2000
<PRE>[DOCID: f:h3974ih.txt]






107th CONGRESS
  2d Session
                                H. R. 3974

To increase the expertise and capacity of community-based organizations 
     involved in economic development activities and key community 
                         development programs.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 14, 2002

 Mrs. Jones of Ohio (for herself and Mr. Watts of Oklahoma) introduced 
 the following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
To increase the expertise and capacity of community-based organizations 
     involved in economic development activities and key community 
                         development programs.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Community Economic Development 
Expertise Enhancement Act of 2002''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Congressional Findings.--The Congress finds that--
            (1) there are a multitude of community economic development 
        programs that the Federal Government successfully administers 
        that help many of the Nation's most economically distressed 
        areas revitalize their physical and economic structures and 
        provide support to small and medium-sized businesses to help 
        them grow and generate long-term jobs and economic opportunity;
            (2) there are many nonprofit, nongovernmental, community-
        based economic development organizations, including faith-based 
        organizations, that have successfully operated community 
        economic development programs;
            (3) existing Federal community economic development 
        programs are intended to leverage private sector investment as 
        part of an overall community development effort;
            (4) existing Federal community economic development 
        programs connect residents of distressed neighborhoods to jobs 
        and opportunities of the regional marketplace, thereby 
        replacing economic distress with opportunity;
            (5) existing Federal community economic development 
        programs provide financial assistance, including tax credits 
        and loan guarantees, involve private investment institutions 
        and universities, and provide technical expertise for small 
        businesses;
            (6) existing Federal community economic development 
        programs build upon ongoing efforts to encourage economic 
        growth in distressed communities, helping to create new 
        affordable housing opportunities, allowing communities to 
        address important public safety, infrastructure, and 
        environmental concerns, and providing social services including 
        affordable health care, child care, and youth development;
            (7) the continuing success of Federal community economic 
        development programs will depend in great measure upon the 
        ability of community-based organizations and private sector 
        institutions to form partnerships that connect residents of 
        distressed neighborhoods to jobs and other opportunities;
            (8) the Federal Government administers various programs 
        that employ the services and capabilities of community-based 
        organizations to deliver a wide range of services to residents 
        of distressed communities;
            (9) Federal community economic development programs help 
        achieve lasting improvement and enhance domestic prosperity by 
        the establishment of stable and diversified local economies, 
        sustainable development, and improved local conditions;
            (10) there is a need for greater cooperation between the 
        Federal Government, States, and other entities to ensure that, 
        consistent with national community economic development 
        objectives, Federal programs are compatible with, and further 
        the objectives of, State, regional, and local economic 
        development plans and comprehensive economic development 
        strategies;
            (11) while economic development is an inherently local 
        process, the Federal Government should work in closer 
        partnership with community-based economic development 
        organizations to ensure that existing resources are not wasted 
        and all Americans have an opportunity to participate in the 
        economic growth of the United States; and
            (12) extending technical assistance to community-based 
        economic development organizations may be necessary or 
        desirable to--
                    (A) alleviate economic distress;
                    (B) encourage and support public-private 
                partnerships for the formation and improvement of 
                economic development strategies that promote the growth 
                of the national economy;
                    (C) stimulate modernization and technological 
                advances in the generation and commercialization of 
                goods and services; and
                    (D) enhance the effectiveness of United States 
                companies in the global economy.
    (b) Purposes.--The purposes of this Act are--
            (1) to provide Federal funding to enhance the capabilities 
        of nonprofit, nongovernmental, community-based economic 
        development organizations to leverage private sector investment 
        as part of an overall community development strategy;
            (2) to establish educational programs for nonprofit, 
        nongovernmental, community-based organizations to expand their 
        project development capabilities;
            (3) to increase the use of tax incentives to leverage 
        private sector investment in community economic development 
        projects;
            (4) to promote and facilitate investments in community-
        based economic development projects from traditional and 
        nontraditional capital sources;
            (5) to encourage partnerships between community-based 
        organizations that will expand and enhance the expertise of 
        emerging such nonprofit, nongovernmental organizations in 
        utilizing private sector investment as part of their 
        comprehensive community development strategies; and
            (6) to ensure that viable community economic development 
        projects are successfully pursued throughout the United States 
        in communities having a wide range of economic, geographic, and 
        social characteristics.

