II 

111TH CONGRESS 

1ST SESSION S. 1222 

To amend the Internal Revenue Code of 1986 to extend and expand the 

benefits for businesses operating in empowerment zones, enterprise communities, or renewal communities, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 9, 2009 

Mrs. LINCOLN (for herself, Ms. SNOWE, Mr. KERRY, Ms. LANDRIEU, Mr. 

VITTER, Ms. CANTWELL, Mrs. GILLIBRAND, Mr. BURRIS, and Mr. SCHUMER) introduced the following bill; which was read twice and referred to 

the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to extend 

and expand the benefits for businesses operating in empowerment zones, enterprise communities, or renewal 

communities, and for other purposes. 

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

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

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

5 ‘‘Empowerment Zone, Renewal Community and Enter6 prise Community Enhancement Act of 2009’’. 


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

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

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

7 SEC. 2. EXTENSION OF BENEFITS. 

8 (a) EMPOWERMENT ZONES.— 

9 (1) ROUNDS I AND II DESIGNATIONS.—Section 

10 1391(d)(1) is amended by striking ‘‘December 31, 

11 2009’’ in subparagraph (A)(i) and inserting ‘‘De12 cember 31, 2015’’. 

13 (2) ROUND III DESIGNATIONS.—Section 

14 1391(h)(2) is amended by striking ‘‘December 31, 

15 2009’’ and inserting ‘‘December 31, 2015’’. 

16 (b) RURAL ENTERPRISE COMMUNITIES.—Section 

17 1391(d)(1)(A) is amended by striking ‘‘or’’ at the end of 

18 clause (i) and by striking clause (ii) and inserting the fol19 lowing new clauses: 

20 ‘‘(ii) in the case of an enterprise commu21 nity not described in clause (iii), the close of 

22 the 10th calendar year beginning on or after 

23 such date of designation, or 

24 ‘‘(iii) in the case of an enterprise commu25 nity designated in a rural area pursuant to secVerDate Nov 24 2008 03:07 Jun 10, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1222.IS S1222

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1 tion 766 of division A of the Omnibus Consoli2 dated and Emergency Supplemental Appropria3 tions Act, 1999, December 31, 2015,’’. 

4 (c) RENEWAL COMMUNITIES.— 

5 (1) Sections 1400E(b) and 1400I(g) are each 

6 amended by striking ‘‘December 31, 2009’’ each 

7 place it appears and inserting ‘‘December 31, 

8 2015’’. 

9 (2) Sections 1400E(b)(3), 1400F(b), and 

10 1400J(b) are each amended by striking ‘‘January 1, 

11 2010’’ each place it appears and inserting ‘‘January 

12 1, 2016’’. 

13 (3) Section 1400F(c)(2) amended by striking 

14 ‘‘December 31, 2014’’ and inserting ‘‘December 31, 

15 2020’’. 

16 (4) Section 1400F(d) is amended by striking 

17 ‘‘December 31, 2014’’ and inserting ‘‘December 31, 

18 2020’’. 

19 (5) Section 1400I(d)(2)(A) is amended by strik20 ing ‘‘2010’’ and inserting ‘‘2016’’. 

21 (d) TREATMENT OF TERMINATION DATES SPECI22 FIED IN NOMINATIONS.— 

23 (1) Paragraph (1) of section 1391(d) of such 

24 Code is amended by adding at the end the following 

25 new flush sentence: 


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1 ‘‘The termination date referred to in subparagraph 

2 (B) shall be treated as being no earlier than the ter3 mination date under subparagraph (A) unless an 

4 earlier termination date is designated under sub5 paragraph (B) after the date of the enactment of 

6 this sentence.’’. 

7 (2) Paragraph (1) of section 1400E(b) of such 

8 Code is amended by adding at the end the following 

9 new flush sentence: 

10 ‘‘The termination date referred to in subparagraph 

11 (B) shall be treated as being no earlier than the ter12 mination date under subparagraph (A) unless an 

13 earlier termination date is designated under sub14 paragraph (B) after the date of the enactment of 

15 this sentence.’’. 

