Bill 3813

                    Current Status

Bill Number:                       3813
Type of Legislation:               General Bill GB
Introducing Body:                  House
Introduced Date:                   19970402
Primary Sponsor:                   Cobb-Hunter
All Sponsors:                      Cobb-Hunter, Whipper, Neal,
                                   Breeland, T. Brown, Miller, Canty,
                                   Bailey, Kennedy, Lloyd, Inabinett,
                                   Mack and Cave 
Drafted Document Number:           jic\6061ac.97
Residing Body:                     House
Current Committee:                 Ways and Means Committee 30
                                   HWM
Subject:                           Community Development
                                   Corporation Act of 1997, Commerce
                                   Department, Political
                                   Subdivisions

Body    Date      Action Description                       Com     Leg Involved
______  ________  _______________________________________  _______ ____________

House   19970402  Introduced, read first time,             30 HWM
                  referred to Committee

A BILL

TO AMEND TITLE 13, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PLANNING, RESEARCH, AND DEVELOPMENT BY ADDING CHAPTER 23 SO AS TO ENACT THE "COMMUNITY DEVELOPMENT CORPORATION ACT OF 1997" AND TO AUTHORIZE THE DEPARTMENT OF COMMERCE TO EXPEND FUNDS FOR GRANTS AND LOANS TO COMMUNITY DEVELOPMENT CORPORATIONS; TO DIRECT THE DEPARTMENT TO ESTABLISH OR DESIGNATE A COMMITTEE TO REVIEW GRANT AND LOAN APPLICATIONS; AND TO ESTABLISH ELIGIBILITY CRITERIA.

Whereas, the General Assembly finds that:

(1) Many of South Carolina's urban and rural communities face critical social and economic problems arising in part from people living in poverty and arising in part from the lack of economic growth, employment, affordable housing, and small business and other opportunities;

(2) Local communities already have many of the assets, resources, and a vision of 'personal responsibility' necessary to restore and maintain community and economic growth if given seed funding, technical support, and the opportunity to implement their vision;

(3) The restoration and maintenance of these communities will require increased organizational capacity of local communities and access to capital for development activities, including investment in small businesses, housing, human and organizational development, and other activities that promote the long-term economic and social viability of the community;

(4) Access to credit and capital is essential to unleash the untapped potential and entrepreneurial energy of South Carolina's poorest communities and to empower individuals and communities to become responsible and self sufficient;

(5) The public or private sector alone is not the answer to addressing the long standing problems of our poorest communities, but partnerships with community based nonprofit organizations can revitalize and sustain community and economic development activities. Because responsibility is given to local residents, the chances of success are increased and the development is sustainable;

(6) Community development corporations have proven their ability to identify and respond to community needs and manage community assets for the purpose of community and economic development on a local level; and

Whereas, in accordance with the findings enumerated herein, the General Assembly finds that the provisions of this act are consistent with many public policy objectives of this State and will further economic growth, higher employment, and community development, thereby benefiting all South Carolinians. Now, therefore,

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Title 13 of the 1976 Code is amended by adding:

Community Development Corporation

Grant and Loan Program

Section 13-23-10. This chapter may be cited as the 'Community Development Corporation Act of 1997.'

Section 13-23-20. (A) The Department of Commerce may expend funds for grants and loans to community development corporations. These grant and loan funds must be used to support projects, activities, and operations of community development corporations.

(B) The department shall establish a committee in consultation with or shall designate the Executive Committee of the South Carolina Association of Community Development to review grant applications and to recommend grant recipients and grant amounts to the department. The department shall establish and implement criteria for grant awards in consultation with the executive committee of the association. This criteria shall include a requirement that the applicant has demonstrated a capacity to engage in community development projects and has sufficient organizational structure to ensure proper management of the grant. However, if the entity applying is created after July 1, 1997, the applicant shall submit a strategic plan for community development projects and shall include evidence of developing an organizational structure which ensures proper management.

(C) The department shall provide funds to the association to capitalize a 'Community Development Fund' to leverage private investments in order to build the organizational capacity of the association.

(D) The department shall provide or contract with the association for technical support to enable community development corporations served under this section to be successful in developing their organizational capacity and in implementing their projects.

(E) The department shall establish a revolving loan fund for the purpose of making small loans, $100,000 and less, to community development corporations for economic development projects and activities. The department shall establish a committee in consultation with or shall designate the executive committee of the association to review these loan applications to recommend to the department entities for loans and loan amounts. The department shall establish and implement criteria for loans in consultation with the executive committee of the association. This criteria shall include a requirement that the applicant has demonstrated a capacity to engage in community development projects and has sufficient organizational structure to ensure proper management.

A community development corporation may use a loan made pursuant to this section as leverage to secure matching dollars from other available sources. The revolving loan fund also may be used to provide loans, loan guarantees, and equity capital to eligible individuals, community based development organizations, and nonprofit organizations operating in economically distressed or minority communities.

(F) For purposes of this section, the term 'community development corporation' means a nonprofit corporation:

(1) chartered pursuant to Chapter 31, Title 33;

(2) tax-exempt pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986;

(3) whose primary mission is to develop and improve low income communities and neighborhoods through economic and related development;

(4) who designates a low income area as the specific geographic community within which it will operate;

(5) whose activities and decisions are initiated, managed, and controlled by the constituents of those local communities, and

(6) whose primary function is to develop projects and activities designed to enhance the economic opportunities of the people in the community served, including efforts to enable them to become owners and managers of small businesses and producers of affordable housing and jobs in the community served.

The term 'community development corporation' does not include nonprofit organizations whose sole purposes is to provide housing to neighborhoods or technical assistance to other nonprofit organizations."

SECTION 2. This act takes effect July 1, 1997.