I

104TH CONGRESS

1ST SESSION H. R. 2713

To amend the Internal Revenue Code of 1986 to provide additional tax

incentives to stimulate economic growth in depressed areas, and for

other purposes.

IN THE HOUSE OF REPRESENTATIVES

DECEMBER 5, 1995

Mr. RIGGS (for himself, Mr. ENGLISH of Pennsylvania, Mr. ENSIGN, Mr. COX

of California, Mr. TALENT, Mr. STOCKMAN, and Mr. FLANAGAN) introduced the following bill; which was referred to the Committee on Ways

and Means, and in addition to the Committees on the Judiciary and

Banking and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions

as fall within the jurisdiction of the committee concerned

A BILL

To amend the Internal Revenue Code of 1986 to provide

additional tax incentives to stimulate economic growth

in depressed areas, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE;

4 TABLE OF CONTENTS.

5 (a) SHORT TITLE.—This Act may be cited as the

6 ‘‘Enhanced Enterprise Zones Act of 1995’’.
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1 (b) AMENDMENT OF 1986 CODE.—Except as other2 wise expressly provided, whenever in this Act an amend3 ment or repeal is expressed in terms of an amendment

4 to, or repeal of, a section or other provision, the reference

5 shall be considered to be made to a section or other provi6 sion of the Internal Revenue Code of 1986.

7 (c) TABLE OF CONTENTS.—The table of contents for

8 this Act is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

Sec. 2. Findings and purpose.

TITLE I—FEDERAL TAX INCENTIVES

Sec. 101. Amendments to subchapter U.

Sec. 102. Commercial revitalization tax credit.

TITLE II—REGULATORY FLEXIBILITY

Sec. 201. Definition of small entities in empowerment zones and enterprise

communities for analysis of regulatory functions.

Sec. 202. Waiver or modification of agency rules in empowerment zones and enterprise communities.

TITLE III—RESIDENT MANAGEMENT AND HOMEOWNERSHIP

INCENTIVES

Sec. 301. Enterprise zone opportunity grants.

9 SEC. 2. FINDINGS AND PURPOSE.

10 (a) FINDINGS.—The Congress makes the following

11 findings:

12 (1) Many of the Nation’s urban centers are

13 places with high levels of poverty, high rates of wel14 fare dependency, high crime rates, poor schools, and

15 joblessness.
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1 (2) Federal tax incentives and regulatory re2 forms can encourage economic growth, job creation

3 and small business formation in many urban centers.

4 (3) Encouraging private sector investment in

5 America’s economically distressed urban and rural

6 areas is essential to breaking the cycle of poverty

7 and the related ills of crime, drug abuse, illiteracy,

8 welfare dependency, and unemployment.

9 (4) The provisions creating empowerment zones

10 that were enacted in 1993 should be enhanced by

11 providing incentives to increase entrepreneurial

12 growth, capital formation, job creation, educational

13 opportunities, and homeownership in designated en14 terprise communities and empowerment zones.

15 (b) PURPOSE.—The purpose of this Act is to increase

16 job creation, small business expansion and formation, edu17 cational opportunities, and homeownership in economically

18 depressed areas by providing Federal tax incentives, regu19 latory reforms, school reform pilot projects, and home20 ownership incentives.

21 TITLE I—FEDERAL TAX

22 INCENTIVES

23 SEC. 101. AMENDMENTS TO SUBCHAPTER U.

24 (a) IN GENERAL.—Subchapter U of chapter 1 (relat25 ing to designation and treatment of empowerment zones,
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1 enterprise communities, and rural development investment

2 areas) is amended—

3 (1) by redesignating part IV as part V,

4 (2) by redesignating section 1397D as section

5 1397F, and

6 (3) by inserting after part III the following new

7 part:

8 ‘‘PART IV—ADDITIONAL INCENTIVES FOR

9 EMPOWERMENT ZONES AND ENTERPRISE

10 COMMUNITIES

‘‘Sec. 1397D. Empowerment zone and enterprise community capital gain.

‘‘Sec. 1397E. Empowerment zone and enterprise community

stock.

11 ‘‘SEC. 1397D. EMPOWERMENT ZONE AND ENTERPRISE COM12 MUNITY CAPITAL GAIN.

13 ‘‘(a) GENERAL RULE.—Gross income does not in14 clude any qualified capital gain recognized on the sale or

15 exchange of a qualified zone asset held for more than 5

16 years.

17 ‘‘(b) QUALIFIED ZONE ASSET.—For purposes of this

18 section—

19 ‘‘(1) IN GENERAL.—The term ‘qualified zone

20 asset’ means—

21 ‘‘(A) any qualified zone stock,

22 ‘‘(B) any qualified zone business property,

23 and
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1 ‘‘(C) any qualified zone partnership inter2 est.

3 ‘‘(2) QUALIFIED ZONE STOCK.—

4 ‘‘(A) IN GENERAL.—Except as provided in

5 subparagraph (B), the term ‘qualified zone

6 stock’ means any stock in a domestic corpora7 tion if—

8 ‘‘(i) such stock is acquired by the tax9 payer on original issue from the corpora10 tion solely in exchange for cash,

11 ‘‘(ii) as of the time such stock was is12 sued, such corporation was an enterprise

13 zone business (or, in the case of a new cor14 poration, such corporation was being orga15 nized for purposes of being an enterprise

16 zone business), and

17 ‘‘(iii) during substantially all of the

18 taxpayer’s holding period for such stock,

19 such corporation qualified as an enterprise

20 zone business.

21 ‘‘(B) EXCLUSION OF STOCK FOR WHICH

22 DEDUCTION UNDER SECTION 1397E AL23 LOWED.—The term ‘qualified zone stock’ shall

24 not include any stock the basis of which is re25 duced under section 1397E.
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1 ‘‘(C) REDEMPTIONS.—The term ‘qualified

2 zone stock’ shall not include any stock acquired

3 from a corporation which made a substantial

4 stock redemption or distribution (without a

5 bona fide business purpose therefor) in an at6 tempt to avoid the purposes of this section.

7 ‘‘(3) QUALIFIED ZONE BUSINESS PROPERTY.—

8 ‘‘(A) IN GENERAL.—The term ‘qualified

9 zone business property’ means tangible property

10 if—

11 ‘‘(i) such property was acquired by

12 the taxpayer by purchase (as defined in

13 section 179(d)(2)) after the date on which

14 the designation of the empowerment zone

15 or enterprise community took effect,

16 ‘‘(ii) the original use of such property

17 in the empowerment zone or enterprise

18 community commences with the taxpayer,

19 and

20 ‘‘(iii) during substantially all of the

21 taxpayer’s holding period for such prop22 erty, substantially all of the use of such

23 property was in an enterprise zone busi24 ness of the taxpayer.
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1 ‘‘(B) SPECIAL RULE FOR SUBSTANTIAL IM2 PROVEMENTS.—

3 ‘‘(i) IN GENERAL.—The requirements

4 of clauses (i) and (ii) of subparagraph (A)

5 shall be treated as satisfied with respect

6 to—

7 ‘‘(I) property which is substan8 tially improved by the taxpayer, and

9 ‘‘(II) any land on which such

10 property is located.