16 SEC. 3. REVISION OF BENEFITS. 

17 (a) SAFE HARBOR FOR MEETING REQUIREMENT

18 THAT 35 PERCENT OF EMPLOYEES BE RESIDENTS OF

19 ZONE.— 

20 (1) IN GENERAL.—Section 1397C (defining en21 terprise zone business) is amended by adding at the 

22 end the following new subsection: 

23 ‘‘(g) ADDITIONAL SAFE HARBOR FOR MEETING RE24 QUIREMENT THAT 35 PERCENT OF EMPLOYEES BE RESI25 DENTS OF ZONE.—The requirements of subsections (b)(6) 


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1 and (c)(5) shall not fail to be treated as met for any period 

2 with respect to a qualified business if— 

3 ‘‘(1) as of the date of issuance of an issue, the 

4 date property is placed in service, or the date of the 

5 sale of an asset, it is reasonably expected that within 

6 3 years after such date the business will increase 

7 employment by at least the lesser of— 

8 ‘‘(A) in the case of— 

9 ‘‘(i) a business located in a renewal 

10 community or in a rural area (as defined 

11 in section 1393(a)(2)) in an empowerment 

12 zone or enterprise community, 500 full13 time employees, or 

14 ‘‘(ii) a business located outside a rural 

15 area (as so defined) in an empowerment 

16 zone or enterprise community, 1,000 full17 time employees, or 

18 ‘‘(B) 10 percent of the number of full-time 

19 employees estimated to have been employed in 

20 such zone or community on the date of its des21 ignation, 

22 ‘‘(2) as of the date of issuance of the issue, it 

23 is reasonably expected that as a result of the bonds 

24 the business will increase employment by at least 


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1 one job for each $150,000 in face amount of the 

2 issue, 

3 ‘‘(3) at any time within 3 years after the date 

4 of the issuance of an issue, the date property is 

5 placed in service, or the date of the sale of an asset, 

6 the requirements of such subsections are met, or 

7 ‘‘(4) the business enters into a binding agree8 ment with the appropriate local government employ9 ment agency to apply a first source rule to advertise 

10 and prioritize employment opportunities with such 

11 business for qualified residents of such zone or com12 munity.’’. 

13 (2) EFFECTIVE DATE.—The amendment made 

14 by this subsection shall take effect on the date of the 

15 enactment of this Act, except that in the case of ob16 ligations which are outstanding on such date, such 

17 date shall be deemed the date of issuance for such 

18 obligations. 

19 (b) ELIGIBILITY OF BUSINESSES DEVELOPING OR

20 HOLDING INTANGIBLES.— 

21 (1) IN GENERAL.—Paragraph (4) of section 

22 1397C(d) is amended by inserting before the period 

23 ‘‘unless the intangibles are developed within the em24 powerment zone’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by this subsection shall apply to taxable years begin3 ning after the date of the enactment of this Act. 

4 (c) REDUCED WAGE CREDIT ALLOWABLE FOR ZONE

5 RESIDENTS EMPLOYED OUTSIDE THE ZONE; EMPLOYEES

6 NEED NOT BE RESIDENTS OF ZONE IN WHICH EM7 PLOYED.— 

8 (1) IN GENERAL.—Subsection (b) of section 

9 1396 is amended to read as follows: 

10 ‘‘(b) APPLICABLE PERCENTAGE.— 

11 ‘‘(1) QUALIFIED ZONE EMPLOYEES WHO PER12 FORM SUBSTANTIALLY ALL OF THEIR SERVICES IN

13 AN EMPOWERMENT ZONE.—The applicable percent14 age is 20 percent with respect to qualified zone em15 ployees who would meet the requirement of sub16 section (d)(1) if only services performed within an 

17 empowerment zone were taken into account. 

18 ‘‘(2) OTHER QUALIFIED ZONE EMPLOYEES.— 

19 ‘‘(A) IN GENERAL.—The applicable per20 centage is— 

21 ‘‘(i) 20 percent in the case of des22 ignated qualified zone employees of em23 ployers which are enterprise zone busi24 nesses, and 


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1 ‘‘(ii) 10 percent in the case of any 

2 other designated qualified zone employee. 

3 ‘‘(B) LIMITATIONS ON NUMBER OF DES4 IGNATED EMPLOYEES.— 

5 ‘‘(i) IN GENERAL.—For purposes of 

6 subparagraph (A), the term ‘designated 

7 qualified zone employee’ means a qualified 

8 zone employee— 

9 ‘‘(I) to whom paragraph (1) does 

10 not apply, and 

11 ‘‘(II) who is designated under 

12 this subparagraph. 

