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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 100 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 100

   To provide tax incentives for the establishment of tax enterprise 
                     zones, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

             January 21 (legislative day, January 5), 1993

    Mr. Riegle (for himself, Mr. Kennedy, Mr. Kerry, and Mr. Biden) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL

 
   To provide tax incentives for the establishment of tax enterprise 
                     zones, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Enhanced Enterprise Zones Act of 
1993''.

 TITLE I--URBAN TAX ENTERPRISE ZONES AND RURAL DEVELOPMENT INVESTMENT 
                                 ZONES

SEC. 100. AMENDMENT OF 1986 CODE.

    Except as otherwise expressly provided, whenever in this title an 
amendment to or repeal is expressed in terms of an amendment to, or 
repeal of, a section or other provision, the reference shall be 
considered to be made to section or other provision of the Internal 
Revenue Code of 1986.

SEC. 101. STATEMENT OF PURPOSE.

    It is the purpose of this title to establish a demonstration 
program of providing incentives for the creation of tax enterprise 
zones in order--
            (1) to revitalize economically and physically distressed 
        areas, primarily by encouraging the formation of new businesses 
        and the retention and expansion of existing businesses,
            (2) to promote meaningful employment for tax enterprise 
        zone residents, and
            (3) to encourage individuals to reside in the tax 
        enterprise zones in which they are employed.

               Subtitle A--Designation and Tax Incentives

SEC. 102. DESIGNATION AND TREATMENT OF URBAN TAX ENTERPRISE ZONES AND 
              RURAL DEVELOPMENT INVESTMENT ZONES.

    (a) In General.--Chapter 1 (relating to normal taxes and surtaxes) 
is amended by inserting after subchapter T the following new 
subchapter:

   ``Subchapter U--Designation and Treatment of Tax Enterprise Zones

                              ``Part I. Designation of tax enterprise 
                                        zones.
                              ``Part II. Incentives for tax enterprise 
                                        zones.

             ``PART I--DESIGNATION OF TAX ENTERPRISE ZONES

                              ``Sec. 1391. Designation procedure.
                              ``Sec. 1392. Eligibility and selection 
                                        criteria.
                              ``Sec. 1393. Definitions and special 
                                        rules.

``SEC. 1391. DESIGNATION PROCEDURE.

    ``(a) In General.--For purposes of this title, the term `tax 
enterprise zone' means any area which is, under this part--
            ``(1) nominated by 1 or more local governments and the 
        State in which it is located for designation as a tax 
        enterprise zone, and
            ``(2) designated by--
                    ``(A) the Secretary of Housing and Urban 
                Development in the case of an urban tax enterprise 
                zone, or
                    ``(B) the Secretary of Agriculture, in consultation 
                with the Secretary of Commerce, in the case of a rural 
                development investment zone.
    ``(b) Number of Designations.--
            ``(1) Aggregate limit.--The appropriate Secretaries may 
        designate in the aggregate 50 nominated areas as tax enterprise 
        zones under this section, subject to the availability of 
        eligible nominated areas. Not more than 25 urban tax enterprise 
        zones may be designated and not more than 25 rural development 
        investment zones may be designated. Such designations may be 
        made only during calendar years after 1992 and before 1997.
            ``(2) Annual limits.--
                    ``(A) Urban tax enterprise zones.--The number of 
                urban tax enterprise zones designated under paragraph 
                (1)--
                            ``(i) before 1994 shall not exceed 8,
                            ``(ii) before 1995 shall not exceed 15, and
                            ``(iii) before 1996 shall not exceed 21.
                    ``(B) Rural development investment zones.--The 
                number of rural development investment zones designated 
                under paragraph (1)--
                            ``(i) before 1994 shall not exceed 8,
                            ``(ii) before 1995 shall not exceed 15, and
                            ``(iii) before 1996 shall not exceed 21.
            ``(3) Advance designations permitted.--For purposes of this 
        subchapter, a designation during any calendar year shall be 
        treated as made on January 1 of the following calendar year if 
        the appropriate Secretary, in making such designation, 
        specifies that such designation is effective as of such January 
        1.
    ``(c) Limitations on Designations.--The appropriate Secretary may 
not make any designation under subsection (a) unless--
            ``(1) the local governments and the State in which the 
        nominated area is located have the authority--
                    ``(A) to nominate the area for designation as a tax 
                enterprise zone, and
                    ``(B) to provide assurances satisfactory to the 
                appropriate Secretary that the commitments under 
                section 1392(c) will be fulfilled,
            ``(2) a nomination of the area is submitted within a 
        reasonable time before the calendar year for which designation 
        as a tax enterprise zone is sought (or, if later, a reasonable 
        time after the date of the enactment of this subchapter),
            ``(3) the appropriate Secretary determines that any 
        information furnished is reasonably accurate, and
            ``(4) the State and local governments certify that no 
        portion of the area nominated is already included in a tax 
        enterprise zone or in an area otherwise nominated to be a tax 
        enterprise zone.
    ``(d) Period for Which Designation Is in Effect.--
            ``(1) In general.--Any designation of an area as a tax 
        enterprise zone shall remain in effect during the period 
        beginning on the date of the designation and ending on the 
        earliest of--
                    ``(A) December 31 of the 15th calendar year 
                following the calendar year in which such date occurs,
                    ``(B) the termination date designated by the State 
                and local governments as provided for in their 
                nomination, or
                    ``(C) the date the appropriate Secretary revokes 
                the designation under paragraph (2).
            ``(2) Revocation of designation.--
                    ``(A) In general.--The appropriate Secretary shall 
                revoke the designation of an area as a tax enterprise 
                zone if such Secretary determines that the local 
                government or the State in which it is located--
                            ``(i) has modified the boundaries of the 
                        area, or
                            ``(ii) is not complying substantially with 
                        the State and local commitments pursuant to 
                        section 1392(c).
                    ``(B) Applicable procedures.--A designation may be 
                revoked by the appropriate Secretary under subparagraph 
                (A) only after a hearing on the record involving 
                officials of the State or local government involved.

``SEC. 1392. ELIGIBILITY AND SELECTION CRITERIA.

    ``(a) In General.--The appropriate Secretary may make a designation 
of any nominated area under section 1391 only on the basis of the 
eligibility and selection criteria set forth in this section.
    ``(b) Eligibility Criteria.--
            ``(1) Urban tax enterprise zones.--A nominated area which 
        is not a rural area shall be eligible for designation under 
        section 1391 only if it meets the following criteria:
                    ``(A) Population.--The nominated area has a 
                population (as determined by the most recent census 
                data available) of not less than 4,000.
                    ``(B) Distress.--The nominated area is one of 
                pervasive poverty, unemployment, and general distress.
                    ``(C) Size.--The nominated area--
                            ``(i) does not exceed 20 square miles,
                            ``(ii) has a boundary which is continuous, 
                        or consists of not more than 3 noncontiguous 
                        parcels within the same metropolitan area,
                            ``(iii) is located entirely within 1 State, 
                        and
                            ``(iv) does not include any portion of a 
                        central business district (as such term is used 
                        for purposes of the most recent Census of 
                        Retail Trade).
                    ``(D) Unemployment rate.--The unemployment rate (as 
                determined by the appropriate available data) is not 
                less than 1.5 times the national unemployment rate.
                    ``(E) Poverty rate.--The poverty rate (as 
                determined by the most recent census data available) 
                for not less than 90 percent of the population census 
                tracts (or where not tracted, the equivalent county 
                divisions as defined by the Bureau of the Census for 
                the purposes of defining poverty areas) within the 
                nominated area is not less than 20 percent.
                    ``(F) Course of action.--There has been adopted for 
                the nominated area a course of action which meets the 
                requirements of subsection (c).
            ``(2) Rural development investment zones.--A nominated area 
        which is a rural area shall be eligible for designation under 
        section 1391 only if it meets the following criteria:
                    ``(A) Population.--The nominated area has a 
                population (as determined by the most recent census 
                data available) of not less than 1,000.
                    ``(B) Distress.--The nominated area is one of 
                general distress.
                    ``(C) Size.--The nominated area--
                            ``(i) does not exceed 10,000 square miles,
                            ``(ii) consists of areas within not more 
                        than 4 contiguous counties,
                            ``(iii) has a boundary which is continuous, 
                        or consists of not more than 3 noncontiguous 
                        parcels, and
                            ``(iv) is located entirely within 1 State.
                    ``(D) Additional criteria.--Not less than 2 of the 
                following criteria:
                            ``(i) Unemployment rate.--The criterion set 
                        forth in paragraph (1)(D).
                            ``(ii) Poverty rate.--The criterion set 
                        forth in paragraph (1)(E).
                            ``(iii) Job loss.--The amount of wages 
                        attributable to employment in the area, and 
                        subject to tax under section 3301 during the 
                        preceding calendar year, is not more than 95 
                        percent of such wages during the 5th preceding 
                        calendar year.
                            ``(iv) Out-migration.--The population of 
                        the area decreased (as determined by the most 
                        recent census data available) by 10 percent or 
                        more between 1980 and 1990.
                    ``(E) Course of action.--There has been adopted for 
                the nominated area a course of action which meets the 
                requirements of subsection (c).
            ``(3) Areas within indian reservations ineligible.--A 
        nominated area shall not be eligible for designation under 
        section 1391 if any portion of such area is within an Indian 
        reservation.
    ``(c) Required State and Local Course of Action.--
            ``(1) In general.--No nominated area may be designated as a 
        tax enterprise zone unless the local government and the State 
        in which it is located agree in writing that, during any period 
        during which the area is a tax enterprise zone, the governments 
        will follow a specified course of action designed to reduce the 
        various burdens borne by employers or employees in the area.
            ``(2) Course of action.--The course of action under 
        paragraph (1) may be implemented by both governments and 
        private nongovernmental entities, may not be funded from 
        proceeds of any Federal program (other than discretionary 
        proceeds), and may include--
                    ``(A) a certification by the State insurance 
                commissioner (or similar State official) that basic 
                commercial property insurance of a type comparable to 
                that insurance generally in force in urban or rural 
                areas, whichever is applicable, throughout the State is 
                available to businesses within the tax enterprise zone,
                    ``(B) a reduction of tax rates or fees applying 
                within the tax enterprise zone,
                    ``(C) an increase in the level, or efficiency of 
                delivery, of local public services within the tax 
                enterprise zone,
                    ``(D) actions to reduce, remove, simplify, or 
                streamline government paperwork requirements applicable 
                within the tax enterprise zone,
                    ``(E) the involvement in the program by public 
                authorities or private entities, organizations, 
                neighborhood associations, and community groups, 
                particularly those within the nominated area, including 
                a written commitment to provide jobs and job training 
                for, and technical, financial, or other assistance to, 
                employers, employees, and residents of the nominated 
                area,
                    ``(F) the giving of special preference to 
                contractors owned and operated by members of any 
                socially and economically disadvantaged group (within 
                the meaning of section 8(a) of the Small Business Act 
                (15 U.S.C. 637(a)),
                    ``(G) the gift (or sale at below fair market value) 
                of surplus land in the tax enterprise zone to 
                neighborhood organizations agreeing to operate a 
                business on the land,
                    ``(H) the establishment of a program under which 
                employers within the tax enterprise zone may purchase 
                health insurance for their employees on a pooled basis,
                    ``(I) the establishment of a program to encourage 
                local financial institutions to satisfy their 
                obligations under the Community Reinvestment Act of 
                1977 (12 U.S.C. 2901 et seq.) by making loans to 
                enterprise zone businesses, with emphasis on startup 
                and other small-business concerns (as defined in 
                section 3(a) of the Small Business Act (15 U.S.C. 
                632(a)),
                    ``(J) the giving of special preference to qualified 
                low-income housing projects located in tax enterprise 
                zones, in the allocation of the State housing credit 
                ceiling applicable under section 42, and
                    ``(K) the giving of special preference to 
                facilities located in tax enterprise zones, in the 
                allocation of the State ceiling on private activity 
                bonds applicable under section 146.
            ``(3) Recognition of past efforts.--In evaluating courses 
        of action agreed to by any State or local government, the 
        appropriate Secretary shall take into account the past efforts 
        of the State or local government in reducing the various 
        burdens borne by employers and employees in the area involved.
            ``(4) Prohibition of assistance for business relocations.--
                    ``(A) In general.--The course of action implemented 
                under paragraph (1) may not include any action to 
                assist any establishment in relocating from 1 area to 
                another area.
                    ``(B) Exception.--The limitation established in 
                subparagraph (A) shall not be construed to prohibit 
                assistance for the expansion of an existing business 
                entity through the establishment of a new branch, 
                affiliate, or subsidiary if--
                            ``(i) the establishment of the new branch, 
                        affiliate, or subsidiary will not result in an 
                        increase in unemployment in the area of 
                        original location or in any other area where 
                        the existing business entity conducts business 
                        operations, and
                            ``(ii) there is no reason to believe that 
                        the new branch, affiliate, or subsidiary is 
                        being established with the intention of closing 
                        down the operations of the existing business 
                        entity in the area of its original location or 
                        in any other area where the existing business 
                        entity conducts business operations.
    ``(d) Selection Criteria.--From among the nominated areas eligible 
for designation under subsection (b) by the appropriate Secretary, such 
appropriate Secretary shall make designations of tax enterprise zones 
on the basis of the following factors (each of which is to be given 
equal weight):
            ``(1) State and local commitments.--The strength and 
        quality of the commitments which have been promised as part of 
        the course of action relative to the fiscal ability of the 
        nominating State and local governments.
            ``(2) Implementation of course of action.--The 
        effectiveness and enforceability of the guarantees that the 
        course of action will actually be carried out, including the 
        specificity with which the commitments under paragraph (1) are 
        described in order that the applicable Secretary will be better 
        able to determine annually under section 1391(d)(2)(A)(ii) 
        whether the commitments are being carried out.
            ``(3) Private commitments.--The level of commitments by 
        private entities of additional resources and contributions to 
        the economy of the nominated area, including the creation of 
        new or expanded business activities.
            ``(4) Average rankings.--The average ranking with respect 
        to--
                    ``(A) the criteria set forth in subparagraphs (D) 
                and (E) of subsection (b)(1), in the case of an area 
                which is not a rural area, or
                    ``(B) the 2 criteria set forth in subsection 
                (b)(2)(D) that give the area a higher average ranking, 
                in the case of a rural area.
            ``(5) Revitalization potential.--The potential for the 
        revitalization of the nominated area as a result of zone 
        designation, taking into account particularly the number of 
        jobs to be created and retained.

``SEC. 1393. DEFINITIONS AND SPECIAL RULES.

    For purposes of this subchapter--
            ``(1) Urban tax enterprise zone.--The term `urban tax 
        enterprise zone' means a tax enterprise zone which meets the 
        requirements of section 1392(b)(1).
            ``(2) Rural development investment zone.--The term `rural 
        development investment zone' means a tax enterprise zone which 
        meets the requirements of section 1392(b)(2).
            ``(3) Governments.--If more than 1 local government seeks 
        to nominate an area as a tax enterprise zone, any reference to, 
        or requirement of, this subchapter shall apply to all such 
        governments.
            ``(4) Local government.--The term `local government' 
        means--
                    ``(A) any county, city, town, township, parish, 
                village, or other general purpose political subdivision 
                of a State, and
                    ``(B) any combination of political subdivisions 
                described in subparagraph (A) recognized by the 
                appropriate Secretary.
            ``(5) Nominated area.--The term `nominated area' means an 
        area which is nominated by 1 or more local governments and the 
        State in which it is located for designation as a tax 
        enterprise zone under this subchapter.
            ``(6) Rural area.--The term `rural area' means any area 
        which is--
                    ``(A) outside of a metropolitan statistical area 
                (within the meaning of section 143(k)(2)(B)), or
                    ``(B) determined by the Secretary of Agriculture, 
                after consultation with the Secretary of Commerce, to 
                be a rural area.
            ``(7) Appropriate secretary.--The term `appropriate 
        Secretary' means--
                    ``(A) the Secretary of Housing and Urban 
                Development in the case of urban tax enterprise zones, 
                and
                    ``(B) the Secretary of Agriculture in the case of 
                rural development investment zones.
            ``(8) State-chartered development corporations.--An area 
        shall be treated as nominated by a State and a local government 
        if it is nominated by an economic development corporation 
        chartered by the State.

             ``PART II--INCENTIVES FOR TAX ENTERPRISE ZONES

                              ``Subpart A. Enterprise zone employment 
                                        credit.
                              ``Subpart B. Investment incentives.
                              ``Subpart C. Regulations.

             ``Subpart A--Enterprise Zone Employment Credit

                              ``Sec. 1394. Enterprise zone employment 
                                        credit.
                              ``Sec. 1395. Other definitions and 
                                        special rules.

``SEC. 1394. ENTERPRISE ZONE EMPLOYMENT CREDIT.

    ``(a) Amount of Credit.--For purposes of section 38, the amount of 
the enterprise zone employment credit determined under this section 
with respect to any employer for any taxable year is 15 percent of the 
qualified zone wages paid or incurred during such taxable year.
    ``(b) Qualified Zone Wages.--
            ``(1) In general.--For purposes of this section, the term 
        `qualified zone wages' means any wages paid or incurred by an 
        employer for services performed by an employee while such 
        employee is a qualified zone employee.
            ``(2) Only first $20,000 of wages per year taken into 
        account.--With respect to each qualified zone employee, the 
        amount of qualified zone wages which may be taken into account 
        for the taxable year shall not exceed $20,000.
            ``(3) Coordination with targeted jobs credit.--The term 
        `qualified zone wages' shall not include wages attributable to 
        service rendered during the 1-year period beginning with the 
        day the individual begins work for the employer if any portion 
        of such wages is taken into account in determining the credit 
        under section 51.
    ``(c) Qualified Zone Employee.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `qualified zone employee' means, with 
        respect to any period, any employee of an employer if--
                    ``(A) substantially all of the services performed 
                during such period by such employee for such employer 
                are performed within a tax enterprise zone in a trade 
                or business of the employer, and
                    ``(B) the principal place of abode of such employee 
                while performing such services is within such tax 
                enterprise zone.
            ``(2) Certain individuals not eligible.--The term 
        `qualified zone employee' shall not include--
                    ``(A) any individual described in subparagraph (A), 
                (B), or (C) of section 51(i)(1),
                    ``(B) any 5-percent owner (as defined in section 
                416(i)(1)(B)),
                    ``(C) any individual employed by the employer at 
                any facility described in section 144(c)(6)(B), and
                    ``(D) any individual employed by the employer in a 
                trade or business the principal activity of which is 
                farming (within the meaning of subparagraphs (A) or (B) 
                of section 2032A(e)(5)), but only if, as of the close 
                of the taxable year, the sum of--
                            ``(i) the aggregate unadjusted bases (or, 
                        if greater, the fair market value) of the 
                        assets owned by the employer which are used in 
                        such a trade or business, and
                            ``(ii) the aggregate value of assets leased 
                        by the employer which are used in such a trade 
                        or business (as determined under regulations 
                        prescribed by the Secretary),
                exceeds $500,000.
    ``(d) Early Termination of Employment by Employer.--
            ``(1) In general.--If the employment of any employee is 
        terminated by the taxpayer before the day 1 year after the day 
        on which such employee began work for the employer--
                    ``(A) no wages with respect to such employee shall 
                be taken into account under subsection (a) for the 
                taxable year in which such employment is terminated, 
                and
                    ``(B) the tax under this chapter for the taxable 
                year in which such employment is terminated shall be 
                increased by the aggregate credits (if any) allowed 
                under section 38(a) for prior taxable years by reason 
                of wages taken into account with respect to such 
                employee.
            ``(2) Carrybacks and carryovers adjusted.--In the case of 
        any termination of employment to which paragraph (1) applies, 
        the carrybacks and carryovers under section 39 shall be 
        properly adjusted.
            ``(3) Subsection not to apply in certain cases.--
                    ``(A) In general.--Paragraph (1) shall not apply 
                to--
                            ``(i) a termination of employment of an 
                        employee who voluntarily leaves the employment 
                        of the taxpayer,
                            ``(ii) a termination of employment of an 
                        individual who before the close of the period 
                        referred to in paragraph (1) becomes disabled 
                        to perform the services of such employment 
                        unless such disability is removed before the 
                        close of such period and the taxpayer fails to 
                        offer reemployment to such individual, or
                            ``(iii) a termination of employment of an 
                        individual if it is determined under the 
                        applicable State unemployment compensation law 
                        that the termination was due to the misconduct 
                        of such individual.
                    ``(B) Changes in form of business.--For purposes of 
                paragraph (1), the employment relationship between the 
                taxpayer and an employee shall not be treated as 
                terminated--
                            ``(i) by a transaction to which section 
                        381(a) applies if the employee continues to be 
                        employed by the acquiring corporation, or
                            ``(ii) by reason of a mere change in the 
                        form of conducting the trade or business of the 
                        taxpayer if the employee continues to be 
                        employed in such trade or business and the 
                        taxpayer retains a substantial interest in such 
                        trade or business.
            ``(4) Special rule.--Any increase in tax under paragraph 
        (1) shall not be treated as a tax imposed by this chapter for 
        purposes of--
                    ``(A) determining the amount of any credit 
                allowable under this chapter, and
                    ``(B) determining the amount of the tax imposed by 
                section 55.