SEC. 3. GRANTS TO INCREASE CAPACITY AND EXPERTISE OF NONPROFIT, 
              NONGOVERNMENTAL COMMUNITY-BASED ORGANIZATIONS INVOLVED IN 
              COMMUNITY ECONOMIC DEVELOPMENT ACTIVITIES.

    (a) Grant Authority.--The Secretary of Housing and Urban 
Development may make grants under this section only to eligible 
community-based economic development organizations only for the 
purposes under subsection (c).
    (b) Eligible Community-Based Economic Development Organizations.--
For purposes of this section, the term ``eligible community-based 
economic development organization'' means a community-based economic 
development organization (as such term is defined under section 7) that 
demonstrates management capacity by meeting, as determined by the 
Secretary, two or more of the following requirements:
            (1) Affordable housing.--Having completed construction of 
        10 or more dwelling units of affordable housing.
            (2) Facilities.--Having completed construction of a 
        commercial, industrial, retail, or community facility project.
            (3) Partnering.--Partnering, or having a history of 
        partnering, with other communit
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y-based economic development 
        organizations to provide training, education, capacity, 
        technical assistance, or other mentoring services.
            (4) Support of emerging organizations.--Exhibiting 
        willingness to form operational partnerships and execute 
        contractual agreements with emerging community-based economic 
        development organizations.
            (5) Ownership of assets.--Having ownership of tangible 
        assets the value of which are equal to or exceed the value of 
        the grant requested under this section.
    (c) Use of Funds.--
            (1) Purposes.--Amounts from grants under this section may 
        be used only for the following purposes:
                    (A) Salaries and administrative expenses.--For 
                salaries or administrative expenses of the grantee or 
                an emerging community-based economic development 
                organization that is undertaking a community economic 
                development project.
                    (B) Technical assistance.--To provide technical 
                assistance to an emerging community-based economic 
                development organization that is undertaking a 
                community economic development project.
                    (C) Training and research.--Through subgrants 
                pursuant to paragraph (2), for training, research, and 
                technical assistance relating to community economic 
                development, including subgrants for program evaluation 
                and economic impact analyses.
            (2) Expenditure.--Amounts from grants under this section 
        may be used directly by the eligible community-based economic 
        development organization receiving the grant or redistributed 
        by such recipient to other nonprofit, nongovernmental entities 
        in grants, loans, loan guarantees, payments to reduce interest 
        on loan guarantees, or other appropriate assistance, except 
        that a recipient may not provide any such assistance from grant 
        amounts to a private, for-profit entity.
    (d) Selection Criteria.--The Secretary shall issue rules, 
guidelines, and procedures to provide for the selection of eligible 
community-based economic development organizations for grants under 
this section, based upon a determination of the relative effectiveness 
of such organizations in carrying out the purposes of this Act. Such 
rules, guidelines, and procedures shall provide for consideration of 
the following factors:
            (1) The number of such organizations eligible to receive 
        assistance under existing programs other than this section.
            (2) The extent to which grant amounts provided under this 
        section will enhance the capabilities of community-based 
        economic development organizations in underserved States and 
        localities.
            (3) The extent to which an eligible community-based 
        economic development organization applying for a grant does not 
        have access to other traditional local financial sources.
            (4) The extent to which such an organization represents 
        nonprofit, nongovernmental organizations that serve low-income 
        communities and persons.
            (5) The extent to which such an organization will recover 
        its cost of operating in underserved areas.
            (6) The extent to which such an organization will implement 
        a plan to become financially sustainable.
    (e) Amount.--A grant under this section to a single grantee shall 
be in an amount that is not less than $250,000 and does not exceed 
$1,000,000.
    (f) Prohibition of Matching Funds Requirement.--The Secretary may 
not require a grantee under this section to provide amounts from 
sources other than this section to fund the activities to be carried 
out with grant amounts under this section.
    (g) Eligibility for Community Reinvestment Act Credits.--In 
assessing and taking into account, under section 804(a) of the 
Community Reinvestment Act of 1977, the record of any regulated 
financial institution, the appropriate Federal financial supervisory 
agency (as defined in section 803(1) of such Act) may consider as a 
factor investments in community economic development projects of 
eligible community-based economic development organizations in 
determining whether the institution is meeting the credit needs of its 
community for purposes of such section 804(a).
    (h) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated 
        for grants under this section $75,000,000 for each of fiscal 
        years 2003, 2004, and 2005.
            (2) Set-aside for technical assistance and training.--Of 
        the amount made available under this Act for each fiscal year, 
        $10,000,000 shall be available only for technical assistance 
        and training activities, to be conducted by a national 
        organization having extensive nationwide partnerships and 
        experience in working with community-based economic development 
        organizations, as authorized by section 4 of the HUD 
        Demonstration Act of 1993 (42 U.S.C. 9816 note), as in effect 
        immediately before May 1, 2000. Of the amount reserved for use 
        under this paragraph, not less than $4,000,000 shall be used 
        for such development organizations in rural areas.

