‘‘(d) NOTICE OF AVAILABILITY OF ADVANCE PAY-
MENT
OF EARNED INCOME CREDIT.—Each employer
shall take reasonable steps to notify all qualified zone em-
ployees of the availability to eligible individuals of receiv-
ing advanced payments of the credit under section 32 (re-
lating 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 enter-
prise zone stock.
‘‘(b) LIMITATION.—
‘‘(1) IN GENERAL.—The maximum amount al-
lowed as a deduction under subsection (a) to a tax-
payer 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 sec-
tion to the taxpayer for all prior taxable years.
‘‘(2) EXCESS AMOUNTS.—If the amount other-
wise 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 para-
graph (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 QUALI-
FIED ENTERPRISE ZONE PROPERTY.—
‘‘(A) IN GENERAL.—Such term shall in-
clude such stock only to the extent that the pro-
ceeds of such issuance are used by such issuer
during the 12-month period beginning on the
date of issuance to purchase (as defined in sec-
tion 179(d)(2)) qualified enterprise zone prop-
erty.
‘‘(B) QUALIFIED ENTERPRISE ZONE PROP-
ERTY.—For purposes of this section, the term
‘qualified enterprise zone property’ means prop-
erty 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 re-
demption or distribution (without a bona fide busi-
ness 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 indi-
viduals 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 re-
duced 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 de-
preciation.
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 (de-
termined without regard to this paragraph).
‘‘(3) CERTAIN EVENTS TREATED AS DISPOSI-
TIONS.—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 enter-
prise 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 ref-
erence to the adjusted basis of such stock)
before the end of the 5-year period begin-
ning 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 (deter-
mined 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 aggre-
gate decrease in tax of the taxpayer result-
ing 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 dispos-
ing of such stock (and any other property the basis
of which is determined in whole or in part by ref-
erence 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
PARTNER-
SHIPS AND S CORPORATIONS.—In the case of a part-
nership or an S corporation, the limitations under
subsection (b) shall apply at the partner and share-
holder 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 treat-
ed as individuals for purposes of this section.
‘‘SEC. 1397. NONRECOGNITION OF GAIN FROM NEW ZONE
INVESTMENTS.
‘‘(a) GENERAL RULE.—At the election of an individ-
ual, 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 ex-
change, exceeds
‘‘(2) the cost (not heretofore taken into account
under this subsection) of any qualified zone asset
purchased directly by the taxpayer during the rein-
vestment 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 ex-
change of property, the determination of wheth-
er 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 pur-
chase 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 ‘rein-
vestment 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 QUAL-
IFY.—
‘‘(1) IN GENERAL.—If, during the 10-year pe-
riod beginning on the date any qualified zone re-
placement asset was purchased by the taxpayer,
such asset ceases to be a qualified zone asset, not-
withstanding any provision of this subtitle other
than paragraph (3), the taxpayer shall be treated as
disposing of such asset during the taxable year dur-
ing 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 non-
recognition 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 sub-
section (d)(4)) purchased during the reinvestment period.
‘‘(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 sec-
tion 1397B for such purposes, the term ‘qualified busi-
ness’ shall not include any trade or business of producing
property of a character subject to the allowance for deple-
tion 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 para-
graph (1), the term ‘real property’ means any prop-
erty which is section 1250 property (as defined in
section 1250(c)).
‘‘(3) SPECIAL RULES.—
‘‘(A) CERTAIN
RULES
MADE
APPLICA-
BLE.—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 rea-
son 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 BUSI-
NESSES.—
‘‘(1) IN
GENERAL.—For purposes of section
585(a)—
‘‘(A) the deduction for a reasonable addi-
tion to a reserve for bad debts shall be com-
puted separately with respect to qualified enter-
prise 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 reason-
able addition to the reserve for bad debts of any fi-
nancial 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 quali-
fied enterprise zone loans under the percentage
method as provided by paragraph (3).
‘‘(3) PERCENTAGE METHOD.—The amount de-
termined under this paragraph for any taxable year
shall be the amount necessary to increase the bal-
ance of the reserve for losses on loans (at the close
of the taxable year) to 10 percent of qualified enter-
prise 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 sub-
section 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 enter-
prise zone loans.
‘‘(5) QUALIFIED ENTERPRISE ZONE LOANS.—
For purposes of this subsection, the term ‘qualified
enterprise zone loan’ means any loan made to an en-
terprise 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 part-
nership 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 in-
come of such entity is derived from the active con-
duct 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 prop-
erty.
‘‘(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 in-
come of such individual from such business is de-
rived 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 (wheth-
er 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 attrib-
utable 
to 
collectibles 
(as 
defined 
in 
section
408(m)(2)) other than collectibles that are held pri-
marily 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 attrib-
utable to nonqualified financial property.
For purposes of this subsection, the term ‘employee’ in-
cludes the proprietor.
‘‘(d) QUALIFIED BUSINESS.—For purposes of this
section—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided 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 prop-
erty (as so defined)—
‘‘(i) such property was originally
placed in service after the date the tax en-
terprise 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 PROP-
ERTY.—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 resi-
dents of a tax enterprise zone.
‘‘(4) TREATMENT OF BUSINESS HOLDING IN-
TANGIBLES.—The term ‘qualified business’ shall not
include any trade or business consisting predomi-
nantly 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, op-
tions, futures contracts, forward contracts, warrants, no-
tional 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 inter-
est.
‘‘(2) QUALIFIED ZONE STOCK.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the term ‘qualified zone
stock’ means any stock in a domestic corpora-
tion if—
‘‘(i) such stock is acquired by the tax-
payer on original issue from the corpora-
tion solely in exchange for cash,
‘‘(ii) as of the time such stock was is-
sued, such corporation was an enterprise
zone business (or, in the case of a new cor-
poration, such corporation was being orga-
nized 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 at-
tempt 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 prop-
erty, substantially all of the use of such
property was in a tax enterprise zone and
in an enterprise zone business of the tax-
payer.
‘‘(B) SPECIAL RULE FOR SUBSTANTIAL IM-
PROVEMENTS.—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, prop-
erty shall be treated as substantially improved
by the taxpayer if, during any 24-month period
beginning after the date on which the designa-
tion of the tax enterprise zone took effect, addi-
tions 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 in-
clude land which is not an integral part of a
qualified business (as defined in section
1397B(c)).
