WASHINGTON, D.C. -- United States Senator Daniel K. Inouye announced that the Conference Report to the Revenue Reconciliation Act of 1997 includes a provision that would change the criteria for empowerment zones (EZs) and enterprise communities (ECs) for Hawaii and Alaska in the event of future designations of additional zones and communities by the Congress. The Act includes a second round of EZ designations. Twenty new zones would be created (fifteen urban and five rural).

"I am pleased the Congress recognized the economically depressed areas and unique characteristics of Hawaii and Alaska to warrant this change in the formula. Since the establishment of this program, Hawaii and Alaska have not been able to participate and hence been prohibited from accessing funds sorely needed in both states to address serious conditions of homelessness, substandard housing and lack of economic opportunity," stated Senator Inouye.

The provision modifies the EZ and EC designation criteria so that Hawaii or Alaska will not be subject to the general size limitations and the general poverty-rate criterias. Instead, the nominated areas in Hawaii and Alaska will be eligible for EZ or EC designation if, for each census tract or block group within such area, at least 20 percent of the families have incomes which are 50 percent or less of the statewide median family income.

Pursuant to the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993), the Secretaries of the Department of Housing and Urban Development (HUD) and the Department of Agriculture designated a total of nine empowerment zones and 95 enterprise communities on December 21, 1994. As required by law, six empowerment zones are located in urban areas (with aggregate population for the six designated urban empowerment zones limited to 750,000) and three empowerment zones are located in rural areas. Of the enterprise communities, 65 are located in urban areas and 30 are located in rural areas. Designated empowerment zones and enterprise communities are identified by census trends and are required to satisfy certain eligibility criteria based on decennial census data. These include population limitations, geographic size limitations, and poverty rate criteria.

The 10-year EZ/EC Program targets federal grants to distressed urban and rural communities for social services, community redevelopment, and provides tax and regulatory relief to attract or retain businesses in distressed communities. In general, the same eligibility criteria and selection process apply to EZs and ECs. However, EZs receive much larger grants than ECs, and businesses located in EZs are eligible for more tax incentives than businesses in ECs.

The Revenue Reconciliation Act of 1997 will now be transmitted to the White House to await President Clinton's signature.