[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3787 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3787

  To amend the Internal Revenue Code of 1986 to extend and modify the 
benefits available in empowerment zones and other tax-incentive areas, 
  to require the Secretary of Commerce to establish a program for the 
 award of grants to States to establish revolving loan funds for small 
and medium-sized manufacturers to improve energy efficiency and produce 
clean energy technology, to amend the Internal Revenue Code of 1986 to 
     provide a tax credit for farmers' investments in value-added 
                  agriculture, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 15, 2010

Mrs. Gillibrand introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to extend and modify the 
benefits available in empowerment zones and other tax-incentive areas, 
  to require the Secretary of Commerce to establish a program for the 
 award of grants to States to establish revolving loan funds for small 
and medium-sized manufacturers to improve energy efficiency and produce 
clean energy technology, to amend the Internal Revenue Code of 1986 to 
     provide a tax credit for farmers' investments in value-added 
                  agriculture, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; ETC.

    (a) Short Title.--This Act may be cited as the ``Upstate Works 
Act''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; etc.
  TITLE I--INVESTMENTS FOR MANUFACTURING PROGRESS AND CLEAN TECHNOLOGY

Sec. 101. Clean energy manufacturing revolving loan fund program.
Sec. 102. Clean energy and efficiency manufacturing partnerships.
Sec. 103. Technical amendments.
   TITLE II--AGRICULTURAL PRODUCERS VALUE-ADDED INVESTMENT TAX CREDIT

Sec. 201. Credit for farmer investment in value-added agricultural 
                            property.
                TITLE III--TRAINING GRANTS FOR EMPLOYEES

Sec. 301. Definition of Secretary.
Sec. 302. Authorization.
Sec. 303. Use of amounts.
Sec. 304. Requirement of matching funds.
Sec. 305. Limit on administrative expenses.
Sec. 306. Authorization of appropriations.
            TITLE IV--TAX CREDITS TO EXPAND BROADBAND ACCESS

Sec. 401. Credit for property used to furnish broadband services in 
                            rural areas.
            TITLE V--SUPPORTING INVESTMENT IN URBAN CENTERS

Sec. 501. Extension of benefits.
Sec. 502. Expansion of businesses eligible for benefits; expansion of 
                            eligible business activities.
Sec. 503. Modifications permitting expansion of designated areas.
Sec. 504. Expanded use of tax-exempt bonds.
Sec. 505. Other modifications.
Sec. 506. Grants for awareness of zone benefits and technical 
                            assistance to small business.
Sec. 507. Effective date.

  TITLE I--INVESTMENTS FOR MANUFACTURING PROGRESS AND CLEAN TECHNOLOGY

SEC. 101. CLEAN ENERGY MANUFACTURING REVOLVING LOAN FUND PROGRAM.

    The National Institute of Standards and Technology Act (15 U.S.C. 
271 et seq.) is amended by inserting after section 26 the following:

``SEC. 27. CLEAN ENERGY MANUFACTURING REVOLVING LOAN FUND PROGRAM.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to develop the long-term manufacturing capacity of 
        the United States;
            ``(2) to create jobs through the retooling and expansion of 
        manufacturing facilities to produce clean energy technology 
        products and energy efficient products;
            ``(3) to improve the long-term competitiveness of domestic 
        manufacturing by increasing the energy efficiency of 
        manufacturing facilities; and
            ``(4) to assist small and medium-sized manufacturers 
        diversify operations to respond to emerging clean energy 
        technology product markets.
    ``(b) Definitions.--In this section:
            ``(1) Clean energy technology product.--The term `clean 
        energy technology product' means technology products relating 
        to--
                    ``(A) wind turbines;
                    ``(B) solar energy;
                    ``(C) fuel cells;
                    ``(D) advanced batteries, battery systems, or 
                storage devices;
                    ``(E) biomass equipment;
                    ``(F) geothermal equipment;
                    ``(G) advanced biofuels;
                    ``(H) ocean energy equipment;
                    ``(I) carbon capture and storage;
                    ``(J) such other products as the Secretary 
                determines--
                            ``(i) relate to the production, use, 
                        transmission, storage, control, or conservation 
                        of energy;
                            ``(ii) reduce greenhouse gas 
                        concentrations;
                            ``(iii) achieve the earliest and maximum 
                        emission reductions within a reasonable period 
                        per dollar invested;
                            ``(iv) result in the fewest non-greenhouse 
                        gas environmental impacts; and
                            ``(v)(I) reduce the need for additional 
                        energy supplies by--
                                    ``(aa) using existing energy 
                                supplies with greater efficiency; or
                                    ``(bb) transmitting, distributing, 
                                or transporting energy with greater 
                                effectiveness through the 
                                infrastructure of the United States; or
                            ``(II) diversify the sources of energy 
                        supply of the United States--
                                    ``(aa) to strengthen energy 
                                security; and
                                    ``(bb) to increase supplies with a 
                                favorable balance of environmental 
                                effects if the entire technology system 
                                is considered.
            ``(2) Energy efficient product.--The term `energy efficient 
        product' means a product that the Secretary, in consultation 
        with the Secretary of Energy, determines--
                    ``(A) consumes significantly less energy than the 
                average amount that all similar products consumed on 
                the day before the date of the enactment of this Act; 
                or
                    ``(B) is a component, system, or group of 
                subsystems that is designed, developed, and validated 
                to optimize the energy efficiency of a product.
            ``(3) Program.--The term `Program' means the grant program 
        established pursuant to subsection (c)(1).
            ``(4) Revolving loan fund.--The term `revolving loan fund' 
        means a revolving loan fund described in subsection (d).
            ``(5) Small or medium-sized manufacturer.--The term `small 
        or medium-sized manufacturer' means a manufacturer that employs 
        fewer than 500 full-time equivalent employees at a 
        manufacturing facility that is not owned or controlled by an 
        automobile manufacturer.
    ``(c) Grant Program.--
            ``(1) Establishment.--Not later than 120 days after the 
        date of the enactment of this section, the Secretary shall 
        establish a program under which the Secretary shall award 
        grants to States to establish revolving loan funds to provide 
        loans to small or medium-sized manufacturers to finance the 
        cost of--
                    ``(A) reequipping, expanding, or establishing 
                (including applicable engineering costs) a 
                manufacturing facility in the United States to 
                produce--
                            ``(i) clean energy technology products;
                            ``(ii) energy efficient products; or
                            ``(iii) integral component parts of clean 
                        energy technology products or energy efficient 
                        products; or
                    ``(B) reducing the energy intensity or greenhouse 
                gas production of a manufacturing facility in the 
                United States, including using energy intensive 
                feedstocks.
            ``(2) Maximum amount.--The Secretary may not award a grant 
        under the Program in an amount that exceeds $500,000,000 in any 
        fiscal year.
    ``(d) Criteria for Awarding Grants.--
            ``(1) Matching funds.--The Secretary may not award a grant 
        to a State under the Program unless the State ensures that not 
        less than 20 percent of the amount of each loan provided by the 
        State under the Program originates from non-Federal sources.
            ``(2) Administrative costs.--Grants under the Program may 
        only be used for the costs of administering the revolving loan 
        fund, in accordance with regulations promulgated by the 
        Secretary.
            ``(3) Application.--Each State seeking a grant under the 
        Program shall submit an application to the Secretary in such 
        form, in such manner, and containing such information as the 
        Secretary considers appropriate.
            ``(4) Evaluation.--The Secretary shall evaluate and 
        prioritize each application submitted by a State for a grant 
        under the Program on the basis of--
                    ``(A) the description of--
                            ``(i) the revolving loan fund to be 
                        established with the grant; and
                            ``(ii) how such revolving loan fund is 
                        expected to achieve the purposes described in 
                        subsection (a);
                    ``(B) whether the State will be able to provide 
                loans from the revolving loan fund to small or medium-
                sized manufacturers within 120 days after receiving the 
                grant;
                    ``(C) a description of how the State is planning to 
                coordinate the administration of the revolving loan 
                fund with other State and Federal programs, including 
                programs administered by the Assistant Secretary for 
                Economic Development;
                    ``(D) a description of the actual or potential 
                clean energy manufacturing supply chains, including 
                significant component parts, in the region served by 
                the revolving loan fund;
                    ``(E) how the State is planning to target the 
                provision of loans under the Program to manufacturers 
                located in regions characterized by high unemployment 
                and sudden and severe economic dislocation, 
                particularly if mass layoffs have resulted in a 
                precipitous increase in unemployment;
                    ``(F) the availability of a skilled manufacturing 
                workforce in the region served by the revolving loan 
                fund;
                    ``(G) the capacity of the region's workforce and 
                education systems to provide pathways for unemployed or 
                low-income workers into skilled manufacturing 
                employment;
                    ``(H) a description of how the State will target 
                loans to small or medium-sized manufacturers that--
                            ``(i) manufacture automobile components; 
                        and
                            ``(ii)(I) increase the energy efficiency of 
                        their manufacturing facilities; or
                            ``(II) retool to manufacture clean energy 
                        products or energy efficient products, 
                        including manufacturing components to improve 
                        the compliance of an automobile with fuel 
                        economy standards prescribed under section 
                        32902 of title 49, United States Code;
                    ``(I) a description of how the State is planning to 
                use the loan fund to achieve the earliest and maximum 
                greenhouse gas emission reductions within a reasonable 
                period of time for each dollar invested and with the 
                fewest non-greenhouse gas environmental impacts; and
                    ``(J) such other factors as the Secretary considers 
                appropriate to ensure that grants awarded under the 
                Program effectively and efficiently achieve the 
                purposes described in subsection (a).
    ``(e) Revolving Loan Funds.--
            ``(1) In general.--A State receiving a grant under the 
