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![handle is hein.crs/crsahge0001 and id is 1 raw text is: Order Code RS20381
Updated October 22, 2002
CRS Report for Congress
Received through the CRS Web
Empowerment Zone/Enterprise Communities
Program: Overview of Rounds 1, 11, and III
Bruce K. Mulock
Specialist in Government and Business
Government and Finance Division
Summary
In 1993, Congress set in motion a major economic development initiative designed
to revitalize deteriorating urban and rural communities. The Empowerment Zone/
Enterprise Communities (EZ/EC) program targeted federal grants for social services and
community redevelopment, and provided tax and regulatory relief intended to attract and
retain businesses in designated areas. It embraced a two-tier designation process.
Originally, six urban and three rural areas were designated Empowerment Zones (EZs).
They enjoyed the bulk of the tax and grant incentives. An additional 60 urban and 30
rural areas were designated Enterprise Communities (ECs); they received a smaller
package of federal incentives. In 1997, Congress created a Round II of the EZ/EC
program, authorizing the designation of 20 additional EZs (15 urban, 5 rural). Round
II EZs were given a different mix of tax incentives. And, unlike for the Round I EZs,
the enabling legislation for Round II zones did not include Social Service Block Grant
(SSBG) funding. Instead of mandatory SSBG funding, Congress has appropriated some
discretionary funding for Round II EZs from FY1999 through FY2002.
At the end of the post-election session, the 106th Congress passed P.L. 106-554
which included authorization for the Secretaries of HUD and Agriculture to designate
nine additional EZs (seven urban and two rural). Round III EZs were announced (see
[http://www.hud.gov/news/release.cfm?content=pr02-008.cfm].) on January 15, 2002.
The Consolidated Appropriations Act also included provisions that significantly affect
Round I and Round II EZs. This report provides an overview of the EZ/EC
program-including funding issues-as well as a summary of EZ-related provisions of
P.L. 106-554. It will be updated as events warrant.
Background
Over the past half century, Congress has enacted a half dozen or more major
economic development initiatives designed to revitalize some of the nation's more
impoverished areas. Beginning with the Housing Act of 1949, which authorized loans
and capital grants to help selected localities undertake so-called slum clearance and urban
redevelopment, through the Model Cities program (1966), which sought to improve urban
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