[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2936 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2936

 To provide incentives for new markets and community development, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 26, 2000

 Mr. Robb (for himself, Mr. Daschle, Mr. Baucus, Mr. Breaux, Mr. Dodd, 
Mr. Dorgan, Mr. Johnson, Mr. Kennedy, Mr. Kerrey, Mr. Kerry, Mr. Leahy, 
 Mr. Lieberman, Mrs. Lincoln, Mr. Reid, Mr. Rockefeller, Mr. Schumer, 
  Mr. Torricelli, Mr. Harkin, and Mr. Bayh) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To provide incentives for new markets and community development, 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; ETC.

    (a) Short Title.--This Act may be cited as the ``Creating New 
Markets and Empowering America Act of 2000''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--

Sec. 1. Short title; etc.
                    TITLE I--NEW MARKETS TAX CREDIT

Sec. 101. New markets tax credit.
            TITLE II--AMERICA'S PRIVATE INVESTMENT COMPANIES

Sec. 201. Definitions.
Sec. 202. Authorization.
Sec. 203. Selection of APIC's.
Sec. 204. Operations of APIC's.
Sec. 205. Credit enhancement by the Federal government.
Sec. 206. APIC requests for guarantee actions.
Sec. 207. Examination and monitoring of APIC's.
Sec. 208. Penalties.
Sec. 209. Effective date.
Sec. 210. Sunset.
          TITLE III--COMMUNITY DEVELOPMENT AND VENTURE CAPITAL

            Subtitle A--New Markets Venture Capital Program

Sec. 301. New markets venture capital program.
Sec. 302. Bankruptcy exemption for NMVC companies.
Sec. 303. Federal savings associations.
      Subtitle B--Community Development Venture Capital Assistance

Sec. 311. Findings.
Sec. 312. Community development venture capital activities.
                       Subtitle C--Business LINC

Sec. 321. Grants authorized.
Sec. 322. Regulations.
  TITLE IV--EXPANSION AND EXTENSION OF EMPOWERMENT ZONE TAX INCENTIVES

Sec. 401. Additional empowerment zone designations.
Sec. 402. Extension of enterprise zone treatment through 2009.
Sec. 403. 20 percent employment credit for all empowerment zones.
Sec. 404. Increased expensing under section 179.
Sec. 405. Higher limits on tax-exempt empowerment zone facility bonds.
Sec. 406. Nonrecognition of gain on rollover of empowerment zone 
                            investments.
Sec. 407. Increased exclusion of gain on sale of empowerment zone 
                            stock.
Sec. 408. Treatment of intangibles.
Sec. 409. Application of developable site opportunities to round I 
                            empowerment zones and enterprise 
                            communities.
Sec. 410. Funding entitlement for round II empowerment zones.
Sec. 411. Extension of termination date for expensing of environmental 
                            remediation costs; extension to renewal 
                            communities.
                  TITLE V--AMERICAN COMMUNITY RENEWAL

Sec. 501. Designation of and tax incentives for renewal communities.
Sec. 502. Work opportunity credit for hiring youth residing in renewal 
                            communities.
Sec. 503. Evaluation and reporting requirements.
               TITLE VI--HOMEOWNERSHIP AND REVITALIZATION

Sec. 601. Increase in State ceiling on low-income housing credit.
Sec. 602. Additional modifications to low-income housing credit.
Sec. 603. Increase in State ceiling on private activity bonds.
Sec. 604. Home ownership tax credit.
Sec. 605. Tax credit for renovating historic homes.
Sec. 606. Transfer of unoccupied and substandard HUD-held housing to 
                            local governments and community development 
                            corporations.
Sec. 607. Transfer of HUD assets in revitalization areas.
Sec. 608. Risk-sharing demonstration.
              TITLE VII--TRADE-AFFECTED COMMUNITIES RELIEF

Sec. 701. Definitions.
Sec. 702. Petitions and determinations.
Sec. 703. Grants for economic development.
Sec. 704. Provide incentives for new investments for trade-affected 
                            communities.
Sec. 705. Central clearinghouse for economic development.
Sec. 706. Appropriations.
Sec. 707. Supplement not supplant.
Sec. 708. Regulations.
                  TITLE VIII--DELTA REGIONAL AUTHORITY

Sec. 801. Delta Regional Authority.
        TITLE IX--FEDERAL GRANT PROGRAM PARTICIPATION EXPANSION

Sec. 901. Equal opportunity for religious and other community 
                            organizations to participate in Federal 
                            grant programs.
                   TITLE X--NEW MILLENNIUM CLASSROOMS

Sec. 1001. Credit for computer donations to schools, senior centers, 
                            public libraries, and other training 
                            centers.

                    TITLE I--NEW MARKETS TAX CREDIT

SEC. 101. NEW MARKETS TAX CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business-related credits) is amended by adding at the end 
the following new section:

``SEC. 45D. NEW MARKETS TAX CREDIT.

    ``(a) Allowance of Credit.--
            ``(1) In general.--For purposes of section 38, in the case 
        of a taxpayer who holds a qualified equity investment on a 
        credit allowance date of such investment which occurs during 
        the taxable year, the new markets tax credit determined under 
        this section for such taxable year is an amount equal to the 
        applicable percentage of the amount paid to the qualified 
        community development entity for such investment at its 
        original issue.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is--
                    ``(A) 5 percent with respect to the first 3 credit 
                allowance dates, and
                    ``(B) 6 percent with respect to the remainder of 
                the credit allowance dates.
            ``(3) Credit allowance date.--For purposes of paragraph 
        (1), the term `credit allowance date' means, with respect to 
        any qualified equity investment--
                    ``(A) the date on which such investment is 
                initially made, and
                    ``(B) each of the 6 anniversary dates of such date 
                thereafter.
    ``(b) Qualified Equity Investment.--For purposes of this section--
            ``(1) In general.--The term `qualified equity investment' 
        means any equity investment in a qualified community 
        development entity if--
                    ``(A) such investment is acquired by the taxpayer 
                at its original issue (directly or through an 
                underwriter) solely in exchange for cash,
                    ``(B) substantially all of such cash is used by the 
                qualified community development entity to make 
                qualified low-income community investments, and
                    ``(C) such investment is designated for purposes of 
                this section by the qualified community development 
                entity.
        Such term shall not include any equity investment issued by a 
        qualified community development entity more than 7 years after 
        the date that such entity receives an allocation under 
        subsection (f). Any allocation not used within such 7-year 
        period may be reallocated by the Secretary under subsection 
        (f).
            ``(2) Limitation.--The maximum amount of equity investments 
        issued by a qualified community development entity which may be 
        designated under paragraph (1)(C) by such entity shall not 
        exceed the portion of the limitation amount allocated under 
        subsection (f) to such entity.
            ``(3) Safe harbor for determining use of cash.--The 
        requirement of paragraph (1)(B) shall be treated as met if at 
        least 85 percent of the aggregate gross assets of the qualified 
        community development entity are invested in qualified low-
        income community investments.
            ``(4) Treatment of subsequent purchasers.--The term 
        `qualified equity investment' includes any equity investment 
        which would (but for paragraph (1)(A)) be a qualified equity 
        investment in the hands of the taxpayer if such investment was 
        a qualified equity investment in the hands of a prior holder.
            ``(5) Redemptions.--A rule similar to the rule of section 
        1202(c)(3) shall apply for purposes of this subsection.
            ``(6) Equity investment.--The term `equity investment' 
        means--
                    ``(A) any stock (other than nonqualified preferred 
                stock as defined in section 351(g)(2)) in an entity 
                which is a corporation, and
                    ``(B) any capital interest in an entity which is a 
                partnership.
    ``(c) Qualified Community Development Entity.--For purposes of this 
section--
            ``(1) In general.--The term `qualified community 
        development entity' means any corporation or partnership if--
                    ``(A) the primary mission of the entity is serving, 
                or providing investment capital for, low-income 
                communities or low-income persons,
                    ``(B) the entity maintains accountability to 
                residents of low-income communities through 
                representation on governing or advisory boards or 
                otherwise, (This requirement may be met by an entity 
                that controls the community development entity applying 
                for a credit allocation.) and
                    ``(C) the entity is certified by the Secretary for 
                purposes of this section as being a qualified community 
                development entity.
            ``(2) Special rules for certain organizations.--The 
        requirements of paragraph (1) shall be treated as met by--
                    ``(A) any specialized small business investment 
                company (as defined in section 1044(c)(3)), and
                    ``(B) any community development financial 
                institution (as defined in section 103 of the Community 
                Development Banking and Financial Institutions Act of 
                1994 (12 U.S.C. 4702)).
    ``(d) Qualified Low-Income Community Investments.--For purposes of 
this section--
            ``(1) In general.--The term `qualified low-income community 
        investment' means--
                    ``(A) any equity investment in, or loan to, any 
                qualified active low-income community business,
                    ``(B) the purchase from another community 
                development entity of any loan made by such entity 
                which is a qualified low-income community investment if 
                the amount received by such other entity from such 
                purchase is used by such other entity to make qualified 
                low-income community investments,
                    ``(C) financial counseling and other services 
                specified in regulations prescribed by the Secretary to 
                businesses located in, and residents of, low-income 
                communities, and
                    ``(D) any equity investment in, or loan to, any 
                qualified community development entity if substantially 
                all of the investment or loan is used by such entity to 
                make qualified low-income community investments 
                described in subparagraphs (A), (B), and (C).
            ``(2) Qualified active low-income community business.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `qualified active low-income community 
                business' means, with respect to any taxable year, any 
                corporation (including a nonprofit corporation) or 
                partnership if for such year--
                            ``(i) at least 50 percent of the total 
                        gross income of such entity is derived from the 
                        active conduct of a qualified business within 
                        any low-income community,
                            ``(ii) a substantial portion of the use of 
                        the tangible property of such entity (whether 
                        owned or leased) is within any low-income 
                        community,
                            ``(iii) a substantial portion of the 
                        services performed for such entity by its 
                        employees are performed in any low-income 
                        community,
                            ``(iv) less than 5 percent of the average 
                        of the aggregate unadjusted bases of the 
                        property of such entity is attributable to 
                        collectibles (as defined in section 408(m)(2)) 
                        other than collectibles that are held primarily 
                        for sale to customers in the ordinary course of 
                        such business, and
                            ``(v) less than 5 percent of the average of 
                        the aggregate unadjusted bases of the property 
                        of such entity is attributable to nonqualified 
                        financial property (as defined in section 
                        1397C(e)). The determination of whether an 
                        investment made by a community development 
                        entity constitutes a qualified low-income 
                        community investment is made at the time that 
                        the entity makes the loan to, or purchases 
                        equity interests in a qualified business.
                    ``(B) Proprietorship.--Such term shall include any 
                business carried on by an individual as a proprietor if 
                such business would meet the requirements of 
                subparagraph (A) were it incorporated.
                    ``(C) Portions of business may be qualified active 
                low-income community business.--The term `qualified 
                active low-income community business' includes any 
                trades or businesses which would qualify as a qualified 
active low-income community business if such trades or businesses were 
separately incorporated.
            ``(3) Qualified business.--For purposes of this subsection, 
        the term `qualified business' has the meaning given to such 
        term by section 1397C(d); except that--
                    ``(A) in lieu of applying paragraph (2)(B) thereof, 
                the rental to others of real property located in any 
                low-income community shall be treated as a qualified 
                business if there are substantial improvements located 
                on such property,
                    ``(B) paragraph (3) thereof shall not apply, and
                    ``(C) such term shall not include any business if a 
                significant portion of the equity interests in such 
                business are held by any person who otherwise holds a 
                significant portion of the equity investments in the 
                community development entity.
    ``(e) Low-Income Community.--For purposes of this section--
            ``(1) In general.--The term `low-income community' means 
        any population census tract (including tracts in U.S. 
        territories or possessions) if--
                    ``(A) the poverty rate for such tract is at least 
                20 percent,
                    ``(B)(i) in the case of a tract not located within 
                a metropolitan area, the median family income for such 
                tract does not exceed 80 percent of statewide (or if in 
                a U.S. territory, territory-wide) median family income, 
                or
                    ``(ii) in the case of a tract located within a 
                metropolitan area, the median family income for such 
                tract does not exceed 80 percent of the greater of 
                statewide (or if in a U.S. territory, territory-wide) 
                median family income or the metropolitan area median 
                family income.
            ``(2) Areas not within census tracts.--In the case of an 
        area which is not tracted for population census tracts, the 
        equivalent county divisions (as defined by the Bureau of the 
        Census for purposes of defining poverty areas) shall be used 
        for purposes of determining poverty rates and median family 
        income.
            ``(3) Targeted population.--The Secretary may prescribe 
        regulations under which 1 or more targeted populations (within 
        the meaning of section 3(20) of the Riegle Community 
        Development and Regulatory Improvement Act of 1974 (12 U.S.C. 
        4702(20))) may be treated as low-income communities. Such 
        regulations shall include procedures for identifying the area 
        covered by any such community for purposes of determining 
        entities which are qualified active low-income community 
        businesses with respect to such community.
    ``(f) National Limitation on Amount of Investments Designated.--
            ``(1) In general.--There is a new markets tax credit 
        limitation for each calendar year. Such limitation is--
                    ``(A) $1,000,000,000 for 2001,
                    ``(B) $1,500,000,000 for 2002 and 2003,
                    ``(C) $2,000,000,000 for 2004 and 2005,
                    ``(D) $3,500,000,000 for 2006 and 2007.
            ``(2) Allocation of limitation.--The limitation under 
        paragraph (1) shall be allocated by the Secretary among 
        qualified community development entities selected by the 
        Secretary. In making allocations under the preceding sentence, 
        the Secretary shall give priority to community development 
        entities with records of having successfully provided capital 
        or technical assistance to disadvantaged businesses or 
        communities and to entities whose controlling parents have such 
        records.
            ``(3) Carryover of unused limitation.--If the new markets 
        tax credit limitation for any calendar year exceeds the 
        aggregate amount allocated under paragraph (2) for such year, 
such limitation for the succeeding calendar year shall be increased by 
the amount of such excess.
    ``(g) Recapture of Credit in Certain Cases.--
            ``(1) In general.--If, at any time during the 7-year period 
        beginning on the date of the original issue of a qualified 
        equity investment in a qualified community development entity, 
        there is a recapture event with respect to such investment, 
        then the tax imposed by this chapter for the taxable year in 
        which such event occurs shall be increased by the credit 
        recapture amount.
            ``(2) Credit recapture amount.--For purposes of paragraph 
        (1), the credit recapture amount is an amount equal to the sum 
        of--
                    ``(A) the aggregate decrease in the credits allowed 
                to the taxpayer under section 38 for all prior taxable 
                years which would have resulted if no credit had been 
                determined under this section with respect to such 
                investment, plus
                    ``(B) interest at the overpayment rate established 
                under section 6621 on the amount determined under 
                subparagraph (A) for each prior taxable year for the 
                period beginning on the due date for filing the return 
                for the prior taxable year involved.
        No deduction shall be allowed under this chapter for interest 
        described in subparagraph (B).
            ``(3) Recapture event.--For purposes of paragraph (1), 
        there is a recapture event with respect to an equity investment 
        in a qualified community development entity if--
                    ``(A) such entity ceases to be a qualified 
                community development entity,
                    ``(B) the proceeds of the investment cease to be 
                used as required of subsection (b)(1)(B), or
                    ``(C) such investment is redeemed by such entity.
        If the original community development entity no longer exists, 
        a successor entity can continue to meet the requirements of a 
        community development entity without triggering recapture. A 
        recapture event occurs only if the entity fails to make a good 
        faith effort to ensure that the proceeds of the investment as 
        required by subsection (b)(1)(B).
            ``(4) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (1) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under this subsection shall not be treated as a tax 
                imposed by this chapter for purposes of determining the 
                amount of any credit under this chapter or for purposes 
                of section 55.
    ``(h) Basis Reduction.--The basis of any qualified equity 
investment shall be reduced by the amount of any credit determined 
under this section with respect to such investment. This subsection 
shall not apply for purposes of sections 1202, 1400B, and 1400F.
    ``(i) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out this section, including 
regulations--
            ``(1) which limit the credit for investments which are 
        directly or indirectly subsidized by other Federal benefits 
        (including the credit under section 42 and the exclusion from 
        gross income under section 103),
            ``(2) which prevent the abuse of the provisions of this 
        section through the use of related parties,
            ``(3) which provide rules for determining whether the 
        requirement of subsection (b)(1)(B) is treated as met,
            ``(4) which impose appropriate reporting requirements, and
            ``(5) which apply the provisions of this section to newly 
        formed entities.''.
    (b) Credit Made Part of General Business Credit.--
            (1) In general.--Subsection (b) of section 38 is amended by 
        striking ``plus'' at the end of paragraph (11), by striking the 
        period at the end of paragraph (12) and inserting ``, plus'', 
        and by adding at the end the following new paragraph:
            ``(13) the new markets tax credit determined under section 
        45D(a).''.
            (2) Limitation on carryback.--Subsection (d) of section 39 
        is amended by adding at the end the following new paragraph:
            ``(9) No carryback of new markets tax credit before january 
        1, 2001.--No portion of the unused business credit for any 
        taxable year which is attributable to the credit under section 
        45D may be carried back to a taxable year ending before January 
        1, 2001.''.
    (c) Deduction for Unused Credit.--Subsection (c) of section 196 is 
amended by striking ``and'' at the end of paragraph (7), by striking 
the period at the end of paragraph (8) and inserting ``, and'', and by 
adding at the end the following new paragraph:
            ``(9) the new markets tax credit determined under section 
        45D(a).''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

                              ``Sec. 45D. New markets tax credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to investments made after December 31, 2000.
    (f) Regulations on Allocation of National Limitation.--Not later 
than 60 days after the date of the enactment of this Act, the Secretary 
of the Treasury or the Secretary's delegate shall prescribe regulations 
which specify--
            (1) how entities shall apply for an allocation under 
        section 45D(f)(2) of the Internal Revenue Code of 1986, as 
        added by this section,
            (2) the competitive procedure through which such 
        allocations are made, and
            (3) the actions that such Secretary or delegate shall take 
        to ensure that such allocations are properly made to 
        appropriate entities.

            TITLE II--AMERICA'S PRIVATE INVESTMENT COMPANIES

SEC. 201. DEFINITIONS.

    As used in this title:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Small Business Administration.
            (2) Agency.--The term ``agency'' has the meaning given such 
        term in section 551(1) of title 5, United States Code.
            (3) APIC.--The term ``APIC'' means a business entity that 
        has been licensed under the terms of this title as an America's 
        Private Investment Company, and the license of which has not 
        been revoked.
            (4) Community development entity.--The term ``community 
        development entity'' means an entity the primary mission of 
        which is serving or providing investment capital for low-income 
        communities or low-income persons, and which maintains 
        accountability to residents of low-income communities.
            (5) HUD.--The term ``HUD'' means the Secretary of Housing 
        and Urban Development or the Department of Housing and Urban 
        Development, as the context requires.
            (6) License.--The term `license' means a license issued by 
        HUD as provided in section 202.
            (7) Low-income community.--The term ``low-income 
        community'' means--
                    (A) a census tract or tracts that have--
                            (i) a poverty rate of 20 percent or 
                        greater, based on the most recent census data; 
                        or
                            (ii) a median family income that does not 
                        exceed 80 percent of the greater of--
                                    (I) the median family income for 
                                the metropolitan area in which such 
                                census tract or tracts are located, or
                                    (II) the median family income for 
                                the State in which such census tract or 
                                tracts are located;
                    (B) a property that was located on a military 
                installation that was closed or realigned pursuant to 
                title II of the Defense Authorization Amendments and 
                Base Closure and Realignment Act (Public Law 100-526; 
                10 U.S.C. 2687 note), the Defense Base Closure and 
                Realignment Act of 1990 (part A of title XXIX of Public 
Law 101-510; 10 U.S.C. 2687 note), section 2687 of title 10, United 
States Code, or any other similar law enacted after the date of the 
enactment of this Act that provides for closure or realignment of 
military installations; or
                    (C) an area designated by the Secretary of the 
                Treasury as eligible for new markets tax credits under 
                section 45D of the Internal Revenue Code of 1986 (as 
                added by section 101).
            (8) Low-income person.--The term ``low-income person'' 
        means a person who is a member of a low-income family, as such 
        term is defined in section 104 of the Cranston-Gonzalez 
        National Affordable Housing Act (42 U.S.C. 12704).
            (9) Private equity capital.--
                    (A) In general.--The term ``private equity 
                capital'' means--
                            (i) in the case of a corporate entity, the 
                        paid-in capital and paid-in surplus of the 
                        corporate entity;
                            (ii) in the case of a partnership entity, 
                        the contributed capital of the partners of the 
                        partnership entity;
                            (iii) in the case of a limited liability 
                        company entity, the equity investment of the 
                        members of the limited liability company 
                        entity; and
                            (iv) earnings from investments of the 
                        entity that are not distributed to investors 
                        and are available for reinvestment by the 
                        entity.
                    (B) Exclusions.--Such term does not include any--
                            (i) funds borrowed by an entity from any 
                        source or obtained through the issuance of 
                        leverage; except that this clause may not be 
                        construed to exclude amounts evidenced by a 
                        legally binding and irrevocable investment 
                        commitment in the entity, or the use by an 
                        entity of a pledge of such investment 
                        commitment to obtain bridge financing from a 
                        private lender to fund the entity's activities 
                        on an interim basis; or
                            (ii) funds obtained directly or indirectly 
                        from any Federal, State, or local government or 
                        any government agency, except for--
                                    (I) funds invested by an employee 
                                welfare benefit plan or pension plan; 
                                and
                                    (II) credits against any Federal, 
                                State, or local taxes.
            (10) Qualified active business.--The term ``qualified 
        active business'' means a business or trade--
                    (A) that, at the time that an investment is made in 
                the business or trade, or within one year of the time 
                the investment is made, is deriving at least 50 percent 
                of its gross income from the conduct of trade or 
                business activities in low-income communities;
                    (B) a substantial portion of the use of the 
                tangible property of which is used within low-income 
                communities;
                    (C) a substantial portion of the services that the 
                employees of which perform are performed in low-income 
                communities; and
                    (D) less than 5 percent of the aggregate unadjusted 
                bases of the property of which is attributable to 
                certain financial property, as the Secretary shall set 
                forth in regulations, or in collectibles, other than 
                collectibles held primarily for sale to customers.
            (11) Qualified debenture.--The term ``qualified debenture'' 
        means a debt instrument having terms that meet the requirements 
        established pursuant to section 204(c)(1).
            (12) Qualified low-income community investment.--The term 
        ``qualified low-income community investment'' means--
                    (A) an equity investment in, or a loan to, a 
                qualified active business;
                    (B) the purchase from another community development 
                entity of any loan made by such entity which is a 
                qualified low-income community investment if the amount 
                received by such other entity from such purchase is 
                used by such other entity to make qualified low-income 
                community investments;
                    (C) financial counseling and other services 
                specified in regulations prescribed by the Secretary to 
                businesses located in, and residents of, low-income 
                communities; and
                    (D) any equity investment in, or loan to, any 
                qualified community development entity if substantially 
                all of the investment or loan is used by such entity to 
                make qualified low-income community investments 
                described in subparagraphs (A), (B), and (C).
            (13) ``Secretary'' means the Secretary of Housing and Urban 
        Development, unless otherwise specified in this title.

SEC. 202. AUTHORIZATION.

    (a) Licenses.--The Secretary is authorized to license community 
development entities as America's Private Investment Companies, in 
accordance with the terms of this title.
    (b) Regulations.--The Secretary shall regulate APICs for compliance 
with sound financial management practices, and the program and 
procedural goals of this title and other related Acts, and other 
purposes as required or authorized by this title, or determined by the 
Secretary. The Secretary shall issue such regulations as are necessary 
to carry out the licensing and regulatory and other duties under this 
title, and may issue notices and other guidance or directives as the 
Secretary determines are appropriate to carry out such duties.
    (c) Use of Credit Subsidy for Licenses.--
            (1) Number of licenses.--The number of APICs licensed at 
        any one time may not exceed--
                    (A) the number that may be supported by the amount 
                of budget authority appropriated in accordance with 
                section 504(b) of the Federal Credit Reform Act of 1990 
                (2 U.S.C. 661c) for the cost (as such term is defined 
                in section 502 of such Act) of the subsidy and the 
                investment strategies of such APICs; or
                    (B) to the extent the limitation under section 
                203(e)(1) applies, the number authorized under such 
                section.
            (2) Use of additional credit subsidy.--Subject to the 
        limitation under paragraph (1), the Secretary may use any 
        budget authority available after credit subsidy has been 
        allocated for the APICs initially licensed pursuant to section 
        203 as follows:
                    (A) Additional licenses.--To license additional 
                APICs.
                    (B) Credit subsidy increases.--To increase the 
                credit subsidy allocated to an APIC as an award for 
                high performance under this title, except that such 
                increases may be made only in accordance with the 
                following requirements and limitations:
                            (i) Timing.--An increase may only be 
                        provided for an APIC that has been licensed for 
                        a period of not less than 2 years.
                            (ii) Competition.--An increase may only be 
                        provided for a fiscal year pursuant to a 
                        competition for such fiscal year among APICs 
                        eligible for, and requesting, such an increase. 
                        The competition shall be based upon criteria 
                        that the Secretary shall establish, which shall 
                        include the financial soundness and performance 
                        of the APICs, as measured by achievement of the 
                        public performance goals included in the APICs 
                        statements required under section 203(a)(6) and 
                        audits conducted under section 207(b)(2). Among 
                        the criteria established by the Secretary to 
                        determine priority for selection under this 
                        section, the Secretary shall include making 
                        investments in and loans to qualified active 
                        businesses in urban or rural areas that have 
                        been designated under subchapter U of chapter 1 
                        of the Internal Revenue Code of 1986 as 
                        empowerment zones or enterprise communities.
    (d) Cooperation and Coordination.--
            (1) Program policies.--The Secretary is authorized to 
        coordinate and cooperate, through memoranda of understanding, 
        an APIC liaison committee, or otherwise, with the 
        Administrator, the Secretary of the Treasury, and other 
        agencies in the discretion of the Secretary, on implementation 
        of this title, including regulation, examination, and 
        monitoring of APICs under this title.
            (2) Financial soundness requirements.--The Secretary shall 
        consult with the Administrator and the Secretary of the 
        Treasury, and may consult with such other heads of agencies as 
        the Secretary may consider appropriate, in establishing any 
        regulations, requirements, guidelines, or standards for 
        financial soundness or management practices of APICs or 
        entities applying for licensing as APICs. In implementing and 
        monitoring compliance with any such regulations, requirements, 
        guidelines, and standards, the Secretary shall enter into such 
        agreements and memoranda of understanding with the 
        Administrator and the Secretary of the Treasury as may be 
        appropriate to provide for such officials to provide any 
        assistance that may be agreed to.
            (3) Operations.--The Secretary may carry out this title--
                    (A) directly, through agreements with other Federal 
                entities under section 1535 of title 31, United States 
                Code, or otherwise, or
                    (B) indirectly, under contracts or agreements, as 
                the Secretary shall determine.
    (e) Fees and Charges for Administrative Costs.--To the extent 
provided in appropriations Acts, the Secretary is authorized to impose 
fees and charges for application, review, licensing, and regulation, or 
other actions under this title, and to pay for the costs of such 
activities from the fees and charges collected.
    (f) Guarantee Fees.--The Secretary is authorized to set and collect 
fees for loan guarantee commitments and loan guarantees that the 
Secretary makes under this title.
    (g) Funding.--
            (1) Authorization of appropriations for loan guarantee 
        commitments.--For each of fiscal years 2000, 2001, 2002, 2003, 
        and 2004, there is authorized to be appropriated up to 
        $36,000,000 for the cost (as such term is defined in section 
        502(5) of the Federal Credit Reform Act of 1990) of annual loan 
        guarantee commitments under this title. Amounts appropriated 
        under this paragraph shall remain available for until expended.
            (2) Aggregate loan guarantee commitment limitation.--The 
        Secretary may make commitments to guarantee loans only to the 
        extent that the total loan principal, any part of which is 
        guaranteed, will not exceed $1,000,000,000, unless another such 
        amount is specified in appropriation Acts for any fiscal year.
            (3) Authorization for appropriation of administrative 
        expenses.--For each of the fiscal years 2000, 2001, 2002, 2003, 
        and 2004, there is authorized to be appropriated $1,000,000 for 
        administrative expenses for carrying out this title. The 
        Secretary may transfer amounts appropriated under this 
        paragraph to any appropriation account of HUD or another 
        agency, to carry out the program under this title. Any agency 
        to which the Secretary may transfer amounts under this title is 
        authorized to accept such transferred amounts in any 
        appropriation account of such agency.
    (h) Personnel.--
            (1) Office personnel.--The Secretary may appoint and fix 
        the compensation of such officers and employees who staff the 
        APIC program at HUD as the Secretary considers necessary to 
        carry out the functions of this title. Such officers and 
        employees may be paid without regard to the provisions of 
chapter 51 and subchapter III of chapter 53 of title 5, United States 
Code, relating to classification and General Schedule pay rates.
            (2) Comparability of compensation with federal banking 
        agencies.--In fixing and directing compensation under paragraph 
        (1), the Secretary shall consult with, and maintain 
        comparability with the compensation of, officers and employees 
        of the Office of the Comptroller of the Currency, the Board of 
        Governors of the Federal Reserve System, the Federal Deposit 
        Insurance Corporation, and the Office of Thrift Supervision.
            (3) Outside experts and consultants.--Notwithstanding any 
        provision of law limiting pay or compensation, the Secretary 
        may appoint and compensate such outside experts and consultants 
        as the Secretary determines necessary to assist in the 
        implementation of this title.
    (i) Bank Participation.--Any national bank, or any member bank of 
the Federal Reserve System or nonmember insured bank to the extent 
permitted under applicable State law, may invest in any 1 or more 
APICs, or in any entity established to invest solely in APICs, except 
that in no event shall the total amount of such investments of any such 
bank exceed 5 percent of the total capital and surplus of the bank.

SEC. 203. SELECTION OF APIC'S.

