I
103D CONGRESS
1ST SESSION
H. R. 15
To amend the Internal Revenue Code of 1986 to provide tax incentives
to encourage community development in enterprise zones, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. RANGEL introduced the following bill; which was referred jointly to the
Committees on Ways and Means, Education and Labor, Energy and
Commerce, and Banking, Finance and Urban Affairs
A BILL
To amend the Internal Revenue Code of 1986 to provide
tax incentives to encourage community development in
enterprise zones, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Enterprise Zone Community Development Act of 1993’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—
Sec. 1. Short title; etc.
TITLE I—URBAN TAX ENTERPRISE ZONES AND RURAL
DEVELOPMENT INVESTMENT ZONES
Sec. 101. Statement of purpose.
Subtitle A—Designation and Tax Incentives
Sec. 102. Designation and treatment of urban tax enterprise zones and rural
development investment zones.
Sec. 103. Technical and conforming amendments.
Sec. 104. Effective date.
Subtitle B—Redevelopment Bonds for Tax Enterprise Zones
Sec. 111. Special rules for redevelopment bonds providing financing for tax en-
terprise zones.
Subtitle C—Expansion of Targeted Jobs Credit
Sec. 121. Economically disadvantaged zone residents included as members of
targeted group.
Subtitle D—Credit for Contributions to Certain Community Development
Corporations
Subtitle E—Report on Number of Areas Meeting Enterprise Zone Criteria
Sec. 141. Report.
TITLE II—AUTHORIZATION FOR ADDITIONAL ASSISTANCE TO
DISTRESSED COMMUNITIES
Subtitle A—National Public-Private Partnership Programs
Sec. 201. National public-private partnership programs.
Subtitle B—Block Grant Funding for Eligible Programs
Sec. 211. Authorization of appropriations.
Sec. 212. Allocation of amounts among tax enterprise zones.
Sec. 213. Use of amounts.
Sec. 214. Eligible programs.
Sec. 215. Application for funding.
Sec. 216. Interagency Council.
Sec. 217. Definitions.
Sec. 218. Study and report.
Sec. 219. Regulations.
Subtitle C—Other Programs
CHAPTER 1—COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
Sec. 231. Waiver of public services cap under community development block
grant program.
Sec. 232. Emergency community development loan guarantee authority.
CHAPTER 2—YOUNG ADULT EMPLOYMENT DEMONSTRATION PROGRAM
Sec. 241. Establishment of young adult employment demonstration program.
CHAPTER 3—NATIONAL COMMUNITY ECONOMIC PARTNERSHIP
Sec. 251. Short title; findings and purpose.
PART I—COMMUNITY ECONOMIC PARTNERSHIP
INVESTMENT FUNDS
Sec. 255. Purpose.
Sec. 256. Provision of assistance.
Sec. 257. Approval of applications.
Sec. 259. Limitations on use of funds.
Sec. 260. Program priority for special emphasis programs.
PART II—EMERGING COMMUNITY DEVELOPMENT
CORPORATIONS
Sec. 265. Community development corporation improvement grants.
Sec. 266. Emerging community development corporation revolving loan funds.
PART III—RESEARCH AND DEMONSTRATION
Sec. 271. Research and demonstration.
PART IV—MISCELLANEOUS PROVISIONS
Sec. 275. Joint programs.
Sec. 276. Reports.
Sec. 277. Definitions.
Sec. 278. Authorization of appropriations.
Sec. 279. Prohibition.
Sec. 280. Effective date.
CHAPTER 4—MISCELLANEOUS PROGRAMS
Sec. 285. Establishment of enterprise capital access fund.
Sec. 286. Access to jobs/reverse commuting demonstration program.
Sec. 287. Study of insurance availability in central cities and distressed urban
areas.
TITLE 
I—URBAN 
TAX 
ENTER-
PRISE ZONES AND RURAL DE-
VELOPMENT 
INVESTMENT
ZONES
SEC. 101. STATEMENT OF PURPOSE.
