2,000,000 in lines of credit under this title to a single applicant. (2) Period of availability.--A line of credit provided under this title shall remain available over a period of time established by the Secretary, but in no event shall any such period of time be in excess of 3 years from the date on which such line of credit is made available. (3) Exception.--Notwithstanding paragraphs (1) and (2), if a recipient of a line of credit under this title has made full and productive use of such line of credit, can demonstrate the need and demand for additional assistance, and can meet the requirements of section 102(b)(2), the amount of such line of credit may be increased by not more than $1,500,000. (c) Amounts Drawn From Line of Credit.--Amounts drawn from each line of credit under this title shall be used solely for the purposes described in section 101 and shall only be drawn down as needed to provide loans, investments, or to defray administrative costs related to the establishment of a revolving loan fund. (d) Use of Revolving Loan Funds.--Revolving loan funds established with lines of credit provided under this title may be used to provide technical assistance to private business enterprises and to provide financial assistance in the form of loans, loan guarantees, interest reduction assistance, equity shares, and other such forms of assistance to business enterprises in target areas and who are in compliance with section 103(a)(4). SEC. 105. LIMITATIONS ON USE OF FUNDS. (a) Matching Requirement.--Not to exceed 50 percent of the total amount to be invested by an entity under this title may be derived from funds made available from a line of credit under this title. (b) Technical Assistance and Administration.--Not to exceed 10 percent of the amounts available from a line of credit under this title shall be used for the provision of training or technical assistance and for the planning, development, and management of economic development projects. Community development corporations shall be encouraged by the Secretary to seek technical assistance from other community development corporations, with expertise in the planning, development and management of economic development projects. The Secretary shall assist in the identification and facilitation of such technical assistance. (c) Local and Private Sector Contributions.--To receive funds available under a line of credit provided under this title, an entity, using procedures established by the Secretary, shall demonstrate to the community development corporation that such entity agrees to provide local and private sector contributions in accordance with section 102(b)(2)(D), will participate with such community development corporation in a loan, guarantee or investment program for a designated business enterprise, and that the total financial commitment to be provided by such entity is at least equal to the amount to be drawn from the line of credit. (d) Use of Proceeds From Investments.--Proceeds derived from investments made using funds made available under this title may be used only for the purposes described in section 101 and shall be reinvested in the community in which they were generated. SEC. 106. PROGRAM PRIORITY FOR SPECIAL EMPHASIS PROGRAMS. (a) In General.--The Secretary shall give priority in providing lines of credit under this title to community development corporations that propose to undertake economic development activities in distressed communities that target women, Native Americans, at risk youth, farmworkers, population-losing communities, very low-income communities, single mothers, veterans, and refugees; or that expand employee ownership of private enterprises and small businesses, and to programs providing loans of not more than $35,000 to very small business enterprises. (b) Reservation of Funds.--Not less than 5 percent of the amounts made available under section 403(a)(2)(A) may be reserved to carry out the activities described in subsection (a). TITLE II--EMERGING COMMUNITY DEVELOPMENT CORPORATIONS SEC. 201. COMMUNITY DEVELOPMENT CORPORATION IMPROVEMENT GRANTS. (a) Purpose.--It is the purpose of this section to provide assistance to community development corporations to upgrade the management and operating capacity of such corporations and to enhance the resources available to enable such corporations to increase their community economic development activities. (b) Skill Enhancement Grants.-- (1) In general.--The Secretary shall award grants to community development corporations to enable such corporations to attain or enhance the business management and development skills of the individuals that manage such corporations to enable such corporations to seek the public and private resources necessary to develop community economic development projects. (2) Use of funds.--A recipient of a grant under paragraph (1) may use amounts received under such grant-- (A) to acquire training and technical assistance from agencies or institutions that have extensive experience in the development and management of low- income community economic development projects; or (B) to acquire such assistance from other highly successful community development corporations. (c) Operating Grants.-- (1) In general.