``SEC. 1395. OTHER DEFINITIONS AND SPECIAL RULES.

    ``(a) Wages.--For purposes of this subpart, the term `wages' has 
the same meaning as when used in section 51.
    ``(b) Controlled Groups.--For purposes of this subpart--
            ``(1) all employers treated as a single employer under 
        subsection (a) or (b) of section 52 shall be treated as a 
        single employer for purposes of this subpart, and
            ``(2) the credit (if any) determined under section 1394 
        with respect to each such employer shall be its proportionate 
        share of the wages giving rise to such credit.
    ``(c) Certain Other Rules Made Applicable.--For purposes of this 
subpart, rules similar to the rules of section 51(k) and subsections 
(c), (d), and (e) of section 52 shall apply.
    ``(d) Notice of Availability of Advance Payment of Earned Income 
Credit.--Each employer shall take reasonable steps to notify all 
qualified zone employees of the availability to eligible individuals of 
receiving advanced payments of the credit under section 32 (relating to 
the earned income credit).

                   ``Subpart B--Investment Incentives

                              ``Sec. 1396. Deduction for purchase of 
                                        enterprise zone stock.
                              ``Sec. 1397. 50 percent exclusion for 
                                        gain from new zone investments.
                              ``Sec. 1397A. Nonrecognition of gain from 
                                        new zone investments.
                              ``Sec. 1397B. Additional incentives.
                              ``Sec. 1397C. Enterprise zone business 
                                        defined.

``SEC. 1396. DEDUCTION FOR PURCHASE OF ENTERPRISE ZONE STOCK.

    ``(a) General Rule.--In the case of an individual, there shall be 
allowed as a deduction an amount equal to 50 percent of the aggregate 
amount paid in cash by the taxpayer during the taxable year for the 
purchase of enterprise zone stock.
    ``(b) Limitation.--
            ``(1) In general.--The maximum amount allowed as a 
        deduction under subsection (a) to a taxpayer for the taxable 
        year shall not exceed the lesser of--
                    ``(A) $25,000, or
                    ``(B) the excess of $250,000 over the amount 
                allowed as a deduction under this section to the 
                taxpayer for all prior taxable years.
            ``(2) Excess amounts.--If the amount otherwise deductible 
        by any person under subsection (a) exceeds the limitation under 
        paragraph (1)(A)--
                    ``(A) the amount of such excess shall be treated as 
                an amount paid to which subsection (a) applies during 
                the next taxable year, and
                    ``(B) the deduction allowed for any taxable year 
                shall be allocated proportionately among the enterprise 
                zone stock purchased by such person on the basis of the 
                respective purchase prices per share.
            ``(3) Aggregation with family members.--The taxpayer and 
        members of the taxpayer's family shall be treated as one person 
        for purposes of paragraph (1), and the limitations contained in 
        such paragraph shall be allocated among the taxpayer and such 
        members in accordance with their respective purchases of 
        enterprise zone stock. For purposes of this paragraph, an 
        individual's family includes only such individual's spouse and 
        minor children.
    ``(c) Enterprise Zone Stock.--For purposes of this section--
            ``(1) In general.--The term `enterprise zone stock' means 
        stock of a corporation if--
                    ``(A) such stock is acquired on original issue from 
                the corporation, and
                    ``(B) such corporation is, at the time of issue, a 
                qualified enterprise zone issuer.
            ``(2) Proceeds must be invested in qualified enterprise 
        zone property.--
                    ``(A) In general.--Such term shall include such 
                stock only to the extent that the proceeds of such 
                issuance are used by such issuer during the 12-month 
                period beginning on the date of issuance to purchase 
                (as defined in section 179(d)(2)) qualified enterprise 
                zone property.
                    ``(B) Qualified enterprise zone property.--For 
                purposes of this section, the term `qualified 
                enterprise zone property' means property to which 
                section 168 applies--
                            ``(i) the original use of which in a tax 
                        enterprise zone commences with the issuer, and
                            ``(ii) substantially all of the use of 
                        which is in a tax enterprise zone.
            ``(3) Redemptions.--The term `enterprise zone stock' shall 
        not include any stock acquired from a corporation which made a 
        substantial stock redemption or distribution (without a bona 
        fide business purpose therefor) in an attempt to avoid the 
        purposes of this section.
    ``(d) Qualified Enterprise Zone Issuer.--For purposes of this 
section, the term `qualified enterprise zone issuer' means any domestic 
C corporation if--
            ``(1) such corporation is an enterprise zone business or, 
        in the case of a new corporation, such corporation is being 
        organized for purposes of being an enterprise zone business,
            ``(2) such corporation does not have more than one class of 
        stock,
            ``(3) the sum of--
                    ``(A) the money,
                    ``(B) the aggregate unadjusted bases of property 
                owned by such corporation, and
                    ``(C) the value of property leased to the 
                corporation (as determined under regulations prescribed 
                by the Secretary),
        does not exceed $5,000,000, and
            ``(4) more than 20 percent of the total voting power, and 
        20 percent of the total value, of the stock of such corporation 
        is owned directly by individuals or estates or indirectly by 
        individuals through partnerships or trusts.
The determination under paragraph (3) shall be made as of the time of 
issuance of the stock in question but shall include amounts received 
for such stock.
    ``(e) Dispositions of Stock.--
            ``(1) Basis reduction.--For purposes of this title, the 
        basis of any enterprise zone stock shall be reduced by the 
        amount of the deduction allowed under this section with respect 
        to such stock.
            ``(2) Deduction recaptured as ordinary income.--For 
        purposes of section 1245--
                    ``(A) any stock the basis of which is reduced under 
                paragraph (1) (and any other property the basis of 
                which is determined in whole or in part by reference to 
                the adjusted basis of such stock) shall be treated as 
                section 1245 property, and
                    ``(B) any reduction under paragraph (1) shall be 
                treated as a deduction allowed for depreciation.
        If an exchange of any stock described in paragraph (1) 
        qualifies under section 354(a), 355(a), or 356(a), the amount 
        of gain recognized under section 1245 by reason of this 
        paragraph shall not exceed the amount of gain recognized in the 
        exchange (determined without regard to this paragraph).
            ``(3) Certain events treated as dispositions.--For purposes 
        of determining the amount treated as ordinary income under 
        section 1245 by reason of paragraph (2), paragraph (3) of 
        section 1245(b) (relating to certain tax-free transactions) 
        shall not apply.
            ``(4) Interest charged if disposition within 5 years of 
        purchase.--
                    ``(A) In general.--If--
                            ``(i) a taxpayer disposes of any enterprise 
                        zone stock with respect to which a deduction 
                        was allowed under subsection (a) (or any other 
                        property the basis of which is determined in 
                        whole or in part by reference to the adjusted 
                        basis of such stock) before the end of the 5-
                        year period beginning on the date such stock 
                        was purchased by the taxpayer, and
                            ``(ii) section 1245(a) applies to such 
                        disposition by reason of paragraph (2),
                then the tax imposed by this chapter for the taxable 
                year in which such disposition occurs shall be 
                increased by the amount determined under subparagraph 
                (B).
                    ``(B) Additional amount.--For purposes of 
                subparagraph (A), the additional amount shall be equal 
                to the amount of interest (determined at the rate 
                applicable under section 6621(a)(2)) that would 
                accrue--
                            ``(i) during the period beginning on the 
                        date the stock was purchased by the taxpayer 
                        and ending on the date of such disposition by 
                        the taxpayer,
                            ``(ii) on an amount equal to the aggregate 
                        decrease in tax of the taxpayer resulting from 
                        the deduction allowed under this subsection (a) 
                        with respect to such stock.
                    ``(C) Special rule.--Any increase in tax under 
                subparagraph (A) shall not be treated as a tax imposed 
                by this chapter for purposes of--
                            ``(i) determining the amount of any credit 
                        allowable under this chapter, and
                            ``(ii) determining the amount of the tax 
                        imposed by section 55.
    ``(f) Disqualification.--
            ``(1) Issuer ceases to qualify.--If, during the 10-year 
        period beginning on the date enterprise zone stock was 
        purchased by the taxpayer, the issuer of such stock ceases to 
        be a qualified enterprise zone issuer (determined without 
        regard to subsection (d)(3)), then notwithstanding any 
        provision of this subtitle other than paragraph (2), the 
        taxpayer shall be treated for purposes of subsection (e) as 
        disposing of such stock (and any other property the basis of 
        which is determined in whole or in part by reference to the 
        adjusted basis of such stock) during the taxable year during 
        which such cessation occurs at its fair market value as of the 
        1st day of such taxable year.
            ``(2) Cessation of enterprise zone status not to cause 
        recapture.--A corporation shall not fail to be treated as a 
        qualified enterprise zone issuer for purposes of paragraph (1) 
        solely by reason of the termination or revocation of a tax 
        enterprise zone designation.
    ``(g) Other Special Rules.--
            ``(1) Application of limits to partnerships and s 
        corporations.--In the case of a partnership or an S 
        corporation, the limitations under subsection (b) shall apply 
        at the partner and shareholder level and shall not apply at the 
        partnership or corporation level.
            ``(2) Deduction not allowed to estates and trusts.--Estates 
        and trusts shall not be treated as individuals for purposes of 
        this section.

``SEC. 1397. 50 PERCENT EXCLUSION FOR GAIN FROM NEW ZONE INVESTMENTS.

    ``(a) General Rule.--In the case of an individual, gross income 
shall not include 50 percent of any qualified capital gain recognized 
on the sale or exchange of a qualified zone asset held for more than 5 
years.
    ``(b) Qualified Zone Asset.--For purposes of this section--
            ``(1) In general.--The term `qualified zone asset' means--
                    ``(A) any qualified zone stock,
                    ``(B) any qualified zone business property, and
                    ``(C) any qualified zone partnership interest.
            ``(2) Qualified zone stock.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `qualified zone stock' means 
                any stock in a domestic corporation if--
                            ``(i) such stock is acquired by the 
                        taxpayer on original issue from the corporation 
                        solely in exchange for cash,
                            ``(ii) as of the time such stock was 
                        issued, such corporation was an enterprise zone 
                        business (or, in the case of a new corporation, 
                        such corporation was being organized for 
                        purposes of being an enterprise zone business), 
                        and
                            ``(iii) during substantially all of the 
                        taxpayer's holding period for such stock, such 
                        corporation qualified as an enterprise zone 
                        business.
                    ``(B) Exclusion of stock for which deduction under 
                section 1396 allowed.--The term `qualified zone stock' 
                shall not include any stock the basis of which is 
                reduced under section 1396(e)(1).
                    ``(C) Redemptions.--The term `qualified zone stock' 
                shall not include any stock acquired from a corporation 
                which made a substantial stock redemption or 
                distribution (without a bona fide business purpose 
                therefor) in an attempt to avoid the purposes of this 
                section.
            ``(3) Qualified zone business property.--
                    ``(A) In general.--The term `qualified zone 
                business property' means tangible property if--
                            ``(i) such property was acquired by the 
                        taxpayer by purchase (as defined in section 
                        179(d)(2)) after the date on which the 
                        designation of the tax enterprise zone took 
                        effect,
                            ``(ii) the original use of such property in 
                        a tax enterprise zone commences with the 
                        taxpayer, and
                            ``(iii) during substantially all of the 
                        taxpayer's holding period for such property, 
                        substantially all of the use of such property 
                        was in a tax enterprise zone and in an 
                        enterprise zone business of the taxpayer.
                    ``(B) Special rule for substantial improvements.--
                The requirements of clauses (i) and (ii) of 
                subparagraph (A) shall be treated as satisfied with 
                respect to--
                            ``(i) property which is substantially 
                        improved by the taxpayer, and
                            ``(ii) any land on which such property is 
                        located.
                For purposes of the preceding sentence, property shall 
                be treated as substantially improved by the taxpayer 
                if, during any 24-month period beginning after the date 
                on which the designation of the tax enterprise zone 
                took effect, additions to basis with respect to such 
                property in the hands of the taxpayer exceed the 
                greater of (i) an amount equal to the adjusted basis at 
                the beginning of such 24-month period in the hands of 
                the taxpayer, or (ii) $5,000.
                    ``(C) Limitation on land.--The term `qualified zone 
                business property' shall not include land which is not 
                an integral part of a qualified business (as defined in 
                section 1397C(c)).
            ``(4) Qualified zone partnership interest.--The term 
        `qualified zone partnership interest' means any interest in a 
        partnership if--
                    ``(A) such interest is acquired by the taxpayer 
                from the partnership solely in exchange for cash,
                    ``(B) as of the time such interest was acquired, 
                such partnership was an enterprise zone business (or, 
                in the case of a new partnership, such partnership was 
                being organized for purposes of being an enterprise 
                zone business), and
                    ``(C) during substantially all of the taxpayer's 
                holding period for such interest, such partnership 
                qualified as an enterprise zone business.
        A rule similar to the rule of paragraph (2)(C) shall apply for 
        purposes of this paragraph.
            ``(5) Treatment of subsequent purchasers.--The term 
        `qualified zone asset' includes any property which would be a 
        qualified zone asset but for paragraph (2)(A)(i), (3)(A)(ii), 
        or (4)(A) in the hands of the taxpayer if such property was a 
        qualified zone asset in the hands of any prior holder.
            ``(6) 10-year safe harbor.--If any property ceases to be a 
        qualified zone asset by reason of paragraph (2)(A)(iii), 
        (3)(A)(iii), or (4)(C) after the 10-year period beginning on 
        the date the taxpayer acquired such property, such property 
        shall continue to be treated as meeting the requirements of 
        such paragraph; except that the amount of gain to which 
        subsection (a) applies on any sale or exchange of such property 
        shall not exceed the amount which would be qualified capital 
        gain had such property been sold on the date of such cessation.
            ``(7) Treatment of zone terminations.--The termination of 
        any designation of an area as a tax enterprise zone shall be 
        disregarded for purposes of determining whether any property is 
        a qualified zone asset.
    ``(c) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified capital gain.--Except as otherwise provided 
        in this subsection, the term `qualified capital gain' means any 
        long-term capital gain.
            ``(2) Certain gain on real property not qualified.--The 
        term `qualified capital gain' shall not include any gain which 
        would be treated as ordinary income under section 1250 if 
        section 1250 applied to all depreciation rather than the 
        additional depreciation.
            ``(3) Gain attributable to periods after termination of 
        zone designation not qualified.--The term `qualified capital 
        gain' shall not include any gain attributable to periods after 
        the termination of any designation of an area as a tax 
        enterprise zone.
    ``(d) Treatment of Pass-Thru Entities.--
            ``(1) Sales and exchanges.--Gain on the sale or exchange of 
        an interest in a pass-thru entity held by the taxpayer (other 
        than an interest in an entity which was an enterprise zone 
        business during substantially all of the period the taxpayer 
        held such interest) for more than 5 years shall be treated as 
        gain described in subsection (a) to the extent such gain is 
        attributable to amounts which would be qualified capital gain 
        on qualified zone assets (determined as if such assets had been 
        sold on the date of the sale or exchange) held by such entity 
        for more than 5 years and throughout the period the taxpayer 
        held such interest. A rule similar to the rule of paragraph 
        (2)(C) shall apply for purposes of the preceding sentence.
            ``(2) Income inclusions.--
                    ``(A) In general.--Any amount included in income by 
                reason of holding an interest in a pass-thru entity 
                (other than an entity which was an enterprise zone 
                business during substantially all of the period the 
                taxpayer held the interest to which such inclusion 
                relates) shall be treated as gain described in 
                subsection (a) if such amount meets the requirements of 
                subparagraph (B).
                    ``(B) Requirements.--An amount meets the 
                requirements of this subparagraph if--
                            ``(i) such amount is attributable to 
                        qualified capital gain recognized on the sale 
                        or exchange by the pass-thru entity of property 
                        which is a qualified zone asset in the hands of 
                        such entity and which was held by such entity 
                        for the period required under subsection (a), 
                        and
                            ``(ii) such amount is includible in the 
                        gross income of the taxpayer by reason of the 
                        holding of an interest in such entity which was 
                        held by the taxpayer on the date on which such 
                        pass-thru entity acquired such asset and at all 
                        times thereafter before the disposition of such 
                        asset by such pass-thru entity.
                    ``(C) Limitation based on interest originally held 
                by taxpayer.--Subparagraph (A) shall not apply to any 
                amount to the extent such amount exceeds the amount to 
                which subparagraph (A) would have applied if such 
                amount were determined by reference to the interest the 
                taxpayer held in the pass-thru entity on the date the 
                qualified zone asset was acquired.
            ``(3) Pass-thru entity.--For purposes of this subsection, 
        the term `pass-thru entity' means--
                    ``(A) any partnership,
                    ``(B) any S corporation,
                    ``(C) any regulated investment company, and
                    ``(D) any common trust fund.
    ``(e) Sales and Exchanges of Interests in Partnerships and S 
Corporations Which Are Qualified Zone Businesses.--In the case of the 
sale or exchange of an interest in a partnership, or of stock in an S 
corporation, which was an enterprise zone business during substantially 
all of the period the taxpayer held such interest or stock, the amount 
of qualified capital gain shall be determined without regard to--
            ``(1) any intangible, and any land, which is not an 
        integral part of any qualified business (as defined in section 
        1397C(b)), and
            ``(2) gain attributable to periods before the designation 
        of an area as a tax enterprise zone.
    ``(f) Certain Tax-Free and Other Transfers.--For purposes of this 
section--
            ``(1) In general.--In the case of a transfer of a qualified 
        zone asset to which this subsection applies, the transferee 
        shall be treated as--
                    ``(A) having acquired such asset in the same manner 
                as the transferor, and
                    ``(B) having held such asset during any continuous 
                period immediately preceding the transfer during which 
                it was held (or treated as held under this subsection) 
                by the transferor.
            ``(2) Transfers to which subsection applies.--This 
        subsection shall apply to any transfer--
                    ``(A) by gift,
                    ``(B) at death, or
                    ``(C) from a partnership to a partner thereof of a 
                qualified zone asset with respect to which the 
                requirements of subsection (d)(2) are met at the time 
                of the transfer (without regard to the 5-year holding 
                requirement).
            ``(3) Certain rules made applicable.--Rules similar to the 
        rules of section 1244(d)(2) shall apply for purposes of this 
        section.
    ``(g) Certain Businesses Treated as Not Qualified Businesses.--For 
purposes of this section and section 1397A, the term `enterprise zone 
business' has the meaning given such term by section 1397C except that, 
in applying section 1397C for such purposes, the term `qualified 
business' shall not include any trade or business of producing property 
of a character subject to the allowance for depletion under section 
611.

``SEC. 1397A. NONRECOGNITION OF GAIN FROM NEW ZONE INVESTMENTS.