13 ‘‘(ii) MANNER OF DESIGNATIONS.— 

14 Designations under this subparagraph 

15 shall be made by the local government or 

16 governments which nominated the area to 

17 be an empowerment zone. 

18 ‘‘(iii) LIMITATION ON DESIGNA19 TIONS.—The number of employees for 

20 whom a designation under this subpara21 graph is in effect at any one time with re22 spect to each empowerment zone shall not 

23 exceed— 

24 ‘‘(I) 500 for purposes of subpara25 graph (A)(i), and 


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1 ‘‘(II) 2,000 for purposes of sub2 paragraph (A)(ii).’’. 

3 (2) QUALIFIED ZONE EMPLOYEE.—Paragraph 

4 (1) of section 1396(d) is amended— 

5 (A) by striking ‘‘within an empowerment 

6 zone’’ in subparagraph (A), and 

7 (B) by striking ‘‘such empowerment zone’’ 

8 in subparagraph (B) and inserting ‘‘an em9 powerment zone’’. 

10 (3) EFFECTIVE DATE.—The amendments made 

11 by this subsection shall apply to taxable years begin12 ning after the date of the enactment of this Act. 

13 (d) CARRYFORWARD OF UNALLOCATED STATE COM14 MERCIAL REVITALIZATION EXPENDITURE CEILING.— 

15 (1) IN GENERAL.—Paragraph (1) of section 

16 1400I(d) is amended to read as follows: 

17 ‘‘(1) IN GENERAL.—The aggregate commercial 

18 revitalization expenditure amount which a commer19 cial revitalization agency may allocate for any cal20 endar year is the amount equal to the sum of— 

21 ‘‘(A) the amount of the State commercial 

22 revitalization expenditure ceiling determined 

23 under this paragraph for such calendar year for 

24 such agency (determined without regard to sub25 paragraph (B)), and 


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1 ‘‘(B) the aggregate of the unused State 

2 commercial revitalization expenditure ceilings 

3 determined under this paragraph for such agen4 cy for each of the 2 preceding calendar years. 

5 For purposes of subparagraph (B), amounts of ex6 penditure ceiling shall be treated as allocated by an 

7 agency first from unused amounts for the second 

8 preceding calendar year, then from unused amounts 

9 for the 1st preceding calendar year, and then from 

10 amounts from the current year State allocation.’’. 

11 (2) EFFECTIVE DATE.—The amendment made 

12 by this subsection shall apply to calendar years be13 ginning after the date of the enactment of this Act. 

14 (e) COMMERCIAL REVITALIZATION DEDUCTION FOR

15 BUILDING EXPANSIONS.— 

16 (1) IN GENERAL.—Section 1400I(b)(1) is 

17 amended— 

18 (A) by striking ‘‘any building (and its 

19 structural components) if’’, 

20 (B) by inserting ‘‘any building (and its 

21 structural components) if’’ before ‘‘the building 

22 is placed’’ in subparagraph (A), 

23 (C) by striking ‘‘or’’ at the end of subpara24 graph (A), 


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1 (D) by striking ‘‘such building not de2 scribed in subparagraph (A),’’ in subparagraph 

3 (B) and inserting ‘‘any building (and its struc4 tural components) not described in subpara5 graph (A) if’’, 

6 (E) by striking the period at the end of 

7 subparagraph (B)(ii) and inserting ‘‘, or’’, and 

8 (F) by adding at the end the following new 

9 subparagraph: 

10 ‘‘(C) in the case of any expansion of a 

11 building not described in subparagraph (A) or 

12 (B), such expansion if— 

13 ‘‘(i) such expansion is made to a 

14 building owned by the taxpayer, 

15 ‘‘(ii) the taxpayer provides a detailed 

16 accounting of the distinct capital costs at17 tributable to such expansion, and 

18 ‘‘(iii) such expansion is placed in serv19 ice by the taxpayer in a renewal commu20 nity and the original use of such expansion 

21 begins with the taxpayer.’’. 

22 (2) EFFECTIVE DATE.—The amendments made 

23 by this subsection shall apply to property placed in 

24 service after the date of the enactment of this Act. 


