Economic Empowerment for Underserved Communities Act

II 116TH CONGRESS 2D SESSION S. 5011 To codify the Minority Business Development Agency of the Department of Commerce, and for other purposes. IN THE SENATE OF THE UNITED STATES DECEMBER 11, 2020 Mrs. LOEFFLER (for herself, Mr. CRAPO, and Mr. RUBIO) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To codify the Minority Business Development Agency of the Department of Commerce, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Economic Empower- 4 ment for Underserved Communities Act’’. 5 SEC. 2. PURPOSES. 6 The purposes of this Act, and the amendments made 7 by this Act, are to— 8 (1) ensure that underserved communities have 9 access to capital to promote economic revitalization; 10 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 5011 IS (2) respond to the unprecedented loss of jobs 1 and minority-owned businesses as a result of the 2 COVID–19 pandemic; and 3 (3) further encourage long-term investments in 4 low-income and minority communities. 5 SEC. 3. SUPPORTING THE CDFI FUND. 6 (a) APPROPRIATIONS.—Of the amounts made avail- 7 able to the Secretary of the Treasury under section 4027 8 of the CARES Act (15 U.S.C. 9061), $7,000,000,000 9 shall be made available to the Fund to carry out this sec- 10 tion. 11 (b) SET ASIDES.—Of the amounts made available 12 under subsection (a), the following amounts shall be set 13 aside: 14 (1) Up to $1,000,000,000, to remain available 15 until September 30, 2022, to support, prepare for, 16 and respond to the economic impact of the 17 coronavirus, provided that the Fund shall— 18 (A) provide grants funded under this para- 19 graph using a formula that takes into account 20 criteria such as certification status, financial 21 and compliance performance, portfolio and bal- 22 ance sheet strength, a diversity of CDFI busi- 23 ness model types, and program capacity, of 24 which not less than $30,000,000 may be for 25 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 5011 IS grants to benefit Native American, Native Ha- 1 waiian, and Alaska Native communities; and 2 (B) make funds available under this para- 3 graph not later than 60 days after the date of 4 enactment of this Act. 5 (2) Up to $4,000,000,000, to remain available 6 until September 30, 2025, to provide grants to 7 CDFIs— 8 (A) to expand lending or investment activ- 9 ity in low- or moderate-income minority commu- 10 nities and to minorities that have significant 11 unmet capital or financial services needs; and 12 (B) using a formula that takes into ac- 13 count criteria such as certification status, finan- 14 cial and compliance performance, portfolio and 15 balance sheet strength, a diversity of CDFI 16 business model types, and program capacity, as 17 well as experience making loans and invest- 18 ments to those areas and populations identified 19 in this paragraph. 20 (3) Up to $500,000,000, to remain available 21 until expended, for technical assistance, technology, 22 and training under sections 108(a)(1)(B) and 109, 23 respectively, of the Community Development Bank- 24 ing and Financial Institutions Act of 1994 (12 25 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 5011 IS U.S.C. 4707(a)(1)(B), 4708), with a preference for 1 minority-led and minority-owned CDFIs that pri- 2 marily serve low- and moderate-income communities. 3 (4) Up to $500,000,000, to remain available 4 until expended, to provide grants to recipients that 5 are minority-led and minority-owned CDFIs. 6 (c) ADMINISTRATIVE EXPENSES.—Funds made 7 available under this section may be used for administrative 8 expenses, including administration of Fund programs and 9 the New Markets Tax Credit Program under section 45D 10 of the Internal Revenue Code of 1986. 11 (d) EMERGENCY DESIGNATION.— 12 (1) IN GENERAL.—The amounts provided under 13 this section are designated as an emergency require- 14 ment pursuant to section 4(g) of the Statutory Pay- 15 As-You-Go Act of 2010 (2 U.S.C. 933(g)). 16 (2) DESIGNATION IN SENATE.—In the Senate, 17 this section is designated as an emergency require- 18 ment pursuant to section 4112(a) of H. Con. Res. 19 71 (115th Congress), the concurrent resolution on 20 the budget for fiscal year 2018. 21 (e) DEFINITIONS.—In this section: 22 (1) CDFI.—The term ‘‘CDFI’’ means a com- 23 munity development financial institution, as defined 24 in section 103 of the Community Development 25 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 5011 IS Banking and Financial Institutions Act of 1994 (12 1 U.S.C. 4702). 