    ``(a) General Rule.--At the election of an individual, qualified 
capital gain (within the meaning of section 1397) from the sale or 
exchange of a qualified zone asset shall be recognized only to the 
extent that--
            ``(1) the amount realized from such sale or exchange, 
        exceeds
            ``(2) the cost (not heretofore taken into account under 
        this subsection) of any qualified zone asset purchased directly 
        by the taxpayer during the reinvestment period.
    ``(b) Qualified Zone Asset.--For purposes of this section--
            ``(1) In general.--The term `qualified zone asset' has the 
        meaning given such term by section 1397.
            ``(2) Time for testing.--
                    ``(A) Sales.--In the case of a sale or exchange of 
                property, the determination of whether such property is 
                a qualified zone asset shall be made as of the time of 
                the sale or exchange.
                    ``(B) Purchases.--In the case of a purchase of 
                property, the determination of whether such property is 
                a qualified zone asset shall be made as of the time of 
                such purchase.
    ``(c) Other Definitions.--For purposes of this section--
            ``(1) Reinvestment period.--The term `reinvestment period' 
        means, with respect to any sale or exchange, the 6-month period 
        beginning on the date of such sale or exchange.
            ``(2) Purchase.--The term `purchase' has the meaning given 
        to such term by section 179(d)(2).
    ``(d) Business or Property Ceases To Qualify.--
            ``(1) In general.--If, during the 10-year period beginning 
        on the date any qualified zone replacement asset was purchased 
        by the taxpayer, such asset ceases to be a qualified zone 
        asset, notwithstanding any provision of this subtitle other 
        than paragraph (3), the taxpayer shall be treated as disposing 
        of such asset during the taxable year during which such 
        cessation occurs at its fair market value as of the 1st day of 
        such taxable year.
            ``(2) Limitation on gain recognized.--The amount of gain 
        recognized pursuant to paragraph (1) with respect to any asset 
        shall not exceed the lesser of--
                    ``(A) the amount of gain which was not recognized 
                under subsection (a) by the reason of the purchase of 
                such asset, or
                    ``(B) the excess of the fair market value referred 
                to in paragraph (1) over the adjusted basis of such 
                asset.
            ``(3) Cessation of enterprise zone status not to cause 
        recapture.--An asset shall not fail to be treated as a 
        qualified zone asset for purposes of paragraph (1) solely by 
        reason of the termination of a tax enterprise zone designation.
            ``(4) Qualified zone replacement asset.--For purposes of 
        paragraph (1), the term `qualified zone replacement asset' 
        means any qualified zone asset the purchase of which resulted 
        in the nonrecognition of gain under subsection (a) with respect 
        to any other property.
    ``(e) Basis of Qualified Zone Replacement Asset.--If gain from the 
sale or exchange of any property is not recognized by reason of 
subsection (a), such gain shall be applied to reduce (in the order 
acquired) the basis of any qualified zone replacement asset (as defined 
in subsection (d)(4)) purchased during the reinvestment period.
    ``(f) Coordination With Installment Method Reporting.--This section 
shall not apply to any gain from any installment sale (as defined in 
section 453(b)) if section 453(a) applies to such sale.
    ``(g) Statute of Limitations.--If any gain is realized by the 
taxpayer on any sale or exchange to which an election under this 
section applies, then--
            ``(1) the statutory period for the assessment of any 
        deficiency with respect to such gain shall not expire before 
        the expiration of 3 years from the date the Secretary is 
        notified by the taxpayer (in such manner as the Secretary may 
        by regulations prescribe) of--
                    ``(A) the taxpayer's cost of purchasing any 
                qualified zone replacement asset,
                    ``(B) the taxpayer's intention not to purchase 
                qualified zone replacement asset within the 
                reinvestment period, or
                    ``(C) a failure to make such purchase within the 
                reinvestment period, and
            ``(2) such deficiency may be assessed before the expiration 
        of such 3-year period notwithstanding the provisions of any law 
        or rule of law which would otherwise prevent such assessment.

``SEC. 1397B. ADDITIONAL INCENTIVES.

    ``(a) Increase in Expensing Under Section 179.--In the case of an 
enterprise zone business, section 179(b)(1) shall be applied by 
substituting `$20,000' for `$10,000'.
    ``(b) Ordinary Loss Treatment for Certain Property.--
            ``(1) In general.--Loss on any qualified zone asset (as 
        defined in section 1397(b)) held for more than 2 years (5 years 
        in the case of real property) shall be treated as an ordinary 
        loss.
            ``(2) Real property.--For purposes of paragraph (1), the 
        term `real property' means any property which is section 1250 
        property (as defined in section 1250(c)).
            ``(3) Special rules.--
                    ``(A) Certain rules made applicable.--For purposes 
                of this subsection, rules similar to the following 
                rules shall apply:
                            ``(i) Paragraphs (1), (2), and (3) of 
                        section 1244(d).
                            ``(ii) Subsections (b)(6), (c)(3), (d), 
                        (e), and (f) of section 1397.
                    ``(B) Coordination with section 1231.--Losses 
                treated as ordinary losses by reason of this subsection 
                shall not be taken into account in applying section 
                1231.

``SEC. 1397C. ENTERPRISE ZONE BUSINESS DEFINED.

    ``(a) In General.--For purposes of this subpart, the term 
`enterprise zone business' means--
            ``(1) any qualified business entity, and
            ``(2) any qualified proprietorship.
    ``(b) Qualified Business Entity.--For purposes of this section, the 
term `qualified business entity' means, with respect to any taxable 
year, any corporation or partnership if for such year--
            ``(1)(A) every trade or business of such entity is the 
        active conduct of a qualified business within a tax enterprise 
        zone, and
            ``(B) at least 80 percent of the total gross income of such 
        entity is derived from the active conduct of such business,
            ``(2) substantially all of the use of the tangible property 
        of such entity (whether owned or leased) is within a tax 
        enterprise zone,
            ``(3) substantially all of the intangible property of such 
        entity is used in, and exclusively related to, the active 
        conduct of any such business,
            ``(4) substantially all of the services performed for such 
        entity by its employees are performed in a tax enterprise zone,
            ``(5) at least \1/3\ of its employees are residents of a 
        tax enterprise zone,
            ``(6) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such entity is attributable 
        to collectibles (as defined in section 408(m)(2)) other than 
        collectibles that are held primarily for sale to customers in 
        the ordinary course of such business, and
            ``(7) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such entity is attributable 
        to nonqualified financial property.
    ``(c) Qualified Proprietorship.--For purposes of this section, the 
term `qualified proprietorship' means, with respect to any taxable 
year, any qualified business carried on by an individual as a 
proprietorship if for such year--
            ``(1) at least 80 percent of the total gross income of such 
        individual from such business is derived from the active 
        conduct of such business in a tax enterprise zone,
            ``(2) substantially all of the use of the tangible property 
        of such individual in such business (whether owned or leased) 
        is within a tax enterprise zone,
            ``(3) substantially all of the intangible property of such 
        business is used in, and exclusively related to, the active 
        conduct of such business,
            ``(4) substantially all of the services performed for such 
        individual in such business by employees of such business are 
        performed in a tax enterprise zone,
            ``(5) at least \1/3\ of such employees are residents of a 
        tax enterprise zone,
            ``(6) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such individual which is 
        used in such business is attributable to collectibles (as 
        defined in section 408(m)(2)) other than collectibles that are 
        held primarily for sale to customers in the ordinary course of 
        such business, and
            ``(7) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such individual which is 
        used in such business is attributable to nonqualified financial 
        property.
For purposes of this subsection, the term `employee' includes the 
proprietor.
    ``(d) Qualified Business.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `qualified business' means any trade or 
        business.
            ``(2) Rental of real property.--The rental to others of 
        real property located in a tax enterprise zone shall be treated 
        as a qualified business if and only if--
                    ``(A) in the case of real property which is not 
                residential rental property (as defined in section 
                168(e)(2)), the lessee is an enterprise zone business, 
                or
                    ``(B) in the case of residential rental property 
                (as so defined)--
                            ``(i) such property was originally placed 
                        in service after the date the tax enterprise 
                        zone was designated, or
                            ``(ii) such property is rehabilitated after 
                        such date in a rehabilitation which meets 
                        requirements based on the principles of section 
                        42(e)(3).
            ``(3) Rental of tangible personal property.--The rental to 
        others of tangible personal property shall be treated as a 
        qualified business if and only if substantially all of the 
        rental of such property is by enterprise zone businesses or by 
        residents of a tax enterprise zone.
            ``(4) Treatment of business holding intangibles.--The term 
        `qualified business' shall not include any trade or business 
        consisting predominantly of the development or holding of 
        intangibles for sale or license.
            ``(5) Certain businesses excluded.--The term `qualified 
        business' shall not include--
                    ``(A) any trade or business consisting of the 
                operation of any facility described in section 
                144(c)(6)(B), and
                    ``(B) any trade or business the principal activity 
                of which is farming (within the meaning of 
                subparagraphs (A) or (B) of section 2032A(e)(5)), but 
                only if, as of the close of the preceding taxable year, 
                the sum of--
                            ``(i) the aggregate unadjusted bases (or, 
                        if greater, the fair market value) of the 
                        assets owned by the taxpayer which are used in 
                        such a trade or business, and
                            ``(ii) the aggregate value of assets leased 
                        by the taxpayer which are used in such a trade 
                        or business,
                exceeds $500,000.
        For purposes of subparagraph (B), rules similar to the rules of 
        section 1395(b) shall apply.
    ``(e) Nonqualified Financial Property.--For purposes of this 
section, the term `nonqualified financial property' means debt, stock, 
partnership interests, options, futures contracts, forward contracts, 
warrants, notional principal contracts, annuities, and other similar 
property specified in regulations; except that such term shall not 
include--
            ``(1) reasonable amounts of working capital held in cash, 
        cash equivalents, or debt instruments with a term of 18 months 
        or less, or
            ``(2) debt instruments described in section 1221(4).

                        ``Subpart C--Regulations

                              ``Sec. 1397C. Regulations.

``SEC. 1397C. REGULATIONS.

    ``The Secretary shall prescribe such regulations as may be 
necessary or appropriate to carry out the purposes of this part, 
including--
            ``(1) regulations limiting the benefit of this part in 
        circumstances where such benefits, in combination with benefits 
        provided under other Federal programs, would result in an 
        activity being 100 percent or more subsidized by the Federal 
        Government,
            ``(2) regulations preventing abuse of the provisions of 
        this part, and
            ``(3) regulations dealing with inadvertent failures of 
        entities to be qualified zone businesses.''
    (b) Clerical Amendment.--The table of subchapters for chapter 1 is 
amended by inserting after the item relating to subchapter T the 
following new item:

                              ``Subchapter U. Designation and treatment 
                                        of tax enterprise zones.''

SEC. 103. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Enterprise Zone Employment Credit Part of General Business 
Credit.--
            (1) Subsection (b) of section 38 (relating to current year 
        business credit) is amended by striking ``plus'' at the end of 
        paragraph (7), by striking the period at the end of paragraph 
        (8) and inserting ``, plus'', and by adding at the end the 
        following new paragraph:
            ``(9) the enterprise zone employment credit determined 
        under section 1394(a).''
            (2) Subsection (d) of section 39 is amended by adding at 
        the end thereof the following new paragraph:
            ``(4) No carryback of section 1394 credit before 
        enactment.--No portion of the unused business credit for any 
        taxable year which is attributable to the enterprise zone 
        employment credit determined under section 1394 may be carried 
        to a taxable year ending before the date of the enactment of 
        section 1394.''
    (b) Nonitemizers Allowed Deduction for Enterprise Zone Stock.--
Subsection (a) of section 62 is amended by adding at the end thereof 
the following new paragraph:
            ``(15) Enterprise zone stock.--The deduction allowed by 
        section 1396.''
    (c) Denial of Deduction for Portion of Wages Equal to Enterprise 
Zone Employment Credit.--
            (1) Subsection (a) of section 280C (relating to rule for 
        targeted jobs credit) is amended--
                    (A) by striking ``the amount of the credit 
                determined for the taxable year under section 51(a)'' 
                and inserting ``the sum of the credits determined for 
                the taxable year under sections 51(a) and 1394(a)'', 
                and
                    (B) by striking ``Targeted Jobs Credit'' in the 
                subsection heading and inserting ``Employment 
                Credits''.
            (2) Subsection (c) of section 196 (relating to deduction 
        for certain unused business credits) is amended by striking 
        ``and'' at the end of paragraph (4), by striking the period at 
        the end of paragraph (5) and inserting ``, and'', and by adding 
        at the end the following new paragraph:
            ``(6) the enterprise zone employment credit determined 
        under section 1394(a).''
    (d) Other Amendments.--
            (1)(A) Section 172(d)(2) (relating to modifications with 
        respect to net operating loss deduction) is amended to read as 
        follows:
            ``(2) Capital gains and losses of taxpayers other than 
        corporations.--In the case of a taxpayer other than a 
        corporation--
                    ``(A) the amount deductible on account of losses 
                from sales or exchanges of capital assets shall not 
                exceed the amount includable on account of gains from 
                sales or exchanges of capital assets; and
                    ``(B) the exclusion provided by section 1397 shall 
                not be allowed.''
            (B) Subparagraph (B) of section 172(d)(4) is amended by 
        inserting ``, (2)(B),'' after ``paragraph (1)''.
            (2) Subsection (c) of section 381 (relating to carryovers 
        in certain corporate acquisitions) is amended by adding at the 
        end the following new paragraph:
            ``(26) Enterprise zone provisions.--The acquiring 
        corporation shall take into account (to the extent proper to 
        carry out the purposes of this section and subchapter U, and 
        under such regulations as may be prescribed by the Secretary) 
        the items required to be taken into account for purposes of 
        subchapter U in respect of the distributor or transferor 
        corporation.''
            (3) Paragraph (4) of section 642(c) is amended to read as 
        follows:
            ``(4) Adjustments.--To the extent that the amount otherwise 
        allowable as a deduction under this subsection consists of gain 
        described in section 1397(a), proper adjustment shall be made 
        for any exclusion allowable to the estate or trust under 
        section 1397. In the case of a trust, the deduction allowed by 
        this subsection shall be subject to section 681 (relating to 
        unrelated business income).''
            (4) Paragraph (3) of section 643(a) is amended by adding at 
        the end thereof the following new sentence: ``The exclusion 
        under section 1397 shall not be taken into account.''
            (5) Paragraph (4) of section 691(c) is amended by striking 
        ``1201, and 1211'' and inserting ``1201, 1397, and 1211''.
            (6) The second sentence of paragraph (2) of section 871(a) 
        is amended by inserting ``such gains and losses shall be 
        determined without regard to section 1397 and'' after ``except 
        that''.
            (7) Paragraph (1) of section 1371(d) (relating to 
        coordination with investment credit recapture) is amended by 
        inserting before the period at the end the following ``and for 
        purposes of section 1394(d)(3)''.
            (8) Subsection (a) of section 1016 (relating to adjustments 
        to basis) is amended by striking ``and'' at the end of 
        paragraph (23), by striking the period at the end of paragraph 
        (24) and inserting a semicolon, and by adding at the end 
        thereof the following new paragraphs:
            ``(25) in the case of stock with respect to which a 
        deduction was allowed under section 1396(a), to the extent 
        provided in section 1396(e); and
            ``(26) in the case of property the acquisition of which 
        resulted under section 1397A in the nonrecognition of any part 
        of the gain realized on the sale or exchange of other property, 
        to the extent provided in section 1397A(e).''
            (9) Section 1223 (relating to holding period of property) 
        is amended by redesignating paragraph (15) as paragraph (16) 
        and by inserting after paragraph (14) the following new 
        paragraph:
            ``(15) In determining the period for which the taxpayer has 
        held property the acquisition of which resulted under section 
        1397A in the nonrecognition of any part of the gain realized on 
        the sale or exchange of any qualified zone asset (as defined in 
        section 1397A(b)), there shall be included the period for which 
        such asset had been held as of the date of such sale or 
        exchange.''

SEC. 104. EFFECTIVE DATE.

    (a) General Rule.--The amendments made by this subtitle shall take 
effect on the date of the enactment of this Act.
    (b) Requirement for Rules.--Not later than the date 4 months after 
the date of the enactment of this Act, the appropriate Secretaries 
shall issue rules--
            (1) establishing the procedures for nominating areas for 
        designation as tax enterprise zones,
            (2) establishing a method for comparing the factors listed 
        in section 1392(d) of the Internal Revenue Code of 1986 (as 
        added by this subtitle),
            (3) establishing recordkeeping requirements necessary or 
        appropriate to assist the studies required by subtitle E, and
            (4) providing that State and local governments shall have 
        at least 30 days after such rules are published to file 
        applications for nominated areas before such applications are 
        evaluated and compared and any area designated as a tax 
        enterprise zone.

        Subtitle B--Redevelopment Bonds for Tax Enterprise Zones

SEC. 111. SPECIAL RULES FOR REDEVELOPMENT BONDS PROVIDING FINANCING FOR 
              TAX ENTERPRISE ZONES.

