II 

110TH CONGRESS 

1ST SESSION S. 1627 

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

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

IN THE SENATE OF THE UNITED STATES 

JUNE 14, 2007 

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

SCHUMER, Mr. VITTER, Mr. ROCKEFELLER, Ms. COLLINS, Mrs. CLINTON, and Mr. INHOFE) introduced the following bill; which was read twice 

and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to extend 

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

communities, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

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

5 ‘‘Empowerment Zone and Renewal Community Enhance6 ment Act of 2007’’. 


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

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

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

7 SEC. 2. EXTENSION OF BENEFITS. 

8 (a) EMPOWERMENT ZONES.— 

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

10 1391(d)(1) is amended— 

11 (A) by striking ‘‘December 31, 2009’’ in 

12 subparagraph (A)(i) and inserting ‘‘December 

13 31, 2015’’, and 

14 (B) by adding at the end the following new 

15 flush sentence: 

16 ‘‘For purposes of section 1396, subparagraph (A) 

17 shall be applied by substituting ‘December 31, 2009’ 

18 for ‘December 31, 2015’ in the case of designations 

19 made under subsection (a).’’. 

20 (2) ROUND III DESIGNATIONS.—Section 

21 1391(h)(2) is amended by striking ‘‘December 31, 

22 2009’’ and inserting ‘‘December 31, 2015’’. 

23 (b) RURAL ENTERPRISE COMMUNITIES.—Section 

24 1391(d)(1)(A) is amended by striking clause (ii) and in25 serting the following new clauses: 


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1 ‘‘(ii) in the case of an enterprise commu2 nity designated in an urban area, the close of 

3 the 10th calendar year beginning on or after 

4 such date of designation, or 

5 ‘‘(iii) in the case of an enterprise commu6 nity designated in a rural area, December 31, 

7 2015,’’. 

8 (c) RENEWAL COMMUNITIES.— 

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

10 amended by striking ‘‘December 31, 2009’’ and in11 serting ‘‘December 31, 2015’’. 

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

13 1400J(b) are each amended by striking ‘‘January 1, 

14 2010’’ and inserting ‘‘January 1, 2016’’. 

15 (3) Section 1400F(d) is amended— 

16 (A) by striking ‘‘December 31, 2010’’ and 

17 inserting ‘‘December 31, 2016’’, and 

18 (B) by striking ‘‘December 31, 2014’’ and 

19 inserting ‘‘December 31, 2020’’. 

20 (4) Section 1400I(d)(2)(A) is amended by strik21 ing ‘‘2010’’ and inserting ‘‘2016’’. 

22 SEC. 3. REVISION OF BENEFITS. 

23 (a) SAFE HARBOR FOR MEETING REQUIREMENT

24 THAT 35 PERCENT OF EMPLOYEES BE RESIDENTS OF

25 ZONE.— 


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1 (1) IN GENERAL.—Section 1397C (defining en2 terprise zone business) is amended by adding at the 

3 end the following new subsection: 

4 ‘‘(g) ADDITIONAL SAFE HARBOR FOR MEETING RE5 QUIREMENT THAT 35 PERCENT OF EMPLOYEES BE RESI6 DENTS OF ZONE.—The requirements of subsections (b)(6) 

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

8 with respect to a qualified business if— 

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

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

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

12 3 years after such date the business will increase 

13 employment by at least the lesser of— 

14 ‘‘(A) in the case of— 

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

16 community or in a rural area (as defined 

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

18 zone or enterprise community, 500 full19 time employees, or 

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

21 area (as so defined) in an empowerment 

22 zone or enterprise community, 1,000 full23 time employees, or 

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

25 employees estimated to have been employed in 


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1 such zone or community on the date of its des2 ignation, 

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

4 is reasonably expected that as a result of the bonds 

5 the business will increase employment by at least 

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

7 issue, 

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

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

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

11 the requirements of such subsections are met, or 

12 ‘‘(4) the business enters into a binding agree13 ment with the appropriate local government employ14 ment agency to apply a first source rule to advertise 

15 and prioritize employment opportunities with such 

16 business for qualified residents of such zone or com17 munity.’’. 

18 (2) EFFECTIVE DATE.—The amendment made 

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

20 enactment of this Act, except that in the case of ob21 ligations which are outstanding on such date, such 

22 date shall be deemed the date of issuance for such 

23 obligations. 