11 ‘‘(ii) SUBSTANTIAL IMPROVEMENT.—

12 For purposes of clause (i), property shall

13 be treated as substantially improved by the

14 taxpayer if, during any 24-month period

15 beginning after the date on which the des16 ignation of the empowerment zone or en17 terprise community took effect, additions

18 to basis with respect to such property in

19 the hands of the taxpayer exceed the great20 er of—

21 ‘‘(I) an amount equal to the ad22 justed basis at the beginning of such

23 24-month period in the hands of the

24 taxpayer, or

25 ‘‘(II) $5,000.
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1 ‘‘(C) LIMITATION ON LAND.—The term

2 ‘qualified zone business property’ shall not in3 clude land which is not an integral part of an

4 enterprise zone business.

5 ‘‘(4) QUALIFIED ZONE PARTNERSHIP INTER6 EST.—The term ‘qualified zone partnership interest’

7 means any interest in a partnership if—

8 ‘‘(A) such interest is acquired by the tax9 payer from the partnership solely in exchange

10 for cash,

11 ‘‘(B) as of the time such interest was ac12 quired, such partnership was an enterprise zone

13 business (or, in the case of a new partnership,

14 such partnership was being organized for pur15 poses of being an enterprise zone business), and

16 ‘‘(C) during substantially all of the tax17 payer’s holding period for such interest, such

18 partnership qualified as an enterprise zone

19 business.

20 A rule similar to the rule of paragraph (2)(C) shall

21 apply for purposes of this paragraph.

22 ‘‘(5) TREATMENT OF SUBSEQUENT PUR23 CHASERS.—The term ‘qualified zone asset’ includes

24 any property which would be a qualified zone asset

25 but for paragraph (2)(A)(i), (3)(A)(ii), or (4)(A) in
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1 the hands of the taxpayer if such property was a

2 qualified zone asset in the hands of all prior holders.

3 ‘‘(6) 10-YEAR SAFE HARBOR.—If any property

4 ceases to be a qualified zone asset by reason of para5 graph (2)(A)(iii), (3)(A)(iii), or (4)(C) after the 10-

6 year period beginning on the date the taxpayer ac7 quired such property, such property shall continue to

8 be treated as meeting the requirements of such

9 paragraph; except that the amount of gain to which

10 subsection (a) applies on any sale or exchange of

11 such property shall not exceed the amount which

12 would be qualified capital gain had such property

13 been sold on the date of such cessation.

14 ‘‘(7) TREATMENT OF ZONE TERMINATIONS.—

15 The termination of any designation of an area as an

16 empowerment zone or enterprise community shall be

17 disregarded for purposes of determining whether any

18 property is a qualified zone asset.

19 ‘‘(c) OTHER DEFINITIONS AND SPECIAL RULES.—

20 For purposes of this section—

21 ‘‘(1) QUALIFIED CAPITAL GAIN.—Except as

22 otherwise provided in this subsection, the term

23 ‘qualified capital gain’ means any long-term capital

24 gain recognized on the sale or exchange of a quali25 fied zone asset held for more than 5 years.
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1 ‘‘(2) CERTAIN GAIN ON REAL PROPERTY NOT

2 QUALIFIED.—The term ‘qualified capital gain’ shall

3 not include any gain which would be treated as ordi4 nary income under section 1250 if section 1250 ap5 plied to all depreciation rather than the additional

6 depreciation.

7 ‘‘(3) GAIN ATTRIBUTABLE TO PERIODS AFTER

8 TERMINATION OF ZONE DESIGNATION NOT QUALI9 FIED.—The term ‘qualified capital gain’ shall not in10 clude any gain attributable to periods after the ter11 mination of any designation of an area as an

12 empowerment zone or enterprise community.

13 ‘‘(4) RELATED PARTY TRANSACTIONS.—The

14 term ‘qualified capital gain’ shall not include any

15 gain attributable, directly or indirectly, in whole or

16 in part, to a transaction with a related person.

17 ‘‘(5) ENTERPRISE ZONE BUSINESS.—The term

18 ‘enterprise zone business’ has the meaning given

19 such term by section 1394(b)(3), except that, in ap20 plying section 1394(b)(3), the term ‘qualified busi21 ness’ shall not include any trade or business of pro22 ducing property of a character subject to the allow23 ance for depletion under section 611.

24 ‘‘(d) TREATMENT OF PASS-THRU ENTITIES.—
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1 ‘‘(1) SALES AND EXCHANGES.—Gain on the

2 sale or exchange of an interest in a pass-thru entity

3 held by the taxpayer (other than an interest in an

4 entity which was an enterprise zone business during

5 substantially all of the period the taxpayer held such

6 interest) for more than 5 years shall be treated as

7 gain described in subsection (a) to the extent such

8 gain is attributable to amounts which would be

9 qualified capital gain on qualified zone assets (deter10 mined as if such assets had been sold on the date

11 of the sale or exchange) held by such entity for more

12 than 5 years and throughout the period the taxpayer

13 held such interest. A rule similar to the rule of para14 graph (2)(C) shall apply for purposes of the preced15 ing sentence.

16 ‘‘(2) INCOME INCLUSIONS.—

17 ‘‘(A) IN GENERAL.—Any amount included

18 in income by reason of holding an interest in a

19 pass-thru entity (other than an entity which

20 was an enterprise zone business during substan21 tially all of the period the taxpayer held the in22 terest to which such inclusion relates) shall be

23 treated as gain described in subsection (a) if

24 such amount meets the requirements of sub25 paragraph (B).
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1 ‘‘(B) REQUIREMENTS.—An amount meets

2 the requirements of this subparagraph if—

3 ‘‘(i) such amount is attributable to

4 qualified capital gain recognized on the

5 sale or exchange by the pass-thru entity of

6 property which is a qualified zone asset in

7 the hands of such entity and which was

8 held by such entity for the period required

9 under subsection (a), and

10 ‘‘(ii) such amount is includible in the

11 gross income of the taxpayer by reason of

12 the holding of an interest in such entity

13 which was held by the taxpayer on the date

14 on which such pass-thru entity acquired

15 such asset and at all times thereafter be16 fore the disposition of such asset by such

17 pass-thru entity.