It is the purpose of this title to establish a demonstra-
tion program of providing incentives for the creation of
tax enterprise zones in order—
(1) to revitalize economically and physically dis-
tressed areas, primarily by encouraging the forma-
tion of new businesses and the retention and expan-
sion of existing businesses,
(2) to promote meaningful employment for tax
enterprise zone residents, and
(3) to encourage individuals to reside in the tax
enterprise zones in which they are employed.
Subtitle A—Designation and Tax
Incentives
SEC. 102. DESIGNATION AND TREATMENT OF URBAN TAX
ENTERPRISE ZONES AND RURAL DEVELOP-
MENT INVESTMENT ZONES.
(a) IN GENERAL.—Chapter 1 (relating to normal
taxes and surtaxes) is amended by inserting after sub-
chapter T the following new subchapter:
‘‘Subchapter U—Designation and Treatment
of Tax Enterprise Zones
‘‘Part I. Designation of tax enterprise zones.
‘‘Part II. Incentives for tax enterprise zones.
‘‘PART I—DESIGNATION OF TAX ENTERPRISE
ZONES
‘‘Sec. 1391. Designation procedure.
‘‘Sec. 1392. Eligibility and selection criteria.
‘‘Sec. 1393. Definitions and special rules.
‘‘SEC. 1391. DESIGNATION PROCEDURE.
‘‘(a) IN GENERAL.—For purposes of this title, the
term ‘tax enterprise zone’ means any area which is, under
this part—
‘‘(1) nominated by 1 or more local governments
and the State in which it is located for designation
as a tax enterprise zone, and
‘‘(2) designated by—
‘‘(A) the Secretary of Housing and Urban
Development in the case of an urban tax enter-
prise zone, or
‘‘(B) the Secretary of Agriculture, in con-
sultation with the Secretary of Commerce, in
the case of a rural development investment
zone.
‘‘(b) NUMBER OF DESIGNATIONS.—
‘‘(1) AGGREGATE LIMIT.—The appropriate Sec-
retaries may designate in the aggregate 150 nomi-
nated areas as tax enterprise zones under this sec-
tion, subject to the availability of eligible nominated
areas. Not more than 50 large city zones may be
designated; not more than 50 other urban zones may
be designated; and not more than 50 rural develop-
ment investment zones may be designated. Such des-
ignations may be made only during calendar years
after 1992 and before 1999.
‘‘(2) ANNUAL LIMITS.—
‘‘(A) 1993.—During 1993, the number of
urban tax enterprise zones designated under
paragraph (1) shall not exceed 8, and the num-
ber of rural development investment zones des-
ignated under paragraph (1) shall not exceed 8.
‘‘(B) AFTER 1993.—As of the close of
each calendar year after 1993, the number of
urban tax enterprise zones and rural develop-
ment investment zones shall not exceed the
numbers determined in accordance with the fol-
lowing table:
‘‘As of the close of:
The maximium number is:
Urban tax enter-
prise zones
Rural develop-
ment investment
zones
1993
1994
1995
1996
1997
‘‘(3) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) LARGE CITY ZONE.—The term ‘large
city zone’ means any urban tax enterprise zone
located in a city having a population (as deter-
mined by the most recent census data available)
of at least 600,000.
‘‘(B) OTHER
URBAN
ZONE.—The term
‘other urban zone’ means any urban tax enter-
prise zone not located in a city described in
clause (i).
‘‘(4) ADVANCE
DESIGNATIONS
PERMITTED.—
For purposes of this subchapter, a designation dur-
ing any calendar year shall be treated as made on
January 1 of the following calendar year if the ap-
propriate Secretary, in making such designation,
specifies that such designation is effective as of such
January 1.
‘‘(c) LIMITATIONS ON DESIGNATIONS.—The appro-
priate Secretary may not make any designation under sub-
section (a) unless—
‘‘(1) the local governments and the State in
which the nominated area is located have the au-
thority—
‘‘(A) to nominate the area for designation
as a tax enterprise zone, and
‘‘(B) to provide assurances satisfactory to
the appropriate Secretary that the commit-
ments under section 1392(c) will be fulfilled,
‘‘(2) a nomination of the area is submitted
within a reasonable time before the calendar year for
which designation as a tax enterprise zone is sought
(or, if later, a reasonable time after the date of the
enactment of this subchapter),
‘‘(3) the appropriate Secretary determines that
any information furnished is reasonably accurate,
and
‘‘(4) the State and local governments certify
that no portion of the area nominated is already in-
cluded in a tax enterprise zone.
