I
105TH CONGRESS
2D SESSION
H. R. 4071
To authorize the Secretary of Agriculture to make grants to establish 33
additional rural enterprise communities, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 17, 1998
Mr. HINCHEY (for himself, Mr. WATKINS, Mr. COSTELLO, Mr. GUTIERREZ,
Mr. WISE, Ms. FURSE, Mr. FROST, Mr. SCHUMER, Mr. FALEOMAVAEGA,
Mr. JACKSON of Illinois, Mr. BOUCHER, Mr. BALDACCI, Mr. SANDERS,
Mr. FARR of California, Mr. ALLEN, Mr. RAHALL, Mr. THOMPSON, Ms.
CHRISTIAN-GREEN, Ms. WOOLSEY, Mr. PASTOR, Mr. MASCARA, Mr.
MINGE, Mrs. THURMAN, Mr. TOWNS, Mr. PETERSON of Pennsylvania,
Mr. MOLLOHAN, and Mr. ROMERO-BARCELO´) introduced the following
bill; which was referred to the Committee on Ways and Means, and in
addition to the Committee on Agriculture, for a period to be subsequently
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned
A BILL
To authorize the Secretary of Agriculture to make grants
to establish 33 additional rural enterprise communities,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Rural Enterprise Com-
munities Act of 1998’’.
SEC. 2. SELECTION OF ADDITIONAL ENTERPRISE COMMU-
NITIES.
(a) IN GENERAL.—Section 1391(g)(1) of the Internal
Revenue Code of 1986 is amended—
(1) in the first sentence by inserting before the
period at the end the following: ‘‘, and an additional
33 nominated areas as enterprise communities in
rural areas’’, and
(2) in the second sentence by striking ‘‘Of that
number’’ and inserting ‘‘Of the 20 additional em-
powerment zones created pursuant to this para-
graph’’.
(b) EXTENSION
OF APPLICATION DEADLINE
FOR
NEW RURAL ENTERPRISE COMMUNITIES.—Paragraph
(2) of section 1391(g) of such Code (relating to period
designations may be made and take effect) is amended to
read as follows:
‘‘(2) PERIOD DESIGNATIONS MAY BE MADE AND
TAKE EFFECT.—
‘‘(A) EMPOWERMENT
ZONE.—A designa-
tion of an empowerment zone may be made
under this subsection after August 5, 1997, and
before January 1, 1999.
‘‘(B) RURAL ENTERPRISE COMMUNITY.—A
designation of a rural enterprise community
may be made under this subsection after Au-
gust 5, 1997, and before January 1, 2000.’’.
(c) NONCONTIGUOUS PARCELS.—Clause (ii) of sec-
tion 1391(g)(3)(B) of such Code is amended—
(1) by striking ‘‘SPECIAL
RULE
FOR
RURAL
AREAS.—If’’ and inserting ‘‘SPECIAL
RULES
FOR
RURAL AREAS.—
‘‘(I) LARGE AREAS.—If’’, and
(2) by adding at the end the following new sub-
clause:
‘‘(II) EXCEPTION
TO
CONTIG-
UOUS
RULE.—Notwithstanding sec-
tion 1392(a)(3)(B), the Secretary of
Agriculture may designate noncontig-
uous parcels as an empowerment zone
or enterprise community under this
subsection, if the Secretary deter-
mines that such parcels, taken to-
gether, have the characteristics of, or
potential for developing, a cohesive re-
gional community identity.’’.
(d) MODIFICATIONS TO ELIGIBILITY CRITERIA.—
(1) POVERTY
RATE.—Clause (v) of section
1391(g)(3)(A) of such Code is amended to read as
follows:
‘‘(v) SPECIAL RULE FOR RURAL EM-
POWERMENT
ZONES
AND
ENTERPRISE
COMMUNITIES.—The Secretary of Agri-
culture may designate an empowerment
zone or enterprise community in a rural
area (but not more than 1 empowerment
zone and 16 enterprise communities) with-
out regard to clause (i) if the area to be
designated satisfies 1 or more of the fol-
lowing criteria:
‘‘(I) Emigration criteria specified
by the Secretary of Agriculture.