    (a) Eligible Applicants.--An entity shall be eligible to be 
selected for licensing under section 202 as an APIC only if the entity 
submits an application in compliance with the requirements established 
pursuant to subsection (b) and the entity meets or complies with the 
following requirements:
            (1) Organization.--The entity shall be a private, for-
        profit entity that qualifies as a community development entity, 
        as determined by the Secretary, for the purposes of the new 
        markets tax credits under section 45D of the Internal Revenue 
        Code of 1986 (as added by section 101).
            (2) Minimum private equity capital.--The amount of private 
        equity capital reasonably available to the entity, as 
        determined by the Secretary, at the time that a license is 
        approved may not be less than $25,000,000.
            (3) Qualified management.--The management of the entity 
        shall, in the determination of the Secretary, meet such 
        standards as the Secretary shall establish to ensure that the 
        management of the APIC is qualified, and has the financial 
        expertise, knowledge, experience, and capability necessary, to 
        make investments for community and economic development in low-
        income communities.
            (4) Conflict of interest.--The entity shall demonstrate 
        that, in accordance with sound financial management practices, 
        the entity is structured to preclude financial conflict of 
        interest between the APIC and a manager or investor.
            (5) Investment strategy.--The entity shall prepare and 
        submit to the Secretary an investment strategy that includes 
        benchmarks for evaluation of its progress, that includes an 
        analysis of existing locally owned businesses in the 
        communities in which the investments under the strategy will be 
        made, that prioritizes such businesses for investment 
        opportunities, and that fulfills the specific public purpose 
        goals of the entity.
            (6) Statement of public purpose goals.--The entity shall 
        prepare and submit to the Secretary a statement of the public 
        purpose goals of the entity, which shall--
                    (A) set forth goals that shall promote community 
                and economic development, which shall include--
                            (i) making investments in low-income 
                        communities that further economic development 
                        objectives by targeting such investments in 
                        businesses or trades that comply with the 
                        requirements under subparagraphs (A) through 
                        (C) of section 201(10) relating to low-income 
                        communities in a manner that benefits low-
                        income persons;
                            (ii) creating jobs in low-income 
                        communities for residents of such communities;
                            (iii) involving community-based 
                        organizations and residents in community 
                        development activities;
                            (iv) such other goals as the Secretary 
                        shall specify; and
                            (v) such elements as the entity may set 
                        forth to achieve specific public purpose goals;
                    (B) include such other elements as the Secretary 
                shall specify; and
                    (C) include proposed measurements and strategies 
                for meeting the goals.
            (7) Compliance with laws.--The entity shall agree to comply 
        with applicable laws, including Federal executive orders, 
        Office of Management and Budget circulars, and requirements of 
        the Department of the Treasury, and such additional operating 
        and regulatory requirements as the Secretary may impose from 
        time to time.
            (8) Other.--The entity shall satisfy any other application 
        requirements that the Secretary may impose by regulation or 
        Federal Register notice.
    (b) Competitions.--The Secretary shall select eligible entities 
under subsection (a) to be licensed under section 202 as APICs on the 
basis of competitions. The Secretary shall announce each such 
competition by causing a notice to be published in the Federal Register 
that invites applications for licenses and sets forth the requirements 
for application and such other terms of the competition not otherwise 
provided for, as determined by the Secretary.
    (c) Selection.--In competitions under subsection (b), the Secretary 
shall select eligible entities under subsection (a) for licensing as 
APICs on the basis of--
            (1) the extent to which the entity is expected to achieve 
        the goals of this title by meeting or exceeding criteria 
        established under subsection (d); and
            (2) to the extent practicable and subject to the existence 
        of approvable applications, ensuring geographical diversity 
        among the applicants selected and diversity of APICs investment 
        strategies, so that urban and rural communities are both 
        served, in the determination of the Secretary, by the program 
        under this title.
    (d) Selection Criteria.--The Secretary shall establish selection 
criteria for competitions under subsection (b), which shall include the 
following criteria:
            (1) Capacity.--
                    (A) Management.--The extent to which the entity's 
                management has the quality, experience, and expertise 
                to make and manage successful investments for community 
                and economic development in low-income communities.
                    (B) State and local cooperation.--The extent to 
                which the entity demonstrates a capacity to cooperate 
                with States or units of general local government and 
                with community-based organizations and residents of 
                low-income communities.
            (2) Investment strategy.--The quality of the entity's 
        investment strategy submitted in accordance with subsection 
        (a)(5) and the extent to which the investment strategy furthers 
        the goals of this title pursuant to paragraph (3) of this 
        subsection.
            (3) Public purpose goals.--With respect to the statement of 
        public purpose goals of the entity submitted in accordance with 
        subsection (a)(6), and the strategy and measurements included 
        therein--
                    (A) the extent to which such goals promote 
                community and economic development;
                    (B) the extent to which such goals provide for 
                making qualified investments in low-income communities 
                that further economic development objectives, such as--
                            (i) creating, within 2 years of the 
                        completion of the initial such investment, job 
                        opportunities, opportunities for ownership, and 
                        other economic opportunities within a low-
                        income community, both short-term and of a 
                        longer duration;
                            (ii) improving the economic vitality of a 
                        low-income community, including stimulating 
                        other business development;
                            (iii) bringing new income into a low-income 
                        community and assisting in the revitalization 
                        of such community;
                            (iv) converting real property for the 
                        purpose of creating a site for business 
                        incubation and location, or business district 
                        revitalization;
                            (v) enhancing economic competition, 
                        including the advancement of technology;
                            (vi) rural development;
                            (vii) mitigating, rehabilitating, and 
                        reusing real property considered subject to the 
                        Solid Waste Disposal Act (42 U.S.C. 6901 et 
                        seq.; commonly referred to as the Resource 
                        Conservation and Recovery Act) or restoring 
                        coal mine-scarred land;
                            (viii) creation of local wealth through 
                        investments in employee stock ownership 
                        companies or resident-owned ventures; and
                            (ix) any other objective that the Secretary 
                        may establish to further the purposes of this 
                        title;
                    (C) the quality of jobs to be created for residents 
                of low-income communities, taking into consideration 
                such factors as the payment of higher wages, job 
                security, employment benefits, opportunity for 
                advancement, and personal asset building;
                    (D) the extent to which achievement of such goals 
                will involve community-based organizations and 
                residents in community development activities; and
                    (E) the extent to which the investments referred to 
                in subparagraph (B) are likely to benefit existing 
                small business in low-income communities or will 
                encourage the growth of small business in such 
                communities.
            (4) Other.--Any other criteria that the Secretary may 
        establish to carry out the purposes of this title.
    (e) First Year Requirements.--
            (1) Numerical limitation.--The number of APICs may not, at 
        any time during the 1-year period that begins upon the 
        Secretary awarding the first license for an APIC under this 
        title, exceed 15.
            (2) Limitation on allocation of available credit subsidy.--
        Of the amount of budget authority initially made available for 
        allocation under this title for APICs, the amount allocated for 
        any single APIC may not exceed 20 percent.
            (3) Native american private investment company.--Subject 
        only to the absence of an approvable application from an 
        entity, during the 1-year period referred to in paragraph (1), 
        of the entities selected and licensed by the Secretary as 
        APICs, at least one shall be an entity that has as its primary 
        purpose the making of qualified low-income community 
        investments in areas that are within Indian country (as such 
        term is defined in section 1151 of title 18, United States 
        Code) or within lands that have status as Hawaiian home land 
        under section 204 of the Hawaiian Homes Commission Act, 1920 
        (42 Stat. 108) or are acquired pursuant to such Act. The 
        Secretary may establish specific selection criteria for 
        applicants under this paragraph.
    (f) Communications Between HUD and Applicants.--
            (1) In general.--The Secretary shall set forth in 
        regulations the procedures under which HUD and applicants for 
        APIC licenses, and others, may communicate. Such regulations 
        shall--
                    (A) specify by position the HUD officers and 
                employees who may communicate with such applicants and 
                others;
                    (B) permit HUD officers and employees to request 
                and discuss with the applicant and others (such as 
                banks or other credit or business references, or 
                potential investors) any more detailed information that 
                may be desirable to facilitate HUD's review of the 
                applicant's application;
                    (C) restrict HUD officers and employees from 
                revealing to any applicant the fact or chances of award 
                of a license to such applicant or any other applicant, 
                unless there has been a public announcement of the 
                results of the competition; and
                    (D) set forth requirements for making and keeping 
                records of any communications conducted under this 
                subsection, including requirements for making such 
                records available to the public after the award of 
                licenses under an initial or subsequent notice, as 
                appropriate, under subsection (a).
            (2) Timing.--Regulations under this subsection may be 
        issued as interim rules for effect on or before the date of 
        publication of the first notice under subsection (a), and shall 
        apply only with respect to applications under such notice. 
        Regulations to implement this subsection with respect to any 
        notice after the first such notice shall be subject to notice 
        and comment rulemaking.
            (3) Inapplicability of department of hud act provision.--
        Section 12(e)(2) of the Department of Housing and Urban 
        Development Act (42 U.S.C. 3537a(e)(2)) is amended by inserting 
        before the period at the end the following: ``or any license 
        provided under title II of the Creating New Markets and 
        Empowering America Act of 2000''.

SEC. 204. OPERATIONS OF APIC'S.

    (a) Powers and Authorities.--
            (1) In general.--An APIC shall have any powers or 
        authorities that--
                    (A) the APIC derives from the jurisdiction in which 
                it is organized, or that the APIC otherwise has;
                    (B) may be conferred by a license under this title; 
                and
                    (C) the Secretary may prescribe by regulation.
            (2) New market assistance.--Nothing in this title shall 
        preclude an APIC or its investors from receiving an allocation 
        of new markets tax credits if the APIC satisfies the applicable 
        terms and conditions under the Internal Revenue Code of 1986.
    (b) Investment Limitations.--
            (1) Qualified low-income community investments.--
        Substantially all investments that an APIC makes shall be 
qualified low-income community investments if the investments are 
financed with--
                    (A) amounts available from the proceeds of the 
                issuance of an APIC's qualified debenture guaranteed 
                under this title;
                    (B) proceeds of the sale of obligations described 
                under subsection (c)(3)(C)(iii); or
                    (C) the use of private equity capital, as 
                determined by the Secretary, in an amount specified in 
                the APIC's license.
            (2) Single business investments.--An APIC shall not, as a 
        matter of sound financial practice, invest in any one business, 
        an amount that exceeds an amount equal to 35 percent of the sum 
        of--
                    (A) the APIC's private equity capital, plus
                    (B) an amount equal to the percentage limit that 
                the Secretary determines that APIC may have outstanding 
                at any one time, under subsection (c)(2)(A).
    (c) Borrowing Powers; Qualified Debentures.--
            (1) Issuance.--An APIC may issue qualified debentures. The 
        Secretary shall, by regulation, specify the terms and 
        requirements for debentures to be considered qualified 
        debentures for purposes of this title, except that the term to 
        maturity of any qualified debenture may not exceed 21 years and 
        each qualified debenture shall bear interest during all or any 
        part of that time period at a rate or rates approved by the 
        Secretary.
            (2) Leverage limits.--In general, as a matter of sound 
        financial management practices--
                    (A) the total amount of qualified debentures that 
                an APIC issues under this title that an APIC may have 
                outstanding at any one time shall not exceed an amount 
                equal to 200 percent of the private equity capital of 
                the APIC, as determined by the Secretary; and
                    (B) an APIC shall not have more than $300,000,000 
                in face value of qualified debentures issued under this 
                title outstanding at any one time.
            (3) Repayment.--
                    (A) Condition of business wind-up.--An APIC must 
                have repaid, or have otherwise been relieved of 
                indebtedness, with respect to any interest or principal 
                amounts of borrowings under this subsection no less 
                than 2 years before the APIC may dissolve or otherwise 
                complete the wind-up of its business.
                    (B) Timing.--An APIC may repay any interest or 
                principal amounts of borrowings under this subsection 
                at any time, except that the repayment of such amounts 
                shall not relieve an APIC of any duty otherwise 
                applicable to the APIC under this title, unless the 
                Secretary orders such relief.
                    (C) Use of investment proceeds before repayment.--
                Until an APIC has repaid all interest and principal 
                amounts on APIC borrowings under this subsection, an 
                APIC may use the proceeds of investments in accordance 
                with regulations issued by the Secretary only to--
                            (i) pay for proper costs and expenses the 
                        APIC incurs in connection with such 
                        investments;
                            (ii) pay for the reasonable administrative 
                        expenses of the APIC;
                            (iii) purchase Treasury securities;
                            (iv) repay interest and principal amounts 
                        on APIC borrowings under this subsection;
                            (v) make interest, dividend, or other 
                        distributions to or on behalf of an investor; 
                        or
                            (vi) undertake such other purposes as the 
                        Secretary may approve.
                    (D) Use of investment proceeds after repayment.--
                After an APIC has repaid all interest and principal 
                amounts on APIC borrowings under this subsection, and 
                subject to continuing compliance with subsection (a), 
                the APIC may use the proceeds from investments to make 
                interest, dividend, or other distributions to or on 
                behalf of investors in the nature of returns on 
                capital, or the withdrawal of private equity capital, 
                without regard to subparagraph (C) but in conformity 
                with the APIC's investment strategy and statement of 
                public purpose goals.
    (d) Reuse of Qualified Debenture Proceeds.--An APIC may use the 
proceeds of sale of Treasury securities purchased under subsection 
(c)(3)(C)(iii) to make qualified low-income community investments, 
subject to the Secretary's approval. In making the request for the 
Secretary's approval, the APIC shall follow the procedures applicable 
to an APIC's request for HUD guarantee action, as the Secretary may 
modify such procedures for implementation of this subsection. Such 
procedures shall include the description and certifications that an 
APIC must include in all requests for guarantee action, and the 
environmental certification applicable to initial expenditures for a 
project or activity.
    (e) Antipirating.--Notwithstanding any other provision of law, an 
APIC may not use any private equity capital required to be contributed 
under this title, or the proceeds from the sale of any qualified 
debenture under this title, to make an investment, as determined by the 
Secretary, to assist directly in the relocation of any industrial or 
commercial plant, facility, or operation, from 1 area to another area, 
if the relocation is likely to result in a significant loss of 
employment in the labor market area from which the relocation occurs.
    (f) Exclusion of APIC From Definition of Debtor Under Bankruptcy 
Provisions.--Section 109(b)(2) of title 11 of the United States Code is 
amended by inserting before ``credit union'' the following: ``America's 
Private Investment Company licensed under title II of the Creating New 
Markets and Empowering America Act of 2000,''.

SEC. 205. CREDIT ENHANCEMENT BY THE FEDERAL GOVERNMENT.

    (a) Issuance and Guarantee of Qualified Debentures.--
            (1) Authority.--To the extent consistent with the Federal 
        Credit Reform Act of 1990, the Secretary is authorized to make 
        commitments to fully and unconditionally guarantee the timely 
        payment of all principal and interest on, qualified debentures 
        issued by APICs. Such commitments or guarantees may only be 
        made in accordance with the terms and conditions established 
        under paragraph (2).
            (2) Terms and conditions.--The Secretary shall establish 
        such terms and conditions as the Secretary determines to be 
        appropriate for commitments and guarantees under this 
        subsection, including terms and conditions relating to amounts, 
        expiration, number, priorities of repayment, security, 
        collateral, amortization, payment of interest (including the 
        timing thereof), and fees and charges. The terms and conditions 
        applicable to any particular commitment or guarantee may be 
        established in documents that the Secretary approves for such 
        commitment or guarantee.
            (3) Seniority.--Notwithstanding any other provision of 
        Federal law or any law or the constitution of any State, 
        qualified debentures guaranteed under this subsection by the 
        Secretary shall be senior to any other debt obligation, equity 
        contribution or earnings, or the distribution of dividends, 
        interest, or other amounts, of an APIC.
    (b) Issuance of Trust Certificates.--The Secretary, or an agent or 
entity selected by the Secretary, is authorized to cause a trust to 
issue trust certificates representing ownership of all or a fractional 
part of guaranteed qualified debentures issued by APICs and held in 
trust.
    (c) Guarantee of Trust Certificates.--
            (1) In general.--The Secretary is authorized, upon such 
        terms and conditions as the Secretary determines to be 
        appropriate, to fully and unconditionally guarantee the timely 
        payment of the principal of and interest on any trust 
        certificate issued under this section.
            (2) Substitution option.--The Secretary shall have the 
        option to replace in the corpus of the trust any prepaid or 
        defaulted qualified debenture with a debenture, another full 
        faith and credit instrument, or any obligations of the United 
        States, that may reasonably substitute for such prepaid or 
        defaulted qualified debenture.
            (3) Proportionate reduction option.--In the event that the 
        Secretary elects not to exercise the option under paragraph 
        (2), and a qualified debenture in such trust is prepaid, or in 
        the event of default of a qualified debenture, the guarantee of 
        timely payment of principal and interest on the trust 
        certificate shall be reduced in proportion to the amount of 
        principal and interest that such prepaid qualified debenture 
        represents in the trust, provided that the guarantee of timely 
        payment of principal of and interest on the trust certificates 
        remains full and unconditional. Interest on prepaid or 
        defaulted qualified debentures shall accrue and be guaranteed 
        by the Secretary only through the date of payment of the 
        guarantee. During the term of a trust certificate, it may be 
        called for redemption due to prepayment or default of all 
        qualified debentures that are in the corpus of the trust.
    (d) Full Faith and Credit Backing of Guarantees.--The full faith 
and credit of the United States is pledged to the timely payment of all 
amounts which may be required to be paid under any guarantee by the 
Secretary pursuant to this section.
    (e) Subrogation and Liens.--
            (1) Subrogation.--In the event the Secretary pays a claim 
        under a guarantee issued under this section, the Secretary 
        shall be subrogated fully to the rights satisfied by such 
        payment.
            (2) Priority of liens.--No State or local law, and no 
        Federal law, shall preclude or limit the exercise by the 
        Secretary of its ownership rights in the debentures in the 
        corpus of a trust under this section.
    (f) Registration.--
            (1) In general.--The Secretary shall provide for a central 
        registration of all trust certificates issued pursuant to this 
        section.
            (2) Agents.--The Secretary may contract with an agent or 
        agents to carry out on behalf of the Secretary the pooling and 
        the central registrations functions of this section 
        notwithstanding any other provisions of law, including 
        maintenance on behalf of and under the direction of the 
        Secretary, such commercial bank accounts or investments in 
        obligations of the United States as may be necessary to 
        facilitate trusts backed by qualified debentures guaranteed 
        under this title and the issuance of trust certificates to 
        facilitate formation of the corpus of the trusts. The Secretary 
        may require such agent or agents to provide a fidelity bond or 
insurance in such amounts as the Secretary determines to be necessary 
to protect the interests of the Government.
            (3) Form.--Book-entry or other electronic forms of 
        registration for trust certificates under this title are 
        authorized.
    (g) Timing of Issuance of Guarantees of Qualified Debentures and 
Trust Certificates.--The Secretary may, from time to time in the 
Secretary's discretion, exercise the authority to issue guarantees of 
qualified debentures under this title or trust certificates under this 
title.
    (h) Conforming Amendment.--Section 514(c)(6) of the Internal 
Revenue Code of 1986 is amended by inserting ``or a debenture issued by 
an America's Private Investment Company (APIC), to the extent it is 
guaranteed by the Secretary of Housing and Urban Development'' before 
the period at the end.

SEC. 206. APIC REQUESTS FOR GUARANTEE ACTIONS.

    (a) In General.--The Secretary may issue a guarantee under this 
title for a qualified debenture that an APIC intends to issue only 
pursuant to a request to the Secretary by the APIC for such guarantee 
that is made in accordance with regulations governing the content and 
procedures for such requests, that the Secretary shall prescribe. Such 
regulations shall provide that each such request shall include--
            (1) a description of the manner in which the APIC intends 
        to use the proceeds from the qualified debenture;
            (2) a certification by the APIC that the APIC is in 
        substantial compliance with--
                    (A) this title and other applicable laws, including 
                any requirements established under this title by the 
                Secretary;
                    (B) all terms and conditions of its license, any 
                cease-and-desist order issued under section 210, and of 
                any penalty or condition that may have arisen from 
                examination or monitoring by the Secretary or 
                otherwise, including the satisfaction of any financial 
                audit exception that may have been outstanding; and
                    (C) all requirements relating to the allocation and 
                use of new markets tax credits under section 45D of the 
                Internal Revenue Code of 1986 (as added by section 
                101); and
            (3) any other information or certification that the 
        Secretary considers appropriate.
    (b) Requests for Guarantee of Qualified Debentures That Include 
Funding for Initial Expenditure for a Project or Activity.--In addition 
to the description and certification that an APIC is required to supply 
in all requests for guarantee action under subsection (a), in the case 
of an APIC's request for a guarantee that includes a qualified 
debenture, the proceeds of which the APIC expects to be used as its 
initial expenditure for a project or activity in which the APIC intends 
to invest, and the expenditure for which would require an environmental 
assessment under the National Environmental Policy Act of 1969 and 
other related laws that further the purposes of such Act, such request 
for guarantee action must include evidence satisfactory to the 
Secretary of the certification of the completion of environmental 
review of the project or activity required of the cognizant State or 
local government under subsection (c). If the environmental review 
responsibility for the project or activity has not been assumed by a 
State or local government under subsection (c), then the Secretary 
shall be responsible for carrying out the applicable responsibilities 
under the National Environmental Policy Act of 1969 and other 
provisions of law that further the purposes of such Act that relate to 
the project or activity, and the Secretary shall execute such 
responsibilities before acting on the APIC's request for the guarantee 
that is covered by this subsection.
    (c) Responsibility for Environmental Reviews.--
            (1) Execution of responsibility by the secretary.--This 
        subsection shall apply to guarantees by the Secretary of 
        qualified debentures under this title, the proceeds of which 
        would be used in connection with qualified low-income community 
        investments of APICs under this title.
            (2) Assumption of responsibility by cognizant unit of 
        general government.--
                    (A) Guarantee of qualified debentures.--In order to 
                assure that the policies of the National Environmental 
                Policy Act of 1969 and other provisions of law that 
                further the purposes of such Act (as specified in 
                regulations issued by the Secretary) are most 
                effectively implemented in connection with the 
                expenditure of funds under this title, and to assure to 
                the public undiminished protection of the environment, 
                the Secretary may, under such regulations, in lieu of 
                the environmental protection procedures otherwise 
                applicable, provide for the guarantee of qualified 
                debentures, any part of the proceeds of which are to 
                fund particular qualified low-income community 
                investments of APICs under this title, if a State or 
                unit of general local government, as designated by the 
                Secretary in accordance with regulations issued by the 
                Secretary, assumes all of the responsibilities for 
                environmental review, decision making, and action 
                pursuant to the National Environmental Policy Act of 
                1969 and such other provisions of law that further such 
                Act as the regulations of the Secretary specify, that 
                would otherwise apply to the Secretary were the 
                Secretary to undertake the funding of such investments 
                as a Federal action.
                    (B) Implementation.--The Secretary shall issue 
                regulations to carry out this subsection only after 
                consultation with the Council on Environmental Quality. 
                Such regulations shall--
                            (i) specify any other provisions of law 
                        which further the purposes of the National 
                        Environmental Policy Act of 1969 and to which 
                        the assumption of responsibility as provided in 
                        this subsection applies;
                            (ii) provide eligibility criteria and 
                        procedures for the designation of a State 
or unit of general local government to assume all of the 
responsibilities in this subsection;
                            (iii) specify the purposes for which funds 
                        may be committed without regard to the 
                        procedure established under paragraph (3);
                            (iv) provide for monitoring of the 
                        performance of environmental reviews under this 
                        subsection;
                            (v) in the discretion of the Secretary, 
                        provide for the provision or facilitation of 
                        training for such performance; and
                            (vi) subject to the discretion of the 
                        Secretary, provide for suspension or 
                        termination by the Secretary of the assumption 
                        under subparagraph (A).
                    (C) Responsibilities of states and units of general 
                local government.--The Secretary's duty under 
                subparagraph (B) shall not be construed to limit any 
                responsibility assumed by a State or unit of general 
                local government with respect to any particular request 
                for guarantee under subparagraph (A), or the use of 
                funds for a qualified investment.
            (3) Procedure.--Subject to compliance by the APIC with the 
        requirements of this title, the Secretary shall approve the 
        request for guarantee of a qualified debenture, any part of the 
        proceeds of which is to fund particular qualified low-income 
        community investments of APICs under this title, that is 
        subject to the procedures authorized by this subsection only 
        if, not less than 15 days prior to such approval and prior to 
        any commitment of funds to such investment (except for such 
        purposes specified in the regulations issued under paragraph 
        (2)(B)), the APIC submits to the Secretary a request for 
        guarantee of a qualified debenture that is accompanied by 
        evidence of a certification of the State or unit of general 
        local government which meets the requirements of paragraph (4). 
        The approval by the Secretary of any such certification shall 
        be deemed to satisfy the Secretary's responsibilities pursuant 
        to paragraph (1) under the National Environmental Policy Act of 
        1969 and such other provisions of law as the regulations of the 
        Secretary specify insofar as those responsibilities relate to 
        the guarantees of qualified debentures, any parts of the 
        proceeds of which are to fund such investments, which are 
        covered by such certification.
            (4) Certification.--A certification under the procedures 
        authorized by this subsection shall--
                    (A) be in a form acceptable to the Secretary;
                    (B) be executed by the chief executive officer or 
                other officer of the State or unit of general local 
                government who qualifies under regulations of the 
                Secretary;
                    (C) specify that the State or unit of general local 
                government under this subsection has fully carried out 
                its responsibilities as described under paragraph (2); 
                and
                    (D) specify that the certifying officer--
                            (i) consents to assume the status of a 
                        responsible Federal official under the National 
                        Environmental Policy Act of 1969 and each 
                        provision of law specified in regulations 
                        issued by the Secretary insofar as the 
                        provisions of such Act or other such provision 
                        of law apply pursuant to paragraph (2); and
                            (ii) is authorized and consents on behalf 
                        of the State or unit of general local 
                        government and himself or herself to accept the 
                        jurisdiction of the Federal courts for the 
                        purpose of enforcement of the responsibilities 
                        of such an official.

SEC. 207. EXAMINATION AND MONITORING OF APIC'S.

    (a) In General.--The Secretary shall, under regulations, through 
audits, performance agreements, license conditions, or otherwise, 
examine and monitor the operations and activities of APICs for 
compliance with sound financial management practices, and for 
satisfaction of the program and procedural goals of this title and 
other related Acts. The Secretary may undertake any responsibility 
under this section in cooperation with an APIC liaison committee, or 
any agency that is a member of such a committee, or other agency.
    (b) Monitoring, Updating, and Program Review.--
            (1) Reporting and updating.--The Secretary shall establish 
        such annual or more frequent reporting requirements for APICs, 
        and such requirements for the updating of the statement of 
        public purpose goals, investment strategy (including the 
        benchmarks in such strategy), and other documents that may have 
        been used in the license application process under this title, 
        as the Secretary determines necessary to assist the Secretary 
        in monitoring the compliance and performance of APICs.
            (2) Annual audits.--The Secretary shall require each APIC 
        to have an independent audit conducted annually of the 
        operations of the APIC. The Secretary, in consultation with the 
        Administrator and the Secretary of the Treasury, shall 
        establish requirements and standards for such audits, including 
        requirements that such audits be conducted in accordance with 
        generally accepted accounting principles, that the APIC submit 
        the results of the audit to Secretary, and that specify the 
        information to be submitted.
            (3) Examinations.--The Secretary shall, no less often than 
        once every 2 years, examine the operations and portfolio of 
        each APIC licensed under this title for compliance with sound 
        financial management practices, and for compliance with this 
        title.
            (4) Examination standards.--
                    (A) Sound financial management practices.--The 
                Secretary shall examine each APIC to ensure, as a 
                matter of sound financial management practices, 
                substantial compliance with this and other applicable 
                laws, including Federal executive orders, Department of 
                Treasury and Office of Management and Budget guidance, 
                circulars, and application and licensing requirements 
                on a continuing basis. The Secretary may, by 
                regulation, establish any additional standards for 
                sound financial management practices, including 
                standards that address solvency and financial exposure.
                    (B) Performance and other examinations.--The 
                Secretary shall monitor each APIC's progress in meeting 
                the goals in the APIC's statement of public purpose 
                goals, executing the APIC's investment strategy, and 
                other matters.
    (c) Inspector General Responsibility.--In carrying out monitoring 
of HUD's responsibilities under this title and for purposes of ensuring 
that the program under this title is operated in accordance with sound 
financial management practices, the Inspector General of the Department 
of Housing and Urban Development shall consult with the Inspector 
General of the Department of the Treasury and the Inspector General of 
the Small Business Administration, as appropriate, and may enter into 
such agreements and memoranda of understanding as may be necessary to 
obtain the cooperation of the Inspectors General of the Department of 
the Treasury and the Small Business Administration in carrying out such 
function.
    (d) Annual Report by Secretary.--The Secretary shall submit a 
report to the Congress annually regarding the operations, activities, 
financial health, and achievements of the APIC program under this 
title. The report shall list each investment made by an APIC and 
include a summary of the examinations conducted under subsection 
(b)(3), the guarantee actions of HUD, and any regulatory or policy 
actions taken by HUD. The report shall distinguish recently licensed 
APICs from APICs that have held licenses for a longer period for 
purposes of indicating program activities and performance.
    (e) GAO Report.--
            (1) Requirement.--Not later than 2 years after the date of 
        the enactment of this Act, the Comptroller General of the 
        United States shall submit a report to the Congress regarding 
        the operation of the program under this title for licensing and 
        guarantees for APICs.
            (2) Contents.--The report shall include--
                    (A) an analysis of the operations and monitoring by 
                HUD of the APIC program under this title;
                    (B) the administrative and capacity needs of HUD 
                required to ensure the integrity of the program;
                    (C) the extent and adequacy of any credit subsidy 
                appropriated for the program; and
                    (D) the management of financial risk and liability 
                of the Federal Government under the program.

SEC. 208. PENALTIES.

    (a) Violations Subject to Penalty.--The Secretary may impose a 
penalty under this subsection on any APIC or manager of an APIC that, 
by any act, practice, or failure to act, engages in fraud, 
mismanagement, or noncompliance with this title, the regulations under 
this title, or a condition of the APIC's license under this title. The 
Secretary shall, by regulation, identify, by generic description of a 
role or responsibilities, any manager of an APIC that is subject to a 
penalty under this section.
    (b) Penalties Requiring Notice and an Opportunity to Respond.--If, 
after notice in writing to an APIC or the manager of an APIC that the 
APIC or manager has engaged in any action, practice, or failure to act 
that, under subsection (a), is subject to a penalty, and after an 
opportunity for the APIC or manager to respond to the notice, the 
Secretary determines that the APIC or manager engaged in such action or 
failure to act, the Secretary may, in addition to other penalties 
imposed--
            (1) assess a civil money penalty, except than any civil 
        money penalty under this subsection shall be in an amount not 
        exceeding $10,000;
            (2) issue an order to cease and desist with respect to such 
        action, practice, or failure to act of the APIC or manager;
            (3) suspend, or condition the use of, the APIC's license, 
        including deferring, for the period of the suspension, any 
        commitment to guarantee any new qualified debenture of the 
        APIC, except that any suspension or condition under this 
        paragraph may not exceed 90 days; and
            (4) impose any other penalty that the Secretary determines 
        to be less burdensome to the APIC than a penalty under 
        subsection (c).
    (c) Penalties Requiring Notice and Hearing.--If, after notice in 
writing to an APIC or the manager of an APIC that an APIC or manager 
has engaged in any action, practice, or failure to act that, under 
subsection (a), is subject to a penalty, and after an opportunity for 
administrative hearing, the Secretary determines that the APIC or 
manager engaged in such action or failure to act, the Secretary may--
            (1) assess a civil money penalty against the APIC or a 
        manager in any amount;
            (2) require the APIC to divest any interest in an 
        investment, on such terms and conditions as the Secretary may 
        impose; or
            (3) revoke the APIC's license.
    (d) Effective Date of Penalties.--
            (1) Prior notice requirement.--Except as provided in 
        paragraph (2) of this subsection, a penalty under subsection 
        (b) or (c) shall not be due and payable and shall not otherwise 
        take effect or be subject to enforcement by an order of a 
        court, before notice of the penalty is published in the Federal 
        Register.
            (2) Cease-and-desist orders and suspension or conditioning 
        of license.--In the case of a cease-and-desist order under 
        subsection (b)(2) or the suspension or conditioning of an 
        APIC's license under subsection (b)(3), the following 
        procedures shall apply:
                    (A) Action without published notice.--The Secretary 
                may order an APIC or manager to cease and desist from 
                an action, practice, or failure to act or may suspend 
                or condition an APIC's license, for not more than 45 
                days without prior publication of notice in the Federal 
                Register, but such cease-and-desist order or suspension 
                or conditioning shall take effect only after the 
                Secretary has issued a written notice (which may 
                include a writing in electronic form) of such action to 
                the APIC. Notwithstanding subsection (b), such written 
                notice shall be effective without regard to whether the 
                APIC has been accorded an opportunity to respond. Upon 
                such notice, such cease-and-desist order or suspension 
                or conditioning shall be subject to enforcement by an 
                order of a court.
                    (B) Publication of notice of suspension or 
                conditioning of license.--Upon a suspension or 
                conditioning of a license taking effect pursuant to 
                subparagraph (A), the Secretary shall promptly cause a 
                notice of suspension or conditioning of such license 
                for a period of not more than 90 days to be published 
                in the Federal Register. The Secretary shall provide 
                the APIC an opportunity to respond to such notice. For 
                purposes of the determining the duration of the period 
                of any suspension or conditioning under this 
                subparagraph, the first day of such period shall be the 
                day of issuance of the written notice under this 
paragraph of the suspension or conditioning.
                    (C) Revocation of license.--During the period of 
                the suspension or conditioning of an APIC's license, 
                the Secretary may take action under subsection (c)(3) 
                to revoke the license of the APIC, in accordance with 
                the procedures applicable to such subsection. 
                Notwithstanding any other provision of this section, if 
                the Secretary takes such action, the Secretary may 
                extend the suspension or conditioning of the APIC's 
                license, for one or more periods of not more than 90 
                days each, by causing notice of such action to be 
                published in the Federal Register--
                            (i) for the first such extension, before 
                        the expiration of the period under subparagraph 
                        (B); and
                            (ii) for any subsequent extension, before 
                        the expiration of the preceding extension 
                        period under this subparagraph.
                    (D) Term of effectiveness.--A cease-and-desist 
                order or the suspension or conditioning of an APIC's 
                license by the Secretary under this paragraph shall 
                remain in effect in accordance with the terms of the 
                order, suspension, or conditioning until final 
                adjudication in any action undertaken to challenge the 
                order, or the suspension or conditioning, or the 
                revocation, of an APIC's license.