‘‘(4) QUALIFIED
ZONE
PARTNERSHIP
INTER-
EST.—The term ‘qualified zone partnership interest’
means any interest in a partnership if—
‘‘(A) such interest is acquired by the tax-
payer from the partnership solely in exchange
for cash,
‘‘(B) as of the time such interest was ac-
quired, such partnership was an enterprise zone
business (or, in the case of a new partnership,
such partnership was being organized for pur-
poses of being an enterprise zone business), and
‘‘(C) during substantially all of the tax-
payer’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
PUR-
CHASERS.—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 para-
graph (2)(A)(iii), (3)(A)(iii), or (4)(C) after the 10-
year period beginning on the date the taxpayer ac-
quired 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 ordi-
nary income under section 1250 if section 1250 ap-
plied to all depreciation rather than the additional
depreciation.
‘‘(3) GAIN ATTRIBUTABLE TO PERIODS AFTER
TERMINATION OF ZONE DESIGNATION NOT QUALI-
FIED.—The term ‘qualified capital gain’ shall not in-
clude any gain attributable to periods after the ter-
mination of any designation of an area as a tax en-
terprise 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 at-
tributable to amounts which would be qualified cap-
ital 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 in-
terest. 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 substan-
tially all of the period the taxpayer held the in-
terest 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 be-
fore the disposition of such asset by such
pass-thru entity.
‘‘(C) LIMITATION
BASED
ON
INTEREST
ORIGINALLY
HELD
BY
TAXPAYER.—Subpara-
graph (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 des-
ignation of an area as a tax enterprise zone.
‘‘(e) CERTAIN
TAX-FREE
AND
OTHER
TRANS-
FERS.—For purposes of this section—
‘‘(1) IN GENERAL.—In the case of a transfer of
a qualified zone asset to which this subsection ap-
plies, 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 AP-
PLIES.—This subsection shall apply to any trans-
fer—
‘‘(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 pro-
grams, would result in an activity being 100 percent
or more subsidized by the Federal Government,
‘‘(2) regulations preventing abuse of the provi-
sions of this part, and
‘‘(3) regulations dealing with inadvertent fail-
ures of entities to be qualified zone businesses.’’
(b) CLERICAL AMENDMENT.—The table of sub-
chapters 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 de-
termined under section 1394(a).’’
(2) Subsection (d) of section 39 is amended by
adding at the end thereof the following new para-
graph:
‘‘(4) NO CARRYBACK OF SECTION 1394 CREDIT
BEFORE
ENACTMENT.—No portion of the unused
business credit for any taxable year which is attrib-
utable to the enterprise zone employment credit de-
termined 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 EN-
TERPRISE ZONE STOCK.—Subsection (a) of section 62 is
amended by adding at the end thereof the following new
paragraph:
‘‘(15) ENTERPRISE ZONE STOCK.—The deduc-
tion 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 CRED-
IT’’ 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 de-
termined 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 sec-
tion and subchapter U, and under such regulations
as may be prescribed by the Secretary) the items re-
quired to be taken into account for purposes of sub-
chapter 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 semi-
colon, 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 non-
recognition of any part of the gain realized on the
sale or exchange of other property, to the extent pro-
vided 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 para-
graph (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 ex-
change of any qualified zone asset (as defined in sec-
tion 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 Rev-
enue 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 pub-
lished 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 ENTER-
PRISE ZONES.
(a) IN GENERAL.—Subsection (c) of section 144 (re-
lating 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 begin-
ning on the date a tax enterprise zone is des-
ignated—
‘‘(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 require-
ments 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 pur-
pose governmental unit guarantees the payment
of principal and interest on the issue either di-
rectly 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 earn-
ings on such proceeds.
‘‘(C) EXPANSION
OF
REDEVELOPMENT
PURPOSES.—
‘‘(i) IN GENERAL.—The term ‘redevel-
opment purposes’ includes the making of
loans to any enterprise zone business (as
defined in section 1397B) for—
‘‘(I) the acquisition of land with-
in the tax enterprise zone for use in
such business, or
‘‘(II) the acquisition, construc-
tion, reconstruction, or improvement
by such business of land, or property
of a character subject to the allowance
for depreciation, for use in such busi-
ness.
‘‘(ii) $5,000,000 LIMITATION.—Clause
(i) shall apply to loans made to any enter-
prise 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; REPAY-
MENTS
MUST
BE
USED
FOR
REDEMP-
TIONS.—Clause (i) shall apply only to
loans—
‘‘(I) made during the 18-month
period beginning on the date of issu-
ance of the issue financing such loan,
‘‘(II) repayments of principal on
which are used not later than the
close of the 1st semiannual period be-
ginning after the date the repayment
is received to redeem bonds which are
part of such issue, and
‘‘(III) the effective rate of inter-
est on which does not exceed the yield
on the issue by more than 0.125 per-
centage 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 resi-
dential real property.
‘‘(v) COORDINATION
WITH
RESTRIC-
TIONS ON USE OF PROCEEDS.—Paragraphs
(6) and (8) shall apply notwithstanding
clause (i); except that in applying para-
graph (6), subsection (a)(8) shall be treat-
ed 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 ex-
ceeds the principal amount of loans to which
subparagraph (C)(i) applies, an amount of pro-
ceeds equal to such excess shall be used not
later than the close of the 1st semiannual pe-
riod 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 RE-
QUIRED.—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 sen-
tence.
‘‘(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 pro-
vided 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 out-
standing) 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
BANK-
RUPTCY.—Clause (i) shall not apply to any
cessation resulting from bankruptcy.’’
(b) VOLUME CAP ONLY CHARGED WITH 50 PER-
CENT
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 begin-
ning 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 be-
ginning 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 en-
terprise zone business (as defined in sec-
tion 1397B), or
‘‘(ii) substantially all of the use of the
property (determined in accordance with
subchapter U) with respect to which the fi-
nancing 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 re-
sulting from bankruptcy.’’
Subtitle C—Expansion of Targeted
Jobs Credit
SEC. 121. ECONOMICALLY DISADVANTAGED ZONE RESI-
DENTS INCLUDED AS MEMBERS OF TAR-
GETED GROUP.
(a) ALLOWANCE OF CREDIT FOR HIRING TAX EN-
TERPRISE 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 strik-
ing the period at the end of subparagraph (J) and insert-
ing ‘‘, or’’, and by adding at the end the following new
subparagraph:
‘‘(K) an economically disadvantaged tax enter-
prise zone resident.’’
(b) ECONOMICALLY DISADVANTAGED TAX ENTER-
PRISE 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 ‘economi-
cally disadvantaged tax enterprise zone resi-
dent’ 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 eco-
nomically disadvantaged family (as deter-
mined 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 sub-
stituting ‘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 Contribu-
tions to Certain Community De-
velopment Corporations
SEC. 131. CREDIT FOR CONTRIBUTIONS TO CERTAIN COM-
MUNITY 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 sec-
tion.