18 ‘‘(C) LIMITATION BASED ON INTEREST

19 ORIGINALLY HELD BY TAXPAYER.—Subpara20 graph (A) shall not apply to any amount to the

21 extent such amount exceeds the amount to

22 which subparagraph (A) would have applied if

23 such amount were determined by reference to

24 the interest the taxpayer held in the pass-thru
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1 entity on the date the qualified zone asset was

2 acquired.

3 ‘‘(3) PASS-THRU ENTITY.—For purposes of this

4 subsection, the term ‘pass-thru entity’ means—

5 ‘‘(A) any partnership,

6 ‘‘(B) any S corporation,

7 ‘‘(C) any regulated investment company,

8 and

9 ‘‘(D) any common trust fund.

10 ‘‘(e) SALES AND EXCHANGES OF INTERESTS IN

11 PARTNERSHIPS AND S CORPORATIONS WHICH ARE

12 QUALIFIED ZONE BUSINESSES.—In the case of the sale

13 or exchange of an interest in a partnership, or of stock

14 in an S corporation, which was an enterprise zone business

15 during substantially all of the period the taxpayer held

16 such interest or stock, the amount of qualified capital gain

17 shall be determined without regard to—

18 ‘‘(1) any intangible, and any land, which is not

19 an integral part of any qualified business (as defined

20 in section 1397B(b) except that references to

21 empowerment zones shall be treated as including ref22 erences to enterprise communities), and

23 ‘‘(2) gain attributable to periods before the des24 ignation of an area as an empowerment zone or en25 terprise community.
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1 ‘‘(f) CERTAIN TAX-FREE AND OTHER TRANSFERS.—

2 For purposes of this section—

3 ‘‘(1) IN GENERAL.—In the case of a transfer of

4 a qualified zone asset to which this subsection ap5 plies, the transferee shall be treated as—

6 ‘‘(A) having acquired such asset in the

7 same manner as the transferor, and

8 ‘‘(B) having held such asset during any

9 continuous period immediately preceding the

10 transfer during which it was held (or treated as

11 held under this subsection) by the transferor.

12 ‘‘(2) TRANSFERS TO WHICH SUBSECTION AP13 PLIES.—This subsection shall apply to any trans14 fer—

15 ‘‘(A) by gift,

16 ‘‘(B) at death, or

17 ‘‘(C) from a partnership to a partner

18 thereof of a qualified zone asset with respect to

19 which the requirements of subsection (d)(2) are

20 met at the time of the transfer (without regard

21 to the 5-year holding requirement).

22 ‘‘(3) CERTAIN RULES MADE APPLICABLE.—

23 Rules similar to the rules of section 1244(d)(2) shall

24 apply for purposes of this section.
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1 ‘‘SEC. 1397E. EMPOWERMENT ZONE AND ENTERPRISE COM2 MUNITY STOCK.

3 ‘‘(a) GENERAL RULE.—At the election of any individ4 ual, the aggregate amount paid by such taxpayer during

5 the taxable year for the purchase of enterprise zone stock

6 on the original issue of such stock by a qualified issuer

7 shall be allowed as a deduction.

8 ‘‘(b) LIMITATIONS.—

9 ‘‘(1) CEILING.—

10 ‘‘(A) IN GENERAL.—The maximum

11 amount allowed as a deduction under subsection

12 (a) to a taxpayer shall not exceed—

13 ‘‘(i) $100,000 for any taxable year,

14 and

15 ‘‘(ii) when added to the aggregate

16 amount allowed as a deduction under this

17 section in all prior years, $500,000.

18 ‘‘(B) EXCESS AMOUNTS.—If the amount

19 otherwise deductible by any person under sub20 section (a) exceeds the limitation under—

21 ‘‘(i) subparagraph (A)(i), the amount

22 of such excess shall be treated as an

23 amount paid in the next taxable year, and

24 ‘‘(ii) subparagraph (A), the deduction

25 allowed for any taxable year shall be allo26 cated proportionately among the enterprise
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1 zone stock purchased by such person on

2 the basis of the respective purchase prices

3 per share.

4 ‘‘(2) RELATED PERSON.—The taxpayer and

5 members of the taxpayer’s family shall be treated as

6 one person for purposes of paragraph (1) and the

7 limitations contained in such paragraph shall be al8 located among the taxpayer and such members in

9 accordance with their respective purchases of enter10 prise zone stock. For purposes of this paragraph, an

11 individual’s family includes only such individual’s

12 spouse and minor children.

13 ‘‘(3) PARTIAL TAXABLE YEAR.—If designation

14 of an area as an empowerment zone or enterprise

15 community occurs, expires, or is revoked pursuant to

16 section 1391 on a date other than the first or last

17 day of the taxable year of the taxpayer, or in the

18 case of a short taxable year, the limitations specified

19 in paragraph (1) shall be adjusted on a pro rata

20 basis (based upon the number of days).

21 ‘‘(c) ENTERPRISE ZONE STOCK.—For purposes of

22 this section—

23 ‘‘(1) IN GENERAL.—The term ‘enterprise zone

24 stock’ means stock of a corporation if—
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1 ‘‘(A) such stock is acquired on original

2 issue from the corporation, and

3 ‘‘(B) such corporation is, at the time of

4 issue, a qualified enterprise zone issuer.

5 ‘‘(2) PROCEEDS MUST BE INVESTED IN QUALI6 FIED ENTERPRISE ZONE PROPERTY.—

7 ‘‘(A) IN GENERAL.—Such term shall in8 clude such stock only to the extent that the pro9 ceeds of such issuance are used by such issuer

10 during the 12-month period beginning on the

11 date of issuance to purchase (as defined in sec12 tion 179(d)(2)) qualified enterprise zone prop13 erty.

14 ‘‘(B) QUALIFIED ENTERPRISE ZONE PROP15 ERTY.—For purposes of this section, the term

16 ‘qualified enterprise zone property’ means prop17 erty to which section 168 applies (or would

18 apply but for section 179)—

19 ‘‘(i) the original use of which com20 mences in an empowerment zone or enter21 prise community with the issuer, and

22 ‘‘(ii) substantially all of the use of

23 which is in such empowerment zone or en24 terprise community.
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1 ‘‘(3) REDEMPTIONS.—The term ‘enterprise

2 zone stock’ shall not include any stock acquired from

3 a corporation which made a substantial stock re4 demption or distribution (without a bona fide busi5 ness purpose therefor) in an attempt to avoid the

6 purposes of this section.