SEC. 209. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this title 
shall take effect upon the expiration of the 6-month period beginning 
on the date of the enactment of this Act.
    (b) Issuance of Regulations and Guidelines.--Any authority under 
this title of the Secretary, the Administrator, and the Secretary of 
the Treasury to issue regulations, standards, guidelines, or licensing 
requirements, and any authority of such officials to consult or enter 
into agreements or memoranda of understanding regarding such issuance, 
shall take effect on the date of the enactment of this Act.

SEC. 210. SUNSET.

    (a) In general.--After the expiration of the 5-year period 
beginning upon the date that the Secretary awards the first license for 
an APIC under this title--
            (1) the Secretary may not license any APIC; and
            (2) no amount may be appropriated for the costs (as such 
        term is defined in section 502 of the Federal Credit Reform Act 
        of 1990 (2 U.S.C. 661c) of any guarantee under this title for 
        any debenture issued by an APIC.
    (b) Construction.--This section may not be construed to prohibit, 
limit, or affect the award, allocation, or use of any budget authority 
for the costs of such guarantees that is appropriated before the 
expiration of such 5-year period.

          TITLE III--COMMUNITY DEVELOPMENT AND VENTURE CAPITAL

            Subtitle A--New Markets Venture Capital Program

SEC. 301. NEW MARKETS VENTURE CAPITAL PROGRAM.

    (a) In General.--Title III of the Small Business Investment Act of 
1958 (15 U.S.C. 681 et seq.) is amended--
            (1) by striking the title designation and heading and 
        inserting the following:

               ``TITLE III--INVESTMENT DIVISION PROGRAMS

          ``Subtitle A--Small Business Investment Companies'';

        and
            (2) by adding at the end the following:

           ``Subtitle B--New Markets Venture Capital Program

``SEC. 351. DEFINITIONS.

    ``In this subtitle--
            ``(1) the term `eligible company' means a company that--
                    ``(A) is a newly formed for-profit entity, which 
                may be a newly formed for-profit subsidiary of an 
                existing entity; and
                    ``(B) has a management team with experience in 
                community development financing or relevant venture 
                capital financing;
            ``(2) the term `low-income individual' means an individual 
        whose income (adjusted for family size) does not exceed--
                    ``(A) for metropolitan areas, 80 percent of the 
                area median income; and
                    ``(B) for nonmetropolitan areas, the greater of--
                            ``(i) 80 percent of the area median income; 
                        or
                            ``(ii) 80 percent of the statewide (or, in 
                        the case of a U.S. territory, territory-wide) 
                        nonmetropolitan area median income;
            ``(3) the term `low- or moderate-income geographic area' 
        means--
                    ``(A) any population census tract (or in the case 
                of an area that is not tracted for population census 
                tracts, the equivalent county division, as defined by 
                the Bureau of the Census of the Department of Commerce 
                for purposes of defining poverty areas), if--
                            ``(i) the poverty rate for such census 
                        tract is not less than 20 percent;
                            ``(ii) in the case of a tract--
                                    ``(I) that is located within a 
                                metropolitan area, the median family 
                                income for such tract does not exceed 
                                the greater of 80 percent of the 
                                statewide (or in the case of a U.S. 
                                territory, territory-wide) median 
                                family income or 80 percent of the 
                                metropolitan area median family income; 
                                or
                                    ``(II) that is not located within a 
                                metropolitan area, the median family 
                                income for such tract does not 
exceed 80 percent of the statewide (or, in case of a U.S. territory, 
territory-wide) median family income; or
                            ``(iii) as determined by the Administrator 
                        based on objective criteria, a substantial 
                        population of low-income individuals reside, an 
                        inadequate access to investment capital exists, 
                        or other indications of economic distress exist 
                        in that census tract; or
                    ``(B) any area located within--
                            ``(i) a HUBZone (as defined in section 3(p) 
                        of the Small Business Act and the implementing 
                        regulations issued under that section);
                            ``(ii) an urban empowerment zone or urban 
                        enterprise community (as designated by the 
                        Secretary of Housing and Urban Development); or
                            ``(iii) a rural empowerment zone or rural 
                        enterprise community (as designated by the 
                        Secretary of Agriculture);
                    ``(C) any other area designated by the Secretary of 
                the Treasury, as a low-income community for the 
                purposes of the New Markets Tax Credit;
            ``(4) the terms `new markets venture capital company' and 
        `NMVC company' mean a company that has been designated as a new 
        markets venture capital company by the Administrator under 
        section 354(d);
            ``(5) the term `participation agreement' means an agreement 
        between the Administrator and a company granted final approval 
        under section 354(d) that--
                    ``(A) details the operating plan and investment 
                criteria of the company; and
                    ``(B) requires the company to make investments in 
                smaller enterprises, at least 80 percent of which are 
                located in low- or moderate-income geographic areas; 
                and
            ``(6) the term `specialized small business investment 
        company' means any small business investment company that--
                    ``(A) invests solely in small business concerns 
                that contribute to a well-balanced national economy by 
                facilitating ownership in such concerns by persons 
                whose participation in the free enterprise system is 
                hampered because of social or economic disadvantages;
                    ``(B) is organized or chartered under State 
                business or nonprofit corporations statutes, or formed 
                as a limited partnership; and
                    ``(C) was licensed under section 301(d), as in 
                effect before September 30, 1996.

``SEC. 352. PURPOSES.

    ``The purposes of this subtitle are--
            ``(1) to encourage venture capital investment in smaller 
        enterprises located within urban and rural areas;
            ``(2) to promote the creation of wealth, economic 
        development, and job opportunities in low- and moderate-income 
        geographic areas; and
            ``(3) to establish a venture capital program, which shall 
        be administered by the Administrator--
                    ``(A) to make grants to NMVC companies for the 
                purpose of providing marketing, management, and 
                technical assistance to smaller enterprises financed, 
                or expected to be financed, by such companies; and
                    ``(B) to guarantee debentures issued by NMVC 
                companies to enable such companies to make venture 
                capital investments in smaller enterprises within urban 
                and rural areas.

``SEC. 353. PROGRAM ESTABLISHMENT.

    ``There is established a New Markets Venture Capital Program, under 
which the Administrator is authorized to--
            ``(1) make grants to NMVC companies, as provided in section 
        355; and
            ``(2) guarantee debentures issued by NMVC companies, as 
        provided in section 356.

``SEC. 354. SELECTION OF NMVC COMPANIES.

    ``(a) Applications.--In order to be eligible to participate in the 
program under this subtitle as an NMVC company, an eligible company 
shall submit to the Administrator an application, within such period of 
time as the Administrator shall establish, which shall include--
            ``(1) a business plan that--
                    ``(A) includes the information referred to in 
                subparagraph (A) of section 351(5); and
                    ``(B) describes the manner and geographic areas in 
                which the applicant will--
                            ``(i) make successful venture capital 
                        investments in smaller enterprises described in 
                        subparagraph (B) of section 351(5); and
                            ``(ii) provide marketing, management, and 
                        technical assistance to those enterprises;
            ``(2) the qualifications and general business reputation of 
        the management of the applicant, specifically addressing--
                    ``(A) the experience of the management in making 
                venture capital investments in smaller enterprises 
                described in section 351(5)(B); and
                    ``(B) the success of those investments in terms of 
                business growth, jobs created, and such other factors 
                as the Administrator may require;
            ``(3) a description of the manner in which the applicant 
        will interface with community organizations;
            ``(4) a proposal describing the manner in which grant 
        amounts made available under this subtitle would provide 
        marketing, management, and technical assistance to smaller 
        enterprises expected to be financed by the applicant;
            ``(5) proposed criteria by which to evaluate the 
        performance of the applicant in meeting program objectives;
            ``(6) the management and financial strength of any parent 
        or affiliated firm, or any firm essential to the success of the 
        business plan of the applicant;
            ``(7) with respect to binding commitments to be made to the 
        company under this subtitle, an estimate of the ratio of cash 
        to in-kind contributions; and
            ``(8) such other information as the Administrator may 
        require.
    ``(b) Criteria for Conditional Approval.--
            ``(1) In general.--Upon receipt of an application submitted 
        under subsection (a), the Administrator shall review the 
        application and make a determination regarding whether to grant 
        conditional approval to the applicant to operate as an NMVC 
        company during the time period described in subsection (c), 
        based on--
                    ``(A) the geographic area and employment 
                characteristics of the smaller enterprises in which the 
                proposed investments of the NMVC company will be made 
                (in order to promote investment nationwide);
                    ``(B) the likelihood that the applicant will meet 
                the goals of the business plan of the applicant;
                    ``(C) the experience and background of the 
                management team of the company;
                    ``(D) the need for equity or equity-type 
                investments within the proposed investment areas;
                    ``(E) the extent to which the applicant will 
                concentrate its activities on serving its investment 
                areas;
                    ``(F) the likelihood that the applicant will be 
                able to satisfy the requirements of subsection (c);
                    ``(G) the extent to which the proposed activities 
                will expand economic opportunities within the 
                investment areas; and
                    ``(H) such other factors as the Administrator 
                determines to be appropriate.
            ``(2) Nationwide distribution.--The Administrator shall 
        select companies under paragraph (1) in such a way that 
        promotes investment nationwide.
    ``(c) Requirements for Final Approval.--
            ``(1) In general.--Subject to paragraph (2), each applicant 
        that is granted conditional approval by the Administrator to 
        operate as an NMVC company under subsection (b) shall, before 
        the expiration of a time period established by the 
        Administrator, not to exceed 24 months, beginning on the date 
        on which such conditional approval is granted--
                    ``(A) raise not less than $5,000,000 of contributed 
                capital or binding capital commitments from 1 or more 
                investors (other than an agency of the Federal 
                Government) that meet criteria established by the 
                Administrator; and
                    ``(B) in order to provide marketing, management, 
                and technical assistance, have--
                            ``(i) cash or binding commitments for 
                        contributions (in cash or in-kind) from 1 or 
                        more sources other than the Administration that 
                        meet criteria established by the Administrator, 
                        payable or available over a multiyear period 
                        acceptable to the Administrator (not to exceed 
                        10 years), in an amount equal to 30 percent of 
                        the capital and commitments raised under 
                        subparagraph (A);
                            ``(ii) purchased an annuity from an 
                        insurance company acceptable to the 
                        Administrator, using amounts (other than the 
                        amounts raised to satisfy the requirements of 
                        subparagraph (A)) from any source other than 
                        the Administration, that would yield cash 
                        payments over a multiyear period acceptable to 
                        the Administrator (not to exceed 10 years), in 
                        an amount equal to 30 percent of the capital 
                        and commitments raised under subparagraph (A); 
                        or
                            ``(iii) cash or binding commitments for 
                        contributions (in cash or in-kind) of the type 
                        described in clause (i) and have purchased an 
                        annuity of the type described in clause (ii), 
                        that in the aggregate make available, over a 
                        multiyear period acceptable to the 
                        Administrator (not to exceed 10 years), an 
                        amount equal to 30 percent of the capital and 
                        commitments raised under subparagraph (A).
            ``(2) Exception.--The Administrator may, in the discretion 
        of the Administrator and based upon a showing of special 
        circumstances and good cause, consider an applicant to have 
        satisfied the requirements of paragraph (1)(B) if the applicant 
        has--
                    ``(A) a viable plan that reasonably projects the 
                capacity of the applicant to raise the amount (in cash 
                or in-kind) required under paragraph (1)(B); and
                    ``(B) binding commitments in an amount equal to not 
                less than 20 percent of the total amount required under 
                paragraph (1)(B).
    ``(d) Grant of Final Approval; Designation.--The Administrator 
shall, with respect to each applicant conditionally approved to operate 
as an NMVC company under subsection (b), either--
            ``(1) grant final approval to the applicant to operate as 
        an NMVC company under this subtitle and designate the applicant 
        as an NMVC company, if the applicant--
                    ``(A) satisfies the requirements of subsection (c) 
                on or before the expiration of the time period 
                described in that subsection; and
                    ``(B) enters into a participation agreement with 
                the Administrator; or
            ``(2) if the applicant fails to satisfy the requirements of 
        subsection (c) on or before the expiration of the time period 
        described in that subsection, revoke the conditional approval 
        granted under subsection (b).

``SEC. 355. TECHNICAL ASSISTANCE GRANTS.

    ``(a) Grants.--
            ``(1) Grants to nmvc's.--
                    ``(A) In general.--The Administrator, in accordance 
                with such terms and conditions as the Administrator may 
                require, is authorized to award 1 or more grants to 
                each NMVC company, which shall be used to provide 
                marketing, management, and technical assistance for the 
                benefit of smaller enterprises financed, or expected to 
                be financed, by the NMVC company.
                    ``(B) Grant amount.--Subject to subparagraph (C), 
                the amount of a grant awarded to an NMVC company under 
                this subsection shall be equal to 30 percent of the 
                amount of capital and commitments raised under section 
                354(c)(1)(A).
                    ``(C) Matching requirement.--In order to receive 
                funds under a grant awarded under this subsection, an 
                NMVC company shall provide a matching contribution (in 
                cash or in-kind) from sources other than the 
                Administration, in an amount equal to the funds to be 
                received.
            ``(2) Grants to specialized small business investment 
        companies.--
                    ``(A) Authority.--In accordance with this section, 
                the Administrator may make grants to specialized small 
                business investment companies to provide marketing, 
                management, and technical assistance to smaller 
                enterprises, if the smaller enterprise is financed, or 
                expected to be financed, by such companies after the 
effective date of the Creating New Markets and Empowering America Act 
of 2000.
                    ``(B) Use of funds.--The proceeds of a grant made 
                under this paragraph may be used by the company 
                receiving such grant only to provide marketing, 
                management, and technical assistance in connection with 
                one or more equity or equity-type investments (made 
                with capital raised after the effective date of the 
                Creating New Markets and Empowering America Act of 
                2000) in one or more smaller enterprises located in 
                low- or moderate-income geographic areas.
                    ``(C) Submission of plans.--A specialized small 
                business investment company shall be eligible for a 
                grant under this section only if the company submits to 
                the Administrator, in such form and manner as the 
                Administrator may require, a plan for use of the grant.
                    ``(D) Grant amount.--Subject to subparagraph (E), 
                the amount of a grant awarded to a specialized small 
                business investment company under this subsection shall 
                be equal to not more than 30 percent of the investments 
                of the specialized small business investment company 
                described in subparagraph (B).
                    ``(E) Matching requirement.--In order to receive 
                funds under a grant awarded under this subsection, a 
                specialized small business investment company shall 
                provide a matching contribution (in cash or in-kind) 
                from sources other than the Administration, in an 
                amount equal to the funds to be received.
            ``(3) Multiyear grants.--Amounts from a grant awarded under 
        this section shall be paid upon the direction of the 
        Administrator over a multiyear period of not to exceed 10 
        years.
            ``(4) Pro rata reductions.--If the amount made available to 
        carry out this section for a fiscal year is insufficient for 
        the Administrator to award grants in the amounts required under 
        paragraphs (1) and (2), the Administrator may make pro rata 
        reductions in the amounts otherwise payable to each NMVC 
        company or specialized small business investment company under 
        those paragraphs.
    ``(b) Supplemental Grants.--
            ``(1) In general.--In addition to any grant under 
        subsection (a), the Administrator, in accordance with such 
        terms and conditions as the Administrator may require, may make 
        1 or more supplemental grants to an NMVC company or specialized 
        small business investment company, which shall be used to 
        provide additional marketing, management, and technical 
        assistance for the benefit of smaller enterprises financed, or 
        expected to be financed, by the NMVC company or the specialized 
        small business investment company, as applicable.
            ``(2) Matching requirement.--The Administrator may require, 
        as a condition of any supplemental grant made under this 
        subsection, that the NMVC company or the specialized small 
        business investment company, as applicable, provide a matching 
        contribution (in cash or in-kind) from 1 or more sources other 
        than the Administration in an amount equal to the amount of the 
        supplemental grant.
    ``(c) Limitation.--No part of any grant made available under this 
section may be used for any purpose other than to provide marketing, 
management, and technical assistance to smaller enterprises financed, 
or expected to be financed, by an NMVC company or a specialized small 
business investment company, as applicable.

``SEC. 356. DEBENTURES.

    ``(a) In General.--The Administrator is authorized to fully and 
unconditionally guarantee the timely payment of principal and interest 
as scheduled on debentures issued by NMVC companies, in accordance with 
such terms and conditions as the Administrator determines to be 
appropriate.
    ``(b) Full Faith and Credit.--The full faith and credit of the 
United States is pledged to the payment of all amounts that may be 
required to be paid under any guarantee under this section.
    ``(c) Debenture Requirements.--A debenture guaranteed under this 
section--
            ``(1) may be issued for a term of not to exceed 15 years;
            ``(2) shall bear interest at a rate approved by the 
        Administrator; and
            ``(3) shall contain such other terms and conditions as the 
        Administrator may require.
    ``(d) Total Face Value.--
            ``(1) In general.--The total face amount of debentures 
        issued by an NMVC company and guaranteed under this section 
        that may be outstanding at any one time shall not exceed 150 
        percent of the contributed capital of the NMVC company, as 
        determined by the Administrator.
            ``(2) Contributed capital.--For purposes of this 
        subsection, the contributed capital of an NMVC company includes 
        capital that is deemed to be Federal funds contributed by an 
        investor other than an agency of the Federal Government.

``SEC. 357. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES.

    ``(a) In General.--The Administrator (or an agent of the 
Administrator) is authorized to cause a trust to issue trust 
certificates representing ownership of all or a fractional part of 
debentures guaranteed by the Administrator under section 356, if such 
trust certificates are based on and backed by a trust or pool approved 
by the Administrator and composed solely of debentures guaranteed under 
section 356.
    ``(b) Guarantee Authority.--
            ``(1) In general.--The Administrator is authorized, upon 
        such terms and conditions as the Administrator determines to be 
        appropriate, to fully and unconditionally guarantee the timely 
        payment of the principal of and interest on any trust 
        certificate issued under this section.
            ``(2) Reduction.--If a debenture in a trust or pool 
        described in subsection (a) is prepaid, or in the event of 
        default of a debenture, the guarantee of timely payment of 
        principal and interest on the related trust certificate issued 
        under this section shall be reduced in proportion to the 
corresponding payment amount of principal and interest on the trust 
certificates, provided that the guarantee of timely payment of 
principal and interest on the trust certificates after such reduction 
shall remain full and unconditional.
            ``(3) Accrual of interest.--Interest on prepaid or 
        defaulted debentures shall accrue and be guaranteed by the 
        Administrator only through the date of payment of the 
        guarantee.
            ``(4) Redemption of trust certificates.--During the term of 
        any trust certificate issued under this subsection, the trust 
        certificate may be called for redemption due to prepayment or 
        default of all debentures in the trust or pool.
    ``(c) Full Faith and Credit.--The full faith and credit of the 
United States is pledged to the payment of all amounts that may be 
required to be paid under any guarantee of a trust certificate issued 
under this section.
    ``(d) Fees.--The Administrator shall not collect a fee for any 
guarantee of a trust certificate issued under this section, except that 
nothing in this subsection may be construed to preclude an agent of the 
Administrator from collecting a fee approved by the Administrator for 
the functions described in subsection (f)(2).
    ``(e) Subrogation.--
            ``(1) In general.--If the Administrator pays a claim under 
        a guarantee issued under this section, the Administration shall 
        be subrogated fully to the rights satisfied by such payment.
            ``(2) Ownership rights.--No Federal, State, or local law 
        shall preclude or limit the exercise by the Administrator of 
        the ownership rights of the Administrator in the debentures 
        residing in a trust or pool against which trust certificates 
        are issued under this section.
    ``(f) Central Registration.--
            ``(1) In general.--The Administrator may provide for a 
        central registration of all trust certificates issued under 
        this section.
            ``(2) Contracting of functions.--
                    ``(A) In general.--The Administrator may contract 
                with an agent or agents to carry out on behalf of the 
                Administrator the pooling and the central registration 
                functions referred to in this section, including, 
                notwithstanding any other provision of law--
                            ``(i) maintenance on behalf of and under 
                        the direction of the Administrator of such 
                        commercial bank accounts or investments in 
                        obligations of the United States as may be 
                        necessary to facilitate trusts or pools backed 
                        by debentures guaranteed under this subtitle; 
                        and
                            ``(ii) the issuance of trust certificates 
                        to facilitate such poolings.
                    ``(B) Fidelity bond or insurance required.--An 
                agent contracting with the Administrator under this 
                paragraph shall be required to provide a fidelity bond 
                or insurance in such amounts as the Administrator 
                determines to be necessary to fully protect the 
                interests of the Government.
            ``(3) Regulation of brokers and dealers.--The Administrator 
        may regulate brokers and dealers in trust certificates issued 
        under this section.
            ``(4) Electronic registration.--Nothing in this subsection 
        may be construed to prohibit the use of a book-entry or other 
        electronic form of registration for trust certificates issued 
        under this section.

``SEC. 358. FEES.

    ``Except as provided under section 357(d), the Administrator may 
charge such fees as the Administrator determines to be appropriate with 
respect to any guarantee issued or grant awarded under this subtitle.

``SEC. 359. BANK PARTICIPATION.

    ``Any national bank, or any member bank of the Federal Reserve 
System or nonmember insured bank, to the extent permitted under 
applicable State law, may invest in any 1 or more NMVC companies, or in 
any entity established to invest solely in NMVC companies, except that 
in no event shall the total amount of such investments of any such bank 
exceed 5 percent of the total capital and surplus of the bank.

``SEC. 360. FEDERAL FINANCING BANK.

    ``Section 318 shall not apply to any debenture issued by a NMVC 
company under this subtitle.

``SEC. 361. REPORTING REQUIREMENTS.

    ``Each NMVC company shall provide to the Administrator such 
information as the Administrator may request, including--
            ``(1) information related to the measurement criteria that 
        the NMVC company proposed in the application submitted under 
        section 354(a);
            ``(2) documentation on the use of technical assistance 
        grants under this subtitle; and
            ``(3) in each case in which the company under this subtitle 
        makes an investment in, or a loan or grant to, a business that 
        is not located in a low- or moderate-income geographic area, a 
        report on the number and percentage of employees of the 
        business who reside in such areas.

``SEC. 362. EXAMINATIONS.

    ``(a) In General.--Each NMVC company shall be subject to 
examinations made at the direction of the Investment Division of the 
Administration, which may be conducted with the assistance of a private 
sector entity that has both the qualifications to conduct and the 
expertise in conducting such examinations.
    ``(b) Assessment of Costs.--The cost of examinations under 
subsection (a), including the compensation of the examiners, may, in 
the discretion of the Administrator, be assessed against the company 
examined, and when so assessed shall be paid by such company.
    ``(c) Deposit of Fees.--Fees collected under this section shall be 
deposited in the account for salaries and expenses of the 
Administration.

``SEC. 363. INJUNCTIONS AND OTHER ORDERS.

    ``(a) In General.--If, in the judgment of the Administrator, an 
NMVC company or any other person has engaged or is about to engage in 
any act or practice that constitutes or will constitute a violation of 
any provision of this subtitle (or any rule, regulation, or order 
issued under this subtitle) or of a participation agreement entered 
into under this subtitle--
            ``(1) the Administrator may make application to the proper 
        district court of the United States or a United States court of 
        any place subject to the jurisdiction of the United States for 
        an order enjoining such act or practice, or for an order 
        enforcing compliance with such provision; and
            ``(2) such court shall--
                    ``(A) have jurisdiction over such application and 
                any ensuing proceedings; and
                    ``(B) upon a showing by the Administrator that such 
                NMVC company or other person has engaged or is about to 
                engage in any such act or practice, grant without bond 
                a permanent or temporary injunction, restraining order, 
                or other appropriate order.
    ``(b) Powers of Court.--In any proceeding under subsection (a)--
            ``(1) the court as a court of equity may, to such extent as 
        the court determines to be necessary, take exclusive 
        jurisdiction of the NMVC company and the assets thereof, 
        wherever located; and
            ``(2) the court shall have jurisdiction in any such 
        proceeding to appoint a trustee or receiver to hold or 
        administer under the direction of the court the assets so 
        possessed.
    ``(c) Trustee or Receiver.--The Administrator is authorized to act 
as trustee or receiver of the NMVC company referred to in subsection 
(a). Upon request by the Administrator, the court may appoint the 
Administrator to act in such capacity, unless the court determines such 
appointment to be inequitable or otherwise inappropriate based on the 
special circumstances at issue.

``SEC. 364. UNLAWFUL ACTS AND OMISSIONS BY OFFICERS, DIRECTORS, 
              EMPLOYEES, OR AGENTS; BREACH OF FIDUCIARY DUTY.

    ``(a) In General.--If an NMVC company violates any provision of 
this subtitle (or any rule or regulation issued under this subtitle), 
or of a participation agreement entered into under this subtitle, by 
failing to comply with the terms thereof or by engaging in any act or 
practice that constitutes or will constitute a violation thereof, such 
violation shall be deemed to be also a violation and an unlawful act on 
the part of any person who, directly or indirectly, authorizes, orders, 
participates in, or causes, brings about, counsels, aids, or abets in 
the commission of any act, practice, or transaction that constitutes or 
will constitute, in whole or in part, such violation.
    ``(b) Breach of Fiduciary Duty.--It shall be unlawful for any 
officer, director, employee, agent, or other participant in the 
management or conduct of the affairs of an NMVC company to engage in 
any act or practice, or to omit any act, in breach of the fiduciary 
duty of such officer, director, employee, agent, or participant, if, as 
a result thereof, the NMVC company has suffered or is in imminent 
danger of suffering financial loss or other damage.
    ``(c) Other Prohibitions.--Except with the written consent of the 
Administrator, it shall be unlawful--
            ``(1) for any person to take office as an officer, 
        director, or employee of an NMVC company, or to become an agent 
        or participant in the conduct of the affairs or management of 
        an NMVC company, if that person--
                    ``(A) has been convicted of a felony, or any other 
                criminal offense involving dishonesty or breach of 
                trust; or
                    ``(B) has been found civilly liable in damages, or 
                has been permanently or temporarily enjoined by order, 
                judgment, or decree of a court of competent 
                jurisdiction, by reason of any act or practice 
                involving fraud or breach of trust; or
            ``(2) for any person to continue to serve in any of the 
        capacities described in paragraph (1), if that person is 
        subsequently--
                    ``(A) convicted of a felony, or any other criminal 
                offense involving dishonesty or breach of trust; or
                    ``(B) found civilly liable in damages, or is 
                permanently or temporarily enjoined by an order, 
                judgment, or decree of a court of competent 
                jurisdiction, by reason of any act or practice 
                involving fraud or breach of trust.
    ``(d) Notice.--The Administrator may serve upon any officer, 
director, employee, or other participant in the conduct of the 
management or other affairs of an NMVC company a written notice of the 
intention of the Administrator to remove that person from his or her 
position whenever, in the opinion of the Administrator, that person--
            ``(1) has willfully committed any substantial violation 
        of--
                    ``(A) this subtitle (or any rule, regulation, or 
                order issued under this subtitle); or
                    ``(B) a participation agreement entered into under 
                this subtitle; or
                    ``(C) a cease-and-desist order that has become 
                final; or
            ``(2) has willfully committed or engaged in any act, 
        omission, or practice that constitutes a substantial breach of 
        fiduciary duty, and that such violation or such breach of 
        fiduciary duty is one involving personal dishonesty on the part 
        of such person.
    ``(e) Suspension or Removal.--The Administrator may suspend or 
remove from office any person upon whom the Administrator has served a 
notice under subsection (d), in accordance with the procedures set 
forth in section 313.

``SEC. 365. REGULATIONS.

    ``The Administrator may promulgate such regulations as the 
Administrator determines to be necessary to carry out this subtitle.

``SEC. 366. AUTHORIZATIONS.

    ``(a) In General.--There is authorized to be appropriated to the 
Administration, for fiscal years 2000 through 2005, to remain available 
until expended--
            ``(1) such subsidy budget authority as may be necessary to 
        guarantee $150,000,000 of debentures under this subtitle; and
            ``(2) $30,000,000 to make grants under this subtitle.
    ``(b) Funds Collected for Examinations.--Funds deposited under 
section 362(c) may be used only for the costs of examinations under 
section 362 and for the costs of other oversight activities with 
respect to the program established under this subtitle.''.
    (b) Conforming Amendment.--Section 20(e)(1)(C) of the Small 
Business Act (15 U.S.C. 631 note) is amended by inserting ``subtitle A 
of'' before ``title III''.
    (c) Clerical Amendment.--Subtitle A of title III of the Small 
Business Investment Company Act of 1958 (15 U.S.C. 681 et seq.), as so 
designated by this title, is amended by striking ``this title'' each 
place that term appears and inserting ``this subtitle''.

SEC. 302. BANKRUPTCY EXEMPTION FOR NMVC COMPANIES.

    Section 109(b)(2) of title 11, United States Code, is amended by 
inserting after ``homestead association,'' the following: ``a new 
markets venture capital company (as defined in section 351 of the Small 
Business Investment Act of 1958),''.

SEC. 303. FEDERAL SAVINGS ASSOCIATIONS.

    Section 5(c)(4) of the Home Owners' Loan Act (12 U.S.C. 1464(c)(4)) 
is amended by adding at the end the following:
                    ``(F) New markets venture capital companies.--A 
                Federal savings association may invest in stock, 
                obligations, or other securities of any new markets 
                venture capital company (as defined in section 351 of 
                the Small Business Investment Act of 1958). A Federal 
                savings association may not make any investment under 
                this subparagraph if its aggregate outstanding 
                investment under this subparagraph would exceed 5 
                percent of the capital and surplus of such savings 
                association.''.

      Subtitle B--Community Development Venture Capital Assistance

SEC. 311. FINDINGS.

    Congress finds that--
            (1) there is a need for the development and expansion of 
        organizations that provide private equity capital to smaller 
        businesses in areas in which equity-type capital is scarce, 
        such as inner cities and rural areas, in order to create and 
        retain jobs for low-income residents of those areas;
            (2) to invest successfully in smaller businesses, 
        particularly in inner cities and rural areas, requires highly 
        specialized investment and management skills;
            (3) there is a shortage of professionals who possess such 
        skills and there are few training grounds for individuals to 
        obtain those skills;
            (4) providing assistance to organizations that provide 
        specialized technical assistance and training to individuals 
        and organizations seeking to enter or expand in this segment of 
        the market would stimulate small business development and 
        entrepreneurship in economically distressed communities; and
            (5) assistance from the Federal Government could act as a 
        catalyst to attract investment from the private sector and 
        would help to develop a specialized venture capital industry 
        focused on creating jobs, increasing business ownership, and 
        generating wealth in low-income communities.

SEC. 312. COMMUNITY DEVELOPMENT VENTURE CAPITAL ACTIVITIES.

    (a) In General.--The Small Business Act (15 U.S.C. 631 et seq.) is 
amended--
            (1) by redesignating section 34 as section 35; and
            (2) by inserting after section 33 the following:

``SEC. 34. COMMUNITY DEVELOPMENT VENTURE CAPITAL ACTIVITIES.