(b) DETERMINATION OF CREDIT.—The credit deter-
mined 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 con-
tribution 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 pe-
riod 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 corpora-
tion for qualified low-income assistance within
its operational area, and
(D) which is designated by such corpora-
tion 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 COR-
PORATIONS.—
(1) IN GENERAL.—For purposes of this section,
the term ‘‘selected community development corpora-
tion’’ means any corporation—
(A) which is described in section 501(c)(3)
of such Code and exempt from tax under sec-
tion 501(a) of such Code,
(B) the principal purposes of which include
promoting employment of, and business oppor-
tunities 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
CORPORATIONS
MAY
BE
SE-
LECTED.—
(A) IN GENERAL.—The Secretary of Hous-
ing and Urban Development may select 10 cor-
porations for purposes of this section, subject to
the availability of eligible corporations. Such se-
lections 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 se-
lecting corporations for purposes of this section,
such Secretary shall give priority to corpora-
tions with a demonstrated record of perform-
ance 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 deter-
mined 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 juris-
diction of the local government which includes
such area.
(f) QUALIFIED LOW-INCOME ASSISTANCE.—For pur-
poses of this section, the term ‘‘qualified low-income as-
sistance’’ means assistance—
(1) which is designed to provide employment of,
and business opportunities for, low-income individ-
uals who are residents of the operational area of the
community development corporation, and
(2) which is approved by the Secretary of Hous-
ing and Urban Development.
Subtitle E—Report on Number of
Areas Meeting Enterprise Zone
Criteria
SEC. 141. REPORT.
(a) IN GENERAL.—The Secretary of the Treasury, in
consultation with the Secretary of Housing and Urban De-
velopment 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 cri-
teria 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—AUTHORIZATION FOR
ADDITIONAL ASSISTANCE TO
DISTRESSED COMMUNITIES
Subtitle A—National Public-Private
Partnership Programs
SEC. 201. NATIONAL PUBLIC-PRIVATE PARTNERSHIP PRO-
GRAMS.
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that public-private partnerships between government
and community-based organizations offer an opportunity
to empower residents of low-income distressed commu-
nities and to forge innovative solutions to the challenges
confronting these communities, and that increased re-
sources should be invested in such partnerships.
(b) AUTHORIZATION OF APPROPRIATIONS.—To pro-
mote national public-private partnerships, there are au-
thorized to be appropriated—
(1) with respect to the Head Start program
under the Head Start Act (42 U.S.C. 9831 et
seq.)—
(A) $40,000,000 for fiscal year 1993;
(B) $252,000,000 for fiscal year 1994;
(C) $264,000,000 for fiscal year 1995;
(D) $276,000,000 for fiscal year 1996;
(E) $294,000,000 for fiscal year 1997;
(F) $306,000,000 for fiscal year 1998;
(G) $324,000,000 for fiscal year 1999;
(H) $336,000,000 for fiscal year 2000;
(I) $454,000,000 for fiscal year 2001; and
(J) $472,000,000 for fiscal year 2002;
(2) with respect to the programs under sections
329, 330, 340 and 340A of the Public Health Serv-
ice Act (42 U.S.C. 254c)—
(A) $20,000,000 for fiscal year 1993;
(B) $126,000,000 for fiscal year 1994;
(C) $132,000,000 for fiscal year 1995;
(D) $136,000,000 for fiscal year 1996;
(E) $144,000,000 for fiscal year 1997;
(F) $156,000,000 for fiscal year 1998;
(G) $162,000,000 for fiscal year 1999;
(H) $168,000,000 for fiscal year 2000;
(I) $230,000,000 for fiscal year 2001; and
(J) $236,000,000 for fiscal year 2002;
(3) with respect to the National Community
Economic Partnership program established under
chapter 3 of subtitle C of this title—
(A) $40,000,000 for fiscal year 1993;
(B) $252,000,000 for fiscal year 1994;
(C) $264,000,000 for fiscal year 1995;
(D) $276,000,000 for fiscal year 1996;
(E) $294,000,000 for fiscal year 1997;
(F) $306,000,000 for fiscal year 1998;
(G) $324,000,000 for fiscal year 1999;
(H) $336,000,000 for fiscal year 2000;
(I) $454,000,000 for fiscal year 2001; and
(J) $472,000,000 for fiscal year 2002;
(4) with respect to the Job Corps program
under part B of title IV of the Job Training Part-
nership Act (29 U.S.C. 1692 et seq.)—
(A) $40,000,000 for fiscal year 1993;
(B) $252,000,000 for fiscal year 1994;
(C) $264,000,000 for fiscal year 1995;
(D) $276,000,000 for fiscal year 1996;
(E) $294,000,000 for fiscal year 1997;
(F) $306,000,000 for fiscal year 1998;
(G) $324,000,000 for fiscal year 1999;
(H) $336,000,000 for fiscal year 2000;
(I) $454,000,000 for fiscal year 2001; and
(J) $472,000,000 for fiscal year 2002;
(5) with respect to the Enterprise Capital Ac-
cess Fund Demonstration Program established
under section 285 of this Act—
(A) $20,000,000 for fiscal year 1993;
(B) $126,000,000 for fiscal year 1994;
(C) $132,000,000 for fiscal year 1995;
(D) $136,000,000 for fiscal year 1996;
(E) $144,000,000 for fiscal year 1997;
(F) $156,000,000 for fiscal year 1998;
(G) $162,000,000 for fiscal year 1999;
(H) $168,000,000 for fiscal year 2000;
(I) $230,000,000 for fiscal year 2001; and
(J) $236,000,000 for fiscal year 2002;
(6) with respect to the Youthbuild program
under subtitle D of title IV of the Cranston-
Gonzalez National Affordable Housing Act—
(A) $10,000,000 for fiscal year 1993;
(B) $66,000,000 for fiscal year 1994;
(C) $66,000,000 for fiscal year 1995;
(D) $72,000,000 for fiscal year 1996;
(E) $72,000,000 for fiscal year 1997;
(F) $78,000,000 for fiscal year 1998;
(G) $78,000,000 for fiscal year 1999;
(H) $84,000,000 for fiscal year 2000;
(I) $115,000,000 for fiscal year 2001; and
(J) $121,000,000 for fiscal year 2002; and
(7) with respect to the Neighborhood Reinvest-
ment Corporation established under title VI of the
Housing and Community Development Amendments
of 1978—
(A) $10,000,000 for fiscal year 1993;
(B) $66,000,000 for fiscal year 1994;
(C) $66,000,000 for fiscal year 1995;
(D) $72,000,000 for fiscal year 1996;
(E) $72,000,000 for fiscal year 1997;
(F) $78,000,000 for fiscal year 1998;
(G) $78,000,000 for fiscal year 1999;
(H) $84,000,000 for fiscal year 2000;
(I) $115,000,000 for fiscal year 2001; and
(J) $121,000,000 for fiscal year 2002.