‘‘(d) PERIOD FOR WHICH DESIGNATION IS IN EF-
FECT.—
‘‘(1) IN GENERAL.—Any designation of an area
as a tax enterprise zone shall remain in effect during
the period beginning on the date of the designation
and ending on the earliest of—
‘‘(A) December 31 of the 15th calendar
year following the calendar year in which such
date occurs,
‘‘(B) the termination date designated by
the State and local governments as provided for
in their nomination, or
‘‘(C) the date the appropriate Secretary re-
vokes the designation under paragraph (2).
‘‘(2) REVOCATION OF DESIGNATION.—
‘‘(A) IN GENERAL.—The appropriate Sec-
retary shall revoke the designation of an area
as a tax enterprise zone if such Secretary deter-
mines that the local government or the State in
which it is located—
‘‘(i) has modified the boundaries of
the area, or
‘‘(ii) is not complying substantially
with the State and local commitments pur-
suant to section 1392(c).
‘‘(B) APPLICABLE PROCEDURES.—A des-
ignation may be revoked by the appropriate
Secretary under subparagraph (A) only after a
hearing on the record involving officials of the
State or local government involved.
‘‘SEC. 1392. ELIGIBILITY AND SELECTION CRITERIA.
‘‘(a) IN GENERAL.—The appropriate Secretary may
make a designation of any nominated area under section
1391 only on the basis of the eligibility and selection cri-
teria set forth in this section.
‘‘(b) ELIGIBILITY CRITERIA.—
‘‘(1) URBAN TAX ENTERPRISE ZONES.—A nom-
inated area which is not a rural area shall be eligible
for designation under section 1391 only if it meets
the following criteria:
‘‘(A) POPULATION.—The nominated area
has a population (as determined by the most re-
cent census data available) of not less than
4,000.
‘‘(B) DISTRESS.—The nominated area is
one of pervasive poverty, unemployment, and
general distress.
‘‘(C) SIZE.—The nominated area—
‘‘(i) does not exceed 20 square miles,
‘‘(ii) has a boundary which is continu-
ous, or consists of not more than 3 non-
contiguous parcels within the same metro-
politan area,
‘‘(iii) is located entirely within 1
State, and
‘‘(iv) does not include any portion of
a central business district (as such term is
used for purposes of the most recent Cen-
sus of Retail Trade).
‘‘(D) UNEMPLOYMENT RATE.—The unem-
ployment rate (as determined by the appro-
priate available data) is not less than 1.5 times
the national unemployment rate.
‘‘(E) POVERTY
RATE.—The poverty rate
(as determined by the most recent census data
available) for not less than 90 percent of the
population census tracts (or where not tracted,
the equivalent county divisions as defined by
the Bureau of the Census for the purposes of
defining poverty areas) within the nominated
area is not less than 20 percent.
‘‘(F) COURSE OF ACTION.—There has been
adopted for the nominated area a course of ac-
tion which meets the requirements of subsection
(c).
‘‘(2) 
RURAL
DEVELOPMENT
INVESTMENT
ZONES.—A nominated area which is a rural area
shall be eligible for designation under section 1391
only if it meets the following criteria:
‘‘(A) POPULATION.—The nominated area
has a population (as determined by the most re-
cent census data available) of not less than
1,000.
‘‘(B) DISTRESS.—The nominated area is
one of general distress.
‘‘(C) SIZE.—The nominated area—
‘‘(i)(I) does not exceed 10,000 square
miles, or
‘‘(II) consists of areas within not
more than 4 contiguous counties,
‘‘(ii) has a boundary which is continu-
ous, or consists of not more than 3 non-
contiguous parcels, and
‘‘(iii) is located entirely within 1
State.
‘‘(D) ADDITIONAL
CRITERIA.—Not less
than 2 of the following criteria:
‘‘(i) UNEMPLOYMENT RATE.—The cri-
terion set forth in paragraph (1)(D).
