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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1338 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 1338

            To provide assistance to distressed communities.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 15, 1993

Mr. Upton introduced the following bill; which was referred jointly to 
 the Committees on Ways and Means, Banking, Finance and Urban Affairs, 
     Education and Labor, Energy and Commerce, the Judiciary, and 
                              Agriculture

_______________________________________________________________________

                                 A BILL

 
            To provide assistance to distressed communities.

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

SECTION 1. SHORT TITLE; ETC.

    (a) Short Title.--This Act may be cited as the ``Enterprise Zone 
and Model Neighborhood Aid Act of 1993''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment 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 a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--

Sec. 1. Short title; etc.
 TITLE I--URBAN TAX ENTERPRISE ZONES AND RURAL DEVELOPMENT INVESTMENT 
                                 ZONES

Sec. 101. Statement of purpose.
               Subtitle A--Designation and Tax Incentives

Sec. 102. Designation and treatment of urban tax enterprise zones and 
                            rural development investment zones.
Sec. 103. Technical and conforming amendments.
Sec. 104. Effective date.
        Subtitle B--Redevelopment Bonds for Tax Enterprise Zones

Sec. 111. Special rules for redevelopment bonds providing financing for 
                            tax enterprise zones.
             Subtitle C--Expansion of Targeted Jobs Credit

Sec. 121. Economically disadvantaged zone residents included as members 
                            of targeted group.
 Subtitle D--Credit for Contributions to Certain Community Development 
                              Corporations

Sec. 131. Credit for contributions to certain community development 
                            corporations.
   Subtitle E--Authority for National Banks To Deal in Securities of 
              Corporations Located in Tax Enterprise Zones

Sec. 141. Authority for national banks to deal in securities of 
                            corporations located in tax enterprise 
                            zones.
 Subtitle F--Report on Number of Areas Meeting Enterprise Zone Criteria

Sec. 151. Report.
     TITLE II--ADDITIONAL ASSISTANCE TO ENTERPRISE ZONES AND OTHER 
                         DISTRESSED COMMUNITIES

Sec. 201. Purpose.
        Subtitle A--National Public-Private Partnership Program

Sec. 211. Sense of Congress.
Sec. 212. Authorization of appropriations.
  Subtitle B--Coordinated and Comprehensive Neighborhood Aid for Tax 
                 Enterprise Zones and Other Communities

   Chapter 1--Enterprise Community Block Grant Demonstration Program

Sec. 221. Funding.
Sec. 222. Allocation of amounts among tax enterprise zones.
Sec. 223. Use of amounts.
               Chapter 2--Model Neighborhood Aid Program

Sec. 231. Purpose.
Sec. 232. Single applications by local governments for funding under 
                            eligible programs.
Sec. 233. Availability and use of amounts.
Sec. 234. Priority in funding.
Sec. 235. Treatment of previously approved weed and seed communities.
Sec. 236. One-time strategy implementation grants.
 Chapter 3--Eligible Programs and Interagency Council for Neighborhood 
                                  Aid

Sec. 241. Eligible programs.
Sec. 242. Interagency Council for Neighborhood Aid.
Sec. 243. Neighborhood aid plans.
Sec. 244. Definitions.
Sec. 245. Study and report.
Sec. 246. Regulations.
         Subtitle C--Community Development Block Grant Program

Sec. 251. Increase of public services cap under community development 
                            block grant program.
Sec. 252. Emergency community development loan guarantee authority.
        Subtitle D--Young Adult Employment Demonstration Program

Sec. 261. Establishment of young adult employment demonstration 
                            program.
          Subtitle E--National Community Economic Partnership

Sec. 271. Short title.
Sec. 272. Findings and purpose.
Sec. 273. Assistance to States.
Sec. 274. State assistance to community development corporations.
Sec. 275. State plans.
Sec. 276. Reports.
Sec. 277. Definitions.
Sec. 278. Prohibition.
Sec. 279. Effective date.
                   Subtitle F--Miscellaneous Programs

Sec. 281. Enterprise capital access fund.
Sec. 282. Access to jobs/reverse commuting demonstration program.

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

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 100 nominated areas as tax 
        enterprise zones under this section, subject to the 
        availability of eligible nominated areas. Not less than 33 
        large city zones shall be designated; not less than 33 other 
        urban zones shall be designated; and not less than 33 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) 1993.--During 1993, the number of urban tax 
                enterprise zones designated under paragraph (1) shall 
                not exceed 9, and the number of rural development 
                investment zones designated under paragraph (1) shall 
                not exceed 8.
                    ``(B) After 1993.--As of the close of each calendar 
                year after 1993, the number of urban tax enterprise 
                zones and rural development investment zones shall not 
                exceed the numbers determined in accordance with the 
                following table:
      

            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Large city zone.--The term `large city zone' 
                means any urban tax enterprise zone located in a city 
                having a population (as determined by the most recent 
                census data available) of at least 100,000.
                    ``(B) Other urban zone.--The term `other urban 
                zone' means any urban tax enterprise zone not located 
                in a city described in subparagraph (A).
            ``(4) 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.
    ``(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) in the case of a large city, 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) located 
                entirely 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)(I) does not exceed 10,000 square 
                        miles, or
                            ``(II) consists of areas within not more 
                        than 4 contiguous counties,
                            ``(ii) has a boundary which is continuous, 
                        or consists of not more than 3 noncontiguous 
                        parcels, and
                            ``(iii) 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).
    ``(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--
                    ``(A) an economic development corporation chartered 
                by the State, or
                    ``(B) a community development corporation--
                            ``(i) which is described in section 
                        501(c)(3) and exempt from tax under section 
                        501(a), and
                            ``(ii) the principal purposes of which 
                        include promoting employment of, and business 
                        opportunities for, low-income individuals who 
                        are residents of its operational area.

             ``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. 1394A. Credit to qualified zone 
                                        employees of tax-exempt 
                                        organizations.
                              ``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. 1394A. CREDIT TO QUALIFIED ZONE EMPLOYEES OF TAX-EXEMPT 
              ORGANIZATIONS.

    ``(a) Allowance of Credit.--In the case of a qualified zone 
employee who received qualified zone wages during the taxable year from 
any tax-exempt employer, there shall be allowed as a credit against the 
tax imposed by this chapter for such taxable year an amount equal to 15 
percent of the qualified zone wages received by such employee from such 
employer during such taxable year.
    ``(b) 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.
    ``(c) Limitation Based on Amount of Tax.--For purposes of this 
title, the credit allowed under this section shall be treated as 
allowed under subpart A of part IV of subchapter A of this chapter 
(relating to nonrefundable personal credits).
    ``(d) Tax-Exempt Employer.--For purposes of this section, the term 
`tax-exempt employer' means any employer who is exempt from tax under 
this subtitle. Such term shall not include the Federal Government, any 
State or local government or political subdivision thereof, or any 
agency or instrumentality of any of the foregoing.
    ``(e) Other Definitions and Special Rules.--
            ``(1) Definitions.--Terms used in this section which are 
        also used in section 1394 shall have the respective meanings 
        given such terms in section 1394.
            ``(2) Special rules.--Rules similar to the rules of section 
        1394(d) shall apply for purposes of this section.