        Program shall establish, maintain, and administer a revolving 
        loan fund in accordance with this subsection.
            ``(2) Deposits.--A revolving loan fund shall consist of--
                    ``(A) amounts from grants awarded under this 
                section; and
                    ``(B) all amounts held or received by the State 
                incident to the provision of loans described in 
                subsection (f), including all collections of principal 
                and interest.
            ``(3) Expenditures.--Amounts in the revolving loan fund 
        shall be available for the provision and administration of 
        loans in accordance with subsection (f).
    ``(f) Loans.--
            ``(1) In general.--A State receiving a grant under this 
        section shall use the amount in the revolving loan fund to 
        provide loans to small or medium-sized manufacturers.
            ``(2) Loan terms and conditions.--
                    ``(A) Terms.--In determining the term of each loan 
                provided under paragraph (1), the State shall ensure 
                that--
                            ``(i) the term of any loan for fixed assets 
                        does not exceed the useful life of the asset 
                        and is shorter than 15 years; and
                            ``(ii) the term of any loan for working 
                        capital is not longer than 3 years.
                    ``(B) Interest rates.--The interest rate set by the 
                State for each loan provided under paragraph (1)--
                            ``(i) shall enable the loan recipient to 
                        accomplish the activities described in 
                        subparagraphs (A) and (B) of subsection (c)(1);
                            ``(ii) may be set at below-market interest 
                        rates;
                            ``(iii) may not be lower than 0 percent; 
                        and
                            ``(iv) may not be greater than 500 basis 
                        points above the prime rate, as of the 
                        settlement date for such loan.
                    ``(C) Description and budget for use of loan 
                funds.--Each recipient of a loan from a State under the 
                Program shall develop and submit, to the State and to 
                the Secretary, a description and budget for the use of 
                loan amounts, including a description of--
                            ``(i) any new business expected to be 
                        developed with the loan;
                            ``(ii) any improvements to manufacturing 
                        operations to be developed with the loan; and
                            ``(iii) any technology expected to be 
                        commercialized with the loan.
                    ``(D) Priority in review and preference in 
                selection for certain loan applicants.--
                            ``(i) Review.--In reviewing applications 
                        submitted by small or medium-sized 
                        manufacturers for a loan, a recipient of a 
                        grant under the Program shall give priority to 
                        small or medium-sized manufacturers described 
                        in clause (iii).
                            ``(ii) Selection.--In selecting small or 
                        medium-sized manufacturers to receive a loan, a 
                        recipient of a grant under the Program shall 
                        give preference to small or medium-sized 
                        manufacturers described in clause (iii).
                            ``(iii) Priority and preferred small or 
                        medium-sized manufacturers.--A small or medium-
                        sized manufacturer described in this clause is 
                        a manufacturer that--
                                    ``(I) is certified by a Hollings 
                                Manufacturing Extension Center or a 
                                manufacturing-related local 
                                intermediary designated by the 
                                Secretary for purposes of providing 
                                such certification; or
                                    ``(II) provides individuals 
                                employed at the manufacturing 
                                facilities of the manufacturer with--
                                            ``(aa) pay that is, on 
                                        average, not less than the 
                                        average wage of an individual 
                                        working in a manufacturing 
                                        facility in the State; and
                                            ``(bb) health benefits.
                            ``(iv) Certification by hollings 
                        manufacturing extension center.--A Hollings 
                        Manufacturing Extension Center or other entity 
                        designated by the Secretary for purposes of 
                        providing certification under clause (iii)(I) 
                        may not certify applications for a loan until 
                        the Center or other entity has completed a 
                        qualitative and quantitative review of the 
                        applicant's business strategy, manufacturing 
                        operations, and technological ability to 
                        contribute to the purposes described in 
                        subsection (a).
                    ``(E) Repayment upon relocation outside united 
                states.--
                            ``(i) In general.--The recipient of a loan 
                        under paragraph (1) to finance the cost of 
                        reequipping, expanding, or establishing a 
                        manufacturing facility or to reduce the energy 
                        intensity of a manufacturing facility that 
                        relocates the production activities of such 
                        manufacturing facility outside the United 
                        States during the term of the loan shall repay 
                        such loan in full in accordance with this 
                        subparagraph.
                            ``(ii) Payment of interest.--The repayment 
                        of a loan under clause (i) shall bear interest 
                        at a penalty rate determined by the Secretary 
                        to deter recipients of loans under paragraph 
                        (1) from relocating production activities 
                        outside the United States.
                            ``(iii) Period of repayment.--The Secretary 
                        shall determine the duration of the repayment 
                        of a loan under clause (i).
                    ``(F) Compliance with wage rate requirements.--Each 
                recipient of a loan under paragraph (1) shall 
                incorporate, into all contracts for construction, 
                alteration, or repair, which are paid for, in whole or 
                in part, with amounts obtained pursuant to such loan, a 
                requirement that all laborers and mechanics employed by 
                contractors and subcontractors performing construction, 
                alteration, or repair shall be paid wages at rates not 
                less than those determined by the Secretary of Labor, 
                in accordance with subchapter IV of chapter 31 of title 
                40, United States Code (known as the `Davis-Bacon 
                Act'), to be prevailing for the corresponding classes 
                of laborers and mechanics employed on projects of a 
                character similar to the contract work in the same 
                locality in which the work is to be performed. With 
                respect to the labor standards specified in this 
                subparagraph, the Secretary of Labor shall have the 
                authority and functions set forth in Reorganization 
                Plan Numbered 14 of 1950 (15 Fed. Reg. 3176; 64 Stat. 
                1267) and section 3145 of title 40, United States Code.
                    ``(G) Annual reports by loan recipients.--Not less 
                frequently than once each year during the term of each 
                loan issued by a State under paragraph (1), the loan 
                recipient shall submit a report to such State that 
                contains such information as the Secretary may specify 
                for purposes of the Program, including information that 
                the Secretary can use to determine whether a recipient 
                of a loan is required to repay the loan under 
                subparagraph (E).
            ``(3) Annual reports by grant recipients.--Not less 
        frequently than once each year, each recipient of a grant under 
        the Program shall submit a report to the Secretary that 
        describes--
                    ``(A) the impact of each loan issued by the State 
                under the Program; and
                    ``(B) the aggregate impact of all such loans, 
                including--
                            ``(i) the sales increased or retained;
                            ``(ii) cost savings or costs avoided;
                            ``(iii) additional investment encouraged; 
                        and
                            ``(iv) jobs created or retained.
    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated $15,000,000,000 for each of fiscal years 2011 and 2012 to 
carry out this section.''.

