[Congressional Record Volume 149, Number 139 (Friday, October 3, 2003)]
[Senate]
[Pages S12449-S12452]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE:
  S. 1711. A bill to increase the expertise and capacity of community-
based organizations involved in economic development activities and key 
development programs; to the Committee on Banking, Housing, and Urban 
Affairs.
  Mr. CORZINE. Mr. President, I rise today to introduce the Community 
Economic Development Expertise Enhancement Act of 2003.
  This regulation would provide funding for nonprofit, community-based 
economic development organizations and for the establishment of 
partnerships between these organizations. Most importantly, the 
legislation would authorize grants to promote the use of mentors to 
improve the operational capabilities of community-based organizations 
in the areas of project development, personnel management, legal 
services, and financial management. These and other eligible uses of 
the funding would increase the capacity of these organizations to 
expand community development activities throughout the country.
  Over the past several decades, our Nation has seen the emergence of 
community-based organizations that have helped break the cycle of 
poverty for millions of families. Today, according to the National 
Congress of Community Economic Development, there are more than 3,600 
of these organizations, many of which serve some of our Nation's most 
economically challenged communities. These include both urban and rural 
areas, as well as suburban regions.
  Typically, community development corporations have annual budgets 
ranging from $200,000 to $500,000 and staffs averaging about six 
members. Their lack of personnel, expertise and financing often creates 
real constraints on their ability to make even greater contributions to 
their community.
  This legislation would expand our investment in these organizations, 
and expand their capacity to build homes, create jobs, improve public 
safety, provide critical social services, increase access to capital, 
and turn around communities now filled with despair. The bill would 
serve a wide range of communities with different economic, geographic, 
and social characteristics.
  I hope my colleagues will support the bill, and I ask unanimous 
consent that the text of the legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1711

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

     SECTION 1. SHORT TITLE.

        This Act may be cited as the ``Community Economic 
     Development Expertise Enhancement Act of 2003''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) there are a multitude of community economic development 
     programs administered by the Federal Government that assist 
     many of the most economically distressed areas in the United 
     States in--
       (A) revitalizing physical and economic structures; and
       (B) providing support to small- and medium-sized businesses 
     to encourage and assist the businesses in generating long-
     term jobs and economic opportunity;
       (2) there are many nonprofit, nongovernmental, community-
     based economic development organizations, including faith-
     based organizations, that have successfully operated 
     community economic development programs that create jobs, 
     build homes, and revitalize local markets;

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       (3) Federal community economic development programs in 
     effect as of the date of enactment of this Act are intended 
     to leverage private sector investment as part of an overall 
     community development effort;
       (4) Federal community economic development programs connect 
     residents of distressed neighborhoods to jobs and 
     opportunities of the regional marketplace, replacing economic 
     distress with opportunity;
       (5) Federal community economic development programs--
       (A) provide financial assistance, including tax credits and 
     loan guarantees;
       (B) involve private investment institutions and 
     universities; and
       (C) provide technical expertise for small businesses;
       (6) Federal community economic development programs in 
     effect as of the date of enactment of this Act build on 
     ongoing efforts to encourage economic growth in distressed 
     communities by--
       (A) helping to create new affordable housing opportunities;
       (B) allowing communities to address important public 
     safety, access to capital, infrastructure, and environmental 
     concerns; and
       (C) providing social services, including affordable health 
     care, transportation, child care, and youth development;
       (7) the continuing success of Federal community economic 
     development programs will depend in great measure on the 
     ability of community-based organizations and private sector 
     institutions to form partnerships that connect residents of 
     distressed neighborhoods to jobs and other opportunities;
       (8) the Federal Government administers various programs 
     that employ the services and capabilities of community-based 
     organizations to deliver a wide range of services to 
     residents of distressed communities;
       (9) Federal community economic development programs help 
     achieve lasting improvement and enhance domestic prosperity 
     by the establishment of stable and diversified local 
     economies, sustainable development, and improved local 
     conditions;
       (10) there is a need for greater cooperation between the 
     Federal Government, States, and other entities to ensure 
     that, consistent with national community economic development 
     objectives, Federal programs are compatible with, and further 
     the objectives of, State, regional, and local economic 
     development plans and comprehensive economic development 
     strategies;
       (11) while economic development is an inherently local 
     process, the Federal Government should work in closer 
     partnership with community-based economic development 
     organizations to ensure that--
       (A) resources are fully utilized; and
       (B) all people in the United States have an opportunity to 
     participate in the economic growth of the United States; and
       (12) extending technical assistance to community-based 
     economic development organizations may be necessary or 
     desirable--
       (A) to alleviate economic distress;
       (B) to encourage and support public-private partnerships 
     for the formation and improvement of economic development 
     strategies that promote the growth of the national economy;
       (C) to stimulate modernization and technological advances 
     in the generation and commercialization of goods and 
     services; and
       (D) to enhance the effectiveness of United States companies 
     in the global economy.
       (b) Purposes.--The purposes of this Act are--
       (1) to provide a new source of Federal funding to enhance 
     the capabilities of nonprofit, nongovernmental, community-
     based economic development organizations, or collaborations 
     of those organizations, to leverage private sector investment 
     as part of an overall community development strategy;
       (2) to establish educational programs for nonprofit, 
     nongovernmental, community-based organizations to expand the 
     project development capabilities of those organizations;
       (3) to increase the use of tax incentives to leverage 
     private sector investment in community economic development 
     projects;
       (4) to promote and facilitate investments in community-
     based economic development projects from traditional and 
     nontraditional capital sources;
       (5) to encourage partnerships between community-based 
     organizations that will expand and enhance the expertise of 
     emerging nonprofit, nongovernmental organizations in using 
     private sector investment as part of the comprehensive 
     community development strategies of the organizations; and
       (6) to ensure that viable community economic development 
     projects are successfully pursued throughout the United 
     States in communities having a wide range of economic, 
     geographic, and social characteristics.