``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. Nonrecognition of gain from 
                                        new zone investments.
                              ``Sec. 1397A. Other incentives.
                              ``Sec. 1397B. Enterprise zone business 
                                        defined.
                              ``Sec. 1397C. Other definitions.

``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. NONRECOGNITION OF GAIN FROM NEW ZONE INVESTMENTS.

    ``(a) General Rule.--At the election of an individual, qualified 
capital gain (as defined in section 1397C) 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 1397C.
            ``(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.
    ``(h) Certain Businesses Treated as Not Qualified Businesses.--For 
purposes of this section, the term `enterprise zone business' has the 
meaning given such term by section 1397B except that, in applying 
section 1397B 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. 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 1397C(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 (a)(6), (b)(3), (c), 
                        (d), and (e) of section 1397C.
                    ``(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.
    ``(c) Additions to Reserves for Bad Debts With Respect to Loans to 
Enterprise Zone Businesses.--
            ``(1) In general.--For purposes of section 585(a)--
                    ``(A) the deduction for a reasonable addition to a 
                reserve for bad debts shall be computed separately with 
                respect to qualified enterprise zone loans, and
                    ``(B) section 585(c) shall not apply to the 
                deduction computed under this subsection for a 
                reasonable addition to a reserve for bad debts with 
                respect to qualified enterprise zone loans.
            ``(2) Addition to reserve for bad debts.--For purposes of 
        section 585(a), the reasonable addition to the reserve for bad 
        debts of any financial institution to which section 585 applies 
        (after the application of paragraph (1)) shall be an amount 
        determined by the taxpayer which shall not exceed the addition 
        to the reserve for losses on qualified enterprise zone loans 
        under the percentage method as provided by paragraph (3).
            ``(3) Percentage method.--The amount determined under this 
        paragraph for any taxable year shall be the amount necessary to 
        increase the balance of the reserve for losses on loans (at the 
        close of the taxable year) to 10 percent of qualified 
        enterprise zone loans outstanding at such time.
            ``(4) Banks using experience method.--In the case of a bank 
        to which section 585(a) applies (determined without regard to 
        this subsection), the amount determined under paragraph (3) of 
        this subsection for any taxable year shall in no event be less 
        than the amount determined under section 585(b) for such 
        taxable year with respect to qualified enterprise zone loans.
            ``(5) Qualified enterprise zone loans.--For purposes of 
        this subsection, the term `qualified enterprise zone loan' 
        means any loan made to an enterprise zone business for use in 
        the conduct of a qualified business within a tax enterprise 
        zone.

``SEC. 1397B. 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).

``SEC. 1397C. OTHER DEFINITIONS.

    ``(a) Qualified Zone Asset.--For purposes of this subpart--
            ``(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 1397B(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 which is 
        qualified capital gain 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.
    ``(b) 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.
    ``(c) 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 
        qualified capital gain 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 qualified capital gain 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.
    ``(d) 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 
        1397B(b)), and
            ``(2) gain attributable to periods before the designation 
        of an area as a tax enterprise zone.
    ``(e) 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.

                        ``Subpart C--Regulations

                              ``Sec. 1397D. Regulations.

``SEC. 1397D. 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) 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.''
            (2) 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)''.
            (3) Subsection (a) of section 1016 (relating to adjustments 
        to basis) is amended by striking ``and'' at the end of 
        paragraph (25), by striking the period at the end of paragraph 
        (26) and inserting a semicolon, and by adding at the end 
        thereof the following new paragraphs:
            ``(27) 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
            ``(28) 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).''
            (4) 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 1397C(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), and
            (3) 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 a 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) $5,000,000 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 $5,000,000. 
                        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--Expansion of Targeted Jobs Credit

SEC. 121. ECONOMICALLY DISADVANTAGED ZONE RESIDENTS INCLUDED AS MEMBERS 
              OF TARGETED GROUP.

    (a) Allowance of Credit for Hiring Tax Enterprise Zone Residents.--
Paragraph (1) of section 51(d) (defining members of targeted groups) is 
amended by striking ``or'' at the end of subparagraph (I), by striking 
the period at the end of subparagraph (J) and inserting ``, or'', and 
by adding at the end the following new subparagraph:
            ``(K) an economically disadvantaged tax enterprise zone 
        resident.''
    (b) Economically Disadvantaged Tax Enterprise Zone Resident.--
Section 51(d) is amended by adding at the end thereof the following new 
paragraph:
            ``(17) Economically disadvantaged tax enterprise zone 
        resident.--
                    ``(A) In general.--The term `economically 
                disadvantaged tax enterprise zone resident' means an 
                individual--
                            ``(i) whose principal place of abode while 
                        performing services for the employer is within 
                        a tax enterprise zone (as defined in section 
                        1391(a)), and
                            ``(ii) who is certified by the designated 
                        local agency as being a member of an 
                        economically disadvantaged family (as 
                        determined under paragraph (11)).
                    ``(B) Special rule for determining amount of 
                credit.--For purposes of applying this subpart to wages 
                paid or incurred to any economically disadvantaged tax 
                enterprise zone resident, subsection (a) shall be 
                applied by substituting `30 percent' for `40 
                percent'.''
    (c) Effective Date.--The amendments made by this section shall 
apply to individuals who begin work for the employer after the date of 
the enactment of this Act.

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

SEC. 131. 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 E--Authority for National Banks To Deal in Securities of 
              Corporations Located in Tax Enterprise Zones

SEC. 141. AUTHORITY FOR NATIONAL BANKS TO DEAL IN SECURITIES OF 
              CORPORATIONS LOCATED IN TAX ENTERPRISE ZONES.

    The clause designated the ``Seventh'' of section 5136 of the 
Revised Statutes (12 U.S.C. 24) is amended by adding at the end thereof 
the following new sentence: ``Any national bank meeting minimum capital 
requirements which is located in (or maintains a branch located in) a 
tax enterprise zone (as defined in section 1391 of the Internal Revenue 
Code of 1986) may deal in securities issued by any corporation whose 
office is located in such zone and may underwrite the securities of any 
corporation headquartered in such zone.''