24 (b) ELIGIBILITY OF BUSINESSES DEVELOPING OR

25 HOLDING INTANGIBLES.— 


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

2 1397C(d) is amended by inserting before the period 

3 ‘‘unless the intangibles are developed within the em4 powerment zone’’. 

5 (2) EFFECTIVE DATE.—The amendment made 

6 by this subsection shall apply to taxable years begin7 ning after the date of the enactment of this Act. 

8 (c) REDUCED WAGE CREDIT ALLOWABLE FOR ZONE

9 RESIDENTS EMPLOYED OUTSIDE THE ZONE; EMPLOYEES

10 NEED NOT BE RESIDENTS OF ZONE IN WHICH EM11 PLOYED.— 

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

13 1396 is amended to read as follows: 

14 ‘‘(b) APPLICABLE PERCENTAGE.— 

15 ‘‘(1) QUALIFIED ZONE EMPLOYEES WHO PER16 FORM SUBSTANTIALLY ALL OF THEIR SERVICES IN

17 AN EMPOWERMENT ZONE.—The applicable percent18 age is 20 percent with respect to qualified zone em19 ployees who would meet the requirement of sub20 section (d)(1) if only services performed within an 

21 empowerment zone were taken into account. 

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

23 ‘‘(A) IN GENERAL.—The applicable per24 centage is— 


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1 ‘‘(i) 20 percent in the case of des2 ignated qualified zone employees of em3 ployers which are enterprise zone busi4 nesses, and 

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

6 other designated qualified zone employee. 

7 ‘‘(B) LIMITATIONS ON NUMBER OF DES8 IGNATED EMPLOYEES.— 

9 ‘‘(i) IN GENERAL.—For purposes of 

10 subparagraph (A), the term ‘designated 

11 qualified zone employee’ means a qualified 

12 zone employee— 

13 ‘‘(I) to whom paragraph (1) does 

14 not apply, and 

15 ‘‘(II) who is designated under 

16 this subparagraph. 

17 ‘‘(ii) MANNER OF DESIGNATIONS.— 

18 Designations under this subparagraph 

19 shall be made by the local government or 

20 governments which nominated the area to 

21 be an empowerment zone. 

22 ‘‘(iii) LIMITATION ON DESIGNA23 TIONS.—The number of employees for 

24 whom a designation under this subpara25 graph is in effect at any one time with reVerDate Aug 31 2005 02:16 Jun 20, 2007 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1627.IS S1627

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1 spect to each empowerment zone shall not 

2 exceed— 

3 ‘‘(I) 500 for purposes of subpara4 graph (A)(i), and 

5 ‘‘(II) 2,000 for purposes of sub6 paragraph (A)(ii).’’. 

7 (2) QUALIFIED ZONE EMPLOYEE.—Paragraph 

8 (1) of section 1396(d) is amended— 

9 (A) by striking ‘‘within an empowerment 

10 zone’’ in subparagraph (A), and 

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

12 in subparagraph (B) and inserting ‘‘an em13 powerment zone’’. 

14 (3) EFFECTIVE DATE.—The amendments made 

15 by this subsection shall apply to taxable years begin16 ning after the date of the enactment of this Act. 

17 (d) CARRYFORWARD OF UNALLOCATED STATE COM18 MERCIAL REVITALIZATION EXPENDITURE CEILING.— 

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

20 1400I(d) is amended to read as follows: 

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

22 revitalization expenditure amount which a commer23 cial revitalization agency may allocate for any cal24 endar year is the amount equal to the sum of— 


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

2 revitalization expenditure ceiling determined 

3 under this paragraph for such calendar year for 

4 such agency (determined without regard to sub5 paragraph (B)), and 

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

7 commercial revitalization expenditure ceilings 

8 determined under this paragraph for such agen9 cy for each of the 2 preceding calendar years. 

10 For purposes of subparagraph (B), amounts of ex11 penditure ceiling shall be treated as allocated by an 

12 agency first from unused amounts for the second 

13 preceding calendar year, then from unused amounts 

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

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

16 (2) EFFECTIVE DATE.—The amendment made 

17 by this subsection shall apply to calendar years be18 ginning after the date of the enactment of this Act. 