‘‘(ii) POVERTY
RATE.—The criterion
set forth in paragraph (1)(E).
‘‘(iii) JOB
LOSS.—The amount of
wages attributable to employment in the
area, and subject to tax under section
3301 during the preceding calendar year,
is not more than 95 percent of such wages
during the 5th preceding calendar year.
‘‘(iv) 
OUT-MIGRATION.—The 
popu-
lation of the area decreased (as determined
by the most recent census data available)
by 10 percent or more between 1980 and
1990.
‘‘(E) COURSE OF ACTION.—There has been
adopted for the nominated area a course of ac-
tion which meets the requirements of subsection
(c).
‘‘(c) REQUIRED STATE AND LOCAL COURSE OF AC-
TION.—
‘‘(1) IN GENERAL.—No nominated area may be
designated as a tax enterprise zone unless the local
government and the State in which it is located
agree in writing that, during any period during
which the area is a tax enterprise zone, the govern-
ments will follow a specified course of action de-
signed to reduce the various burdens borne by em-
ployers or employees in the area.
‘‘(2) COURSE OF ACTION.—The course of action
under paragraph (1) may be implemented by both
governments and private nongovernmental entities,
may not be funded from proceeds of any Federal
program (other than discretionary proceeds), and
may include—
‘‘(A) a certification by the State insurance
commissioner (or similar State official) that
basic commercial property insurance of a type
comparable to that insurance generally in force
in urban or rural areas, whichever is applicable,
throughout the State is available to businesses
within the tax enterprise zone,
‘‘(B) a reduction of tax rates or fees apply-
ing within the tax enterprise zone,
‘‘(C) an increase in the level, or efficiency
of delivery, of local public services within the
tax enterprise zone,
‘‘(D) actions to reduce, remove, simplify,
or streamline government paperwork require-
ments applicable within the tax enterprise zone,
‘‘(E) the involvement in the program by
public authorities or private entities, organiza-
tions, neighborhood associations, and commu-
nity groups, particularly those within the nomi-
nated area, including a written commitment to
provide jobs and job training for, and technical,
financial, or other assistance to, employers, em-
ployees, and residents of the nominated area,
‘‘(F) the giving of special preference to
contractors owned and operated by members of
any socially and economically disadvantaged
group (within the meaning of section 8(a) of
the Small Business Act (15 U.S.C. 637(a)),
‘‘(G) the gift (or sale at below fair market
value) of surplus land in the tax enterprise zone
to neighborhood organizations agreeing to oper-
ate a business on the land,
‘‘(H) the establishment of a program
under which employers within the tax enterprise
zone may purchase health insurance for their
employees on a pooled basis,
‘‘(I) the establishment of a program to en-
courage local financial institutions to satisfy
their obligations under the Community Rein-
vestment Act of 1977 (12 U.S.C. 2901 et seq.)
by making loans to enterprise zone businesses,
with emphasis on startup and other small-busi-
ness concerns (as defined in section 3(a) of the
Small Business Act (15 U.S.C. 632(a)),
‘‘(J) the giving of special preference to
qualified low-income housing projects located in
tax enterprise zones, in the allocation of the
State housing credit ceiling applicable under
section 42, and
‘‘(K) the giving of special preference to fa-
cilities located in tax enterprise zones, in the al-
location of the State ceiling on private activity
bonds applicable under section 146.
‘‘(3) RECOGNITION
OF
PAST
EFFORTS.—In
evaluating courses of action agreed to by any State
or local government, the appropriate Secretary shall
take into account the past efforts of the State or
local government in reducing the various burdens
borne by employers and employees in the area in-
volved.
‘‘(4) PROHIBITION OF ASSISTANCE FOR BUSI-
NESS RELOCATIONS.—
‘‘(A) IN GENERAL.—The course of action
implemented under paragraph (1) may not in-
clude any action to assist any establishment in
relocating from 1 area to another area.