(c) AVAILABILITY OF AMOUNTS.—The amounts ap-
propriated for programs pursuant to paragraphs (1), (2),
(4), (6), and (7) of subsection (b) shall be available only
for projects or activities that directly and principally bene-
fit the residents of tax enterprise zones designated pursu-
ant to section 1391 of the Internal Revenue Code of 1986.
Of the amounts appropriated for programs pursuant to
paragraphs (3) and (5) of subsection (b), not less than
50 percent shall be available only for projects or activities
that directly and principally benefit the residents of such
zones.
Subtitle B—Block Grant Funding
for Eligible Programs
SEC. 211. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated for assist-
ance under section 212, $320,000,000 for fiscal year
1993, 
$1,950,000,000 
for 
fiscal 
year 
1994,
$1,992,000,000 for fiscal year 1995, $2,022,000,000 for
fiscal year 1996, $2,460,000,000 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 amounts authorized by section
201(b) of this Act.
SEC. 212. ALLOCATION OF AMOUNTS AMONG TAX ENTER-
PRISE ZONES.
(a) IN GENERAL.—Except as provided in subsection
(d), the interagency council established under section 216
of this Act shall make any amounts appropriated pursuant
to section 211 available under this subtitle to provide as-
sistance on behalf of each tax enterprise zone designated
under section 1391 of the Internal Revenue Code of 1986
for which an application under section 215 of this Act has
been approved by the interagency council.
(b) ALLOCATION BETWEEN URBAN
AND RURAL
ZONES.—Of the amounts available each fiscal year under
this title for tax enterprise zones, 80 percent shall be avail-
able 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
each fiscal year under this title for urban tax enter-
prise zones shall be allocated so as to reserve an
equal amount for each urban zone that may be des-
ignated prior to the end of the calendar year begin-
ning during the fiscal year for which such amounts
were made available, pursuant to the annual limits
on zones specified in section 1391 of the Internal
Revenue Code of 1986.
(2) RURAL
ZONES.—The amounts available
each fiscal year under this title for rural develop-
ment investment zones shall be allocated so as to re-
serve an equal amount for each rural development
investment zone that may be designated prior to the
end of the calendar year beginning during the fiscal
year for which such amounts were made available,
pursuant to the annual limits on zones specified in
section 1391 of the Internal Revenue Code of 1986.
(d) SET-ASIDE.—Of the amounts appropriated pur-
suant to section 211 for fiscal year 1993, not less than
$5,000,000 shall be made available by the Interagency
Council for the Access to Jobs/Reverse Community Dem-
onstration Program authorized under section 286.
(e) AVAILABILITY.—Notwithstanding any other pro-
vision of law, amounts appropriated pursuant to author-
izations under this subtitle shall remain available until the
end of the fiscal year following the year for which such
amounts are appropriated.
SEC. 213. USE OF AMOUNTS.
(a) IN GENERAL.—The assistance allocated under
section 212 on behalf of each tax enterprise zone (as de-
fined in section 1391 of the Internal Revenue Code of
1986) shall be available only for carrying out selected pro-
grams within the tax enterprise zone, in accordance with
the application of the tax enterprise zone approved under
section 215 and subject to the provisions of this section.
(b) ALLOCATION AMONG PROGRAM CATEGORIES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), of the total amount of assistance provided
under this subtitle on behalf of a tax enterprise zone
for any fiscal year, the sum of the amounts used to
carry out selected programs referred to under any
one of paragraphs (1) through (5) of section 214
may not exceed 20 percent of such total amount.
(2) WAIVER OF CAPS.—Pursuant to a request
contained in an application under section 215, the
interagency council may provide that the require-
ment under paragraph (1) shall not apply with re-
spect to amounts used to carry out selected pro-
grams under the application, except that of the total
amount of assistance provided under this subtitle on
behalf of such tax enterprise zone for any fiscal
year, the sum of the amounts used to carry out se-
lected programs referred to under any single para-
graph under section 214 may not exceed 30 percent
of such total amount and may not be less than 5
percent of such total amount.
(c) ALLOCATION
AMONG
JOB
TRAINING
PRO-
GRAMS.—In any fiscal year, of the sum of the amounts
of assistance provided under this subtitle on behalf of a
tax enterprise zone that are used to carry out any of the
job training programs under section 214(2), not less than
25 percent shall be used for assistance under the Young
Adult Employment Demonstration program referred to in
section 214(2)(A) of this Act.
(d) PROVISION OF ASSISTANCE.—Upon the approval
of an application under section 215 for a tax enterprise
zone, the appropriate Federal agency head for each se-
lected program under the approved application shall make
available on behalf of the enterprise zone (under such pro-
gram and through the appropriate eligible entity), from
amounts available on behalf of such zone pursuant to sec-
tion 212, the amount of assistance determined in accord-
ance with the approved application.
(e) 
SUPPLEMENTATION
REQUIREMENT.—Any
amounts provided under this subtitle shall be in supple-
ment to, and shall not supplant, any Federal, State, local,
or private funds from other sources already used, or com-
mitted for use, for programs, projects, activities, and serv-
ices assisted under this subtitle or comparable to such pro-
grams, projects, activities, and services. Federal agency
heads shall not reduce the usual allocations with respect
to any jurisdiction under any of the eligible programs de-
scribed in section 214 because such jurisdiction allocates
funds under this title to any of such programs.
SEC. 214. ELIGIBLE PROGRAMS.
Assistance may be provided under this subtitle for
carrying out the following activities, projects, and pro-
grams:
(1) CRIME AND CRIMINAL JUSTICE.—
(A) Community policing projects and ac-
tivities 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 Dem-
onstration 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 Partner-
ship 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 Commut-
ing Demonstration Program established under
section 286 of this Act.
(3) EDUCATION.—
(A) The programs under the Carl D. Per-
kins Vocational Educational and Applied Tech-
nology Education Act (20 U.S.C. 2301 et seq.).
(B) Projects under the Comprehensive
Child Development Act (42 U.S.C. 9881 et
seq.).
(C) Activities under the Child Care and
Development Block Grant Act of 1990 (42
U.S.C. 9858 et seq.).
(D) The programs under chapter 1 of title
I of the Elementary and Secondary Education
Act of 1965.
(E) The TRIO programs under part A of
title IV of the Higher Education Act of 1965
(20 U.S.C. 1070 et seq.).
(F) The programs under the Adult Edu-
cation Act (20 U.S.C. 1201 et seq.).
(G) Literacy activities authorized under
the National Literacy Act of 1991.