    ``(a) Definitions.--In this section, the following definitions 
shall apply:
            ``(1) Community development venture capital organization.--
        The term `community development venture capital organization' 
        means a privately-controlled organization that--
                    ``(A) has a primary mission of promoting community 
                development in low-income communities, as defined by 
                the Administrator, through investment in private 
                business enterprises; or
                    ``(B) administers or is in the process of 
                establishing a community development venture capital 
                fund for the purpose of making equity investments in 
                private business enterprises in such communities.
            ``(2) Developmental organization.--The term `developmental 
        organization'--
                    ``(A) means a public or private entity, including a 
                college or university, that provides technical 
                assistance to community development venture capital 
                organizations or that conducts research or training in 
                community development venture capital investment; and
                    ``(B) may include an intermediary organization.
            ``(3) Intermediary organization.--The term `intermediary 
        organization'--
                    ``(A) means a private, nonprofit entity that has--
                            ``(i) a primary mission of promoting 
                        community development through investment in 
                        private businesses in low-income communities; 
                        and
                            ``(ii) significant prior experience in 
                        providing technical assistance or financial 
                        assistance to community development venture 
                        capital organizations; and
                    ``(B) may include community development venture 
                capital organizations.
    ``(b) Authority.--In order to promote the development of community 
development venture capital organizations, the Administrator may--
            ``(1) enter into contracts with 1 or more developmental 
        organizations to carry out training and research activities 
        under subsection (c); and
            ``(2) make grants in accordance with this section--
                    ``(A) to developmental organizations to carry out 
                training and research activities under subsection (c); 
                and
                    ``(B) to intermediary organizations to provide 
                intensive marketing, management, and technical 
                assistance and training to community development 
venture capital organizations under subsection (d).
    ``(c) Training and Research Activities.--
            ``(1) In general.--Subject to paragraph (2), a 
        developmental organization that receives a grant under 
        subsection (b) shall use the funds made available through the 
        grant for 1 or more of the following training and research 
        activities:
                    ``(A) Strengthening professional skills.--Creating 
                and operating training programs to enhance the 
                professional skills for individuals in community 
                development venture capital organizations or operating 
                private community development venture capital funds.
                    ``(B) Increasing interest in community development 
                venture capital.--Creating and operating a program to 
                select and place students and recent graduates from 
                business and related professional schools as interns 
                with community development venture capital 
                organizations and intermediary organizations for a 
                period of up to 1 year, and to provide stipends for 
                such interns during the internship period.
                    ``(C) Promoting `best practices'.--Organizing an 
                annual national conference for community development 
                venture capital organizations to discuss and share 
                information on the best practices regarding issues 
                relevant to the creation and operation of community 
                development venture capital organizations.
                    ``(D) Mobilizing academic resources.--Encouraging 
                the formation of 1 or more centers for the study of 
                community development venture capital at graduate 
                schools of business and management, providing funding 
                for the development of materials for courses on topics 
                in this area, and providing funding for research on 
                economic, operational, and policy issues relating to 
                community development venture capital.
            ``(2) Limitation.--The Administrator shall ensure that not 
        more than 25 percent of the amount made available to carry out 
        this section is used for the activities described in paragraph 
        (1).
    ``(d) Intensive Marketing, Management, and Technical Assistance and 
Training.--An intermediary organization that receives a grant under 
subsection (b) shall use the funds made available through the grant to 
provide intensive marketing, management, and technical assistance and 
training to promote the development of community development venture 
capital organizations, which assistance may include grants to community 
development venture capital organizations for the start up costs and 
operating support of those organizations.
    ``(e) Matching Contribution Requirement.--The Administrator shall 
require, as a condition of any grant made to an intermediary 
organization under this section, that a matching contribution equal to 
the amount of such grant be provided from sources other than the 
Federal Government.
    ``(f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $20,000,000 for fiscal years 
2000 through 2003, to remain available until expended.''.
    (b) Requirements.--The Administrator of the Small Business 
Administration may promulgate such regulations as may be necessary to 
carry out section 34 of the Small Business Act, as added by this 
section, which regulations may take effect upon issuance.

                       Subtitle C--Business LINC

SEC. 321. GRANTS AUTHORIZED.

    Section 8 of the Small Business Act (15 U.S.C. 637) is amended by 
adding at the end the following:
    ``(m) Business LINC Grants.--
            ``(1) In general.--The Administrator may make grants to and 
        enter into cooperative agreements with any coalition of private 
        or public sector participants that--
                    ``(A) expand business-to-business relationships 
                between large and small businesses; and
                    ``(B) provide businesses, directly or indirectly, 
                with online information and a database of companies 
                that are interested in mentor-protegee programs or 
                community-based, state-wide, or local business 
                development programs.
            ``(2) Matching requirements.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Administrator may make grants to and enter into 
                cooperative agreements with any coalition of private or 
                public sector participants if the coalition provides a 
                matching amount, either in-kind or in cash, equal to 
                the grant amount.
                    ``(B) Waiver.--In the best interests of the program 
                established under this subsection, the Administrator 
                may waive the requirements for matching funds to be 
                provided by the coalition under subparagraph (A).
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $6,600,000 for 
        each of fiscal years 2000 through 2005, to remain available 
        until expended.''.

SEC. 322. REGULATIONS.

    The Administrator of the Small Business Administration may 
promulgate such regulations as the Administrator determines to be 
necessary to carry out this subtitle and the amendment made by this 
subtitle.

  TITLE IV--EXPANSION AND EXTENSION OF EMPOWERMENT ZONE TAX INCENTIVES

SEC. 401. ADDITIONAL EMPOWERMENT ZONE DESIGNATIONS.

    Section 1391 is amended by adding at the end the following new 
subsections:
    ``(h) Additional Designations Permitted.--
            ``(1) In general.--In addition to the areas designated 
        under subsections (a) and (g), the appropriate Secretaries may 
        designate in the aggregate an additional 9 nominated areas as 
        empowerment zones under this section, subject to the 
        availability of eligible nominated areas. Of that number, up to 
        7 may be designated in urban areas and at least 2 may be 
designated in rural areas.
            ``(2) Period designations may be made and take effect.--A 
        designation may be made under this subsection after the date of 
        the enactment of this subsection and before January 1, 2001. 
        Subject to subparagraphs (B) and (C) of subsection (d)(1), such 
        designations shall remain in effect during the period beginning 
        on January 1, 2001, and ending on December 31, 2009.
            ``(3) Modifications to eligibility criteria, etc.--
                    ``(A) In general.--The rules of subsection (g)(3) 
                shall apply to designations under this subsection, and 
                with respect to the criteria for any designation, an 
                additional eligibility criteria shall be the 
                consideration that the nominated area is a strategic 
                planning community and with respect to the criteria for 
                the designation of any rural area, an additional 
                eligibility criteria shall be the existence of 
                outmigration from such area.
                    ``(B) Strategic planning community.--The term 
                `strategic planning community' means a respondent to 
                the Notice Inviting Applications at 63 Federal Register 
                19162 (April 16, 1998) whose application was ranked 
                16th through 30th in the competition that concluded in 
                December 1998.
            ``(4) Empowerment zones which become renewal communities.--
        The number of areas which may be designated as empowerment 
        zones under this subsection shall be increased by 1 for each 
        area which ceases to be an empowerment zone by reason of 
        section 1400E(e). Each additional area designated by reason of 
        the preceding sentence shall have the same urban or rural 
        character as the area it is replacing.
    ``(i) Transfer of Enterprise Community Designation.--
            ``(1) Prohibition of dual designation.--
                    ``(A) In general.--No area may retain dual 
                designation as an enterprise community and an 
                empowerment zone or renewal community. The subsequent 
                designation as an empowerment zone or a renewal 
                community of any area previously designated under 
                subsection (b)(1) as an enterprise community shall 
                cause that area to forfeit its designation as an 
                enterprise community.
                    ``(B) Rules for inclusion in empowerment zone.--In 
                the case of any enterprise community which is later 
                designated pursuant to subsection (g) or (h) as an 
                empowerment zone, all census tracts included in such 
                enterprise community shall be included in such 
                empowerment zone without regard to the limitations on 
                population or size imposed by paragraphs (1) and (3) of 
                section 1392(a).
            ``(2) Redesignations.--
                    ``(A) In general.--Any enterprise community 
                designation that is forfeited pursuant to this 
                paragraph shall be available for transfer by the 
                appropriate Secretary.
                    ``(B) Rules of redesignation.--To the extent that 
                enterprise community designations become available for 
                transfer pursuant to subparagraph (A) and for the 
                period that such designations remain in effect pursuant 
                to subsection (d), the appropriate Secretaries may 
                designate the highest ranking areas nominated for 
                designation as empowerment zones pursuant to subsection 
                (g) or (h) which were not so designated and which 
                continue to meet appropriate eligibility criteria, as 
                enterprise communities. Except as set forth in 
                subparagraph (C), areas designated as enterprise 
                communities pursuant to this paragraph shall be subject 
                to all other limitations and shall be accorded all 
                remaining benefits otherwise applicable to enterprise 
                communities designated pursuant to subsection (b)(1).
                    ``(C) Special rules.--Any area nominated for 
                designation as an enterprise community pursuant to this 
                paragraph which is located in Alaska or Hawaii shall be 
                treated as meeting the requirements of paragraphs (2), 
                (3), and (4) of section 1392(a) if for each census 
                tract or block group within such area 20 percent or 
                more of the families have income which is 50 percent or 
                less of the statewide median family income (as 
                determined under section 143).''.

SEC. 402. EXTENSION OF ENTERPRISE ZONE TREATMENT THROUGH 2009.

    (a) In General.--Subparagraph (A) of section 1391(d)(1) (relating 
to period for which designation is in effect) is amended to read as 
follows:
                    ``(A) December 31, 2009,''.
    (b) District of Columbia.--Section 1400(f) (relating to time for 
which designation applicable) is amended by striking ``2002'' both 
places it appears and inserting ``2009''.

SEC. 403. 20 PERCENT EMPLOYMENT CREDIT FOR ALL EMPOWERMENT ZONES.

    (a) 20 Percent Credit.--Subsection (b) of section 1396 (relating to 
empowerment zone employment credit) is amended to read as follows:
    ``(b) Applicable Percentage.--For purposes of this section, the 
applicable percentage is 20 percent.''.
    (b) All Empowerment Zones Eligible for Credit.--Section 1396 is 
amended by striking subsection (e).
    (c) Conforming Amendment.--Subsection (d) of section 1400 is 
amended to read as follows:
    ``(d) Special Rule for Application of Employment Credit.--With 
respect to the DC Zone, section 1396(d)(1)(B) (relating to empowerment 
zone employment credit) shall be applied by substituting `the District 
of Columbia' for `such empowerment zone'.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to wages paid or incurred after December 31, 2000.

SEC. 404. INCREASED EXPENSING UNDER SECTION 179.

    (a) In General.--Subparagraph (A) of section 1397A(a)(1) is amended 
by striking ``$20,000'' and inserting ``$35,000''.
    (b) Expensing for Property Used in Developable Sites.--Section 
1397A is amended by striking subsection (c).
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2000.

SEC. 405. HIGHER LIMITS ON TAX-EXEMPT EMPOWERMENT ZONE FACILITY BONDS.

    (a) In General.--Paragraph (3) of section 1394(f) (relating to 
bonds for empowerment zones designated under section 1391(g)) is 
amended to read as follows:
            ``(3) Empowerment zone facility bond.--For purposes of this 
        subsection, the term `empowerment zone facility bond' means any 
        bond which would be described in subsection (a) if only 
        empowerment zones were taken into account under sections 1397C 
        and 1397D.'' .
    (b) Conforming Amendments.--
            (1) Subsection (f) of section 1394 is amended by striking 
        ``new empowerment zone facility bond'' each place it appears 
        and inserting ``empowerment zone facility bond''.
            (2) The heading for such subsection is amended to read as 
        follows:
    ``(f) Bonds for Empowerment Zones.--''.
            (3) Paragraph (1) of section 1394(c) is amended--
                    (A) by striking ``empowerment zone or'' in 
                subparagraph (A), and
                    (B) by striking ``empowerment zones and'' in 
                subparagraph (B).
    (c) Effective Date.--The amendments made by this section shall 
apply to obligations issued after December 31, 2000.

SEC. 406. NONRECOGNITION OF GAIN ON ROLLOVER OF EMPOWERMENT ZONE 
              INVESTMENTS.

    (a) In General.--Part III of subchapter U of chapter 1 is amended--
            (1) by redesignating subpart C as subpart D,
            (2) by redesignating sections 1397B and 1397C as sections 
        1397C and 1397D, respectively, and
            (3) by inserting after subpart B the following new subpart:

  ``Subpart C--Nonrecognition of Gain on Rollover of Empowerment Zone 
                              Investments

                              ``Sec. 1397B. Nonrecognition of Gain on 
                                        Rollover of Empowerment Zone 
                                        Investments.

``SEC. 1397B. NONRECOGNITION OF GAIN ON ROLLOVER OF EMPOWERMENT ZONE 
              INVESTMENTS.

    ``(a) Nonrecognition of Gain.--In the case of any sale of a 
qualified empowerment zone asset held by the taxpayer for more than 1 
year and with respect to which such taxpayer elects the application of 
this section, gain from such sale shall be recognized only to the 
extent that the amount realized on such sale exceeds--
            ``(1) the cost of any qualified empowerment zone asset 
        (with respect to the same zone as the asset sold) purchased by 
        the taxpayer during the 60-day period beginning on the date of 
        such sale, reduced by
            ``(2) any portion of such cost previously taken into 
        account under this section.
This section shall apply only to gain which is qualified capital gain.
    ``(b) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified empowerment zone asset.--
                    ``(A) In general.--The term `qualified empowerment 
                zone asset' means any property which would be a 
                qualified community asset (as defined in section 1400F) 
                if in section 1400F--
                            ``(i) references to empowerment zones were 
                        substituted for references to renewal 
                        communities, and
                            ``(ii) references to enterprise zone 
                        businesses (as defined in section 1397C) were 
                        substituted for references to renewal community 
                        businesses.
                    ``(B) Treatment of dc zone.--

                                For termination of rollover with 
respect to the District of Columbia Enterprise Zone for property 
acquired after December 31, 2002, see section 1400(f).
            ``(2) Qualified capital gain.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `qualified capital gain' means 
                any gain from the sale or exchange of--
                            ``(i) a capital asset, or
                            ``(ii) property used in the trade or 
                        business (as defined in section 1231(b)).
                    ``(B) Certain rules to apply.--Rules similar to the 
                rules of paragraphs (3) and (4) of section 1400B(e) 
                shall apply for purposes of this subsection.
            ``(3) Purchase.--A taxpayer shall be treated as having 
        purchased any property if, but for paragraph (4), the 
        unadjusted basis of such property in the hands of the taxpayer 
        would be its cost (within the meaning of section 1012).
            ``(4) Basis adjustments.--If gain from any sale is not 
        recognized by reason of subsection (a), such gain shall be 
        applied to reduce (in the order acquired) the basis for 
        determining gain or loss of any qualified empowerment zone 
        asset which is purchased by the taxpayer during the 60-day 
        period described in subsection (a). This paragraph shall not 
        apply for purposes of section 1202.
            ``(5) Holding period.--For purposes of determining whether 
        the nonrecognition of gain under subsection (a) applies to any 
        qualified empowerment zone asset which is sold--
                    ``(A) the taxpayer's holding period for such asset 
                and the asset referred to in subsection (a)(1) shall be 
                determined without regard to section 1223, and
                    ``(B) only the first year of the taxpayer's holding 
                period for the asset referred to in subsection (a)(1) 
                shall be taken into account for purposes of paragraphs 
                (2)(A)(iii), (3)(C), and (4)(A)(iii) of section 
                1400F(b).''
    (b) Conforming Amendments.--
            (1) Paragraph (23) of section 1016(a) is amended--
                    (A) by striking ``or 1045'' and inserting ``1045, 
                or 1397B'', and
                    (B) by striking ``or 1045(b)(4)'' and inserting 
                ``1045(b)(4), or 1397B(b)(4)''.
            (2) Paragraph (15) of section 1223 is amended to read as 
        follows:
            ``(15) Except for purposes of sections 1202(a)(2), 
        1202(c)(2)(A), 1400B(b), and 1400F(b), in determining the 
        period for which the taxpayer has held property the acquisition 
        of which resulted under section 1045 or 1397B in the 
        nonrecognition of any part of the gain realized on the sale of 
        other property, there shall be included the period for which 
        such other property has been held as of the date of such 
        sale.''
            (3) Paragraph (2) of section 1394(b) is amended--
                    (A) by striking ``section 1397C'' and inserting 
                ``section 1397D'', and
                    (B) by striking ``section 1397C(a)(2)'' and 
                inserting ``section 1397D(a)(2)''.
            (4) Paragraph (3) of section 1394(b) is amended--
                    (A) by striking ``section 1397B'' each place it 
                appears and inserting ``section 1397C'', and
                    (B) by striking ``section 1397B(d)'' and inserting 
                ``section 1397C(d)''.
            (5) Sections 1400(e) and 1400B(c) are each amended by 
        striking ``section 1397B'' each place it appears and inserting 
        ``section 1397C''.
            (6) The table of subparts for part III of subchapter U of 
        chapter 1 is amended by striking the last item and inserting 
        the following new items:

                              ``Subpart C. Nonrecognition of gain on 
                                        rollover of empowerment zone 
                                        investments.
                              ``Subpart D. General provisions.''
            (7) The table of sections for subpart D of such part III is 
        amended to read as follows:

                              ``Sec. 1397C. Enterprise zone business 
                                        defined.
                              ``Sec. 1397D. Qualified zone property 
                                        defined.''
    (c) Effective Date.--The amendments made by this section shall 
apply to qualified empowerment zone assets acquired after December 31, 
2000.

SEC. 407. INCREASED EXCLUSION OF GAIN ON SALE OF EMPOWERMENT ZONE 
              STOCK.

    (a) In General.--Subsection (a) of section 1202 is amended to read 
as follows:
    ``(a) Exclusion.--
            ``(1) In general.--In the case of a taxpayer other than a 
        corporation, gross income shall not include 50 percent of any 
        gain from the sale or exchange of qualified small business 
        stock held for more than 5 years.
            ``(2) Empowerment zone businesses.--
                    ``(A) In general.--In the case of qualified small 
                business stock acquired after the date of the enactment 
                of this paragraph in a corporation which is a qualified 
                business entity (as defined in section 1397C(b)) during 
                substantially all of the taxpayer's holding period for 
                such stock, paragraph (1) shall be applied by 
                substituting `60 percent' for `50 percent'.
                    ``(B) Certain rules to apply.--Rules similar to the 
                rules of paragraphs (5) and (7) of section 1400B(b) 
                shall apply for purposes of this paragraph.
                    ``(C) Gain after 2014 not qualified.--Subparagraph 
                (A) shall not apply to gain attributable to periods 
                after December 31, 2014.''.
    (b) Conforming Amendment.--Paragraph (8) of section 1(h) is amended 
by striking ``means'' and all that follows and inserting ``means the 
excess of--
                    ``(A) the gain which would be excluded from gross 
                income under section 1202 but for the percentage 
                limitation in section 1202(a), over
                    ``(B) the gain excluded from gross income under 
                section 1202.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to stock acquired after December 31, 2000.

SEC. 408. TREATMENT OF INTANGIBLES.

    (a) In General.--Section 1397C(d)(4) (relating to treatment of 
business holding intangibles) is amended--
            (1) by striking ``development or'', and
            (2) by inserting ``unless a substantial portion of the 
        development with respect to such intangibles occurs within any 
        empowerment zone'' after ``license''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 409. APPLICATION OF DEVELOPABLE SITE OPPORTUNITIES TO ROUND I 
              EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES.

    (a) In General.--Section 1392(a)(4) (relating to poverty rate) is 
amended--
            (1) by redesignating subparagraphs (A), (B), and (C) as 
        clauses (i), (ii), and (iii), respectively,
            (2) by striking ``The poverty rate--'' and inserting the 
        following:
                    ``(A) In general.--The poverty rate--'', and
            (3) by adding at the end the following:
                    ``(B) Exception for developable sites.--
                Subparagraph (A) shall not apply to up to 3 
                noncontiguous parcels in a nominated area which may be 
                developed for commercial or industrial purposes. The 
                aggregate area of noncontiguous parcels to which the 
                preceding sentence applies with respect to any 
                nominated area shall not exceed 2,000 acres.''.
    (b) Conforming Amendments.--Section 1391(g)(3)(A) is amended by 
striking clause (iii) and by redesignating clauses (iv) and (v) as 
clauses (iii) and (iv), respectively.
    (c) Effective Date.--The amendments made by this section shall take 
effect with respect to designations made before, on, and after the date 
of the enactment of this Act.

SEC. 410. FUNDING ENTITLEMENT FOR ROUND II EMPOWERMENT ZONES.

    (a) In General.--
            (1) Entitlement.--Section 2007(a)(1) of the Social Security 
        Act (42 U.S.C. 1397f(a)(1)) is amended--
                    (A) in subparagraph (A), by striking ``in the 
                State; and'' and inserting ``that is in the State and 
                is designated pursuant to section 1391(b) of the 
                Internal Revenue Code of 1986;'';
                    (B) by adding after subparagraph (B) the following:
                    ``(C)(i) 9 grants under this section for each 
                qualified empowerment zone that is in an urban area in 
                the State and is designated pursuant to section 1391(g) 
                of such Code; and
                    ``(ii) 9 grants under this section for each 
                qualified empowerment zone that is in a rural area in 
                the State and is designated pursuant to section 1391(g) 
                of such Code; and
                    ``(D) 8 grants under this section for each 
                qualified enterprise community that is in the State and 
                is designated pursuant to section 766 of the 
                Agriculture, Rural Development, Food and Drug 
                Administration, and Related Agencies Appropriations 
                Act, 1999.''.
            (2) Amount of grants.--Section 2007(a)(2) of such Act (42 
        U.S.C. 1397f(a)(2)) is amended--
                    (A) in the heading of subparagraph (A), by 
                inserting ``Original'' before ``Empowerment'';
                    (B) in subparagraph (A), in the matter preceding 
                clause (i), by inserting ``referred to in paragraph 
                (1)(A)'' after ``empowerment zone'';
                    (C) by redesignating subparagraph (C) as 
                subparagraph (F); and
                    (D) by inserting after subparagraph (B) the 
                following:
                    ``(C) Additional empowerment grants.--The amount of 
                the grant to a State under this section for a qualified 
                empowerment zone referred to in paragraph (1)(C) shall 
                be--
                            ``(i) if the zone is in an urban area, 
                        $10,000,000 for each of fiscal years 2001 
                        through 2008 and $13,300,000 for fiscal year 
                        2009; or
                            ``(ii) if the zone is in a rural area, 
                        $3,000,000 for each of fiscal years 2001 
                        through 2009,
                multiplied by the proportion of the population of the 
                zone that resides in the State.
                    ``(D) Additional enterprise community grants.--The 
                amount of the grant to a State under this section for a 
                qualified enterprise community referred to in paragraph 
                (1)(D) shall be $250,000, multiplied by the proportion 
                of the population of the community that resides in the 
                State, for each of fiscal years 2001 through 2008.''.
            (3) Timing of grants.--Section 2007(a)(3) of such Act (42 
        U.S.C. 1397f(a)(3)) is amended--
                    (A) in the heading of subparagraph (A), by 
                inserting ``Original'' before ``Qualified'';
                    (B) in subparagraph (A), in the matter preceding 
                clause (i), by inserting ``referred to in paragraph 
                (1)(A)'' after ``empowerment zone''; and
                    (C) by adding after subparagraph (B) the following:
                    ``(C) Additional qualified empowerment zones.--With 
                respect to each qualified empowerment zone referred to 
                in paragraph (1)(C), the Secretary shall make 1 grant 
                under this section to the State in which the zone is 
                located, on the first day of fiscal year 2001 and of 
                each of the 8 succeeding fiscal years.
                    ``(D) Additional qualified enterprise 
                communities.--With respect to each qualified enterprise 
                community referred to in paragraph (1)(D), the 
                Secretary shall make 1 grant under this section to the 
                State in which the community is located on the first 
                day of fiscal year 2001 and each of the 7 succeeding 
                fiscal years.''.
            (4) Funding.--Section 2007(a)(4) of such Act (42 U.S.C. 
        1397f(a)(4)) is amended--
                    (A) by striking ``(4) Funding.--$1,000,000,000'' 
                and inserting the following:
            ``(4) Funding.--
                    ``(A) Original grants.--$1,000,000,000'';
                    (B) by inserting ``for empowerment zones and 
                enterprise communities described in subparagraphs (A) 
                and (B) of paragraph (1)'' before the period; and
                    (C) by adding after and below the end the 
                following:
                    ``(B) Additional empowerment zone grants.--
                $1,535,000,000 shall be made available to the Secretary 
                for grants under this section for empowerment zones 
                referred to in paragraph (1)(C).
                    ``(C) Additional enterprise community grants.--
                $40,000,000 shall be made available to the Secretary 
                for grants under this section for enterprise 
                communities referred to in paragraph (1)(D).''.
            (5) Direct funding for indian tribes.--Section 2007(a) of 
        such Act (42 U.S.C. 1397f(a)) is amended by adding at the end 
        the following:
            ``(5) Direct funding for indian tribes.--
                    ``(A) In general.--The Secretary may make a grant 
                under this section directly to the governing body of an 
                Indian tribe if--
                            ``(i) the tribe is identified in the 
                        strategic plan of a qualified empowerment zone 
                        or qualified enterprise community as the entity 
                        that assumes sole or primary responsibility for 
                        carrying out activities and projects under the 
                        grant; and
                            ``(ii) the grant is to be used for 
                        activities and projects that are--
                                    ``(I) included in the strategic 
                                plan of the qualified empowerment zone 
or qualified enterprise community, consistent with this section; and
                                    ``(II) approved by the Secretary of 
                                Agriculture, in the case of a qualified 
                                empowerment zone or qualified 
                                enterprise community in a rural area, 
                                or the Secretary of Housing and Urban 
                                Development, in the case of a qualified 
                                empowerment zone or qualified 
                                enterprise community in an urban area.
                    ``(B) Rules of interpretation.--
                            ``(i) If grant under this section is made 
                        directly to the governing body of an Indian 
                        tribe under subparagraph (A), the tribe shall 
                        be considered a State for purposes of this 
                        section.
                            ``(ii) This subparagraph shall not be 
                        construed as making applicable to this section 
                        the provisions of the Indian Self-Determination 
                        and Education Assistance Act.''.
            (6) Definitions.--
                    (A) Qualified enterprise community.--Section 
                2007(f)(2)(A) of such Act (42 U.S.C. 1397f(f)(2)(A)) is 
                amended by inserting ``or pursuant to section 766 of 
                the Agriculture, Rural Development, Food and Drug 
                Administration, and Related Agencies Appropriations 
                Act, 1999'' before the semicolon.
                    (B) Strategic plan.--Section 2007(f)(3) of such Act 
                (42 U.S.C. 1397f(f)(3)) is amended by inserting ``or 
                under section 766 of the Agriculture, Rural 
                Development, Food and Drug Administration, and Related 
                Agencies Appropriations Act, 1999'' before the period.
                    (C) Indian tribe.--Section 2007(f) of such Act (42 
                U.S.C. 1397f(f)), as amended by subparagraph (C), is 
                amended by adding at the end the following:
            ``(8) Indian tribe.--The term `Indian tribe' means any 
        Indian tribe, band, nation, or other organized group or 
        community, including any Alaska Native village or regional or 
        village corporation as defined in or established pursuant to 
        the Alaska Native Claims Settlement Act, which is recognized as 
        eligible for the special programs and services provided by the 
        United States to Indians because of their status as Indians.''.
    (b) Use of Grant Funds.--
            (1) Revolving loan activities.--Section 2007(b) of the 
        Social Security Act (42 U.S.C. 1397f(b)) is amended by adding 
        at the end the following:
            ``(5) Revolving loan activities.--
                    ``(A) In general.--In order to assist disadvantaged 
                adults and youths in achieving and maintaining economic 
                self-support, a State may use amounts paid under this 
                section to fund revolving loan funds or similar 
                arrangements for the purpose of making loans to 
                residents, institutions, organizations, or businesses.
                    ``(B) Rules for disbursement.--Amounts to be used 
                as described in subparagraph (A) shall be disbursed by 
                the Secretary, consistent with the provisions of the 
                Cash Management Improvement Act and its implementing 
                rules, regulations, and procedures issued by the 
                Secretary of the Treasury--
                            ``(i) in the case of a grant to a revolving 
                        loan fund--
                                    ``(I) pursuant to a written 
                                irrevocable grant commitment; and
                                    ``(II) at such time or times as the 
                                Secretary determines that the funds are 
                                needed to meet the purposes of such 
                                commitment; or
                            ``(ii) in the case of a grant for purposes 
                        of capitalizing an insured depository 
                        institution (as defined in section 3 of the 
                        Federal Deposit Insurance Act (12 U.S.C. 1813)) 
                        or an insured credit union (as defined in 
                        section 101 of the Federal Credit Union Act (12 
                        U.S.C. 1742)), at such time or times as the 
                        Secretary determines that funds are needed for 
                        such capitalization.''.
            (2) Use as non-federal share.--Section 2007(b) of such Act 
        (42 U.S.C. 1397f(b)), as amended by paragraph (1), is amended 
        by adding at the end the following:
            ``(6) A State may use amounts received from a grant under 
        this section to pay all or part of the non-Federal share of 
        expenditures under any other Federal grant to a local public or 
        nonprofit private agency or organization for activities 
        consistent with the purposes of this section, unless the 
        statutory authority for such other grant expressly prohibits 
        counting of Federal grant funds as such non-Federal share.''.
    (c) Environmental Review.--Section 2007 of the Social Security Act 
(42 U.S.C. 1397f) is amended--
            (1) by redesignating subsection (f) as subsection (g); and
            (2) by inserting after subsection (e) the following:
    ``(f) Environmental Review.--
            ``(1) Execution of responsibility by the secretary of 
        housing and urban development and the secretary of 
        agriculture.--
                    ``(A) Applicability.--This subsection shall apply 
                to grants under this section in connection with 
                empowerment zones and enterprise communities.
                    ``(B) Execution of responsibility.--With respect to 
                grants described in subparagraph (A), the Secretary of 
                Housing and Urban Development and the Secretary of 
                Agriculture, as appropriate, shall execute the 
                responsibilities under the National Environmental 
                Policy Act of 1969 and other provisions of law that 
                further the purposes of such Act (as specified in 
                regulations issued by each such Secretary under 
                paragraph (2)(B)) that would otherwise apply to the 
                Secretary of Health and Human Services, and may provide 
for the assumption of such responsibilities in accordance with 
paragraphs (2) through (5).
                    ``(C) Definition of secretary.--Except as otherwise 
                specified, in this subsection, the term `Secretary' 
                means the Secretary of Housing and Urban Development 
                for purposes of grants under this section with respect 
                to qualified empowerment zones and qualified enterprise 
                communities in urban areas, and the Secretary of 
                Agriculture for purposes of grants under this section 
                with respect to qualified empowerment zones and 
                qualified enterprise communities in rural areas.
            ``(2) Assumption of responsibility by states, units of 
        general local government, and indian tribes.--
                    ``(A) Release of funds.--In order to assure that 
                the policies of the National Environmental Policy Act 
                of 1969 and other provisions of law that further the 
                purposes of such Act (as specified in regulations 
                issued by the Secretary under subparagraph (B)) are 
                most effectively implemented in connection with the 
                expenditure of funds under this section, and to assure 
                to the public undiminished protection of the 
                environment, the Secretary may, under such regulations, 
                in lieu of the environmental protection procedures 
                otherwise applicable, provide for the release of funds 
                for particular projects to recipients of assistance 
                under this section if the State, unit of general local 
                government, or Indian tribe, as designated by the 
                Secretary in accordance with regulations issued by the 
                Secretary under subparagraph (B), assumes all of the 
                responsibilities for environmental review, 
                decisionmaking, and action pursuant to such Act, and 
                such other provisions of law as the regulations of the 
                Secretary specify, that would otherwise apply to the 
                Secretary were the Secretary to undertake such projects 
                as Federal projects.
                    ``(B) Implementation.--The Secretary of Housing and 
                Urban Development and the Secretary of Agriculture 
                shall each issue regulations to carry out this 
                subsection only after consultation with the Council on 
                Environmental Quality. Such regulations shall--
                            ``(i) specify any other provisions of law 
                        that further the purposes of the National 
                        Environmental Policy Act of 1969 and to which 
                        the assumption of responsibility as provided in 
                        this subsection applies;
                            ``(ii) provide eligibility criteria and 
                        procedures for the designation of a State, unit 
                        of general local government, or Indian tribe to 
                        assume all of the responsibilities described in 
                        subparagraph (A);
                            ``(iii) specify the purposes for which 
                        funds may be committed without regard to the 
                        procedure established under paragraph (3);
                            ``(iv) provide for monitoring of the 
                        performance of environmental reviews under this 
                        subsection;
                            ``(v) in the discretion of the Secretary, 
                        provide for the provision or facilitation of 
                        training for such performance; and
                            ``(vi) subject to the discretion of the 
                        Secretary, provide for suspension or 
                        termination by the Secretary of the assumption 
                        under subparagraph (A).
                    ``(C) Responsibilities of state, unit of general 
                local government, or indian tribe.--The Secretary's 
                duty under subparagraph (B) shall not be construed to 
                limit any responsibility assumed by a State, unit of 
                general local government, or Indian tribe with respect 
                to any particular release of funds under subparagraph 
                (A).
            ``(3) Procedure.--The Secretary shall approve the release 
        of funds for projects subject to the procedures authorized by 
        this subsection only if, not less than 15 days prior to such 
        approval and prior to any commitment of funds to such projects 
        (except for such purposes specified in the regulations issued 
        under paragraph (2)(B)), the recipient submits to the Secretary 
        a request for such release accompanied by a certification of 
        the State, unit of general local government, or Indian tribe 
        that meets the requirements of paragraph (4). The approval by 
        the Secretary of any such certification shall be deemed to 
        satisfy the Secretary's responsibilities pursuant to paragraph 
        (1) under the National Environmental Policy Act of 1969 and 
        such other provisions of law as the regulations of the 
        Secretary specify insofar as those responsibilities relate to 
        the releases of funds for projects to be carried out pursuant 
        thereto that are covered by such certification.
            ``(4) Certification.--A certification under the procedures 
        authorized by this subsection shall--
                    ``(A) be in a form acceptable to the Secretary;
                    ``(B) be executed by the chief executive officer or 
                other officer of the State, unit of general local 
                government, or Indian tribe who qualifies under 
                regulations of the Secretary;
                    ``(C) specify that the State, unit of general local 
                government, or Indian tribe under this subsection has 
                fully carried out its responsibilities as described 
                under paragraph (2); and
                    ``(D) specify that the certifying officer--
                            ``(i) consents to assume the status of a 
                        responsible Federal official under the National 
                        Environmental Policy Act of 1969 and each 
                        provision of law specified in regulations 
                        issued by the Secretary insofar as the 
                        provisions of such Act or other such provisions 
                        of law apply pursuant to paragraph (2); and
                            ``(ii) is authorized and consents on behalf 
                        of the State, unit of general local government, 
                        or Indian tribe and himself or herself to 
                        accept the jurisdiction of the Federal courts 
for the purpose of enforcement of the responsibilities as such an 
official.
            ``(5) Approval by states.--In cases in which a unit of 
        general local government carries out the responsibilities 
        described in paragraph (2), the Secretary may permit the State 
        to perform those actions of the Secretary described in 
        paragraph (3). The performance of such actions by the State, 
        where permitted, shall be deemed to satisfy the 
        responsibilities referred to in the second sentence of 
        paragraph (3).''.