7 ‘‘(d) QUALIFIED ENTERPRISE ZONE ISSUER.—For

8 purposes of this section, the term ‘qualified enterprise

9 zone issuer’ means any domestic C corporation if—

10 ‘‘(1) such corporation is a corporation described

11 in section 1397B(b) (except that in applying such

12 section the references to empowerment zones shall

13 be treated as including references to enterprise com14 munities) or, in the case of a new corporation, such

15 corporation is being organized for purposes of being

16 such a corporation,

17 ‘‘(2) such corporation does not have more than

18 one class of stock,

19 ‘‘(3) the sum of—

20 ‘‘(A) the money,

21 ‘‘(B) the aggregate unadjusted bases of

22 property owned by such corporation, and

23 ‘‘(C) the value of property leased to the

24 corporation (as determined under regulations

25 prescribed by the Secretary),
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1 does not exceed $50,000,000, and

2 ‘‘(4) more than 20 percent of the total voting

3 power, and 20 percent of the total value, of the

4 stock of such corporation is owned directly by indi5 viduals or estates or indirectly by individuals

6 through partnerships or trusts.

7 The determination under paragraph (3) shall be made as

8 of the time of issuance of the stock in question but shall

9 include amounts received for such stock.

10 ‘‘(e) DISPOSITIONS OF STOCK.—

11 ‘‘(1) BASIS REDUCTION.—For purposes of this

12 title, the basis of any enterprise zone stock shall be

13 reduced by the amount of the deduction allowed

14 under this section with respect to such stock.

15 ‘‘(2) DEDUCTION RECAPTURED AS ORDINARY

16 INCOME.—For purposes of section 1245—

17 ‘‘(A) any stock the basis of which is re18 duced under paragraph (1) (and any other

19 property the basis of which is determined in

20 whole or in part by reference to the adjusted

21 basis of such stock) shall be treated as section

22 1245 property, and

23 ‘‘(B) any reduction under paragraph (1)

24 shall be treated as a deduction allowed for de25 preciation.
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1 If an exchange of any stock described in paragraph

2 (1) qualifies under section 354(a), 355(a), or

3 356(a), the amount of gain recognized under section

4 1245 by reason of this paragraph shall not exceed

5 the amount of gain recognized in the exchange (de6 termined without regard to this paragraph).

7 ‘‘(3) CERTAIN EVENTS TREATED AS DISPOSI8 TIONS.—For purposes of determining the amount

9 treated as ordinary income under section 1245 by

10 reason of paragraph (2), paragraph (3) of section

11 1245(b) (relating to certain tax-free transactions)

12 shall not apply.

13 ‘‘(4) INTEREST CHARGED IF DISPOSITION

14 WITHIN 5 YEARS OF PURCHASE.—

15 ‘‘(A) IN GENERAL.—If—

16 ‘‘(i) a taxpayer disposes of any enter17 prise zone stock with respect to which a

18 deduction was allowed under subsection (a)

19 (or any other property the basis of which

20 is determined in whole or in part by ref21 erence to the adjusted basis of such stock)

22 before the end of the 5-year period begin23 ning on the date such stock was purchased

24 by the taxpayer, and
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1 ‘‘(ii) section 1245(a) applies to such

2 disposition by reason of paragraph (2),

3 then the tax imposed by this chapter for the

4 taxable year in which such disposition occurs

5 shall be increased by the amount determined

6 under subparagraph (B).

7 ‘‘(B) ADDITIONAL AMOUNT.—For purposes

8 of subparagraph (A), the additional amount

9 shall be equal to the amount of interest (deter10 mined at the rate applicable under section

11 6621(a)(2)) that would accrue—

12 ‘‘(i) during the period beginning on

13 the date the stock was purchased by the

14 taxpayer and ending on the date of such

15 disposition by the taxpayer, and

16 ‘‘(ii) on an amount equal to the aggre17 gate decrease in tax of the taxpayer result18 ing from the deduction allowed under this

19 subsection (a) with respect to such stock.

20 ‘‘(C) SPECIAL RULE.—Any increase in tax

21 under subparagraph (A) shall not be treated as

22 a tax imposed by this chapter for purposes of—

23 ‘‘(i) determining the amount of any

24 credit allowable under this chapter, and
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1 ‘‘(ii) determining the amount of the

2 tax imposed by section 55.

3 ‘‘(f) DISQUALIFICATION.—

4 ‘‘(1) ISSUER CEASES TO QUALIFY.—If, during

5 the 10-year period beginning on the date enterprise

6 zone stock was purchased by the taxpayer, the issuer

7 of such stock ceases to be a qualified enterprise zone

8 issuer (determined without regard to subsection

9 (d)(3)), then notwithstanding any provision of this

10 subtitle other than paragraph (2), the taxpayer shall

11 be treated for purposes of subsection (e) as dispos12 ing of such stock (and any other property the basis

13 of which is determined in whole or in part by ref14 erence to the adjusted basis of such stock) during

15 the taxable year during which such cessation occurs

16 at its fair market value as of the 1st day of such

17 taxable year.

18 ‘‘(2) CESSATION OF ENTERPRISE ZONE STATUS

19 NOT TO CAUSE RECAPTURE.—A corporation shall

20 not fail to be treated as a qualified enterprise zone

21 issuer for purposes of paragraph (1) solely by reason

22 of the termination or revocation of a designation as

23 an empowerment zone or enterprise community, as

24 the case may be.

25 ‘‘(g) OTHER SPECIAL RULES.—
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1 ‘‘(1) APPLICATION OF LIMITS TO PARTNER2 SHIPS AND S CORPORATIONS.—In the case of a part3 nership or an S corporation, the limitations under

4 subsection (b) shall apply at the partner and share5 holder level and shall not apply at the partnership

6 or corporation level.

7 ‘‘(2) DEDUCTION NOT ALLOWED TO ESTATES

8 AND TRUSTS.—Estates and trusts shall not be treat9 ed as individuals for purposes of this section.’’

10 (b) ADDITIONAL EXPENSING.—Section 1397A (relat11 ing to increase in expensing under section 179) is amend12 ed—

13 (1) in subparagraph (A) of subsection (a)(1),

14 by striking ‘‘$20,000’’ and inserting ‘‘$35,000’’, and

15 (2) by adding at the end the following new sub16 section:

17 ‘‘(c) ENTERPRISE ZONE BUSINESS.—For purposes of

18 this section, the term ‘enterprise zone business’ has the

19 meaning given such term by section 1397B, except that

20 in applying such section references to empowerment zones

21 shall be treated as including references to enterprise com22 munities.’’

23 (c) TECHNICAL AMENDMENT.—Subsection (a) of sec24 tion 1016 (relating to adjustments to basis) is amended

25 by striking ‘‘and’’ at the end of paragraph (24), by strik-
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1 ing the period at the end of paragraph (25) and inserting

2 ‘‘, and’’; and by adding at the end the following new para3 graph:

4 ‘‘(26) to the extent provided in section

5 1397E(b), in the case of stock with respect to which

6 a deduction was allowed or allowable under section

7 1397E(a).’’