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1 (f) AUTHORITY TO EXPAND BOUNDARIES OF ZONES

2 AND COMMUNITIES.— 

3 (1) EMPOWERMENT ZONES AND ENTERPRISE

4 COMMUNITIES.—Section 1391 is amended by adding 

5 at the end the following new subsection: 

6 ‘‘(i) AUTHORITY TO EXPAND BOUNDARIES OF DES7 IGNATED AREAS.— 

8 ‘‘(1) IN GENERAL.—At the request of all gov9 ernments which nominated an area as an empower10 ment zone or enterprise community, the appropriate 

11 Secretary may expand the area of such zone or com12 munity to include 1 or more contiguous or non13 contiguous areas if such governments establish to 

14 the satisfaction of the appropriate Secretary that 

15 such expansion furthers the purposes of the designa16 tion of the initial area as such a zone or community. 

17 ‘‘(2) RURAL AREAS.—With respect to any em18 powerment zone or enterprise community located in 

19 a rural area, at the request of the nominating local 

20 government, the appropriate Secretary shall expand 

21 the area of such zone or community to include the 

22 entire area of such nominating local government, but 

23 only if— 

24 ‘‘(A) either— 


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1 ‘‘(i) the poverty rate and the unem2 ployment rate for such entire area as de3 termined by the 2000 decennial census 

4 data was at least 110 percent of such rate 

5 for the United States, or 

6 ‘‘(ii) during the period beginning with 

7 the 1990 decennial census and ending with 

8 the 2000 decennial census, such entire 

9 area has a net out migration of inhabitants 

10 of at least 10 percent of the population of 

11 such area, and 

12 ‘‘(B) such entire area meets 1 or more of 

13 the following criteria determined by the 2000 

14 decennial census data: 

15 ‘‘(i) Median household income is not 

16 more than 70 percent of such income for 

17 the United States. 

18 ‘‘(ii) Per capita income is not more 

19 than 75 percent of such income for the 

20 United States. 

21 ‘‘(iii) The percentage of such area’s 

22 population which is disabled is at least 130 

23 percent of such percentage for the United 

24 States.’’. 


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1 (2) RENEWAL COMMUNITIES.—Section 1400E 

2 is amended by adding at the end the following new 

3 subsection: 

4 ‘‘(h) AUTHORITY TO EXPAND BOUNDARIES OF DES5 IGNATED AREAS.— 

6 ‘‘(1) IN GENERAL.—At the request of all gov7 ernments which nominated an area as a renewal 

8 community, the Secretary of Housing and Urban 

9 Development may expand the area of such commu10 nity to include 1 or more noncontiguous areas if 

11 such governments establish to the satisfaction of 

12 such Secretary that such expansion furthers the pur13 poses of the designation of the initial area as a re14 newal community. 

15 ‘‘(2) RURAL AREAS.—With respect to any re16 newal community located in a rural area, at the re17 quest of the nominating local government, the Sec18 retary of Housing and Urban Development shall ex19 pand the area of such community to include the en20 tire area of such nominating local government, but 

21 only if— 

22 ‘‘(A) either— 

23 ‘‘(i) the poverty rate and the unem24 ployment rate for such entire area as de25 termined by the 2000 decennial census 


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1 data was at least 110 percent of such rate 

2 for the United States, or 

3 ‘‘(ii) during the period beginning with 

4 the 1990 decennial census and ending with 

5 the 2000 decennial census, such entire 

6 area has a net out migration of inhabitants 

7 of at least 10 percent of the population of 

8 such area, and 

9 ‘‘(B) such entire area meets 1 or more of 

10 the following criteria determined by the 2000 

11 decennial census data: 

12 ‘‘(i) Median household income is not 

13 more than 70 percent of such income for 

14 the United States. 

15 ‘‘(ii) Per capita income is not more 

16 than 75 percent of such income for the 

17 United States. 

18 ‘‘(iii) The percentage of such area’s 

19 population which is disabled is at least 130 

20 percent of such percentage for the United 

21 States.’’. 

22 (3) EFFECTIVE DATE.—The amendments made 

23 by this subsection shall take effect on the date of the 

24 enactment of this Act. 


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1 (g) MODIFICATION OF REQUIREMENT FOR EXPAND2 ING DESIGNATED AREA BASED ON 2000 CENSUS.— 

3 (1) IN GENERAL.—Clause (ii) of section 

4 1400E(g)(1)(A) is amended to read as follows: 

5 ‘‘(ii) such tract has a poverty rate 

6 using 2000 census data— 

7 ‘‘(I) which is at least 20 percent, 

8 or 

9 ‘‘(II) which exceeds the poverty 

10 rate for such tract using 1990 census 

11 data.’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by this subsection shall take effect on the date of the 

14 enactment of this Act. 