     SEC. 3. DEFINITIONS.

        In this Act:
       (1) Community-based economic development organization.--
       (A) In general.--The term ``community-based economic 
     development organization'' means a nonprofit, nongovernmental 
     organization that--
       (i) has the primary mission to serve, or provide investment 
     capital for, low-income communities and low-income 
     individuals; and
       (ii) either--

       (I) maintains accountability to residents of low-income 
     communities through representation of those residents on any 
     governing board of the organization or on any advisory board 
     to the organization; or
       (II) maintains accountability to low-income communities by 
     having a governing board that primarily consists of leaders 
     of community-based development organizations from the region 
     or State of the organization.

       (B) Inclusion.--The term ``community-based economic 
     development organization'' includes any faith-based 
     organization that complies with the requirements under 
     clauses (i) and (ii) of subparagraph (A).
       (C) Treatment of community development financial 
     institutions.--The requirements of subparagraph (A) shall be 
     deemed to be met by 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)).
       (2) Community economic development project.--The term 
     ``community economic development project'' means a project 
     that involves--
       (A) investment in business enterprises, including 
     investments in the form of loan origination, equity 
     investment, and monetary assistance to home buyers or to 
     business owners for business development projects; or
       (B) the construction or rehabilitation of facilities, 
     including commercial or industrial facilities, homes, 
     apartment buildings, and community parks.
       (3) Low-income community.--The term ``low-income 
     community'' has the meaning given the term in section 45D of 
     the Internal Revenue Code of 1986.
       (4) Low-income individual.--The term ``low-income 
     individual'' means any individual who--
       (A) lives in an area other than a metropolitan area and 
     whose median family income does not exceed 80 percent of the 
     statewide median family income; or
       (B) lives in a metropolitan area and whose median family 
     income does not exceed 80 percent of the greater of the 
     statewide median family income or the metropolitan area 
     median family income, as those terms are used in section 45D 
     of the Internal Revenue Code of 1986.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.

     SEC. 4. GRANTS TO INCREASE CAPACITY AND EXPERTISE OF 
                   NONPROFIT, NONGOVERNMENTAL COMMUNITY-BASED 
                   ORGANIZATIONS INVOLVED IN COMMUNITY ECONOMIC 
                   DEVELOPMENT ACTIVITIES.