    (a) In General.--Subsection (c) of section 144 (relating to 
qualified redevelopment bonds) is amended by adding at the end thereof 
the following new paragraph:
            ``(9) Special rules for tax enterprise zones.--For purposes 
        of this subsection, in the case of bonds issued during the 60-
        month period beginning on the date a tax enterprise zone is 
        designated--
                    ``(A) Treatment as designated blighted area.--Such 
                tax enterprise zone shall be treated as a designated 
                blighted area during such 60-month period (or, if 
                shorter, the period such designation is in effect). Any 
                area designated by reason of the preceding sentence 
                shall not be taken into account in applying paragraph 
                (4)(C).
                    ``(B) Security for bonds.--The requirements of 
                paragraph (2)(B) shall be treated as met with respect 
                to a financed area that is within a tax enterprise zone 
                if the general purpose governmental unit guarantees the 
                payment of principal and interest on the issue either 
                directly or through insurance, a letter of credit, or a 
                similar agreement but only if the cost thereof is 
                financed other than with proceeds of any tax-exempt 
                private activity bond or earnings on such proceeds.
                    ``(C) Expansion of redevelopment purposes.--
                            ``(i) In general.--The term `redevelopment 
                        purposes' includes the making of loans to any 
                        enterprise zone business (as defined in section 
                        1397B) for--
                                    ``(I) the acquisition of land 
                                within the tax enterprise zone for use 
                                in such business, or
                                    ``(II) the acquisition, 
                                construction, reconstruction, or 
                                improvement by such business of land, 
                                or property of a character subject to 
                                the allowance for depreciation, for use 
                                in such business.
                            ``(ii) $2,500,000 limitation.--Clause (i) 
                        shall apply to loans made to any enterprise 
                        zone business only if the aggregate principal 
                        amount of such loans (whether or not financed 
                        by the same issue) does not exceed $2,500,000. 
                        For purposes of the preceding sentence, all 
                        persons treated as a single employer under 
                        subsection (a) or (b) of section 52 shall be 
                        treated as 1 person.
                            ``(iii) Loans must be made within 18 months 
                        after bonds issued; repayments must be used for 
                        redemptions.--Clause (i) shall apply only to 
                        loans--
                                    ``(I) made during the 18-month 
                                period beginning on the date of 
                                issuance of the issue financing such 
                                loan,
                                    ``(II) repayments of principal on 
                                which are used not later than the close 
                                of the 1st semiannual period beginning 
                                after the date the repayment is 
                                received to redeem bonds which are part 
                                of such issue, and
                                    ``(III) the effective rate of 
                                interest on which does not exceed the 
                                yield on the issue by more than 0.125 
                                percentage points.
                        In determining the effective rate of interest 
                        for purposes of subclause (III), there shall be 
                        taken into account all fees, charges, and other 
                        amounts (other than amounts for any credit 
                        report) borne by the borrower which are 
                        attributable to the loan or the bond issue.
                            ``(iv) Housing loans excluded.--Clause (i) 
                        shall not apply to any loan to be used directly 
                        or indirectly to provide residential real 
                        property.
                            ``(v) Coordination with restrictions on use 
                        of proceeds.--Paragraphs (6) and (8) shall 
                        apply notwithstanding clause (i); except that 
                        in applying paragraph (6), subsection (a)(8) 
                        shall be treated as not including a reference 
                        to a facility the primary purpose of which is 
                        retail food services.
                    ``(D) Issuer to designate amount of issue to be 
                used for loans.--Subparagraph (C) shall not apply with 
                respect to any issue unless the issuer designates 
                before the date of issuance the amount of the proceeds 
                of such issue which is to be used for loans to which 
                subparagraph (C)(i) applies. If such amount exceeds the 
                principal amount of loans to which subparagraph (C)(i) 
                applies, an amount of proceeds equal to such excess 
                shall be used not later than the close of the 1st 
                semiannual period beginning after the close of the 18-
                month period referred to in subparagraph (C)(iii) to 
                redeem bonds which are part of such issue.
                    ``(E) De minimis redemptions not required.--
                Subparagraphs (C)(iii) and (D) shall not be construed 
                to require amounts of less than $250,000 to be used to 
                redeem bonds. The Secretary may by regulation treat 
                related issues as 1 issue for purposes of the preceding 
                sentence.
                    ``(F) Penalty.--
                            ``(i) In general.--In the case of property 
                        with respect to which financing was provided 
                        under this paragraph, if at any time during the 
                        10-period beginning on the date such financing 
                        was provided--
                                    ``(I) such property ceases to be in 
                                use in an enterprise zone business (as 
                                defined in section 1397B), or
                                    ``(II) substantially all of the use 
                                of such property ceases to be in a tax 
                                enterprise zone,
                        there is hereby imposed on the trade or 
                        business to which such financing was provided a 
                        penalty equal to 1.25 percent of so much of the 
                        face amount of all financing provided (whether 
                        or not from the same issue and whether or not 
                        such issue is outstanding) before such 
                        cessation to the trade or business using such 
                        property.
                            ``(ii) No penalty by reason of zone 
                        termination.--No penalty shall be imposed under 
                        clause (i) solely by reason of the termination 
                        or revocation of a tax enterprise zone 
                        designation.
                            ``(iii) Exception for bankruptcy.--Clause 
                        (i) shall not apply to any cessation resulting 
                        from bankruptcy.''
    (b) Volume Cap Only Charged With 50 Percent of Tax Enterprise Zone 
Redevelopment Bonds.--Subsection (g) of section 146 is amended by 
striking ``and'' at the end of paragraph (3), by striking the period at 
the end of paragraph (4) and inserting ``, and'', and by adding at the 
end thereof the following new paragraph:
            ``(5) 50 percent of any qualified redevelopment bond 
        issued--
                    ``(A) as part of an issue 95 percent or more of the 
                net proceeds of which are to be used for 1 or more 
                redevelopment purposes (as defined in section 144(c)) 
                in a tax enterprise zone, and
                    ``(B) during the 60-month period beginning on the 
                date of the designation of such zone.''
    (c) Penalties for Loans Made to Businesses That Cease To Be 
Enterprise Zone Businesses, Etc.--Subsection (b) of section 150 is 
amended by adding at the end thereof the following new paragraph:
            ``(6) Enterprise zone redevelopment bonds.--In the case of 
        any financing provided by an issue the interest on which is 
        exempt from tax by reason of section 144(c)(9)--
                    ``(A) In general.--No deduction shall be allowed 
                under this chapter for interest on such financing which 
                accrues during the period beginning on the first day of 
                the calendar year which includes the date on which--
                            ``(i) the trade or business to which the 
                        financing was provided ceases to be an 
                        enterprise zone business (as defined in section 
                        1397B), or
                            ``(ii) substantially all of the use of the 
                        property (determined in accordance with 
                        subchapter U) with respect to which the 
                        financing was provided ceases to be in a tax 
                        enterprise zone.
                The preceding sentence shall not apply solely by reason 
                of the termination or revocation of a tax enterprise 
                zone designation.
                    ``(B) Exception for bankruptcy.--This paragraph 
                shall not apply to any cessation resulting from 
                bankruptcy.''

 Subtitle C--Credit for Contributions to Certain Community Development 
                              Corporations

SEC. 121. CREDIT FOR CONTRIBUTIONS TO CERTAIN COMMUNITY DEVELOPMENT 
              CORPORATIONS.

    (a) In General.--For purposes of section 38 of the Internal Revenue 
Code of 1986, the current year business credit shall include the credit 
determined under this section.
    (b) Determination of Credit.--The credit determined under this 
section for each taxable year in the credit period with respect to any 
qualified CDC contribution made by the taxpayer is an amount equal to 5 
percent of such contribution.
    (c) Credit Period.--For purposes of this section, the credit period 
with respect to any qualified CDC contribution is the period of 10 
taxable years beginning with the taxable year during which such 
contribution was made.
    (d) Qualified CDC Contribution.--For purposes of this section--
            (1) In general.--The term ``qualified CDC contribution'' 
        means any transfer of cash--
                    (A) which is made to a selected community 
                development corporation during the 5-year period 
                beginning on the date such corporation was selected for 
                purposes of this section,
                    (B) the amount of which is available for use by 
                such corporation for at least 10 years,
                    (C) which is to be used by such corporation for 
                qualified low-income assistance within its operational 
                area, and
                    (D) which is designated by such corporation for 
                purposes of this section.
            (2) Limitations on amount designated.--The aggregate amount 
        of contributions to a selected community development 
        corporation which may be designated by such corporation shall 
        not exceed $2,000,000.
    (e) Selected Community Development Corporations.--
            (1) In general.--For purposes of this section, the term 
        ``selected community development corporation'' means any 
        corporation--
                    (A) which is described in section 501(c)(3) of such 
                Code and exempt from tax under section 501(a) of such 
                Code,
                    (B) the principal purposes of which include 
                promoting employment of, and business opportunities 
                for, low-income individuals who are residents of the 
                operational area, and
                    (C) which is selected by the Secretary of Housing 
                and Urban Development for purposes of this section.
            (2) Only 10 corporations may be selected.--
                    (A) In general.--The Secretary of Housing and Urban 
                Development may select 10 corporations for purposes of 
                this section, subject to the availability of eligible 
                corporations. Such selections may be made only before 
                January 1, 1994. At least 4 of the operational areas of 
                the corporations selected must be rural areas (as 
                defined by section 1393(6) of such Code).
                    (B) Priority of designations.--In selecting 
                corporations for purposes of this section, such 
                Secretary shall give priority to corporations with a 
                demonstrated record of performance in administering 
                community development programs which target at least 75 
                percent of the jobs emanating from their investment 
                funds to low income or unemployed individuals.
            (3) Operational areas must have certain characteristics.--A 
        corporation may be selected for purposes of this section only 
        if its operational area meets the following criteria:
                    (A) The area meets the size requirements under 
                paragraph (1)(C) or (2)(C) of section 1391(b) which 
                would apply if such area were to be designated as a tax 
                enterprise zone.
                    (B) The unemployment rate (as determined by the 
                appropriate available data) is not less than the 
                national unemployment rate.
                    (C) The median family income of residents of such 
                area does not exceed 80 percent of the median gross 
                income of residents of the jurisdiction of the local 
                government which includes such area.
    (f) Qualified Low-Income Assistance.--For purposes of this section, 
the term ``qualified low-income assistance'' means assistance--
            (1) which is designed to provide employment of, and 
        business opportunities for, low-income individuals who are 
        residents of the operational area of the community development 
        corporation, and
            (2) which is approved by the Secretary of Housing and Urban 
        Development.

              Subtitle D--Indian Employment and Investment

SEC. 131. INVESTMENT TAX CREDIT FOR PROPERTY ON INDIAN RESERVATIONS.

    (a) Allowance of Indian Reservation Credit.--Section 46 (relating 
to investment credits) is amended by striking ``and'' at the end of 
paragraph (2), by striking the period at the end of paragraph (3) and 
inserting ``, and'', and by adding after paragraph (3) the following 
new paragraph:
            ``(4) the Indian reservation credit.''
    (b) Amount of Indian Reservation Credit.--
            (1) In general.--Section 48 (relating to the energy credit 
        and the reforestation credit) is amended by adding after 
        subsection (b) the following new subsection:
    ``(c) Indian Reservation Credit.--
            ``(1) In general.--For purposes of section 46, the Indian 
        reservation credit for any taxable year is the Indian 
        reservation percentage of the qualified investment in qualified 
        Indian reservation property placed in service during such 
        taxable year, determined in accordance with the following 
        table:

          ``In the case of qualified
                                                                       
                  Indian reservation property
                                                 The Indian reservation
                  which is:
                                                         percentage is:
                  Reservation personal property......         105      
                  New reservation construction                155      
                    property.
                  Reservation infrastructure                  15.      
                    investment.

            ``(2) Qualified investment in qualified indian reservation 
        property defined.--For purposes of this subpart--
                    ``(A) In general.--The term `qualified Indian 
                reservation property' means property--
                            ``(i) which is--
                                    ``(I) reservation personal 
                                property,
                                    ``(II) new reservation construction 
                                property, or
                                    ``(III) reservation infrastructure 
                                investment, and
                            ``(ii) not acquired (directly or 
                        indirectly) by the taxpayer from a person who 
                        is related to the taxpayer (within the meaning 
                        of section 465(b)(3)(C)).
                The term `qualified Indian reservation property' does 
                not include any property (or any portion thereof) 
                placed in service for purposes of conducting or housing 
                class I, II, or III gaming (as defined in section 4 of 
                the Indian Regulatory Act (25 U.S.C. 2703)).
                    ``(B) Qualified investment.--The term `qualified 
                investment' means--
                            ``(i) in the case of reservation 
                        infrastructure investment, the amount expended 
                        by the taxpayer for the acquisition or 
                        construction of the reservation infrastructure 
                        investment; and
                            ``(ii) in the case of all other qualified 
                        Indian reservation property, the taxpayer's 
                        basis for such property.
                    ``(C) Reservation personal property.--The term 
                `reservation personal property' means qualified 
                personal property which is used by the taxpayer 
                predominantly in the active conduct of a trade or 
                business within an Indian reservation. Property shall 
                not be treated as `reservation personal property' if it 
                is used or located outside the Indian reservation on a 
                regular basis.
                    ``(D) Qualified personal property.--The term 
                `qualified personal property' means property--
                            ``(i) for which depreciation is allowable 
                        under section 168,
                            ``(ii) which is not--
                                    ``(I) nonresidential real property,
                                    ``(II) residential rental property, 
                                or
                                    ``(III) real property which is not 
                                described in (I) or (II) and which has 
                                a class life of more than 12.5 years.
                For purposes of this subparagraph, the terms 
                `nonresidential real property', `residential rental 
                property', and `class life' have the respective 
                meanings given such terms by section 168.
                    ``(E) New reservation construction property.--The 
                term `new reservation construction property' means 
                qualified real property--
                            ``(i) which is located in an Indian 
                        reservation,
                            ``(ii) which is used by the taxpayer 
                        predominantly in the active conduct of a trade 
                        or business within an Indian reservation, and
                            ``(iii) which is originally placed in 
                        service by the taxpayer.
                    ``(F) Qualified real property.--The term `qualified 
                real property' means property for which depreciation is 
                allowable under section 168 and which is described in 
                clause (I), (II), or (III) of subparagraph (D)(ii).
                    ``(G) Reservation infrastructure investment.--
                            ``(i) In general.--The term `reservation 
                        infrastructure investment' means qualified 
                        personal property or qualified real property 
                        which--
                                    ``(I) benefits the tribal 
                                infrastructure,
                                    ``(II) is available to the general 
                                public, and
                                    ``(III) is placed in service in 
                                connection with the taxpayer's active 
                                conduct of a trade or business within 
                                an Indian reservation.
                            ``(ii) Property may be located outside the 
                        reservation.--Qualified personal property and 
                        qualified real property used or located outside 
                        an Indian reservation shall be reservation 
                        infrastructure investment only if its purpose 
                        is to connect to existing tribal infrastructure 
                        in the reservation, and shall include, but not 
                        be limited to, roads, power lines, water 
                        systems, railroad spurs, and communications 
                        facilities.
                    ``(H) Coordination with other credits.--The term 
                `qualified Indian reservation property' shall not 
                include any property with respect to which the energy 
                credit or the rehabilitation credit is allowed.
            ``(3) Real estate rentals.--For purposes of this section, 
        the rental to others of real property located within an Indian 
        reservation shall be treated as the active conduct of a trade 
        or business in an Indian reservation.
            ``(4) Indian reservation defined.--For purposes of this 
        subpart, the term `Indian reservation' means a reservation, as 
        defined in--
                    ``(A) section 3(d) of the Indian Financing Act of 
                1974 (25 U.S.C. 1452(d)), or
                    ``(B) section 4(10) of the Indian Child Welfare Act 
                of 1978 (25 U.S.C. 1903(10)).
            ``(5) Limitation based on unemployment.--
                    ``(A) General rule.--The Indian reservation credit 
                allowed under section 46 for any taxable year shall 
                equal--
                            ``(i) if the Indian unemployment rate on 
                        the applicable Indian reservation for which the 
                        credit is sought exceeds 300 percent of the 
                        national average unemployment rate at any time 
                        during the calendar year in which the property 
                        is placed in service or during the immediately 
                        preceding 2 calendar years, 100 percent of such 
                        credit,
                            ``(ii) if such Indian unemployment rate 
                        exceeds 150 percent but not 300 percent, 50 
                        percent of such credit, and
                            ``(iii) if such Indian unemployment rate 
                        does not exceed 150 percent, 0 percent of such 
                        credit.
                    ``(B) Special rule for large projects.--In the case 
                of a qualified Indian reservation property which has 
                (or is a component of a project which has) a projected 
                construction period of more than 2 years or a cost of 
                more than $1,000,000, subparagraph (A) shall apply by 
                substituting `during the earlier of the calendar year 
                in which the taxpayer enters into a binding agreement 
                to make a qualified investment or the first calendar 
                year in which the taxpayer has expended at least 10 
                percent of the taxpayer's qualified investment, or the 
                preceding calendar year' for `during the calendar year 
                in which the property is placed in service or during 
                the immediately preceding 2 calendar years'.
                    ``(C) Determination of indian unemployment.--For 
                purposes of this paragraph, with respect to any Indian 
                reservation, the Indian unemployment rate shall be 
                based upon Indians unemployed and able to work, and 
                shall be certified by the Secretary of the Interior.
            ``(6) Coordination with nonrevenue laws.--Any reference in 
        this subsection to a provision not contained in this title 
        shall be treated for purposes of this subsection as a reference 
        to such provision as in effect on the date of the enactment of 
        this paragraph.''
            (2) Lodging to qualify.--Paragraph (2) of section 50(b) 
        (relating to property used for lodging) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (C),
                    (B) by striking the period at the end of 
                subparagraph (D) and inserting ``; and'' and
                    (C) by adding at the end thereof the following 
                subparagraph:
                    ``(E) new reservation construction property.''
    (c) Recapture.--Subsection (a) of section 50 (relating to recapture 
in case of dispositions, etc.), is amended by adding at the end thereof 
the following new paragraph:
            ``(6) Special rules for indian reservation property.--
                    ``(A) In general.--If, during any taxable year, 
                property with respect to which the taxpayer claimed an 
                Indian reservation credit--
                            ``(i) is disposed of, or
                            ``(ii) in the case of reservation personal 
                        property--
                                    ``(I) otherwise ceases to be 
                                investment credit property with respect 
                                to the taxpayer, or
                                    ``(II) is removed from the Indian 
                                reservation, converted or otherwise 
                                ceases to be Indian reservation 
                                property,
                the tax under this chapter for such taxable year shall 
                be increased by the amount described in subparagraph 
                (B).
                    ``(B) Amount of increase.--The increase in tax 
                under subparagraph (A) shall equal the aggregate 
                decrease in the credits allowed under section 38 by 
                reason of section 48(c) for all prior taxable years 
                which would have resulted had the qualified investment 
                taken into account with respect to the property been 
                limited to an amount which bears the same ratio to the 
                qualified investment with respect to such property as 
                the period such property was held by the taxpayer bears 
                to the applicable recovery period under section 168(g).
                    ``(C) Coordination with other recapture 
                provisions.--In the case of property to which this 
                paragraph applies, paragraph (1) shall not apply and 
                the rules of paragraphs (3), (4), and (5) shall 
                apply.''
    (d) Basis Adjustment To Reflect Investment Credit.--Paragraph (3) 
of section 50(c) (relating to basis adjustment to investment credit 
property) is amended by striking ``energy credit or reforestation 
credit'' and inserting ``energy credit, reforestation credit, or Indian 
reservation credit other than with respect to any expenditure for new 
reservation construction property''.
    (e) Certain Governmental Use Property To Qualify.--Paragraph (4) of 
section 50(b) (relating to property used by governmental units or 
foreign persons or entities) is amended by redesignating subparagraphs 
(D) and (E) as subparagraphs (E) and (F), respectively, and inserting 
after subparagraph (C) the following new subparagraph:
                    ``(D) Exception for reservation infrastructure 
                investment.--This paragraph shall not apply for 
                purposes of determining the Indian reservation credit 
                with respect to reservation infrastructure 
                investment.''
    (f) Application of At-Risk Rules.--Subparagraph (C) of section 
49(a)(1) is amended by striking ``and'' at the end of clause (ii), by 
striking the period at the end of clause (iii) and inserting ``, and'', 
and by adding at the end the following new clause:
                            ``(iv) the qualified investment in 
                        qualified Indian reservation property.''
    (g) Clerical Amendments.--
            (1) The caption of section 48 is amended by deleting the 
        period at the end thereof and adding ``; indian reservation 
        credit.''
            (2) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 is amended by striking out the item 
        relating to section 48 and inserting the following:

                              ``Sec. 48. Energy credit; reforestation 
                                        credit; Indian reservation 
                                        credit.''
    (h) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 1992.

SEC. 132. INDIAN EMPLOYMENT CREDIT.

    (a) Allowance of Indian Employment Credit.--Section 38(b) (relating 
to general business credits), as amended by section 103, is amended by 
striking ``plus'' at the end of paragraph (8), by striking the period 
at the end of paragraph (9) and inserting ``, plus'', and by adding 
after paragraph (9) the following new paragraph:
            ``(10) the Indian employment credit as determined under 
        section 45A.''
    (b) Amount of Indian Employment Credit.--Subpart D of Part IV of 
subchapter A of chapter 1 (relating to business related credits) is 
amended by adding at the end thereof the following new section:

``SEC. 45A. INDIAN EMPLOYMENT CREDIT.