8 (d) CLERICAL AND CONFORMING AMENDMENTS.—

9 (1) The table of parts for subchapter U is

10 amended by striking the item relating to part IV

11 and inserting the following new items:

‘‘Part IV. Additional incentives for empowerment zones and enterprise communities.

‘‘Part V. Regulations.’’

12 (2) The table of sections for part V of sub13 chapter U of chapter 1, as redesignated by sub14 section (a)(1), is amended by redesignating the item

15 relating to section 1397D as section 1397F.

16 (3) Section 1397F, as so redesignated, is

17 amended by striking ‘‘and III’’ each place it appears

18 and inserting ‘‘, III, and IV’’.

19 (e) EFFECTIVE DATE.—The amendments made by

20 this section apply to taxable years beginning after Decem21 ber 31, 1995.

22 SEC. 102. COMMERCIAL REVITALIZATION TAX CREDIT.

23 (a) ALLOWANCE OF CREDIT.—Section 46 of the In24 ternal Revenue Code of 1986 (relating to investment cred-
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1 it) is amended by striking ‘‘and’’ at the end of paragraph

2 (2), by striking the period at the end of paragraph (3)

3 and inserting ‘‘, and’’, and by adding at the end the follow4 ing new paragraph:

5 ‘‘(4) the commercial revitalization credit.’’

6 (b) COMMERCIAL REVITALIZATION CREDIT.—Sub7 part E of part IV of subchapter A of chapter 1 of the

8 Internal Revenue Code of 1986 (relating to rules for com9 puting investment credit) is amended by inserting after

10 section 48 the following new section:

11 ‘‘SEC. 48A. COMMERCIAL REVITALIZATION CREDIT.

12 ‘‘(a) GENERAL RULE.—For purposes of section 46,

13 except as provided in subsection (e), the commercial revi14 talization credit for any taxable year is an amount equal

15 to the applicable percentage of the qualified revitalization

16 expenditures with respect to any qualified revitalization

17 building.

18 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of

19 this section—

20 ‘‘(1) IN GENERAL.—The term ‘applicable per21 centage’ means—

22 ‘‘(A) 20 percent, or

23 ‘‘(B) at the election of the taxpayer, 5 per24 cent for each taxable year in the credit period.
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1 The election under subparagraph (B), once made,

2 shall be irrevocable.

3 ‘‘(2) CREDIT PERIOD.—

4 ‘‘(A) IN GENERAL.—The term ‘credit pe5 riod’ means, with respect to any building, the

6 period of 10 taxable years beginning with the

7 taxable year in which the building is placed in

8 service.

9 ‘‘(B) APPLICABLE RULES.—Rules similar

10 to the rules under paragraphs (2) and (4) of

11 section 42(f) shall apply.

12 ‘‘(c) QUALIFIED REVITALIZATION BUILDINGS AND

13 EXPENDITURES.—For purposes of this section—

14 ‘‘(1) QUALIFIED REVITALIZATION BUILDING.—

15 The term ‘qualified revitalization building’ means

16 any building (and its structural components) if—

17 ‘‘(A) such building is located in an eligible

18 commercial revitalization area,

19 ‘‘(B) a commercial revitalization credit

20 amount is allocated to the building under sub21 section (e), and

22 ‘‘(C) depreciation (or amortization in lieu

23 of depreciation) is allowable with respect to the

24 building.
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1 ‘‘(2) QUALIFIED REHABILITATION EXPENDI2 TURE.—

3 ‘‘(A) IN GENERAL.—The term ‘qualified

4 rehabilitation expenditure’ means any amount

5 properly chargeable to capital account—

6 ‘‘(i) for property for which deprecia7 tion is allowable under section 168 and

8 which is—

9 ‘‘(I) nonresidential real property,

10 or

11 ‘‘(II) an addition or improvement

12 to property described in subclause (I),

13 ‘‘(ii) in connection with the construc14 tion or substantial rehabilitation or recon15 struction of a qualified revitalization build16 ing, and

17 ‘‘(iii) for the acquisition of land in

18 connection with the qualified revitalization

19 building.

20 ‘‘(B) DOLLAR LIMITATION.—The aggre21 gate amount which may be treated as qualified

22 revitalization expenditures with respect to any

23 qualified revitalization building for any taxable

24 year shall not exceed $10,000,000, reduced by

25 any such expenditures with respect to the build-
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1 ing taken into account by the taxpayer or any

2 predecessor in determining the amount of the

3 credit under this section for all preceding tax4 able years.

5 ‘‘(C) CERTAIN EXPENDITURES NOT IN6 CLUDED.—The term ‘qualified revitalization ex7 penditure’ does not include—

8 ‘‘(i) STRAIGHT LINE DEPRECIATION

9 MUST BE USED.—Any expenditure (other

10 than with respect to land acquisitions) with

11 respect to which the taxpayer does not use

12 the straight line method over a recovery

13 period determined under subsection (c) or

14 (g) of section 168. The preceding sentence

15 shall not apply to any expenditure to the

16 extent the alternative depreciation system

17 of section 168(g) applies to such expendi18 ture by reason of subparagraph (B) or (C)

19 of section 168(g)(1).

20 ‘‘(ii) ACQUISITION COSTS.—The costs

21 of acquiring any building or interest there22 in and any land in connection with such

23 building to the extent that such costs ex24 ceed 30 percent of the qualified revitaliza-
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1 tion expenditures determined without re2 gard to this clause.

3 ‘‘(iii) OTHER CREDITS.—Any expendi4 ture which the taxpayer may take into ac5 count in computing any other credit allow6 able under this part unless the taxpayer

7 elects to take the expenditure into account

8 only for purposes of this section.

9 ‘‘(3) ELIGIBLE COMMERCIAL REVITALIZATION

10 AREA.—The term ‘eligible commercial revitalization

11 area’ means an empowerment zone or enterprise

12 community designated under subchapter U.

13 ‘‘(4) SUBSTANTIAL REHABILITATION OR RE14 CONSTRUCTION.—For purposes of this subsection, a

15 rehabilitation or reconstruction shall be treated as a

16 substantial rehabilitation or reconstruction only if

17 the qualified revitalization expenditures in connec18 tion with the rehabilitation or reconstruction exceed

19 25 percent of the fair market value of the building

20 (and its structural components) immediately before

21 the rehabilitation or reconstruction.

