USC Subpart 1

USC Subpart 1
in effect

34 U.S.C. § 12181 Purpose

It is the purpose of this subpart to increase private investment in distressed local communities and to build and expand the capacity of local institutions to better serve the economic needs of local residents through the provision of financial and technical assistance to community development corporations.

34 U.S.C. § 12182 Provision of assistance

(a) AuthorityThe Secretary of Health and Human Services (referred to in this part as the “Secretary”) may, in accordance with this subpart, provide nonrefundable lines of credit to community development corporations for the establishment, maintenance or expansion of revolving loan funds to be utilized to finance projects intended to provide business and employment opportunities for low-income, unemployed, or underemployed individuals and to improve the quality of life in urban and rural areas. (b) Revolving loan funds(1) Competitive assessment of applicationsIn providing assistance under subsection (a) of this section, the Secretary shall establish and implement a competitive process for the solicitation and consideration of applications from eligible entities for lines of credit for the capitalization of revolving funds. (2) Eligible entitiesTo be eligible to receive a line of credit under this subpart an applicant shall—(A) be a community development corporation; (B) prepare and submit an application to the Secretary that shall include a strategic investment plan that identifies and describes the economic characteristics of the target area to be served, the types of business to be assisted and the impact of such assistance on low-income, underemployed, and unemployed individuals in the target area; (C) demonstrate previous experience in the development of low-income housing or community or business development projects in a low-income community and provide a record of achievement with respect to such projects; and (D) have secured one or more commitments from local sources for contributions (either in cash or in kind, letters of credit or letters of commitment) in an amount that is at least equal to the amount requested in the application submitted under subparagraph (B). (3) ExceptionNotwithstanding the provisions of paragraph (2)(D), the Secretary may reduce local contributions to not less than 25 percent of the amount of the line of credit requested by the community development corporation if the Secretary determines such to be appropriate in accordance with section 12186 of this title.

34 U.S.C. § 12183 Approval of applications

(a) In generalIn evaluating applications submitted under section 12182(b)(2)(B) of this title, the Secretary shall ensure that—(1) the residents of the target area to be served (as identified under the strategic development plan) would have an income that is less than the median income for the area (as determined by the Secretary); (2) the applicant community development corporation possesses the technical and managerial capability necessary to administer a revolving loan fund and has past experience in the development and management of housing, community and economic development programs; (3) the applicant community development corporation has provided sufficient evidence of the existence of good working relationships with—(A) local businesses and financial institutions, as well as with the community the corporation proposes to serve; and (B) local and regional job training programs; (4) the applicant community development corporation will target job opportunities that arise from revolving loan fund investments under this subpart so that 75 percent of the jobs retained or created under such investments are provided to—(A) individuals with—(i) incomes that do not exceed the Federal poverty line; or (ii) incomes that do not exceed 80 percent of the median income of the area; (B) individuals who are unemployed or underemployed; (C) individuals who are participating or have participated in job training programs authorized under title I of the Workforce Innovation and Opportunity Act [29 U.S.C. 3111 et seq.] or the Family Support Act of 1988 (Public Law 100–485); (D) individuals whose jobs may be retained as a result of the provision of financing available under this subpart; or (E) individuals who have historically been underrepresented in the local economy; and (5) a representative cross section of applicants are approved, including large and small community development corporations, urban and rural community development corporations and community development corporations representing diverse populations. (b) PriorityIn determining which application to approve under this subpart the Secretary shall give priority to those applicants proposing to serve a target area—(1) with a median income that does not exceed 80 percent of the median for the area (as determined by the Secretary); and (2) with a high rate of unemployment, as determined by the Secretary or in which the population loss is at least 7 percent from April 1, 1980, to April 1, 1990, as reported by the Bureau of the Census.

34 U.S.C. § 12184 Availability of lines of credit and use

(a) Approval of applicationThe Secretary shall provide a community development corporation that has an application approved under section 12183 of this title with a line of credit in an amount determined appropriate by the Secretary, subject to the limitations contained in subsection (b). (b) Limitations on availability of amounts(1) Maximum amountThe Secretary shall not provide in excess of $2,000,000 in lines of credit under this subpart to a single applicant. (2) Period of availabilityA line of credit provided under this subpart shall remain available over a period of time established by the Secretary, but in no event shall any such period of time be in excess of 3 years from the date on which such line of credit is made available. (3) ExceptionNotwithstanding paragraphs (1) and (2), if a recipient of a line of credit under this subpart has made full and productive use of such line of credit, can demonstrate the need and demand for additional assistance, and can meet the requirements of section 12182(b)(2) of this title, the amount of such line of credit may be increased by not more than $1,500,000. (c) Amounts drawn from line of creditAmounts drawn from each line of credit under this subpart shall be used solely for the purposes described in section 12181 of this title and shall only be drawn down as needed to provide loans, investments, or to defray administrative costs related to the establishment of a revolving loan fund. (d) Use of revolving loan fundsRevolving loan funds established with lines of credit provided under this subpart may be used to provide technical assistance to private business enterprises and to provide financial assistance in the form of loans, loan guarantees, interest reduction assistance, equity shares, and other such forms of assistance to business enterprises in target areas and who are in compliance with section 12183(a)(4) of this title.

34 U.S.C. § 12185 Limitations on use of funds

(a) Matching requirementNot to exceed 50 percent of the total amount to be invested by an entity under this subpart may be derived from funds made available from a line of credit under this subpart. (b) Technical assistance and administrationNot to exceed 10 percent of the amounts available from a line of credit under this subpart shall be used for the provision of training or technical assistance and for the planning, development, and management of economic development projects. Community development corporations shall be encouraged by the Secretary to seek technical assistance from other community development corporations, with expertise in the planning, development and management of economic development projects. The Secretary shall assist in the identification and facilitation of such technical assistance. (c) Local and private sector contributionsTo receive funds available under a line of credit provided under this subpart, an entity, using procedures established by the Secretary, shall demonstrate to the community development corporation that such entity agrees to provide local and private sector contributions in accordance with section 12182(b)(2)(D) of this title, will participate with such community development corporation in a loan, guarantee or investment program for a designated business enterprise, and that the total financial commitment to be provided by such entity is at least equal to the amount to be drawn from the line of credit. (d) Use of proceeds from investmentsProceeds derived from investments made using funds made available under this subpart may be used only for the purposes described in section 12181 of this title and shall be reinvested in the community in which they were generated.

34 U.S.C. § 12186 Program priority for special emphasis programs

(a) In generalThe Secretary shall give priority in providing lines of credit under this subpart to community development corporations that propose to undertake economic development activities in distressed communities that target women, Native Americans, at risk youth, farmworkers, population-losing communities, very low-income communities, single mothers, veterans, and refugees; or that expand employee ownership of private enterprises and small businesses, and to programs providing loans of not more than $35,000 to very small business enterprises. (b) Reservation of fundsNot less than 5 percent of the amounts made available under section 31112(a)(2)(A) 11 See References in Text note below. may be reserved to carry out the activities described in subsection (a).

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