       (a) Grant Authority.--The Secretary may provide grants 
     under this section only--
       (1) to eligible community-based economic development 
     organizations; and
       (2) for the purposes described in subsection (c).
       (b) Eligible Community-Based Economic Development 
     Organization.--
       (1) Definition.--In this section, the term ``eligible 
     community-based economic development organization'' means a 
     community-based economic development organization, or a 
     collaboration of organizations (including city or State 
     community economic development associations), that 
     demonstrates management capacity by meeting, as determined by 
     the Secretary, 2 or more of the requirements in paragraph 
     (2).
       (2) Requirements.--The requirements referred to in 
     paragraph (1), with respect to an eligible community-based 
     economic development organization, are--
       (A) completion of construction of 10 or more dwelling units 
     of affordable housing;
       (B) completion of construction of a commercial, industrial, 
     retail, or community facility project;
       (C) the past or present provision, in partnership with 
     community-based economic development organizations, of 
     training, education, capacity, technical assistance, or other 
     mentoring services;
       (D) the exhibition of willingness to form operational 
     partnerships and execute contractual agreements with emerging 
     community-based economic development organizations; and
       (E) the possession of tangible assets the value of which is 
     not less than the value of the grant requested under this 
     section.
       (c) Use of Funds.--
       (1) Purposes.--Amounts from a grant provided under this 
     section may be used only--
       (A) to pay salaries or administrative expenses of the 
     grantee or an emerging community-based economic development 
     organization that is undertaking a community economic 
     development project;
       (B) to provide technical assistance to an emerging 
     community-based economic development organization that is 
     undertaking a community economic development project; or
       (C) to conduct training or research, and to carry out 
     technical assistance, relating to community economic 
     development through subgrants under paragraph (2), including 
     subgrants for program evaluation and economic impact 
     analyses.
       (2) Expenditure.--Amounts from a grant provided under this 
     section may be--
       (A) used directly by the eligible community-based economic 
     development organization receiving the grant; or
       (B) redistributed by the recipient to a nonprofit, 
     nongovernmental entity in the form of--
       (i) a grant;
       (ii) a loan;
       (iii) a loan guarantee;

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       (iv) a payment to reduce interest on a loan guarantee; or
       (v) other appropriate assistance.
       (d) Selection Criteria.--
       (1) In general.--Subject to paragraph (2), the Secretary 
     shall promulgate rules, including guidelines and procedures, 
     to provide for the selection of eligible community-based 
     economic development organizations for grants under this 
     section.
       (2) Criteria.--The rules promulgated under paragraph (1) 
     shall--
       (A) be based on a determination of the relative 
     effectiveness of the organizations in carrying out the 
     purposes of this Act; and
       (B) provide for consideration of--
       (i) the number of eligible community-based economic 
     development organizations eligible to receive assistance 
     under programs other than this section;
       (ii) the extent to which grant amounts provided under this 
     section will enhance the capabilities of community-based 
     economic development organizations in underserved States and 
     localities;
       (iii) the extent to which an eligible community-based 
     economic development organization applying for a grant does 
     not have access to other traditional local financial sources;
       (iv) the extent to which an eligible community-based 
     economic development organization represents nonprofit, 
     nongovernmental organizations that serve low-income 
     communities and individuals; and
       (v) the extent to which an eligible community-based 
     economic development organization will implement a plan to 
     become financially sustainable.
       (e) Amount.--A grant provided under this section to a 
     single grantee shall be in an amount that is not less than 
     $250,000 and not greater than $1,000,000.
       (f) Prohibition of Matching Funds Requirement.--The 
     Secretary may not require a grantee under this section to 
     provide amounts from sources other than this section to fund 
     the specific activities to be carried out with grant amounts 
     provided under this section.
       (g) Eligibility for Community Reinvestment Act Credits.--In 
     determining whether an eligible community-based economic 
     development organization is meeting the credit needs of the 
     community of that organization for the purpose of section 
     804(a) of the Community Reinvestment Act of 1977 (12 U.S.C. 
     2903(a)), the appropriate Federal financial supervisory 
     agency (as defined in section 803 of that Act (12 U.S.C. 
     2902)), in assessing and taking into account the record of 
     any regulated financial institution, may consider as a factor 
     investments in community economic development projects of 
     eligible community-based economic development organizations.
       (h) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     provide grants under this section $75,000,000 for each of 
     fiscal years 2004 through 2006.
       (2) Set-aside for technical assistance and training.--
       (A) In general.--Of the amount made available under this 
     Act for each fiscal year, subject to subparagraph (C), 
     $10,000,000 shall be available only for technical assistance 
     and training activities, to be conducted by organizations 
     described in subparagraph (B).
       (B) Organizations.--The organizations referred to in 
     subparagraph (A) are national community development 
     organizations, State community development associations, and 
     city community development associations, that have extensive 
     nationwide partnerships and experience in working with 
     community-based economic development organizations in 
     accordance with section 4 of the HUD Demonstration Act of 
     1993 (42 U.S.C. 9816 note), as in effect on April 30, 2000.
       (C) Reservation.--Of the amount reserved for use under this 
     paragraph, not less than $4,000,000 shall be used for the 
     support of development organizations in rural areas.