(4) HEALTH, NUTRITION AND FAMILY ASSIST-
ANCE.—
(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 in-
dividuals under criminal justice super-
vision.
(iii) Substance abuse treatment for
pregnant and postpartum women.
(iv) Community prevention grants re-
garding substance abuse.
(v) Substance abuse treatment im-
provement grants.
(C) The programs under title XXVI of the
Public Health Service Act (42 U.S.C. 300ff–21
et seq.).
(D) The family support programs under
subtitle F of title VII of the Stewart B. McKin-
ney 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 re-
source 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
DEVELOP-
MENT.—
(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 mod-
ernization 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 at-
tached 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-Gon-
zalez National Affordable Housing Act (42
U.S.C. 12721 et seq.).
(F) The self-help housing technical assist-
ance 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 sec-
tion 515 of the Housing Act of 1949 (42
U.S.C. 1485).
(I) Rural rental housing assistance pay-
ments 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 sec-
tion 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 sec-
tion 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).
SEC. 215. APPLICATION FOR FUNDING.
(a) ESTABLISHMENT OF APPLICATION PROCESS.—
The interagency council shall establish, by regulation, a
procedure for a single comprehensive application to be
submitted to the council for each tax enterprise zone des-
ignated under section 1391 of the Internal Revenue Code
of 1986 for the purpose of making amounts available
under this subtitle on behalf of such tax enterprise zones.
The interagency council shall provide for the form and
manner of such applications, and shall require the applica-
tions to be made by the State, the unit of local govern-
ment, or the economic or community development corpora-
tion, that submitted the nomination for designation of the
area designated as a tax enterprise zone and submitted
promptly after such designation.
(b) LOCAL COORDINATION.—
(1) PURPOSES.—The interagency council shall
provide that each application under this section shall
be developed in coordination and consultation with a
local coordinating board under paragraph (2), which
shall ensure that the programs, projects, activities,
and services under section 214(1) carried out with
amounts provided under this subtitle are sufficiently
coordinated with the other programs, projects, ac-
tivities, and services assisted under this subtitle, and
that all such programs, projects, activities, and serv-
ices are coordinated with law enforcement efforts
within the area nominated for designation as a tax
enterprise zone.
(2) 
MEMBERSHIP.—The 
local 
coordinating
board referred to in paragraph (1) shall include rep-
resentatives of units of local government within such
area, representatives of law enforcement agencies
having jurisdiction within such area, residents of the
area, community leaders, including local business
persons, bankers, architects and planners, represent-
atives of school boards, and representatives of non-
profit community-based organizations such as com-
munity development corporations and community ac-
tion agencies.
(c) CONTENTS.—Each application under the proce-
dure established under this section shall contain the fol-
lowing information:
(1) A list of the programs referred to under
section 214 for which funding is requested and a
general description of the types of activities to be
carried out with such assistance.
(2) A statement documenting the percentage of
the total amount of any funding received under this
subtitle that will be used for each selected program.
(3) A statement documenting the entities that
will receive any assistance provided for the selected
programs on behalf of the tax enterprise zone and
the entities’ eligibility for such assistance.
(4) A statement documenting the membership
of the local coordinating board organized pursuant
to the requirement under subsection (b) and describ-
ing the coordination between the programs, projects,
activities, and services assisted under this title and
local law enforcement efforts in the tax enterprise
zone.
(5) A request for any waiver of the requirement
under section 213(b)(1) and a statement document-
ing the rationale for such waiver.
(6) A statement documenting any other Fed-
eral, State, and local resources for the community in
which the tax enterprise zone is located that will be
dedicated to the types of programs, projects, activi-
ties, and services to be assisted under this subtitle.
(7) A statement documenting a strong commit-
ment by nonprofit community-based organizations in
the tax enterprise zone for carrying out the selected
programs and similar programs, projects, activities,
and services.
(8) A statement documenting any private sector
resources, including corporate contributions and in-
dividual commitments, to supplement assistance pro-
vided under this subtitle.
(9) A statement documenting the efforts made
by the local jurisdiction containing the tax enterprise
zone to encourage local financial institutions to sat-
isfy their obligations under the Community Reinvest-
ment Act of 1977 (12 U.S.C. 2901 et seq.) by mak-
ing loans to enterprise zone businesses with empha-
sis on startup and other small business concerns (as
defined in section 3(a) of the Small Business Act
(15 U.S.C. 632(a)) and the commitments made by
local financial institutions in response to these ef-
forts.
(10) A statement demonstrating a balanced,
comprehensive plan for the tax enterprise zone, that
addresses public safety, supports drug and crime
prevention, improves health, education and other so-
cial services, and promotes neighborhood revitaliza-
tion through strategies to create jobs and other eco-
nomic opportunities which assist families to become
self sufficient. Such strategies shall include improve-
ments in infrastructure, public facilities, and afford-
able housing opportunities embodying good urban
design and neighborhood planning principles that
contribute to the creation of wholesome and attrac-
tive social, economic, and physical environments.
(11) A statement demonstrating that any
amounts requested for selected programs are part of
an integrated and comprehensive plan for the use of
Federal, State, local, and private resources to ac-
complish specific goals and measurable outcomes for
neighborhood revitalization.
(d) REVIEW.—In reviewing each application submit-
ted under this section, each member of the council shall
review the portion of the application concerning any re-
quest or eligibility for assistance under any selected pro-
gram under the jurisdiction of such member to determine
whether providing assistance under this subtitle pursuant
to such application will comply with the laws and regula-
tions applicable to such program.
(e) APPROVAL AND DISAPPROVAL.—
(1) TIMING.—The council shall review each ap-
plication promptly upon receipt and shall approve or
disapprove the application not later than the expira-
tion of the 30-day period beginning upon such
receipt.
(2) STANDARDS FOR APPROVAL.—The council
shall approve an application if the council deter-
mines that the assistance requested for the selected
programs under the application will assist in the eco-
nomic development of the tax enterprise zone, that
the eligible entities identified in the application are
capable and qualified to receive and administer the
assistance pursuant to the application, and that the
information, documentation, or evidence required
under subsection (c) is sufficient in the determina-
tion of the council.
(3) DISAPPROVAL
AND
RESUBMISSION.—If,
pursuant to review under this section, the council
determines that the application of a tax enterprise
zone is incomplete or unsatisfactory, the council
shall, before the expiration of the period referred to
in paragraph (1)—
(A) notify the entity submitting the appli-
cation of the reasons for the failure to approve
the application;
(B) notify the entity submitting the appli-
cation that the application may be resubmitted
during the period referred to in subparagraph
(C); and
(C) permit such entity to resubmit a cor-
rected or amended application during the 30-
day period beginning on notification under this
paragraph.