SEC. 102. CLEAN ENERGY AND EFFICIENCY MANUFACTURING PARTNERSHIPS.

    (a) Hollings Manufacturing Partnership Program.--Section 25(b) of 
the National Institute of Standards and Technology Act (15 U.S.C. 
278k(b)) is amended--
            (1) in paragraph (2), by striking ``and'' at the end;
            (2) in paragraph (3), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(4) the establishment of a clean energy manufacturing 
        supply chain initiative--
                    ``(A) to support manufacturers in their 
                identification of and diversification to new markets, 
                including support for manufacturers transitioning to 
                the use of clean energy supply chains;
                    ``(B) to assist manufacturers improve their 
                competitiveness by reducing energy intensity and 
                greenhouse gas production, including the use of energy 
                intensive feedstocks;
                    ``(C) to increase adoption and implementation of 
                innovative manufacturing technologies;
                    ``(D) to coordinate and leverage the expertise of 
                the National Laboratories and Technology Centers and 
                the Industrial Assessment Centers of the Department of 
                Energy to meet the needs of manufacturers; and
                    ``(E) to identify, assist, and certify 
                manufacturers seeking loans under section 27(e)(1).''.
    (b) Reduction in Cost Share Requirements.--Section 25(c) of the 
National Institute of Standards and Technology Act (15 U.S.C. 278k(c)) 
is amended--
            (1) in paragraph (1), by striking ``six years'' and 
        inserting ``6 years, or as provided in paragraph (5)'';
            (2) in paragraph (3)(B), by striking ``not less than 50 
        percent of the costs incurred for the first 3 years and an 
        increasing share for each of the last 3 years'' and inserting 
        ``50 percent of the costs incurred, or such lesser percentage 
        of the costs incurred that the Secretary determines, by rule, 
        to be appropriate''; and
            (3) in paragraph (5)--
                    (A) by striking ``at declining levels''; and
                    (B) by striking ``one third of the capital and 
                annual operating and maintenance costs'' and inserting 
                ``50 percent of the capital and annual operating and 
                maintenance costs, or such lesser percentage that the 
                Secretary determines, by rule, to be appropriate''.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Commerce for the Hollings 
Manufacturing Partnership Program authorized under sections 25 of the 
National Institute of Standards and Technology Act (15 U.S.C. 278k) and 
for the provision of assistance under section 26 of such Act (15 U.S.C. 
278l)--
            (1) $200,000,000 for fiscal year 2010;
            (2) $250,000,000 for fiscal year 2011;
            (3) $300,000,000 for fiscal year 2012;
            (4) $350,000,000 for fiscal year 2013; and
            (5) $400,000,000 for fiscal year 2014.

SEC. 103. TECHNICAL AMENDMENTS.

    (a) Amendment to National Institute of Standards and Technology 
Act.--Section 25 of the National Institute of Standards and Technology 
Act (15 U.S.C. 278k) is amended--
            (1) in subsection (a), by striking ``(hereafter in this Act 
        referred to as the `Centers')''; and
            (2) by adding at the end the following:
    ``(g) Designation.--
            ``(1) Hollings manufacturing partnership program.--For 
        purposes of this Act, the program established under this 
        section shall be known as the `Hollings Manufacturing 
        Partnership Program'.
            ``(2) Hollings manufacturing extension centers.--For 
        purposes of this Act, the Regional Centers for the Transfer of 
        Manufacturing Technology created and supported under subsection 
        (a) shall be known as `Hollings Manufacturing Extension 
        Centers' or `Centers').''.
    (b) Amendment to Consolidated Appropriations Act, 2005.--Title II 
of division B of the Consolidated Appropriations Act, 2005 (Public Law 
108-447; 118 Stat. 2879; 15 U.S.C. 278k note) is amended under the 
heading ``industrial technology services'' by striking ``2007: Provided 
further, That'' and all that follows through ``Extension Centers.'' and 
inserting ``2007.''.

   TITLE II--AGRICULTURAL PRODUCERS VALUE-ADDED INVESTMENT TAX CREDIT

SEC. 201. CREDIT FOR FARMER INVESTMENT IN VALUE-ADDED AGRICULTURAL 
              PROPERTY.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits) is amended by adding at the end 
the following new section:

``SEC. 45S. VALUE-ADDED AGRICULTURAL PROPERTY INVESTMENT CREDIT.