15 (h) REPEAL OF EXCLUSION OF CENTRAL BUSINESS

16 DISTRICT FROM ELIGIBILITY AS DESIGNATED AREA.— 

17 (1) IN GENERAL.—Paragraph (3) of section 

18 1392(a) is amended by adding ‘‘and’’ at the end of 

19 subparagraph (B), by striking ‘‘, and’’ at the end of 

20 subparagraph (C) and inserting a period, and by 

21 striking subparagraph (D). 

22 (2) EFFECTIVE DATE.—The amendments made 

23 by this subsection shall take effect on the date of the 

24 enactment of this Act. 


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1 (i) CARRYOVER OF UNUSED INCREASED SECTION

2 179 EXPENSING LIMIT.— 

3 (1) IN GENERAL.—Subparagraph (A) of section 

4 1397A(a)(1) is amended to read as follows: 

5 ‘‘(A) the sum of— 

6 ‘‘(i) $35,000, and 

7 ‘‘(ii) the aggregate of the unused in8 creased limitations for each of the 2 pre9 ceding taxable years, or’’. 

10 (2) UNUSED INCREASED LIMITATION.—Section 

11 1397A is amended by adding at the end the fol12 lowing new subsection: 

13 ‘‘(c) UNUSED INCREASED LIMITATION.—For pur14 poses of subsection (a)(1)(A)— 

15 ‘‘(1) IN GENERAL.—The unused increased limi16 tation for any taxable year is the excess (but not 

17 more than $35,000) of the limitation under section 

18 179(b)(1) as increased under subsection (a) over the 

19 cost of section 179 property which is qualified zone 

20 property placed in service during the taxable year. 

21 ‘‘(2) ORDERING RULE.—The limitation under 

22 section 179(b)(1) as increased under subsection (a) 

23 shall be treated as used first from unused limitation 

24 for the second preceding calendar year, then from 

25 unused limitation for the 1st preceding calendar 


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1 year, and then from such limitation for the current 

2 year.’’. 

3 (3) EFFECTIVE DATE.—The amendments made 

4 by this subsection shall apply to taxable years begin5 ning after the date of the enactment of this Act. 

6 (j) ELECTION OF FINANCING ARRANGEMENT IN

7 LIEU OF TAX BENEFITS.— 

8 (1) IN GENERAL.—Section 1396 is amended by 

9 adding at the end the following new subsection: 

10 ‘‘(e) ELECTION OF FINANCING ARRANGEMENT IN

11 LIEU OF TAX BENEFITS.— 

12 ‘‘(1) IN GENERAL.—At the election of any sig13 nificant empowerment zone business, for the pay14 ment period of the debt obligation designated in 

15 such election (or as an amendment to such election) 

16 by such business— 

17 ‘‘(A) such business— 

18 ‘‘(i) shall not be allowed an empower19 ment zone employment credit described in 

20 subsection (a), and 

21 ‘‘(ii) shall not be allowed any deduc22 tion for depreciation under section 168 

23 with respect to qualified zone property that 

24 provides a cost recovery benefit described 

25 in paragraph (2), and 


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1 ‘‘(B) the Secretary shall make the pay2 ments described in paragraph (2) to a trustee 

3 designated by the electing business to accept 

4 such payments on behalf of such holders). 

5 ‘‘(2) PAYMENTS.— 

6 ‘‘(A) IN GENERAL.—At the beginning of 

7 each year of the payment period, the Secretary 

8 shall pay (out of any money in the Treasury not 

9 otherwise appropriated) to the trustee des10 ignated by such business an amount equal to— 

11 ‘‘(i) the empowerment zone employ12 ment credit computed for such year under 

13 this section as if the election was not made 

14 under this subsection, and 

15 ‘‘(ii) except as provided in paragraph 

16 (4)(A), the amount equal to the cost recov17 ery benefit divided by the number of years 

18 in the payment period described in sub19 paragraph (C). 