(4) REVIEW OF RESUBMITTED APPLICATION.—
The council shall review and approve or disapprove
any application resubmitted under paragraph (3) be-
fore the expiration of the 15-day period beginning
upon such resubmission. Any application resubmit-
ted under paragraph (3) that is disapproved may be
resubmitted before the expiration of the 15-day pe-
riod beginning upon such disapproval and shall be
subject to review under the provisions of this para-
graph.
100
(f) PUBLIC COMMENT.—An applicant under this sec-
tion, in conjunction with the relevant local coordinating
board, shall ensure that there are adequate opportunities
for public comment concerning the application submitted
under this section, including—
(1) furnishing citizens with information con-
cerning the amount of funds available pursuant to
this subtitle and the range of activities that may be
undertaken with such funds;
(2) holding one or more public hearings to ob-
tain the views of citizens on community needs; and
(3) providing citizens with reasonable access to
any application filed pursuant to this section and to
records regarding the use of funds received pursuant
to this subtitle.
SEC. 216. INTERAGENCY COUNCIL.
(a) ESTABLISHMENT.—There is hereby established
an interagency council to provide assistance under this
subtitle.
(b) MEMBERSHIP.—The members of the council shall
be the Secretary of Agriculture, the Secretary of Edu-
cation, the Secretary of Health and Human Services, the
Secretary of Housing and Urban Development, the Sec-
retary of Labor, the Director of the Office of National
Drug Control Policy, the Attorney General of the United
101
States and the Chairperson of the Commission on
National and Community Service.
(c) DUTIES.—The council shall—
(1) review and approve applications submitted
under section 215;
(2) direct the appropriate Federal agency head
to provide assistance under the selected programs
under approved applications using amounts available
pursuant to this subtitle; and
(3) carry out any other responsibilities of the
council as provided under this subtitle.
SEC. 217. DEFINITIONS.
For purposes of this subtitle:
(1) The term ‘‘appropriate Federal agency
head’’ means, with respect to each program referred
to in section 214, the head of the Federal agency or
other Federal official responsible for administering
such program.
(2) The term ‘‘approved application’’ means an
application under section 215 for assistance provided
under this subtitle that is approved by the inter-
agency council and which meets the public comment
requirements under section 215(f).
(3) The term ‘‘eligible entity’’ means, with re-
spect to a selected program under an application
102
under section 215, an entity in the tax enterprise
zone that is eligible to receive and administer
amounts under the program and is designated under
the application to receive and administer amounts
provided for the program pursuant to this subtitle.
(4) The terms ‘‘interagency council’’ and ‘‘coun-
cil’’ mean the interagency council established under
section 216.
(5) The term ‘‘selected program’’ means, with
respect to a tax enterprise zone, any of the programs
identified in an application under section 215 for
which funding under this subtitle is requested.
(6) The term ‘‘tax enterprise zone’’ means an
urban tax enterprise zone or a rural development in-
vestment zone designated under section 1391 of the
Internal Revenue Code of 1986.
SEC. 218. STUDY AND REPORT.
(a) GENERAL STUDY.—The council shall conduct a
study to identify—
(1) any alternative methods or systems for allo-
cation of amounts made available pursuant to this
subtitle among tax enterprise zones; and
(2) any problems experienced in the implemen-
tation and administration of the provisions of this
subtitle, including identification of any provisions of
103
law or regulations relating to the programs referred
to in section 214 for which a waiver would facilitate
carrying out the purposes of this subtitle.
(b) REPORT.—Not later than the expiration of the
1-year period beginning on the date of the enactment of
this Act, the council shall submit to the Congress a report
regarding the study conducted under subsection (a), which
shall include any recommendations for improving the pro-
gram for assistance under this subtitle.
SEC. 219. REGULATIONS.
The council shall issue any regulations necessary to
carry out this subtitle not later than the expiration of the
60-day period beginning on the date of the enactment of
this Act.
Subtitle C—Other Programs
CHAPTER 1—COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM
SEC. 231. WAIVER OF PUBLIC SERVICES CAP UNDER COM-
MUNITY DEVELOPMENT BLOCK GRANT PRO-
GRAM.
Section 105(a)(8) of the Housing and Community
Development Act of 1974 (42 U.S.C. 5305(a)) is amend-
ed—
(1) by inserting ‘‘(A)’’ before ‘‘except that not
more than’’;
104
(2) by inserting ‘‘(i)’’ after ‘‘unless such unit of
local government’’; and
(3) by striking ‘‘higher amount, and’’ and in-
serting the following: ‘‘higher amount, or (ii) is lo-
cated within or contains a tax enterprise zone (as
designated under section 1391 of the Internal Reve-
nue Code of 1986), in which case such unit of gen-
eral 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 commu-
nities, 15 percent statewide) under this title, includ-
ing program income, an additional 15 percent of
such amount of assistance for activities under this
paragraph within such enterprise zone, and (B)’’.
SEC. 232. EMERGENCY COMMUNITY DEVELOPMENT LOAN
GUARANTEE AUTHORITY.
Section 108 of the Housing and Community Develop-
ment Act of 1974 is amended by adding at the end the
following new subsection:
‘‘(q) In addition to amounts provided under sub-
section (a), the Secretary may enter into commitments
during each of the fiscal years 1993 through 1997 to guar-
antee notes and obligations with an aggregate principal
amount in each fiscal year of $2,000,000,000. The guar-
antee authority under this subsection shall be effective
105
only to the extent approved or provided for in appropria-
tions Acts, subject only to the absence of qualified appli-
cants 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 guar-
antee pursuant to authority provided under this sub-
section.’’
CHAPTER 
2—YOUNG 
ADULT 
EMPLOY-
MENT DEMONSTRATION PROGRAM
SEC. 241. ESTABLISHMENT OF YOUNG ADULT EMPLOY-
MENT DEMONSTRATION PROGRAM.
(a) IN GENERAL.—Title IV of the Job Training Part-
nership Act (29 U.S.C. 1671 et seq.) is amended by add-
ing 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 train-
ing 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 enter-
106
prise zones who are not currently served or are un-
derserved by Federal education and job training pro-
grams;
‘‘(3) enable communities located in or contain-
ing 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 comprehen-
sive 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 Em-
ployment 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 de-
livery 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 vil-
107
lage, or migrant or seasonal farmworker
community.
‘‘(2) NUMBER OF GRANTS.—The Secretary may
award not more than 25 grants during the first fis-
cal 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 likeli-
hood 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 ap-
prove an application unless the application contains assur-
ances 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.
108
‘‘SEC. 499K. APPLICATION.