    ``(a) General Rule.--For purposes of section 38, in the case of a 
taxpayer who is--
            ``(1) an eligible person, or
            ``(2) a farmer-owned entity,
the value-added agricultural property investment credit determined 
under this section for any taxable year is 50 percent of the basis of 
any qualified value-added agricultural property placed in service 
during the taxable year. In the case of a farmer-owned entity, such 
credit shall be allocated on a pro rata basis among eligible persons 
holding qualified investments in such entity as of the last day of such 
taxable year.
    ``(b) Maximum Credit.--For purposes of subsection (a)--
            ``(1) Property placed in service by eligible person.--In 
        the case of property placed in service during a taxable year by 
        an eligible person, the credit determined under this section 
        for such year shall not exceed $30,000, reduced by the amount 
        of the creditable investments allowed for the taxable year 
        under paragraph (2).
            ``(2) Property placed in service by farmer-owned entity.--
                    ``(A) In general.--In the case of property placed 
                in service by a farmer-owned entity, the credit 
                determined under this section shall not exceed the sum 
                of the eligible person's creditable investments in such 
                entity as of the date such property is placed in 
                service.
                    ``(B) Creditable investments.--For purposes of 
                subparagraph (A), the term `creditable investments' 
                means, with respect to any property placed in service 
                by a farmer-owned entity, the aggregate qualified 
                investments made by the eligible person in such entity, 
                reduced (but not below zero) by the sum of--
                            ``(i) the amount of the aggregate qualified 
                        investments made by such person in such entity 
                        which were taken into account under this 
                        section with respect to property previously 
                        placed in service by such entity, and
                            ``(ii) the amount of the aggregate 
                        qualified investments made by such person in 
                        all other farmer-owned entities which were 
                        taken into account under this section with 
                        respect to property previously placed in 
                        service by such other entities.
                    ``(C) Limitation.--For purposes of this paragraph, 
                the aggregate qualified investments made by the 
                eligible person which may be taken into account for any 
                taxable year shall not exceed $30,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified value-added agricultural property.--The 
        term `qualified value-added agricultural property' means 
        property--
                    ``(A) which is used to add value to a good or 
                product, suitable for food or nonfood use, derived in 
                whole or in part from organic matter which is available 
                on a renewable basis, including agricultural crops and 
                agricultural wastes and residues, wood wastes and 
                residues, and domesticated animal wastes,
                    ``(B)(i) to which section 168 applies without 
                regard to any useful life, or
                    ``(ii) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable and 
                having a useful life (determined as of the time such 
                property is placed in service) of 3 years or more, and
                    ``(C) which is owned and operated by an eligible 
                person or a farmer-owned entity.
            ``(2) Eligible person.--
                    ``(A) In general.--The term `eligible person' means 
                a person who materially participates during the taxable 
                year in an eligible farming business.
                    ``(B) Material participation.--For purposes of 
                subparagraph (A), the determination of whether a person 
                materially participates in the trade or business of 
                farming shall be made in a manner similar to the manner 
                in which such determination is made under section 
                2032A(e)(6). In the case that the person is a 
                corporation, cooperative, partnership, estate, or 
                trust, such determination shall be made at the 
                shareholder, partner, or beneficial interests level (as 
                the case may be).
                    ``(C) Eligible farming business.--For purposes of 
                subparagraph (A), the term `eligible farming business' 
                means a farming business (as defined in section 
                263A(e)(4)) which is not a passive activity (within the 
                meaning of section 469(c)).
            ``(3) Farmer-owned entity.--
                    ``(A) In general.--The term `farmer-owned entity' 
                means--
                            ``(i) a corporation (including an S 
                        corporation) in which eligible persons own 50 
                        percent or more of the total voting power of 
                        the stock and 50 percent or more (in value) of 
                        the stock,
                            ``(ii) a partnership in which eligible 
                        persons own 50 percent or more of the total 
                        voting power of the profits interest and 50 
                        percent or more (in value) of the profits 
                        interest, and
                            ``(iii) a cooperative in which eligible 
                        persons own 50 percent or more of the total 
                        voting power of the member patronage interests 
                        and 50 percent or more (in value) of the member 
                        patronage interests.
                    ``(B) Constructive ownership rules.--For purposes 
                of subparagraph (A), rules similar to the rules of 
                section 263A(e)(2)(B) shall apply; except that, in 
                applying such rules, the members of an individual's 
                family shall be the individuals described in 
                subparagraph (C).
                    ``(C) Members of family.--The family of any 
                individual shall include only his spouse and children, 
                grandchildren, and great grandchildren (whether by the 