--The Secretary shall award grants to community development corporations to enable such corporations to support an administrative capacity for the planning, development, and management of low-income community economic development projects. (2) Use of funds.--A recipient of a grant under paragraph (1) may use amounts received under such grant-- (A) to conduct evaluations of the feasibility of potential low-income community economic development projects that address identified needs in the low- income community and that conform to those projects and activities permitted under title I; (B) to develop a business plan related to such a potential project; or (C) to mobilize resources to be contributed to a planned low-income community economic development project or strategy. (d) Applications.--A community development corporation that desires to receive a grant under this section shall prepare and submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require. (e) Amount Available for a Community Development Corporation.-- Amounts provided under this section to a community development corporation shall not exceed $75,000 per year. Such corporations may apply for grants under this section for up to 3 consecutive years, except that such corporations shall be required to submit a new application for each grant for which such corporation desires to receive and compete on the basis of such applications in the selection process. SEC. 202. EMERGING COMMUNITY DEVELOPMENT CORPORATION REVOLVING LOAN FUNDS. (a) Authority.--The Secretary is authorized to award grants to emerging community development corporations to enable such corporations to establish, maintain or expand revolving loan funds, to make or guarantee loans, or to make capital investments in new or expanding local businesses. (b) Eligibility.--To be eligible to receive a grant under subsection (a), an entity shall-- (1) be a community development corporation; (2) have completed not less than one nor more than two community economic development projects or related projects that improve or provide job and employment opportunities to low-income individuals; (3) prepare and submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including a strategic investment plan that identifies and describes the economic characteristics of the target area to be served, the types of business to be assisted using amounts received under the grant and the impact of such assistance on low-income individuals; and (4) have secured one or more commitments from local sources for contributions (either in cash or in kind, letters of credit, or letters of commitment) in an amount that is equal to at least 10 percent of the amounts requested in the application submitted under paragraph (2). (c) Use of the Revolving Loan Fund.-- (1) In general.--A revolving loan fund established or maintained with amounts received under this section may be utilized to provide financial and technical assistance, loans, loan guarantees or investments to private business enterprises to-- (A) finance projects intended to provide business and employment opportunities for low-income individuals and to improve the quality of life in urban and rural areas; and (B) build and expand the capacity of emerging community development corporations and serve the economic needs of local residents. (2) Technical assistance.--The Secretary shall encourage emerging community development corporations that receive grants under this section to seek technical assistance from established community development corporations, with expertise in the planning, development and management of economic development projects and shall facilitate the receipt of such assistance. (3) Limitation.--Not to exceed 10 percent of the amounts received under this section by a grantee shall be used for training, technical assistance and administrative purposes. (d) Use of Proceeds From Investments.--Proceeds derived from investments made with amounts provided under this section may be utilized only for the purposes described in this title and shall be reinvested in the community in which they were generated. (e) Amounts Available.--Amounts provided under this section to a community development corporation shall not exceed $500,000 per year. TITLE III--RESEARCH AND DEMONSTRATION SEC. 301. RESEARCH AND DEMONSTRATION. (a) Grants.--The Secretary shall award grants to organizations to enable such organizations to undertake programs involving research, testing, studies or demonstrations related to community economic development. (b) Eligible Organizations.--To be eligible to receive a grant under this section, an entity shall-- (1) be a community development corporation, university, fiscal intermediary or a nonprofit organization involved in community-based economic development activities; and (2) prepare and submit to the Secretary an application at such time, in such manner and containing such information as the Secretary determines appropriate. (c) Use of Funds.--Amounts received under a grant awarded under this section shall be made available for studies, reports, tests or demonstration projects that-- (1) identify current problems facing both urban and rural low-income communities or specific population groups within low-income communities and population-losing communities; (2) identify solutions to the problems facing both urban and rural low-income communities or specific population groups within low-income communities; (3) examine or critique current strategies being implemented to address economic issues facing low-income communities; and (4) relate to any other matters determined appropriate by the Secretary. (d) Maximum Amount of Grant.