SEC. 4. ASSESSMENT OF COMMUNITY-BASED ECONOMIC DEVELOPMENT EXPERTISE.

    (a) Capability Study.--The Secretary shall conduct a study to 
assess the capability needs of community-based economic development 
organizations, which shall--
            (1) analyze, evaluate, and recommend processes to improve 
        the administrative and operational capabilities of such 
        organizations to acceptable levels of success in support of the 
        role of the Federal Government in community economic 
        development; and
            (2) assess the extent to which Federal agencies can 
        incorporate such organizations into the formulation of the 
        strategic plans of funding agencies and, if the extent or 
        quality of this type of involvement is satisfactory, can 
        support the role of the Federal Government in community 
        economic development.
The Secretary shall submit a report regarding the results of the study 
under this subsection not later than the expiration of the 6-month 
period beginning on the date of the enactment of this Act.
    (b) Reports to Congress.--Not later than the first March 1 
occurring after the end of each fiscal year for which amounts are made 
available for grants under section 3, the Secretary shall submit a 
report to the Congress, which shall include--
            (1) an evaluation of the progress made during such fiscal 
        year to enhance the administrative and operational capabilities 
        of community-based economic development organizations in 
        support of the role of the Federal Government in community 
        economic development;
            (2) an assessment of the extent to which Federal agencies 
        have, during such fiscal year, involved community-based 
        economic development organizations in responsibilities for 
        carrying out community economic development programs 
        administered by the agencies and delivering services under such 
        programs that enhance the operational capabilities of the 
        organizations; and
            (3) a plan for making recommendations for actions or 
        measures to further involve community-based economic 
        development organizations in the strategic operations of 
        Federal agencies in support of community economic development.

SEC. 5. ADVISORY COUNCIL.

