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The Empowerment Zones/Enterprise Communities Program is a federal, state, local government partnership for stimulating comprehensive renewal--particularly economic growth and social development--in distressed urban neighborhoods and rural areas across the nation. It seeks to motivate long-term change in the designated localities and demonstrate a positive and productive working partnership among multiple layers of government.
Recognizing that local involvement is a key component of long-term neighborhood renewal, the program takes a "bottom up" approach. Local leaders, residents, community-based organizations and local governments work together to set goals and develop strategies. Federal and state government agencies provide grant funding and other assistance for implementing the locally developed strategies.
At the federal level, the program involves multiple agencies, primarily the Department of Health and Human Services, the Department of Agriculture, and the Department of Housing and Urban Development. Numerous other agencies are also engaged. These include, among others, the Departments of Education, Justice, Transportation and Commerce, the Environmental Protection Agency and the Small Business Administration.
The EZ/EC program is rooted in three key perspectives:
The Empowerment Zone and Enterprise Community projects are being implemented in 140 economically distressed urban neighborhoods and rural areas throughout the nation.
The Departments of Agriculture (USDA) and Housing and Urban Development (HUD) designated the EZ/EC project sites following two thorough application and review processes. The first competition, called "Round One," took place in 1994. More than 500 localities applied by submitting detailed plans that described their target neighborhoods and discussed their proposed comprehensive renewal strategies. From those applicants, USDA and HUD designated 3 rural and 6 urban Empowerment Zones and 30 rural and 65 urban Enterprise Communities. These "Round One" EZ designations are effective through December 31, 2009, and the EC designations are effective through December 21, 2004.
USDA and HUD held a second competition, known as "Round Two," in 1999. The application and review process was essentially the same as for the earlier competition. Approximately 300 localities applied for EZ/EC designation by submitting detailed revitalization plans, and from them USDA and HUD named 20 new Empowerment Zones--5 in rural places and 15 in urban areas--and 20 new rural Round Two Enterprise Communities. There are no urban Round Two Enterprise Communities. The Round Two designations are effective through 2008.
Click these links to view a list of all the rural and urban designated EZ/EC localities and information about the revitalization work underway in each locality.
The federal government provides several types of special assistance for residents and organizations in the designated EZ/EC project neighborhoods. For both Round One and Round Two projects, the Federal agencies provide substantial grant funding, federal tax incentives for businesses located in the EZ/EC project neighborhoods, technical assistance and "special consideration" in competitions for certain additional federal grants. Assistance for the Round One sites is slightly different from that available to the Round Two neighborhoods. The following paragraphs provide more details.
The HHS Office of Community Services has provided $1 billion in special flexible funding to states for the Round One EZ/EC projects. It has awarded $40 million for renewal programs in each rural EZ site and $100 million for efforts in each urban EZ project. OCS has also provided states $2.95 million for each Round One EC project.
Beyond their substantial size, the OCS grants are remarkable in three respects. First, the allowed uses are quite broad. The designated localities may use these funds for a wide variety of projects such as day care services, health care, housing construction and rehabilitation, sewer infrastructure, education improvement, and so forth. Second, the OCS made the grants available for the localities for a ten-year period. OCS awarded the grants on December 21, 1994. The grants will be active through December 21, 2004. And third, as noted above, OCS awarded the grants to states. The states are required to pass the funds to the designated localities for projects in keeping with their strategic neighborhood revitalization plans. Detailed information about the OCS grants is posted in the section titled, "EZ/EC SSBG Grants Management Information."
USDA and HUD manage special flexible funding for the Round Two EZ/EC projects. Because of limited Congressional appropriations for the grants, USDA and HUD are awarding them for the designated EZ/EC projects on an annual basis. To date, USDA has awarded the Round Two rural EZs $6 million each and the Round Two rural ECs approximately $750,000 a piece. HUD has awarded the Round Two rural EZs approximately $19 million each. In addition, unlike the Round One funding, the HUD and USDA are awarding the Round Two grants directly to the designated EZ/EC localities, not to states as pass through agents.
The U.S. Department of the Treasury manages targeted tax incentives for businesses located in EZ/EC neighborhoods. The incentives complement the usual federal credit and deduction programs. They also work in tandem with some state-managed tax incentive projects. The federal incentives are as follows:
The Department of Housing and Urban Development has published a downloadable document that provides information about federal tax incentives entitled, Tax Incentive Guide for Businesses in the Renewal Communities, Empowerment Zones, and Enterprise Communities.
A key element of the overall EZ/EC Program is the renewed commitment for cooperation among the federal, state, and local-level governments. HUD, USDA and HHS and other federal agencies work to identify federal assistance programs that would be useful to localities as they implement their EZ/EC projects. Also, when appropriate, the three lead federal agencies work with the designated communities and other federal departments to overcome federal programmatic and regulatory issues that impede local-level progress.
Many federal government agencies give preferences, priority treatment, set-asides, or other forms of special attention to grant applicants seeking funding for key elements of a local EZ/EC project. Each agency provides this special consideration within its own framework and in keeping with applicable statutory and regulatory requirements.
The Community Empowerment Board provides overall management and coordination of the program at the federal level. The board, which is chaired by the Vice President, includes cabinet Secretaries and Directors of more than 20 federal agencies and departments. It establishes the program’s broad policy and goals.
The U.S. Departments of Housing and Urban Development and Agriculture share responsibilities for federal level oversight and management of the local EZ/EC projects. HUD is the primary federal agency for the designated urban sites and USDA has the lead for the rural localities.
The U.S. Department of Health and Human Services, Office of Community Services manages $1 billion in special grants for local Round One EZ/EC projects. Detailed information about the OCS grants is posted in the section titled, "EZ/EC SSBG Grants Management Information."
All other federal domestic agencies support the EZ/EC projects according to their subject matter expertise. They attempt to provide technical assistance and grant resources, as appropriate, to help the local EZ/EC projects achieve their long-term goals.
Additional information about the EZ/EC Program is available at web sites managed by USDA, HUD, the Department of Education and the Small Business Administration:
U.S. Department of Agriculture
U.S. Department of Housing and Urban Development
U.S. Department of Education
U.S. Small Business Administration
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This document was last modified 6/13/2001 1:00pm EST
