Title II: America's Private Investment Companies - Authorizes the Secretary of Housing and Urban Development to license America's Private Investment Companies (for-profit investment entities qualifying as community development entities).
Title III: Community Development and Venture Capital- Subtitle A: New Markets Venture Capital Program - Amends the Small Business Investment Act of 1958 to establish a New Markets Venture Capital Program under which the Administrator of the Small Business Administration (SBA) is authorized to make grants to new market venture capital companies (NMVCs) and specialized small business investment companies and to guarantee debentures issued by NMVCs.
Subtitle B: Community Development Venture Capital Assistance - Authorizes the SBA Administrator to: (1) contract with one or more community development organizations to carry out training and research activities for individuals in community development venture capital organizations (privately-controlled organizations which promote community development in low-income communities through investment in private businesses); and (2) make grants to community development organizations for the cost of such training and research activities and to intermediary organizations to provide intense marketing, management, and technical assistance and training to community development venture capital organizations.
Subtitle C: Business LINC - Authorizes the Administrator to make grants to, and enter into cooperative agreements with, any coalition of private or public sector participants that: (1) expand business-to-business relationships between large and small businesses; and (2) provide businesses with information about companies interested in mentor-protegee programs or community-based, Statewide, or local business development programs.
Title IV: Expansion and Extension of Empowerment Zone Tax Incentives - Provides for the designation of additional empowerment zones and increased empowerment zone tax incentives.
Title V: American Community Renewal - Amends the Code to authorize the Secretary of Housing and Urban Development to designate (upon local or State nomination) up to 40 renewal communities (based on degree of poverty), of which at least 20 percent shall be in rural areas.
Title VI: Homeownership and Revitalization - Revises the low-income housing credit. Establishes a home ownership tax credit which shall be allocated, through State housing finance agencies, to qualified lenders making qualified home ownership loans to certain low-income households. Establishes a credit for renovating historic homes.
Amends the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997 to direct the Secretary to transfer ownership of qualified HUD-held properties (substandard or unoccupied multifamily or unoccupied single family properties) to local governments and community development corporations under specified conditions.
Title VII: Trade-Affected Communities Relief - Authorizes a trade-affected community, a group of such communities, or the Governor of a State on behalf of such communities to petition the Secretary of Commerce for eligibility certification for community-based economic development assistance.
Title VIII: Delta Regional Authority - Amends the Consolidated Farm and Rural Development Act to establish the Delta Regional Authority to: (1) develop comprehensive and coordinated plans and programs, establish priorities, and approve grants for the economic development of the Mississippi Delta region (parts of Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee surrounding such Delta); (2) provide for research, demonstration, investigation, assessment and evaluation of such region's assets and needs; (3) encourage the formation and capacity of local development districts and private investment in industrial, commercial, and other economic development projects; and (4) provide a forum for the consideration of problems and possible solutions of the region.
Title IX: Federal Grant Program Participation Expansion - Directs The Substance Abuse and Mental Health Services Administration in the Department of Health and Human Services to 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.
Title X: New Millennium Classrooms - Establishes a limited credit for the donation of computers to schools, senior centers, public libraries, and other training centers located in a renewal community, empowerment zone or enterprise community, Indian reservation, or defined low-income community.
[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>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S7676-7677)
Read twice and referred to the Committee on Finance.
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