    (a) Establishment and Duties.--The Secretary shall establish an 
advisory council to be known as the Secretary's Advisory Council on 
Community Economic Development (in this section referred to as the 
``Advisory Council''). The Advisory Council shall make recommendati
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ons 
to the Secretary on carrying out this Act, including recommendations on 
developing plans under section 4(b)(3) and reviewing and making 
recommendations on such plans that have been developed.
    (b) Membership.--The Advisory Council shall consist of not less 
than 19 members, appointed by the Secretary, as follows:
            (1) Ex officio members.--The following members, who shall 
        serve as nonvoting members:
                    (A) The Secretary of Housing and Urban Development, 
                or the designee of such Secretary.
                    (B) The Secretary of Health and Human Services, or 
                the designee of such Secretary.
                    (C) The Assistant Secretary for Economic 
                Development of the Department of Commerce, or the 
                designee of the Assistant Secretary.
                    (D) The Administrator of the Community Development 
                Financial Institutions Fund, or the designee of the 
                Administrator.
                    (E) The Under Secretary of Agriculture for Rural 
                Development, or the designee of the Under Secretary.
            (2) Other members.--No fewer than 14 members, who are not 
        officers or employees of the Federal Government, who shall 
        serve as voting members:
                    (A) No fewer than 2 individuals who conduct 
                research on community economic development activities.
                    (B) No fewer than 2 individuals who are experts in 
                community economic development financing.
                    (C) No fewer than 3 individuals who are publicly 
                elected officials.
                    (D) No fewer than 7 individuals who are 
                representatives of community-based economic development 
                organizations that carry out community economic 
                development activities.
    (c) Travel Expenses.--Members of the Advisory Council shall not 
receive any pay by reason of their service on the Advisory Council, but 
shall receive travel expenses, including per diem in lieu of 
subsistence, in accordance with sections 5702 and 5703 of title 5, 
United States Code.

SEC. 6. COORDINATION WITH PRESIDENT'S ANNUAL BUDGET REQUEST.

    The President of the United States shall include, together with 
each annual budget of the United States Government required to be 
submitted under section 1105(a) of title 31, United States Code, a 
report regarding Federal financial support for community economic 
development that includes--
            (1) a detailed summary of the total level of funding 
        committed to community-based economic development organizations 
        throughout all Federal agencies;
            (2) a statement of projected funding levels for the grant 
        program under section 3 of this Act for the upcoming fiscal 
        year and each fiscal year thereafter until 2010, and projected 
        funding levels for financial assistance for economic 
        development activities for each Federal agency that provides 
        such assistance;
            (3) an identification and analysis of the method (including 
        grant agreements, procurement contracts, and cooperative 
        agreements (as such terms are used in chapter 63 of title 31, 
        United States Code) by which such financial assistance is 
        provided for each such economic development activity; and
            (4) recommendations for specific activities and measures to 
        enhance community-based economic development capacity building 
        in States having less concentrated economic and infrastructure 
        resources and to strengthen nationwide community-based economic 
development.

SEC. 7. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Community-based economic development organization.--
                    (A) In general.--For purposes of this section, the 
                term ``community-based economic development 
                organization'' means a nonprofit, nongovernmental 
                organization that--
                            (i) has as its primary mission to serve, or 
                        provide investment capital for, low-income 
                        communities and low-income persons; and
                            (ii) maintains accountability to residents 
                        of low-income communities through their 
                        representation on any governing board of the 
                        organization or on any advisory board to the 
                        organization.
                    (B) Nondiscrimination against faith-based 
                organizations.--Such term shall include any faith-based 
                organization that complies with the requirements under 
                clauses (i) and (ii) of subparagraph (A).
                    (C) Treatment of community development financial 
                institutions.--The requirements of subparagraph (A) 
                shall be treated as met by any community development 
                financial institution (as such term is defined in 
                section 103 of the Community Development Banking and 
                Financial Institutions Act of 1994 (12 U.S.C. 4702).
            (2) Community economic development project.--The term 
        ``community economic development project'' means a project that 
        involves--
                    (A) investment in business enterprises, including 
                investments in the form of loan origination, equity 
                investment, and monetary assistance to home buyers or 
                to business owners for business development projects; 
                or
                    (B) the construction or rehabilitation of 
                facilities, including commercial or industrial 
                facilities, homes, apartment buildings, and community 
                parks.
            (3) Low-income communities and persons.--The terms ``low-
        income communities'' and ``low-income persons'' shall have the 
        meanings given such terms in section 45D of the Internal 
        Revenue Code of 1986 (26 U.S.C. 45D).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
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