Congress has long had an interest in the revitalization of distressed areas through expanded business and employment opportunities. This interest continues today, with combined federal government expenses of $10.9 billion and $5.1 billion in foregone tax revenue in FY2009 for the purpose of community and regional development. Given this commitment towards the goal of economic development, it is natural to ask about the effectiveness of the underlying programs. Empowerment Zones (EZs), Enterprise Communities (ECs), and Renewal Communities (RCs) are federally designated geographic areas characterized by high levels of poverty and economic distress, where businesses and local governments may be eligible to receive federal grants and tax incentives. The objective of this report is to provide a comparative overview of the similarities and differences among the three programs, specifically policies to target and provide federal incentives to economically distressed zones. The report also examines studies that have evaluated the impact of EZs, ECs, and RCs, and provides information on their current status. Finally, the report discusses recent legislative activity and congressional issues and options. Since 1993, Congress has authorized three rounds of EZs (1993, 1997, 1999), two rounds of ECs (1993, 1997), and one round of RCs (2000) with the objective of revitalizing selected economically distressed communities. In addition, Round I contained a supplemental round established by the Clinton Administration. The three programs have different benefits and eligibility criteria. For example, the nine initial EZs each received tax incentives and grants of $100 million (urban) and $40 million (rural), whereas the 95 initial ECs each received tax benefits and smaller grants of $2.95 million for smaller urban counties and rural communities. RCs did not receive grants, but benefitted from wage credits, and tax investment incentives. Eligibility varied depending on levels of population, unemployment, and poverty. In its FY2010 and FY2011 budgets, the Administration requested that Congress extend tax incentives for EZs and RCs until December 31, 2010 and 2011. EZ and RC tax incentives were extended in the Emergency Economic Stabilization Act of 2008 ( P.L. 110-343 ), through December 31, 2009. EZ and RC tax benefits lapsed from January 2010 until December 2010. Currently, the estimated $1.8 billion in grant incentives provided to EZs and ECs since 1993 have mostly been expended. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ( P.L. 111-312 ), enacted on December 17, 2010, extended EZ tax benefits, but not RCs, until the end of 2011. In addition, legislation such as the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ) provided broadband education, training, and equipment for selected facilities located within EZs and ECs, and recovery zone bonds for EZs. In 2009, P.L. 111-8 and P.L. 111-80 provided $3 million in appropriations for EZs and ECs. While a short-term extension of EZ tax incentives was enacted in the 111 th Congress, a similar extension of the RC tax incentives might continue to be an issue in the 112 th Congress. After Congress authorized the programs, federal agencies responsible for administering the programs held competitions to designate a selected number of communities. According to estimates by the Government Accountability Office (GAO), 993 communities applied for designation and 184 were selected. In addition to funding authorized through legislation in the three rounds, designated communities also received funding through annual appropriations laws from 1999 to 2009. Federal block grant funds for Round I remained available to finance qualified projects until December 31, 2004. By contrast, Round II funds are available to communities until expended, with the exception of FY2003 appropriations for Round II, which were available until September 30, 2005. Tax incentives expired on December 31, 2009. Table 1 summarizes the three rounds of EZ, EC, and RC programs and the number of designated communities by urban and rural category. As shown in Table 2 , four federal agencies are responsible for administering the programs. Federal grants for the EZ and EC programs are administered by the Department of Health and Human Services (HHS), the Department of Housing and Urban Development (HUD) and the Department of Agriculture (USDA). Although EZ and EC grants have mostly been expended, Congress has provided funding for selected EZs and ECs through annual HUD and USDA appropriations (see section " Grant Incentives "); in addition, legislation such as the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ) provided broadband education, training, and equipment for selected facilities located within ECs. HHS is responsible for providing EZ and EC grants under the Social Services Block Grant program to (1) help prevent, reduce, or eliminate dependence on public assistance; (2) help individuals achieve or maintain self-sufficiency; and (3) prevent neglect, abuse, or exploitation of children and adults. HUD administers the urban programs