SEC. 411. EXTENSION OF TERMINATION DATE FOR EXPENSING OF ENVIRONMENTAL 
              REMEDIATION COSTS; EXTENSION TO RENEWAL COMMUNITIES.

    (a) Extension of Termination Date.--Subsection (h) of section 198 
is amended by inserting before the period ``(December 31, 2009, in the 
case of an empowerment zone or renewal community)''.
    (b) Extension.--
            (1) In general.--Subparagraph (A) of section 198(c)(2) 
        (defining targeted area) is amended by striking ``and'' at the 
        end of clause (iii), by striking the period at the end of 
        clause (iv) and inserting ``, and'', and by adding at the end 
        the following new clause:
                            ``(v) any renewal community (as defined in 
                        section 1400E).''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to expenditures paid or incurred after December 31, 
        2000.

                  TITLE V--AMERICAN COMMUNITY RENEWAL

SEC. 501. DESIGNATION OF AND TAX INCENTIVES FOR RENEWAL COMMUNITIES.

    (a) In General.--Chapter 1 is amended by adding at the end the 
following new subchapter:

                  ``Subchapter X--Renewal Communities

                              ``Part I.   Designation.
                              ``Part II.  Renewal community capital 
                                        gain; renewal community 
                                        business.
                              ``Part III.  Additional incentives.

                         ``PART I--DESIGNATION

                              ``Sec. 1400E. Designation of renewal 
                                        communities.

``SEC. 1400E. DESIGNATION OF RENEWAL COMMUNITIES.

    ``(a) Designation.--
            ``(1) Definitions.--For purposes of this title, the term 
        `renewal community' means any area--
                    ``(A) which is nominated by one or more local 
                governments and the State or States in which it is 
                located for designation as a renewal community 
                (hereinafter in this section referred to as a 
                `nominated area'), and
                    ``(B) which the Secretary of Housing and Urban 
                Development designates as a renewal community, after 
                consultation with--
                            ``(i) the Secretaries of Agriculture, 
                        Commerce, Labor, and the Treasury; the Director 
                        of the Office of Management and Budget, and the 
                        Administrator of the Small Business 
                        Administration, and
                            ``(ii) in the case of an area on an Indian 
                        reservation, the Secretary of the Interior.
            ``(2) Number of designations.--
                    ``(A) In general.--The Secretary of Housing and 
                Urban Development may designate not more than 40 
                nominated areas as renewal communities.
                    ``(B) Minimum designation in rural areas.--Of the 
                areas designated under paragraph (1), at least 20 
                percent must be areas--
                            ``(i) which are within a local government 
                        jurisdiction or jurisdictions with a population 
                        of less than 50,000,
                            ``(ii) which are outside of a metropolitan 
                        statistical area (within the meaning of section 
                        143(k)(2)(B)), or
                            ``(iii) which are determined by the 
                        Secretary of Housing and Urban Development, 
                        after consultation with the Secretary of 
                        Commerce, to be rural areas.
            ``(3) Areas designated based on degree of poverty, etc.--
                    ``(A) In general.--Except as otherwise provided in 
                this section, the nominated areas designated as renewal 
                communities under this subsection shall be those 
                nominated areas with the highest average ranking with 
                respect to the criteria described in subparagraphs (B), 
                (C), and (D) of subsection (c)(3). For purposes of the 
                preceding sentence, an area shall be ranked within each 
                such criterion on the basis of the amount by which the 
                area exceeds such criterion, with the area which 
                exceeds such criterion by the greatest amount given the 
                highest ranking.
                    ``(B) Exception where inadequate course of action, 
                etc.--An area shall not be designated under 
                subparagraph (A) if the Secretary of Housing and Urban 
                Development determines that the course of action 
                described in subsection (d)(2) with respect to such 
                area is inadequate.
            ``(4) Limitation on designations.--
                    ``(A) Publication of regulations.--The Secretary of 
                Housing and Urban Development shall prescribe by 
                regulation no later than 4 months after the date of the 
                enactment of this section, after consultation with the 
                officials described in paragraph (1)(B)--
                            ``(i) the procedures for nominating an area 
                        under paragraph (1)(A),
                            ``(ii) the parameters relating to the size 
                        and population characteristics of a renewal 
                        community, and
                            ``(iii) the manner in which nominated areas 
                        will be evaluated based on the criteria 
                        specified in subsection (d).
                    ``(B) Time limitations.--The Secretary of Housing 
                and Urban Development may designate nominated areas as 
                renewal communities only during the 24-month period 
                beginning on the first day of the first month following 
                the month in which the regulations described in 
subparagraph (A) are prescribed.
                    ``(C) Procedural rules.--The Secretary of Housing 
                and Urban Development shall not make any designation of 
                a nominated area as a renewal community under paragraph 
                (2) unless--
                            ``(i) the local governments and the States 
                        in which the nominated area is located have the 
                        authority--
                                    ``(I) to nominate such area for 
                                designation as a renewal community,
                                    ``(II) to make the State and local 
                                commitments described in subsection 
                                (d), and
                                    ``(III) to provide assurances 
                                satisfactory to the Secretary of 
                                Housing and Urban Development that such 
                                commitments will be fulfilled,
                            ``(ii) a nomination regarding such area is 
                        submitted in such a manner and in such form, 
                        and contains such information, as the Secretary 
                        of Housing and Urban Development shall by 
                        regulation prescribe, and
                            ``(iii) the Secretary of Housing and Urban 
                        Development determines that any information 
                        furnished is reasonably accurate.
            ``(5) Nomination process for indian reservations.--For 
        purposes of this subchapter, in the case of a nominated area on 
        an Indian reservation, the reservation governing body (as 
        determined by the Secretary of the Interior) shall be treated 
        as being both the State and local governments with respect to 
        such area.
    ``(b) Period for Which Designation Is in Effect.--
            ``(1) In general.--Any designation of an area as a renewal 
        community shall remain in effect during the period beginning on 
        January 1, 2001, and ending on the earliest of--
                    ``(A) December 31, 2009,
                    ``(B) the termination date designated by the State 
                and local governments in their nomination, or
                    ``(C) the date the Secretary of Housing and Urban 
                Development revokes such designation.
            ``(2) Revocation of designation.--The Secretary of Housing 
        and Urban Development may revoke the designation under this 
        section of an area if such Secretary determines that the local 
        government or the State in which the area is located--
                    ``(A) has modified the boundaries of the area, or
                    ``(B) is not complying substantially with, or fails 
                to make progress in achieving, the State or local 
                commitments, respectively, described in subsection (d).
            ``(3) Earlier termination of environmental remediation 
        expensing if earlier termination of designation.--If the 
        designation of an area as a renewal community terminates before 
        December 31, 2009, the date of such termination shall be 
        substituted for `December 31, 2009' in section 198(h) with 
        respect to such area.
    ``(c) Area and Eligibility Requirements.--
            ``(1) In general.--The Secretary of Housing and Urban 
        Development may designate a nominated area as a renewal 
        community under subsection (a) only if the area meets the 
        requirements of paragraphs (2) and (3) of this subsection.
            ``(2) Area requirements.--A nominated area meets the 
        requirements of this paragraph if--
                    ``(A) the area is within the jurisdiction of one or 
                more local governments,
                    ``(B) the boundary of the area is continuous, and
                    ``(C) the area--
                            ``(i) has a population, of at least--
                                    ``(I) 4,000 if any portion of such 
                                area (other than a rural area described 
                                in subsection (a)(2)(B)(i)) is located 
                                within a metropolitan statistical area 
                                (within the meaning of section 
                                143(k)(2)(B)) which has a population of 
                                50,000 or greater, or
                                    ``(II) 1,000 in any other case, or
                            ``(ii) is entirely within an Indian 
                        reservation (as determined by the Secretary of 
                        the Interior).
            ``(3) Eligibility requirements.--A nominated area meets the 
        requirements of this paragraph if the State and the local 
        governments in which it is located certify (and the Secretary 
        of Housing and Urban Development, after such review of 
        supporting data as he deems appropriate, accepts such 
        certification) that--
                    ``(A) the area is one of pervasive poverty and 
                general distress,
                    ``(B) the poverty rate for each population census 
                tract within the nominated area is at least 20 percent, 
                and
                    ``(C) in the case of an urban area, at least 70 
                percent of the households living in the area have 
                incomes below 80 percent of the median income of 
                households within the jurisdiction of the local 
                government (determined in the same manner as under 
                section 119(b)(2) of the Housing and Community 
                Development Act of 1974).
            ``(4) Consideration of high incidence of crime.--The 
        Secretary of Housing and Urban Development shall take into 
        account, in selecting nominated areas for designation as 
        renewal communities under this section, the extent to which 
        such areas have a high incidence of crime.
            ``(5) Consideration of communities identified in gao 
        study.--The Secretary of Housing and Urban Development shall 
        take into account, in selecting nominated areas for designation 
        as renewal communities under this section, if the area has 
census tracts identified in the May 12, 1998, report of the Government 
Accounting Office regarding the identification of economically 
distressed areas.
    ``(d) Required State and Local Commitments.--
            ``(1) In general.--The Secretary of Housing and Urban 
        Development may designate any nominated area as a renewal 
        community under subsection (a) only if--
                    ``(A) the local government and the State in which 
                the area is located agree in writing that, during any 
                period during which the area is a renewal community, 
                such governments will follow a specified course of 
                action which meets the requirements of paragraph (2) 
                and is designed to reduce the various burdens borne by 
                employers or employees in such area, and
                    ``(B) the economic growth promotion requirements of 
                paragraph (3) are met.
            ``(2) Course of action.--
                    ``(A) In general.--A course of action meets the 
                requirements of this paragraph if such course of action 
                is a written document, signed by a State (or local 
                government) and neighborhood organizations, which 
                evidences a partnership between such State or 
                government and community-based organizations and which 
                commits each signatory to specific and measurable 
                goals, actions, and timetables. Such course of action 
                shall include at least 4 of the following:
                            ``(i) A reduction of tax rates or fees 
                        applying within the renewal community.
                            ``(ii) An increase in the level of 
                        efficiency of local services within the renewal 
                        community.
                            ``(iii) Crime reduction strategies, such as 
                        crime prevention (including the provision of 
                        such services by nongovernmental entities).
                            ``(iv) Actions to reduce, remove, simplify, 
                        or streamline governmental requirements 
                        applying within the renewal community.
                            ``(v) Involvement in the program by private 
                        entities, organizations, neighborhood 
                        organizations, and community groups, 
                        particularly those in the renewal community, 
                        including a commitment from such private 
                        entities to provide jobs and job training for, 
                        and technical, financial, or other assistance 
                        to, employers, employees, and residents from 
                        the renewal community.
                            ``(vi) The gift (or sale at below fair 
                        market value) of surplus real property (such as 
                        land, homes, and commercial or industrial 
                        structures) in the renewal community to 
                        neighborhood organizations, community 
                        development corporations, or private companies.
                    ``(B) Recognition of past efforts.--For purposes of 
                this section, in evaluating the course of action agreed 
                to by any State or local government, the Secretary of 
                Housing and Urban Development shall take into account 
                the past efforts of such State or local government in 
                reducing the various burdens borne by employers and 
                employees in the area involved.
            ``(3) Economic growth promotion requirements.--The economic 
        growth promotion requirements of this paragraph are met with 
        respect to a nominated area if the local government and the 
        State in which such area is located certify in writing that 
        such government and State (respectively) have repealed, will 
        not enforce, or will reduce within the area at least 4 of the 
        following if such area is designated as a renewal community:
                    ``(A) Licensing requirements for occupations that 
                do not ordinarily require a professional degree.
                    ``(B) Zoning restrictions on home-based businesses 
                which do not create a public nuisance.
                    ``(C) Permit requirements for street vendors who do 
                not create a public nuisance.
                    ``(D) Zoning or other restrictions that impede the 
                formation of schools or child care centers.
                    ``(E) Franchises or other restrictions on 
                competition for businesses providing public services, 
                including taxicabs, jitneys, cable television, or trash 
                hauling.
        This paragraph shall not apply to the extent that such 
        regulation of businesses and occupations is necessary for and 
        well-tailored to the protection of health and safety.
    ``(e) Coordination With Treatment of Empowerment Zones and 
Enterprise Communities.--
            ``(1) In general.--For purposes of this title, the 
        designation under section 1391 of any area as an empowerment 
        zone or enterprise community shall cease to be in effect as of 
        the date that any portion of such area is designated as a 
        renewal community.
            ``(2) Special rule for wage credit.--For purposes of 
        section 1400H (relating to renewal community employment 
        credit)--
                    ``(A) there shall not be taken into account wages 
                taken into account under section 1396 (without regard 
                to section 1400H), and
                    ``(B) the $15,000 amount in section 1396(c) shall 
                (in applying section 1400H) be reduced for any calendar 
                year by the amount of wages paid or incurred during 
                such year which are taken into account in determining 
                the credit under section 1396 (without regard to 
                section 1400H).
    ``(f) Definitions and Special Rules.--For purposes of this 
subchapter--
            ``(1) Governments.--If more than one government seeks to 
        nominate an area as a renewal community, any reference to, or 
        requirement of, this section shall apply to all such 
        governments.
            ``(2) Local government.--The term `local government' 
        means--
                    ``(A) any county, city, town, township, parish, 
                village, or other general purpose political subdivision 
                of a State, and
                    ``(B) any combination of political subdivisions 
                described in subparagraph (A) recognized by the 
                Secretary of Housing and Urban Development.
            ``(3) State.--The term `State' means the several States.
            ``(4) Application of rules relating to census tracts.--The 
        rules of sections 1392(b)(4) shall apply.
            ``(5) Census data.--Population and poverty rate shall be 
        determined by using 1990 census data.

 ``PART II--RENEWAL COMMUNITY CAPITAL GAIN; RENEWAL COMMUNITY BUSINESS

                              ``Sec. 1400F. Renewal community capital 
                                        gain.
                              ``Sec. 1400G. Renewal community business 
                                        defined.

``SEC. 1400F. RENEWAL COMMUNITY CAPITAL GAIN.

    ``(a) General Rule.--Gross income does not include any qualified 
capital gain recognized on the sale or exchange of a qualified 
community asset held for more than 5 years.
    ``(b) Qualified Community Asset.--For purposes of this section--
            ``(1) In general.--The term `qualified community asset' 
        means--
                    ``(A) any qualified community stock,
                    ``(B) any qualified community partnership interest, 
                and
                    ``(C) any qualified community business property.
            ``(2) Qualified community stock.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `qualified community stock' 
                means any stock in a domestic corporation if--
                            ``(i) such stock is acquired by the 
                        taxpayer after December 31, 2000, and before 
                        January 1, 2010, at its original issue 
                        (directly or through an underwriter) from the 
                        corporation solely in exchange for cash,
                            ``(ii) as of the time such stock was 
                        issued, such corporation was a renewal 
                        community business (or, in the case of a new 
                        corporation, such corporation was being 
                        organized for purposes of being a renewal 
                        community business), and
                            ``(iii) during substantially all of the 
                        taxpayer's holding period for such stock, such 
                        corporation qualified as a renewal community 
                        business.
                    ``(B) Redemptions.--A rule similar to the rule of 
                section 1202(c)(3) shall apply for purposes of this 
                paragraph.
            ``(3) Qualified community partnership interest.--The term 
        `qualified community partnership interest' means any capital or 
        profits interest in a domestic partnership if--
                    ``(A) such interest is acquired by the taxpayer 
                after December 31, 2000, and before January 1, 2010, 
                from the partnership solely in exchange for cash,
                    ``(B) as of the time such interest was acquired, 
                such partnership was a renewal community business (or, 
                in the case of a new partnership, such partnership was 
                being organized for purposes of being a renewal 
                community business), and
                    ``(C) during substantially all of the taxpayer's 
                holding period for such interest, such partnership 
                qualified as a renewal community business.
        A rule similar to the rule of paragraph (2)(B) shall apply for 
        purposes of this paragraph.
            ``(4) Qualified community business property.--
                    ``(A) In general.--The term `qualified community 
                business property' means tangible property if--
                            ``(i) such property was acquired by the 
                        taxpayer by purchase (as defined in section 
                        179(d)(2)) after December 31, 2000, and before 
                        January 1, 2010,
                            ``(ii) the original use of such property in 
                        the renewal community commences with the 
                        taxpayer, and
                            ``(iii) during substantially all of the 
                        taxpayer's holding period for such property, 
                        substantially all of the use of such property 
                        was in a renewal community business of the 
                        taxpayer.
                    ``(B) Special rule for substantial improvements.--
                The requirements of clauses (i) and (ii) of 
                subparagraph (A) shall be treated as satisfied with 
                respect to--
                            ``(i) property which is substantially 
                        improved by the taxpayer before January 1, 
                        2010, and
                            ``(ii) any land on which such property is 
                        located.
                The determination of whether a property is 
                substantially improved shall be made under clause (ii) 
                of section 1400B(b)(4)(B), except that `December 31, 
                2000' shall be substituted for `December 31, 1997' in 
                such clause.
    ``(c) Qualified Capital Gain.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `qualified capital gain' means any gain 
        recognized on the sale or exchange of--
                    ``(A) a capital asset, or
                    ``(B) property used in the trade or business (as 
                defined in section 1231(b).
            ``(2) Gain before 2001 or after 2014 not qualified.--The 
        term `qualified capital gain' shall not include any gain 
        attributable to periods before January 1, 2001, or after 
        December 31, 2014.
            ``(3) Certain rules to apply.--Rules similar to the rules 
        of paragraphs (3), (4), and (5) of section 1400B(e) shall apply 
        for purposes of this subsection.
    ``(d) Certain Rules To Apply.--For purposes of this section, rules 
similar to the rules of paragraphs (5), (6), and (7) of subsection (b), 
and subsections (f) and (g), of section 1400B shall apply; except that 
for such purposes section 1400B(g)(2) shall be applied by substituting 
`January 1, 2001' for `January 1, 1998' and `December 31, 2014' for 
`December 31, 2007'.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out the purposes of this section, 
including regulations to prevent the avoidance of the purposes of this 
section.

``SEC. 1400G. RENEWAL COMMUNITY BUSINESS DEFINED.

    ``For purposes of this subchapter, the term `renewal community 
business' means any entity or proprietorship which would be a qualified 
business entity or qualified proprietorship under section 1397C if 
references to renewal communities were substituted for references to 
empowerment zones in such section.

                   ``PART III--ADDITIONAL INCENTIVES

                              ``Sec. 1400H. Renewal community 
                                        employment credit.
                              ``Sec. 1400I. Commercial revitalization 
                                        deduction.
                              ``Sec. 1400J. Increase in expensing under 
                                        section 179.

``SEC. 1400H. RENEWAL COMMUNITY EMPLOYMENT CREDIT.

    ``(a) In General.--Subject to the modification in subsection (b), a 
renewal community shall be treated as an empowerment zone for purposes 
of section 1396 with respect to wages paid or incurred after December 
31, 2000.
    ``(b) Modification.--In applying section 1396 with respect to 
renewal communities--
            ``(1) the applicable percentage shall be 15 percent, and
            ``(2) subsection (c) thereof shall be applied by 
        substituting `$10,000' for `$15,000' each place it appears.

``SEC. 1400I. COMMERCIAL REVITALIZATION DEDUCTION.

    ``(a) General Rule.--At the election of the taxpayer, either--
            ``(1) one-half of any qualified revitalization expenditures 
        chargeable to capital account with respect to any qualified 
        revitalization building shall be allowable as a deduction for 
        the taxable year in which the building is placed in service, or
            ``(2) a deduction for all such expenditures shall be 
        allowable ratably over the 120-month period beginning with the 
        month in which the building is placed in service.
    ``(b) Qualified Revitalization Buildings and Expenditures.--For 
purposes of this section--
            ``(1) Qualified revitalization building.--The term 
        `qualified revitalization building' means any building (and its 
        structural components) if--
                    ``(A) such building is located in a renewal 
                community and is placed in service after December 31, 
                2000,
                    ``(B) a commercial revitalization deduction amount 
                is allocated to the building under subsection (d), and
                    ``(C) depreciation is allowable with respect to the 
                building (without regard to this section).
            ``(2) Qualified revitalization expenditure.--
                    ``(A) In general.--The term `qualified 
                revitalization expenditure' means any amount properly 
                chargeable to capital account--
                            ``(i) for property for which depreciation 
                        is allowable under section 168 (without regard 
                        to this section) and which is--
                                    ``(I) nonresidential real property, 
                                or
                                    ``(II) an addition or improvement 
                                to property described in subclause (I),
                            ``(ii) in connection with the construction 
                        of any qualified revitalization building which 
                        was not previously placed in service or in 
                        connection with the substantial rehabilitation 
                        (within the meaning of section 47(c)(1)(C)) of 
                        a building which was placed in service before 
                        the beginning of such rehabilitation, and
                            ``(iii) for land (including land which is 
                        functionally related to such property and 
                        subordinate thereto).
                    ``(B) Dollar limitation.--The aggregate amount 
                which may be treated as qualified revitalization 
                expenditures with respect to any qualified 
                revitalization building for any taxable year shall not 
                exceed the excess of--
                            ``(i) $10,000,000, reduced by
                            ``(ii) any such expenditures with respect 
                        to the building taken into account by the 
                        taxpayer or any predecessor in determining the 
                        amount of the deduction under this section for 
                        all preceding taxable years.
                    ``(C) Certain expenditures not included.--The term 
                `qualified revitalization expenditure' does not 
                include--
                            ``(i) Acquisition costs.--The costs of 
                        acquiring any building or interest therein and 
                        any land in connection with such building to 
                        the extent that such costs exceed 30 percent of 
                        the qualified revitalization expenditures 
                        determined without regard to this clause.
                            ``(ii) Credits.--Any expenditure which the 
                        taxpayer may take into account in computing any 
                        credit allowable under this title unless the 
                        taxpayer elects to take the expenditure into 
                        account only for purposes of this section.
    ``(c) Limitation on Aggregate Expenditures Allowable With Respect 
to Buildings Located in a State.--
            ``(1) In general.--The aggregate qualified revitalization 
        expenditures chargeable to capital account with respect to any 
        building which may be taken into account in determining the 
        deduction under this section with respect to such building 
        shall not exceed the commercial revitalization expenditure 
        amount allocated to such building under this subsection by the 
        commercial revitalization agency. Such allocation shall be made 
        at the same time and in the same manner as under paragraphs (1) 
        and (7) of section 42(h).
            ``(2) Commercial revitalization expenditure amount for 
        agencies.--
                    ``(A) In general.--The aggregate commercial 
                revitalization expenditure amount which a commercial 
                revitalization agency may allocate for any calendar 
                year is the amount of the State commercial 
                revitalization expenditure ceiling determined under 
                this paragraph for such calendar year for such agency.
                    ``(B) State commercial revitalization expenditure 
                ceiling.--The State commercial revitalization 
                expenditure ceiling applicable to any State--
                            ``(i) for each calendar year after 2000 and 
                        before 2010 is $12,000,000 for each renewal 
                        community in the State, and
                            ``(ii) for each calendar year thereafter is 
                        zero.
                    ``(C) Commercial revitalization agency.--For 
                purposes of this section, the term `commercial 
                revitalization agency' means any agency authorized by a 
                State to carry out this section.
    ``(d) Responsibilities of Commercial Revitalization Agencies.--
            ``(1) Plans for allocation.--Notwithstanding any other 
        provision of this section, the commercial revitalization 
        deduction amount with respect to any building shall be zero 
        unless--
                    ``(A) such amount was allocated pursuant to a 
                qualified allocation plan of the commercial 
                revitalization agency which is approved (in accordance 
                with rules similar to the rules of section 147(f)(2) 
                (other than subparagraph (B)(ii) thereof)) by the 
                governmental unit of which such agency is a part, and
                    ``(B) such agency notifies the chief executive 
                officer (or its equivalent) of the local jurisdiction 
                within which the building is located of such allocation 
                and provides such individual a reasonable opportunity 
                to comment on the allocation.
            ``(2) Qualified allocation plan.--For purposes of this 
        subsection, the term `qualified allocation plan' means any 
        plan--
                    ``(A) which sets forth selection criteria to be 
                used to determine priorities of the commercial 
                revitalization agency which are appropriate to local 
                conditions,
                    ``(B) which considers--
                            ``(i) the degree to which a project 
                        contributes to the implementation of a 
                        strategic plan that is devised for a renewal 
                        community through a citizen participation 
                        process,
                            ``(ii) the amount of any increase in 
                        permanent, full-time employment by reason of 
                        any project, and
                            ``(iii) the active involvement of residents 
                        and nonprofit groups within the renewal 
                        community, and
                    ``(C) which provides a procedure that the agency 
                (or its agent) will follow in monitoring compliance 
                with this section.
    ``(e) Special Rules.--
            ``(1) Deduction in lieu of depreciation.--The deduction 
        provided by this section for qualified revitalization 
        expenditures shall--
                    ``(A) with respect to the deduction determined 
                under subsection (a)(1), be in lieu of any depreciation 
                deduction otherwise allowable on account of \1/2\ of 
                such expenditures, and
                    ``(B) with respect to the deduction determined 
                under subsection (a)(2), be in lieu of any depreciation 
                deduction otherwise allowable on account of all of such 
                expenditures.
            ``(2) Basis adjustment, etc.--For purposes of sections 1016 
        and 1250, the deduction under this section shall be treated in 
        the same manner as a depreciation deduction. For purposes of 
        section 1250(b)(5), the straight line method of adjustment 
        shall be determined without regard to this section.
            ``(3) Substantial rehabilitations treated as separate 
        buildings.--A substantial rehabilitation (within the meaning of 
        section 47(c)(1)(C)) of a building shall be treated as a 
        separate building for purposes of subsection (a).
            ``(4) Clarification of allowance of deduction under minimum 
        tax.--Notwithstanding section 56(a)(1), the deduction under 
        this section shall be allowed in determining alternative 
        minimum taxable income under section 55.
    ``(f) Regulations.--For purposes of this section, the Secretary 
shall, by regulations, provide for the application of rules similar to 
the rules of section 49 and subsections (a) and (b) of section 50.
    ``(g) Termination.--This section shall not apply to any building 
placed in service after December 31, 2009.

``SEC. 1400J. INCREASE IN EXPENSING UNDER SECTION 179.

    ``(a) In General.--For purposes of section 1397A--
            ``(1) a renewal community shall be treated as an 
        empowerment zone,
            ``(2) a renewal community business shall be treated as an 
        empowerment zone business, and
            ``(3) qualified renewal property shall be treated as 
        enterprise zone property.
    ``(b) Qualified Renewal Property.--For purposes of this section--
            ``(1) In general.--The term `qualified renewal property' 
        means any property to which section 168 applies (or would apply 
        but for section 179) if--
                    ``(A) such property was acquired by the taxpayer by 
                purchase (as defined in section 179(d)(2)) after 
                December 31, 2000, and before January 1, 2010, and
                    ``(B) such property would be qualified zone 
                property (as defined in section 1397D) if references to 
                renewal communities were substituted for references to 
                empowerment zones in section 1397D.
            ``(2) Certain rules to apply.--The rules of subsections 
        (a)(2) and (b) of section 1397D shall apply for purposes of 
        this section.''.
    (b) Exception for Commercial Revitalization Deduction From Passive 
Loss Rules.--
            (1) Paragraph (3) of section 469(i) is amended by 
        redesignating subparagraphs (C), (D), and (E) as subparagraphs 
        (D), (E), and (F), respectively, and by inserting after 
        subparagraph (B) the following new subparagraph:
                    ``(C) Exception for commercial revitalization 
                deduction.--Subparagraph (A) shall not apply to any 
                portion of the passive activity loss for any taxable 
                year which is attributable to the commercial 
                revitalization deduction under section 1400I.''.
            (2) Subparagraph (E) of section 469(i)(3), as redesignated 
        by subparagraph (A), is amended to read as follows:
                    ``(E) Ordering rules to reflect exceptions and 
                separate phase-outs.--If subparagraph (B), (C), or (D) 
                applies for a taxable year, paragraph (1) shall be 
                applied--
                            ``(i) first to the portion of the passive 
                        activity loss to which subparagraph (C) does 
                        not apply,
                            ``(ii) second to the portion of the passive 
                        activity credit to which subparagraph (B) or 
                        (D) does not apply,
                            ``(iii) third to the portion of such credit 
                        to which subparagraph (B) applies,
                            ``(iv) fourth to the portion of such loss 
                        to which subparagraph (C) applies, and
                            ``(v) then to the portion of such credit to 
                        which subparagraph (D) applies.''.
            (3)(A) Subparagraph (B) of section 469(i)(6) is amended by 
        striking ``or'' at the end of clause (i), by striking the 
        period at the end of clause (ii) and inserting ``, or'', and by 
        adding at the end the following new clause:
                            ``(iii) any deduction under section 1400I 
                        (relating to commercial revitalization 
                        deduction).''.
            (B) The heading for such subparagraph (B) is amended by 
        striking ``or rehabilitation credit'' and inserting ``, 
        rehabilitation credit, or commercial revitalization 
        deduction''.
    (c) Clerical Amendment.--The table of subchapters for chapter 1 is 
amended by adding at the end the following new item:

                ``Subchapter X. Renewal Communities.''.