19 (e) COMMERCIAL REVITALIZATION DEDUCTION FOR

20 BUILDING EXPANSIONS.— 

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

22 amended— 

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

24 structural components) if’’, 


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

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

3 is placed’’ in subparagraph (A), 

4 (C) by striking ‘‘or’’ at the end of subpara5 graph (A), 

6 (D) by striking ‘‘such building not de7 scribed in subparagraph (A),’’ in subparagraph 

8 (B) and inserting ‘‘any building (and its struc9 tural components) not described in subpara10 graph (A) if’’, 

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

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

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

14 subparagraph: 

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

16 building not described in subparagraph (A) or 

17 (B), such expansion if— 

18 ‘‘(i) such expansion is made to a 

19 building owned by the taxpayer, 

20 ‘‘(ii) the taxpayer provides a detailed 

21 accounting of the distinct capital costs at22 tributable to such expansion, and 

23 ‘‘(iii) such expansion is placed in serv24 ice by the taxpayer in a renewal commuVerDate Aug 31 2005 02:16 Jun 20, 2007 Jkt 059200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1627.IS S1627

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1 nity and the original use of such expansion 

2 begins with the taxpayer.’’. 

3 (2) EFFECTIVE DATE.—The amendments made 

4 by this subsection shall apply to property placed in 

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

6 (f) AUTHORITY TO EXPAND BOUNDARIES OF ZONES

7 AND COMMUNITIES.— 

8 (1) EMPOWERMENT ZONES AND ENTERPRISE

9 COMMUNITIES.—Section 1391 is amended by adding 

10 at the end the following new subsection: 

11 ‘‘(i) AUTHORITY TO EXPAND BOUNDARIES OF DES12 IGNATED AREAS.— 

13 ‘‘(1) IN GENERAL.—At the request of all gov14 ernments which nominated an area as an empower15 ment zone or enterprise community, the appropriate 

16 Secretary may expand the area of such zone or com17 munity to include 1 or more noncontiguous areas if 

18 such governments establish to the satisfaction of the 

19 appropriate Secretary that such expansion furthers 

20 the purposes of the designation of the initial area as 

21 such a zone or community. 

22 ‘‘(2) RURAL AREAS.—With respect to any em23 powerment zone or enterprise community located in 

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

25 government, the appropriate Secretary shall expand 


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1 the area of such zone or community to include the 

2 entire area of such nominating local government, but 

3 only if— 

4 ‘‘(A) either— 

5 ‘‘(i) the poverty rate and the unem6 ployment rate for such entire area as de7 termined by the 2000 decennial census 

8 data was at least 110 percent of such rate 

9 for the United States, or 

10 ‘‘(ii) during the period beginning with 

11 the 1990 decennial census and ending with 

12 the 2000 decennial census, such entire 

13 area has a net out migration of inhabitants 

14 of at least 10 percent of the population of 

15 such area, and 

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

17 the following criteria determined by the 2000 

18 decennial census data: 

19 ‘‘(i) Median household income is not 

20 more than 70 percent of such income for 

21 the United States. 

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

23 than 75 percent of such income for the 

24 United States. 


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

2 population which is disabled is at least 130 

3 percent of such percentage for the United 

4 States.’’. 

5 (2) RENEWAL COMMUNITIES.—Section 1400E 

6 is amended by adding at the end the following new 

7 subsection: 

8 ‘‘(h) AUTHORITY TO EXPAND BOUNDARIES OF DES9 IGNATED AREAS.— 

10 ‘‘(1) IN GENERAL.—At the request of all gov11 ernments which nominated an area as a renewal 

12 community, the Secretary of Housing and Urban 

13 Development may expand the area of such commu14 nity to include 1 or more noncontiguous areas if 

15 such governments establish to the satisfaction of 

16 such Secretary that such expansion furthers the pur17 poses of the designation of the initial area as a re18 newal community. 

19 ‘‘(2) RURAL AREAS.—With respect to any re20 newal community located in a rural area, at the re21 quest of the nominating local government, the Sec22 retary of Housing and Urban Development shall ex23 pand the area of such community to include the en24 tire area of such nominating local government, but 

25 only if— 


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1 ‘‘(A) either— 

2 ‘‘(i) the poverty rate and the unem3 ployment rate for such entire area as de4 termined by the 2000 decennial census 

5 data was at least 110 percent of such rate 

6 for the United States, or 

7 ‘‘(ii) during the period beginning with 

8 the 1990 decennial census and ending with 

9 the 2000 decennial census, such entire 

10 area has a net out migration of inhabitants 

11 of at least 10 percent of the population of 

12 such area, and 

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

14 the following criteria determined by the 2000 

15 decennial census data: 

16 ‘‘(i) Median household income is not 

17 more than 70 percent of such income for 

18 the United States. 