                whole or half blood), and the spouses of his children, 
                grandchildren, and great grandchildren, who reside in 
                the same household or jointly operate farming 
                businesses (as defined in section 263A(e)(4)). For 
                purposes of the preceding sentence, a child who is 
                legally adopted, or who is placed with the taxpayer by 
                an authorized placement agency for adoption by the 
                taxpayer, shall be treated as a child by blood.
            ``(4) Qualified investments.--
                    ``(A) In general.--The term `qualified investments' 
                means a payment of cash for the purchase of a qualified 
                equity interest in a farmer-owned entity.
                    ``(B) Qualified equity interest.--The term 
                `qualified equity interest' means--
                            ``(i) any stock in a domestic corporation 
                        if such stock is acquired by the taxpayer after 
                        December 31, 2008, and before January 1, 2015, 
                        at its original issue (directly or through an 
                        underwriter) from the corporation solely in 
                        exchange for cash,
                            ``(ii) any capital or profits interest in a 
                        domestic partnership if such interest is 
                        acquired by the taxpayer after December 31, 
                        2008, and before January 1, 2015, and
                            ``(iii) any patronage interest in a 
                        cooperative if such interest is acquired by the 
                        taxpayer after December 31, 2008, and before 
                        January 1, 2015.
                Rules similar to the rules of section 1202(c)(3) shall 
                apply for purposes of this paragraph.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Treatment of married individuals.--In the case of a 
        separate return by a married individual (as defined in section 
        7703), subsection (b)(3)(A) shall be applied by substituting 
        `$15,000' for `$30,000'.
            ``(2) Applicable rules.--Under regulations prescribed by 
        the Secretary--
                    ``(A) Allocation of credit in the case of estates 
                and trusts.--Rules similar to the rules of subsection 
                (d) of section 52 shall apply.
                    ``(B) Certain property not eligible.--Rules similar 
                to the rules of section 50(b) shall apply.
            ``(3) Basis adjustment.--For purposes of this subtitle, if 
        a credit is allowed under this section to any eligible person 
        with respect to qualified value-added agricultural property, 
        the basis of such property shall be reduced by the amount of 
        the credit so allowed and increased by the amount of recapture 
        under subsection (e).
    ``(e) Recapture in the Case of Certain Dispositions.--
            ``(1) In general.--Under regulations prescribed by the 
        Secretary, rules similar to the rules of section 50(a) shall 
        apply with respect to an eligible person if, within the 5-year 
        period beginning on the date qualified value-added agricultural 
        property with respect to which such person was allowed a credit 
        under subsection (a) is originally placed in service--
                    ``(A) such property ceases to be qualified for 
                purposes of this section,
                    ``(B) the eligible person or the farmer-owned 
                entity (as the case may be) disposes of all or part of 
                such property, or
                    ``(C) the eligible person or the farmer-owned 
                entity (as the case may be) ceases to be an eligible 
                person or farmer-owned entity for purposes of this 
                section.
            ``(2) Special rules in event of death.--
                    ``(A) In general.--The period in paragraph (1) 
                shall be suspended with respect to an eligible person 
                for the 2-year period beginning on the date of death of 
                such person.
                    ``(B) Heirs who are eligible persons.--In the case 
                that an heir of an eligible person is also an eligible 
                person, neither paragraph (1) nor subparagraph (A) of 
                this paragraph (unless elected by such heir) shall 
                apply with respect to the transfer of property to such 
                heir.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the purposes of this section.
    ``(g) Termination.--This section shall not apply to property placed 
in service after December 31, 2012.''.
    (b) Credit Allowed as Part of General Business Credit.--Section 
38(b) (defining current year business credit) is amended by striking 
``plus'' at the end of paragraph (35), by striking the period at the 
end of paragraph (36) and inserting ``, plus'', and by adding at the 
end the following new paragraph:
            ``(37) in the case of an eligible person (as defined in 
        section 45S(c)(2)) or farmer-owned entity (as defined in 
        section 45S(c)(3)), the value-added agricultural property 
        investment credit determined under section 45S(a).''.
    (c) Credit Allowable Against Minimum Tax.--Subparagraph (B) of 
section 38(c)(4) is amended by redesignating clauses (vii) through (ix) 
as clauses (viii) through (x), respectively, and by inserting after 
clause (vi) the following new clause:
                            ``(vii) the credit determined under section 
                        45S (relating to value-added agricultural 
                        property investment credit).''.
    (d) Deduction for Certain Unused Business Credits.--Subsection (c) 
of section 196 is amended by striking ``and'' at the end of paragraph 
(13), by striking the period at the end of paragraph (14) and inserting 
``, and'', and by adding at the end the following new paragraph:
            ``(15) the value-added agricultural property investment 
        credit determined under section 45S.''.
    (e) Basis Adjustment.--Subsection (a) of section 1016 is amended by 
striking ``and'' at the end of paragraph (36), by striking the period 
at the end of paragraph (37) and inserting ``, and'', and by adding at 
the end the following new paragraph:
            ``(38) to the extent provided in section 45S(d)(3), in the 
        case of payments with respect to which a credit has been 
        allowed under section 38.''.
    (f) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
thereof the following new item:

``Sec. 45S. Value-added agricultural property investment credit.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to qualified investments (as defined in section 45S(c)(4) of the 
Internal Revenue Code of 1986, as added by this section) made, and 
property placed in service, after December 31, 2010.

                TITLE III--TRAINING GRANTS FOR EMPLOYEES

SEC. 301. DEFINITION OF SECRETARY.

    In this title, the term ``Secretary'' means the Secretary of Labor.

SEC. 302. AUTHORIZATION.

    (a) In General.--The Secretary, in consultation with the Secretary 
of Commerce, shall award grants to eligible entities described in 
subsection (b) to assist the entities to improve the job skills 
necessary for employment in specific industries.
    (b) Eligible Entities Described.--
            (1) In general.--An eligible entity described in this 
        subsection is a consortium that--
                    (A) shall consist of representatives from not less 
                than 5 businesses, or a lesser number of businesses if 
                such lesser number of businesses employs at least 30 
                percent of the employees in the industry involved in 
                the region (or a nonprofit organization that represents 
                such businesses);
                    (B) may consist of representatives from--
                            (i) labor organizations;
                            (ii) State and local government; and
                            (iii) educational institutions;
                    (C) is established to serve 1 or more particular 
                industries; and
                    (D) is established to serve an eligible area.
            (2) Eligible area.--The term ``eligible area'' means any 
        county that, based on information contained in the most recent 
        decennial census, has a population of not more than 1,000,000 
        residents.
            (3) Majority of representatives.--A majority of the 
        representatives comprising the consortium shall be 
        representatives described in paragraph (1)(A).
    (c) Priority for Small Businesses.--In providing grants under 
subsection (a), the Secretary shall give priority to an eligible entity 
if a majority of representatives forming the entity represent small-
business concerns (as defined in section 3(a) of the Small Business Act 
(15 U.S.C. 632(a)).
    (d) Maximum Amount of Grant.--The amount of a grant awarded to an 
eligible entity under subsection (a) may not exceed $1,000,000 for any 
fiscal year.

SEC. 303. USE OF AMOUNTS.

    (a) In General.--The Secretary may not award a grant under section 
402 to an eligible entity unless the entity agrees to use amounts 
received from the grant to improve the job skills necessary for 
employment by businesses in the industry with respect to which the 
entity was established.
    (b) Conduct of Program.--
            (1) In general.--In carrying out the program described in 
        subsection (a), the eligible entity may provide for--
                    (A) an assessment of training and job skill needs 
                for the industry;
                    (B) the development of a sequence of skill 
                standards that are benchmarked to advanced industry 
                practices;
                    (C) the development of curriculum and training 
                methods, including, where appropriate, e-learning or 
                technology-based training;
                    (D) the purchase, lease, or receipt of donations of 
                training equipment;
                    (E) the identification of training providers and 
                the development of partnerships between the industry 
                and educational institutions, including community 
                colleges;
                    (F) the development of apprenticeship programs;
                    (G) the development of training programs for 
                workers, including dislocated workers;
                    (H) the development of training plans for 
                businesses; and
                    (I) the development of the membership of the 
                entity.
            (2) Additional requirement.--In carrying out the program 
        described in subsection (a), the eligible entity shall provide 
        for the development and tracking of performance outcome 
        measures for the program and the training providers involved in 
        the program.
    (c) Administrative Costs.--The eligible entity may use not more 
than 10 percent of the amount of a grant to pay for administrative 
costs associated with the program described in subsection (a).

SEC. 304. REQUIREMENT OF MATCHING FUNDS.

    (a) In General.--The Secretary may not award a grant under section 
402 to an eligible entity unless the entity agrees that the entity will 
make available non-Federal contributions toward the costs of carrying 
out activities under the grant in an amount that is not less than $2 
for each $1 of Federal funds provided under the grant, of which--
            (1) $1 shall be provided by the businesses participating in 
        the entity; and
            (2) $1 shall be provided by the State or local government 
        involved.
    (b) Other Contributions.--
            (1) Equipment.--Equipment donations to facilities that are 
        not owned or operated by the members of the eligible entity 
        involved and that are shared by the members may be included in 
        determining compliance with subsection (a).
            (2) Limitation.--
                    (A) In general.--An eligible entity may not include 
                in-kind contributions in complying with the requirement 
                of subsection (a).
                    (B) Consideration.--The Secretary may consider 
                donations described in subparagraph (A) in ranking 
                applications.

SEC. 305. LIMIT ON ADMINISTRATIVE EXPENSES.

    The Secretary may use not more than 5 percent of the amounts made 
available to carry out this title to pay the Federal administrative 
costs associated with awarding grants under this title.

SEC. 306. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this title--
            (1) $50,000,000 for each of fiscal years 2011 through 2015; 
        and
            (2) such sums as are necessary for each fiscal year 
        thereafter.

            TITLE IV--TAX CREDITS TO EXPAND BROADBAND ACCESS

SEC. 401. CREDIT FOR PROPERTY USED TO FURNISH BROADBAND SERVICES IN 
              RURAL AREAS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits), as amended by this Act, is 
amended by inserting after section 45S the following new section:

``SEC. 45T. PROPERTY USED TO FURNISH BROADBAND SERVICES IN RURAL AREAS.