‘‘(II) Underemployment criteria
specified by the Secretary of Agri-
culture.
‘‘(III) Is an area which the Sec-
retary of Agriculture has determined
has experienced, or may reasonably be
foreseen to be about to experience, a
special need to meet an expected rise
in unemployment, or other economic
adjustment problems, including those
caused by any action or decision of
the Federal Government.
‘‘(IV) Is an area which the Sec-
retary of Agriculture has determined
is about to experience or has experi-
enced a sudden economic dislocation
resulting in job loss that is significant
both in terms of the number of jobs
eliminated and the effect upon the
employment rate of the area.’’.
(2) SIZE
LIMITATION.—Clause (i) of section
1391(g)(3)(B) of such Code is amended to read as
follows:
‘‘(i) IN GENERAL.—
‘‘(I) DEVELOPABLE
SITES
NOT
TAKEN INTO ACCOUNT.—The parcels
described in subparagraph (A)(iii)
shall not be taken into account in de-
termining whether the requirement of
subparagraph (A) or (B) of section
1392(a)(3) is met.
‘‘(II) INAPPLICABLE TO CERTAIN
AREAS.—The Secretary of Agriculture
may designate no more than 1 em-
powerment zone and no more than 8
enterprise communities in rural areas
without regard to subparagraph (A)
or (B) of section 1392(a)(3) so long
as such zone or community (as the
case may be) meets the eligibility cri-
teria set forth in this paragraph.’’.
(e) USE OF BOND PROCEEDS MUST BE CONSISTENT
WITH STRATEGIC PLAN.—Subparagraph (C) of section
1394(f)(2) of such Code is amended by adding at the end
the following new clause:
‘‘(iii) In the case of new empowerment
zone facility bonds in an empowerment
zone in a rural area issued after the date
of the enactment of the Rural Enterprise
Communities Act of 1998 (including an
issue of refunding bonds), paragraph (1)
and subsection (a) shall not apply if the
bond proceeds will be used for activities
which are consistent with the strategic
plan for such empowerment zone.’’.
(f) ZONE ACADEMY BONDS.—
(1) COMPREHENSIVE EDUCATION PLAN MUST
BE CONSISTENT WITH STRATEGIC PLAN.—Subpara-
graph (A) of section 1397E(d)(4) of such Code is
amended by striking ‘‘and’’ at the end of clause (iii),
by striking the period at the end of clause (iv) and
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new clause:
‘‘(v) in the case of an empowerment
zone located in a rural area, the com-
prehensive education plan of such public
school or program (as the case may be) is
consistent with the strategic plan for such
empowerment zone.’’.
(2) ALLOCATION OF NATIONAL LIMITATION TO
RURAL
EMPOWERMENT
ZONES.—Subsection (c) of
section 1397E of such Code is amended by adding
at the end the following new paragraph:
‘‘(5) ALLOCATION
TO
RURAL
EMPOWERMENT
ZONES.—For each calendar year, not less than 25
percent of the national zone academy bond limitation
shall be allocated to empowerment zones in rural
areas.’’.
(g) ELIGIBILITY
OF INSULAR AREAS.—Subsection
(a) of section 1393 of such Code is amended by adding
at the end the following new paragraph:
‘‘(10) STATE.—For the purposes of designating
empowerment zones in rural areas after the date of
the enactment of the Rural Enterprise Communities
Act of 1998, the term ‘State’ includes Puerto Rico,
the Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.’’.
(h) TECHNICAL AMENDMENT.—Subparagraph (C) of
section 1391(g)(3) of such Code is amended by striking
‘‘paragraph (1)(B)’’ and inserting ‘‘paragraph (3)(B)’’.
SEC. 3. RECOGNITION AND INCENTIVES FOR TOP PER-
FORMING EMPOWERMENT ZONES AND EN-
TERPRISE COMMUNITIES.