‘‘(B) EXCEPTION.—The limitation estab-
lished in subparagraph (A) shall not be con-
strued to prohibit assistance for the expansion
of an existing business entity through the estab-
lishment of a new branch, affiliate, or subsidi-
ary if—
‘‘(i) the establishment of the new
branch, affiliate, or subsidiary will not re-
sult in an increase in unemployment in the
area of original location or in any other
area where the existing business entity
conducts business operations, and
‘‘(ii) there is no reason to believe that
the new branch, affiliate, or subsidiary is
being established with the intention of clos-
ing down the operations of the existing
business entity in the area of its original
location or in any other area where the ex-
isting business entity conducts business op-
erations.
‘‘(d) SELECTION CRITERIA.—From among the nomi-
nated areas eligible for designation under subsection (b)
by the appropriate Secretary, such appropriate Secretary
shall make designations of tax enterprise zones on the
basis of the following factors (each of which is to be given
equal weight):
‘‘(1) STATE AND LOCAL COMMITMENTS.—The
strength and quality of the commitments which have
been promised as part of the course of action rel-
ative to the fiscal ability of the nominating State
and local governments.
‘‘(2) IMPLEMENTATION
OF
COURSE
OF
AC-
TION.—The effectiveness and enforceability of the
guarantees that the course of action will actually be
carried out, including the specificity with which the
commitments under paragraph (1) are described in
order that the applicable Secretary will be better
able 
to 
determine 
annually 
under 
section
1391(d)(2)(A)(ii) whether the commitments are
being carried out.
‘‘(3) PRIVATE
COMMITMENTS.—The level of
commitments by private entities of additional re-
sources and contributions to the economy of the
nominated area, including the creation of new or ex-
panded business activities.
‘‘(4) AVERAGE RANKINGS.—The average rank-
ing with respect to—
‘‘(A) the criteria set forth in subpara-
graphs (D) and (E) of subsection (b)(1), in the
case of an area which is not a rural area, or
‘‘(B) the 2 criteria set forth in subsection
(b)(2)(D) that give the area a higher average
ranking, in the case of a rural area.
‘‘(5) REVITALIZATION POTENTIAL.—The poten-
tial for the revitalization of the nominated area as
a result of zone designation, taking into account
particularly the number of jobs to be created and re-
tained.
‘‘SEC. 1393. DEFINITIONS AND SPECIAL RULES.
‘‘For purposes of this subchapter—
‘‘(1) URBAN
TAX
ENTERPRISE
ZONE.—The
term ‘urban tax enterprise zone’ means a tax enter-
prise zone which meets the requirements of section
1392(b)(1).
‘‘(2) 
RURAL
DEVELOPMENT
INVESTMENT
ZONE.—The term ‘rural development investment
zone’ means a tax enterprise zone which meets the
requirements of section 1392(b)(2).
‘‘(3) GOVERNMENTS.—If more than 1 local gov-
ernment seeks to nominate an area as a tax enter-
prise zone, any reference to, or requirement of, this
subchapter shall apply to all such governments.
‘‘(4) LOCAL
GOVERNMENT.—The term ‘local
government’ means—
‘‘(A) any county, city, town, township, par-
ish, village, or other general purpose political
subdivision of a State, and
‘‘(B) any combination of political subdivi-
sions described in subparagraph (A) recognized
by the appropriate Secretary.
‘‘(f) COORDINATION WITH INSTALLMENT METHOD
REPORTING.—This section shall not apply to any gain
from any installment sale (as defined in section 453(b))
if section 453(a) applies to such sale.
‘‘(g) STATUTE OF LIMITATIONS.—If any gain is real-
ized by the taxpayer on any sale or exchange to which
an election under this section applies, then—
‘‘(1) the statutory period for the assessment of
any deficiency with respect to such gain shall not ex-
pire before the expiration of 3 years from the date
the Secretary is notified by the taxpayer (in such
manner as the Secretary may by regulations pre-
scribe) of—
‘‘(A) the taxpayer’s cost of purchasing any
qualified zone replacement asset,
‘‘(B) the taxpayer’s intention not to pur-
chase qualified zone replacement asset within
the reinvestment period, or
‘‘(C) a failure to make such purchase with-
in the reinvestment period, and
‘‘(2) such deficiency may be assessed before the
expiration of such 3-year period notwithstanding the
provisions of any law or rule of law which would oth-
erwise prevent such assessment.