2 (2) FUND.—The term ‘‘Fund’’ means the Com- 3 munity Development Financial Institutions Fund es- 4 tablished under section 104(a) of the Community 5 Development Banking and Financial Institutions Act 6 of 1994 (12 U.S.C. 4703(a)). 7 (3) MINORITY.—The term ‘‘minority’’ means 8 any Black American, Native American, Hispanic 9 American, or Asian American. 10 SEC. 4. PERMANENT EXTENSION OF NEW MARKETS TAX 11 CREDIT. 12 (a) EXTENSION.— 13 (1) IN GENERAL.—Subparagraph (H) of section 14 45D(f)(1) of the Internal Revenue Code of 1986 is 15 amended by inserting ‘‘and each calendar year there- 16 after’’ after ‘‘for 2020’’. 17 (2) CONFORMING AMENDMENT.—Section 18 45D(f)(3) of such Code is amended by striking the 19 last sentence. 20 (b) INFLATION ADJUSTMENT.—Subsection (f) of sec- 21 tion 45D of the Internal Revenue Code of 1986 is amend- 22 ed by adding at the end the following new paragraph: 23 ‘‘(4) INFLATION ADJUSTMENT.— 24 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 5011 IS ‘‘(A) IN GENERAL.—In the case of any cal- 1 endar year beginning after 2020, the dollar 2 amount in paragraph (1)(G) shall be increased 3 by an amount equal to— 4 ‘‘(i) such dollar amount, multiplied by 5 ‘‘(ii) the cost-of-living adjustment de- 6 termined under section 1(f)(3) for the cal- 7 endar year, determined by substituting 8 ‘calendar year 2019’ for ‘calendar year 9 2016’ in subparagraph (A)(ii) thereof. 10 ‘‘(B) ROUNDING RULE.—Any increase 11 under subparagraph (A) which is not a multiple 12 of $1,000,000 shall be rounded to the nearest 13 multiple of $1,000,000.’’. 14 (c) ALTERNATIVE MINIMUM TAX RELIEF.—Subpara- 15 graph (B) of section 38(c)(4) of the Internal Revenue 16 Code of 1986 is amended— 17 (1) by redesignating clauses (vii) through (xii) 18 as clauses (viii) through (xiii), respectively, and 19 (2) by inserting after clause (vi) the following 20 new clause: 21 ‘‘(vii) the credit determined under sec- 22 tion 45D, but only with respect to credits 23 determined with respect to qualified equity 24 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 5011 IS investments (as defined in section 45D(b)) 1 initially made after December 31, 2019,’’. 2 (d) EFFECTIVE DATES.— 3 (1) IN GENERAL.—Except as provided in para- 4 graph (2), the amendments made by this section 5 shall apply to taxable years beginning after Decem- 6 ber 31, 2019. 7 (2) ALTERNATIVE MINIMUM TAX RELIEF.—The 8 amendments made by subsection (c) shall apply to 9 credits determined with respect to qualified equity 10 investments (as defined in section 45D(b) of the In- 11 ternal Revenue Code of 1986) initially made after 12 December 31, 2020. 13 SEC. 5. OPPORTUNITY ZONE PROGRAM REPRESENTATIVES. 14 Section 4 of the Small Business Act (15 U.S.C. 633) 15 is amended by adding at the end the following: 16 ‘‘(i) OPPORTUNITY ZONE PROGRAM REPRESENTA- 17 TIVES.— 18 ‘‘(1) IN GENERAL.—The Administrator, 19 through each district office of the Administration, 20 small business development center, women’s business 21 center described in section 29, chapter of the Service 22 Corps of Retired Executives authorized by section 23 8(b)(1), and Veteran Business Outreach Center de- 24 scribed in section 32, shall train and educate field 25 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 5011 IS representatives on investments in areas that have 1 been designated as qualified opportunity zones under 2 section 1400Z–1 of the Internal Revenue Code of 3 1986. 4 ‘‘(2) DUTIES.—A field representative trained 5 under paragraph (1) shall— 6 ‘‘(A) serve as a point of contact for ques- 7 tions and resources on the investments de- 8 scribed in paragraph (1) for the area served by 9 the district office, small business development 10 center, women’s business center, chapter of the 11 Service Corps of Retired Executives, and Vet- 12 eran Business Outreach Center, as applicable; 13 ‘‘(B) educate elected leaders within such 14 area on those investments; and 15 ‘‘(C) hold an annual seminar in each State 16 to educate managers of qualified opportunity 17 funds (as defined in section 1400Z–2(d) of the 18 Internal Revenue Code of 1986), qualified op- 19 portunity zone businesses (as defined in such 20 section), State and local government officials, 21 accountants, lawyers, and other interested per- 22 sons on how to benefit from such investments. 23 ‘‘(3) REPORT.— 24 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 5011 IS ‘‘(A) IN GENERAL.