(a) PRIORITY GIVEN TO TOP PERFORMING ENTER-
PRISE
COMMUNITIES.—Subparagraph (D) of section
1391(g)(3) of the Internal Revenue Code of 1986 (relating
to modifications to eligibility criteria, etc.) is amended to
read as follows:
‘‘(D) PREVIOUSLY
DESIGNATED
ENTER-
PRISE COMMUNITIES MAY BE INCLUDED.—
‘‘(i) IN GENERAL.—Subsection (e)(5)
shall not apply to any enterprise commu-
nity designated under subsection (a) that
is also nominated for designation under
this subsection.
‘‘(ii) PRIORITY.—In designating em-
powerment zones under paragraph (1), the
appropriate Secretary shall give priority to
top performing enterprise communities.’’.
(b) RECOGNITION OF TOP PERFORMING EMPOWER-
MENT ZONES AND ENTERPRISE COMMUNITIES.—Section
1391 of such Code (relating to designation procedure) is
amended by adding at the end the following new sub-
section:
‘‘(h) RECOGNITION OF TOP PERFORMING EMPOWER-
MENT ZONES AND ENTERPRISE COMMUNITIES.—For pur-
poses of subsection (g)—
‘‘(1) IN GENERAL.—The appropriate Secretary
shall recognize annually the top performing em-
powerment zones and enterprise communities.
‘‘(2) TOP PERFORMING EMPOWERMENT ZONE
AND ENTERPRISE COMMUNITY.—The terms ‘top per-
forming empowerment zone’ and ‘top performing en-
terprise community’ mean an empowerment zone or
an enterprise community, as the case may be, that,
as of the end of the applicable period of evaluation,
has completed or made substantial progress toward
the achievement of the benchmarks specified in the
application for designation as an empowerment zone
or enterprise community under this section, as deter-
mined by the appropriate Secretary.’’.
SEC. 4. FUNDING ENTITLEMENT FOR ADDITIONAL RURAL
EMPOWERMENT ZONES AND RURAL ENTER-
PRISE COMMUNITIES.
(a) 
ENTITLEMENT.—Paragraph 
(1) 
of 
section
2007(a) of the Social Security Act (42 U.S.C. 1397f(a))
is amended—
(1) in subparagraph (A), by striking ‘‘in the
State; and’’ and inserting ‘‘in the State designated
pursuant to section 1391(b) of the Internal Revenue
Code of 1986;’’,
(2) in subparagraph (B), by striking the period
at the end and inserting ‘‘; and’’, and
(3) by adding at the end the following new sub-
paragraph:
‘‘(C) 10 grants under this section for each qualified
rural empowerment zone and 2 grants for each qualified
rural enterprise community in the State designated pursu-
ant to section 1391(g) of such Code.’’.
(b) AMOUNT OF GRANTS.—Paragraph (2) of section
2007(a) of such Act (42 U.S.C. 1397f(a)) is amended—
(1) in the heading of subparagraph (A), by
striking ‘‘EMPOWERMENT’’ and inserting ‘‘ORIGINAL
EMPOWERMENT’’,
(2) in subparagraph (A), in the matter preced-
ing clause (i), by inserting ‘‘described in paragraph
(1)(A)’’ after ‘‘empowerment zone’’,
(3) by redesignating subparagraph (C) as sub-
paragraph (D), and
(4) by inserting after subparagraph (B) the fol-
lowing new subparagraph:
‘‘(C) 
ADDITIONAL
EMPOWERMENT
GRANTS.—The amount of each grant to a State
made under this section for a qualified rural
empowerment zone or rural enterprise commu-
nity described in paragraph (1)(C) shall be—
‘‘(i) $2,000,000 if the area is des-
ignated as a rural empowerment zone, or
‘‘(ii) $1,500,000 if the area is des-
ignated as a rural enterprise community,
multiplied by the proportion of the population
of the zone that resides in that State.’’.
