SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural Opportunity Communities Act of 
1998''.

SEC. 2. FUNDING ENTITLEMENT FOR RURAL OPPORTUNITY COMMUNITIES AND 
              ADDITIONAL ENTERPRISE ZONES.

    (a) Entitlement.--Paragraph (1) of section 2007(a) of the Social 
Security Act (42 U.S.C. 1397f(a)) is amended--
            (1) in subparagraph (A), by striking ``in the State; and'' 
        and inserting ``in the State designated pursuant to section 
        1391(b) of the Internal Revenue Code of 1986;'',
            (2) in subparagraph (B), by striking the period at the end 
        and inserting a semicolon, and
            (3) by adding at the end the following new subparagraphs:
    ``(C) 2 grants under this section for each rural opportunity 
community in the State designated pursuant to section 3 of the Rural 
Opportunity Communities Act of 1998; and
    ``(D) 10 grants under this section for each qualified empowerment 
zone in the State designated pursuant to section 1391(g) of such 
Code.''.
    (b) Amount of Grants.--Paragraph (2) of section 2007(a) of such Act 
(42 U.S.C. 1397f(a)) is amended--
            (1) in the heading of subparagraph (A), by striking 
        ``Empowerment'' and inserting ``Original empowerment'',
            (2) in subparagraph (A), in the matter preceding clause 
        (i), by inserting ``described in paragraph (1)(A)'' after 
        ``empowerment zone'',
            (3) by redesignating subparagraph (C) as subparagraph (E), 
        and
            (4) by inserting after subparagraph (B) the following new 
        subparagraphs:
                    ``(C) Rural opportunity communities.--The amount of 
                each grant to a State made under this section for each 
                rural opportunity community described in paragraph 
                (1)(C) is $1,000,000, multiplied by the proportion of 
                the population of the community that resides in that 
                State.
                    ``(D) Additional empowerment grants.--The amount of 
                each grant to a State made under this section for a 
                qualified empowerment zone described in paragraph 
                (1)(D) shall be--
                            ``(i) if the zone is designated in an urban 
                        area, $10,000,000, or
                            ``(ii) if the zone is designated in a rural 
                        area, $3,600,000,
                multiplied by the proportion of the population of the 
                zone that resides in that State.''.
    (c) Timing of Grants.--Paragraph (3) of section 2007(a) of such Act 
(42 U.S.C. 1397f(a)) is amended--
            (1) in the heading of subparagraph (A) by striking 
        ``Qualified'' and inserting ``Original qualified'',
            (2) in subparagraph (A), in the matter preceding clause 
        (i), by inserting ``described in paragraph (1)(A)'' after 
        ``empowerment zone'', and
            (3) by adding at the end the following new subparagraphs:
                    ``(C) Rural opportunity communities.--With respect 
                to each rural opportunity community described in 
                paragraph (1)(C), the Secretary shall make 1 grant 
                under this subsection to the State (or, if applicable, 
                to the governing body of the Indian tribe or tribal 
                organization of the area) in which the rural 
                opportunity community lies--
                            ``(i) on the date of the designation of the 
                        community under section 3 of the Rural 
                        Opportunity Communities Act of 1998; and
                            ``(ii) on the first day of the first fiscal 
                        year that begins after such date of 
                        designation.
                    ``(D) Additional qualified empowerment zones.--With 
                respect to each qualified empowerment zone described in 
                paragraph (1)(D), the Secretary shall make 1 grant 
                under this subsection to the State (or, if applicable, 
                to the governing body of the Indian tribe or tribal 
                organization of the area) in which the zone lies--
                            ``(i) on the date of the designation of the 
                        zone under such part I; and
                            ``(ii) on the first day of each of the nine 
                        fiscal years that begin after such date of 
                        designation.''.
    (d) Funding.--Paragraph (4) of section 2007(a) of such Act (42 
U.S.C. 1397f(a)) is amended--
            (1) by redesignating the matter following the caption as 
        subparagraph (A), by indenting such matter, and by moving such 
        matter 2 ems to the right,
            (2) by inserting ``Original grants.--'' after the 
        subparagraph designation ``(A)'',
            (3) in subparagraph (A), as so redesignated, by inserting 
        before the period ``for empowerment zones and enterprise 
        communities described in subparagraphs (A) and (B) of paragraph 
        (1)'', and
            (4) by adding at the end the following new subparagraph:
                    ``(B) Additional grants.--$1,700,000,000 shall be 
                made available to the Secretary under this section 
                for--
                            ``(i) grants for rural opportunity 
                        communities described in paragraph (1)(C), and
                            ``(ii) grants for empowerment zones 
                        described in paragraph (1)(D).''.

