THE WHITE HOUSE
Office of the Vice President
VICE PRESIDENT GORE ANNOUNCES COMPETITION FOR 20 NEW URBAN AND RURAL EMPOWERMENT ZONES Touts Success of Administration's Empowerment Approach
New Orleans, LA -- Vice President Gore announced today a competition for 20 new Empowerment Zones to create jobs and business opportunities for economically distressed parts of urban and rural America.
Gore, who chairs President Clinton's Community Empowerment Board, announced Round II of the Empowerment Zone initiative today in an address to the National Conference of Black Mayors meeting in New Orleans.
The Vice President 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 15 new urban and 5 new rural zones will join the 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 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."
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, and helped provide job training and educational opportunities for nearly 45,000 residents of Empowerment Zones and Enterprise Communities.
In addition, 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.
"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," Housing Secretary Andrew Cuomo said. "These zones create a partnership for success between the federal government, local government, the businesses community and neighborhood residents."
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 President's 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 give communities a significant resource for stimulating economic activity within the Empowerment Zones.
Secondly, through an increase Section 179 deduction, businesses in the Empowerment Zones can 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.
In 1994, the Clinton Administration selected nine Empowerment Zones -- six urban and three rural -- which entitled them to receive federal tax incentives and direct funding for physical improvements and social services.
These communities fashioned comprehensive revitalization strategies, with all local stakeholders - residents, non-profits, business and government -- at the table. In addition, Los Angeles and Cleveland were designated full empowerment zones by the Administration in January of 1998.