20 ‘‘(B) COST RECOVERY BENEFIT.—For pur21 poses of subparagraph (A), the cost recovery 

22 benefit shall be an amount equal to 25 percent 

23 of— 

24 ‘‘(i) the cost of any tangible property 

25 which is qualified zone property (including 


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1 improvements to such tangible property) 

2 incurred by the significant empowerment 

3 zone business before the end of the first 5 

4 full calendar years beginning after the date 

5 the election is made under this subsection, 

6 and 

7 ‘‘(ii) any such cost for which a bind8 ing contract for financing the acquisition 

9 of such tangible property (including im10 provements to such tangible property) has 

11 been made by such business and which 

12 under the terms of the financing is to be 

13 incurred within the first 5 full calendar 

14 years beginning after the date of the elec15 tion made under this subsection. 

16 ‘‘(C) PAYMENT PERIOD.—The payment pe17 riod is the period of 15 calendar years begin18 ning with the earlier of— 

19 ‘‘(i) the calendar year specified by the 

20 significant empowerment zone business as 

21 the 1st year of the payment period without 

22 regard to the date the property is placed in 

23 service, or 


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1 ‘‘(ii) the 5th calendar year beginning 

2 after the date that the election under this 

3 subsection is made. 

4 ‘‘(3) SIGNIFICANT EMPOWERMENT ZONE BUSI5 NESS.—For purposes of this subsection, the term 

6 ‘significant empowerment zone business’ means any 

7 trade or business operating in an empowerment zone 

8 if— 

9 ‘‘(A) such business is nominated by the 

10 chief executive or the legislative body of the 

11 State or a local government in which the zone 

12 property is located, and 

13 ‘‘(B) the Secretary of Housing and Urban 

14 Development determines that— 

15 ‘‘(i) it is a facility for qualified re16 search as defined in section 41(d) which is 

17 reasonably anticipated to make at least 

18 $50,000,000 of capital expenditures within 

19 the first 3 years of the payment period, or 

20 ‘‘(ii) with respect to any other busi21 ness, it is reasonably anticipated that such 

22 business will increase employment in such 

23 zone by the end of the first 3 years of the 

24 payment period by at least the lesser of— 


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1 ‘‘(I) 1,000 full-time employees or 

2 equivalents, or 

3 ‘‘(II) 10 percent of the number 

4 of full-time employees estimated to 

5 have been employed in such zone on 

6 the date of its designation. 

7 ‘‘(4) SPECIAL RULES.— 

8 ‘‘(A) ADJUSTMENT TO COST RECOVERY

9 BENEFIT.—In the event that the significant em10 powerment zone business does not incur a cost 

11 within the period described in paragraph (2)(B) 

12 and for which a cost recovery benefit payment 

13 is made under this subsection, the Secretary 

14 shall reduce future recovery benefit payments to 

15 recover 110 percent of the overpayments in 

16 equal installments over the remaining payment 

17 period. In the event that a cost described in 

18 paragraph (2)(B)(i) is incurred, or a contract 

19 described in paragraph (2)(B)(ii) is entered 

20 into, after the beginning of the payment period, 

21 the Secretary shall increase future recover ben22 efit payments to recover 100 percent of the cost 

23 recovery benefit associated with such costs or 

24 contracts in equal installments over the remain25 ing payment period. 


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1 ‘‘(B) BASIS ADJUSTMENT.—For purposes 

2 of this subtitle, if a cost recovery payment is 

3 made under this subsection with respect to any 

4 property, the basis of such property shall be re5 duced by the amount of such payment. 

6 ‘‘(5) TREATMENT OF PAYMENTS.—Any pay7 ment made under this subsection shall not be treat8 ed as a Federal Government guarantee for purposes 

9 of section 149(b).’’. 

10 (2) CONFORMING AMENDMENT.—Section 

11 1016(a) is amended by striking ‘‘and’’ at the end of 

12 paragraph (36), by striking the period at the end of 

13 paragraph (37) and inserting ‘‘, and’’, and by add14 ing at the end the following new paragraph: 

15 ‘‘(38) to the extent provided in section 

16 1396(e)(4)(B).’’. 

17 (3) EFFECTIVE DATE.—The amendments made 

18 by this subsection shall apply to taxable years begin19 ning after the date of the enactment of this Act. 

