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Empowerment Zones Program

Published on AidPage by IDILOGIC on Jun 24, 2005

Administered by:

US Federal Government Agency (see all agencies)
Department of Agriculture , Rural Business-Cooperative Service
CFDA #: 10.772

Possible uses and use restrictions...

The USDA Empowerment Zone and Enterprise Community (EZ/EC) program is the first step in rebuilding communities in America's poverty-stricken rural communities. It is designed to empower people and communities all across this Nation by inspiring Americans to work together to improve living conditions in their communities, and create jobs and opportunity. Under this program the Federal government has designated 57 rural areas as EZs and ECs. These communities meet certain poverty and distress criteria and have prepared creative strategic plans for revitalization. All designations were made in consultation with the Community Empowerment Board, which the President established on September 9, 1993. For the purposes of this program, Round I refers to those EZs and ECs designated in 1994 and Round II refers to those designated in 1998. Empowerment Zones are eligible for private activity tax exempt bonding authority for qualifying enterprises and facilities. Bond issues are subject to State private activity bond caps and special limits on issue size. Round I Empowerment Zones are eligible for employer wage credits, with a phase out beginning in year 2005. Empowerment Zones are eligible for accelerated Section 179 expensing for eligible property. Certain environmental remediation expenditures for cleaning up sites in enterprise communities may be deducted in the year incurred by taxpayers, where those expenses would ordinarily be capitalized and depreciated over time. EZ/ECs are also eligible for qualified academy zone taxable bonding authority, where the holder receives a tax credit in an amount equal to a credit rate (set by the Treasury Department) multiplied by the face amount of the bond. Round II rural zones can each issue up to $60,000,000 in "new bonds" to Finance Zone facilities in addition to Round I type tax exempt bonds. The benefits described above may or may not be all-inclusive. EZ/EC communities benefit from additional legislated benefits in the future. They receive special consideration in competition for funding under numerous Federal programs, including the National Service and Community Policing initiatives. The Federal government will focus special attention on working cooperatively with designated enterprise communities to overcome regulatory impediments, to permit flexible use of existing Federal funds, and to assist these communities in meeting essential mandates. Round II Empowerment Zones have authority to issue private activity bonds for qualified enterprises and facilities, which are not subject to State private activity bond caps, and enjoy a greater allowance for section 179 expending. Round II Empowerment Zones will not enjoy the employer wage credits mentioned above. All EC and EZ employers, however, may use the Work Opportunity Tax Credit, as such credit may be extended.