—Not later than 1 year 1 after the date of enactment of this subsection, 2 and annually thereafter through 2026, the di- 3 rector of each regional office of the Administra- 4 tion shall submit to the Administrator a report 5 on the success of the efforts of the field rep- 6 resentatives trained under paragraph (1), in- 7 cluding any problems faced by, and best prac- 8 tices of, the field representatives. 9 ‘‘(B) SUBMISSION BY ADMINISTRATOR.— 10 The Administrator shall submit each report re- 11 ceived under subparagraph (A) to the Com- 12 mittee on Small Business and Entrepreneurship 13 of the Senate and the Committee on Small 14 Business of the House of Representatives.’’. 15 SEC. 6. SMALL BUSINESS INVESTMENT COMPANY PRO- 16 GRAM. 17 (a) IN GENERAL.—Part A of title III of the Small 18 Business Investment Act of 1958 (15 U.S.C. 681 et seq.) 19 is amended— 20 (1) in section 302(a) (15 U.S.C. 682(a))— 21 (A) in paragraph (1)— 22 (i) in subparagraph (A), by striking 23 ‘‘or’’ at the end; 24 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 5011 IS (ii) in subparagraph (B), by striking 1 the period at the end and inserting ‘‘; or’’; 2 and 3 (iii) by adding at the end the fol- 4 lowing: 5 ‘‘(C) $20,000,000, adjusted every 5 years 6 for inflation, with respect to each licensee au- 7 thorized or seeking authority to sell bonds to 8 Administration as a participating investment 9 company under section 321.’’; and 10 (2) by adding at the end the following: 11 ‘‘SEC. 321. SMALL BUSINESS AND DOMESTIC PRODUCTION 12 RECOVERY INVESTMENT FACILITY. 13 ‘‘(a) DEFINITIONS.—In this section: 14 ‘‘(1) COVERED POPULATION CENSUS TRACT.— 15 The term ‘covered population census tract’ means a 16 population census tract for which— 17 ‘‘(A) in the case of a tract that is not lo- 18 cated within a metropolitan area, the median 19 income does not exceed 80 percent of the state- 20 wide (or, with respect to a possession or terri- 21 tory of the United States, the possession- or 22 territory-wide) median family income; or 23 ‘‘(B) in the case of a tract that is located 24 within a metropolitan area, the median family 25 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 11 •S 5011 IS income does not exceed 80 percent of the great- 1 er of the statewide (or, with respect to a posses- 2 sion or territory of the United States, the 3 possession- or territory-wide) median family in- 4 come and the metropolitan area median family 5 income. 6 ‘‘(2) ELIGIBLE SMALL BUSINESS CONCERN.— 7 The term ‘eligible small business concern’— 8 ‘‘(A) means a small business concern 9 that— 10 ‘‘(i)(I) except as provided in sub- 11 clauses (II), (III), and (IV), had gross re- 12 ceipts during the first or second quarter in 13 2020 that are not less than 50 percent less 14 than the gross receipts of the entity during 15 the same quarter in 2019; 16 ‘‘(II) if the entity was not in business 17 during the first or second quarter of 2019, 18 but was in business during the third and 19 fourth quarter of 2019, had gross receipts 20 during the first or second quarter of 2020 21 that are less than 50 percent of the 22 amount of the gross receipts of the entity 23 during the third or fourth quarter of 2019; 24 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 12 •S 5011 IS ‘‘(III) if the entity was not in business 1 during the first, second, or third quarter of 2 2019, but was in business during the 3 fourth quarter of 2019, had gross receipts 4 during the first or second quarter of 2020 5 that are less than 50 percent of the 6 amount of the gross receipts of the entity 7 during the fourth quarter of 2019; or 8 ‘‘(IV) if the entity was not in business 9 during 2019, but was in operation on Feb- 10 ruary 15, 2020, had gross receipts during 11 the second quarter of 2020 that are less 12 than 50 percent of the amount of the gross 13 receipts of the entity during the first quar- 14 ter of 2020; 15 ‘‘(ii) is a manufacturing business that 16 is assigned a North American Industry 17 Classification System code beginning with 18 31, 32, or 33 at the time at which the 19 small business concern receives an invest- 20 ment from a participating investment com- 21 pany under the facility; or 22 ‘‘(iii) is located in a small business 23 low-income census tract; and 24 ‘‘(B) does not include— 25 VerDate Sep 11 2014 16:14 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S5011.IS S5011 pamtmann on DSKBC07HB2PROD with BILLS 13 •S 5011 IS ‘‘(i) an issuer, the securities of whi [Text truncated for display. 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