    ``(a) Amount of Credit.--
            ``(1) In general.--For purposes of section 38, the amount 
        of the Indian employment credit determined under this section 
        with respect to any employer for any taxable year is 10 percent 
        (30 percent in the case of an employer with at least 85 percent 
        Indian employees throughout the taxable year) of the sum of--
                    ``(A) the qualified wages paid or incurred during 
                such taxable year, plus
                    ``(B) qualified employee health insurance costs 
                paid or incurred during such taxable year.
        In no event shall the amount of the Indian employment credit 
        for any taxable year exceed the credit limitation amount 
        determined under subsection (e) for such taxable year.
            ``(2) Indian employee.--For purposes of paragraph (1), the 
        term `Indian employee' means an employee who is an enrolled 
        member of an Indian tribe or the spouse of such a member.
    ``(b) Qualified Wages; Qualified Employee Health Insurance Costs.--
For purposes of this section--
            ``(1) Qualified wages.--
                    ``(A) In general.--The term `qualified wages' means 
                any wages paid or incurred by an employer for services 
                performed by an employee while such employee is a 
                qualified employee.
                    ``(B) Coordination with targeted jobs credit.--The 
                term `qualified wages' shall not include wages 
                attributable to service rendered during the 1-year 
                period beginning with the day the individual begins 
                work for the employer if any portion of such wages is 
                taken into account in determining the credit under 
                section 51.
            ``(2) Qualified employee health insurance costs.--
                    ``(A) In general.--The term `qualified employee 
                health insurance costs' means any amount paid or 
                incurred by an employer for health insurance to the 
                extent such amount is attributable to coverage provided 
                to any employee while such employee is a qualified 
                employee.
                    ``(B) Exception for amounts paid under salary 
                reduction arrangements.--No amount paid or incurred for 
                health insurance pursuant to a salary reduction 
                arrangement shall be taken into account under 
                subparagraph (A).
    ``(c) Qualified Employee.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `qualified employee' means, with respect 
        to any period, any employee of an employer if--
                    ``(A) substantially all of the services performed 
                during such period by such employee for such employer 
                are performed within an Indian reservation,
                    ``(B) the principal place of abode of such employee 
                while performing such services is on or near the 
                reservation in which the services are performed, and
                    ``(C) the employee began work for such employer on 
                or after January 1, 1993.
            ``(2) Credit allowed only for first 7 years.--An employee 
        shall not be treated as a qualified employee for any period 
        after the date 7 years after the day on which such employee 
        first began work for the employer.
            ``(3) Individuals receiving wages in excess of $30,000 not 
        eligible.--An employee shall not be treated as a qualified 
        employee for any taxable year of the employer if the total 
        amount of the wages paid or incurred by such employer to such 
        employee during such taxable year (whether or not for services 
        within an Indian reservation) exceeds the amount determined at 
        an annual rate of $30,000. The Secretary shall adjust the 
        $30,000 amount contained in the preceding sentence for years 
        beginning after 1992 at the same time and in the same manner as 
        under section 415(d).
            ``(4) Employment must be trade or business employment.--An 
        employee shall be treated as a qualified employee for any 
        taxable year of the employer only if more than 50 percent of 
        the wages paid or incurred by the employer to such employee 
        during such taxable year are for services performed in a trade 
        or business of the employer. Any determination as to whether 
        the preceding sentence applies with respect to any employee for 
        any taxable year shall be made without regard to subsection 
        (f)(2).
            ``(5) Certain employees not eligible.--The term `qualified 
        employee' shall not include--
                    ``(A) any individual described in subparagraph (A), 
                (B), or (C) of section 51(i)(1),
                    ``(B) any 5-percent owner (as defined in section 
                416(i)(1)(B)),
                    ``(C) any individual who is neither an enrolled 
                member of an Indian tribe nor the spouse of an enrolled 
                member of an Indian tribe, and
                    ``(D) any individual if the services performed by 
                such individual for the employer involve the conduct of 
                class I, II, or III gaming as defined in section 4 of 
                the Indian Gaming Regulatory Act (25 U.S.C. 2703), or 
                are performed in a building housing such gaming 
                activity.
            ``(6) Indian tribe defined.--The term `Indian tribe' means 
        any Indian tribe, band, nation, pueblo, or other organized 
        group or community, including any Alaska Native village, or 
        regional or village corporation, as defined in, or established 
        pursuant to, the Alaska Native Claims Settlement Act (43 U.S.C. 
        1601 et seq.) which is recognized as eligible for the special 
        programs and services provided by the United States to Indians 
        because of their status as Indians.
            ``(7) Indian reservation defined.--The term `Indian 
        reservation' means a reservation, as defined in--
                    ``(A) section 3(d) of the Indian Financing Act of 
                1974 (25 U.S.C. 1452(d)), or
                    ``(B) section 4(10) of the Indian Child Welfare Act 
                of 1978 (25 U.S.C. 1903 (10)).
    ``(d) Early Termination of Employment by Employer.--
            ``(1) In general.--If the employment of any employee is 
        terminated by the taxpayer before the day 1 year after the day 
        on which such employee began work for the employer--
                    ``(A) no wages (or qualified employee health 
                insurance costs) with respect to such employee shall be 
                taken into account under subsection (a) for the taxable 
                year in which such employment is terminated, and
                    ``(B) the tax under this chapter for the taxable 
                year in which such employment is terminated shall be 
                increased by the aggregate credits (if any) allowed 
                under section 38(a) for prior taxable years by reason 
                of wages (or qualified employee health insurance costs) 
                taken into account with respect to such employee.
            ``(2) Carrybacks and carryovers adjusted.--In the case of 
        any termination of employment to which paragraph (1) applies, 
        the carrybacks and carryovers under section 39 shall be 
        properly adjusted.
            ``(3) Subsection not to apply in certain cases.--
                    ``(A) In general.--Paragraph (1) shall not apply 
                to--
                            ``(i) a termination of employment of an 
                        employee who voluntarily leaves the employment 
                        of the taxpayer,
                            ``(ii) a termination of employment of an 
                        individual who before the close of the period 
                        referred to in paragraph (1) becomes disabled 
                        to perform the services of such employment 
                        unless such disability is removed before the 
                        close of such period and the taxpayer fails to 
                        offer reemployment to such individual, or
                            ``(iii) a termination of employment of an 
                        individual if it is determined under the 
                        applicable State unemployment compensation law 
                        that the termination was due to the misconduct 
                        of such individual.
                    ``(B) Changes in form of business.--For purposes of 
                paragraph (1), the employment relationship between the 
                taxpayer and an employee shall not be treated as 
                terminated--
                            ``(i) by a transaction to which section 
                        381(a) applies if the employee continues to be 
                        employed by the acquiring corporation, or
                            ``(ii) by reason of a mere change in the 
                        form of conducting the trade or business of the 
                        taxpayer if the employee continues to be 
                        employed in such trade or business and the 
                        taxpayer retains a substantial interest in such 
                        trade or business.
            ``(4) Special rule.--Any increase in tax under paragraph 
        (1) shall not be treated as a tax imposed by this chapter for 
        purposes of--
                    ``(A) determining the amount of any credit 
                allowable under this chapter, and
                    ``(B) determining the amount of the tax imposed by 
                section 55.
    ``(e) Credit Limitation Amount.--For purposes of this section--
            ``(1) Credit limitation amount.--The credit limitation 
        amount for a taxable year shall be an amount equal to the 
        credit rate (10 or 30 percent as determined under subsection 
        (a)) multiplied by the increased credit base.
            ``(2) Increased credit base.--The increased credit base for 
        a taxable year shall be the excess of--
                    ``(A) the sum of any qualified wages and qualified 
                employee health insurance costs paid or incurred by the 
                employer during the taxable year with respect to 
                employees whose wages (paid or incurred by the 
                employer) during the taxable year do not exceed the 
                amount determined under paragraph (3) of subsection 
                (c), over
                    ``(B) the sum of any qualified wages and qualified 
                employee health insurance costs paid or incurred by the 
                employer (or any predecessor) during calendar year 1992 
                with respect to employees whose wages (paid or incurred 
                by the employer or any predecessor) during 1992 did not 
                exceed $30,000.
            ``(3) Special rule for short taxable years.--For any 
        taxable year having less than 12 months--
                    ``(A) the amounts paid or incurred by the employer 
                shall be annualized for purposes of determining the 
                increased credit base, and
                    ``(B) the credit limitation amount shall be 
                multiplied by a fraction, the numerator of which is the 
                number of days in the taxable year and the denominator 
                of which is 365.
    ``(f) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Wages.--The term `wages' has the same meaning given 
        to such term in section 51.
            ``(2) Controlled groups.--
                    ``(A) All employers treated as a single employer 
                under section (a) or (b) of section 52 shall be treated 
                as a single employer for purposes of this section.
                    ``(B) The credit (if any) determined under this 
                section with respect to each such employer shall be its 
                proportionate share of the wages and qualified employee 
                health insurance costs giving rise to such credit.
            ``(3) Certain other rules made applicable.--Rules similar 
        to the rules of section 51(k) and subsections (c), (d), and (e) 
        of section 52 shall apply.
            ``(4) Coordination with nonrevenue laws.--Any reference in 
        this section to a provision not contained in this title shall 
        be treated for purposes of this section as a reference to such 
        provision as in effect on the date of the enactment of this 
        paragraph.''
    (c) Denial of Deduction for Portion of Wages Equal to Indian 
Employment Credit.--
            (1) Subsection (a) of section 280C (relating to rule for 
        targeted jobs credit) is amended by striking ``51(a)'' and 
        inserting ``45A(a), 51(a), and''.
            (2) Subsection (c) of section 196 (relating to deduction 
        for certain unused business credits) is amended by striking 
        ``and'' at the end of paragraph (5), by striking the period at 
        the end of paragraph (6) and inserting ``, and'', and by adding 
        at the end the following new paragraph:
            ``(7) the Indian employment credit determined under section 
        45A(a).''
    (d) Denial of Carrybacks to Preenactment Years.--Subsection (d) of 
section 39 is amended by adding at the end thereof the following new 
paragraph:
            ``(5) No carryback of section 45 credit before enactment.--
        No portion of the unused business credit for any taxable year 
        which is attributable to the Indian employment credit 
        determined under section 45 may be carried to a taxable year 
        ending before the date of the enactment of section 45A.''
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
thereof the following:

                              ``Sec. 45A. Indian employment credit.''

    (f) Effective Date.--The amendments made by this section shall 
apply to wages paid or incurred after December 31, 1992.

                           Subtitle E--Study

SEC. 141. STUDY OF EFFECTIVENESS OF TAX ENTERPRISE ZONE INCENTIVES.

    (a) In General.--The Secretary of the Treasury, in consultation 
with the appropriate Secretary (as defined in section 1393(7) of the 
Internal Revenue Code of 1986, as added by this title), shall contract 
within 3 months of the date of the enactment of this Act, with the 
National Academy of Sciences (hereafter in this section referred to as 
the ``Academy'') to conduct a study of the relative effectiveness of 
the incentives provided by this Act in achieving the purposes of such 
subtitles in tax enterprise zones.
    (b) Conduct of Study.--If the Academy contracts for the conduct of 
the study described in subsection (a), the Academy shall develop a 
study methodology and shall oversee and manage the conduct of such 
study.
    (c) Reports.--The Academy shall submit to the Committee on Ways and 
Means of the House of Representatives and the Committee on Finance of 
the Senate--
            (1) not later than July 1, 1997, an interim report setting 
        forth the findings as a result of such study, and
            (2) not later than July 1, 2002, a final report setting 
        forth the findings as a result of such study.

    TITLE II--AUTHORIZATION FOR ADDITIONAL ASSISTANCE TO DISTRESSED 
                              COMMUNITIES

        Subtitle A--National Public-Private Partnership Programs

SEC. 201. NATIONAL PUBLIC-PRIVATE PARTNERSHIP PROGRAMS.

    (a) Sense of Congress.--It is the sense of Congress that public-
private partnerships between government and community-based 
organizations offer an opportunity to empower residents of low-income 
distressed communities and to forge innovative solutions to the 
challenges confronting these communities, and that increased resources 
should be invested in such partnerships.
    (b) Authorization of Appropriations.--To promote national public-
private partnerships, there are authorized to be appropriated--
            (1) with respect to the Head Start program under the Head 
        Start Act (42 U.S.C. 9831 et seq.)--
                    (A) $40,000,000 for fiscal year 1993;
                    (B) $42,000,000 for fiscal year 1994;
                    (C) $44,000,000 for fiscal year 1995;
                    (D) $46,000,000 for fiscal year 1996;
                    (E) $49,000,000 for fiscal year 1997;
                    (F) $51,000,000 for fiscal year 1998;
                    (G) $54,000,000 for fiscal year 1999;
                    (H) $56,000,000 for fiscal year 2000;
                    (I) $59,000,000 for fiscal year 2001; and
                    (J) $62,000,000 for fiscal year 2002;
            (2) with respect to the community health centers program 
        under sections 329, 330, 340 and 340A of the Public Health 
        Service Act (42 U.S.C. 254c)--
                    (A) $20,000,000 for fiscal year 1993;
                    (B) $21,000,000 for fiscal year 1994;
                    (C) $22,000,000 for fiscal year 1995;
                    (D) $23,000,000 for fiscal year 1996;
                    (E) $24,000,000 for fiscal year 1997;
                    (F) $26,000,000 for fiscal year 1998;
                    (G) $27,000,000 for fiscal year 1999;
                    (H) $28,000,000 for fiscal year 2000;
                    (I) $30,000,000 for fiscal year 2001; and
                    (J) $31,000,000 for fiscal year 2002;
            (3) with respect to the National Community Economic 
        Partnership program established under chapter 3 of subtitle C--
                    (A) $40,000,000 for fiscal year 1993;
                    (B) $42,000,000 for fiscal year 1994;
                    (C) $44,000,000 for fiscal year 1995;
                    (D) $46,000,000 for fiscal year 1996;
                    (E) $49,000,000 for fiscal year 1997;
                    (F) $51,000,000 for fiscal year 1998;
                    (G) $54,000,000 for fiscal year 1999;
                    (H) $56,000,000 for fiscal year 2000;
                    (I) $59,000,000 for fiscal year 2001; and
                    (J) $62,000,000 for fiscal year 2002;
            (4) with respect to the Job Corps program under part B of 
        title IV of the Job Training Partnership Act (29 U.S.C. 1692 et 
        seq.)--
                    (A) $40,000,000 for fiscal year 1993;
                    (B) $42,000,000 for fiscal year 1994;
                    (C) $44,000,000 for fiscal year 1995;
                    (D) $46,000,000 for fiscal year 1996;
                    (E) $49,000,000 for fiscal year 1997;
                    (F) $51,000,000 for fiscal year 1998;
                    (G) $54,000,000 for fiscal year 1999;
                    (H) $56,000,000 for fiscal year 2000;
                    (I) $59,000,000 for fiscal year 2001; and
                    (J) $62,000,000 for fiscal year 2002;
            (5) with respect to the Enterprise Capital Access Fund 
        Demonstration Program established under section 271--
                    (A) $20,000,000 for fiscal year 1993;
                    (B) $21,000,000 for fiscal year 1994;
                    (C) $22,000,000 for fiscal year 1995;
                    (D) $23,000,000 for fiscal year 1996;
                    (E) $24,000,000 for fiscal year 1997;
                    (F) $26,000,000 for fiscal year 1998;
                    (G) $27,000,000 for fiscal year 1999;
                    (H) $28,000,000 for fiscal year 2000;
                    (I) $30,000,000 for fiscal year 2001; and
                    (J) $31,000,000 for fiscal year 2002;
            (6) with respect to the Youthbuild program under subtitle D 
        of title IV of the Cranston-Gonzalez National Affordable 
        Housing Act--
                    (A) $10,000,000 for fiscal year 1993;
                    (B) $11,000,000 for fiscal year 1994;
                    (C) $11,000,000 for fiscal year 1995;
                    (D) $12,000,000 for fiscal year 1996;
                    (E) $12,000,000 for fiscal year 1997;
                    (F) $13,000,000 for fiscal year 1998;
                    (G) $13,000,000 for fiscal year 1999;
                    (H) $14,000,000 for fiscal year 2000;
                    (I) $15,000,000 for fiscal year 2001; and
                    (J) $16,000,000 for fiscal year 2002; and
            (7) with respect to the Neighborhood Reinvestment 
        Corporation established under title VI of the Housing and 
        Community Development Act of 1978--
                    (A) $10,000,000 for fiscal year 1993;
                    (B) $11,000,000 for fiscal year 1994;
                    (C) $11,000,000 for fiscal year 1995;
                    (D) $12,000,000 for fiscal year 1996;
                    (E) $12,000,000 for fiscal year 1997;
                    (F) $13,000,000 for fiscal year 1998;
                    (G) $13,000,000 for fiscal year 1999;
                    (H) $14,000,000 for fiscal year 2000;
                    (I) $15,000,000 for fiscal year 2001; and
                    (J) $16,000,000 for fiscal year 2002.
    (c) Availability of Amounts.--The amounts appropriated for programs 
pursuant to paragraphs (1), (2), (4), (6), and (7) of subsection (b) 
shall be available only for projects or activities that directly and 
principally benefit the residents of tax enterprise zones designated 
pursuant to section 1391 of the Internal Revenue Code of 1986. Of the 
amounts appropriated for programs pursuant to paragraphs (3) and (5) of 
subsection (b), 50 percent shall be available only for projects or 
activities that directly and principally benefit the residents of such 
zones.

         Subtitle B--Block Grant Funding for Eligible Programs

SEC. 211. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated for assistance under 
section 212, $320,000,000 for fiscal year 1993, $325,000,000 for fiscal 
year 1994, $332,000,000 for fiscal year 1995, $337,000,000 for fiscal 
year 1996, $341,000,000 for fiscal year 1997, and such sums as may be 
necessary for each of the fiscal years 1998 through 2002, except that 
amounts authorized under this subsection for each of the fiscal years 
1998 through 2002 shall not be less than the amount of the revenue loss 
estimates to result as a result of enterprise zone tax preferences 
under section 1391 of the Internal Revenue Code of 1986 less the 
amounts authorized by section 211(b).

SEC. 212. ALLOCATION OF AMOUNTS AMONG TAX ENTERPRISE ZONES.

    (a) In General.--Except as provided in subsection (d), the 
interagency council established under section 216 of this Act shall 
make any amounts appropriated pursuant to section 211(a) available 
under this subtitle to provide assistance on behalf of each tax 
enterprise zone designated under section 1391 of the Internal Revenue 
Code of 1986 for which an application under section 215 of this Act has 
been approved by the interagency council.
    (b) Allocation Between Urban and Rural Zones.--Of the amounts 
available each fiscal year under this title for tax enterprise zones, 
70 percent shall be available for urban tax enterprise zones and 30 
percent shall be available for rural development investment zones.
    (c) Division Among Urban and Rural Zones.--
            (1) Urban zones.--The amounts available each fiscal year 
        under this title for urban tax enterprise zones shall be 
        allocated so as to reserve an equal amount for each urban zone 
        that may be designated prior to the end of the calendar year 
        beginning during the fiscal year for which such amounts were 
        made available, pursuant to the annual limits on zones 
        specified in section 1391 of the Internal Revenue Code of 1986.
            (2) Rural zones.--The amounts available each fiscal year 
        under this title for rural development investment zones shall 
        be allocated so as to reserve an equal amount for each rural 
        development investment zone that may be designated prior to the 
        end of the calendar year beginning during the fiscal year for 
        which such amounts were made available, pursuant to the annual 
        limits on zones specified in section 1391 of the Internal 
        Revenue Code of 1986.
    (d) Set-Aside.--Of the amounts appropriated pursuant to section 211 
for fiscal year 1993, not less than $5,000,000 shall be made available 
by the Interagency Council for the Access to Jobs/Reverse Community 
Demonstration Program authorized under section 272.
    (e) Availability.--Notwithstanding any other provision of law, 
amounts appropriated pursuant to authorizations under this title shall 
remain available until the end of the fiscal year following the year 
for which such amounts are appropriated.

SEC. 213. USE OF AMOUNTS.

    (a) In General.--The assistance allocated under section 212 on 
behalf of each tax enterprise zone (as defined in section 1391 of the 
Internal Revenue Code of 1986) shall be available only for carrying out 
selected programs within the tax enterprise zone, in accordance with 
the application of the tax enterprise zone approved under section 215 
and subject to the provisions of this section.
    (b) Allocation Among Program Categories.--
            (1) In general.--Except as provided in paragraph (2), of 
        the total amount of assistance provided under this subtitle on 
        behalf of a tax enterprise zone for any fiscal year, the sum of 
        the amounts used to carry out selected programs referred to 
        under any one of paragraphs (1) through (5) of section 214 may 
        not exceed 20 percent of such total amount.
            (2) Waiver of caps.--Pursuant to a request contained in an 
        application under section 215, the interagency council may 
        provide that the requirement under paragraph (1) shall not 
        apply with respect to amounts used to carry out selected 
        programs under the application, except that of the total amount 
        of assistance provided under this subtitle on behalf of such 
        tax enterprise zone for any fiscal year, the sum of the amounts 
        used to carry out selected programs referred to under any 
        single paragraph under section 214 may not exceed 30 percent of 
        such total amount and may not be less than 5 percent of such 
        total amount.
    (c) Allocation Among Job Training Programs.--In any fiscal year, of 
the sum of the amounts of assistance provided under this subtitle on 
behalf of a tax enterprise zone that are used to carry out any of the 
job training programs under section 214(2), not less than 25 percent 
shall be used for assistance under the Young Adult Employment 
Demonstration program referred to in section 214(2)(A) of this Act.
    (d) Provision of Assistance.--Upon the approval of an application 
under section 215 for a tax enterprise zone, the appropriate Federal 
agency head for each selected program under the approved application 
shall make available on behalf of the enterprise zone (under such 
program and through the appropriate eligible entity), from amounts 
available on behalf of such zone pursuant to section 212, the amount of 
assistance determined in accordance with the approved application.
    (e) Supplementation Requirement.--Any amounts provided under this 
subtitle shall be in supplement to, and shall not supplant, any 
Federal, State, local, or private funds from other sources already 
used, or committed for use, for programs, projects, activities, and 
services assisted under this subtitle or comparable to such programs, 
projects, activities, and services. Federal agency heads shall not 
reduce the usual allocations with respect to any jurisdiction under any 
of the eligible programs described in section 214 because such 
jurisdiction allocates funds under this title to any of such programs.