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

20 than 75 percent of such income for the 

21 United States. 

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

23 population which is disabled is at least 130 

24 percent of such percentage for the United 

25 States.’’. 


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1 (3) EFFECTIVE DATE.—The amendments made 

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

3 enactment of this Act. 

4 (g) MODIFICATION OF REQUIREMENT FOR EXPAND5 ING DESIGNATED AREA BASED ON 2000 CENSUS.— 

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

7 1400E(g)(1)(A) is amended to read as follows: 

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

9 using 2000 census data— 

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

11 or 

12 ‘‘(II) which exceeds the poverty 

13 rate for such tract using 1990 census 

14 data.’’. 

15 (2) EFFECTIVE DATE.—The amendment made 

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

17 enactment of this Act. 

18 (h) REPEAL OF EXCLUSION OF CENTRAL BUSINESS

19 DISTRICT FROM ELIGIBILITY AS DESIGNATED AREA.— 

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

21 1392(a) is amended by adding ‘‘and’’ at the end of 

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

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

24 striking subparagraph (D). 


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1 (2) EFFECTIVE DATE.—The amendments made 

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

3 enactment of this Act. 

4 (i) CARRYOVER OF UNUSED INCREASED SECTION

5 179 EXPENSING LIMIT.— 

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

7 1397A(a)(1) is amended to read as follows: 

8 ‘‘(A) the sum of— 

9 ‘‘(i) $35,000, and 

10 ‘‘(ii) the aggregate of the unused in11 creased limitations for each of the 2 pre12 ceding taxable years, or’’. 

13 (2) UNUSED INCREASED LIMITATION.—Section 

14 1392 is amended by adding at the end the following 

15 new subsection: 

16 ‘‘(c) UNUSED INCREASED LIMITATION.—For pur17 poses of subsection (a)(1)(A)— 

18 ‘‘(1) IN GENERAL.—The unused increased limi19 tation for any taxable year is the excess (but not 

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

21 179(b)(1) as increased under subsection (a) over the 

22 cost of section 179 property which is qualified zone 

23 property placed in service during the taxable year. 

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

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


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1 shall be treated as used first from unused limitation 

2 for the second preceding calendar year, then from 

3 unused limitation for the 1st preceding calendar 

4 year, and then from such limitation for the current 

5 year.’’. 

6 (3) EFFECTIVE DATE.—The amendments made 

7 by this subsection shall apply to taxable years begin8 ning after the date of the enactment of this Act. 

9 (j) ELECTION OF FINANCING ARRANGEMENT IN

10 LIEU OF TAX BENEFITS.— 

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

12 adding at the end the following new subsection: 

13 ‘‘(e) ELECTION OF FINANCING ARRANGEMENT IN

14 LIEU OF TAX BENEFITS.— 

15 ‘‘(1) IN GENERAL.—At the election of any sig16 nificant empowerment zone business, for the pay17 ment period of the debt obligation designated in 

18 such election by such business— 

19 ‘‘(A) such business— 

20 ‘‘(i) shall not be allowed an empower21 ment zone employment credit described in 

22 subsection (a), and 

23 ‘‘(ii) shall not be allowed any deduc24 tion for depreciation under section 168 


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1 with respect to qualified zone property, 

2 and 

3 ‘‘(B) the Secretary shall make the pay4 ments described in paragraph (2) to the holder 

5 of such debt obligation (or in the event that 

6 there is more than 1 holder, to such trustee 

7 designated by the electing business to accept 

8 such payments on behalf of such holders). 

9 ‘‘(2) PAYMENTS.— 

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

11 each year of the payment period, the Secretary 

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

13 otherwise appropriated) to the holder of the 

14 debt obligation designated by such business an 

15 amount equal to— 

16 ‘‘(i) the empowerment zone employ17 ment credit computed each year under this 

18 section as if the election was not made 

19 under this subsection, and 

20 ‘‘(ii) the cost recovery benefit de21 scribed in subparagraph (B), 

22 paid in equal installments (or as adjusted pur23 suant to paragraph (4)(A)) over the payment 

24 period described in subparagraph (C). 