 Subtitle F--Report on Number of Areas Meeting Enterprise Zone Criteria

SEC. 151. REPORT.

    (a) In General.--The Secretary of the Treasury, in consultation 
with the Secretary of Housing and Urban Development and the Secretary 
of Agriculture, shall conduct a study to determine--
            (1) the number of areas in the United States which satisfy 
        the tax enterprise zone eligibility criteria specified in 
        section 1391(b) of the Internal Revenue Code of 1986, and
            (2) the estimated additional cost to the Federal Government 
        by reason of this title and title II if all such areas were 
        designated as tax enterprise zones.
    (b) Report.--The report of the study required by subsection (a) 
shall be submitted to the Congress not later than 1 year after the date 
of the enactment of this Act.

     TITLE II--ADDITIONAL ASSISTANCE TO ENTERPRISE ZONES AND OTHER 
                         DISTRESSED COMMUNITIES

SEC. 201. PURPOSE.

    The purpose of this title is to implement initiatives to improve 
the quality of life and expand economic opportunity by providing 
assistance to States, units of general local government, and other 
entities for implementing activities to rejuvenate neighborhoods and 
promote economic opportunity.

        Subtitle A--National Public-Private Partnership Program

SEC. 211. 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.

SEC. 212. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--To promote national public-private partnerships, 
there are authorized to be appropriated--
            (1) for grants under section 236 for implementation of the 
        Model Neighborhood Aid Program established under chapter 2 of 
        subtitle B of this Act--
                    (A) $40,000,000 for fiscal year 1993;
                    (B) $126,000,000 for fiscal year 1994;
                    (C) $132,000,000 for fiscal year 1995;
                    (D) $138,000,000 for fiscal year 1996;
                    (E) $147,000,000 for fiscal year 1997;
                    (F) $153,000,000 for fiscal year 1998;
                    (G) $162,000,000 for fiscal year 1999;
                    (H) $168,000,000 for fiscal year 2000;
                    (I) $227,000,000 for fiscal year 2001; and
                    (J) $236,000,000 for fiscal year 2002;
            (2) for the National Community Economic Partnership program 
        established under subtitle E of this title--
                    (A) $40,000,000 for fiscal year 1993;
                    (B) $126,000,000 for fiscal year 1994;
                    (C) $132,000,000 for fiscal year 1995;
                    (D) $138,000,000 for fiscal year 1996;
                    (E) $147,000,000 for fiscal year 1997;
                    (F) $153,000,000 for fiscal year 1998;
                    (G) $162,000,000 for fiscal year 1999;
                    (H) $168,000,000 for fiscal year 2000;
                    (I) $227,000,000 for fiscal year 2001; and
                    (J) $236,000,000 for fiscal year 2002; and
            (3) for the Enterprise Capital Access Fund Demonstration 
        Program established under section 281 of this Act--
                    (A) $20,000,000 for fiscal year 1993;
                    (B) $63,000,000 for fiscal year 1994;
                    (C) $66,000,000 for fiscal year 1995;
                    (D) $68,000,000 for fiscal year 1996;
                    (E) $72,000,000 for fiscal year 1997;
                    (F) $78,000,000 for fiscal year 1998;
                    (G) $81,000,000 for fiscal year 1999;
                    (H) $84,000,000 for fiscal year 2000;
                    (I) $115,000,000 for fiscal year 2001; and
                    (J) $118,000,000 for fiscal year 2002.
    (b) Availability of Amounts.--Notwithstanding any other provision 
of this Act, of the amounts appropriated for programs pursuant to 
paragraphs (2) and (3) of subsection (a), not less than 50 percent 
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.
    (c) Treatment of Appropriated Amounts.--Notwithstanding the 
provisions of title XII of Public Law 102-368 (106 Stat. 1160-1161) and 
the programs referred to in such title, the National Public/Private 
Partnership Program under such title shall consist of the eligible 
programs, projects, and activities under the programs under the 
provisions of this subtitle, chapter 2 of subtitle B, subtitle E, and 
section 281 and such provisions shall be considered the National 
Public/Private Partnership Program for which amounts are available 
under title XII of Public Law 102-368.

  Subtitle B--Coordinated and Comprehensive Neighborhood Aid for Tax 
                 Enterprise Zones and Other Communities

   CHAPTER 1--ENTERPRISE COMMUNITY BLOCK GRANT DEMONSTRATION PROGRAM

SEC. 221. FUNDING.

    (a) Authorization of Appropriations.--There are authorized to be 
appropriated for assistance under section 222, $400,000,000 for fiscal 
year 1993, $1,260,000,000 for fiscal year 1994, $1,320,000,000 for 
fiscal year 1995, $1,380,000,000 for fiscal year 1996, $1,470,000,000 
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 section for each of the fiscal years 1998 through 2002 shall not 
be less than twice 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 sum of the amounts 
authorized by section 212(a) of this Act.
    (b) Treatment of Appropriated Amounts.--The program for providing 
assistance under this chapter shall be considered the Enterprise 
Community Block Grant Demonstration Program for which amounts are 
available under title XII of Public Law 102-368 (106 Stat. 1160).

SEC. 222. ALLOCATION OF AMOUNTS AMONG TAX ENTERPRISE ZONES.

    (a) In General.--The Interagency Council established under section 
242 of this Act shall make any amounts available pursuant to section 
221 (and not set aside under section 222(d)) available under this 
chapter to provide assistance on behalf of each tax enterprise zone 
designated under section 1391 of the Internal Revenue Code of 1986 for 
which a neighborhood aid plan under section 243 of this Act has been 
submitted and approved by the Interagency Council.
    (b) Allocation Between Urban and Rural Zones.--Of the amounts 
available for each fiscal year under this chapter for tax enterprise 
zones, 80 percent shall be available for urban tax enterprise zones and 
20 percent shall be available for rural development investment zones.
    (c) Division Among Urban and Rural Zones.--
            (1) Urban zones.--The amounts available for each fiscal 
        year under this chapter 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 for each fiscal 
        year under this chapter 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 available pursuant to subsection (a) 
for fiscal year 1993, the Interagency Council established under section 
242 shall make not less than $5,000,000 available for the access to 
jobs/reverse commuting demonstration program under section 282.
    (e) Availability.--Notwithstanding any other provision of law, 
amounts available pursuant to authorizations under this chapter shall 
remain available until the end of the fiscal year following the year 
for which such amounts are appropriated.

SEC. 223. USE OF AMOUNTS.