     SEC. 5. ASSESSMENT OF COMMUNITY-BASED ECONOMIC DEVELOPMENT 
                   EXPERTISE.

       (a) Capability Study.--
       (1) In general.--The Secretary shall conduct a study to 
     assess the capability needs of community-based economic 
     development organizations that--
       (A) analyzes, evaluates, and recommends processes to 
     improve the administrative and operational capabilities of 
     the organizations to acceptable levels of success in support 
     of the role of the Federal Government in community economic 
     development; and
       (B) assesses the extent to which Federal agencies may--
       (i) incorporate the organizations into the formulation of 
     the strategic plans of funding agencies; and
       (ii) if the extent or quality of that type of involvement 
     is satisfactory, support the role of the Federal Government 
     in community economic development.
       (2) Report.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report that describes the results of the study under this 
     subsection.
       (b) Annual Reports to Congress.--Not later than the first 
     March 1 occurring after the end of each fiscal year for which 
     amounts are made available for grants under section 4, the 
     Secretary shall submit to Congress a report that includes--
       (1) an evaluation of the progress made during the fiscal 
     year covered by the report, to enhance the administrative and 
     operational capabilities of community-based economic 
     development organizations in support of the role of the 
     Federal Government in community economic development;
       (2) an assessment of the extent to which Federal agencies 
     have, during that fiscal year, involved community-based 
     economic development organizations in--
       (A) carrying out community economic development programs 
     administered by the agencies; and
       (B) delivering services under those programs that enhance 
     the operational capabilities of the organizations; and
       (3) a plan for making recommendations for actions or 
     measures to further involve community-based economic 
     development organizations in the strategic operations of 
     Federal agencies in support of community economic 
     development.
       (c) Final Evaluation.--
       (1) In general.--On termination of the grant program under 
     section 4, the Secretary shall select an independent entity 
     that has experience in national community economic 
     development activities, nonprofit community-based developers, 
     and impact evaluation and analysis to conduct an evaluation 
     of the impact of the grant program.
       (2) Report.--Not later than 180 days after the conclusion 
     of the last fiscal year for which amounts are made available 
     for grants under section 4, the entity conducting the 
     evaluation under this subsection shall submit to the 
     Secretary and Congress a final report regarding the 
     evaluation.

     SEC. 6. ADVISORY COUNCIL.

       (a) Establishment.--The Secretary shall establish an 
     advisory council to be known as the ``Secretary's Advisory 
     Council on Community Economic Development'' (referred to in 
     this section as the ``Advisory Council'').
       (b) Duties.--The Advisory Council shall make 
     recommendations to the Secretary, for use in carrying out 
     this Act, including recommendations on--
       (1) developing plans under section 5(b)(3); and
       (2) reviewing and making recommendations on plans that have 
     been developed.
       (c) Membership.--
       (1) In general.--The Advisory Council shall consist of not 
     less than 19 members, to be appointed by the Secretary, as 
     described in paragraphs (2) and (3).
       (2) Nonvoting members.--The nonvoting members of the 
     Advisory Council shall be--
       (A) the Secretary of Housing and Urban Development;
       (B) the Secretary of Health and Human Services;
       (C) the Assistant Secretary for Economic Development of the 
     Department of Commerce;
       (D) the Administrator of the Community Development 
     Financial Institutions Fund; and
       (E) the Under Secretary of Agriculture for Rural 
     Development.
       (3) Voting members.--
       (A) In general.--The Advisory Council shall have not less 
     than 14 voting members, to include--
       (i) at least 2 individuals who conduct research on 
     community economic development activities;
       (ii) at least 2 individuals who are experts in community 
     economic development financing;
       (iii) at least 3 individuals who are publicly elected 
     officials; and
       (iv) at least 7 individuals who are representatives of 
     community-based economic development organizations that carry 
     out community economic development activities.
       (B) Limitation.--No voting member of the Advisory Council 
     may be an officer or employee of the Federal Government.
       (d) Travel Expenses.--Members of the Advisory Council shall 
     not receive any compensation for service on the Advisory 
     Council, other than travel expenses (including per diem in 
     lieu of subsistence), in accordance with sections 5702 and 
     5703 of title 5, United States Code.

     SEC. 7. COORDINATION WITH THE ANNUAL BUDGET REQUEST OF THE 
                   PRESIDENT.

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

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