Rural Empowerment Zone and Enterprise Community Act of 1993

Rural Empowerment Zone and Enterprise Community Act of 1993
Name	Rural Empowerment Zone and Enterprise Community Act of 1993
Enacted by	103rd United States Congress
Enacted date	1993
Public law	Public Law 103-66
Introduced in	United States House of Representatives
Sponsor	Henry Hyde
Signed by	Bill Clinton
Signed date	1993

Rural Empowerment Zone and Enterprise Community Act of 1993 is a United States statute enacted during the 103rd United States Congress and signed by Bill Clinton to promote economic development in designated rural areas through tax incentives, grants, and regulatory flexibility. The Act built on prior initiatives such as the enterprise zone concept and intersected with federal programs administered by agencies including the United States Department of Agriculture, Department of the Treasury, and Department of Housing and Urban Development. Its passage reflected legislative alliances among figures in the United States House of Representatives and the United States Senate and influenced subsequent statutes like the Community Renewal Tax Relief Act of 2000 and the Taxpayer Relief Act debates.

Background and Legislative History

The Act emerged from policy debates among members of the 103rd United States Congress, influenced by earlier programs such as the New Markets Tax Credit discussions and the Urban Enterprise Zone experiments in states like New Jersey and California. Proponents cited examples from the Rural Electrification Administration era, advocates including Michael Harrington-era community development coalitions, and legislative frameworks shaped by committees such as the United States House Committee on Ways and Means and the United States Senate Committee on Finance. Key legislative milestones included hearings with officials from the United States Department of Agriculture, testimony from nonprofit organizations like the Local Initiatives Support Corporation and private sector stakeholders such as Community Development Financial Institutions Fund. Negotiations involved appropriations considerations linked to the Budget Reconciliation Act processes and input from governors of states including Texas, North Carolina, and Mississippi.

Provisions of the Act

The Act authorized designation of specific rural areas for enhanced assistance, creating legal mechanisms for tax credits, targeted grants, and regulatory waivers administered by agencies including the Internal Revenue Service, United States Department of Agriculture, and Department of Housing and Urban Development. Statutory provisions drew on terminology from prior statutes like the Economic Recovery Tax Act of 1981 and implemented programmatic features similar to the Enterprise Community pilot models. It set eligibility criteria modeled on census measures used by the United States Census Bureau, employment metrics from the Bureau of Labor Statistics, and poverty thresholds derived from the Office of Management and Budget. The Act authorized partnerships with entities such as the Local Initiatives Support Corporation, Habitat for Humanity International, and regional development districts including those in Appalachia and the Delta Regional Authority footprint.

Designation and Selection of Empowerment Zones and Enterprise Communities

Designation procedures combined executive branch nominations with statutory criteria applied by agencies like the United States Department of Agriculture and the Department of Housing and Urban Development, with final approvals often coordinated with the United States Treasury Department. Selection emphasized factors documented by the United States Census Bureau, data from the Economic Research Service (USDA), and input from state offices such as those of the governors of Alabama, Kentucky, and New Mexico. Application processes involved local entities including community development corporations, tribal governments such as the Cherokee Nation in specific regions, and nonprofit intermediaries like the Enterprise Community Partners. Designations mirrored selection approaches previously used in programs overseen by the Small Business Administration and the Appalachian Regional Commission.

Funding Mechanisms and Tax Incentives

The Act established grant funding streams appropriated through congressional acts and tax-based incentives administered by the Internal Revenue Service; features included wage credits, accelerated depreciation modeled on provisions from the Revenue Act of 1921 lineage, and tax-exempt bonding capacity similar to rules applied by the Municipal Securities Rulemaking Board-associated practices. Funding drew on federal appropriations overseen by the Congressional Budget Office and implementation guidance from the Office of Management and Budget, while partnerships with the Community Development Financial Institutions Fund and private banks such as Bank of America-type institutions facilitated leverage of credit. The design of incentives referenced mechanisms used in the New Markets Tax Credit and tax increment financing strategies deployed in municipalities like Detroit and Baltimore.

Implementation, Administration, and Oversight

Administration relied on interagency coordination among the United States Department of Agriculture, Department of Housing and Urban Development, Department of the Treasury, the Internal Revenue Service, and regional authorities such as the Appalachian Regional Commission and the Delta Regional Authority. Oversight responsibilities involved the Government Accountability Office and congressional committees including the House Committee on Ways and Means and the Senate Committee on Finance, which reviewed program reports and audits. Local implementation engaged stakeholder organizations like the Local Initiatives Support Corporation, Opportunity Finance Network, and municipal governments in cities including Rural Kentucky locales and Hudson, New York-adjacent communities, coordinating workforce initiatives with entities such as the Department of Labor (United States).

Impact and Outcomes

Evaluations by the Government Accountability Office, academic researchers at institutions like Harvard University and University of Michigan, and policy analysts from think tanks such as the Brookings Institution and the Urban Institute reported mixed results: some designated areas experienced job growth, business formation, and infrastructure projects comparable to successes documented in Enterprise Zone (United Kingdom) studies, while others showed limited change, echoing findings from New Deal-era regional programs. Outcomes varied across regions including Appalachia, the Mississippi Delta, and rural counties in Oklahoma and Montana, with impacts mediated by local governance capacity, engagement by community development corporations, and private investment from firms modeled after Walmart-scale retailers and regional banks.

Criticisms, Legal Challenges, and Revisions

Critics from organizations such as the Center on Budget and Policy Priorities, academic critics at Columbia University, and representatives from affected counties in states like Louisiana raised concerns about uneven benefits, potential displacement, and insufficient oversight. Legal challenges drew on administrative law precedents from cases involving the Administrative Procedure Act and disputes adjudicated in federal courts including the United States Court of Appeals for the District of Columbia Circuit. Subsequent legislative revisions and related statutes like the Community Renewal Tax Relief Act of 2000 and programmatic adjustments by the Department of the Treasury sought to refine eligibility, increase transparency as advocated by the Government Accountability Office, and integrate lessons from evaluations by institutions such as the Brookings Institution and Urban Institute.

Category:United States federal legislation 1993