    (a) In General.--The assistance allocated for a fiscal year under 
section 222 on behalf of each tax enterprise zone shall be available 
only for carrying out selected programs within the tax enterprise zone, 
in accordance with the neighborhood aid plan of the tax enterprise zone 
for the fiscal year approved under section 243 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 chapter 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 (6) of section 241 may 
        not exceed 20 percent of such total amount.
            (2) Waiver of caps.--Pursuant to a request contained in an 
        neighborhood aid plan under section 243, the interagency 
        council may provide that the requirement under paragraph (1) 
        shall not apply with respect to amounts for the fiscal year 
        involved that are used to carry out selected programs under the 
        plan, except that of the total amount of assistance provided 
        under this chapter on behalf of such tax enterprise zone for 
        the fiscal year, the sum of the amounts used to carry out 
        selected programs referred to under any single paragraph under 
        section 241 may not exceed 30 percent of such total amount and 
        may not be less than 5 percent of such total amount.
    (c) Provision of Assistance.--Upon the approval of a neighborhood 
aid plan under section 243 for a tax enterprise zone, the appropriate 
Federal agency head for each selected program under the approved plan 
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 222 for the fiscal 
year involved, the amount of assistance determined in accordance with 
the approved plan.
    (d) Supplementation Requirement.--Any amounts provided under this 
chapter 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 chapter or comparable to such programs, projects, 
activities, and services. No appropriate Federal agency head may reduce 
the usual allocations with respect to any jurisdiction under any 
eligible program because such jurisdiction allocates funds under this 
chapter to any of such programs.

               CHAPTER 2--MODEL NEIGHBORHOOD AID PROGRAM

SEC. 231. PURPOSE.

    The purposes of this chapter are--
            (1) to encourage communities to develop coordinated and 
        comprehensive neighborhood aid plans, with the participation of 
        various governmental, community, neighborhood, law enforcement, 
        business, school and other representatives, that target the 
        delivery of Federal, State, local, and private assistance to 
        the community in an effective and coordinated manner; and
            (2) to provide for communities to request funding under 
        various Federal assistance programs by submission of the single 
        comprehensive plan, to better coordinate the provision of 
        assistance under such programs.

SEC. 232. SINGLE APPLICATIONS BY LOCAL GOVERNMENTS FOR FUNDING UNDER 
              ELIGIBLE PROGRAMS.

    (a) In General.--The Interagency Council established under section 
242 shall carry out a program under this subtitle to make assistance 
for each fiscal year under the eligible programs referred to in section 
241 available to entities eligible to receive and administer such 
assistance in the fiscal year, pursuant to the submission and approval 
of a single coordinated and comprehensive neighborhood aid plan under 
section 243 for such year on behalf of such entities by a unit of 
general local government.
    (b) Treatment of Neighborhood Aid Plan.--Except as provided in 
section 234, each appropriate Federal agency head for each selected 
program under a neighborhood aid plan submitted in accordance with the 
requirements of this chapter and chapter 3 shall treat the plan as an 
application for assistance under the selected program for the fiscal 
year submitted in full compliance with the requirements for requesting 
or applying for assistance under the program.

SEC. 233. AVAILABILITY AND USE OF AMOUNTS.

    (a) Availability.--Any amounts made available for a fiscal year to 
carry out the eligible programs may be made available pursuant to an 
approved plan for such year, except that the amounts made available in 
accordance with section 221 may be made available only as provided in 
this subtitle.
    (b) Use.--Any assistance provided on behalf of a unit of general 
local government pursuant to an approved plan for the fiscal year shall 
be available only for carrying out the selected programs under the plan 
in the amounts and manner provided in the plan.
    (c) Provision of Assistance.--Upon the approval of a neighborhood 
aid plan under section 243 for a unit of general local government, the 
appropriate Federal agency head for each selected program under the 
approved plan shall make available on behalf of the unit of general 
local government (under such program and through the appropriate 
eligible entity) the amount of assistance for the fiscal year involved 
that is approved under the plan by the Interagency Council.
    (d) Waiver of Program Requirements.--The Interagency Council may 
waive the applicability of any Federal laws and regulations relating to 
the eligible programs to the extent necessary to facilitate providing 
assistance under eligible programs pursuant to plans for assistance 
under this chapter.

SEC. 234. PRIORITY IN FUNDING.

    In allocating any amounts made available for a fiscal year to carry 
out each eligible program (that is not allocated based on a formula), 
the appropriate Federal agency head shall give priority to providing 
such amounts pursuant to any neighborhood aid plan for the fiscal year 
submitted under this chapter that (1) is approved by the Interagency 
Council with respect to such program, and (2) under which such program 
is a selected program.

SEC. 235. TREATMENT OF PREVIOUSLY APPROVED WEED AND SEED COMMUNITIES.

    (a) Treatment.--Any strategy under subsection (b) shall be 
considered to be a neighborhood aid plan submitted in accordance with 
the requirements of this chapter and chapter 3, except to the extent 
that the Interagency Council for Neighborhood Aid established under 
section 242 requires the unit of general local government submitting 
the strategy to amend the strategy for purposes of including any 
information necessary to facilitate the provision of assistance under 
this chapter. If any such unit of general government submits the 
additional information required by such Interagency Council, the 
strategy shall be considered to be a neighborhood aid plan approved 
under section 243, except that the Interagency Council may exercise any 
authority under section 243(f)(2)(B) with respect to such strategy.
    (b) Identification of Previously Approved Weed and Seed 
Strategies.--A strategy referred to in subsection (a) is any 
comprehensive neighborhood aid strategy of any unit of general local 
government approved, before the date of the enactment of this Act, by 
the interagency council responsible for coordinating the weed and seed 
program activities in connection with amounts made available for the 
Executive Office of Weed and Seed by Public Law 102-395 (106 Stat. 
1830), and shall include any such strategy submitted by a unit of 
general local government and approved by such interagency council but 
not funded with the amounts made available by such Act.

SEC. 236. ONE-TIME STRATEGY IMPLEMENTATION GRANTS.

    To the extent amounts are available to carry out this section, the 
Interagency Council shall make grants to units of general local 
government for which neighborhood aid plans have been approved pursuant 
to this chapter, subject to the following requirements:
            (1) Use.--Amounts from a grant under this section shall be 
        used by the unit of general local government or the eligible 
        entities referred to in the approved plan only for the 
        following purposes:
                    (A) Local coordinating board.--To establish a 
                permanent local coordinating board under section 
                243(c), which shall carry out the functions required 
                under such section and advise the local government and 
                such entities regarding implementation of any approved 
                plans of the local government pursuant to this chapter.
                    (B) Unique or essential activities.--To the extent 
                that such use is authorized in the approved plan of the 
                unit of general local government, to carry out any 
                unique or essential aspect of the approved plan of the 
                unit of general local government for which funding is 
                not available under the selected programs for which 
                funding is provided under the approved plan.
                    (C) Supplementation of selected programs.--To the 
                extent that such use is not prohibited by the 
                Interagency Council in the approved plan of the unit of 
                general local government, to supplement amounts 
                provided under the approved plan for carrying out 
                activities under selected programs.
            (2) One-time grants.--No community may be awarded more than 
        1 grant under this section.
            (3) Grant limit.--No grant awarded under this section may 
        exceed $1,000,000.
            (4) Disbursement.--The Interagency Council may disburse the 
        amounts of any grant awarded under this section to the unit of 
        general local government in increments over a reasonable period 
        of time, as determined by the Council, beginning upon the 
        availability of such grant amounts.