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1 ‘‘(B) COST RECOVERY BENEFIT.—For pur2 poses of subparagraph (A), the cost recovery 

3 benefit shall be an amount equal to 25 percent 

4 of— 

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

6 which is qualified zone property (including 

7 improvements to such tangible property) 

8 incurred by the significant empowerment 

9 zone business, and 

10 ‘‘(ii) any such cost for which a bind11 ing contract for financing the acquisition 

12 of such tangible property (including im13 provements to such tangible property) has 

14 been made by such business and which 

15 under the terms of the financing is to be 

16 incurred within the first 5 full calendar 

17 years beginning after the date of the elec18 tion made under this subsection. 

19 ‘‘(C) PAYMENT PERIOD.—The payment pe20 riod is the period of 15 calendar years begin21 ning with the earlier of— 

22 ‘‘(i) the calendar year specified (be23 fore the beginning of such year) by the sig24 nificant empowerment zone business as the 

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1 gard to the date the property is placed in 

2 service, or 

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

4 after the date that the election under this 

5 subsection is made. 

6 ‘‘(3) SIGNIFICANT EMPOWERMENT ZONE BUSI7 NESS.—For purposes of this subsection, the term 

8 ‘significant empowerment zone business’ means any 

9 trade or business operating in an empowerment zone 

10 if— 

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

12 chief executive or the legislative body of the 

13 State or a local government in which the zone 

14 property is located, and 

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

16 Development determines that— 

17 ‘‘(i) it is a facility for qualified re18 search as defined in section 41(d) which is 

19 reasonably anticipated to make at least 

20 $50,000,000 of capital expenditures within 

21 the first 3 years of the payment period, or 

22 ‘‘(ii) with respect to any other busi23 ness, it is reasonably anticipated that such 

24 business will increase employment in such 


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

2 payment period by at least the lesser of— 

3 ‘‘(I) 1,000 full-time employees or 

4 equivalents, or 

5 ‘‘(II) 10 percent of the number 

6 of full-time employees estimated to 

7 have been employed in such zone on 

8 the date of its designation. 

9 ‘‘(4) SPECIAL RULES.— 

10 ‘‘(A) ADJUSTMENT TO COST RECOVERY

11 BENEFIT.—In the event that the significant em12 powerment zone business does not incur a cost 

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

14 and for which a cost recovery benefit payment 

15 is made under this subsection, the Secretary 

16 shall reduce future recovery benefit payments to 

17 recover 110 percent of the overpayments in 

18 equal installments over the remaining payment 

19 period. 

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

21 of this subtitle, if a cost recovery payment is 

22 made under this subsection with respect to any 

23 property, the basis of such property shall be re24 duced by the amount of such payment. 


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1 ‘‘(5) TREATMENT OF PAYMENTS.—Any pay2 ment made under this subsection shall not be treat3 ed as a Federal Government guarantee for purposes 

4 of section 149(b).’’. 

5 (2) CONFORMING AMENDMENT.—Section 

6 1016(a) is amended by striking ‘‘and’’ at the end of 

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

8 paragraph (37) and inserting ‘‘, and’’, and by add9 ing at the end the following new paragraph: 

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

11 1396(e)(4)(B).’’. 

12 (3) EFFECTIVE DATE.—The amendments made 

13 by this subsection shall apply to taxable years begin14 ning after the date of the enactment of this Act. 

15 (k) CERTAIN FEDERALLY GUARANTEED BONDS

16 ISSUED TO PROVIDE INVESTMENTS IN EMPOWERMENT

17 ZONES AND RENEWAL COMMUNITIES PERMITTED TO BE

18 TAX-EXEMPT, ETC.— 

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

20 149(b)(3) is amended by striking ‘‘or’’ at the end of 

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

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

23 the end the following new clause: 

24 ‘‘(iv) any guarantee by a Federal 

25 Home Loan Bank for a bond 95 percent or 


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1 more of the net proceeds of which are to 

2 be used to provide property in an em3 powerment zone or renewal community.’’. 

4 (2) EFFECTIVE DATE.—The amendments made 

5 by this subsection shall apply to bonds issued after 

6 the date of the enactment of this Act. 