22 ‘‘(d) WHEN EXPENDITURES TAKEN INTO AC23 COUNT.—

24 ‘‘(1) IN GENERAL.—Qualified revitalization ex25 penditures with respect to any qualified revitaliza-
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1 tion building shall be taken into account for the tax2 able year in which the qualified rehabilitated build3 ing is placed in service. For purposes of the preced4 ing sentence, a substantial rehabilitation or recon5 struction of a building shall be treated as a separate

6 building.

7 ‘‘(2) PROGRESS EXPENDITURE PAYMENTS.—

8 Rules similar to the rules of subsections (b)(2) and

9 (d) of section 47 shall apply for purposes of this sec10 tion.

11 ‘‘(e) LIMITATION ON AGGREGATE CREDITS ALLOW12 ABLE WITH RESPECT TO BUILDINGS LOCATED IN A

13 STATE.—

14 ‘‘(1) IN GENERAL.—The amount of the credit

15 determined under this section for any taxable year

16 with respect to any building shall not exceed the

17 commercial revitalization credit amount (in the case

18 of an amount determined under subsection

19 (b)(1)(B), the present value of such amount as de20 termined under the rules of section 42(b)(2)(C)) al21 located to such building under this subsection by the

22 commercial revitalization credit agency. Such alloca23 tion shall be made at the same time and in the same

24 manner as under paragraphs (1) and (7) of section

25 42(h).
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1 ‘‘(2) COMMERCIAL REVITALIZATION CREDIT

2 AMOUNT FOR AGENCIES.—

3 ‘‘(A) IN GENERAL.—The aggregate com4 mercial revitalization credit amount which a

5 commercial revitalization credit agency may al6 locate for any calendar year is the amount of

7 the State commercial revitalization credit ceil8 ing determined under this paragraph for such

9 calendar year for such agency.

10 ‘‘(B) STATE COMMERCIAL REVITALIZATION

11 CREDIT CEILING.—

12 ‘‘(i) IN GENERAL.—The State com13 mercial revitalization credit ceiling applica14 ble to any State for any calendar year is

15 $2,000,000 for each empowerment zone

16 and enterprise community in the State des17 ignated under subchapter U.

18 ‘‘(ii) SPECIAL RULE WHERE ZONE OR

19 COMMUNITY LOCATED IN MORE THAN 1

20 STATE.—If an empowerment zone or enter21 prise community is located in more than 1

22 State, a State’s share of the amount speci23 fied in clause (i) with respect to such zone

24 or community shall be an amount that

25 bears the same ratio to $2,000,000 as the
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1 population in the State bears to the popu2 lation in all States in which such zone or

3 community is located.

4 ‘‘(iii) OTHER SPECIAL RULES.—Rules

5 similar to the rules of subparagraphs (D),

6 (E), (F), and (G) of section 42(h)(3) shall

7 apply for purposes of this subsection.

8 ‘‘(C) COMMERCIAL REVITALIZATION CRED9 IT AGENCY.—For purposes of this section, the

10 term ‘commercial revitalization credit agency’

11 means any agency authorized by a State to

12 carry out this section.

13 ‘‘(f) RESPONSIBILITIES OF COMMERCIAL REVITAL14 IZATION CREDIT AGENCIES.—

15 ‘‘(1) PLANS FOR ALLOCATION.—Notwithstand16 ing any other provision of this section, the commer17 cial revitalization credit dollar amount with respect

18 to any building shall be zero unless—

19 ‘‘(A) such amount was allocated pursuant

20 to a qualified allocation plan of the commercial

21 revitalization credit agency which is approved

22 by the governmental unit (in accordance with

23 rules similar to the rules of section 147(f)(2)

24 (other than subparagraph (B)(ii) thereof)) of

25 which such agency is a part, and
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1 ‘‘(B) such agency notifies the chief execu2 tive officer (or its equivalent) of the local juris3 diction within which the building is located of

4 such project and provides such individual a rea5 sonable opportunity to comment on the project.

6 ‘‘(2) QUALIFIED ALLOCATION PLAN.—For pur7 poses of this subsection, the term ‘qualified alloca8 tion plan’ means any plan—

9 ‘‘(A) which sets forth selection criteria to

10 be used to determine priorities of the commer11 cial revitalization credit agency which are ap12 propriate to local conditions,

13 ‘‘(B) which considers—

14 ‘‘(i) the degree to which a project con15 tributes to the implementation of a strate16 gic plan that is devised for an eligible com17 mercial revitalization area through a citi18 zen participation process,

19 ‘‘(ii) the amount of any increase in

20 permanent, full-time employment by reason

21 of any project, and

22 ‘‘(iii) the active involvement of resi23 dents and nonprofit groups within the eli24 gible commercial revitalization area, and
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1 ‘‘(C) which provides a procedure that the

2 agency (or its agent) will follow in monitoring

3 for compliance with this section.

4 ‘‘(g) TERMINATION.—This section shall not apply to

5 any building placed in service after December 31, 2000.’’

6 (c) CONFORMING AMENDMENTS.—

7 (1) Section 39(d) of the Internal Revenue Code

8 of 1986 is amended by adding at the end the follow9 ing new paragraph:

10 ‘‘(7) NO CARRYBACK OF SECTION 48A CREDIT

11 BEFORE ENACTMENT.—No portion of the unused

12 business credit for any taxable year which is attrib13 utable to any commercial revitalization credit deter14 mined under section 48A may be carried back to a

15 taxable year ending before the date of the enactment

16 of section 48A.’’

17 (2) Subparagraph (B) of section 48(a)(2) of

18 such Code is amended by inserting ‘‘or commercial

19 revitalization’’ after ‘‘rehabilitation’’ each place it

20 appears in the text and heading thereof.

21 (3) Subparagraph (C) of section 49(a)(1) of

22 such Code is amended by striking ‘‘and’’ at the end

23 of clause (ii), by striking the period at the end of

24 clause (iii) and inserting ‘‘, and’’, and by adding at

25 the end the following new clause:
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1 ‘‘(iv) the basis of any qualified revital2 ization building attributable to qualified re3 vitalization expenditures.’’

4 (4) Paragraph (2) of section 50(a) of such Code

5 is amended by inserting ‘‘or 48A(d)(2)’’ after ‘‘sec6 tion 47(d)’’ each place it appears.

7 (5) Subparagraph (B) of section 50(a)(2) of

8 such Code is amended by adding at the end the fol9 lowing new sentence: ‘‘A similar rule shall apply for

10 purposes of section 48A.’’

11 (6) Paragraph (2) of section 50(b) of such Code

12 is amended by striking ‘‘and’’ at the end of subpara13 graph (C), by striking the period at the end of sub14 paragraph (D) and inserting ‘‘, and’’, and by adding

15 at the end the following new subparagraph:

16 ‘‘(E) a qualified revitalization building to

17 the extent of the portion of the basis which is

18 attributable to qualified revitalization expendi19 tures.’’