 CHAPTER 3--ELIGIBLE PROGRAMS AND INTERAGENCY COUNCIL FOR NEIGHBORHOOD 
                                  AID

SEC. 241. ELIGIBLE PROGRAMS.

    Assistance may be provided under chapters 1 and 2 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 241 of this Act).
                    (B) The Job Corps program under part B of title IV 
                of the Job Training Partnership Act (29 U.S.C. 1692 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 286 of 
                this Act.
            (3) Education.--
                    (A) The Head Start program under the Head Start Act 
                (42 U.S.C. 9831 et seq.).
                    (B) The programs under the Carl D. Perkins 
                Vocational Educational and Applied Technology Education 
                Act (20 U.S.C. 2301 et seq.).
                    (C) Projects under the Comprehensive Child 
                Development Act (42 U.S.C. 9881 et seq.).
                    (D) Activities under the Child Care and Development 
                Block Grant Act of 1990 (42 U.S.C. 9858 et seq.).
                    (E) The programs under chapter 1 of title I of the 
                Elementary and Secondary Education Act of 1965.
                    (F) The TRIO programs under part A of title IV of 
                the Higher Education Act of 1965 (20 U.S.C. 1070 et 
                seq.).
                    (G) The programs under the Adult Education Act (20 
                U.S.C. 1201 et seq.).
                    (H) 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.
                            (vi) The programs under sections 329, 330, 
                        340 and 340A of such Act (42 U.S.C. 254c).
                    (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 title V of 
                the Public Health Service Act (42 U.S.C. 290aa et 
                seq.).
                    (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 232 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 (7 
                U.S.C. 2279).
                    (N) Public Housing Family Investment Centers under 
                section 22 of the United States Housing Act of 1937 (42 
                U.S.C. 1437t).
                    (O) The Youthbuild program under subtitle D of 
                title IV of the Cranston-Gonzalez National Affordable 
                Housing Act (42 U.S.C. 12899 et seq.).
                    (P) The Neighborhood Reinvestment Corporation under 
                title VI of the Housing and Community Development 
                Amendments of 1978 (42 U.S.C. 8101 et seq.).
            (6) Others.--Any other activities, projects, and programs 
        authorized in law that are consistent with the purposes of this 
        subtitle, as the Interagency Council may provide.

SEC. 242. INTERAGENCY COUNCIL FOR NEIGHBORHOOD AID.

    (a) Establishment.--There is hereby established an interagency 
council to be known as the Interagency Council for Neighborhood Aid.
    (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 Interagency Council shall--
            (1) review and approve neighborhood aid plans for 
        assistance under chapters 1 and 2 submitted pursuant to section 
        243;
            (2) direct the appropriate Federal agency head to provide 
        assistance under the selected programs under approved plans in 
        the amount approved, pursuant to the provisions of chapters 1 
        and 2; and
            (3) carry out any other responsibilities of the Council as 
        provided under this subtitle.

SEC. 243. NEIGHBORHOOD AID PLANS.