SEC. 214. ELIGIBLE PROGRAMS.

    Assistance may be provided under this subtitle for carrying out the 
following activities, projects, and programs:
            (1) Crime and criminal justice.--
                    (A) Community policing projects and activities 
                under the Edward Byrne Memorial State and Local Law 
                Enforcement Assistance Program under part E of title I 
                of the Omnibus Crime Control and Safe Streets Act of 
                1968 (42 U.S.C. 3751 et seq.).
                    (B) Chapter B of subpart 2 of part E of title I of 
                the Omnibus Crime Control and Safe Streets Act of 1968.
                    (C) Projects and activities under chapter 1 of 
                subtitle B of title III of the Anti-Drug Abuse Act of 
                1988 (42 U.S.C. 11801 et seq.).
            (2) Job training.--
                    (A) The Young Adult Employment Demonstration 
                program under part K of title IV of the Job Training 
                Partnership Act (as added by section 231 of this Act).
                    (B) The Job Corps program under part B of title IV 
                of the Job Training Partnership Act (29 U.S.C. 1691 et 
                seq.).
                    (C) Title II of the Job Training Partnership Act 
                (29 U.S.C. 1601 et seq.).
                    (D) The American Conservation and Youth Corps 
                program under subtitle C of title I of the National and 
                Community Service Act of 1990 (42 U.S.C. 12541 et 
                seq.).
                    (E) The Access to Jobs/Reverse Commuting 
                Demonstration Program established under section 272.
            (3) Education.--
                    (A) The programs under the Carl D. Perkins 
                Vocational Educational and Applied Technology Education 
                Act (20 U.S.C. 2301 et seq.).
                    (B) Projects under the Comprehensive Child 
                Development Act (42 U.S.C. 9881 et seq.).
                    (C) Activities under the Child Care and Development 
                Block Grant Act (42 U.S.C. 9858 et seq.).
                    (D) The programs under chapter 1 of title I of the 
                Elementary and Secondary Education Act of 1965.
                    (E) The TRIO programs under part A of title IV of 
                the Higher Education Act of 1965 (20 U.S.C. 1070 et 
                seq.).
                    (F) The programs under the Adult Education Act (20 
                U.S.C. 1201 et seq.).
                    (G) Literacy activities authorized under the 
                National Literacy Act of 1991.
            (4) Health, nutrition and family assistance.--
                    (A) The special supplemental food program for 
                women, infants, and children under section 17 of the 
                Child Nutrition Act of 1966.
                    (B) The following programs under the Public Health 
                Service Act (42 U.S.C. 201 et seq.):
                            (i) Capacity expansion of substance abuse 
                        treatment facilities.
                            (ii) Substance abuse treatment for 
                        individuals under criminal justice supervision.
                            (iii) Substance abuse treatment for 
                        pregnant and postpartum women.
                            (iv) Community prevention grants regarding 
                        substance abuse.
                            (v) Substance abuse treatment improvement 
                        grants.
                    (C) The programs under title XXVI of the Public 
                Health Service Act (42 U.S.C. 300ff-21 et seq.).
                    (D) The family support programs under subtitle F of 
                title VII of the Stewart B. McKinney Homeless 
                Assistance Act (42 U.S.C. 1148 et seq.).
                    (E) Projects for high risk youth under section 517 
                of the Public Health Service Act (42 U.S.C. 290bb-23).
                    (F) Emergency child protective service grants under 
                section 107 of the Child Abuse Prevention and Treatment 
                Act (42 U.S.C. 5106a).
                    (G) Family support centers and family resource and 
                support programs under sections 933 and 934(d) of the 
                Augustus F. Hawkins Human Services Reauthorization Act 
                of 1990 (Public Law 101-501).
            (5) Housing and community development.--
                    (A) The community development block grant program 
                under title I of the Housing and Community Development 
                Act of 1974 (42 U.S.C. 5301 et seq.).
                    (B) The public and Indian housing modernization 
                program under section 14 of the United States Housing 
                Act of 1937 (42 U.S.C. 14371).
                    (C) The public and assisted housing drug 
                elimination program under chapter 2 of subtitle C of 
                title V of the Anti-Drug Abuse Act of 1988 (42 U.S.C. 
                11901 et seq.).
                    (D) Contracts for rental assistance attached to 
                structures pursuant to paragraph (2) of section 8 of 
                the United States Housing Act of 1937 (42 U.S.C. 
                1437f).
                    (E) The HOME investment partnership program under 
                title II of the Cranston-Gonzalez National Affordable 
                Housing Act (42 U.S.C. 12721 et seq.).
                    (F) The self-help housing technical assistance 
                grant program under section 523 of the Housing Act of 
                1949 (42 U.S.C. 1490c).
                    (G) Rural housing preservation grants under section 
                533 of the Housing Act of 1949 (42 U.S.C. 1490m).
                    (H) Rural rental housing loans under section 515 of 
                the Housing Act of 1949 (42 U.S.C. 1485).
                    (I) Rural rental housing assistance payments under 
                section 521(a)(2) of the Housing Act of 1949 (42 U.S.C. 
                1490a).
                    (J) Rural water and waste disposal grants pursuant 
                to paragraphs (2) and (6) of section 306(a) of the 
                Consolidated Farm and Rural Development Act (7 U.S.C. 
                1926(a)) and water and waste facility loans and grants 
                under section 306C of such Act.
                    (K) Private business enterprise grants under 
                section 310B(c) of the Consolidated Farm and Rural 
                Development Act (7 U.S.C. 1926).
                    (L) Loan guarantees under section 108 of the 
                Housing and Community Development Act (as amended by 
                section 222 of this Act).
                    (M) Outreach and assistance for socially 
                disadvantaged farmers and ranchers under section 2501 
                of the Food, Agriculture, and Trade Act of 1990.
                    (N) Public Housing Family Investment Centers under 
                section 22 of the United States Housing Act of 1937 (42 
                U.S.C. 1437t).

SEC. 215. APPLICATION FOR FUNDING.

    (a) Establishment of Application Process.--The interagency council 
shall establish, by regulation, a procedure for a single comprehensive 
application to be submitted to the council for each tax enterprise zone 
designated under section 1391 of the Internal Revenue Code of 1986 for 
the purpose of making amounts available under this subtitle on behalf 
of such tax enterprise zones. The interagency council shall provide for 
the form and manner of such applications, and shall require the 
applications to be made by the State, unit of local government, or 
economic development agency chartered by the State that submitted the 
nomination for designation of the area designated as a tax enterprise 
zone and submitted promptly after such designation.
    (b) Local Coordination.--
            (1) Purposes.--The interagency council shall provide that 
        each application under this section shall be developed in 
        coordination and consultation with a local coordinating board 
        under paragraph (2), which shall ensure that the programs, 
        projects, activities, and services under section 214(1) carried 
        out with amounts provided under this subtitle are sufficiently 
        coordinated with the other programs, projects, activities, and 
        services assisted under this title, and that all such programs, 
        projects, activities, and services are coordinated with law 
        enforcement efforts within the area nominated for designation 
        as a tax enterprise zone.
            (2) Membership.--The local coordinating board referred to 
        in paragraph (1) shall include representatives of units of 
        local government within such area, representatives of law 
        enforcement agencies having jurisdiction within such area, 
        residents of the area, community leaders, including local 
        business persons, bankers, architects and planners, 
        representatives of school boards, and representatives of 
        nonprofit community-based organizations such as community 
        development corporations and community action agencies.
    (c) Contents.--Each application under the procedure established 
under this section shall contain the following information:
            (1) A list of the programs referred to under section 214 
        for which funding is requested and a general description of the 
        types of activities to be carried out with such assistance as 
        well as a list of activities to be carried out through programs 
        receiving funding under section 201.
            (2) A statement documenting the percentage of the total 
        amount of any funding received under this subtitle that will be 
        used for each selected program and the total amount of funding 
        that will be used for activities to be carried out through 
        programs receiving funding under section 201.
            (3) A statement documenting the entities that will receive 
        any assistance provided for the selected programs on behalf of 
        the tax enterprise zone and the entities' eligibility for such 
        assistance.
            (4) A statement documenting the membership of the local 
        coordinating board organized pursuant to the requirement under 
        subsection (b) and describing the coordination between the 
        programs, projects, activities, and services assisted under 
        this title and local law enforcement efforts in the tax 
        enterprise zone.
            (5) A request for any waiver of the requirement under 
        section 213(b)(1) and a statement documenting the rationale for 
        such waiver.
            (6) A statement documenting any other Federal, State, and 
        local resources for the community in which the tax enterprise 
        zone is located that will be dedicated to the types of 
        programs, projects, activities, and services to be assisted 
        under this title.
            (7) A statement documenting a strong commitment by 
        community-based organizations in the tax enterprise zone for 
        carrying out the selected programs and similar programs, 
        projects, activities, and services.
            (8) A statement documenting any private sector resources, 
        including corporate contributions and individual commitments, 
        to supplement assistance provided under this title.
            (9) A statement documenting the efforts made by the local 
        jurisdiction containing the tax enterprise zone to encourage 
        local financial institutions to satisfy their obligations under 
        the Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) 
        by making loans to enterprise zone businesses with emphasis on 
        startup and other small business concerns (as defined in 
        section 3(a) of the Small Business Act (15 U.S.C. 632(a)) and 
        the commitments made by local financial institutions in 
        response to these efforts.
            (10) A statement demonstrating a balanced, comprehensive 
        plan for the tax enterprise zone, that addresses removing 
        violent offenders from the neighborhood streets, supports drug 
        and crime prevention, improves health, education and other 
        social services, and promotes neighborhood revitalization 
        through strategies to create jobs and other economic 
        opportunities which assist families to become self sufficient. 
        Such strategies shall include improvements in infrastructure, 
        public facilities, and affordable housing opportunities 
        embodying good urban design and neighborhood planning 
        principles that contribute to the creation of wholesome and 
        attractive social, economic, and physical environments.
            (11) A statement demonstrating that any amounts requested 
        for selected programs are part of an integrated and 
        comprehensive plan for the use of Federal, State, local, and 
        private resources to accomplish specific goals and measurable 
        outcomes for neighborhood revitalization.
    (d) Review.--In reviewing each application submitted under this 
section, each member of the council shall review the portion of the 
application concerning any request or eligibility for assistance under 
any selected program under the jurisdiction of such member to determine 
whether providing assistance under this subtitle pursuant to such 
application will comply with the laws and regulations applicable to 
such program.
    (e) Approval and Disapproval.--
            (1) Timing.--The council shall review each application 
        promptly upon receipt and shall approve or disapprove the 
        application not later than the expiration of the 30-day period 
        beginning upon such receipt.
            (2) Standards for approval.--The council shall approve an 
        application if the council determines that the assistance 
        requested for the selected programs under the application will 
        assist in the economic development of the tax enterprise zone, 
        that the eligible entities identified in the application are 
        capable and qualified to receive and administer the assistance 
        pursuant to the application, and that the information, 
        documentation, or evidence required under subsection (c) is 
        sufficient in the determination of the council.
            (3) Disapproval and resubmission.--If, pursuant to review 
        under this section, the council determines that the application 
        of a tax enterprise zone is incomplete or unsatisfactory, the 
        council shall, before the expiration of the period referred to 
        in paragraph (1)--
                    (A) notify the entity submitting the application of 
                the reasons for the failure to approve the application;
                    (B) notify the entity submitting the application 
                that the application may be resubmitted during the 
                period referred to in subparagraph (C); and
                    (C) permit such entity to resubmit a corrected or 
                amended application during the 30-day period beginning 
                on notification under this paragraph.
            (4) Review of resubmitted application.--The council shall 
        review and approve or disapprove any application resubmitted 
        under paragraph (3) before the expiration of the 15-day period 
        beginning upon such resubmission. Any application resubmitted 
        under paragraph (3) that is disapproved may be resubmitted 
        before the expiration of the 15-day period beginning upon such 
        disapproval and shall be subject to review under the provisions 
        of this paragraph.
    (f) Public Comment.--An applicant under this section, in 
conjunction with the relevant local coordinating board, shall ensure 
that there are adequate opportunities for public comment concerning the 
application submitted under this section, including--
            (1) furnishing citizens with information concerning the 
        amount of funds available pursuant to this subtitle and the 
        range of activities that may be undertaken with such funds;
            (2) holding one or more public hearings to obtain the views 
        of citizens on community needs; and
            (3) providing citizens with reasonable access to any 
        application filed pursuant to this section and to records 
        regarding the use of funds received pursuant to this subtitle.

SEC. 216. INTERAGENCY COUNCIL.

    (a) Establishment.--There is hereby established an interagency 
council to provide assistance under this subtitle.
    (b) Membership.--The members of the council shall be the Secretary 
of Agriculture, the Secretary of Education, the Secretary of Health and 
Human Services, the Secretary of Housing and Urban Development, the 
Secretary of Labor, the Director of the Office of National Drug Control 
Policy, the Attorney General of the United States and the Chairperson 
of the Commission on National and Community Service.
    (c) Duties.--The council shall--
            (1) review and approve applications submitted under section 
        215;
            (2) direct the appropriate Federal agency head to provide 
        assistance under the selected programs under approved 
        applications using amounts available pursuant to this subtitle; 
        and
            (3) carry out any other responsibilities of the council as 
        provided under this subtitle.

SEC. 217. DEFINITIONS.

    For purposes of this subtitle:
            (1) The term ``appropriate Federal agency head'' means, 
        with respect to each program referred to in section 214, the 
        head of the Federal agency or other Federal official 
        responsible for administering such program.
            (2) The term ``approved application'' means an application 
        under section 215 for assistance provided under this subtitle 
        that is approved by the interagency council and which meets the 
        public comment requirements under section 215(f).
            (3) The term ``eligible entity'' means, with respect to a 
        selected program under an application under section 215, an 
        entity in the tax enterprise zone that is eligible to receive 
        and administer amounts under the program and is designated 
        under the application to receive and administer amounts 
        provided for the program pursuant to this subtitle.
            (4) The terms ``interagency council'' and ``council'' mean 
        the interagency council established under section 216.
            (5) The term ``selected program'' means, with respect to a 
        tax enterprise zone, any of the programs identified in an 
        application under section 215 for which funding under this 
        subtitle is requested.
            (6) The term ``tax enterprise zone'' means an urban tax 
        enterprise zone, a rural development investment zone designated 
        under section 1391 of the Internal Revenue Code of 1986.

SEC. 218. STUDY AND REPORT.

    (a) General Study.--The council shall conduct a study to identify--
            (1) any alternative methods or systems for allocation of 
        amounts made available pursuant to this subtitle among tax 
        enterprise zones; and
            (2) any problems experienced in the implementation and 
        administration of the provisions of this subtitle, including 
        identification of any provisions of law or regulations relating 
        to the programs referred to in section 214 for which a waiver 
        would facilitate carrying out the purposes of this subtitle.
    (b) Report.--Not later than the expiration of the 1-year period 
beginning on the date of the enactment of this Act, the council shall 
submit to the Congress a report regarding the study conducted under 
subsection (a), which shall include any recommendations for improving 
the program for assistance under this subtitle.

SEC. 219. REGULATIONS.

    The council shall issue any regulations necessary to carry out this 
subtitle not later than the expiration of the 60-day period beginning 
on the date of the enactment of this Act.

                       Subtitle C--Other Programs

          CHAPTER 1--COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM

SEC. 221. WAIVER OF PUBLIC SERVICES CAP UNDER COMMUNITY DEVELOPMENT 
              BLOCK GRANT PROGRAM.

    Section 105(a)(8) of the Housing and Community Development Act of 
1974 (42 U.S.C. 5305(a)) is amended--
            (1) by inserting ``(A)'' before ``unless such unit''; and
            (2) by inserting before the semicolon at the end the 
        following: ``, or (B) unless unit of general local government 
        is located within or contains a tax enterprise zone (as 
        designated under section 1391 of the Internal Revenue Code of 
        1986), in which case such unit of general local government may 
        use, in addition to such 15 percent of the amount of any 
        assistance provided to the unit (or in the case of nonentitled 
        communities, 15 percent statewide) under this title, including 
        program income, an additional 15 percent of such amount of 
        assistance for activities under this paragraph within such 
        enterprise zone''.

SEC. 222. EMERGENCY COMMUNITY DEVELOPMENT LOAN GUARANTEE AUTHORITY.

    Section 108 of the Housing and Community Development Act of 1974 is 
amended by adding at the end thereof the following new subsection:
    ``(q) In addition to amounts provided under subsection (a), the 
Secretary may enter into commitments during each of the fiscal years 
1993 through 1997 to guarantee notes and obligations with an aggregate 
principal amount in each fiscal year of $2,000,000,000. The guarantee 
authority under this subsection shall be effective only to the extent 
approved or provided for in appropriations Acts, subject only to the 
absence of qualified applicants or proposed activities and the 
provisions of this Act, except that the provisions of subsection (k) 
shall not apply with respect to any guarantees and commitments to 
guarantee pursuant to authority provided under this subsection.''.

        CHAPTER 2--YOUNG ADULT EMPLOYMENT DEMONSTRATION PROGRAM

SEC. 231. ESTABLISHMENT OF YOUNG ADULT EMPLOYMENT DEMONSTRATION 
              PROGRAM.

    (a) In General.--Title IV of the Job Training Partnership Act (29 
U.S.C. 1671 et seq.) is amended by adding at the end the following new 
part:

         ``PART K--YOUNG ADULT EMPLOYMENT DEMONSTRATION PROGRAM

``SEC. 499I. STATEMENT OF PURPOSE.

    ``It is the purpose of the Young Adult Employment Demonstration 
program under this part to--
            ``(1) ensure access to education and job training 
        assistance for youth and young adults residing in tax 
        enterprise zones;
            ``(2) make provisions for a comprehensive range of 
        education, training, and employment services to disadvantaged 
        youth and young adults in tax enterprise zones who are not 
        currently served or are underserved by Federal education and 
        job training programs;
            ``(3) enable communities located in or containing tax 
        enterprise zones to establish and meet goals for improving the 
        opportunities available to youth and young adults within the 
        tax enterprise zone; and
            ``(4) facilitate the coordination of comprehensive services 
        to serve such youth and young adults.

``SEC. 499J. PROGRAM AUTHORIZED.

    ``(a) Establishment of Program.--The Secretary is authorized to 
establish a program of Young Adult Employment Demonstration grants to 
provide comprehensive services to youth and young adults living in tax 
enterprise zones.
    ``(b) Eligibility for Grants.--
            ``(1) Recipients.--The Secretary may only award grants 
        under this part to--
                    ``(A) the participating community for a target area 
                that is located within a service delivery area; or
                    ``(B) grantees designated under sections 401 and 
                402, or a consortium of such grantees and the State, 
                when the target area is located in an Indian 
                reservation, Alaskan Native village, or migrant or 
                seasonal farmworker community.
            ``(2) Number of grants.--The Secretary may award not more 
        than 25 grants during the first fiscal year the program is 
        authorized.
    ``(c) Renewability of Grants.--Grants awarded under this part shall 
be for a 1-year period and shall be renewable for each of the 2 
succeeding fiscal years if the Secretary determines the grant recipient 
complied with conditions of the grant during the previous fiscal year.
    ``(d) Factors for Awards.--In awarding grants under this part, the 
Secretary shall consider the quality of the proposed project, the goals 
to be achieved, the likelihood of the project's successful 
implementation, the extent of community support and other Federal and 
non-Federal funds available for similar purposes, and the new State, 
local, or private resources.
    ``(e) Selection Requirements.--In awarding grants under subsection 
(b), the Secretary shall not approve an application unless the 
application contains assurances that the applicant will use funds from 
a grant to provide job training, education, services, stipends (only to 
individuals age 17 to 30), and needs-related payments in accordance 
with sections 499K and 499L.

