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VICE PRESIDENT GORE ANNOUNCES COMPETITION TO DESIGNATE 20 NEW URBAN AND RURAL EMPOWERMENT ZONES
NEW ORLEANS - Vice President Al Gore today announced a nationwide competition to designate 20 new Empowerment Zones to create jobs and business opportunities for residents of economically distressed parts of urban and rural America.
The Vice President, who chairs President Clinton's Community Empowerment Board, announced the plan today in an address to the National Conference of Black Mayors meeting in New Orleans. He noted a recent Standard & Poor's report concluding that the creation of Empowerment Zones, along with other economic development tools, can help cities move toward their economic goals.
The new Empowerment Zones - 15 urban and 5 rural - will join 72 urban areas and 33 rural communities that President Clinton and Vice President Gore designated as Empowerment Zones and Enterprise Communities in December, 1994. The Administration's initiative has already had significant success, generating over $4 billion in private investment through a combination of tax incentives, financing assistance and an improved investment environment.
"The Empowerment Zone initiative is helping reverse the years of decline in many of our cities and rural communities," the Vice President said. "Through our empowerment agenda, we have turned Washington's traditional approach upside down - working hand-in-hand with mayors, listening to communities, supporting bottom-up innovation and encouraging flexibility. Today, our cities are stronger and our neighborhoods are healthier as the result of our efforts to work with and empower America's communities."
"Empowerment Zones are powerful engines for job creation and economic growth that can transform some of our poorest neighborhoods and the lives of people living there," said Department of Housing and Urban Development Secretary Andrew Cuomo, whose Department administers the urban Empowerment Zones program "These zones create a partnership for successful revitalization between government, non-profits, the businesses community and neighborhood residents."
Along with more private investment, the initiative has helped create thousands of jobs that are now filled by people who have traditionally lacked access to economic opportunity. The initiative has also provided job training and educational opportunities for nearly 45,000 residents of Empowerment Zones and Enterprise Communities. Additionally, the program has helped create more affordable housing opportunities; allowed communities to address important public safety, infrastructure and environmental concerns; and provided social services including affordable health care, child care and youth development programs.
The new Empowerment Zones designated following this competition will be eligible to receive a variety of new federal tax incentives to stimulate job creation and economic development in economically distressed areas of cities and rural communities. In addition to the tax incentives, the Clinton Administration's FY 1999 budget proposes $1.5 billion in funding over 10 years for social services in the 15 new Empowerment Zones and $200 million for the 5 rural Zones.
Round II Empowerment Zones will benefit from two new tax incentives -- tax-exempt bond financing and immediate tax-deductibility of the costs of new machinery and equipment. Empowerment Zones with populations of 100,000 or more will be eligible to issue up to $230 million in bonds, while smaller Zones will be able to issue up to $130 million in bonds. This lower-interest funding, which will not be subject to state caps or limits on the size of bond issues, should provide communities a significant resource for stimulating economic activity and thousands of new jobs for residents within the Empowerment Zones.
Secondly, through an increased Section 179 Deduction, businesses in the Empowerment Zones will be able to deduct up to $37,500 of all or part of the cost of qualifying property -- such as machinery and equipment -- in the year it is placed in service instead of recovering the cost over a period of years through depreciation.
TAX PROVISIONS for all Empowerment Zones and Enterprise Communities are as follows:
Cities and rural areas seeking to apply for Empowerment Zone designation have until October 9, 1998 to develop and submit comprehensive revitalization strategies, with designations to be made by January 1, 1999. A critical component of the application process is a dialogue that pulls communities together to devise a vision for the future, approaches to resolve tough problems and the development of new partnerships.
Communities may receive more information about how to apply for an Empowerment Zone and how to attend workshops on the application process by contacting HUD at 800/998-9999 or the U.S. Department of Agriculture at 800/851-3403.
HUD's 10 regional training sessions on the Empowerment Zone application process begin Friday in Columbus, OH.
Content Archived: January 20, 2009