    (a) Establishment of Application Procedure.--The Interagency 
Council shall establish, by regulation, a procedure for submission and 
approval of a single comprehensive neighborhood aid plan for a fiscal 
year as an application under this section for receiving assistance for 
the fiscal year under chapter 1 or 2.
    (b) Requirements.--The Interagency Council shall provide for the 
form and manner of submission of neighborhood aid plans and shall 
require that the plan be submitted--
            (1) in the case of a plan for assistance under chapter 1, 
        by the State, unit of local government, or economic or 
        community development corporation, that submitted the 
        nomination for designation of the area designated as a tax 
        enterprise zone, and promptly after such designation; and
            (2) in the case of a plan for assistance under chapter 2, 
        by a unit of general local government.
    (c) Local Coordination.--
            (1) Purposes.--Each neighborhood aid plan submitted under 
        this section shall be developed in coordination and 
        consultation with a local coordinating board under paragraph 
        (2). The local coordinating board shall ensure that the 
        programs, projects, activities, and services under section 
        241(1) carried out with amounts provided pursuant to an 
        approved plan are sufficiently coordinated with the other 
        programs, projects, activities, and services carried out 
        pursuant to the plan, 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 or the area served under the plan submitted by 
        the unit of general local government, as appropriate.
            (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, and community leaders (including local 
        business persons, bankers, architects or planners, 
        representatives of school boards, and representatives of 
        nonprofit community-based organizations such as community 
        development corporations, community action agencies, community 
        health centers, Head Start agencies, agencies or organizations 
        establishing Job Corps centers, and local Neighborhood Housing 
        Services organizations).
    (d) Contents.--Each neighborhood aid plan for a fiscal year shall 
include the following information:
            (1) A list of the eligible programs for which funding is 
        requested for the fiscal year and a general description of the 
        types of activities to be carried out with such assistance.
            (2) A statement of--
                    (A) in the case of a plan for assistance under 
                chapter 1 for a tax enterprise zone, the percentage of 
                the total amount of any funding received for the fiscal 
                year under chapter 1 that will be used for each 
                selected program; and
                    (B) in the case of a plan for assistance under 
                chapter 2 on behalf of a unit of general local 
                government, the amount of funding requested for the 
                fiscal year for each selected program.
            (3) A statement documenting the entities that will receive 
        any assistance provided for the selected programs on behalf of 
        the tax enterprise zone or unit of general local government, as 
        appropriate, and the entities' eligibility for such assistance.
            (4) A statement documenting the membership of the local 
        coordinating board organized pursuant to subsection (c) and 
        describing the coordination between the programs, projects, 
        activities, and services assisted pursuant to the plan and 
        local law enforcement efforts in the tax enterprise zone or 
        unit of general local government, as appropriate.
            (5) In the case of a plan for assistance under chapter 1, a 
        request for any waiver of the requirement under section 
        223(b)(1) (as authorized in paragraph (2) of such section) for 
        the fiscal year and a statement documenting the rationale for 
        such waiver.
            (6) A statement documenting other Federal, State, and local 
        resources for the fiscal year for the community in which the 
        tax enterprise zone or unit of general local government is 
        located, as appropriate, that will be dedicated to the types of 
        programs, projects, activities, and services to be assisted 
        pursuant to the plan.
            (7) A statement documenting a strong commitment by 
        nonprofit community-based organizations in the tax enterprise 
        zone or unit of general local government, as appropriate, for 
        carrying out the selected programs and similar programs, 
        projects, activities, and services.
            (8) A statement documenting private sector resources, 
        including corporate contributions and individual commitments, 
        to supplement assistance provided pursuant to the plan.
            (9) A statement documenting the efforts made by the local 
        jurisdiction containing the tax enterprise zone or the unit of 
        general local government, as appropriate, to encourage local 
        financial institutions to satisfy their obligations under the 
        Community Reinvestment Act of 1977 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 and the commitments made by local financial 
        institutions in response to these efforts.
            (10) A coordinated and comprehensive strategy for the 
        delivery of Federal, State, and local resources and assistance 
        for the tax enterprise zone or unit of general local 
        government, as appropriate, that addresses public safety, 
        includes 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. The strategy may 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, and any other appropriate activities.
            (11) A statement demonstrating that any amounts requested 
        under the plan 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.
            (12) In the case of a plan for assistance under chapter 2 
        on behalf of unit of general local government, a statement 
        requesting any approval of authority necessary under section 
        236(1)(B) to use grant amounts provided to the unit of general 
        local government to carry out a unique or essential aspect of 
        the plan.
            (13) In the case of a plan for assistance under chapter 2 
        on behalf of unit of general local government, a statement of 
        the extent to which any grant amounts provided to the unit of 
        general local government under section 236 will be used under 
        section 236(1)(C) to supplement amounts for the selected 
        programs provided pursuant to the approved plan.
    (e) Review.--In reviewing each neighborhood aid plan submitted 
under this section, each member of the Interagency Council shall review 
the portion of the plan concerning any request or eligibility for 
assistance under any selected program under the jurisdiction of such 
member to determine whether providing assistance pursuant to such plan 
for the fiscal year involved would comply with the laws and regulations 
applicable to such program (and not waived under section 233(d)).
    (f) Approval and Disapproval.--
            (1) Timing.--The Interagency Council shall review each 
        neighborhood aid plan promptly upon receipt and shall approve 
        or disapprove each plan not later than the expiration of the 
        30-day period beginning upon receipt.
            (2) Standards for approval.--
                    (A) In general.--Subject to the requirements under 
                subparagraph (B), the Council shall approve a plan if 
                the Council determines that--
                            (i) the information, documentation, or 
                        evidence required under subsection (d) is 
                        accurate and sufficient;
                            (ii) the assistance requested for the 
                        selected programs under the plan will assist in 
                        the economic development of the tax enterprise 
                        zone or unit of general local government, as 
                        appropriate;
                            (iii) the eligible entities identified in 
                        the plan are capable and qualified to receive 
                        and administer the assistance pursuant to the 
                        plan; and
                            (iv) the appropriate Federal agency head 
                        has determined that providing assistance 
                        pursuant to the plan for the fiscal year 
                        involved would comply with the laws and 
                        regulations applicable to the selected programs 
                        (and not waived under section 233(d)).
                    (B) Plans of units of general local government.--In 
                approving and disapproving plans for assistance under 
                chapter 2, the Council shall take into consideration 
                any factors relating to determining the appropriate 
                amount of assistance to provide for the fiscal year 
                involved for each selected program under the plan. The 
                Council may, in approving any plan under chapter 2, 
                approve assistance for only certain selected programs 
                under the plan and disapprove assistance for other 
                selected programs, and may approve assistance for 
                certain selected programs in amounts different from the 
                amount of funding requested.
            (3) Disapproval.--If, pursuant to review under this 
        section, the Council determines that any plan is incomplete or 
        unsatisfactory, the council shall, before the expiration of the 
        period referred to in paragraph (1), notify the entity 
        submitting the plan of the reasons for the failure to approve 
        the plan and that the plan may be resubmitted during the period 
        referred to in paragraph (4).
            (4) Review of resubmitted plan.--The Council shall permit 
        any entity that submitted a plan that (A) was disapproved, or 
        (B) was approved in a form different from the form in which the 
        plan was submitted, to resubmit a corrected or amended plan 
        during the 30-day period beginning on notification of such 
        disapproval or approval. The Council shall approve or 
        disapprove any plan resubmitted under this paragraph before the 
        expiration of the 15-day period beginning upon such 
        resubmission. Any plan resubmitted under this paragraph 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.
            (5) Effect of disapproved plan.--Disapproval of a plan 
        submitted under chapter 2 shall not affect the ability or 
        eligibility of any unit of general local government or entity 
        to apply for assistance under any eligible program in any 
        manner other than under this subtitle.
    (g) Public Comment.--Any entity submitting a plan under this 
section, in conjunction with the relevant local coordinating board, 
shall ensure that there are adequate opportunities for public comment 
concerning the plan, including--
            (1) furnishing citizens with information concerning the 
        availability of funds pursuant to chapters 1 and 2 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 a copy of 
        any plan filed pursuant to this section and to records 
        regarding the use of funds received pursuant to the plan.

SEC. 244. DEFINITIONS.

    For purposes of this subtitle:
            (1) The term ``appropriate Federal agency head'' means, 
        with respect to an eligible program, the head of the Federal 
        agency or other Federal official responsible for administering 
        such program.
            (2) The term ``approved plan'' means a neighborhood aid 
        plan under section 243 for assistance under chapter 1 or 2 that 
        is approved by the Interagency Council and meets the public 
        comment requirements under section 243(g).
            (3) The term ``eligible entity'' means, with respect to a 
        selected program under a neighborhood aid plan under section 
        243, an entity in the tax enterprise zone or area to be served 
        by the plan submitted by the unit of general local government, 
        as appropriate, that is eligible to receive and administer 
        amounts under the program and is designated under the plan to 
        receive and administer amounts provided for the program 
        pursuant to approval of the plan.
            (4) The term ``eligible program'' means a program referred 
        to in section 241.
            (5) The terms ``Interagency Council'' and ``Council'' mean 
        the Interagency Council for Neighborhood Aid established under 
        section 242.
            (6) The terms ``neighborhood aid plan'' and ``plan'' mean a 
        neighborhood aid plan under section 243 for assistance under 
        chapter 1 or 2.
            (7) The term ``selected program'' means, with respect to a 
        neighborhood aid plan, any of the programs identified in the 
        plan for which funding is requested pursuant to the plan.
            (8) The term ``State'' means the States of the United 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Commonwealth of the Northern Mariana Islands, Guam, 
        the Virgin Islands, American Samoa, the Trust Territory of the 
        Pacific Islands, and any other territory or possession of the 
        United States.
            (9) The term ``tax enterprise zone'' means an urban tax 
        enterprise zone or a rural development investment zone 
        designated under section 1391 of the Internal Revenue Code of 
        1986.
            (10) The term ``unit of general local government means any 
        city, town, township, county, parish, village, or other general 
        purpose political subdivision of a State.