SEC. 3. RURAL OPPORTUNITY COMMUNITIES.

    (a) Definitions.--For purposes of this section--
            (1) Lead managing entity.--The term ``lead managing 
        entity'' means a nonprofit community-based organization or unit 
        of general purpose local government (including an Indian tribal 
        governmental body), as determined by the Secretary.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
    (b) Designation.--The Secretary may designate not more than 10 
rural opportunity communities under this section.
    (c) Eligible Areas.--
            (1) Location.--An area designated as a rural opportunity 
        community under this section must include--
                    (A) except as provided in subparagraph (B), the 
                entire area of at least 1, but not more than 4, rural 
                contiguous counties (or, if applicable, parishes or 
                State boroughs), as determined by the Secretary; and
                    (B) in the case of a community located in an Indian 
                reservation, the entire area of such reservation.
            (2) Economic distress.--An area designated as a rural 
        opportunity community under this section must demonstrate 
        economic distress resulting from any of the following factors 
        during the most recent 5-year time period: poverty, 
        unemployment, underemployment, major industry disruption, 
        Department of Defense base closings, or other factors as 
        determined appropriate by the Secretary.
            (3) Limitation on designations.--No area may be designated 
        under this section unless the lead managing entity certifies 
        that no portion of the area nominated is already included in an 
        empowerment zone or in an enterprise community or in an area 
        otherwise nominated to be designated under section 1391 of the 
        Internal Revenue Code of 1986.
    (d) Application.--
            (1) In general.--Applications for designation of an area as 
        a rural opportunity community shall be prepared by the lead 
        managing entity and submitted to the Secretary.
            (2) Required items.--No area may be designated under this 
        section unless the application for designation--
                    (A) demonstrates that the nominated area satisfies 
                the eligibility criteria described in this section; and
                    (B) includes a 10-year strategic plan for 
                accomplishing the purposes of this section that--
                            (i) describes the coordinated economic, 
                        human, community, and physical development plan 
                        and related activities proposed for the 
                        nominated area;
                            (ii) describes the process by which the 
                        affected community is a full partner in the 
                        process of developing and implementing the plan 
                        and the extent to which local institutions and 
                        organizations have contributed to the planning 
                        process;
                            (iii) identifies the sources of local, 
                        tribal, and private resources that will be 
                        available in the nominated area and the 
                        private/public partnerships to be used, which 
                        may include participation by, and cooperation 
                        with, universities, medical centers, and other 
                        private and public entities;
                            (iv) identifies baselines, methods, and 
                        benchmarks for measuring the success of 
                        carrying out the strategic plan, in accordance 
                        with criteria established by the Secretary, 
                        including the extent to which persons and 
                        families will be empowered to become 
                        economically self-sufficient; and
                            (v) does not include any action to assist 
                        any establishment in relocating from 1 area 
                        outside the nominated area to the nominated 
                        area, except that assistance for the expansion 
                        of an existing business entity through the 
                        establishment of a new branch, affiliate, or 
                        subsidiary is permitted if--
                                    (I) the establishment of the new 
                                branch, affiliate, or subsidiary will 
                                not result in a decrease in employment 
                                in the area of original location or in 
                                any other area where the existing 
                                business entity conducts business 
                                operations; and
                                    (II) there is no reason to believe 
                                that the new branch, affiliate, or 
                                subsidiary is being established with 
                                the intention of closing down the 
                                operations of the existing business 
                                entity in the area of its original 
                                location or in any other area where the 
                                existing business entity conducts 
                                business operations; and
                            (vi) includes such other information as may 
                        be required by the Secretary.
    (e) Period for Designation.--
            (1) In general.--A designation made under this section must 
        be made by the Secretary before January 1, 2000.
            (2) Revocation of a designation.--The Secretary may revoke 
        the designation under this section of an area if the Secretary 
        determines that the applicable lead managing entity--
                    (A) has modified the boundaries of the area; or
                    (B) is not complying substantially with or fails to 
                make progress in achieving the benchmarks set forth in, 
                the strategic plan under subsection (d)(2)(B).