``SEC. 499K. APPLICATION.

    ``(a) Eligibility To Apply.--Participating communities shall be 
eligible to apply for a Young Adult Employment Demonstration grant 
under this part.
    ``(b) Contents of Application.--Each participating community 
desiring a grant under this part shall, through the individuals 
described in subsection (c), submit an application to the Secretary at 
such time in such manner and accompanied by such information as the 
Secretary may reasonably require. Each such application shall--
            ``(1) include a comprehensive plan for the Young Adult 
        Employment Demonstration initiative designed to achieve 
        identifiable goals for youth and young adults in the target 
        area;
            ``(2) set forth measurable program goals and outcomes, 
        which may include increasing the proportion of--
                    ``(A) youth completing high school or its 
                equivalent;
                    ``(B) youth and young adults entering into 
                postsecondary institutions, apprenticeships, or other 
                advanced training programs;
                    ``(C) youth and young adults placed in jobs; or
                    ``(D) eligible youth and young adults participating 
                in education, training, and employment services;
            ``(3) include supporting goals for the target area such as 
        increasing security and safety, or reducing the number of drug-
        related arrests;
            ``(4) provide assurances that the conditions set forth in 
        section 499L will be met;
            ``(5) demonstrate how the participating community will make 
        use of the resources, expertise, and commitment of institutions 
        of higher education, educational agencies, and vocational and 
        technical schools and institutes;
            ``(6) attempt to ensure that all youth and young adults in 
        the target areas have access to a coordinated and comprehensive 
        range of education and training opportunities which serve the 
        broadest range of interests and needs of youth and young adults 
        and simultaneously mobilize the diverse range of education and 
        training providers in the participating community;
            ``(7) include support services necessary for successful 
        participation by eligible youth and young adults, including 
        child care, transportation, and assistance in resolving 
        personal or family crises such as those related to substance 
        abuse, homelessness, migration, and family violence;
            ``(8) include a system of common intake, individualized 
        assessment, and case management;
            ``(9) include an estimate of the expected number of youth 
        and young adults in the target area to be served;
            ``(10) include a description of the resources available in 
        the participating community from private, local government, 
        State and Federal sources which will be used to achieve the 
        goals of the program;
            ``(11) provide evidence of support for accomplishing the 
        stated goals of the participating community from--
                    ``(A) local elected officials,
                    ``(B) the local school system,
                    ``(C) postsecondary education and training 
                institutions,
                    ``(D) the applicable private industry council,
                    ``(E) local community leaders,
                    ``(F) business,
                    ``(G) labor organizations, and
                    ``(H) other appropriate organizations; and
            ``(12) provide assurances that the target area includes, to 
        the maximum extent possible, the poorest neighborhoods in the 
        community, such as those with substantial numbers of public 
        housing facilities.
    ``(c) Submission of Application.--The application for funds for a 
participating community may only be submitted to the Secretary by--
            ``(1) the mayor of a city or the chief elected official in 
        a metropolitan statistical area, after the Governor of the 
        State has had an opportunity to comment on the application;
            ``(2) the chief elected official of a nonmetropolitan 
        county or the designated chief elected official of contiguous 
        nonmetropolitan counties, after the Governor of the State has 
        had an opportunity to comment on the application; or
            ``(3) the grantee designated under sections 401 or 402, or 
        jointly by the grantee and the Governor of the State in which 
        such grantee is located, in applications for Native American or 
        migrant or seasonal worker communities.

``SEC. 499L. GRANT AGREEMENT.

    ``Each grant recipient under this part shall enter into an 
agreement with the Secretary. Each such agreement shall describe how--
            ``(1) the recipient will designate a target area that will 
        be the focus of the demonstration project and which shall have 
        a population of not more than 25,000 (or upon approval of the 
        Secretary, a population of not more than 75,000), except that 
        in the event that the population of an area from which a high 
        school draws a substantial portion of its enrollment exceeds 
        this limit, the target area may encompass such boundary;
            ``(2) funds provided under this part will be used to 
        support education, training, and supportive activities selected 
        from a set of youth program models designated by the Secretary 
        or from alternative models described in the application and 
        approved by the Secretary, such as--
                    ``(A) nonresidential learning centers;
                    ``(B) alternative schools;
                    ``(C) combined summer remediation, work experience 
                and work readiness training, and school-to-work/
                apprenticeship/post-secondary education program;
                    ``(D) teen parent programs;
                    ``(E) special programs administered by community 
                colleges;
                    ``(F) youth centers;
                    ``(G) initiatives aimed at increased rural student 
                enrollment in post-secondary institutions;
                    ``(H) public-private collaborations to ensure 
                private sector employment and continued learning 
                opportunities for youth; and
                    ``(I) initiatives that combine community and youth 
                service opportunities with education and training 
                activities;
            ``(3) funds received under this section will be used for 
        services to youth and young adults age 14 to 30 at the time of 
        enrollment;
            ``(4) the local educational agency and any other 
        educational agency which operates secondary schools in the 
        target area provide activities and resources to promote the 
        educational goals specified in the application;
            ``(5) the participating community will provide activities 
        and local resources to promote the goals specified in the 
        application;
            ``(6) the participating community shall undertake outreach 
        and recruitment efforts in the target area to encourage, to the 
        maximum extent possible, participation by those disadvantaged 
        youth and young adults who are currently unserved or 
        underserved by education and training programs, including 
        targeted measures specifically designed to enlist the 
        participation of minority youth and young adults, particularly 
        those under the jurisdiction of the child welfare, juvenile 
        justice, and criminal justice systems;
            ``(7) the participating community will carry out special 
        efforts to establish coordination with Federal, State, or local 
        programs that serve the target population; and
            ``(8) funds provided under this part shall be used to pay 
        stipends for participant support in paid work experience and 
        classroom training programs when such programs are combined 
        with other education and training activities.

``SEC. 499M. JOB GUARANTEES.

    ``(a) Program Authority.--The Secretary shall permit a number of 
the grant recipients under this part to enter into an agreement to 
provide, in accordance with this section, a job guarantee program to 
youth meeting prior school attendance and performance standards.
    ``(b) Guarantee Agreements.--A grant recipient providing a job 
guarantee program shall enter into an agreement with the Secretary. 
Such agreement shall--
            ``(1) provide that the program be available to youth aged 
        16 to 19 who undertake a commitment to continue and complete 
        their high school education;
            ``(2) require the grant recipient to guarantee employment 
        to each youth undertaking that commitment if such youth meets 
        school attendance and performance standards for the previous 
        school semester, as established by the Secretary in 
        consultation with the Secretary of Education;
            ``(3) provide that the grant recipient will make additional 
        services available to support the undertaking of any such 
        youth, which shall include counseling, job development and 
        placement, and support services (including child care and 
        transportation);
            ``(4) specify the conditions under which funds provided 
        under this part may be used to provide wage subsidies of up to 
        50 percent through employers, which shall--
                    ``(A) encourage subsidies to employers who provide 
                advanced or specialized training, or who provide a 
                structured and integrated learning experience involving 
                the school and employer; and
                    ``(B) limit the duration of such subsidies to not 
                more than 1 year;
            ``(5) require that the employment provided to any such 
        youth shall not exceed 15 hours per week during the school 
        year;
            ``(6) permit employment to continue through the summer 
        following high school graduation, or until the youth reaches 
        age 19, whichever is later; and
            ``(7) contain such other terms and conditions as the 
        Secretary requires by regulation.
    ``(c) Selection of Grant Recipients.--In determining which grant 
recipients to permit to enter into an agreement under this section, the 
Secretary shall seek to target funds to high poverty areas.
    ``(d) Youth Eligibility.--All youth age 16 to 19, regardless of 
income, residing in the eligible high poverty area shall be eligible to 
participate in the job guarantee.
    ``(e) Private Funds.--Nothing in this section shall be construed to 
prohibit the grant recipient from raising funds to augment such grant 
if such funds are utilized under the conditions of this grant, except 
that such funds shall not be used for administration purposes.

``SEC. 499N. PAYMENTS AND MATCHING REQUIREMENT.

    ``(a) Payments.--In any fiscal year, the grant awarded under this 
part to a grant recipient shall be determined according to the amount 
to be provided for the program pursuant to designation of the program 
as a selected program under an application made on behalf of a tax 
enterprise zone under section 105 of the Revenue Act of 1992, and shall 
be of sufficient size and scope to carry out an effective program.
    ``(b) Matching Requirement.--A grant recipient shall provide non-
Federal funds in an amount equal to 10 percent of the funds from such 
grant, an in-kind contribution equivalent to such percent (as 
determined by the Secretary), or a combination thereof.

``SEC. 499O. REPORTING.

    ``The Secretary is authorized to establish such reporting 
procedures as necessary to carry out the purposes of this part.

``SEC. 499P. FEDERAL RESPONSIBILITIES.

    ``(a) Assistance in Implementation.--The Secretary shall provide 
technical assistance in the implementation of this project in 
participating communities.
    ``(b) Independent Evaluation.--The Secretary shall provide for a 
thorough, independent evaluation of the activities assisted under this 
part. Such evaluation shall include an assessment of--
            ``(1) the impact on youth and young adults residing in 
        target areas, including their rates of school completion, 
        enrollment in advanced education or training, and employment;
            ``(2) the extent to which participating communities 
        fulfilled the goal of guaranteeing access to appropriate 
        education, training, and supportive services to all eligible 
        youth and young adults residing in target areas who seek to 
        participate;
            ``(3) the effectiveness of guaranteed access to 
        comprehensive services combined with outreach and recruitment 
        efforts in enlisting the participation of previously unserved 
        or underserved youth and young adults residing in target areas; 
        and
            ``(4) the effectiveness of efforts to integrate service 
        delivery in target areas, including systems of common intake, 
        assessment, and case management.
    ``(c) Report.--The Secretary shall prepare a report describing the 
results of the independent evaluation conducted pursuant to subsection 
(b).
    ``(d) Reservation of Funds.--The Secretary may reserve not more 
than 5 percent of the amounts to be used for assistance under this part 
in each fiscal year to carry out the provisions of this section.

``SEC. 499Q. DEFINITIONS.

    ``For the purposes of this part--
            ``(1) The term `participating community' means--
                    ``(A) a city, when referring to an urban area that 
                is located within or contains a tax enterprise zone;
                    ``(B) a nonmetropolitan county, or contiguous 
                nonmetropolitan counties, that is located within or 
                contains a tax enterprise zone; and
                    ``(C) a section 401 or 402 grantee, or consortia of 
                the State and section 401 or 402 grantee, when 
                referring to Indian reservation, Alaska Native village, 
                and migrant or seasonal farmworker community, that are 
                located within or contain a tax enterprise zone.
            ``(2) The term `high poverty area' means (A) an urban 
        census tract, a nonmetropolitan county, an Indian reservation, 
        or an Alaskan Native village, with a poverty rate of 30 percent 
        or more as determined by the Secretary based on the latest 
        Bureau of the Census estimates, or (B) a migrant or seasonal 
        farmworker community.
            ``(3) The term `target area' means a high poverty area (or 
        portion thereof), or set of contiguous high poverty areas, that 
        is located within a tax enterprise zone and will be the focus 
        of the program under this part in a participating community.
            ``(4) The term `tax enterprise zone' has the meaning given 
        the term in section 107 of the Revenue Act of 1992.''.
    (b) Technical Amendments.--The Job Training Reform Amendments of 
1992 (Public Law 102-367) is amended--
            (1) in section 406, by striking ``adding at the end'' and 
        inserting ``inserting after part G'';
            (2) in section 407, by striking ``adding at the end'' and 
        inserting ``inserting after part H''; and
            (3) in section 408, by striking ``adding at the end'' and 
        inserting ``inserting after part I''.

           CHAPTER 3--NATIONAL COMMUNITY ECONOMIC PARTNERSHIP

SEC. 241. SHORT TITLE; FINDINGS AND PURPOSE.

    (a) Short Title.--This chapter may be cited as the ``National 
Community Economic Partnership Act of 1992''.
    (b) Findings.--Congress finds that--
            (1) the cities, towns, small communities and rural areas 
        throughout the United States face critical social and economic 
        problems arising in part from a lack of economic growth in 
        community based economies;
            (2) the crisis facing local economies has resulted in--
                    (A) a growing percentage of the workforce earning 
                poverty level wages, even though they work full time 
                and year round;
                    (B) the percentage of the labor force living below 
                the poverty line increasing from 25.7 percent in 1979 
                to 31.5 percent in 1987;
                    (C) population losses, rising unemployment and a 
                decline of the farm sector and of many other rural 
                industries (such as timber, oil, gas, and mining) 
                contribute to the decline of rural economies;
                    (D) with respect to rural areas, 31.9 percent of 
                the workforce falling below the poverty line in 1979, 
                with that percentage rising to 42.1 percent in 1987;
                    (E) with respect to urban areas, 23.4 percent of 
                the workforce falling below the poverty line in 1979, 
                with that percentage rising to 28.9 percent in 1987; 
                and
                    (F) the average wage and salary income of the 90 
                percent of the population with the lowest incomes, 
                between 1977 and 1988, falling 3.5 percent in contrast 
                to the richest 1 percent of the population whose 
                incomes more than doubled in that time period.
            (3) the future well-being of the United States and the 
        well-being of its citizens depends on the establishment and 
        maintenance of viable community development enterprises;
            (4) meeting the goal of establishing and maintaining viable 
        community development enterprises requires--
                    (A) increased public and private investment in 
                business development activities, especially in the 
                small business sector which generates the majority of 
                new jobs as evidenced by the fact that between 1980 and 
                1986, enterprises with less than 100 employees 
                accounted for more than 50 percent of the jobs created 
                in the United States;
                    (B) increased investment and technical assistance 
                to existing community based enterprises as evidenced by 
                the fact that during the first half of the 1980's, more 
                than 75 percent of the total net new jobs in the United 
                States came from the expansion of existing businesses;
                    (C) a substantial expansion and greater continuity 
                in the scope of Federal programs that support community 
                based economic development strategies;
                    (D) the continuing efforts at Federal, State and 
                local levels to coordinate the planning, implementation 
                and evaluation of community economic development 
                efforts; and
                    (E) the formation of a national commission, as an 
                independent agency, to administer the various community 
                development programs and serve as a focal point for 
                Federal efforts to promote community based economic 
                development; and
            (5) community development corporations, due to their proven 
        capacity and achievements in both the field of community based 
        housing and economic development, are appropriate vehicles 
        through which to advance a national community economic 
        development program because--
                    (A) there are currently over 2000 community 
                development corporations throughout the United States, 
                operating projects that promote community based housing 
                and economic development;
                    (B) community development corporations operate in 
                every State and in virtually every major city in the 
                United States, and account for many of the existing 
                efforts undertaken to meet the needs of low income 
                persons in both urban and rural communities;
                    (C) community development corporations have 
                developed some 300,000 units of housing, with over 90 
                percent of these units for use by low income occupants;
                    (D) community development corporations have 
                developed over 19,000,000 square feet of retail space, 
                offices, industrial parks and other industrial 
                developments in economically distressed communities;
                    (E) community development corporations have made 
                loans to over 3000 enterprises, equity investments in 
                242 ventures and own and operate 427 businesses; and
                    (F) community development corporations commercial, 
                industrial and business enterprise development 
                activities have accounted for the creation and 
                retention of nearly 90,000 jobs in the last five years.
    (c) Purpose.--It is the purpose of this chapter to stimulate 
enterprise development in economically distressed urban and rural areas 
through public and private partnerships facilitated by community 
development corporations.

        PART I--COMMUNITY ECONOMIC PARTNERSHIP INVESTMENT FUNDS

SEC. 245. PURPOSE.

    It is the purpose of this part 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.

SEC. 246. PROVISION OF ASSISTANCE.

    (a) Authority.--The Secretary of Health and Human Services 
(hereafter referred to in this chapter as the ``Secretary'') is 
authorized, in accordance with this part, to 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 applications.--In providing 
        assistance under subsection (a), 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 entities.--To be eligible to receive a line of 
        credit under this part 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) Exception.--Notwithstanding 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 250.

SEC. 247. APPROVAL OF APPLICATIONS.

    (a) In General.--In evaluating applications submitted under section 
246(b)(2)(B), 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 part 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 
                the Job Training Partnership Act (29 U.S.C. 1501 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 part; 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) Priority.--In determining which application to approve under 
this part 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.

SEC. 248. AVAILABILITY OF LINES OF CREDIT AND USE.

    (a) Approval of Application.--The Secretary shall provide a 
community development corporation that has an application approved 
under section 247 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 amount.--The Secretary shall not provide in 
        excess of $2,000,000 in lines of credit under this part to a 
        single applicant.
            (2) Period of availability.--A line of credit provided 
        under this part 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) Exception.--Notwithstanding paragraphs (1) and (2), if 
        a recipient of a line of credit under this part 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 246(b)(2), the amount of such line of 
        credit may be increased by not more than $1,500,000.
    (c) Amounts Drawn From Line of Credit.--Amounts drawn from each 
line of credit under this part shall be used solely for the purposes 
described in section 245 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 Funds.--Revolving loan funds established 
with lines of credit provided under this part 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 247(a)(4).

SEC. 249. LIMITATIONS ON USE OF FUNDS.

    (a) Matching Requirement.--Not to exceed 50 percent of the total 
amount to be invested by an entity under this part may be derived from 
funds made available from a line of credit under this part.
    (b) Technical Assistance and Administration.--Not to exceed 10 
percent of the amounts available from a line of credit under this part 
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 Contributions.--To receive funds 
available under a line of credit provided under this part, 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 
246(b)(2)(D), 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 Investments.--Proceeds derived from 
investments made using funds made available under this part may be used 
only for the purposes described in section 245 and shall be reinvested 
in the community in which they were generated.

SEC. 250. PROGRAM PRIORITY FOR SPECIAL EMPHASIS PROGRAMS.

    (a) In General.--The Secretary shall give priority in providing 
lines of credit under this part 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 Funds.--Not less than 5 percent of the amounts 
made available under section 267(a)(2)(A) may be reserved to carry out 
the activities described in subsection (a).

          PART II--EMERGING COMMUNITY DEVELOPMENT CORPORATIONS

SEC. 255. COMMUNITY DEVELOPMENT CORPORATION IMPROVEMENT GRANTS.

    (a) Purpose.--It is the purpose of this section to provide 
assistance to community development corporations to upgrade the 
management and operating capacity of such corporations and to enhance 
the resources available to enable such corporations to increase their 
community economic development activities.
    (b) Skill Enhancement Grants.--
            (1) In general.--The Secretary shall award grants to 
        community development corporations to enable such corporations 
        to attain or enhance the business management and development 
        skills of the individuals that manage such corporations to 
        enable such corporations to seek the public and private 
        resources necessary to develop community economic development 
        projects.
            (2) Use of funds.--A recipient of a grant under paragraph 
        (1) may use amounts received under such grant--
                    (A) to acquire training and technical assistance 
                from agencies or institutions that have extensive 
                experience in the development and management of low-
                income community economic development projects; or
                    (B) to acquire such assistance from other highly 
                successful community development corporations.
    (c) Operating Grants.--
            (1) In general.--The Secretary shall award grants to 
        community development corporations to enable such corporations 
        to support an administrative capacity for the planning, 
        development, and management of low-income community economic 
        development projects.
            (2) Use of funds.--A recipient of a grant under paragraph 
        (1) may use amounts received under such grant--
                    (A) to conduct evaluations of the feasibility of 
                potential low-income community economic development 
                projects that address identified needs in the low-
                income community and that conform to those projects and 
                activities permitted under part I;
                    (B) to develop a business plan related to such a 
                potential project; or
                    (C) to mobilize resources to be contributed to a 
                planned low-income community economic development 
                project or strategy.
    (d) Applications.--A community development corporation that desires 
to receive a grant under this section shall prepare and submit to the 
Secretary an application at such time, in such manner, and containing 
such information as the Secretary may require.
    (e) Amount Available for a Community Development Corporation.--
Amounts provided under this section to a community development 
corporation shall not exceed $75,000 per year. Such corporations may 
apply for grants under this section for up to 3 consecutive years, 
except that such corporations shall be required to submit a new 
application for each grant for which such corporation desires to 
receive and compete on the basis of such applications in the selection 
process.