20 (k) CERTAIN FEDERALLY GUARANTEED BONDS

21 ISSUED TO PROVIDE INVESTMENTS IN EMPOWERMENT

22 ZONES AND RENEWAL COMMUNITIES PERMITTED TO BE

23 TAX-EXEMPT, ETC.— 

24 (1) IN GENERAL.—Subparagraph (A) of section 

25 149(b)(3) is amended by striking ‘‘or’’ at the end of 


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

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

3 the end the following new clause: 

4 ‘‘(iv) any guarantee by a Federal 

5 Home Loan Bank for a bond 95 percent or 

6 more of the net proceeds of which are to 

7 be used to provide property in an em8 powerment zone or renewal community.’’. 

9 (2) EFFECTIVE DATE.—The amendments made 

10 by this subsection shall apply to bonds issued after 

11 the date of the enactment of this Act. 

12 (l) TAX-EXEMPT INTEREST OF FINANCIAL INSTITU13 TIONS ON ZONE FACILITY BONDS NOT SUBJECT TO IN14 TEREST DISALLOWANCE.— 

15 (1) IN GENERAL.—Subparagraph (B) of section 

16 265(b)(3) (defining qualified bond) is amended by 

17 adding at the end the following new clause: 

18 ‘‘(iii) ENTERPRISE ZONE FACILITY

19 BONDS.—The term ‘qualified tax-exempt 

20 obligation’ includes any obligation which is 

21 treated as an exempt facility bond by sec22 tion 1394.’’. 

23 (2) EFFECTIVE DATE.—The amendment made 

24 by this subsection shall apply to taxable years begin25 ning after the date of the enactment of this Act. 


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1 (m) DEVELOPABLE SITES POPULATION CLARIFICA2 TION.— 

3 (1) IN GENERAL.—Subparagraph (C) of section 

4 1391(g)(3) (relating to modifications to eligibility 

5 criteria, etc.) is amended to read as follows: 

6 ‘‘(C) POPULATION LIMITATION.— 

7 ‘‘(i) AGGREGATE POPULATION LIMITA8 TION.—The aggregate population limita9 tion under the last sentence of subsection 

10 (b)(2) shall not apply to a designation 

11 under paragraph (1). 

12 ‘‘(ii) EXCEPTION FOR DEVELOPABLE

13 SITES.—The parcels described in subpara14 graph (A)(iii) shall not be taken into ac15 count in determining whether the require16 ment of section 1392(a)(1)(A) is met.’’. 

17 (2) EFFECTIVE DATE.—The amendment made 

18 by this subsection shall take effect on the date of the 

19 enactment of this Act. 

20 (n) REPORTING.—The Secretary of the Treasury (or 

21 the Secretary’s delegate) shall annually submit to the 

22 Committee on Ways and Means of the House of Rep23 resentatives and the Committee on Finance of the Senate 

24 a report detailing for each empowerment zone, enterprise 


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1 community, and renewal community the amount and type 

2 of claimed tax benefits. 

3 SEC. 4. ADDITIONAL ACCESS TO CAPITAL BY RURAL EN4 TERPRISE COMMUNITIES AND CERTAIN EM5 POWERMENT ZONES. 

6 (a) IN GENERAL.—Section 1394 (relating to tax-ex7 empt enterprise zone facility bonds) is amended by adding 

8 at the end the following new subsection: 

9 ‘‘(g) BONDS FOR RURAL ENTERPRISE COMMU10 NITIES.— 

11 ‘‘(1) IN GENERAL.—In the case of a rural en12 terprise community bond— 

13 ‘‘(A) such bond shall not be treated as a 

14 private activity bond for purposes of section 

15 146, and 

16 ‘‘(B) subsections (c) and (f)(2) of this sec17 tion shall not apply. 

18 ‘‘(2) LIMITATION OF AMOUNT OF BONDS.— 

19 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

20 apply to a rural enterprise community bond 

21 only if such bond is designated for purposes of 

22 this subsection by the Secretary of Agriculture 

23 for the area to which such bond relates. 

24 ‘‘(B) LIMITATION ON BONDS DES25 IGNATED.—The aggregate face amount of 


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1 bonds which may be designated under subpara2 graph (A) with respect to all rural enterprise 

3 communities shall not exceed $200,000,000. 

4 ‘‘(C) SPECIAL RULES.— 

5 ‘‘(i) COORDINATION WITH OTHER LIM6 ITATIONS.—Bonds to which paragraph (1) 

7 applies shall not be taken into account in 

8 applying the limitation of subsection (c) or 

9 (f)(2) to other bonds. 