SEC. 502. WORK OPPORTUNITY CREDIT FOR HIRING YOUTH RESIDING IN RENEWAL 
              COMMUNITIES.

    (a) High-Risk Youth.--Subparagraphs (A)(ii) and (B) of section 
51(d)(5) are each amended by striking ``empowerment zone or enterprise 
community'' and inserting ``empowerment zone, enterprise community, or 
renewal community''.
    (b) Qualified Summer Youth Employee.--Clause (iv) of section 
51(d)(7)(A) is amended by striking ``empowerment zone or enterprise 
community'' and inserting ``empowerment zone, enterprise community, or 
renewal community''.
    (c) Headings.--Paragraphs (5)(B) and (7)(C) of section 51(d) are 
each amended by inserting ``or community'' in the heading after 
``zone''.
    (d) Effective Date.--The amendments made by this section shall 
apply to individuals who begin work for the employer after December 31, 
2000.

SEC. 503. EVALUATION AND REPORTING REQUIREMENTS.

    Not later than the close of the fourth calendar year after the year 
in which the Secretary of Housing and Urban Development first 
designates an area as a renewal community under section 1400E of the 
Internal Revenue Code of 1986, and at the close of each fourth calendar 
year thereafter, such Secretary shall prepare and submit to the 
Congress a report on the effects of such designations in stimulating 
the creation of new jobs, particularly for disadvantaged workers and 
long-term unemployed individuals, and promoting the revitalization of 
economically distressed areas.

               TITLE VI--HOMEOWNERSHIP AND REVITALIZATION

SEC. 601. INCREASE IN STATE CEILING ON LOW-INCOME HOUSING CREDIT.

    (a) In General.--Clause (i) of section 42(h)(3)(C) (relating to 
State housing credit ceiling) is amended by striking ``$1.25'' and 
inserting ``$1.75''.
    (b) Adjustment of State Ceiling for Increases in Cost-of-Living.--
Paragraph (3) of section 42(h) (relating to housing credit dollar 
amount for agencies) is amended by adding at the end the following new 
subparagraph:
                    ``(H) Cost-of-living adjustment.--
                            ``(i) In general.--In the case of a 
                        calendar year after 2001, the dollar amount 
                        contained in subparagraph (C)(i) shall be 
                        increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for such calendar year by 
                                substituting `calendar year 2000' for 
                                `calendar year 1992' in subparagraph 
                                (B) thereof.
                            ``(ii) Rounding.--If any increase under 
                        clause (i) is not a multiple of 5 cents, such 
                        increase shall be rounded to the next lowest 
                        multiple of 5 cents.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years after 2000.

SEC. 602. ADDITIONAL MODIFICATIONS TO LOW-INCOME HOUSING CREDIT.

    (a) Modification of Criteria for Allocating Housing Credits Among 
Projects.--
            (1) Selection criteria.--Subparagraph (C) of 
section 42(m)(1) (relating to certain selection criteria must be used) 
is amended--
                    (A) by inserting ``, including whether the project 
                includes the use of existing housing as part of a 
                community revitalization plan'' before the comma at the 
                end of clause (iii), and
                    (B) by striking clauses (v), (vi), and (vii) and 
                inserting the following new clauses:
                            ``(v) tenant populations with special 
                        housing needs,
                            ``(vi) public housing waiting lists,
                            ``(vii) tenant populations of individuals 
                        with children,
                            ``(viii) projects intended for eventual 
                        tenant ownership, and
                            ``(ix) the accessibility of jobs, including 
                        lower skilled jobs, to the project.''
            (2) Preference for community revitalization projects 
        located in qualified census tracts.--Clause (ii) of section 
        42(m)(1)(B) is amended by striking ``and'' at the end of 
        subclause (I), by adding ``and'' at the end of subclause (II), 
        and by inserting after subclause (II) the following new 
        subclause:
                                    ``(III) projects which are located 
                                in qualified census tracts (as defined 
                                in subsection (d)(5)(C)) and the 
                                development of which contributes to a 
                                concerted community revitalization 
                                plan,''.
    (b) Additional Responsibilities of Housing Credit Agencies.--
            (1) Market study; public disclosure of rationale for not 
        following credit allocation priorities.--Subparagraph (A) of 
        section 42(m)(1) (relating to responsibilities of housing 
        credit agencies) is amended by striking ``and'' at the end of 
        clause (i), by striking the period at the end of clause (ii) 
        and inserting a comma, and by adding at the end the following 
        new clauses:
                            ``(iii) a comprehensive market study of the 
                        housing needs of low-income individuals in the 
                        area to be served by the building is conducted 
                        before the credit allocation is made and at the 
                        developer's expense by a disinterested party 
                        who is approved by such agency, and
                            ``(iv) a written explanation is available 
                        to the general public for any allocation of a 
                        housing credit dollar amount which is not made 
                        in accordance with established priorities and 
                        selection criteria of the housing credit 
                        agency.''.
            (2) Site visits.--Clause (iii) of section 42(m)(1)(B) 
        (relating to qualified allocation plan) is amended by inserting 
        before the period ``and in monitoring for noncompliance with 
        habitability standards through regular site visits''.
    (c) Other Modifications.--
            (1) Adjusted basis to include portion of certain buildings 
        used by low-income individuals who are not tenants and by 
        project employees.--Paragraph (4) of section 42(d) (relating to 
        special rules relating to determination of adjusted basis) is 
        amended--
                    (A) by striking ``subparagraph (B)'' in 
                subparagraph (A) and inserting ``subparagraphs (B) and 
                (C)'',
                    (B) by redesignating subparagraph (C) as 
                subparagraph (D), and
                    (C) by inserting after subparagraph (B) the 
                following new subparagraph:
                    ``(C) Inclusion of basis of property used to 
                provide services for certain nontenants.--
                            ``(i) In general.--The adjusted basis of 
                        any building located in a qualified census 
                        tract (as defined in paragraph (5)(C)) shall be 
                        determined by taking into account the adjusted 
                        basis of property (of a character subject to 
                        the allowance for depreciation and not 
                        otherwise taken into account) used throughout 
                        the taxable year in providing any community 
                        service facility.
                            ``(ii) Limitation.--The increase in the 
                        adjusted basis of any building which is taken 
                        into account by reason of clause (i) shall not 
                        exceed 20 percent of the eligible basis of the 
                        qualified low-income housing project of which 
                        it is a part. For purposes of the preceding 
                        sentence, all community service facilities 
                        which are part of the same qualified low-income 
                        housing project shall be treated as 1 facility.
                            ``(iii) Community service facility.--For 
                        purposes of this subparagraph, the term 
                        `community service facility' means any facility 
                        designed to serve primarily individuals whose 
                        income is 60 percent or less of area median 
                        income (within the meaning of subsection 
                        (g)(1)(B)).''.
            (2) Allocation of credit limit to certain buildings.--
                    (A) The first sentence of section 42(h)(1)(E)(ii) 
                is amended by striking ``(as of'' the first place it 
                appears and inserting ``(as of the later of the date 
                which is 6 months after the date that the allocation 
                was made or''.
                    (B) The last sentence of section 42(h)(3)(C) is 
                amended by striking ``project which'' and inserting 
                ``project which fails to meet the 10 percent test under 
                paragraph (1)(E)(ii) on a date after the close of the 
                calendar year in which the allocation was made or 
                which''.
            (3) Determination of whether buildings are located in high 
        cost areas.--The first sentence of section 42(d)(5)(C)(ii)(I) 
        is amended--
                    (A) by inserting ``either'' before ``in which 50 
                percent'', and
                    (B) by inserting before the period `` or which has 
                a poverty rate of at least 25 percent''.
    (d) Effective Date.--The amendments made by this section shall 
apply to--
            (1) housing credit dollar amounts allocated after December 
        31, 2000, and
            (2) buildings placed in service after December 31, 2000, to 
        the extent paragraph (1) of section 42(h) of the Internal 
        Revenue Code of 1986 does not apply to any building by reason 
        of paragraph (4) thereof, but only with respect to bonds issued 
        after December 31, 2000.

SEC. 603. INCREASE IN STATE CEILING ON PRIVATE ACTIVITY BONDS.

    (a) In General.--Paragraphs (1) and (2) of section 146(d) (relating 
to State ceiling) are amended to read as follows:
            ``(1) In general.--The State ceiling applicable to any 
        State for any calendar year shall be the greater of--
                    ``(A) an amount equal to $75 multiplied by the 
                State population, or
                    ``(B) $225,000,000.
        Subparagraph (B) shall not apply to any possession of the 
        United States.
            ``(2) Inflation adjustment.--In the case of a calendar year 
        after 2001, each of the dollar amounts contained in paragraph 
        (1) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for such calendar year by 
                substituting `calendar year 2000' for `calendar year 
                1992' in subparagraph (B) thereof.
        If any increase determined under the preceding sentence is not 
        a multiple of $1 ($250 in the case of the dollar amount in 
        paragraph (1)(B), such increase shall be rounded to the nearest 
        multiple thereof.''
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years after 2000.

SEC. 604. HOME OWNERSHIP TAX CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits), as amended by section 101(a), 
is amended by adding at the end the following:

``SEC. 45E. HOME OWNERSHIP TAX CREDIT.

    ``(a) Allowance of Credit.--
            ``(1) In general.--For purposes of section 38, the amount 
        of the home ownership tax credit determined under this section 
        for any taxable year in the credit period shall be an amount 
        equal to the applicable percentage of the home ownership tax 
        credit amount allocated such taxpayer by a State housing 
        finance agency in the credit allocation year under subsection 
        (b).
            ``(2) Applicable percentage.--For purposes of this section, 
        the Secretary shall prescribe the applicable percentage for any 
        year in which the taxpayer is a qualified lender. Such 
        percentage with respect to any month in the credit period with 
        respect to such taxpayer shall be percentages which will yield 
over such period amounts of credit under paragraph (1) which have a 
present value equal to 100 percent of the home ownership tax credit 
amount allocated such taxpayer under subsection (b).
            ``(3) Method of discounting.--The present value under 
        paragraph (2) shall be determined in the same manner as the 
        low-income housing credit under section 42(b)(2)(C).
    ``(b) Allocation of Home Ownership Tax Credit Amounts.--
            ``(1) Amount of credit.--Each qualified State shall receive 
        a home ownership tax credit dollar amount for each calendar 
        year in an amount equal to the sum of--
                    ``(A) an amount equal to--
                            ``(i) 40 cents multiplied by the State 
                        population, multiplied by
                            ``(ii) 10, plus
                    ``(B) the unused home ownership tax credit dollar 
                amount (if any) of such State for the preceding year.
            ``(2) Qualified state.--For purposes of this section--
                    ``(A) In general.--The term `qualified State' means 
                a State with an approved allocation plan to allocate 
                home ownership tax credits to qualified lenders through 
                the State housing finance agency.
                    ``(B) Approved allocation plan.--For purposes of 
                this paragraph, the term `approved allocation plan' 
                means a written plan, certified by the Secretary, which 
                includes--
                            ``(i) selection criteria for the allocation 
                        of credits to qualified lenders--
                                    ``(I) based on a process in which 
                                lenders submit bids for the value of 
                                the credit, and
                                    ``(II) which gives priority to 
                                qualified lenders with qualified home 
                                ownership tax credit loans which are 
                                prepaid during a calendar year, for 
                                credit allocations in the succeeding 
                                calendar year,
                            ``(ii) an assurance that the State will not 
                        allocate in excess of 10 percent of the home 
                        ownership tax credit amount for the calendar 
                        year for qualified home ownership tax credit 
                        loans which are neighborhood revitalization 
                        project loans,
                            ``(iii) a procedure that the agency (or an 
                        agent or other private contractor of such 
                        agency) will follow in monitoring for 
                        noncompliance with the provisions of this 
                        section and in notifying the Internal Revenue 
                        Service of such noncompliance with respect to 
                        which such agency becomes aware, and
                            ``(iv) such other assurances as the 
                        Secretary may require.
            ``(3) Qualified lender.--For purposes of this section, the 
        term `qualified lender' means a lender which--
                    ``(A) is an insured depository institution (as 
                defined in section 3 of the Federal Deposit Insurance 
                Act), insured credit union (as defined in section 101 
                of the Federal Credit Union Act), community development 
                financial institution (as defined in section 103 of the 
                Community Development Banking and Financial 
                Institutions Act of 1994 (12 U.S.C. 4702)), or 
                nonprofit community development corporation (as defined 
                in section 613 of the Community Economic Development 
                Act of 1981 (42 U.S.C. 9802)),
                    ``(B) makes available, through such lender or the 
                lender's designee, pre-purchase homeownership 
                counseling for mortgagors, and
                    ``(C) during the 1-year period beginning on the 
                date of the credit allocation, originates not less than 
                100 qualified home ownership tax credit loans in an 
                aggregate amount not less than the amount of the bid of 
                such lender for such credit allocation.
            ``(4) Carryover of credit.--A home ownership tax credit 
        amount received by a State for any calendar year and not 
        allocated in such year shall remain available to be allocated 
        in the succeeding calendar year.
            ``(5) Population.--For purposes of this section, population 
        shall be determined in accordance with section 146(j).
            ``(6) Cost-of-living adjustment.--
                    ``(A) In general.--In the case of a calendar year 
                after 2000, the 40 cent amount contained in paragraph 
                (1)(A)(i) shall be increased by an amount equal to--
                            ``(i) such amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for such 
                        calendar year by substituting `calendar year 
                        1999' for `calendar year 1992' in subparagraph 
                        (B) thereof.
                    ``(B) Rounding.--If any amount as adjusted under 
                subparagraph (A) is not a multiple of 5 cents, such 
                amount shall be rounded to the next lowest multiple of 
                5 cents.
    ``(c) Qualified Home Ownership Tax Credit Loan Defined.--For 
purposes of this section--
            ``(1) In general.--The term `qualified home ownership tax 
        credit loan' means a loan originated and funded by a qualified 
        lender which is secured by a second lien on a residence, but 
        only if--
                    ``(A) the requirements of subsections (d), (e), and 
                (f) are met,
                    ``(B) subject to subparagraphs (F), (H), and (I), 
                the proceeds from such loan are applied exclusively--
                            ``(i) to acquire such residence, or
                            ``(ii) to substantially improve such 
                        residence in connection with a neighborhood 
                        revitalization project,
                    ``(C) the principal amount of the loan is equal to 
                an amount which is--
                            ``(i) not less than 18 percent of the 
                        purchase price of the residence securing the 
                        loan, and
                            ``(ii) not more than the lesser of--
                                    ``(I) 22 percent of such purchase 
                                price, or
                                    ``(II) $25,000,
                    ``(D) in the case of a neighborhood revitalization 
                project loan, subparagraph (C) is applied by 
                substituting--
                            ``(i) `purchase price or appraised value' 
                        for `purchase price', and
                            ``(ii) `$40,000' for `$25,000',
                    ``(E) the loan is--
                            ``(i) amortized over a period of not more 
                        than 30 years (or any lesser period of time as 
                        determined by the lender or the State housing 
                        finance agency (as applicable)), or
                            ``(ii) described in paragraph (2),
                    ``(F) the proceeds of such loan are not used for 
                settlement or other closing costs of the transaction in 
                an amount in excess of 4 percent of the purchase price 
                of the residence securing the loan,
                    ``(G) the rate of interest of the loan does not 
                exceed the greater of--
                            ``(i) the excess of--
                                    ``(I) the prime lending rate in 
                                effect as of the date on which the loan 
                                is originated, over
                                    ``(II) 5.5 percent, or
                            ``(ii) 3 percent,
                    ``(H) the origination fee paid with respect to the 
                loan does not cause the aggregate amount of origination 
                fees paid with respect to any loans secured by the 
                residence--
                            ``(i) in the case of a neighborhood 
                        revitalization project loan, to exceed 1 
                        percent of the appraised value of the residence 
                        which secures the loan, and
                            ``(ii) in the case of any other loan, to 
                        exceed 2 percent of the appraised value of such 
                        residence, and
                    ``(I) the servicing fees of such loan--
                            ``(i) are allocated from interest payments 
                        made with respect to the loan, and
                            ``(ii) may not--
                                    ``(I) in the case of a neighborhood 
                                revitalization project loan, exceed a 
                                total of 38 basis points, and
                                    ``(II) in the case of any other 
                                loan, when added to such fees of any 
                                other loan secured by the residence, 
                                exceed a total of 63 basis points.
            ``(2) Balloon payment loan.--
                    ``(A) In general.--A loan is described in this 
                paragraph if such loan--
                            ``(i) meets the requirements of 
                        subparagraphs (B) and (C),
                            ``(ii) is for a period of 25 years and, 
                        except as provided in clause (iv), no payment 
                        is due on such loan until the sooner of--
                                    ``(I) the end of such period, or
                                    ``(II) the date on which the 
                                residence which secures the loan is 
                                disposed of,
                            ``(iii) does not prohibit early repayment 
                        of such loan, and
                            ``(iv) requires payment on such loan if the 
                        mortgagor receives any portion of the equity of 
                        such residence as part of a refinancing of any 
                        loan secured by such residence.
                    ``(B) Interest.--Notwithstanding paragraph (1)(G), 
                the rate of interest of the loan is zero percent.
                    ``(C) Servicing fees.--Notwithstanding paragraph 
                (1)(I), there shall be no servicing fees in connection 
                with the loan.
            ``(3) Index of amount.--
                    ``(A) In general.--In the case of a calendar year 
                after 2000, the amounts under subparagraphs (C) and (D) 
                of paragraph (1) shall be increased by an amount equal 
                to--
                            ``(i) such amount, multiplied by
                            ``(ii) the housing price adjustment for 
                        such calendar year.
                    ``(B) Housing price adjustment.--For purposes of 
                subparagraph (A), the housing price adjustment for any 
                calendar year is the percentage (if any) by which--
                            ``(i) the housing price index for the 
                        preceding calendar year, exceeds
                            ``(ii) the housing price index for calendar 
                        year 2000.
                    ``(C) Housing price index.--For purposes of 
                subparagraph (B), the housing price index means the 
                housing price index published by the Federal Housing 
                Finance Board (as established in section 2A of the 
                Federal Home Loan Bank Act (12 U.S.C. 1422a)) for the 
                calendar year.
    ``(d) Mortgagor.--
            ``(1) In general.--A loan meets the requirements of this 
        subsection if it is made to a mortgagor--
                    ``(A) whose family income for the year in which the 
                mortgagor applies for the loan is 80 percent or less of 
                the area median gross income for the area in which the 
                residence which secures the mortgage is located,
                    ``(B) for whom the loan would not result in a 
                housing debt-to-income ratio, with respect to the 
                residence securing the loan, or total debt-to-income 
                ratio which is greater than the guidelines set by the 
                Federal Housing Administration (or any other ratio as 
                determined by the State housing finance agency or 
                lender if such ratio is less than such guidelines), and
                    ``(C) who attends pre-purchase homeownership 
                counseling provided by the qualified lender or the 
                lender's designee.
            ``(2) Determination of family income.--For purposes of this 
        subsection and subsection (h), the family income of a mortgagor 
        and area median gross income shall be determined in accordance 
        with section 143(f)(2).
    ``(e) Residence Requirements.--A loan meets the requirements of 
this subsection if it is secured by a residence that is--
            ``(1) a single-family residence (including a manufactured 
        home (within the meaning of section 25(e)(10))) which is the 
        principal residence (within the meaning of section 121) of the 
        mortgagor, or can reasonably be expected to become the 
        principal residence of the mortgagor within a reasonable time 
        after the financing is provided,
            ``(2) purchased by the mortgagor with a down payment in an 
        amount not less than the lesser of--
                    ``(A) 2 percent of the purchase price, or
                    ``(B) $1,000, and
            ``(3) in the case of a mortgagor with a family income 
        greater than 50 percent of the area median gross income, as 
        determined under subsection (d)(1)(A), not financed in 
        connection with a qualified mortgage issued under section 143.
    ``(f) Definition and Special Rules Relating to Credit Period.--
            ``(1) Credit period defined.--For purposes of this section, 
        the term `credit period' means the period of 10 taxable years 
        beginning with the taxable year in which a home ownership tax 
        credit amount is allocated to the taxpayer.
            ``(2) Special rule for 1st year of credit period.--
                    ``(A) In general.--The credit allowable under 
                subsection (a) with respect to any taxpayer for the 1st 
                taxable year of the credit period shall be determined 
                by substituting for the applicable percentage under 
                subsection (a)(2) the fraction--
                            ``(i) the numerator of which is the sum of 
                        the applicable percentages determined under 
                        subsection (a)(2) as of the close of each full 
                        month of such year, during which the taxpayer 
                        was a qualified lender, and
                            ``(ii) the denominator of which is 12.
                    ``(B) Disallowed 1st year credit allowed in 11th 
                year.--Any reduction by reason of subparagraph (A) in 
                the credit allowable (without regard to subparagraph 
                (A)) for the 1st taxable year of the credit period 
                shall be allowable under subsection (a) for the 1st 
                taxable year following the credit period.
            ``(3) Disposition of home ownership tax credit loans.--If a 
        qualified home ownership tax credit loan is disposed of during 
        any year for which a credit is allowable under subsection (a), 
        such credit shall be allocated between the parties on the basis 
        of the number of days during such year the mortgage was held by 
        each and the portion of the total credit allocated to the 
        qualified lender which is attributable to such mortgage.
    ``(g) Loss of Credit.--If, during the taxable year, a qualified 
home ownership tax credit loan is repaid prior to the expiration of the 
credit period with respect to such loan, the amount of the home 
ownership tax credit attributable to such loan is no longer available 
under subsection (a). For purposes of the preceding sentence, the tax 
credit is allowable for the portion of the year in which such repayment 
occurs for which the loan is outstanding, determined in the same manner 
as provided in subsection (f)(2)(A).
    ``(h) Recapture of Portion of Federal Subsidy From Home-Owner.--
            ``(1) In general.--If, during the taxable year, any 
        taxpayer described in paragraph (3) disposes of an interest in 
        a residence with respect to which a home ownership tax credit 
        amount applies, then the taxpayer's tax imposed by this chapter 
        for such taxable year shall be increased by 50 percent of the 
        gain (if any) on the disposition of such interest.
            ``(2) Exceptions.--Paragraph (1) shall not apply to any 
        disposition--
                    ``(A) by reason of death,
                    ``(B) which is made on a date that is more than 10 
                years after the date on which the qualified home 
                ownership tax credit loan secured by such residence was 
                made, or
                    ``(C) in which the purchaser of the residence 
                assumes the qualified home ownership tax credit loan 
                secured by the residence.
            ``(3) Income limitation.--A taxpayer is described in this 
        paragraph if, on the date of the disposition, the family income 
        of the mortgagor is 115 percent or more of the area median 
        gross income as determined under subsection (d)(1)(A) for the 
        year in which the disposition occurs.
            ``(4) Special rules relating to limitation on recapture 
        amount based on gain realized.--For purposes of this 
        subsection, rules similar to the rules of section 143(m)(6) 
        shall apply.
            ``(5) Lender to inform mortgagor of potential recapture.--
        The qualified lender which makes a qualified home ownership tax 
        credit loan to a mortgagor shall, at the time of settlement, 
        provide a written statement informing the mortgagor of the 
        potential recapture under this subsection.
            ``(6) Special rules.--For purposes of this subsection, 
        rules similar to the rules of section 143(m)(8) shall apply.
    ``(i) Other Definitions.--
            ``(1) Neighborhood revitalization project loan.--
                    ``(A) In general.--The term `neighborhood 
                revitalization project loan' means a loan secured by a 
                second lien on a residence, the proceeds of which are 
                used to substantially improve such residence in 
                connection with a neighborhood revitalization project.
                    ``(B) Neighborhood revitalization project.--The 
                term `neighborhood revitalization project' means a 
                project of sufficient size and scope to alleviate 
                physical deterioration and stimulate investment in--
                            ``(i) a geographic location within the 
                        jurisdiction of a unit of local government (but 
                        not the entire jurisdiction) designated in 
                        comprehensive plans, ordinances, or other 
                        documents as a neighborhood, village, or 
                        similar geographic designation, or
                            ``(ii) the entire jurisdiction of a unit of 
                        local government if the population of such 
                        jurisdiction is not in excess of 25,000.
            ``(2) State.--The term `State' includes a possession of the 
        United States.
            ``(3) State housing finance agency.--The term `State 
        housing finance agency' means the public agency, authority, 
        corporation, or other instrumentality of a State that has the 
        authority to provide residential mortgage loan financing 
        throughout the State.
    ``(j) Certification and Other Reports to the Secretary.--
            ``(1) Certification with respect to state allocation of 
        home ownership tax credits.--The Secretary may, upon a finding 
        of noncompliance, revoke the certification of a qualified State 
        and revoke any qualified home ownership tax credit amounts 
        allocated to such State or allocated by such State to a 
        qualified lender.
            ``(2) Annual report from housing finance agencies.--Each 
        State housing finance agency which allocates any home ownership 
        tax credit amount to any qualified lender for any calendar year 
        shall submit to the Secretary (at such time and in such manner 
        as the Secretary shall prescribe) an annual report specifying--
                    ``(A) the home ownership tax credit amount 
                allocated to each qualified lender for such year, and
                    ``(B) with respect to each qualified lender--
                            ``(i) the principal amount of the aggregate 
                        qualified home ownership tax credit loans made 
                        by such lender in such year and the outstanding 
                        amount of such loans in such year, and
                            ``(ii) the number of qualified home 
                        ownership tax credit loans made by such lender 
                        in such year.
        The penalty under section 6652(j) shall apply to any failure to 
        submit the report required by this paragraph on the date 
        prescribed therefore.
    ``(k) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
section.''.
    (b) Limitation on Carryback of Unused Credit.--Subsection (d) of 
section 39 (relating to carryback and carryforward of unused credits), 
as amended by section 101(b)(2) is amended by adding at the end the 
following:
            ``(10) No carryback of home ownership tax credits before 
        effective date.--No portion of the unused business credit for 
        any taxable year which is attributable to the home ownership 
        tax credit determined under section 45E may be carried back to 
        a taxable year ending before the date of the enactment of 
        section 45E.''.
    (c) Conforming Amendments.--
            (1) Section 38(b), as amended by section 101(b)(1), is 
        amended--
                    (A) by striking ``plus'' at the end of paragraph 
                (12),
                    (B) by striking the period at the end of paragraph 
                (13), and inserting ``, plus'', and
                    (C) by adding at the end the following:
            ``(14) the home ownership tax credit determined under 
        section 45E.''
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1, as amended by section 101(d), is 
        amended by adding at the end the following:

                              ``Sec. 45E. Home ownership tax credit.''
    (d) Effective Date.--The amendments made by this section apply to 
calendar years after 2000.

SEC. 605. TAX CREDIT FOR RENOVATING HISTORIC HOMES.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
(relating to nonrefundable personal credits) is amended by inserting 
after section 25A the following new section:

``SEC. 25B. HISTORIC HOMEOWNERSHIP REHABILITATION CREDIT.