20 (7) Subparagraph (C) of section 50(b)(4) of

21 such Code is amended by inserting ‘‘or commercial

22 revitalization’’ after ‘‘rehabilitated’’ each place it ap23 pears in the text or heading thereof.

24 (8) Subparagraph (C) of section 469(i)(3) is

25 amended—
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1 (A) by inserting ‘‘or section 48A’’ after

2 ‘‘section 42’’; and

3 (B) by striking ‘‘CREDIT’’ in the heading

4 and inserting ‘‘AND COMMERCIAL REVITALIZA5 TION CREDITS’’.

6 (d) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to property placed in service after

8 December 31, 1995.

9 TITLE II—REGULATORY

10 FLEXIBILITY

11 SEC. 201. DEFINITION OF SMALL ENTITIES IN

12 EMPOWERMENT ZONES AND ENTERPRISE

13 COMMUNITIES FOR ANALYSIS OF REGU14 LATORY FUNCTIONS.

15 Section 601 of title 5, United States Code, is amend16 ed—

17 (1) by striking ‘‘and’’ at the end of paragraph

18 (5); and

19 (2) by striking paragraph (6) and inserting the

20 following:

21 ‘‘(6) the term ‘small entity’ means—

22 ‘‘(A) a small business, small organization,

23 or small governmental jurisdiction defined in

24 paragraphs (3), (4), and (5) of this section; and
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1 ‘‘(B)(i) any enterprise zone business (as

2 defined by section 1394(b)(3) of the Internal

3 Revenue Code of 1986);

4 ‘‘(ii) any unit of government that nomi5 nated an area which the appropriate Secretary

6 designates as an empowerment zone or enter7 prise community (within the meaning of section

8 1391 of the Internal Revenue Code of 1986)

9 that has a rule pertaining to the carrying out

10 of any project, activity, or undertaking within

11 such zone or community; and

12 ‘‘(iii) any not-for-profit enterprise carrying

13 out a significant portion of its activities within

14 such a zone or community.

15 For purposes of subparagraph (B)(ii), the term ‘ap16 propriate Secretary’ has the meaning given such

17 term by section 1393(a)(1) of the Internal Revenue

18 Code of 1986.’’

19 SEC. 202. WAIVER OR MODIFICATION OF AGENCY RULES IN

20 EMPOWERMENT ZONES AND ENTERPRISE

21 COMMUNITIES.

22 (a) IN GENERAL.—Chapter 6 of title 5, United

23 States Code, is amended by adding after section 612 the

24 following new section:
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1 ‘‘§ 613. Waiver or modification of agency rules in

2 empowerment zones and enterprise com3 munities

4 ‘‘(a) Upon the written request of any government

5 which nominated an area that the appropriate Secretary

6 has designated as an empowerment zone or enterprise

7 community under section 1391 of the Internal Revenue

8 Code of 1986, an agency is authorized, in order to further

9 the job creation, community development, or economic re10 vitalization objectives with respect to such zone or commu11 nity, to waive or modify all or part of any rule which such

12 agency has authority to promulgate, as such rule pertains

13 to the carrying out of projects, activities, or undertakings

14 within such zone or community.

15 ‘‘(b) Nothing in this section shall authorize an agency

16 to waive or modify any rule adopted to carry out a statute

17 or Executive order which prohibits, or the purpose of

18 which is to protect persons against, discrimination on the

19 basis of race, color, religion, sex, familial status, national

20 origin, age, or handicap.

21 ‘‘(c) A request under subsection (a) shall specify the

22 rule or rules to be waived or modified and the change pro23 posed, and shall briefly describe why the change would

24 promote the achievement of the job creation, community

25 development, or economic revitalization objectives of the

26 empowerment zone or enterprise community. If such a re-
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1 quest is made to any agency other than the Department

2 of Housing and Urban Development or the Department

3 of Agriculture, the requesting government shall send a

4 copy of the request to the Secretary of Housing and Urban

5 Development or to the Secretary of Agriculture, whichever

6 is appropriate, at the time the request is made.

7 ‘‘(d) Any petition for a modification or waiver shall—

8 (i) identify the requirements for which the

9 modification or waiver is sought;

10 ‘‘(ii) identify the existing or proposed business

11 or type of business to which the modification or

12 waiver would pertain;

13 ‘‘(iii) demonstrate that the public interest which

14 the proposed change would serve in furthering such

15 job creation, community development, or economic

16 revitalization outweighs the public interest which

17 continuation of the rule unchanged would serve;

18 ‘‘(iv) demonstrate the extent to which the pro19 posed change is likely to further job creation, com20 munity development, or economic revitalization with21 in the empowerment zone or enterprise community

22 against the effect the change is likely to have on the

23 underlying purposes of applicable statutes in the ge24 ographic area which would be affected by the

25 change; and
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1 ‘‘(v) demonstrate that the waiver or modifica2 tion is necessary because the existing rule impedes

3 the implementation of an existing or proposed busi4 ness or type of business that furthers job creation,

5 community development, or economic revitalization.

6 ‘‘(e) The agency may approve, in its discretion, a pe7 tition upon determining that the petition meets the above8 stated criteria. The agency shall not approve any request

9 to waive or modify a rule if that waiver or modification

10 would—

11 ‘‘(1) violate a statutory requirement (including

12 any requirements of the Fair Labor Standards Act

13 of 1938 (52 Stat. 1060; 29 U.S.C. 201 et seq.)); or

14 ‘‘(2) be likely to present a significant risk to the

15 public health, including environmental or occupa16 tional health or safety or of environmental pollution.

17 ‘‘(f) A modified rule shall be enforceable as if it were

18 the issuance of an amendment to the rule being modified

19 or waived.

20 ‘‘(g) If a request is disapproved, the agency shall in21 form all the requesting governments, and the appropriate

22 Secretary (as defined in section 1393(a)(1) of the Internal

23 Revenue Code of 1986), in writing of the reasons therefor

24 and shall, to the maximum extent possible, work with such
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1 governments to develop an alternative, consistent with the

2 standards contained in subsection (d).

3 ‘‘(h) No later than the date on which the petitioner

4 submits the petition to the agency, the petitioner shall in5 form the public of the submission of such petition (includ6 ing a brief description of the petition) through publication

7 of a notice in newspapers of general circulation in the area

8 in which the facility is located. The agency may authorize

9 or require petitioners to use additional or alternative

10 means of informing the public of the submission of such

11 petitions. If the agency proposes to grant the petitions,

12 the agency shall provide public notice and opportunity to

13 comment. The agency shall publish a notice in the Federal

14 Register stating any waiver or modification of a rule under

15 this section, the time such waiver or modification takes

16 effect and its duration, and the scope of the applicability

17 of such waiver or modification, consistent with the Admin18 istrative Procedure Act requirements.