SEC. 245. STUDY AND REPORT.

    (a) General Study.--The Interagency 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 units of general local government; 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 eligible programs 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 Interagency 
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. 246. REGULATIONS.

    The Interagency 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--Community Development Block Grant Program

SEC. 251. INCREASE 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 ``except that not more 
        than'';
            (2) by inserting ``(i)'' after ``unless such unit of local 
        government''; and
            (3) by striking ``higher amount, and'' and inserting the 
        following: ``higher amount, or (ii) 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, 
        and (B)''.

SEC. 252. EMERGENCY COMMUNITY DEVELOPMENT LOAN GUARANTEE AUTHORITY.

    Section 108 of the Housing and Community Development Act of 1974 is 
amended by adding at the end 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.''.

        Subtitle D--Young Adult Employment Demonstration Program

SEC. 261. 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 provided 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 section 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 215 of the Enterprise Zone Community 
Development Act of 1993, 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 217 of the Enterprise Zone Community 
        Development Act of 1993.''.
    (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''.

          Subtitle E--National Community Economic Partnership

SEC. 271. SHORT TITLE.

    This subtitle may be cited as the ``National Community Economic 
Partnership Act of 1993''.

SEC. 272. FINDINGS AND PURPOSE.

    (a) 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 work force 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 work force falling below the poverty line in 1979, 
                with that percentage rising to 42.1 percent in 1987; 
                and
                    (E) with respect to urban areas, 23.4 percent of 
                the work force falling below the poverty line in 1979, 
                with that percentage rising to 28.9 percent in 1987;
            (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 225,000 units of housing, with over 90 
                percent of these units for use by low-income occupants;
                    (D) community development corporations have 
                developed over 17,400,000 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 5 years.
    (b) Purpose.--It is the purpose of this subtitle to provide 
assistance to States to carry out plans developed by the States--
            (1) to stimulate enterprise development and employment 
        opportunities in economically distressed urban and rural areas 
        through public and private partnerships facilitated by 
        community development corporations;
            (2) 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 assistance to community 
        development corporations; and
            (3) to increase the community economic development 
        activities of community development corporations by assisting 
        such corporations in upgrading their management and operating 
        capacity and enhancing the resources available to such 
        corporations.

SEC. 273. ASSISTANCE TO STATES.

    To the extent amounts are available to carry out this subtitle, the 
Secretary of Health and Human Services shall provide assistance to 
States to carry out State plans under section 275 for assistance to 
community development corporations.

SEC. 274. STATE ASSISTANCE TO COMMUNITY DEVELOPMENT CORPORATIONS.

    States may provide assistance with amounts received under this 
subtitle to community development corporations only as provided in the 
State plan of the State approved by the Secretary under section 275. 
Such assistance may be in the form of--
            (1) nonrefundable lines of credit to community development 
        corporations to establish, maintain, or expand revolving loan 
        funds used to finance economic development projects, to defray 
        administrative costs related to the establishment of such 
        revolving loan funds, or to provide training or technical 
        assistance to private business enterprises and for the 
        planning, development, and management of economic development 
        projects;
            (2) grants to community development corporations for 
        acquisition of training and technical assistance to increase 
        the business management and development skills of the 
        individuals who manage such corporations to enable such 
        corporations to seek the public and private resources necessary 
        to develop community economic development projects;
            (3) grants to community development corporations to enable 
        such corporations--
                    (A) to conduct evaluations of the feasibility of 
                potential low-income community economic development 
                projects that address identified needs in low-income 
                communities;
                    (B) to develop business plans related to such 
                projects; or
                    (C) to mobilize resources to be contributed to 
                planned low-income community economic development 
                projects or strategies;
            (4) 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;
            (5) grants to community development corporations, 
        institutions of higher education, or nonprofit organizations to 
        enable such grantees to conduct research, testing, studies, or 
        demonstrations related to community economic development; and
            (6) any other assistance designed to carry out the purposes 
        of this subtitle under section 272(b).

SEC. 275. STATE PLANS.

    (a) Requirement.--The Secretary may provide assistance under this 
subtitle only to States that have submitted a State plan under this 
section that is approved by the Secretary under subsection (c), and 
have entered into an agreement with the Secretary to provide assistance 
to community development corporations, with amounts provided under this 
subtitle, in accordance with the provisions of the approved plan.
    (b) Contents.--Each State plan under this section shall specify--
            (1) the kinds and amounts of assistance to be provided by 
        the State with assistance under this subtitle;
            (2) the terms of such assistance;
            (3) the communities for which such assistance will be used 
        and the extent to which such assistance will be targeted to 
        low-income communities, underemployed and unemployed 
        individuals, population-losing communities, and very low-income 
        communities;
            (4) the extent and manner by which local and private sector 
        contributions will be leveraged with assistance under this 
        subtitle;
            (5) the extent to which assistance under this subtitle will 
        improve or provide employment opportunities for low-income 
        individuals;
            (6) requirements for community development corporations and 
        other entities receiving assistance from amounts provided under 
        this subtitle to report to the State regarding the use and 
        results of such assistance; and
            (7) any other information the Secretary considers 
        appropriate to ensure that assistance under this subtitle is 
        used for the purposes under section 272(b).
    (c) Approval.--The Secretary may approve a State plan under this 
section only if the Secretary determines, on the basis of the State 
plan, that--
            (1) the State has the capacity and capability to carry out 
        the State plan;
            (2) the State plan ensures that such assistance will be 
        used to carry out the purposes of this subtitle under section 
        272(b); and
            (3) the State plan provides that a significant portion of 
        such assistance will be used by community development 
        corporations to serve the economic needs of low-income 
        communities.

SEC. 276. REPORTS.

    Each State receiving assistance under this subtitle shall submit a 
report under this section to the Secretary not later than the 
expiration of the 18-month period beginning upon the first receipt of 
assistance under this subtitle by the State. The report shall describe 
the use of any assistance provided to the State under this subtitle, 
the number of jobs created or retained through such use, and any other 
information that the Secretary considers appropriate.