    ``(a) General Rule.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to 20 percent of the qualified 
rehabilitation expenditures made by the taxpayer with respect to a 
qualified historic home.
    ``(b) Dollar Limitation.--The credit allowed by subsection (a) with 
respect to any residence of a taxpayer shall not exceed $20,000 
($10,000 in the case of a married individual filing a separate return).
    ``(c) Qualified Rehabilitation Expenditure.--For purposes of this 
section--
            ``(1) In general.--The term `qualified rehabilitation 
        expenditure' means any amount properly chargeable to capital 
        account--
                    ``(A) in connection with the certified 
                rehabilitation of a qualified historic home, and
                    ``(B) for property for which depreciation would be 
                allowable under section 168 if the qualified historic 
                home were used in a trade or business.
            ``(2) Certain expenditures not included.--
                    ``(A) Exterior.--Such term shall not include any 
                expenditure in connection with the rehabilitation of a 
                building unless at least 5 percent of the total 
                expenditures made in the rehabilitation process are 
                allocable to the rehabilitation of the exterior of such 
                building.
                    ``(B) Other rules to apply.--Rules similar to the 
                rules of clauses (ii) and (iii) of section 47(c)(2)(B) 
                shall apply.
            ``(3) Mixed use or multifamily building.--If only a portion 
        of a building is used as the principal residence of the 
        taxpayer, only qualified rehabilitation expenditures which are 
        properly allocable to such portion shall be taken into account 
        under this section.
    ``(d) Certified Rehabilitation.--For purposes of this section:
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `certified rehabilitation' has the meaning 
        given such term by section 47(c)(2)(C).
            ``(2) Factors to be considered in the case of targeted area 
        residences, etc.--
                    ``(A) In general.--For purposes of applying section 
                47(c)(2)(C) under this section with respect to the 
                rehabilitation of a building to which this paragraph 
                applies, consideration shall be given to--
                            ``(i) the feasibility of preserving 
                        existing architectural and design elements of 
                        the interior of such building,
                            ``(ii) the risk of further deterioration or 
                        demolition of such building in the event that 
                        certification is denied because of the failure 
                        to preserve such interior elements, and
                            ``(iii) the effects of such deterioration 
                        or demolition on neighboring historic 
                        properties.
                    ``(B) Buildings to which this paragraph applies.--
                This paragraph shall apply with respect to any 
                building--
                            ``(i) any part of which is a targeted area 
                        residence within the meaning of section 
                        143(j)(1), or
                            ``(ii) which is located within an 
                        enterprise community or empowerment zone as 
                        designated under section 1391,
                but shall not apply with respect to any building which 
                is listed in the National Register.
            ``(3) Approved state program.--The term `certified 
        rehabilitation' includes a certification made by--
                    ``(A) a State Historic Preservation Officer who 
                administers a State Historic Preservation Program 
                approved by the Secretary of the Interior pursuant to 
                section 101(b)(1) of the National Historic Preservation 
                Act, as in effect on the date of the enactment of this 
                section, or
                    ``(B) a local government, certified pursuant to 
                section 101(c)(1) of the National Historic Preservation 
                Act, as in effect on the date of the enactment of this 
                section, and authorized by a State Historic 
                Preservation Officer, or the Secretary of the Interior 
                where there is no approved State program),
        subject to such terms and conditions as may be specified by the 
        Secretary of the Interior for the rehabilitation of buildings 
        within the jurisdiction of such officer (or local government) 
        for purposes of this section.
    ``(e) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified historic home.--The term `qualified 
        historic home' means a certified historic structure--
                    ``(A) which has been substantially rehabilitated, 
                and
                    ``(B) which (or any portion of which)--
                            ``(i) is owned by the taxpayer, and
                            ``(ii) is used (or will, within a 
                        reasonable period, be used) by such taxpayer as 
                        his principal residence.
            ``(2) Substantially rehabilitated.--The term `substantially 
        rehabilitated' has the meaning given such term by section 
        47(c)(1)(C); except that, in the case of any building described 
        in subsection (d)(2), clause (i)(I) thereof shall not apply.
            ``(3) Principal residence.--The term `principal residence' 
        has the same meaning as when used in section 121.
            ``(4) Certified historic structure.--
                    ``(A) In general.--The term `certified historic 
                structure' means any building (and its structural 
                components) which--
                            ``(i) is listed in the National Register, 
                        or
                            ``(ii) is located in a registered historic 
                        district (as defined in section 47(c)(3)(B)) 
                        within which only qualified census tracts (or 
                        portions thereof) are located, and is certified 
                        by the Secretary of the Interior to the 
                        Secretary as being of historic significance to 
                        the district.
                    ``(B) Certain structures included.--Such term 
                includes any building (and its structural components) 
                which is designated as being of historic significance 
                under a statute of a State or local government, if such 
                statute is certified by the Secretary of the Interior 
                to the Secretary as containing criteria which will 
                substantially achieve the purpose of preserving and 
                rehabilitating buildings of historic significance.
                    ``(C) Qualified census tracts.--For purposes of 
                subparagraph (A)(ii)--
                            ``(i) In general.--The term `qualified 
                        census tract' means a census tract in which the 
                        median family income is less than twice the 
                        statewide median family income.
                            ``(ii) Data used.--The determination under 
                        clause (i) shall be made on the basis of the 
                        most recent decennial census for which data are 
                        available.
            ``(5) Rehabilitation not complete before certification.--A 
        rehabilitation shall not be treated as complete before the date 
        of the certification referred to in subsection (d).
            ``(6) Lessees.--A taxpayer who leases his principal 
        residence shall, for purposes of this section, be treated as 
        the owner thereof if the remaining term of the lease (as of the 
        date determined under regulations prescribed by the Secretary) 
        is not less than such minimum period as the regulations 
        require.
            ``(7) Tenant-stockholder in cooperative housing 
        corporation.--If the taxpayer holds stock as a tenant-
        stockholder (as defined in section 216) in a cooperative 
        housing corporation (as defined in such section), such 
        stockholder shall be treated as owning the house or apartment 
        which the taxpayer is entitled to occupy as such stockholder.
            ``(8) Allocation of expenditures relating to exterior of 
        building containing cooperative or condominium units.--The 
        percentage of the total expenditures made in the rehabilitation 
        of a building containing cooperative or condominium residential 
        units allocated to the rehabilitation of the exterior of the 
        building shall be attributed proportionately to each 
        cooperative or condominium residential unit in such building 
        for which a credit under this section is claimed.
    ``(f) When Expenditures Taken Into Account.--In the case of a 
building other than a building to which subsection (g) applies, 
qualified rehabilitation expenditures shall be treated for purposes of 
this section as made on the date the rehabilitation is completed.
    ``(g) Allowance of Credit for Purchase of Rehabilitated Historic 
Home.--
            ``(1) In general.--In the case of a qualified purchased 
        historic home, the taxpayer shall be treated as having made (on 
        the date of purchase) the qualified rehabilitation expenditures 
        made by the seller of such home. For purposes of the preceding 
        sentence, expenditures made by the seller shall be deemed to be 
        qualified rehabilitation expenditures if such expenditures, if 
        made by the purchaser, would be qualified rehabilitation 
        expenditures.
            ``(2) Qualified purchased historic home.--For purposes of 
        this subsection, the term `qualified purchased historic home' 
        means any substantially rehabilitated certified historic 
        structure purchased by the taxpayer if--
                    ``(A) the taxpayer is the first purchaser of such 
                structure after the date rehabilitation is completed, 
                and the purchase occurs within 5 years after such date,
                    ``(B) the structure (or a portion thereof) will, 
                within a reasonable period, be the principal residence 
                of the taxpayer,
                    ``(C) no credit was allowed to the seller under 
                this section or section 47 with respect to such 
                rehabilitation, and
                    ``(D) the taxpayer is furnished with such 
                information as the Secretary determines is necessary to 
                determine the credit under this subsection.
    ``(h) Historic Rehabilitation Mortgage Credit Certificate.--
            ``(1) In general.--The taxpayer may elect, in lieu of the 
        credit otherwise allowable under this section, to receive a 
        historic rehabilitation mortgage credit certificate. An 
        election under this paragraph shall be made--
                    ``(A) in the case of a building to which subsection 
                (g) applies, at the time of purchase, or
                    ``(B) in any other case, at the time rehabilitation 
                is completed.
            ``(2) Historic rehabilitation mortgage credit 
        certificate.--For purposes of this subsection, the term 
        `historic rehabilitation mortgage credit certificate' means a 
        certificate--
                    ``(A) issued to the taxpayer, in accordance with 
                procedures prescribed by the Secretary, with respect to 
                a certified rehabilitation,
                    ``(B) the face amount of which shall be equal to 
                the credit which would (but for this subsection) be 
                allowable under subsection (a) to the taxpayer with 
                respect to such rehabilitation,
                    ``(C) which may only be transferred by the taxpayer 
                to a lending institution (including a non-depository 
                institution) in connection with a loan--
                            ``(i) that is secured by the building with 
                        respect to which the credit relates, and
                            ``(ii) the proceeds of which may not be 
                        used for any purpose other than the acquisition 
                        or rehabilitation of such building, and
                    ``(D) in exchange for which such lending 
                institution provides the taxpayer--
                            ``(i) a reduction in the rate of interest 
                        on the loan which results in interest payment 
                        reductions which are substantially equivalent 
                        on a present value basis to the face amount of 
                        such certificate, or
                            ``(ii) if the taxpayer so elects with 
                        respect to a specified amount of the face 
                        amount of such a certificate relating to a 
                        building--
                                    ``(I) which is a targeted area 
                                residence within the meaning of section 
                                143(j)(1), or
                                    ``(II) which is located in an 
                                enterprise community or empowerment 
                                zone as designated under section 1391,
                        a payment which is substantially equivalent to 
                        such specified amount to be used to reduce the 
                        taxpayer's cost of purchasing the building (and 
                        only the remainder of such face amount shall be 
                        taken into account under clause (i)).
            ``(3) Method of discounting.--The present value under 
        paragraph (2)(D)(i) shall be determined--
                    ``(A) for a period equal to the term of the loan 
                referred to in subparagraph (D)(i),
                    ``(B) by using the convention that any payment on 
                such loan in any taxable year within such period is 
                deemed to have been made on the last day of such 
                taxable year,
                    ``(C) by using a discount rate equal to 65 percent 
                of the average of the annual Federal mid-term rate and 
                the annual Federal long-term rate applicable under 
                section 1274(d)(1) to the month in which the taxpayer 
                makes an election under paragraph (1) and compounded 
                annually, and
                    ``(D) by assuming that the credit allowable under 
                this section for any year is received on the last day 
                of such year.
            ``(4) Use of certificate by lender.--The amount of the 
        credit specified in the certificate shall be allowed to the 
        lender only to offset the regular tax (as defined in section 
        55(c)) of such lender. The lender may carry forward all unused 
        amounts under this subsection until exhausted.
            ``(5) Historic rehabilitation mortgage credit certificate 
        not treated as taxable income.--Notwithstanding any other 
        provision of law, no benefit accruing to the taxpayer through 
        the use of an historic rehabilitation mortgage credit 
        certificate shall be treated as taxable income for purposes of 
        this title.
    ``(i) Recapture.--
            ``(1) In general.--If, before the end of the 5-year period 
        beginning on the date on which the rehabilitation of the 
        building is completed (or, if subsection (g) applies, the date 
        of purchase of such building by the taxpayer, or, if subsection 
        (h) applies, the date of the loan)--
                    ``(A) the taxpayer disposes of such taxpayer's 
                interest in such building, or
                    ``(B) such building ceases to be used as the 
                principal residence of the taxpayer,
        the taxpayer's tax imposed by this chapter for the taxable year 
        in which such disposition or cessation occurs shall be 
        increased by the recapture percentage of the credit allowed 
        under this section for all prior taxable years with respect to 
        such rehabilitation.
            ``(2) Recapture percentage.--For purposes of paragraph (1), 
        the recapture percentage shall be determined in accordance with 
        the following table:

``If the disposition or cessation   The recapture percentage is--
        occurs within--
    (i) One full year after the taxpayer becomes                   100 
        entitled to the credit.
    (ii) One full year after the close of the                       80 
        period described in clause (i).
    (iii) One full year after the close of the                      60 
        period described in clause (ii).
    (iv) One full year after the close of the                       40 
        period described in clause (iii).
    (v) One full year after the close of the                        20.
        period described in clause (iv).
    ``(j) Basis Adjustments.--For purposes of this subtitle, if a 
credit is allowed under this section for any expenditure with respect 
to any property (including any purchase under subsection (g) and any 
transfer under subsection (h)), the increase in the basis of such 
property which would (but for this subsection) result from such 
expenditure shall be reduced by the amount of the credit so allowed.
    ``(k) Denial of Double Benefit.--No credit shall be allowed under 
this section for any amount for which credit is allowed under section 
47.
    ``(l) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out the purposes of this section, 
including regulations where less than all of a building is used as a 
principal residence and where more than 1 taxpayer use the same 
dwelling unit as their principal residence.''.
    (b) Conforming Amendment.--Subsection (a) of section 1016 is 
amended by striking ``and'' at the end of paragraph (26), by striking 
the period at the end of paragraph (27) and inserting ``, and'', and by 
adding at the end the following new item:
            ``(28) to the extent provided in section 25B(j).''.
    (c) Clerical Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 is amended by inserting after the 
item relating to section 25A the following new item:

                              ``Sec. 25B. Historic homeownership 
                                        rehabilitation credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred in taxable years beginning after 
December 31, 2000.

SEC. 606. TRANSFER OF UNOCCUPIED AND SUBSTANDARD HUD-HELD HOUSING TO 
              LOCAL GOVERNMENTS AND COMMUNITY DEVELOPMENT CORPORATIONS.

    Section 204 of the Departments of Veterans Affairs and Housing and 
Urban Development, and Independent Agencies Appropriations Act, 1997 
(12 U.S.C. 1715z-11a) is amended--
            (1) by striking ``Flexible Authority.--'' and inserting 
        ``Disposition of HUD-Owned Properties. (a) Flexible Authority 
        for Multifamily Projects.--''; and
            (2) by adding at the end the following new subsection:
    ``(b) Transfer of Unoccupied and Substandard Housing to Local 
Governments and Community Development Corporations.--
            ``(1) Transfer authority.--Notwithstanding the authority 
        under subsection (a) and the last sentence of section 204(g) of 
        the National Housing Act (12 U.S.C. 1710(g)), the Secretary of 
        Housing and Urban Development shall transfer ownership of any 
        qualified HUD property, subject to the requirements of this 
        section, to a unit of general local government having 
        jurisdiction for the area in which the property is located or 
        to a community development corporation which operates within 
        such a unit of general local government in accordance with this 
        subsection, but only to the extent that units of general local 
        government and community development corporations consent to 
        transfer and the Secretary determines that such transfer is 
        practicable.
            ``(2) Qualified hud properties.--For purposes of this 
        subsection, the term `qualified HUD property' means any 
        property for which, as of the date that notification of the 
        property is first made under paragraph (3)(B), not less than 6 
        months have elapsed since the later of the date that the 
property was acquired by the Secretary or the date that the property 
was determined to be unoccupied or substandard, that is owned by the 
Secretary and is--
                    ``(A) an unoccupied multifamily housing project;
                    ``(B) a substandard multifamily housing project; or
                    ``(C) an unoccupied single family property that--
                            ``(i) has been determined by the Secretary 
                        not to be an eligible asset under section 
                        204(h) of the National Housing Act (12 U.S.C. 
                        1710(h)); or
                            ``(ii) is an eligible asset under such 
                        section 204(h), but--
                                    ``(I) is not subject to a specific 
                                sale agreement under such section; and
                                    ``(II) has been determined by the 
                                Secretary to be inappropriate for 
                                continued inclusion in the program 
                                under such section 204(h) pursuant to 
                                paragraph (10) of such section.
            ``(3) Timing.--The Secretary shall establish procedures 
        that provide for--
                    ``(A) time deadlines for transfers under this 
                subsection;
                    ``(B) notification to units of general local 
                government and community development corporations of 
                qualified HUD properties in their jurisdictions;
                    ``(C) such units and corporations to express 
                interest in the transfer under this subsection of such 
                properties;
                    ``(D) a right of first refusal for transfer of 
                qualified HUD properties to units of general local 
                government and community development corporations, 
                under which--
                            ``(i) the Secretary shall establish a 
                        period during which the Secretary may not 
                        transfer such properties except to such units 
                        and corporations;
                            ``(ii) the Secretary shall offer qualified 
                        HUD properties that are single family 
                        properties for purchase by units of general 
                        local government at a cost of $1 for each 
                        property, but only to the extent that the costs 
                        to the Federal Government of disposal at such 
                        price do not exceed the costs to the Federal 
                        Government of disposing of property subject to 
                        the procedures for single family property 
                        established by the Secretary pursuant to the 
                        authority under the last sentence of section 
                        204(g) of the National Housing Act (12 U.S.C. 
                        1710(g));
                            ``(iii) the Secretary may accept an offer 
                        to purchase a property made by a community 
                        development corporation only if the offer 
                        provides for purchase on a cost recovery basis; 
                        and
                            ``(iv) the Secretary shall accept an offer 
                        to purchase such a property that is made during 
                        such period by such a unit or corporation and 
                        that complies with the requirements of this 
                        paragraph;
                    ``(E) a written explanation, to any unit of general 
                local government or community development corporation 
                making an offer to purchase a qualified HUD property 
                under this subsection that is not accepted, of the 
                reason that such offer was not acceptable.
            ``(4) Other disposition.--With respect to any qualified HUD 
        property, if the Secretary does not receive an acceptable offer 
        to purchase the property pursuant to the procedure established 
        under paragraph (3), the Secretary shall dispose of the 
        property to the unit of general local government in which 
        property is located or to community development corporations 
        located in such unit of general local government on a 
        negotiated, competitive bid, or other basis, on such terms as 
        the Secretary deems appropriate.
            ``(5) Satisfaction of indebtedness.--Before transferring 
        ownership of any qualified HUD property pursuant to this 
        subsection, the Secretary shall satisfy any indebtedness 
        incurred in connection with the property to be transferred, by 
        canceling the indebtedness.
            ``(6) Determination of status of properties.--To ensure 
        compliance with the requirements of this subsection, the 
        Secretary shall take the following actions:
                    ``(A) Upon enactment.--Upon the enactment of this 
                subsection, the Secretary shall promptly assess each 
                residential property owned by the Secretary to 
                determine whether such property is a qualified HUD 
                property.
                    ``(B) Upon acquisition.--Upon acquiring any 
                residential property, the Secretary shall promptly 
                determine whether the property is a qualified HUD 
                property.
                    ``(C) Updates.--The Secretary shall periodically 
                reassess the residential properties owned by the 
                Secretary to determine whether any such properties have 
                become qualified HUD properties.
            ``(7) Tenant leases.--This subsection shall not affect the 
        terms or the enforceability of any contract or lease entered 
        into with respect to any residential property before the date 
        that such property becomes a qualified HUD property.
            ``(8) Use of property.--Property transferred under this 
        subsection shall be used only for appropriate neighborhood 
        revitalization efforts, including homeownership, rental units, 
        commercial space, and parks, consistent with local zoning 
        regulations, local building codes, and subdivision regulations 
        and restrictions of record.
            ``(9) Inapplicability to properties made available for 
        homeless.--Notwithstanding any other provision of this 
        subsection, this subsection shall not apply to any properties 
        that the Secretary determines are to be made available for use 
        by the homeless pursuant to subpart E of part 291 of title 24, 
Code of Federal Regulations, during the period that the properties are 
so available.
            ``(10) Protection of existing contracts.--This subsection 
        may not be construed to alter, affect, or annul any legally 
        binding obligations entered into with respect to a qualified 
        HUD property before the property becomes a qualified HUD 
        property.
            ``(11) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Community development corporation.--The term 
                `community development corporation' means a nonprofit 
                organization whose primary purpose is to promote 
                community development by providing housing 
                opportunities for low-income families.
                    ``(B) Cost recovery basis.--The term `cost recovery 
                basis' means, with respect to any sale of a residential 
                property by the Secretary, that the purchase price paid 
                by the purchaser is equal to or greater than the sum of 
                (i) the appraised value of the property, as determined 
                in accordance with such requirements as the Secretary 
                shall establish, and (ii) the costs incurred by the 
                Secretary in connection with such property during the 
                period beginning on the date on which the Secretary 
                acquires title to the property and ending on the date 
                on which the sale is consummated.
                    ``(C) Multifamily housing project.--The term 
                `multifamily housing project' has the meaning given the 
                term in section 203 of the Housing and Community 
                Development Amendments of 1978.
                    ``(D) Residential property.--The term `residential 
                property' means a property that is a multifamily 
                housing project or a single family property.
                    ``(E) Secretary.--The term `Secretary' means the 
                Secretary of Housing and Urban Development.
                    ``(F) Severe physical problems.--The term `severe 
                physical problems' means, with respect to a dwelling 
                unit, that the unit--
                            ``(i) lacks hot or cold piped water, a 
                        flush toilet, or both a bathtub and a shower in 
                        the unit, for the exclusive use of that unit;
                            ``(ii) on not less than three separate 
                        occasions during the preceding winter months, 
                        was uncomfortably cold for a period of more 
                        than 6 consecutive hours due to a malfunction 
                        of the heating system for the unit;
                            ``(iii) has no functioning electrical 
                        service, exposed wiring, any room in which 
                        there is not a functioning electrical outlet, 
                        or has experienced three or more blown fuses or 
                        tripped circuit breakers during the preceding 
                        90-day period;
                            ``(iv) is accessible through a public 
                        hallway in which there are no working light 
                        fixtures, loose or missing steps or railings, 
                        and no elevator; or
                            ``(v) has severe maintenance problems, 
                        including water leaks involving the roof, 
                        windows, doors, basement, or pipes or plumbing 
                        fixtures, holes or open cracks in walls or 
                        ceilings, severe paint peeling or broken 
                        plaster, and signs of rodent infestation.
                    ``(G) Single family property.--The term `single 
                family property' means a 1- to 4-family residence.
                    ``(H) Substandard.--The term `substandard' means, 
                with respect to a multifamily housing project, that 25 
                percent or more of the dwelling units in the project 
                have severe physical problems.
                    ``(I) Unit of general local government.--The term 
                `unit of general local government' has the meaning 
                given such term in section 102(a) of the Housing and 
                Community Development Act of 1974.
                    ``(J) Unoccupied.--The term `unoccupied' means, 
                with respect to a residential property, that the unit 
                of general local government having jurisdiction over 
                the area in which the project is located has certified 
                in writing that the property is not inhabited.
            ``(12) Regulations.--
                    ``(A) Interim.--Not later than 30 days after the 
                date of the enactment of this subsection, the Secretary 
                shall issue such interim regulations as are necessary 
                to carry out this subsection.
                    ``(B) Final.--Not later than 60 days after the date 
                of the enactment of this subsection, the Secretary 
                shall issue such final regulations as are necessary to 
                carry out this subsection.''.

SEC. 607. TRANSFER OF HUD ASSETS IN REVITALIZATION AREAS.

    In carrying out the program under section 204(h) of the National 
Housing Act (12 U.S.C. 1710(h)), upon the request of the chief 
executive officer of a county or the government of appropriate 
jurisdiction and not later than 60 days after such request is made, the 
Secretary of Housing and Urban Development shall designate as a 
revitalization area all portions of such county that meet the criteria 
for such designation under paragraph (3) of such section.

SEC. 608. RISK-SHARING DEMONSTRATION.

    Section 249 of the National Housing Act (12 U.S.C. 1715z-14) is 
amended--
            (1) by striking the section heading and inserting the 
        following:

                    ``risk-sharing demonstration'';

            (2) by striking ``reinsurance'' each place such term 
        appears and insert ``risk-sharing'';
            (3) in subsection (a)--
                    (A) in the first sentence, by inserting ``and 
                insured community development financial institutions'' 
                after ``private mortgage insurers'';
                    (B) in the second sentence--
                            (i) by striking ``two'' and inserting 
                        ``4''; and
                            (ii) by striking ``March 15, 1988'' and 
                        inserting ``the expiration of the 5-year period 
                        beginning on the date of the enactment of the 
                        Creating New Markets and Empowering America Act 
                        of 2000''; and
                    (C) in the last sentence, by striking ``10 
                percent'' and inserting ``20 percent'';
            (4) in subsection (b)--
                    (A) in the first sentence, by inserting ``and with 
                insured community development financial institutions'' 
                before the period at the end;
                    (B) in the first sentence, by striking ``which have 
                been determined to be qualified insurers under section 
                302(b)(2)(C)'';
                    (C) in the second sentence, by inserting ``and 
                insured community development financial institutions'' 
                after ``private mortgage insurance companies'';
                    (D) by striking paragraph (1) and inserting the 
                following new paragraph:
            ``(1) assume the first loss on any mortgage insured 
        pursuant to section 203(b), 234, or 245 that covers a one- to 
        four-family dwelling and is included in the program under this 
        section, up to the percentage of loss that is set forth in the 
        risk-sharing contract;''; and
                    (E) in paragraph (2)--
                            (i) by striking ``carry out (under 
                        appropriate delegation) such'' and inserting 
                        ``delegate underwriting,''; and
                            (ii) by striking ``function'' and inserting 
                        ``functions'';
            (5) in subsection (c)--
                    (A) in the first sentence--
                            (i) by striking ``of'' the first place it 
                        appears and insert ``for'';
                            (ii) by striking ``insurance reserves'' and 
                        inserting ``loss reserves''; and
                            (iii) by striking ``such insurance'' and 
                        inserting ``such reserves''; and
                    (B) in the second sentence, by inserting ``or 
                insured community development financial institution'' 
                after ``private mortgage insurance company'';
            (6) in subsection (d), by inserting ``or insured community 
        development financial institution'' after ``private mortgage 
        insurance company''; and
            (7) by adding at the end the following new subsection:
    ``(e) Insured Community Development Financial Institutions.--For 
purposes of this section, the term `insured community development 
financial institution' means a community development financial 
institution, as such term is defined in section 103 of Reigle Community 
Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4702) 
that is an insured depository institution (as such term is defined in 
section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) or an 
insured credit union (as such term is defined in section 101 of the 
Federal Credit Union Act (12 U.S.C. 1752)).''.

              TITLE VII--TRADE-AFFECTED COMMUNITIES RELIEF

SEC. 701. DEFINITIONS.

    In this title:
            (1) NAFTA.--The term ``NAFTA'' means the North American 
        Free Trade Agreement entered into between the United States, 
        Mexico, and Canada on December 17, 1992.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Commerce.
            (3) Trade-affected community.--The term ``trade-affected 
        community'' means a political subdivision of a State that meets 
        the trade adjustment assistance requirements.
            (4) Trade adjustment assistance requirements.--The term 
        ``trade adjustment assistance requirements'' means--
                    (A) in the case of a political subdivision with a 
                population of not more than 100,000, at least 300 
                workers have been certified after November 1, 1999, as 
                eligible for--
                            (i) trade adjustment assistance under 
                        subchapter A of chapter II of the Trade Act of 
                        1974 (19 U.S.C. 2271 et seq.); or
                            (ii) NAFTA trade adjustment assistance 
                        under subchapter D of chapter 2 of title II of 
                        the Trade Act of 1974 (19 U.S.C. 2331); and
                    (B) in the case of a political subdivision with a 
                population of over 100,000, at least 500 workers have 
                been certified after November 1, 1999, as eligible 
                for--
                            (i) trade adjustment assistance under 
                        subchapter A of chapter II of the Trade Act of 
                        1974 (19 U.S.C. 2271 et seq.); or
                            (ii) NAFTA trade adjustment assistance 
                        under subchapter D of chapter 2 of title II of 
                        the Trade Act of 1974.

SEC. 702. PETITIONS AND DETERMINATIONS.

    (a) In General.--A petition for certification for assistance under 
this title may be filed with the Secretary by a political subdivision 
(in this title referred to as a ``community''), by a group of such 
communities, or by the Governor of a State on behalf of such 
communities.
    (b) Certification.--As soon as practicable after the date on which 
a petition described in subsection (a) is filed, the Secretary shall 
determine if the community (or group of communities) filing the 
petition meets the requirements of a trade-affected community and shall 
certify the community as eligible for assistance under this title if 
the Secretary determines that the community is a trade-affected 
community.

SEC. 703. GRANTS FOR ECONOMIC DEVELOPMENT.

    (a) Grants To Develop Economic Plans.--Each community that is 
certified as a trade-affected community under this title shall receive 
a grant of not more than $100,000 to be used for planning and technical 
assistance to develop economic plans for community adjustment 
assistance and diversification of such community. The amount of the 
grant shall be determined by the Secretary.
    (b) Grants To Carry Out Economic Development Activities.--Each 
community that is certified as a trade-affected community under this 
title shall be eligible to file an application with the Secretary for 
adjustment assistance to make the following improvements in the 
community based on the economic plan developed under subsection (a):
            (1) Construct or expand the industrial and commercial 
        infrastructure.
            (2) Improve educational opportunities.
            (3) Construct advanced manufacturing centers, industrial 
        parks, and water and sewer facilities.
            (4) Improve transportation.
            (5) Establish small business incubators.
            (6) Make technology infrastructure improvements.
            (7) Take such other action as necessary to capitalize on 
        opportunities to diversify the economy and develop new 
        industrial and commercial ventures.
    (c) Regulations.--The Secretary shall prescribe such regulations as 
are necessary to carry out the provisions of this section.

SEC. 704. PROVIDE INCENTIVES FOR NEW INVESTMENTS FOR TRADE-AFFECTED 
              COMMUNITIES.

    (a) Expansion of Work Opportunity Credit.--
            (1) In general.--Section 51(d)(1) (relating to members of 
        targeted groups) is amended by striking ``or'' at the end of 
        subparagraph (G), by striking the period at the end of 
        subparagraph (H) and inserting ``, or'', and by adding at the 
        end the following:
                    ``(I) an adversely affected individual.''
            (2) Adversely affected individual.--Section 51(d) is 
        amended by redesignating paragraphs (10) through (12) as 
        paragraphs (11) through (13), respectively, and by inserting 
        after paragraph (9) the following:
            ``(10) Adversely affected individual.--The term `adversely 
        affected individual' means any individual who is certified by 
        the designated local agency as being adversely affected by 
        trade-related activities and as residing in a trade-affected 
        community as defined in section 701(2) of the Creating New 
        Markets and Empowering America Act of 2000.''
            (3) Effective date.--The amendments made by this subsection 
        shall apply to individuals who begin work for the employer 
        after the date of enactment of this Act.
    (b) Extension of New Markets Tax Credit.--
            (1) In general.--Section 45D(e)(1) (defining low-income 
        community), as added by section 101(a), is amended to read as 
        follows:
            ``(1) In general.--The term `low-income community' means--
                    ``(A) any population census tract if--
                            ``(i) the poverty rate for such tract is at 
                        least 20 percent,
                            ``(ii)(I) in the case of a tract not 
                        located within a metropolitan area, the median 
                        family income for such tract does not exceed 80 
                        percent of statewide median family income, or
                            ``(II) in the case of a tract located 
                        within a metropolitan area, the median family 
                        income for such tract does not exceed 80 
                        percent of the greater of statewide median 
                        family income or the metropolitan area median 
                        family income, or
                    ``(B) any trade-affected community as defined in 
                section 701(2) of the Creating New Markets and 
                Empowering America Act of 2000.''
            (2) Effective date.--The amendments made by this subsection 
        shall apply to investments made after December 31, 2000.

SEC. 705. CENTRAL CLEARINGHOUSE FOR ECONOMIC DEVELOPMENT.

    (a) In General.--The Secretary shall establish a one-stop 
clearinghouse for States and political subdivisions of States to obtain 
information regarding assistance available for trade-affected 
communities. The clearinghouse should be easily accessible and contain 
information regarding grants, low-interest loans, and other types of 
economic development assistance available from government resources for 
trade-affected communities.
    (b) Notification by Department of Labor.--Not later than 15 days 
after the date that a political subdivision meets the trade adjustment 
assistance requirements defined in section 701(4), the Secretary of 
Labor shall notify the Secretary. The Secretary shall notify each such 
political subdivision that the subdivision is eligible to receive a 
grant described in section 703 (a) and (b), that the clearinghouse 
established pursuant to subsection (a) exists, and how to access 
clearinghouse information.

SEC. 706. APPROPRIATIONS.

    There is authorized to be appropriated for fiscal year 2001, and 
each fiscal year thereafter, $30,000,000 for the grants described in 
section 703(a) and $200,000,000 for the grants described in section 
703(b).

SEC. 707. SUPPLEMENT NOT SUPPLANT.

    Funds appropriated pursuant to the authority of this title shall be 
used to supplement and not supplant other Federal, State, and local 
public funds expended to provide economic development assistance for 
communities.

SEC. 708. REGULATIONS.

    The Secretary may promulgate such regulations as may be necessary 
to carry out the provisions of this title.

                  TITLE VIII--DELTA REGIONAL AUTHORITY

SEC. 801. DELTA REGIONAL AUTHORITY.

    The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et 
seq.) is amended by adding at the end the following:

                 ``Subtitle F--Delta Regional Authority

``SEC. 382A. DEFINITIONS.

    ``In this subtitle:
            ``(1) Authority.--The term `Authority' means the Delta 
        Regional Authority established by section 382B.
            ``(2) Region.--The term `region' means areas in the States 
        of Arkansas, Illinois, Kentucky, Louisiana, Mississippi, 
        Missouri, and Tennessee, as defined under section 4 of the 
        Lower Mississippi Delta Development Act (Public Law 100-460; 42 
U.S.C. 3121 note).
            ``(3) Federal grant program.--The term `Federal grant 
        program' means a Federal grant program to provide assistance 
        in--
                    ``(A) acquiring or developing land;
                    ``(B) constructing or equipping a facility; or
                    ``(C) carrying out other community or economic 
                development or economic adjustment activities.

``SEC. 382B. DELTA REGIONAL AUTHORITY.