SEC. 256. EMERGING COMMUNITY DEVELOPMENT CORPORATION REVOLVING LOAN 
              FUNDS.

    (a) Authority.--The Secretary is authorized to award grants to 
emerging community development corporations to enable such corporations 
to establish, maintain or expand revolving loan funds, to make or 
guarantee loans, or to make capital investments in new or expanding 
local businesses.
    (b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity shall--
            (1) be a community development corporation;
            (2) have completed not less than one nor more than two 
        community economic development projects or related projects 
        that improve or provide job and employment opportunities to 
        low-income individuals;
            (3) prepare and submit to the Secretary an application at 
        such time, in such manner, and containing such information as 
        the Secretary may require, including 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 using amounts received under the grant and the impact 
        of such assistance on low-income individuals; and
            (4) 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 equal to 
        at least 10 percent of the amounts requested in the application 
        submitted under paragraph (2).
    (c) Use of the Revolving Loan Fund.--
            (1) In general.--A revolving loan fund established or 
        maintained with amounts received under this section may be 
        utilized to provide financial and technical assistance, loans, 
        loan guarantees or investments to private business enterprises 
        to--
                    (A) finance projects intended to provide business 
                and employment opportunities for low-income individuals 
                and to improve the quality of life in urban and rural 
                areas; and
                    (B) build and expand the capacity of emerging 
                community development corporations and serve the 
                economic needs of local residents.
            (2) Technical assistance.--The Secretary shall encourage 
        emerging community development corporations that receive grants 
        under this section to seek technical assistance from 
        established community development corporations, with expertise 
        in the planning, development and management of economic 
        development projects and shall facilitate the receipt of such 
        assistance.
            (3) Limitation.--Not to exceed 10 percent of the amounts 
        received under this section by a grantee shall be used for 
        training, technical assistance and administrative purposes.
    (d) Use of Proceeds From Investments.--Proceeds derived from 
investments made with amounts provided under this section may be 
utilized only for the purposes described in this subchapter and shall 
be reinvested in the community in which they were generated.
    (e) Amounts Available.--Amounts provided under this section to a 
community development corporation shall not exceed $500,000 per year.

                  PART III--RESEARCH AND DEMONSTRATION

SEC. 261. RESEARCH AND DEMONSTRATION.

    (a) Grants.--The Secretary shall award grants to organizations to 
enable such organizations to undertake programs involving research, 
testing, studies or demonstrations related to community economic 
development.
    (b) Eligible Organizations.--To be eligible to receive a grant 
under this section, an entity shall--
            (1) be a community development corporation, university, 
        fiscal intermediary or a nonprofit organization involved in 
        community-based economic development activities; and
            (2) prepare and submit to the Secretary an application at 
        such time, in such manner and containing such information as 
        the Secretary determines appropriate.
    (c) Use of Funds.--Amounts received under a grant awarded under 
this section shall be made available for studies, reports, tests or 
demonstration projects that--
            (1) identify current problems facing both urban and rural 
        low-income communities or specific population groups within 
        low-income communities and population-losing communities;
            (2) identify solutions to the problems facing both urban 
        and rural low-income communities or specific population groups 
        within low-income communities;
            (3) examine or critique current strategies being 
        implemented to address economic issues facing low-income 
        communities; and
            (4) relate to any other matters determined appropriate by 
        the Secretary.
    (d) Maximum Amount of Grant.--A grant awarded under this section 
shall not exceed $50,000.

                   PART IV--MISCELLANEOUS PROVISIONS

SEC. 265. JOINT PROGRAMS.

    The Secretary shall develop and promulgate, in consultation with 
the heads of other Federal agencies, regulations designed to permit, 
where appropriate, the operation of joint programs under which 
activities supported with assistance provided under this chapter are 
coordinated with community development activities supported with 
assistance provided under other programs administered by the Secretary 
and those administered by the heads of such agencies.

SEC. 266. REPORTS.

    (a) Community Development Corporations.--Not later than 2 years 
after the date on which assistance is provided to a community 
development corporation under part I or II, every 2 years thereafter, 
the community development corporation shall prepare and submit to the 
Secretary a report under this section. Such report shall include--
            (1) the amount of funds received by the community 
        development corporation;
            (2) a summary of the uses of such funds;
            (3) the number of jobs created or retained by the 
        corporation;
            (4) the number and type of new businesses started, 
        including micro-businesses;
            (5) the number of jobs created or retained for individuals 
        identified in section 247(a)(4);
            (6) in the case of funds made available under part I, the 
        source and amount of matching funds;
            (7) in the case of revolving loan funds made available 
        under part II, the amount of funds leveraged; and
            (8) related human services and facilities provided as 
        result of assistance provided under this chapter.
    (b) Secretary.--Not later than 3 years after the date on which 
assistance is first provided under part I or II, and annually 
thereafter, the Secretary shall prepare and submit to the Committee on 
Labor and Human Resources of the Senate and the Committee on Education 
and Labor of the House of Representatives a report containing a summary 
of the reports received by the Secretary under subsection (a) for the 
period in which the report of the Secretary is submitted.

SEC. 267. DEFINITIONS.

    As used in this chapter:
            (1) Community development corporation.--The term 
        ``community development corporation'' means a private, 
        nonprofit corporation whose board of directors is comprised of 
        business, civic and community leaders, and whose principal 
        purpose includes the provision of low-income housing or 
        community economic development projects that primarily benefit 
        low-income individuals and communities.
            (2) Local and private sector contribution.--The term 
        ``local and private sector contribution'' means the funds 
        available at the local level (by private financial 
        institutions, State and local governments) or by any private 
        philanthropic organization and private, nonprofit organizations 
        that will be committed and used solely for the purpose of 
        financing private business enterprises in conjunction with 
        amounts provided under this chapter.
            (3) Population-losing community.--The term ``population-
        losing community'' means any county in which the net population 
        loss is at least 7 percent from April 1, 1980 to April 1, 1990, 
        as reported by the Bureau of the Census.
            (4) Private business enterprise.--The term ``private 
        business enterprise'' means any business enterprise that is 
        engaged in the manufacture of a product, provision of a 
        service, construction or development of a facility, or that is 
        involved in some other commercial, manufacturing or industrial 
        activity, and that agrees to target job opportunities stemming 
        from investments authorized under this chapter to certain 
        individuals.
            (5) Target area.--The term ``target area'' means any area 
        defined in an application for assistance under this chapter 
        that has a population whose income does not exceed the median 
        for the area within which the target area is located.
            (6) Very low-income community.--The term ``very low-income 
        community'' means a community in which the median income of the 
        residents of such community does not exceed 50 percent of the 
        median income of the area.

SEC. 268. AUTHORIZATION OF APPROPRIATIONS.

    (a) Community Economic Partnership Investment Funds and Emerging 
Community Development Corporations.--
            (1) In general.--There are authorized to be appropriated to 
        carry out parts I and II, $40,000,000 for fiscal year 1993, 
        $100,000,000 for fiscal year 1994, and $125,000,000 for fiscal 
        year 1995.
            (2) Earmarks.--Of the aggregate amount appropriated under 
        paragraph (1) for each fiscal year--
                    (A) 60 percent shall be available to carry out part 
                I; and
                    (B) 40 percent shall be available to carry out part 
                II.
            (3) Amounts.--Amounts appropriated under paragraph (1) 
        shall remain available for expenditure without fiscal year 
        limitation.
    (b) Research and Demonstration.--There are authorized to be 
appropriated to carry out part III such sums as may be necessary for 
each of the fiscal years 1993 through 1995.

SEC. 269. PROHIBITION.

    None of the funds authorized under this chapter shall be used to 
finance the construction of housing.

SEC. 270. EFFECTIVE DATE.

    This chapter shall take effect as if included in the Omnibus Budget 
Reconciliation Act of 1990.

                   CHAPTER 4--MISCELLANEOUS PROGRAMS

SEC. 271. ESTABLISHMENT OF ENTERPRISE CAPITAL ACCESS FUND.

    (a) Short Title.--This section may be cited as the ``Enterprise 
Capital Access Fund Demonstration Program''.
    (b) Findings and Purpose.--
            (1) Findings.--The Congress finds that--
                    (A) the Nation's urban and rural communities face 
                critical social and economic problems stemming from 
                lack of economic opportunity among low-income persons 
                and persons living in poverty;
                    (B) the numbers of low-income persons and persons 
                living in poverty has grown significantly over the last 
                decade;
                    (C) lack of access to credit and other forms of 
                capital is a significant factor in the disinvestment 
                and decline of low-income and minority neighborhoods;
                    (D) changes in the banking system and financial 
                markets have made access to credit in low-income and 
                distressed communities increasingly more difficult to 
                obtain as decisionmaking on credit has been removed 
                from local communities;
                    (E) the restoration and maintenance of viable local 
                economies will require improved access to credit, as 
                well as public and private investment in economic and 
                community development activities, business development, 
                and low-income housing;
                    (F) indigenous community-based financial 
                institutions can play a significant role in identifying 
                and responding to community needs;
                    (G) the Federal Government needs to develop new 
                models and institutions for facilitating local 
                revitalization efforts and improving access to credit; 
                and
                    (H) nonprofit financial intermediaries have proven 
                effective in meeting the credit and other capital needs 
                in low-income and distressed communities.
            (2) Purpose.--The purpose of this section is to establish a 
        demonstration program to promote reinvestment in low-income and 
        chronically distressed neighborhoods through community-based 
        nonprofit financial institutions that work cooperatively with 
        residents and State and local government.
    (c) Definitions.--For the purpose of this section, the following 
definitions shall apply:
            (1) Eligible intermediary.--The term ``eligible 
        intermediary'' means a nonprofit organization that--
                    (A) is organized under Federal, State or local 
                laws;
                    (B) complies with standards of financial 
                accountability acceptable to the Secretary;
                    (C) controls, operates or is affiliated with an 
                entity that provides credit or investment capital in a 
                targeted geographic area;
                    (D) has as its primary mission the revitalization 
                of low-income and chronically distressed neighborhoods 
                or communities; and
                    (E) maintains, through significant representation 
                on its governing board and otherwise, accountability to 
                community residents.
            (2) Low-income persons.--The term ``low-income persons'' 
        means persons whose incomes do not exceed 80 percent of the 
        median for the area.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (4) Targeted geographic area.--The term ``targeted 
        geographic area'' means a geographically contiguous area of 
        chronic economic distress as measured by unemployment, growth 
        lag, the extent of poverty, per capita income, extent of blight 
        and disinvestment, fiscal distress, or other indicators deemed 
        appropriate by the Secretary, that has been identified by an 
        eligible intermediary as an area to be served by it.
    (d) Authority.--The Secretary shall carry out, in accordance with 
this section, a demonstration program to provide assistance in the form 
of capital and technical assistance grants to nonprofit financial 
intermediaries for the establishment, maintenance, and expansion of 
such institutions, to be utilized to finance business and employment 
opportunities, housing opportunities affordable to low-income persons, 
and neighborhood revitalization projects.
    (e) Applications.--The Secretary shall establish and implement a 
competitive process for the solicitation and consideration of 
applications from eligible intermediaries.
    (f) Selection Criteria.--
            (1) In general.--Not later than 12 months after the date of 
        enactment of this section, the Secretary shall select eligible 
        intermediaries to participate in the demonstration program, 
        based on--
                    (A) the capacity of the eligible intermediary to 
                carry out the purposes of this title;
                    (B) the financial capacity of the eligible 
                intermediary based on evaluations provided by a 
                certified public accountant and criteria to be 
                determined by the Secretary;
                    (C) the extent of need in the targeted geographic 
                area identified by the eligible intermediary as the 
                area it serves;
                    (D) the extent to which the lending services of the 
                eligible intermediary are coordinated with other 
                revitalization activities in the targeted geographic 
                area;
                    (E) the previous experience and achievements of the 
                eligible intermediary in the financing or development 
                of low-income housing, in development of businesses and 
                other employment opportunities, or in neighborhood 
                revitalization activities;
                    (F) the extent to which the eligible intermediary 
                has firm commitments from local sources to provide 
                matching funds in an amount that is at least equal to 
                the amount requested in the application;
                    (G) an appropriate geographic distribution of 
                intermediaries among regions in the United States;
                    (H) the extent to which the eligible intermediary 
                demonstrates a commitment to serve minority individuals 
                and communities; and
                    (K) other criteria deemed appropriate by the 
                Secretary.
    (g) Capital Grants.--
            (1) In general.--The Secretary shall make capital grants to 
        eligible intermediaries.
            (2) Use of grants.--Capital grants may be used by eligible 
        intermediaries to increase the capital available for loans, 
        loan guarantees, interest rate reduction activities, and other 
        activities deemed appropriate by the Secretary that promote 
        housing affordable to low-income persons and economic and 
        community development activities that benefit low-income 
        persons.
            (3) Amount.--The maximum amount of Federal assistance an 
        eligible intermediary can receive per fiscal year under this 
        section is $1,000,000.
    (h) Technical Assistance.--The Secretary is authorized to make 
grants to eligible intermediaries to provide technical assistance to 
borrowers.
    (i) Training Program.--The Secretary shall establish, or contract 
to establish, an ongoing training program to assist eligible 
intermediaries and their staffs in developing the capacity to carry out 
the purposes of this title.
    (j) Report.--The Secretary shall annually prepare and submit to 
Congress a report containing a summary of the activities carried out 
under this section and the findings and conclusions drawn from such 
activities.
    (k) Duties of Eligible Intermediaries.--An eligible intermediary 
receiving assistance pursuant to this section shall--
            (1) match any assistance awarded by the Secretary dollar-
        for-dollar with non-Federal sources of funds;
            (2) ensure that not less than 70 percent of loans to 
        individual borrowers are to persons whose incomes are at or 
        below 80 percent of the area median income and are residents of 
        the targeted geographic area served; and
            (3) ensure that all loans made to nonprofit or for-profit 
        organizations provide a direct benefit to persons who are 
        residents of the targeted geographic area served.
    (l) Office of Community Banking.--There is established within the 
Department of Housing and Urban Development an Office of Community 
Banking which is responsible for the implementation of this section.
    (m) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $100,000,000 for fiscal year 
1993 and $200,000,000 for fiscal year 1994. Any amounts appropriated 
pursuant to this paragraph shall remain available until expended.

SEC. 272. ACCESS TO JOBS/REVERSE COMMUTING DEMONSTRATION PROGRAM.

    (a) Purpose.--It is the purpose of this section to--
            (1) improve employment rates and earnings in inner-city 
        areas by improving access to job sites for inner-city 
        residents;
            (2) improve the viability of businesses in enterprise zones 
        as a result of the increased incomes and purchasing power of 
        zone residents; and
            (3) test differing approaches to achieving these goals and 
        determine their effects.
    (b) Establishment of Program.--
            (1) In general.--The Secretary of Transportation, in 
        consultation with the Secretary of Labor, shall establish a 
        Reverse Commuting Demonstration Program to test the effects of 
        assisting residents of poor inner-city areas to commute to job 
        sites in other areas of the city or surrounding suburbs.
            (2) Use of non set-aside funds.--Any applicant eligible for 
        block grant funding under section 215 of this Act that submits 
        an application that meets the criteria in subsection (c) shall 
        be approved by the Secretary of Transportation, in consultation 
        with the Secretary of Labor, to utilize funds it receives under 
        this title to carry out a program established under this 
        section.
            (3) Use of set-aside funds.--The funds set-aside under 
        section 212(d) for the program under this section shall be used 
        by the Secretary of Transportation, in consultation with the 
        Secretary of Labor, to fund not more than six demonstration 
        projects utilizing the program models described in subsection 
        (d). Projects shall be selected on a competitive basis from 
        applications that meet the requirements of subsection (c) that 
        are submitted by applicants eligible for block grant funding 
        under section 215 of this Act.
    (c) Application and Approval Criteria.--An application under this 
section shall provide information specified by the Secretary of 
Transportation, in consultation with the Secretary of Labor, that is 
sufficient to satisfy the Secretary that--
            (1) the geographic area whose residents would be served by 
        the program established by the applicant under this section is 
        a low-income area that consists in whole or substantial part of 
        an urban enterprise zone;
            (2) one of the three program models described in subsection 
        (d) will be used by the applicant;
            (3) the data collection procedures that will be established 
        by the applicant will be sufficient to enable the Secretary of 
        Transportation, in consultation with the Secretary of Labor, to 
        conduct an evaluation in accordance with subsection (e); and
            (4) the applicant has the capability to perform adequately 
        with respect to the program established and to meet such other 
        criteria as the Secretary of Labor may prescribe.
    (d) Program Models.--Applications approved under this section shall 
utilize one of the following program models:
            (1) Adding transportation services to existing job training 
        and placement programs.--Under this model an applicant shall 
        supplement existing training and placement programs through the 
        establishment of new transportation services that are designed 
        to--
                    (A) transport inner-city residents to job locations 
                (such as van service between the zones and business 
                parks or major employers, with the service being 
                provided by a public agency, a private vendor, or a 
                neighborhood organization);
                    (B) provide transportation counseling and 
                assistance (such as the creation of car pools and 
                provision of education on public transit routes); or
                    (C) provide a direct subsidy of public transit 
                fares or private automobile expenses.
            (2) Improving public transit systems to facilitate access 
        to jobs/reverse commuting.--Under this model an applicant may--
                    (A) work with the relevant transit operator or 
                agency to modify public transit routes and schedules to 
                increase the accessibility of residents of inner-city 
                areas to job locations (such as through the provision 
                of express bus service to business parks at times 
                coinciding with labor shifts or the provision of new 
                connecting services to fill gaps that impede commuting 
                from inner-city areas to jobs sites); or
                    (B) reimburse public transit operators for the 
                costs of providing reduced fare programs to increase 
                the access of inner city residents to employment 
                opportunities.
        An applicant under subparagraph (A) may request suburban 
        employers to contribute to the costs of implementing such 
        transit services.
            (3) Establishing regional coalitions to improve inner-city 
        access to jobs.--Under this model an applicant shall establish 
        a regional coalition, which may include neighborhood 
        organizations, employers and employers associations, 
        transportation providers, and similar entities, to implement 
        comprehensive strategies to improve the access of residents of 
        inner-cities to jobs through modifications in job training and 
        placement services, support services such as child care, and 
        transportation services. An applicant under this model shall 
        attempt to link job training program participants with job 
        opportunities throughout as much of the metropolitan area as 
        practicable, and transportation barriers between inner-city 
        areas and job locations shall be identified and transportation 
        services implemented to address these problems.
    (e) Evaluation.--The Secretary of Transportation, in consultation 
with the Secretary of Labor, shall conduct a thorough evaluation of the 
program established under this section. Such evaluation shall include 
an assessment of--
            (1) with respect to applicants adding transportation 
        services to job training programs, the effect of the addition 
        of such transportation services on employment rates, job 
        retention, and earnings among residents of the demonstration 
        project areas;
            (2) with respect to applicants improving public transit 
        systems, the effect of the improvements on employment rates, 
        job retention, and earnings;
            (3) with respect to applicants establishing regional 
        coalitions and implementing comprehensive strategies, the 
        effects of such strategies on employment rates, job retention, 
        and earnings; and
            (4) the manner in which the adoption of such comprehensive 
        strategies affect employment and earnings in urban enterprise 
        zones, compared to other urban enterprise zones not initiating 
        programs to improve inner-city access to suburban job 
        locations.
    (f) Other Funding Sources.--Nothing in this section shall be 
construed to prevent an approved applicant from raising funds for any 
program established under the application from other sources to augment 
the funds available under this Act.
    (g) Definition.--As used in this section, the term ``urban 
enterprise zone'' means an area designated under section 1391 of the 
Internal Revenue Code of 1986.

                                 <all>

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