(c) TIMING OF GRANTS.—Paragraph (3) of section
2007(a) of such Act (42 U.S.C. 1397f(a)) is amended—
(1) in the heading of subparagraph (A) by
striking ‘‘QUALIFIED’’ and inserting ‘‘ORIGINAL
QUALIFIED’’,
(2) in subparagraph (A), in the matter preced-
ing clause (i), by inserting ‘‘described in paragraph
(1)(A)’’ after ‘‘empowerment zone’’, and
(3) by adding at the end the following new sub-
paragraphs:
‘‘(C) ADDITIONAL
QUALIFIED
EMPOWER-
MENT ZONES.—With respect to each qualified
empowerment zone described in paragraph
(1)(C), the Secretary of Agriculture shall
make—
‘‘(i) 1 grant under this subsection to
the State in which the rural empowerment
zone lies, on the date of the designation of
the zone under such part I; and
‘‘(ii) 1 grant under this subsection to
such State, on the first day of each of the
nine fiscal years that begin after the date
of the designation.
‘‘(D) ADDITIONAL QUALIFIED ENTERPRISE
COMMUNITIES.—With respect to each qualified
enterprise community described in paragraph
(1)(C), the Secretary of Agriculture shall
make—
‘‘(i) 1 grant under this subsection to
the State in which the rural enterprise
community lies, on the date of the designa-
tion of the zone under such part I; and
‘‘(ii) 1 grant under this subsection to
such State, on the first day of the fiscal
SEC. 5. RESPONSIBILITIES OF THE SECRETARY OF AGRI-
CULTURE.
(a) CONVEYANCE
OF EXCESS AGRICULTURE DE-
PARTMENT
PROPERTY
TO
SUPPORT
EMPOWERMENT
ZONES AND ENTERPRISE COMMUNITIES.—Section 923 of
the Federal Agricultural Improvement and Reform Act of
1996 (7 U.S.C. 2206a) is amended—
(1) by striking ‘‘Notwithstanding’’ and insert-
ing ‘‘(a) IN GENERAL.—Notwithstanding’’,
(2) in paragraph (1) of subsection (a) (as des-
ignated by paragraph (1) of this subsection)—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (B), and
(B) by inserting after subparagraph (C)
the following new subparagraph:
‘‘(D) persons, including Federal, State, or
local government agencies, for activities consist-
ent with the strategic plan for an empowerment
zone, enterprise community, or champion com-
munity located in a rural area; and’’, and
(3) by adding at the end the following new sub-
section:
‘‘(b) DEFINITION.—For the purpose of this section,
the term ‘champion community’ means an applicant for
designation as a rural empowerment zone or enterprise
community whose strategic plan meets criteria specified
by the Secretary of Agriculture.’’.
(b) ENVIRONMENTAL RESPONSIBILITY.—
(1) IN GENERAL.—The Secretary of Agriculture
shall have the responsibility for conducting environ-
mental reviews, decisionmaking, and action pursuant
to the National Environmental Policy Act of 1969
(42 U.S.C. 4321 et seq.) and other provisions of law
as the regulations of the Secretary may specify, that
would apply to Federal actions undertaken with re-
spect to rural empowerment zones and enterprise
communities.
(2) DELEGATION.—The Secretary of Agri-
culture is authorized to delegate the responsibilities
described in paragraph (1) to rural empowerment
zones or enterprise community recipients who as-
sume, and are determined by the Secretary to be
qualified to assume, all of the responsibilities for en-
vironmental review, decisionmaking, and action re-
quired.
SEC. 6. EFFECTIVE DATES.
(a) IN GENERAL.—Except as otherwise provided in
this section, the amendments made by this Act shall take
effect as if included in the amendments made by section
952 of the Taxpayer Relief Act of 1997.
(b) ZONE
ACADEMY
BOND
ALLOCATION.—The
amendments made by section 2(f) shall apply to calendar
years after 1998.
(c) EMPOWERMENT ZONE GRANTS; ENVIRONMENTAL
RESPONSIBILITY
AND PROPERTY CONVEYANCE.—Sec-
tions 4 and 5 and the amendments made by such sections
shall take effect on the date of the enactment of this Act.
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