    ``(a) Establishment.--
            ``(1) In general.--There is established the Delta Regional 
        Authority.
            ``(2) Composition.--The Authority shall be composed of--
                    ``(A) a Federal member, to be appointed by the 
                President, with the advice and consent of the Senate; 
                and
                    ``(B) the Governor (or a designee of the Governor) 
                of each State in the region that elects to participate 
                in the Authority.
            ``(3) Cochairpersons.--The Authority shall be headed by 2 
        cochairpersons, which shall be--
                    ``(A) the Federal member, who shall serve--
                            ``(i) as the Federal cochairperson; and
                            ``(ii) as a liaison between the Federal 
                        Government and the Authority; and
                    ``(B) a State cochairperson, who--
                            ``(i) shall be a Governor of a 
                        participating State in the region; and
                            ``(ii) shall be elected by the State 
                        members for a term of not less than 1 year.
    ``(b) Alternate Members.--
            ``(1) State alternates.--Each State member may have a 
        single alternate, appointed by the Governor from among the 
        members of the cabinet or the personal staff of the Governor.
            ``(2) Alternate federal cochairperson.--The President shall 
        appoint an alternate Federal cochairperson.
            ``(3) Quorum.--A State alternate shall not be counted 
        toward the establishment of a quorum of the Authority in any 
        instance in which a quorum of the State members is required to 
        be present.
            ``(4) Delegation of power.--No power or responsibility of 
        the Authority specified in paragraphs (2) and (3) of subsection 
        (b), and no voting right of any Authority member, shall be 
        delegated to any person--
                    ``(A) who is not a Authority member; or
                    ``(B) who is not entitled to vote in Authority 
                meetings.
    ``(c) Voting.--
            ``(1) In general.--Except as provided in section 382I(d), 
        decisions by the Authority shall require the affirmative vote 
        of the Federal cochairperson and of a majority of the State 
        members (not including a member representing a State that is 
        delinquent under subsection (g)(2)(C).
            ``(2) Quorum.--A quorum of State members shall be required 
        to be present for the Authority to make any policy decision, 
        including--
                    ``(A) a modification or revision of a Authority 
                policy decision;
                    ``(B) approval of a State or regional development 
                plan; and
                    ``(C) any allocation of funds among the States.
            ``(3) Project and grant proposals.--The approval of project 
        and grant proposals shall be--
                    ``(A) a responsibility of the Authority; and
                    ``(B) conducted in accordance with section 382I.
            ``(4) Voting by alternate members.--An alternate member 
        shall vote in the case of the absence, death, disability, 
        removal, or resignation of the State or Federal representative 
        for which the alternate member is an alternate.
    ``(d) Duties.--The Authority shall--
            ``(1) develop, on a continuing basis, comprehensive and 
        coordinated plans and programs to establish priorities and 
        approve grants for the economic development of the region, 
        giving due consideration to other Federal, State, and local 
        planning and development activities in the region;
            ``(2) not later than 220 days after the date of enactment 
        of this subtitle, establish priorities in a development plan 
        for the region (including 5-year regional outcome targets);
            ``(3) provide for an understanding of the needs and assets 
        of the region through research, demonstration, investigation, 
        assessment, and evaluation of the region, in cooperation with 
        Federal, State, and local agencies, universities, local 
        development districts, and other nonprofit groups, as 
        appropriate;
            ``(4) review and study, in cooperation with the appropriate 
        agencies, Federal, State, and local public and private programs 
        in the region;
            ``(5) recommend any modification or addition to a program 
        described in paragraph (4) that could increase the 
        effectiveness of the program;
            ``(6) formulate and recommend interstate compacts and other 
        forms of interstate cooperation;
            ``(7) work with State and local agencies in developing 
        appropriate model legislation;
            ``(8) encourage the formation of, build the capacity of, 
        and provide support for, local development districts in the 
        region;
            ``(9) encourage private investment in industrial, 
        commercial, and other economic development projects in the 
        region;
            ``(10) serve as a focal point and coordinating unit for 
        region programs;
            ``(11) provide a forum for consideration of problems of the 
        region and proposed solutions for those problems; and
            ``(12) establish and involve citizens, special advisory 
        councils, and public conferences to consider and resolve issues 
        concerning the region.
    ``(e) Information.--In carrying out the duties of the Authority 
under subsection (d), the Authority may--
            ``(1) hold such hearings, sit and act at such times and 
        places, take such testimony, receive such evidence, and print 
        or otherwise reproduce and distribute the proceedings and 
        reports on actions by the Authority as the Authority considers 
        appropriate;
            ``(2) authorize, through the Federal or State 
        cochairperson, or any other member of the Authority designated 
        by the Authority, the administration of oaths if the Authority 
        determines that testimony shall be taken or evidence shall be 
        received under oath; and
            ``(3) arrange for the head of any Federal, State, or local 
        department or agency to furnish to the Authority such 
        information as may be available to or procurable by the 
        department or agency;
            ``(4) adopt, amend, and repeal bylaws and rules governing 
        the conduct of Authority business and the performance of 
        Authority functions;
            ``(5) request the head of any Federal department or agency 
        to detail to the Authority such personnel as the Authority 
        requires to carry out functions of the Authority, each such 
        detail to be without loss of seniority, pay, or other employee 
        status;
            ``(6) request the head of any State department or agency or 
        local government to detail to the Authority such personnel as 
        the Authority requires to carry out functions of the Authority, 
        each such detail to be without loss of seniority, pay, or other 
        employee status;
            ``(7) provide for coverage of Authority employees in a 
        suitable retirement and employee benefit system by--
                    ``(A) making arrangements or entering into 
                contracts with any participating State government; or
                    ``(B) otherwise providing retirement and other 
                employee benefit coverage;
            ``(8) accept, use, and dispose of gifts or donations of 
        services or real, personal, tangible, or intangible property;
            ``(9) enter into and perform such contracts, leases, 
        cooperative agreements, or other transactions as are necessary 
        to carry out Authority duties, including any contracts, leases, 
        cooperative agreements, or any other arrangement with--
                    ``(A) any department, agency, or instrumentality of 
                the United States;
                    ``(B) any State (including a political subdivision, 
                agency, or instrumentality of the State); or
                    ``(C) any person, firm, association, or 
                corporation;
            ``(10) establish and maintain a central office and field 
        offices at such locations as the Authority may select; and
            ``(11) take such other actions and incur such other 
        expenses as are necessary or appropriate.
    ``(f) Federal Agency Cooperation.--Federal agencies shall--
            ``(1) cooperate with the Authority; and
            ``(2) provide such assistance in carrying out this subtitle 
        as the Federal cochairperson may request.
    ``(g) Administrative Expenses.--
            ``(1) In general.--Administrative expenses of the Authority 
        shall be paid--
                    ``(A) by the Federal Government, during the period 
                beginning on the date of enactment of this subtitle and 
                ending on September 30, 2000; and
                    ``(B) after September 30, 2000 (except for the 
                expenses of the Federal cochairperson, including 
                expenses of the alternate and staff of the Federal 
                cochairperson, which shall be paid solely by the 
                Federal Government)--
                            ``(i) by the Federal Government, in an 
                        amount equal to 50 percent of the 
                        administrative expenses; and
                            ``(ii) by the States in the region 
                        represented by the Authority, in an amount 
                        equal to 50 percent of the administrative 
                        expenses.
            ``(2) State share.--
                    ``(A) In general.--The share of administrative 
                expenses of the Authority to be paid by each State 
                shall be determined by the Authority.
                    ``(B) No federal participation.--The Federal 
                cochairperson shall not participate or vote in any 
                decision under subparagraph (A) to determine the share 
                of administrative expenses of the Authority to be paid 
                by a State.
                    ``(C) Delinquent states.--If a State is delinquent 
                in payment of the State's share of administrative 
                expenses of the Authority under this subsection--
                            ``(i) no assistance under this subtitle 
                        shall be furnished to the State (including 
                        assistance to a political subdivision or a 
                        resident of the State); and
                            ``(ii) no member of the Authority from the 
                        State shall participate or vote in any action 
                        by the Authority.
    ``(h) Compensation.--
            ``(1) Federal cochairperson.--The Federal cochairperson 
        shall be compensated by the Federal Government at level III of 
        the Executive Schedule in subchapter II of chapter 53 of title 
        V, United States Code.
            ``(2) Alternate federal cochairperson.--The alternate 
        Federal cochairperson--
                    ``(A) shall be compensated by the Federal 
                Government at level V of the Executive Schedule 
                described in paragraph (1); and
                    ``(B) when not actively serving as an alternate for 
                the Federal cochairperson, shall perform such functions 
                and duties as are delegated by the Federal 
                cochairperson.
            ``(3) State members and alternates.--
                    ``(A) In general.--A State shall compensate each 
                member and alternate representing the State on the 
                Authority at the rate established by law of the State.
                    ``(B) No additional compensation.--No State member 
                or alternate member shall receive any salary, or any 
                contribution to or supplementation of salary from any 
                source other than the State for services provided by 
                the member or alternate to the Authority.
            ``(4) Detailed employees.--
                    ``(A) In general.--No person detailed to serve the 
                Authority under subsection (e)(6) shall receive any 
                salary or any contribution to or supplementation of 
                salary for services provided to the Authority from--
                            ``(i) any source other than the State, 
                        local, or intergovernmental department or 
                        agency from which the person was detailed; or
                            ``(ii) the Authority.
                    ``(B) Violation.--Any person that violates this 
                paragraph shall be fined not more than $5,000, 
                imprisoned not more than 1 year, or both.
                    ``(C) Applicable law.--The Federal cochairperson, 
                the alternate Federal cochairperson, and any Federal 
                officer or employee detailed to duty on the Authority 
                under subsection (e)(5) shall not be subject to 
                subparagraph (A), but shall remain subject to sections 
                202 through 209 of title 18, United States Code.
            ``(5) Additional personnel.--
                    ``(A) Compensation.--
                            ``(i) In general.--The Authority may 
                        appoint and fix the compensation of an 
                        executive director and such other personnel as 
                        are necessary to enable the Authority to carry 
                        out the duties of the Authority.
                            ``(ii) Exception.--Compensation described 
                        under clause (i) shall not exceed the maximum 
                        rate for the Senior Executive Service under 
                        section 5382 of title 5, United States Code, 
                        including any applicable locality-based 
                        comparability payment that may be authorized 
                        under section 5304(h)(2)(C) of that title.
                    ``(B) Executive director.--The executive director 
                shall be responsible for--
                            ``(i) the carrying out of the 
                        administrative functions of the Authority;
                            ``(ii) direction of the Authority staff; 
                        and
                            ``(iii) such other duties as the Authority 
                        may assign.
                    ``(C) No federal employee status.--No member, 
                alternate, officer, or employee of the Authority 
                (except the Federal cochairperson of the Authority, the 
                alternate and staff for the Federal cochairperson, and 
                any Federal employee detailed to the Authority under 
                subsection (e)(5)) shall be considered to be a Federal 
                employee for any purpose.
    ``(i) Conflicts of Interest.--
            ``(1) In general.--Except as provided under paragraph (2), 
        no State member, alternate, officer, or employee of the 
        Authority shall participate personally and substantially as a 
        member, alternate, officer, or employee of the Authority, 
        through decision, approval, disapproval, recommendation, the 
        rendering of advice, investigation, or otherwise, in any 
        proceeding, application, request for a ruling or other 
        determination, contract, claim, controversy, or other matter in 
        which, to knowledge of the member, alternate, officer, or 
        employee--
                    ``(A) the member, alternate, officer, or employee;
                    ``(B) the spouse, minor child, partner, or 
                organization (other than a State or political 
                subdivision thereof) of the member, alternate, officer, 
                or employee, in which the member, alternate, officer, 
                or employee is serving as officer, director, trustee, 
                partner, or employee; or
                    ``(C) any person or organization with whom the 
                member, alternate, officer, or employee is negotiating 
                or has any arrangement concerning prospective 
                employment;
    has a financial interest.
            ``(2) Disclosure.--Paragraph (1) shall not apply if the 
        State member, alternate, officer, or employee--
                    ``(A) immediately advises the Authority of the 
                nature and circumstances of the proceeding, 
                application, request for a ruling or other 
                determination, contract, claim, controversy, or other 
                particular matter presenting a conflict of interest;
                    ``(B) makes full disclosure of the financial 
                interest; and
                    ``(C) before the proceeding concerning the matter 
                presenting the conflict of interest, receives a written 
                determination by the Authority that the interest is not 
                so substantial as to be likely to affect the integrity 
                of the services that the Authority may expect from the 
                State member, alternate, officer, or employee.
            ``(3) Violation.--Any person that violates this subsection 
        shall be fined not more than $10,000, imprisoned not more than 
        2 years, or both.
    ``(j) Validity of Contracts, Loans, and Grants.--The Authority may 
declare void any contract, loan, or grant of or by the Authority in 
relation to which the Authority determines that there has been a 
violation of any provision under subsection (h)(4), subsection (i), or 
sections 202 through 209 of title 18, United States Code.

``SEC. 382C. ECONOMIC AND COMMUNITY DEVELOPMENT GRANTS.

    ``(a) In General.--The Authority may approve grants to States and 
public and nonprofit entities for projects, approved in accordance with 
section 382I--
            ``(1) to assist the region in obtaining the job training 
        and employment-related education, leadership, business, and 
        civic development (with an emphasis on entrepreneurship), that 
        are needed to build and maintain strong local economies;
            ``(2) to provide assistance to severely distressed and 
        underdeveloped counties that lack financial resources for 
        improving basic services;
            ``(3) to fund--
                    ``(A) research, demonstrations, evaluations, and 
                assessments of the region; and
                    ``(B) training programs, and construction of 
                necessary facilities, and the provision of technical 
                assistance necessary to complete activities described 
                in subparagraph (A); or
            ``(4) to otherwise achieve the objectives of this subtitle.
    ``(b) Funding.--
            ``(1) In general.--Funds for grants under subsection (a) 
        may be provided--
                    ``(A) entirely from appropriations to carry out 
                this section;
                    ``(B) in combination with funds available under 
                another Federal or Federal grant program; or
                    ``(C) from any other source.
            ``(2) Priority of funding.--To best build the foundations 
        for long-term, self-sustaining economies and to complement 
        other Federal and State resources in the region, Federal funds 
        available under this subtitle shall be focused on the 
        activities in the following order or priority:
                    ``(A) Basic infrastructure in distressed counties.
                    ``(B) Job-related infrastructure.
                    ``(C) Job training or employment-related education.
                    ``(D) Leadership and civic development.
                    ``(E) Business development, with emphasis on 
                entrepreneurship.
            ``(3) Federal share in grant programs.--Notwithstanding any 
        provision of law limiting the Federal share in any grant 
        program, funds appropriated to carry out this section may be 
        used to increase a Federal share in a grant program, as the 
        Authority determines to be appropriate.

``SEC. 382D. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.

    ``(a) Finding.--Congress finds that certain people, States, and 
local communities of the region, including local development districts, 
are unable to take maximum advantage of Federal grant programs for 
which the people are eligible because--
            ``(1) they lack the economic resources to supply the 
        required matching share; or
            ``(2) there are insufficient funds available under the 
        applicable Federal grant law authorizing the program to meet 
        pressing needs of the region.
    ``(b) Federal Grant Program Funding.--In accordance with subsection 
(c), the Federal cochairperson may use amounts made available to carry 
out this subtitle, without regard to any limitations on areas eligible 
for assistance or authorizations for appropriation under any other Act 
to fund all or any portion of the basic Federal contribution to a 
project or activity under a Federal grant program in an amount that is 
above the fixed maximum portion of the cost of the project otherwise 
authorized by the applicable law, not to exceed 80 percent of the costs 
of the project except as provided in section 382F(b).
    ``(c) Certification.--
            ``(1) In general.--In the case of any program or project 
        for which all or any portion of the basic Federal contribution 
        to the project under a Federal grant program is proposed to be 
        made under this section, no Federal contribution shall be made 
        until the Federal official administering the Federal law 
        authorizing the contribution certifies that the program or 
        project--
                    ``(A) meets the applicable requirements of the 
                applicable Federal grant law; and
                    ``(B) could be approved for Federal contribution 
                under the law if funds were available under the law for 
                the program or project.
            ``(2) Certification by authority.--
                    ``(A) In general.--The certifications and 
                determinations required to be made by the Authority for 
                approval of projects under this subtitle in accordance 
                with section 382I--
                            ``(i) shall be controlling; and
                            ``(ii) shall be accepted by the Federal 
                        agencies.
                    ``(B) Acceptance by federal cochairperson.--Any 
                finding, report, certification, or documentation 
                required to be submitted to the head of the department, 
                agency, or instrumentality of the Federal Government 
                responsible for the administration of any Federal grant 
                program shall be accepted by the Federal cochairperson 
                with respect to a supplemental grant for any project 
                under the program.

``SEC. 382E. LOCAL DEVELOPMENT DISTRICTS; CERTIFICATION AND 
              ADMINISTRATIVE EXPENSES.

    ``(a) Definition of Local Development District.--In this section, 
the term ``local development district'' means an entity that is--
            ``(1) organized and operated in a manner that ensures 
        broad-based community participation and an effective 
        opportunity for other nonprofit and citizen groups to 
        contribute to the development and implementation of programs in 
        the region;
            ``(2) certified to the Authority as having a charter or 
        authority that includes the economic development of counties or 
        parts of counties or other political subdivisions within the 
        region--
                    ``(A) by the Governor of each State in which the 
                entity is located; or
                    ``(B) by the State officer designated by the 
                appropriate State law to make the certification; and
            ``(3) is--
                    ``(A) a nonprofit incorporated body organized or 
                chartered under the law of the State in which the 
                entity is located;
                    ``(B) a nonprofit agency or instrumentality of a 
                State or local government;
                    ``(C) a nonprofit agency or instrumentality created 
                through an interstate compact; or
                    ``(D) a nonprofit association or combination of 
                bodies, agencies, and instrumentalities described in 
                subparagraphs (A) through (C).
    ``(b) Grants to Local Development Districts.--
            ``(1) In general.--The Authority may make grants for 
        administrative expenses of local development districts.
            ``(2) Conditions for grants.--
                    ``(A) Maximum amount.--The amount of any grant 
                awarded under paragraph (1) shall not exceed 80 percent 
                of the administrative expenses of the local development 
                district receiving the grant.
                    ``(B) Maximum period.--No grant described in 
                paragraph (1) shall be awarded to a State agency 
                certified as a local development district for a period 
                greater than 3 years.
                    ``(C) Local share.--The contributions of a local 
                development district for administrative expenses may be 
                in cash or in kind, fairly evaluated, including space, 
                equipment, and services.
    ``(c) Duties of Local Development Districts.--Local development 
districts--
            ``(1) shall operate as lead organizations serving 
        multicounty areas in the region at the local level; and
            ``(2) shall serve as a liaison between State and local 
        governments, nonprofit organizations (including community-based 
        groups and educational institutions), the business community, 
        and citizens that--
                    ``(A) are involved in multijurisdictional planning;
                    ``(B) provide technical assistance to local 
                jurisdictions and potential grantees; and
                    ``(C) provide leadership and civic development 
                assistance.

``SEC. 382F. DISTRESSED COUNTIES AND ECONOMICALLY STRONG COUNTIES.

    ``(a) Designations.--Not later than 90 days after the date of 
enactment of this subtitle, and annually thereafter, the Authority, in 
accordance with such criteria as the Authority may establish, shall 
designate--
            ``(1) as distressed counties, counties in the region that 
        are the most severely and persistently distressed and 
        underdeveloped;
            ``(2) as economically strong counties, counties in the 
        region that are approaching or have reached economic parity 
        with the rest of the United States; and
            ``(3) as isolated areas of distress, areas located in an 
        economically strong county that have high rates of poverty or 
        unemployment.
    ``(b) Distressed Counties.--
            ``(1) In general.--The Authority shall allocate at least 50 
        percent of the appropriations made available under section 382N 
        for programs and projects designed to serve the needs of 
        distressed counties in the region.
            ``(2) Funding limitations.--The funding limitations under 
        section 382D(b) shall not apply to projects providing basic 
        services to residents in 1 or more distressed counties in the 
        region.
    ``(c) Economically Strong Counties.--
            ``(1) In general.--Except as provided in this subsection, 
        no funds shall be provided under this subtitle for a project 
        located in a county designated as an economically strong county 
        under subsection (a).
            ``(2) Exceptions.--
                    ``(A) In general.--The funding prohibition under 
                paragraph (1) shall not apply to grants to fund the 
                administrative expenses of local development districts 
                under section 382E(b).
                    ``(B) Multicounty projects.--The Authority may 
                approve additional exceptions to the funding 
                prohibition under paragraph (1) for--
                            ``(i) multicounty projects that include 
                        participation by an economically strong county; 
                        and
                            ``(ii) any other type of project, if the 
                        Authority determines that the project could 
                        bring significant benefits to areas of the 
                        region outside an economically strong county.
                    ``(C) Isolated areas of distress.--
                            ``(i) In general.--An isolated area of 
                        distress shall be eligible for assistance at 
                        the discretion of the Authority.
                            ``(ii) Determination.--A determination of 
                        eligibility of an isolated area of distress for 
                        assistance shall be supported--
                                    ``(I) by the most recent Federal 
                                data available; or
                                    ``(II) if no recent Federal data 
                                are available, by the most recent data 
                                available through the government of the 
                                State in which the isolated area of 
                                distress is located.

``SEC. 382G. DEVELOPMENT PLANNING PROCESS.

    ``(a) State Development Plan.--In accordance with policies 
established by the Authority, each State member shall submit on such 
schedule as the Authority shall prescribe a development plan for the 
area of the region represented by the State member.
    ``(b) Content of Plan.--A State development plan submitted under 
subsection (a) shall--
            ``(1) reflect the goals, objectives, and priorities 
        identified in the regional development plan under section 
        382B(d);
            ``(2) describe--
                    ``(A) the organization and continuous process for 
                development planning of the State, including the 
                procedures established by the State for the 
                participation of local development districts in the 
                development planning process;
                    ``(B) the means by which the development planning 
                process of the State is related to overall State-wide 
                planning and budgeting processes; and
                    ``(C) the method of coordinating planning and 
                projects in the region under this subtitle and other 
                Federal, State, and local programs;
            ``(3)(A) identify the goals, objectives, priorities, and 
        expected outcomes of the State for the region, as determined by 
        the Governor;
            ``(B) identify the needs on which those goals, objectives, 
        priorities are based; and
            ``(C) describe the development strategy for achieving and 
        the expected outcomes of those goals, objectives, and 
        priorities; and
            ``(4) describe how strategies proposed in the plan would 
        advance the objectives of this subtitle.
    ``(c) Consultation With Interested Local Parties.--In carrying out 
the development planning process (including the selection of programs 
and projects for assistance), a State shall--
            ``(1) consult with--
                    ``(A) local development districts;
                    ``(B) local units of government; and
                    ``(C) citizen groups; and
            ``(2) take into consideration the goals, objectives, 
        priorities, and recommendations of the entities identified in 
        paragraph (1).
    ``(d) Public Participation.--
            ``(1) In general.--The Authority and applicable State and 
        local development districts shall encourage and assist, to the 
        maximum extent practicable, public participation in the 
        development, revision, and implementation of all plans and 
        programs under this subtitle.
            ``(2) Regulations.--The Authority shall develop guidelines 
        specifying minimum goals for public participation described in 
        paragraph (1), including public hearings.

``SEC. 382H. PROGRAM DEVELOPMENT CRITERIA.

    ``(a) In General.--In considering programs and projects to be 
provided assistance under this subtitle, and in establishing a priority 
ranking of the requests for assistance presented to the Authority, the 
Authority shall follow procedures that ensure, to the maximum extent 
practicable, consideration of--
            ``(1) the relationship of the project or class of projects 
        to overall regional development;
            ``(2) the per capita income and poverty and unemployment 
        rates in the area;
            ``(3) the financial resources available to the applicants 
        for assistance seeking to carry out the project;
            ``(4) the importance of the project or class of projects in 
        relation to other projects or classes of projects that may be 
        in competition for the same funds;
            ``(5) the prospects that the project for which assistance 
        is sought will improve, on a continuing rather than a temporary 
        basis, the opportunities for employment, the average level of 
        income, or the economic and social development of the area 
        served by the project; and
            ``(6) the extent to which the project design provides for 
        detailed outcome measurements by which grant expenditures and 
        the results of the expenditures may be evaluated.
    ``(b) No Relocation Assistance.--No financial assistance authorized 
by this subtitle shall be used to assist a person or entity in 
relocating from 1 area to another.
    ``(c) Reduction of Funds.--Funds may be provided for a program or 
project in a State under this subtitle only if the Authority determines 
that the level of Federal or State financial assistance provided under 
a law other than this subtitle, for the same type of program or project 
in the same area of the State within the region, will not be reduced so 
as to substitute funds authorized by this subtitle.

``SEC. 382I. APPROVAL OF DEVELOPMENT PLANS AND PROJECTS.

    ``(a) In General.--A State or regional development plan or any 
multistate subregional plan that is proposed for development under this 
subtitle shall be reviewed for approval by the Authority in accordance 
with section 382B(e)(3).
    ``(b) Evaluation by State Member.--An application for a grant or 
any other assistance for a project under this subtitle shall be made 
through and evaluated for approval by the State member of the Authority 
representing the applicant.
    ``(c) Certification.--An application for a grant or other 
assistance for a project shall be approved only on certification by the 
State member and the Federal cochairperson that the application--
            ``(1) reflects an intent that the project comply with any 
        applicable State development plan;
            ``(2) meets applicable criteria under section 382H;
            ``(3) provides adequate assurance that the proposed project 
        will be properly administered, operated, and maintained; and
            ``(4) otherwise meets the requirements of this subtitle.
    ``(d) Votes for Decisions.--The certification by a State member of 
an application for a grant or other assistance for a specific project 
under this section shall, when joined by an affirmative vote of the 
Federal cochairperson for the application, be considered to satisfy the 
requirements for affirmative votes for decisions under section 382B.

``SEC. 382J. CONSENT OF STATES.

    ``Nothing in this subtitle requires any State to engage in or 
accept any program under this subtitle without the consent of the 
State.

``SEC. 382K. RECORDS.

    ``(a) Records of the Authority.--
            ``(1) In general.--The Authority shall maintain accurate 
        and complete records of all transactions and activities of the 
        Authority financed with Federal funds.
            ``(2) Availability.--All records of the Authority shall be 
        available for audit and examination by the Comptroller General 
        of the United States (including authorized representatives of 
        the Comptroller General).
    ``(b) Records of Recipients of Federal Assistance.--
            ``(1) In general.--Recipients of Federal assistance under 
        this subtitle shall, as required by the Authority, maintain 
        accurate and complete records of transactions and activities 
        financed with Federal funds and report on the transactions and 
        activities to the Authority.
            ``(2) Availability.--All records described in paragraph (1) 
        shall be available for audit by the Comptroller General of the 
        United States and the Authority or their duly authorized 
        representatives.

``SEC. 382L. ANNUAL REPORT.

    ``Not later than 180 days after the end of each fiscal year, the 
Authority shall submit to the President and to Congress a report 
describing the activities carried out under this subtitle.

``SEC. 382M. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There is authorized to be appropriated to the 
Authority to carry out this subtitle $30,000,000 for each of fiscal 
years 2001 through 2005, to remain available until expended.
    ``(b) Administrative Expenses.--Not more than 5 percent of the 
amount appropriated under subsection (a) shall be used for 
administrative expenses.''.

        TITLE IX--FEDERAL GRANT PROGRAM PARTICIPATION EXPANSION

SEC. 901. EQUAL OPPORTUNITY FOR RELIGIOUS AND OTHER COMMUNITY 
              ORGANIZATIONS TO PARTICIPATE IN CERTAIN FEDERAL GRANT 
              PROGRAMS.

    (a) In General.--The Substance Abuse and Mental Health Services 
Administration in the Department of Health and Human Services shall 
ensure an equal opportunity for religious and other community 
organizations to provide assistance under the programs administered by 
such Administration by providing information and contact for such 
programs to such organizations in a manner similar to that developed by 
the Office of Community Faith-Based Organizations in the Department of 
Housing and Urban Development.
    (b) Assistance by IRS.--The Commissioner of the Internal Revenue 
Service shall provide for assistance and guidance to religious 
organizations seeking to establish charitable organizations in order to 
provide assistance described in subsection (a).

                   TITLE X--NEW MILLENNIUM CLASSROOMS

SEC. 1001. CREDIT FOR COMPUTER DONATIONS TO SCHOOLS, SENIOR CENTERS, 
              PUBLIC LIBRARIES, AND OTHER TRAINING CENTERS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits), as amended by section 604(a), 
is amended by adding at the end the following new section:

``SEC. 45F. CREDIT FOR COMPUTER DONATIONS TO SCHOOLS, SENIOR CENTERS, 
              PUBLIC LIBRARIES, AND OTHER TRAINING CENTERS.

    ``(a) General Rule.--For purposes of section 38, the computer 
donation credit determined under this section is an amount equal to 50 
percent of the qualified computer contributions made by the taxpayer 
during the taxable year as determined after the application of section 
170(e)(6)(A) to any entity located in--
            ``(1) a renewal community designated under section 1400E,
            ``(2) an empowerment zone or enterprise community 
        designated under section 1391,
            ``(3) an Indian reservation (as defined in section 
        168(j)(6)), or
            ``(4) a low-income community (as defined in subsection (c).
    ``(b) Qualified Computer Contribution.--For purposes of this 
section, the term `qualified computer contribution' has the meaning 
given the term `qualified elementary or secondary educational 
contribution' by section 170(e)(6)(B), except that--
            ``(1) clause (ii) thereof shall be applied--
                    ``(A) by substituting `3 years' for `2 years',
                    ``(B) by inserting `or reacquired' after 
                `acquired', and
                    ``(C) by inserting `for the taxpayer's own use' 
                after `constructed by the taxpayer',
            ``(2) clause (iii) thereof shall be applied by inserting `, 
        the person from whom the donor reacquires the property,' after 
        `the donor',
            ``(3) such term shall include the contribution of a 
        computer (as defined in section 168(i)(2)(B)(ii)) only if 
        computer software (as defined in section 197(e)(3)(B)) that 
        serves as a computer operating system has been lawfully 
        installed in such computer,
            ``(4) notwithstanding clauses (i) and (iv) of section 
        170(e)(6)(B), such term shall include the contribution of 
        computer technology or equipment to--
                    ``(A) multipurpose senior centers (as defined in 
                section 102(35) of the Older Americans Act of 1965 (42 
                U.S.C. 3002(35), as in effect on the date of the 
                enactment of the Creating New Markets and Empowering 
                America Act of 2000) described in section 501(c)(3) and 
                exempt from tax under section 501(a) to be used by 
                individuals who have attained 60 years of age to 
                improve job skills in computers,
                    ``(B) a public library (within the meaning of 
                section 213(2)(A) of the Library Services and 
                Technology Act (20 U.S.C. 9122(2)(A), as in effect on 
                the date of the enactment of the Creating New Markets 
                and Empowering America Act of 2000) established and 
                maintained by an entity described in section 170(c)(1), 
                or
                    ``(C) an organization exempt from tax under section 
                501(a) which provides employment, vocational, and job-
                training services to individuals with barriers to 
                employment, including welfare recipients and 
                individuals with disabilities, and
            ``(5) such term shall only include contributions which meet 
        the minimum standards prescribed by the Secretary by 
        regulation, after consultation, at the option of the Secretary, 
        with the National Telecommunications and Information Agency and 
        any other Federal agency with expertise in computer technology.
    ``(c) Low-Income Community.--For purposes of this section--
            ``(1) In general.--The term `low-income community' means 
        any population census tract if--
                    ``(A)(i) the poverty rate for such tract is at 
                least 20 percent, or
                    ``(ii)(I) in the case of a tract not located within 
                a metropolitan area, the median family income for such 
                tract does not exceed 80 percent of statewide median 
                family income, or
                    ``(II) in the case of a tract located within a 
                metropolitan area, the median family income for such 
                tract does not exceed 80 percent of the greater of 
                statewide median family income or the metropolitan area 
                median family income, and
                    ``(B) the unemployment rate for such tract, as 
                determined by the most recent available data, was at 
                least 1\1/2\ times the national unemployment rate for 
                the period to which such data relate.
            ``(2) Areas not within census tracts.--In the case of an 
        area which is not tracted for population census tracts, the 
        equivalent county divisions (as defined by the Bureau of the 
        Census for purposes of defining poverty areas) shall be used 
        for purposes of determining poverty rates, median family 
        income, and unemployment rates.
    ``(d) Certain Rules Made Applicable.--For purposes of this section, 
rules similar to the rules of paragraphs (1) and (2) of section 41(f) 
shall apply.
    ``(e) Termination.--This section shall not apply to taxable years 
beginning after December 31, 2009.''.
    (b) Current Year Business Credit Calculation.--Section 38(b) 
(relating to current year business credit), as amended by section 
604(c)(1), is amended by striking ``plus'' at the end of paragraph 
(13), by striking the period at the end of paragraph (14) and inserting
``, plus'', and by adding at the end the following:
            ``(15) the computer donation credit determined under 
        section 45F(a).''.
    (c) Disallowance of Deduction by Amount of Credit.--Section 280C 
(relating to certain expenses for which credits are allowable) is 
amended by adding at the end the following:
    ``(d) Credit for Computer Donations.--No deduction shall be allowed 
for that portion of the qualified computer contributions (as defined in 
section 45F(b)) made during the taxable year that is equal to the 
amount of credit determined for the taxable year under section 45F(a). 
In the case of a corporation which is a member of a controlled group of 
corporations (within the meaning of section 52(a)) or a trade or 
business which is treated as being under common control with other 
trades or businesses (within the meaning of section 52(b)), this 
subsection shall be applied under rules prescribed by the Secretary 
similar to the rules applicable under subsections (a) and (b) of 
section 52.''.
    (d) Limitation on Carryback.--Subsection (d) of section 39 
(relating to carryback and carryforward of unused credits), as amended 
by section 604(b), is amended by adding at the end the following:
            ``(11) No carryback of computer donation credit before 
        effective date.--No amount of unused business credit available 
        under section 45F may be carried back to a taxable year 
        beginning on or before the date of the enactment of this 
        paragraph.''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by section 604(c)(2), 
is amended by adding at the end the following:

                              ``Sec. 45F. Credit for computer donations 
                                        to schools, senior centers, 
                                        public libraries, and other 
                                        training centers.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to contributions made in taxable years beginning after December 
31, 2000.
                                 <all>