ELIGIBLE ACTIVITIES.

SEC. 807. ELIGIBLE ACTIVITIES. (a) Additional Eligible Activities.—Section 105(a) of the Housing and Community Development Act of 1974 (42 U.S.C. 5305(a)) is amended— (1) in paragraph (8), by inserting before the semicolon at the end the following: “, and except that of any amount 106 STAT. 3848of assistance under this title (including program income) in each of fiscal years 1993 through 1997 to the City of Los Angeles and County of Los Angeles, each such unit of general government may use not more than 25 percent in each such fiscal year for activities under this paragraph”; (2) in paragraph (19), by striking “and” at the end; (3) by redesignating paragraph (20) as paragraph (25); and (4) by inserting after paragraph (19) the following new paragraphs: “(20) provision of technical assistance to public or nonprofit entities to increase the capacity of such entities to carry out eligible neighborhood revitalization or economic development activities, which assistance shall not be considered a planning cost as defined in paragraph (12) or administrative cost as defined in paragraph (13); “(21) housing services, such as housing counseling, energy auditing, preparation of work specifications, loan processing, inspections, tenant selection, management of tenant-based rental assistance, and other services related to assisting owners, tenants, contractors, and other entities, participating or seeking to participate in housing activities authorized under this section, or under title II of the Cranston-Gonzalez National Afford-able Housing Act, except that activities under this paragraph shall be subject to any limitation on administrative expenses imposed by any law; “(22) provision of assistance by recipients under this title to institutions of higher education having a demonstrated capacity to carry out eligible activities under this subsection for carrying out such activities; “(23) provision of assistance to public and private organizations, agencies, and other entities (including nonprofit and for- profit entities) to enable such entities to facilitate economic development by— “(A) providing credit (including providing direct loans and loan guarantees, establishing revolving loan funds, and facilitating peer lending programs) for the establishment, stabilization, and expansion of microenterprises; “(B) providing technical assistance, advice, and business support services (including assistance, advice, and support relating to developing business plans, securing funding, conducting marketing, and otherwise engaging in microenterprise activities) to owners of microenterprises and persons developing microenterprises; and “(C) providing general support (such as peer support programs and counseling) to owners of microenterprises and persons developing microenterprises; “(24) activities necessary to make essential repairs and to pay operating expenses necessary to maintain the habit-ability of housing units acquired through tax foreclosure proceedings in order to prevent abandonment and deterioration of such housing in primarily low- and moderate-income neighborhoods; and”. (b) Direct Homeownership Assistance.—Section 907(b)(2) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 5305 note) is amended— 106 STAT. 3849 (1) by striking “October 1, 1992” and inserting “October 1, 1994”; (2) by striking “October 1, 1993” and inserting “October 1, 1995”; and (3) by striking “Q8r, “(19F, and “(20)” and inserting “(23F, “(24)”, and “(25F, respectively.” (c) Microenterprise and Small Business Development Initiative.— (1) In general.—Section 105 of the Housing and Community Development Act of 1974 (42 U.S.C. 5305), as amended by section 806, is further amended by adding at the end the following new subsection: “(g) Microenterprise and Small Business Program Requirements.—In developing program requirements and providing assistance pursuant to paragraph (17) of subsection (a) to a microenterprise or small business, the Secretary shall— “(1) take into account the special needs and limitations arising from the size of the entity; and “(2) not consider training, technical assistance, or other support services costs provided to small businesses or microenterprises or to grantees and subgrantees to develop the capacity to provide such assistance, as a planning cost pursuant, to section 105(a)(12) or an administrative cost pursuant to section 105(a)(13).”. (2) Definitions.—Section 102(a) of the Housing and Community Development Act of 1974 (42 U.S.C. 5302(a)) is amended by adding at the end the following new paragraphs: “(22) The term ‘microenterprise’ means a commercial enterprise that has 5 or fewer employees, 1 or more of whom owns the enterprise. “(23) The term ‘small business’ means a business that meets the criteria set forth in section 3(a) of the Small Business Act”. (3) Sense of the congress.—It is the sense of the Congress that each grantee under title I of the Housing and Community Development Act of 1974 should reserve 1 percent of any grant amounts the grantee receives in each fiscal year for the purpose of providing assistance under section 105(a)(23) of such Act to facilitate economic development through commercial microenterprises. (4) Report.—Not later than 18 months after the date of enactment of this Act, the Secretary shall submit to the Congress a report on the effectiveness of assistance provided through title I of the Housing and Community Development Act of 1974 in promoting development of microenterprises, including a review of any statutory or regulatory provision that impedes the development of microenterprises. (d) Loans of CDBG Funds.—Section 105(a)(14) of the Housing and Community Development Act of 1974 (42 U.S.C. 5305(a)(14)) is amended by inserting before “activities” the following: “provision of assistance including loans (both interim and long-term) and grants for”. (e) CDBG Code Enforcement.—Section 105(a)(3) of the Housing and Community Development Act of 1974 is amended by striking “improvements and” and inserting “or private improvements or”. 106 STAT. 3850 (f) Neighborhood-Based Nonprofit Organizations.—Section 105(a)(15) of the Housing and Community Development Act of 1974 (42 U.S.C. 5305(a)(15)) is amended by inserting after “corporations,” the following: “nonprofit organizations serving the development needs of the communities in nonentitlement areas,”.