--A grant awarded under this section shall not exceed $50,000. TITLE IV--MISCELLANEOUS PROVISIONS SEC. 401. JOINT PROGRAMS. The Secretary shall develop and promulgate, in consultation with the heads of other Federal agencies, regulations designed to permit, where appropriate, the operation of joint programs under which activities supported with assistance provided under this Act are coordinated with community development activities supported with assistance provided under other programs administered by the Secretary and those administered by the heads of such agencies. SEC. 402. REPORTS. (a) Community Development Corporations.--Not later than 2 years after the date on which assistance is provided to a community development corporation under title I or II, every 2 years thereafter, the community development corporation shall prepare and submit to the Secretary a report under this section. Such report shall include-- (1) the amount of funds received by the community development corporation; (2) a summary of the uses of such funds; (3) the number of jobs created or retained by the corporation; (4) the number and type of new businesses started, including micro-businesses; (5) the number of jobs created or retained for individuals identified in section 103(a)(4); (6) in the case of funds made available under title I, the source and amount of matching funds; (7) in the case of revolving loan funds made available under title II, the amount of funds leveraged; and (8) related human services and facilities provided as result of assistance provided under this Act. (b) Secretary.--Not later than 3 years after the date on which assistance is first provided under title I or II, and annually thereafter, the Secretary shall prepare and submit to the Committee on Labor and Human Resources of the Senate and the Committee on Education and Labor of the House of Representatives a report containing a summary of the reports received by the Secretary under subsection (a) for the period in which the report of the Secretary is submitted. SEC. 403. DEFINITIONS. As used in this Act: (1) Community development corporation.--The term ``community development corporation'' means a private, nonprofit corporation whose board of directors is comprised of business, civic and community leaders, and whose principal purpose includes the provision of low-income housing or community economic development projects that primarily benefit low-income individuals and communities. (2) Local and private sector contribution.--The term ``local and private sector contribution'' means the funds available at the local level (by private financial institutions, State and local governments) or by any private philanthropic organization and private, nonprofit organizations that will be committed and used solely for the purpose of financing private business enterprises in conjunction with amounts provided under this Act. (3) Population-losing community.--The term ``population- losing community'' means any county in which the net population loss is at least 7 percent from April 1, 1980 to April 1, 1990, as reported by the Bureau of the Census. (4) Private business enterprise.--The term ``private business enterprise'' means any business enterprise that is engaged in the manufacture of a product, provision of a service, construction or development of a facility, or that is involved in some other commercial, manufacturing or industrial activity, and that agrees to target job opportunities stemming from investments authorized under this Act to certain individuals. (5) Target area.--The term ``target area'' means any area defined in an application for assistance under this Act that has a population whose income does not exceed the median for the area within which the target area is located. (6) Very low-income community.--The term ``very low-income community'' means a community in which the median income of the residents of such community does not exceed 50 percent of the median income of the area. SEC. 404. AUTHORIZATION OF APPROPRIATIONS. (a) Community Economic Partnership Investment Funds and Emerging Community Development Corporations.-- (1) In general.--There are authorized to be appropriated to carry out titles I and II, $40,000,000 for fiscal year 1994, $100,000,000 for fiscal year 1995, and $125,000,000 for fiscal year 1996. (2) Earmarks.--Of the aggregate amount appropriated under paragraph (1) for each fiscal year-- (A) 60 percent shall be available to carry out title I; and (B) 40 percent shall be available to carry out title II. (3) Amounts.--Amounts appropriated under paragraph (1) shall remain available for expenditure without fiscal year limitation. (b) Research and Demonstration.--There are authorized to be appropriated to carry out title III such sums as may be necessary for each of the fiscal years 1994 through 1996. SEC. 405. PROHIBITION. None of the funds authorized under this Act shall be used to finance the construction of housing. SEC. 406. EFFECTIVE DATE. This Act shall take effect as if included in the Omnibus Budget Reconciliation Act of 1990. <all> S 244 IS----2