‘‘(a) ELIGIBILITY TO APPLY.—Participating commu-
nities shall be eligible to apply for a Young Adult Employ-
ment Demonstration grant under this part.
‘‘(b) CONTENTS OF APPLICATION.—Each participat-
ing 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 man-
ner 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 propor-
tion 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
109
‘‘(D) eligible youth and young adults par-
ticipating in education, training, and employ-
ment services;
‘‘(3) include supporting goals for the target
area such as increasing security and safety, or re-
ducing 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 commu-
nity will make use of the resources, expertise, and
commitment of institutions of higher education, edu-
cational 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 co-
ordinated 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 participat-
ing community;
‘‘(7) include support services necessary for suc-
cessful participation by eligible youth and young
adults, including child care, transportation, and as-
sistance in resolving personal or family crises such
110
as those related to substance abuse, homelessness,
migration, and family violence;
‘‘(8) include a system of common intake, indi-
vidualized assessment, and case management;
‘‘(9) include an estimate of the expected num-
ber 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 pri-
vate, local government, State and Federal sources
which will be used to achieve the goals of the pro-
gram;
‘‘(11) provide evidence of support for accom-
plishing the stated goals of the participating commu-
nity 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
111
‘‘(12) provide assurances that the target area
includes, to the maximum extent possible, the poor-
est 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 sub-
mitted to the Secretary by—
‘‘(1) the mayor of a city or the chief elected of-
ficial 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 non-
metropolitan 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 ap-
plications for Native American or migrant or sea-
sonal 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—
112
‘‘(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 popu-
lation 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 activi-
ties selected from a set of youth program models
designated by the Secretary or from alternative mod-
els 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;
113
‘‘(G) initiatives aimed at increased rural
student enrollment in post-secondary institu-
tions;
‘‘(H) public-private collaborations to en-
sure 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 appli-
cation;
‘‘(5) the participating community will provide
activities and local resources to promote the goals
specified in the application;
‘‘(6) the participating community shall under-
take 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 under-
114
served by education and training programs, includ-
ing 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 jus-
tice systems;
‘‘(7) the participating community will carry out
special efforts to establish coordination with Federal,
State, or local programs that serve the target popu-
lation; 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 edu-
cation 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—
115
‘‘(1) provide that the program be available to
youth aged 16 to 19 who undertake a commitment
to continue and complete their high school edu-
cation;
‘‘(2) require the grant recipient to guarantee
employment to each youth undertaking that commit-
ment if such youth meets school attendance and per-
formance 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 undertak-
ing of any such youth, which shall include counsel-
ing, 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 employ-
ers, which shall—
‘‘(A) encourage subsidies to employers who
provide advanced or specialized training, or who
provide a structured and integrated learning ex-
perience involving the school and employer; and
‘‘(B) limit the duration of such subsidies to
not more than 1 year;
116
‘‘(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 deter-
mining 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 de-
termined according to the amount to be provided for the
117
program pursuant to designation of the program as a se-
lected 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 pro-
gram.
‘‘(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 contribu-
tion equivalent to such percent (as determined by the Sec-
retary), or a combination thereof.
‘‘SEC. 499O. REPORTING.
‘‘The Secretary is authorized to establish such report-
ing procedures as necessary to carry out the purposes of
this part.
‘‘SEC. 499P. FEDERAL RESPONSIBILITIES.
‘‘(a) ASSISTANCE IN IMPLEMENTATION.—The Sec-
retary shall provide technical assistance in the implemen-
tation 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 re-
siding in target areas, including their rates of school
118
completion, enrollment in advanced education or
training, and employment;
‘‘(2) the extent to which participating commu-
nities fulfilled the goal of guaranteeing access to ap-
propriate education, training, and supportive serv-
ices 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 con-
ducted 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—
119
‘‘(1) 
The 
term 
‘participating 
community’
means—
‘‘(A) a city, when referring to an urban
area that is located within or contains a tax en-
terprise zone;
‘‘(B) a nonmetropolitan county, or contig-
uous nonmetropolitan counties, that is located
within or contains a tax enterprise zone; and
‘‘(C) a section 401 or 402 grantee, or con-
sortia 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 deter-
mined by the Secretary based on the latest Bureau
of the Census estimates, or (B) a migrant or sea-
sonal farmworker community.
‘‘(3) The term ‘target area’ means a high pov-
erty area (or portion thereof), or set of contiguous
high poverty areas, that is located within a tax en-
120
terprise 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 Enter-
prise 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’’.
CHAPTER 3—NATIONAL COMMUNITY
ECONOMIC PARTNERSHIP
SEC. 251. SHORT TITLE; FINDINGS AND PURPOSE.
(a) SHORT TITLE.—This chapter may be cited as the
‘‘National Community Economic Partnership Act of
1993’’.
(b) FINDINGS.—Congress finds that—
(1) the cities, towns, small communities and
rural areas throughout the United States face criti-
cal social and economic problems arising in part
123
(C) a substantial expansion and greater
continuity in the scope of Federal programs
that support community based economic devel-
opment strategies;
(D) the continuing efforts at Federal,
State and local levels to coordinate the plan-
ning, implementation and evaluation of commu-
nity economic development efforts; and
(E) the formation of a national commis-
sion, 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 develop-
ment; 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 develop-
ment program because—
(A) there are currently over 2000 commu-
nity development corporations throughout the
United States, operating projects that promote
community based housing and economic devel-
opment;
124
(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 dis-
tressed communities;
(E) community development corporations
have made loans to over 3000 enterprises, eq-
uity 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.
125
(c) PURPOSE.—It is the purpose of this chapter to
stimulate enterprise development in economically dis-
tressed urban and rural areas through public and private
partnerships facilitated by community development cor-
porations.
PART I—COMMUNITY ECONOMIC
PARTNERSHIP INVESTMENT FUNDS
SEC. 255. PURPOSE.
It is the purpose of this part to increase private in-
vestment in distressed local communities and to build and
expand the capacity of local institutions to better serve
the economic needs of local residents through the provision
of financial and technical assistance to community devel-
opment corporations.
SEC. 256. PROVISION OF ASSISTANCE.
(a) AUTHORITY.—The Secretary of Health and
Human Services (hereafter referred to in this chapter as
the ‘‘Secretary’’) is authorized, in accordance with this
part, to provide nonrefundable lines of credit to commu-
nity development corporations for the establishment,
maintenance or expansion of revolving loan funds to be
utilized to finance projects intended to provide business
and employment opportunities for low-income, unem-
ployed, or underemployed individuals and to improve the
quality of life in urban and rural areas.