19 ‘‘(i) In the event that an agency proposes to amend

20 a rule for which a waiver or modification under this sec21 tion is in effect, the agency shall not change the waiver

22 or modification to impose additional requirements unless

23 it determines, consistent with standards contained in sub24 section (d), that such action is necessary. Such determina-
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1 tions shall be published with the proposal to amend such

2 rule.

3 ‘‘(j) No waiver or modification of a rule under this

4 section shall remain in effect with respect to an

5 empowerment zone or enterprise community after the zone

6 or community designation has expired or has been re7 voked.

8 ‘‘(k) For purposes of this section, the term ‘rule’

9 means—

10 ‘‘(1) any rule as defined in section 551(4) of

11 this title, or

12 ‘‘(2) any rulemaking conducted on the record

13 after opportunity for an agency hearing pursuant to

14 sections 556 and 557 of this title.’’

15 (b) CLERICAL AMENDMENT.—The analysis for chap16 ter 6 of title 5, United States Code, is amended by insert17 ing after the item relating to section 612, the following

18 new item:

‘‘613. Waiver or modification of agency rules in empowerment zones and enterprise communities.’’

19 (c) CONFORMING AMENDMENTS.—

20 (1) Section 601(2) of such title 5 is amended

21 by inserting ‘‘(except for purposes of section 613)’’

22 before ‘‘means’’.

23 (2) Section 612 of such title 5 is amended—
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1 (A) in subsection (a), by inserting ‘‘(except

2 section 613)’’ after ‘‘chapter’’; and

3 (B) in subsection (b), by inserting ‘‘as de4 fined in section 601(2)’’ before the period at

5 the end of the first sentence.

6 TITLE III—RESIDENT MANAGE7 MENT AND HOMEOWNERSHIP

8 INCENTIVES

9 SEC. 301. ENTERPRISE ZONE OPPORTUNITY GRANTS.

10 (a) IN GENERAL.—Section 186 of the Housing and

11 Community Development Act of 1992 (42 U.S.C. 12898a)

12 is amended by striking the section designation and the sec13 tion heading and inserting the following:

14 ‘‘SEC. 186. ENTERPRISE ZONE GRANTS.’’

15 (b) STATEMENT OF PURPOSE.—Section 186(a) of the

16 Housing and Community Development Act of 1992 (42

17 U.S.C. 12898a(a)) is amended—

18 (1) in paragraph (2), by striking ‘‘and’’ at the

19 end;

20 (2) in paragraph (3)—

21 (A) by striking ‘‘federally approved and

22 equivalent State-approved’’; and

23 (B) by striking the period at the end and

24 inserting ‘‘; and’’; and
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1 (3) by adding at the end the following new

2 paragraph:

3 ‘‘(4) to encourage the development of resident

4 management corporations and resident councils in

5 enterprise zones.’’

6 (c) DEFINITIONS.—Section 186(b) of the Housing

7 and Community Development Act of 1992 (42 U.S.C.

8 12898a(b)) is amended by adding at the end the following

9 new paragraphs:

10 ‘‘(7) ENTERPRISE ZONE.—The term ‘enterprise

11 zone’ means an area designated as an enterprise

12 community or an empowerment zone under section

13 1391 of the Internal Revenue Code of 1986.

14 ‘‘(8) RESIDENT MANAGEMENT CORPORATION.—

15 The term ‘resident management corporation’ has the

16 same meaning as in section 24(h) of the United

17 States Housing Act of 1937.’’

18 (d) ASSISTANCE TO NONPROFIT ORGANIZATIONS.—

19 Section 186(c)(1) of the Housing and Community Devel20 opment Act of 1992 (42 U.S.C. 12898a(c)(1)) is amended

21 to read as follows:

22 ‘‘(1) IN GENERAL.—In carrying out this sec23 tion, the Secretary may make grants to nonprofit or24 ganizations—
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1 ‘‘(A) to carry out enterprise zone home2 ownership opportunity programs to promote

3 homeownership in enterprise zones in accord4 ance with this section; and

5 ‘‘(B) to promote the development of resi6 dent management corporations in enterprise

7 zones.’’

8 (e) ELIGIBLE USES OF ASSISTANCE.—Section 186(d)

9 of the Housing and Community Development Act of 1992

10 (42 U.S.C. 12898a(d)) is amended—

11 (1) in paragraph (1)—

12 (A) by striking ‘‘assistance to provide’’ and

13 inserting the following: ‘‘assistance to—

14 ‘‘(A) provide’’;

15 (B) by striking the period at the end and

16 inserting ‘‘; and’’; and

17 (C) by adding at the end the following:

18 ‘‘(B) to promote the development of resi19 dent management corporations in enterprise

20 zones.’’; and

21 (2) in paragraph (2), by striking ‘‘under this

22 subsection’’ and inserting ‘‘under paragraph

23 (1)(A)’’.
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1 (f) PROGRAM REQUIREMENTS.—Section 186(e) of

2 the Housing and Community Development Act of 1992

3 (42 U.S.C. 12898a(e)) is amended—

4 (1) in paragraph (2), by striking ‘‘under this

5 section’’ and inserting ‘‘under subsection (d)(1)(A)’’;

6 and

7 (2) in paragraph (3), by striking ‘‘federally ap8 proved or State-approved’’.

9 (g) TERMS AND CONDITIONS OF ASSISTANCE.—Sec10 tion 186(f)(2) of the Housing and Community Develop11 ment Act of 1992 (42 U.S.C. 12898a(f)(2)) is amended

12 by striking ‘‘under this section’’ and inserting ‘‘under sub13 section (c)(1)(A)’’.

14 (h) PROGRAM SELECTION CRITERIA.—Section

15 186(g)(1) of the Housing and Community Development

16 Act of 1992 (42 U.S.C. 12898a(g)(1)) is amended by

17 striking ‘‘under this section’’ and inserting ‘‘under sub18 section (d)(1)(A)’’.

19 (i) AUTHORIZATION OF APPROPRIATIONS.—Section

20 186(i) of the Housing and Community Development Act

21 of 1992 (42 U.S.C. 12898a(i)) is amended to read as fol22 lows:

23 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There

24 are authorized to be appropriated to carry out this

25 section—
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1 ‘‘(1) $100,000,000 for fiscal year 1997; and

2 ‘‘(2) such sums as may be necessary for each

3 of fiscal years 1998, 1999, and 2000.’’

Æ

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