SEC. 277. DEFINITIONS.

    For purposes of this subtitle:
            (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 providing economic or community development 
        projects that improve or provide job or employment 
        opportunities to low-income individuals or low-income 
        communities.
            (2) Low-income community.--The term ``low-income 
        community'' means a community in which the median income of the 
        residents of such community does not exceed 80 percent of the 
        median income of the area, as determined by the Secretary.
            (3) Population-losing community.--The term ``population-
        losing community'' means a 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) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (5) State.--The term ``State'' means the States of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Commonwealth of the Northern Mariana Islands, 
        Guam, the Virgin Islands, American Samoa, the Trust Territory 
        of the Pacific Islands, and any other territory or possession 
        of the United States.
            (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, as determined by the Secretary.

SEC. 278. PROHIBITION.

    Amounts provided to States under this subtitle may not be used to 
finance the construction of housing.

SEC. 279. EFFECTIVE DATE.

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

                   Subtitle F--Miscellaneous Programs

SEC. 281. 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 decision making 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 assist States in promoting 
        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) Authority.--The Secretary shall carry out a demonstration 
program in accordance with this section to make grants to States to 
provide assistance to eligible intermediaries to finance business and 
employment opportunities, housing opportunities affordable to low-
income persons, and neighborhood revitalization projects by using such 
grant amounts to--
            (1) increase the capital available for loans, loan 
        guarantees, interest rate reduction activities, and other 
        activities that promote housing affordable to low-income 
        persons and economic and community development activities that 
        benefit low-income persons; or
            (2) provide technical assistance to borrowers.
    (d) Applications.--The Secretary shall make grants only to States 
that submit an application to the Secretary, in the form and manner as 
the Secretary shall require, that is approved by the Secretary, and 
enter into an agreement with the Secretary that assistance under this 
section will be used as provided in the approved application. The 
Secretary may approve only applications providing that--
            (1) assistance under this section will be provided only to 
        eligible intermediaries capable of carrying out the purposes of 
        this section;
            (2) eligible intermediaries will contribute for activities 
        under subsection (c) not less than an amount equal to any 
        assistance under this section received by the eligible 
        intermediary;
            (3) not less than 70 percent of loans to individual 
        borrowers made using assistance provided under this section are 
        to low-income persons and who are residents of the targeted 
        geographic area served;
            (4) all loans made to nonprofit or for-profit organizations 
        provide a direct benefit to persons who are residents of the 
        targeted geographic area served; and
            (5) assistance will be used only as provided in this 
        section.
    (e) Report.--The Secretary shall submit a report to the Congress 
annually containing a summary of the activities carried out under this 
section and the findings and conclusions drawn from such activities.
    (f) Definitions.--For purposes of this section:
            (1) Eligible intermediary.--The term ``eligible 
        intermediary'' means a nonprofit organization that--
                    (A) is organized under Federal, State or local 
                laws;
                    (B) has no part of its net earnings inuring to the 
                benefit of any member, founder, contributor, or other 
                person;
                    (C) complies with standards of financial 
                accountability acceptable to the Secretary;
                    (D) controls, operates or is affiliated with an 
                entity that provides credit or investment capital in a 
                targeted geographic area;
                    (E) has as its primary purpose the revitalization 
                of low-income and chronically distressed neighborhoods 
                or communities; and
                    (F) 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) State.--The term ``State'' means the States of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Commonwealth of the Northern Mariana Islands, 
        Guam, the Virgin Islands, American Samoa, the Trust Territory 
        of the Pacific Islands, and any other territory or possession 
        of the United States.
            (5) 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.

SEC. 282. 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 tax enterprise 
        zones and other communities 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 Labor, in consultation 
        with the Secretary of Transportation, 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) Neighborhood aid plan.--Any urban tax enterprise zone 
        or unit of general local government submitting a neighborhood 
        aid plan for assistance under subtitle B of this Act may 
        include the program under this section as a selected program. 
        Assistance may be made available for the program under this 
        section only if the plan includes information meeting the 
        criteria in subsection (c), as approved by the Secretary of 
        Labor, in consultation with the Secretary of Transportation.
            (3) Use of set-aside funds.--The funds set aside under 
        section 222(d) for the program under this section shall be used 
        to fund not more than 6 demonstration projects under this 
        section utilizing the program models described in subsection 
        (d) that are carried out by units of general local government 
        pursuant to approved neighborhood aid plans submitted under 
        chapter 2 of subtitle B. The Secretary of Labor, in 
        consultation with the Secretary of Transportation, shall select 
        the projects on a competitive basis from neighborhood aid plans 
        meeting the requirements of subsection (c) of this section that 
        are submitted under such chapter.
    (c) Required information.--The information required under 
subsection (b)(2) to be included in a neighborhood aid plan shall be 
such information as may be specified by the Secretary of Labor, in 
consultation with the Secretary of Transportation, that is sufficient 
to satisfy the Secretary that--
            (1) the geographic area whose residents would be served by 
        the program established under this section pursuant to the 
        neighborhood aid plan is a low-income area;
            (2) one of the three program models described in subsection 
        (d) will be used by the urban tax enterprise zone or unit of 
        general local government;
            (3) the data collection procedures that will be established 
        by the urban tax enterprise zone or unit of general local 
        government will be sufficient to enable the Secretary of Labor, 
        in consultation with the Secretary of Transportation, to 
        conduct an evaluation in accordance with subsection (e); and
            (4) the urban tax enterprise zone or unit of general local 
        government 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.--A program under this section shall be carried 
out utilizing one of the following program models:
            (1) Adding transportation services to existing job training 
        and placement programs.--Under this model an urban tax 
        enterprise zone or unit of general local government 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 urban tax 
        enterprise zone or unit of general local government 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 urban tax enterprise zone or unit of general local 
        government 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 urban tax enterprise zone 
        or unit of general local government 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 
        urban tax enterprise zone or unit of general local government 
        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 Labor, in consultation with the 
Secretary of Transportation, shall conduct a thorough evaluation of the 
program established under this section. Such evaluation shall include 
an assessment of--
            (1) with respect to urban tax enterprise zones or units of 
        general local government 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 urban tax enterprise zones or units of 
        general local government improving public transit systems, the 
        effect of the improvements, on employment rates, job retention, 
        and earnings;
            (3) with respect to urban tax enterprise zones or units of 
        general local government 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 tax 
        enterprise zones and units of general local government, 
        compared to other urban tax enterprise zones and units of 
        general local government 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 urban tax enterprise zone or unit of general 
local government 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 tax 
enterprise zone'' means an area designated under section 1391 of the 
Internal Revenue Code of 1986 as an urban tax enterprise zone.

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