126
(b) REVOLVING LOAN FUNDS.—
(1) COMPETITIVE
ASSESSMENT
OF
APPLICA-
TIONS.—In providing assistance under subsection
(a), the Secretary shall establish and implement a
competitive process for the solicitation and consider-
ation of applications from eligible entities for lines of
credit for the capitalization of revolving funds.
(2) ELIGIBLE ENTITIES.—To be eligible to re-
ceive a line of credit under this part an applicant
shall—
(A) be a community development corpora-
tion;
(B) prepare and submit an application to
the Secretary that shall include a strategic in-
vestment plan that identifies and describes the
economic characteristics of the target area to be
served, the types of business to be assisted and
the impact of such assistance on low-income,
underemployed, and unemployed individuals in
the target area;
(C) demonstrate previous experience in the
development of low-income housing or commu-
nity or business development projects in a low-
income community and provide a record of
achievement with respect to such projects; and
127
(D) have secured one or more commit-
ments from local sources for contributions (ei-
ther in cash or in kind, letters of credit or let-
ters of commitment) in an amount that is at
least equal to the amount requested in the ap-
plication submitted under subparagraph (B).
(3) EXCEPTION.—Notwithstanding the provi-
sions of paragraph (2)(D), the Secretary may reduce
local contributions to not less than 25 percent of the
amount of the line of credit requested by the com-
munity development corporation if the Secretary de-
termines such to be appropriate in accordance with
section 260.
SEC. 257. APPROVAL OF APPLICATIONS.
(a) IN GENERAL.—In evaluating applications submit-
ted under section 256(b)(2)(B), the Secretary shall ensure
that—
(1) the residents of the target area to be served
(as identified under the strategic development plan)
would have an income that is less than the median
income for the area (as determined by the Sec-
retary);
(2) the applicant community development cor-
poration possesses the technical and managerial ca-
pability necessary to administer a revolving loan
128
fund and has past experience in the development
and management of housing, community and eco-
nomic development programs;
(3) the applicant community development cor-
poration has provided sufficient evidence of the ex-
istence of good working relationships with—
(A) local businesses and financial institu-
tions, as well as with the community the cor-
poration proposes to serve; and
(B) local and regional job training pro-
grams;
(4) the applicant community development cor-
poration will target job opportunities that arise from
revolving loan fund investments under this part so
that 75 percent of the jobs retained or created under
such investments are provided to—
(A) individuals with—
(i) incomes that do not exceed the
Federal poverty line; or
(ii) incomes that do not exceed 80
percent of the median income of the area;
(B) individuals who are unemployed or un-
deremployed;
(C) individuals who are participating or
have participated in job training programs au-
129
thorized under the Job Training Partnership
Act (29 U.S.C. 1501 et seq.) or the Family
Support Act of 1988 (Public Law 100–485);
(D) individuals whose jobs may be retained
as a result of the provision of financing avail-
able under this part; or
(E) individuals who have historically been
underrepresented in the local economy; and
(5) a representative cross section of applicants
are approved, including large and small community
development corporations, urban and rural commu-
nity development corporations and community devel-
opment corporations representing diverse popu-
lations.
(b) PRIORITY.—In determining which application to
approve under this part the Secretary shall give priority
to those applicants proposing to serve a target area—
(1) with a median income that does not exceed
80 percent of the median for the area (as deter-
mined by the Secretary); and
(2) with a high rate of unemployment, as deter-
mined by the Secretary or in which the population
loss is at least 7 percent from April 1, 1980, to
April 1, 1990, as reported by the Bureau of the
Census.
130
SEC. 258. AVAILABILITY OF LINES OF CREDIT AND USE.
(a) APPROVAL
OF APPLICATION.—The Secretary
shall provide a community development corporation that
has an application approved under section 257 with a line
of credit in an amount determined appropriate by the Sec-
retary, subject to the limitations contained in subsection
(b).
(b) LIMITATIONS ON AVAILABILITY OF AMOUNTS.—
(1) MAXIMUM
AMOUNT.—The Secretary shall
not provide in excess of $2,000,000 in lines of credit
under this part to a single applicant.
(2) PERIOD OF AVAILABILITY.—A line of credit
provided under this part shall remain available over
a period of time established by the Secretary, but in
no event shall any such period of time be in excess
of 3 years from the date on which such line of credit
is made available.
(3) EXCEPTION.—Notwithstanding paragraphs
(1) and (2), if a recipient of a line of credit under
this part has made full and productive use of such
line of credit, can demonstrate the need and demand
for additional assistance, and can meet the require-
ments of section 256(b)(2), the amount of such line
of credit may be increased by not more than
$1,500,000.
131
(c) AMOUNTS DRAWN FROM LINE OF CREDIT.—
Amounts drawn from each line of credit under this part
shall be used solely for the purposes described in section
255 and shall only be drawn down as needed to provide
loans, investments, or to defray administrative costs relat-
ed to the establishment of a revolving loan fund.
(d) USE OF REVOLVING LOAN FUNDS.—Revolving
loan funds established with lines of credit provided under
this part may be used to provide technical assistance to
private business enterprises and to provide financial as-
sistance in the form of loans, loan guarantees, interest re-
duction assistance, equity shares, and other such forms
of assistance to business enterprises in target areas and
who are in compliance with section 257(a)(4).
SEC. 259. LIMITATIONS ON USE OF FUNDS.
(a) MATCHING REQUIREMENT.—Not to exceed 50
percent of the total amount to be invested by an entity
under this part may be derived from funds made available
from a line of credit under this part.
(b) TECHNICAL
ASSISTANCE
AND
ADMINISTRA-
TION.—Not to exceed 10 percent of the amounts available
from a line of credit under this part shall be used for the
provision of training or technical assistance and for the
planning, development, and management of economic de-
velopment projects. Community development corporations
132
shall be encouraged by the Secretary to seek technical as-
sistance from other community development corporations,
with expertise in the planning, development and manage-
ment of economic development projects. The Secretary
shall assist in the identification and facilitation of such
technical assistance.
(c) LOCAL AND PRIVATE SECTOR CONTRIBUTIONS.—
To receive funds available under a line of credit provided
under this part, an entity, using procedures established
by the Secretary, shall demonstrate to the community de-
velopment corporation that such entity agrees to provide
local and private sector contributions in accordance with
section 256(b)(2)(D), will participate with such commu-
nity development corporation in a loan, guarantee or in-
vestment program for a designated business enterprise,
and that the total financial commitment to be provided
by such entity is at least equal to the amount to be drawn
from the line of credit.
(d) USE OF PROCEEDS FROM INVESTMENTS.—Pro-
ceeds derived from investments made using funds made
available under this part may be used only for the pur-
poses described in section 255 and shall be reinvested in
the community in which they were generated.