7 (l) TAX-EXEMPT INTEREST OF FINANCIAL INSTITU8 TIONS ON ZONE FACILITY BONDS NOT SUBJECT TO IN9 TEREST DISALLOWANCE.— 

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

11 265(b)(3) (defining qualified bond) is amended by 

12 adding at the end the following new clause: 

13 ‘‘(iii) ENTERPRISE ZONE FACILITY

14 BONDS.—The term ‘qualified tax-exempt 

15 obligation’ includes any obligation which is 

16 treated as an exempt facility bond by sec17 tion 1394.’’. 

18 (2) EFFECTIVE DATE.—The amendment made 

19 by this subsection shall apply to taxable years begin20 ning after the date of the enactment of this Act. 

21 (m) DEVELOPABLE SITES POPULATION CLARIFICA22 TION.— 

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

24 1391(g)(3) (relating to modifications to eligibility 

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


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1 ‘‘(C) POPULATION LIMITATION.— 

2 ‘‘(i) AGGREGATE POPULATION LIMITA3 TION.—The aggregate population limita4 tion under the last sentence of subsection 

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

6 under paragraph (1). 

7 ‘‘(ii) EXCEPTION FOR DEVELOPABLE

8 SITES.—The parcels described in subpara9 graph (A)(iii) shall not be taken into ac10 count in determining whether the require11 ment of section 1392(a)(1)(A) is met.’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

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

14 enactment of this Act. 

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

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

17 Committee on Ways and Means of the House of Rep18 resentatives and the Committee on Finance of the Senate 

19 a report detailing for each empowerment zone, enterprise 

20 community, and renewal community the amount and type 

21 of claimed tax benefits. 


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1 SEC. 4. ADDITIONAL ACCESS TO CAPITAL BY RURAL EN2 TERPRISE COMMUNITIES. 

3 Section 1394 (relating to tax-exempt enterprise zone 

4 facility bonds) is amended by adding at the end the fol5 lowing new subsection: 

6 ‘‘(g) BONDS FOR RURAL ENTERPRISE COMMU7 NITIES.— 

8 ‘‘(1) IN GENERAL.—In the case of a rural en9 terprise community bond— 

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

11 private activity bond for purposes of section 

12 146, and 

13 ‘‘(B) subsections (c) and (f)(2) of this sec14 tion shall not apply. 

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

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

17 apply to a rural enterprise community bond 

18 only if such bond is designated for purposes of 

19 this subsection by the Secretary of Agriculture 

20 for the area to which such bond relates. 

21 ‘‘(B) LIMITATION ON BONDS DES22 IGNATED.—The aggregate face amount of 

23 bonds which may be designated under subpara24 graph (A) with respect to all rural enterprise 

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

26 ‘‘(C) SPECIAL RULES.— 


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1 ‘‘(i) COORDINATION WITH OTHER LIM2 ITATIONS.—Bonds to which paragraph (1) 

3 applies shall not be taken into account in 

4 applying the limitation of subsection (c) or 

5 (f)(2) to other bonds. 

6 ‘‘(ii) CURRENT REFUNDING NOT

7 TAKEN INTO ACCOUNT.—In the case of a 

8 refunding (or series of refundings) of a 

9 bond designated under this paragraph, the 

10 refunding obligation shall be treated as 

11 designated under this paragraph (and shall 

12 not be taken into account in applying sub13 paragraph (B)) if— 

14 ‘‘(I) the amount of the refunding 

15 bond does not exceed the outstanding 

16 amount of the refunded bond, and 

17 ‘‘(II) the refunded bond is re18 deemed not later than 90 days after 

19 the date of issuance of the refunding 

20 bond. 

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

22 For purposes of this subsection, the term ‘rural en23 terprise community bond’ means any bond which 

24 would be described in subsection (a) if all rural enVerDate Aug 31 2005 02:16 Jun 20, 2007 Jkt 059200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S1627.IS S1627

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1 terprise communities were taken into account under 

2 sections 1397C and 1397D. 

3 ‘‘(4) DESIGNATION PROCEDURE.—The Sec4 retary of Agriculture shall establish within 90 days 

5 after the date of the enactment of this subsection, 

6 the procedure for the nomination and selection of 

7 rural enterprise communities with respect to the des8 ignation of rural enterprise community bonds.’’. 

Æ 


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