SEC. 4. RECOGNITION AND INCENTIVES FOR WELL PERFORMING ENTERPRISE 
              COMMUNITIES.

    (a) Priority Given to Well Performing Enterprise Communities.--
Subparagraph (D) of section 1391(g)(3) of the Internal Revenue Code of 
1986 (relating to modifications to eligibility criteria, etc.) is 
amended to read as follows:
                    ``(D) Previously designated enterprise communities 
                may be included.--
                            ``(i) In general.--Subsection (e)(5) shall 
                        not apply to any enterprise community 
                        designated under subsection (a) that is also 
                        nominated for designation under this 
                        subsection.
                            ``(ii) Priority.--In ranking nominations 
                        for designation as an empowerment zone under 
                        paragraph (1), the appropriate Secretary may, 
                        in such Secretary's discretion, give additional 
                        points in the designation process for any 
                        nominated area if such area includes a well-
                        performing enterprise community.''.
    (b) Recognition of Well Performing Empowerment Zones and Enterprise 
Communities.--Section 1391 of the Internal Revenue Code of 1986 
(relating to designation procedure) is amended by adding at the end the 
following new subsection:
    ``(h) Recognition of Well Performing Empowerment Zones and 
Enterprise Communities.--For purposes of subsection (g)--
            ``(1) In general.--The appropriate Secretary shall--
                    ``(A) recognize annually the well performing 
                empowerment zones and enterprise communities, and
                    ``(B) disseminate the best practices of the well 
                performing empowerment zones and enterprise communities 
                to other designated empowerment zones and enterprise 
                communities.
            ``(2) Well performing empowerment zone and enterprise 
        community.--The terms `well performing empowerment zone' and 
        `well performing enterprise community' mean an empowerment zone 
        or an enterprise community, as the case may be, that, as of the 
        end of the applicable period of evaluation, has completed or 
        made substantial progress in the implementation of the 
        strategic plan submitted in the application for designation as 
        an empowerment zone or an enterprise community under this 
        section, as determined by the appropriate Secretary.''.
    (c) Additional Funding for Urban Empowerment Zones and Enterprise 
Communities Demonstrating Satisfactory Performance.--
            (1) Source of funding.--Notwithstanding any other provision 
        of law, the Secretary of Health and Human Services shall set 
        aside 10 percent of the amounts otherwise made available for 
        urban empowerment zones after the date of the enactment of this 
        Act under title XX of the Social Security Act (42 U.S.C. 1397 
        et seq.) or under any other provision of law, and such amount 
        set aside shall be used as provided under paragraphs (2) and 
        (3).
            (2) Distribution of funds.--The Secretary of Health and 
        Human Services shall, at the direction of the Secretary of 
        Housing and Urban Development, make funds available to any 
        urban empowerment zone or enterprise community from the amount 
        set aside under paragraph (1), if the Secretary of Housing and 
        Urban Development determines that such zone or community has 
        completed or made satisfactory progress in the implementation 
        of its approved strategic plan.
            (3) Use of funds.--Amounts distributed under paragraph (2) 
        shall be used by an urban empowerment zone or enterprise 
        community to continue to implement its approved strategic plan.
Output: Rural Opportunity Communities Act of 1998 - Amends title XX (Block Grants to States for Social Services) of the Social Security Act (SSA) to entitle each State to Federal grants for:  (1) each rural opportunity community in the State designated pursuant to this Act; and (2) each additional qualified empowerment zone in the State designated pursuant to the Taxpayer Relief Act of 1997.  Specifies a formula for the amount of each grant, with separate base amounts for empowerment zones in urban or rural areas.  Provides funding for the additional grants made available by this Act. 
Authorizes the Secretary of Agriculture to designate up to ten rural opportunity communities. 
Sets forth the criteria an area must meet to be designated as a rural opportunity community, including that the area must demonstrate economic distress resulting from poverty or certain other factors during the most recent five-year time period. 
Amends the Internal Revenue Code to provide that well-performing empowerment zones and enterprise communities:  (1) may be given additional points in the designation process; and (2) shall be recognized annually, and their best practices disseminated to other designated empowerment zones and enterprise communities. 
Directs the Secretary of Health and Human Services to set aside ten percent of amounts otherwise made available for urban empowerment zones for use by any urban empowerment zone or enterprise community that the Secretary of Housing and Urban Development determines has completed or made satisfactory progress in implementing its approved ten year strategic plan.