under its CDBG program to provide flexible economic development funds for local communities. Economic development activities include job creation and training, entrepreneurial activities, small business expansion, and job support services such as affordable child care and transportation services that would help EZ and RC residents gain employment in jobs that offer upward mobility. USDA oversees the EZ and EC program in rural areas and administers the grants to Round II rural EZ and ECs and Round III EZs. According to the USDA, more than 53 million people live in rural areas of the United States, 16.4% of whom live in households with incomes below the federal poverty level. EZ and EC grants target economic development projects in rural areas experiencing persistent poverty and unemployment levels. The Internal Revenue Service (IRS) is responsible for administering the tax benefits available under the EZ, EC, and RC programs. A list of census tracts eligible for EC and EZ funding can be obtained from HUD. A Community Empowerment Board was established in 1993 to coordinate the EZ, EC program. The Board had 26 members from federal agencies, including the U.S. vice president, who served as chair. According to GAO: The board's function was to consult in the designation of Round I and II EZs and ECs and coordinate the various federal agency resources that EZs and ECs would use to implement their strategic plans. For example, the Community Empowerment Board encouraged other agencies to provide preference points to EZs and ECs in selection competitions for other federal programs. The Community Empowerment Board was disbanded prior to Round III of the EZ program in 2004. Communities nominated for EZ, EC, or RC designations have been required to meet certain eligibility criteria based largely on the socioeconomic characteristics of the residents living in the nominated areas. Specifically, during their initial application, nominated census tracts have been required to meet statutory or regulatory requirements for (1) poverty in each census tract, (2) overall unemployment, and (3) total population. In most cases, these requirements were initially based on 1990 census data since the programs were authorized in 1993. The levels required for eligibility differed by round, by program, and between urban and rural nominees, as shown in Table 3 . In addition to the socioeconomic criteria, communities have also been required to meet criteria regarding geographic size and general economic distress. Further, Indian reservations were excluded from Round I EZ or EC designation. Only census tracts within nominated areas designated by HUD were eligible for tax credits. The enterprise zone concept originated in Great Britain in the mid-1970s. In 1978, Sir Geoffrey Howe, a member of the British Parliament, argued for the establishment of market-based enterprise zones, which would provide government tax relief in economically distressed areas. By the mid-1980s, more than two dozen enterprise zones were established in England. In the United States, enterprise zone legislation was introduced in Congress as early as 1980. Republican Representative Jack Kemp introduced the first enterprise zone bill in May 1980 ( H.R. 7240 , the Urban Jobs and Enterprise Zone Act of 1980). Democratic Representative Robert Garcia co-sponsored with Representative Kemp H.R. 3824 , the Urban Jobs and Enterprise Zone Act of 1981. Although federal legislation was not enacted in the 1980s, several states did implement enterprise zone programs. By the late 1980s, over two thirds of the states had embraced the concept, enacted legislation, and started enterprise zone initiatives. According to one estimate, by July 1993, before the establishment of the federal programs, 37 states had established enterprise zone programs with different eligibility criteria, and benefits. Congress has authorized three rounds for the designation of Empowerment Zones, Enterprise Communities, and Renewal Communities. Three designation rounds—in 1993-1994, 1997-1999, and 2000—applied to EZ programs, while only the first two rounds applied to ECs, and the third round applied to the RC program. In addition, Round I contained a supplemental round established by the Clinton Administration. The designation process is discussed in more detail below, and a list of EZ/E and RC communities is available in Appendix A to this report. The 103 rd Congress established the EZ and EC programs in 1993 through the Omnibus Budget Reconciliation Act of 1993 ( P.L. 103-66 ). The legislation provided both grant and tax incentives to companies located in EZs and ECs that employed local residents and conducted business in economically distressed neighborhoods. Distressed neighborhoods were identified at the census tract level based on several indicators such as the percent of the population in poverty, the unemployment rate, and total population, as shown in Table 3 . To be considered in the first round of EZ and EC programs, areas had to be nominated by one or more local governments and the state or states in which they were located.