Skip Navigation
acfbanner  
ACF
Department of Health and Human Services Administration for Children and Families
          
ACF Home   |   Services   |   Working with ACF   |   Policy/Planning   |   About ACF   |   ACF News   |   HHS Home

  Questions?  |  Privacy  |  Site Index  |  Contact Us  |  Download Reader™Download Reader  |  Print Print      

 
Office of cummunity services skip to primary page contentincreasing the capacity of individuals familines and communities

How does the Federal Government Support the Local EZ/EC Projects?

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.

Flexible Grant Funding

Round One EZ/EC Funding

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."

Round Two Funding

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.

Federal Tax Incentives

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:

  • Tax Credits for Wages Paid to EZ Residents--Organizations that employ EZ neighborhood residents may claim federal tax credits of up to $3,000 per year for each EZ resident employed. The credit is available only to businesses located in Round One EZ neighborhoods.
  • Tax Deductions for Businesses that invest in facilities located in an EZ neighborhood--Businesses that meet federal requirements for an "Enterprise Zone Business" may claim deductions for property such as equipment and machinery. These deductions are available only to businesses located in Round One EZ neighborhoods.
  • Tax-Exempt Private Facility Bonds for businesses in EZ/EC neighborhoods--Local governments may issue facility bonds (which are tax-exempt) to raise capital for private business expansion projects in EZ/EC neighborhoods. The bonds are available for businesses located in Round One or Round Two EZ/EC neighborhoods.

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 .

Overcoming Federal Barriers

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.

Special Attention in Grant Programs

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.