10 ‘‘(ii) CURRENT REFUNDINGS NOT

11 TAKEN INTO ACCOUNT.—In the case of a 

12 refunding (or series of refundings) of a 

13 bond designated under this paragraph, the 

14 refunding obligation shall be treated as 

15 designated under this paragraph (and shall 

16 not be taken into account in applying sub17 paragraph (B)) if— 

18 ‘‘(I) the amount of the refunding 

19 bond does not exceed the outstanding 

20 amount of the refunded bond, and 

21 ‘‘(II) the refunded bond is re22 deemed not later than 90 days after 

23 the date of issuance of the refunding 

24 bond. 


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1 ‘‘(3) RURAL ENTERPRISE COMMUNITY BOND.— 

2 For purposes of this subsection, the term ‘rural en3 terprise community bond’ means any bond which 

4 would be described in subsection (a) if all rural en5 terprise communities were taken into account under 

6 sections 1397C and 1397D. 

7 ‘‘(4) DESIGNATION PROCEDURE.—The Sec8 retary of Agriculture shall establish within 90 days 

9 after the date of the enactment of this subsection, 

10 the procedure for the nomination and selection of 

11 rural enterprise communities with respect to the des12 ignation of rural enterprise community bonds.’’. 

13 (b) ACCESS TO ADDITIONAL CAPITAL BY CERTAIN

14 EMPOWERMENT ZONES.—Section 1394 (relating to tax15 exempt enterprise zone facility bonds), as amended by sub16 section (a), is amended by adding at the end the following 

17 new subsection: 

18 ‘‘(h) ACCESS TO CAPITAL FOR EMPOWERMENT

19 ZONES THAT HAVE UTILIZED THE EXISTING ALLOCA20 TION.— 

21 ‘‘(1) IN GENERAL.—The appropriate Secretary 

22 may designate empowerment zone facility bonds in 

23 excess of the applicable limitation amounts under 

24 subsections (c) and (f)(2) in the case of any em25 powerment zone with respect to which enterprise 


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1 zone facility bonds and empowerment zone facility 

2 bonds have been designated and issued up to such 

3 applicable limitation amounts as of December 31, 

4 2009. 

5 ‘‘(2) LIMITATION OF AMOUNT OF BONDS.— 

6 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

7 apply to an empowerment zone facility bond 

8 only if such bond is designated for purposes of 

9 this subsection by the appropriate Secretary for 

10 the area to which such bond relates. 

11 ‘‘(B) LIMITATION ON BONDS DES12 IGNATED.—The aggregate face amount of 

13 bonds which may be designated under subpara14 graph (A)— 

15 ‘‘(i) with respect to all empowerment 

16 zones described in paragraph (1) shall not 

17 exceed $300,000,000, 

18 ‘‘(ii) with respect to all urban areas 

19 shall not exceed $230,000,000, and 

20 ‘‘(iii) with respect to all rural areas 

21 shall not exceed $70,00,000. 

22 ‘‘(C) SPECIAL RULES.— 

23 ‘‘(i) COORDINATION WITH OTHER LIM24 ITATIONS.—Bonds to which paragraph (1) 

25 applies shall not be taken into account in 


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1 applying the limitation of subsection (c) or 

2 (f)(2) to other bonds. 

3 ‘‘(ii) CURRENT REFUNDINGS NOT

4 TAKEN INTO ACCOUNT.—In the case of a 

5 refunding (or series of refundings) of a 

6 bond designated under this paragraph, the 

7 refunding obligation shall be treated as 

8 designated under this paragraph (and shall 

9 not be taken into account in applying sub10 paragraph (B)) if— 

11 ‘‘(I) the amount of the refunding 

12 bond does not exceed the outstanding 

13 amount of the refunded bond, and 

14 ‘‘(II) the refunded bond is re15 deemed not later than 90 days after 

16 the date of issuance of the refunding 

17 bond. 

18 ‘‘(3) DESIGNATIONS PROCEDURE.—The appro19 priate Secretary shall establish within 90 days after 

20 the date of the enactment of this subsection, the 

21 procedure for the nomination and selection of em22 powerment zones with respect to the designation of 

23 empowerment zone facility bonds.’’. 

Æ 


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