    ``(a) In General.--For purposes of section 38, the broadband 
services credit determined under this section is an amount equal to 50 
percent of the cost of each qualified broadband property placed in 
service during the taxable year.
    ``(b) Increased Percentage Where High Speed Service Provided.--
Subsection (a) shall be applied by substituting `60 percent' for `50 
percent' in any case where the qualified broadband property provides 
transmission service at a speed which is not less than--
            ``(1) except in the case of commercial mobile radio 
        services, 50 megabits per second downstream and 20 megabits per 
        second upstream, and
            ``(2) in the case of commercial mobile radio services, 10 
        megabits per second downstream and 2 megabits per second 
        upstream.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified broadband property.--The term `qualified 
        broadband property' means section 1245 property (as defined in 
        section 1245(a)(3))--
                    ``(A) which is used to provide broadband services 
                in rural areas to purchasers of such services,
                    ``(B) which is--
                            ``(i) tangible property (to which section 
                        168 applies), or
                            ``(ii) computer software (as defined in 
                        section 197(e)(3)(B)) which is described in 
                        section 197(e)(3)(A) and to which section 167 
                        applies, and
                    ``(C) the original use of which commences with the 
                taxpayer.
        Such term shall not include any property described in section 
        50(b).
            ``(2) Broadband.--The term `broadband' means an Internet 
        Protocol-based transmission service (at a speed which is not 
        less than 5 megabits per second downstream and 1 megabit per 
        second upstream) that enables users to send and receive voice, 
        video, data, graphics, or a combination, without regard to any 
        transmission media or technology.
            ``(3) Rural area.--The term `rural area' means any census 
        tract outside a metropolitan statistical area (as defined by 
        the Office of Management and Budget).
            ``(4) Regulated entities.--The credit determined under 
        subsection (a) may not be used to reduce a taxpayer's cost of 
        service, but may be used to reduce rate base, provided that 
        such reduction is restored not less rapidly than ratably. For 
        purposes of determining ratable restorations to rate base, the 
        period of time used in computing depreciation expense for 
        purposes of reflecting operating results in the taxpayer's 
        regulated books of account shall be used.
    ``(d) Other Rules to Apply.--Rules similar to the rules of 
paragraphs (3), (4), and (5) of section 179(d) shall apply for purposes 
of this section.
    ``(e) Basis Reduction.--Rules similar to the rules of sections 
50(c) (other than paragraph (3) thereof) and 1016(a)(19) shall apply 
for purposes of this section.''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38, as amended by this Act, is amended by striking ``plus'' 
at the end of paragraph (37), by striking the period at the end of 
paragraph (38) and inserting ``, plus'', and by adding at the end the 
following new paragraph:
            ``(39) the broadband services credit determined under 
        section 45T(a).''.
    (c) Clerical Amendment.--The table of sections subpart D of part IV 
of subchapter A of chapter 1, as amended by this Act, is amended by 
adding at the end the following new item:

``Sec. 45T. Property used to furnish broadband services in rural 
                            areas.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of enactment of this 
Act in taxable years ending after such date.

            TITLE V--SUPPORTING INVESTMENT IN URBAN CENTERS

SEC. 501. EXTENSION OF BENEFITS.

    (a) Empowerment Zones.--
            (1) Rounds i and ii designations.--Section 1391(d)(1) is 
        amended by striking ``December 31, 2009'' in subparagraph 
        (A)(i) and inserting ``December 31, 2019''.
            (2) Round iii designations.--Section 1391(h)(2) is amended 
        by striking ``December 31, 2009'' and inserting ``December 31, 
        2019''.
    (b) Rural Enterprise Communities.--Section 1391(d)(1)(A) is amended 
by striking ``or'' at the end of clause (i) and by striking clause (ii) 
and inserting the following new clauses:
                            ``(ii) in the case of an enterprise 
                        community not described in clause (iii), the 
                        close of the 10th calendar year beginning on or 
                        after such date of designation, or
                            ``(iii) in the case of an enterprise 
                        community designated in a rural area pursuant 
                        to section 766 of division A of the Omnibus 
                        Consolidated and Emergency Supplemental 
                        Appropriations Act, 1999, December 31, 2019,''.
    (c) Renewal Communities.--
            (1) Sections 1400E(b) and 1400I(g) are each amended by 
        striking ``December 31, 2009'' each place it appears and 
        inserting ``December 31, 2019''.
            (2) Sections 1400E(b)(3), 1400F(b), and 1400J(b) are each 
        amended by striking ``January 1, 2010'' each place it appears 
        and inserting ``January 1, 2020''.
            (3) Section 1400F(c)(2) amended by striking ``December 31, 
        2014'' and inserting ``December 31, 2024''.
            (4) Section 1400F(d) is amended by striking ``December 31, 
        2014'' and inserting ``December 31, 2024''.
            (5) Section 1400I(d)(2)(A) is amended by striking ``2010'' 
        and inserting ``2020''.
    (d) Treatment of Termination Dates Specified in Nominations.--
            (1) Paragraph (1) of section 1391(d) is amended by adding 
        at the end the following new flush sentence:
        ``The termination date referred to in subparagraph (B) shall be 
        treated as being no earlier than the termination date under 
        subparagraph (A) unless an earlier termination date is 
        designated under subparagraph (B) after the date of the 
        enactment of this sentence.''.
            (2) Paragraph (1) of section 1400E(b) is amended by adding 
        at the end the following new flush sentence:
        ``The termination date referred to in subparagraph (B) shall be 
        treated as being no earlier than the termination date under 
        subparagraph (A) unless an earlier termination date is 
        designated under subparagraph (B) after the date of the 
        enactment of this sentence''.

SEC. 502. EXPANSION OF BUSINESSES ELIGIBLE FOR BENEFITS; EXPANSION OF 
              ELIGIBLE BUSINESS ACTIVITIES.

    (a) Expansion of Qualified Business Entities.--
            (1) In general.--Subsections (b) and (c) of section 1397C 
        are amended to read as follows:
    ``(b) Qualified Business Entity.--For purposes of this section, the 
term `qualified business entity' means, with respect to any taxable 
year, any corporation or partnership if for such year--
            ``(1) any trade or business of such entity is the active 
        conduct of a qualified business within an empowerment zone,
            ``(2) at least 35 percent of its employees are residents of 
        an empowerment zone,
            ``(3) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such entity is attributable 
        to collectibles (as defined in section 408(m)(2)) other than 
        collectibles that are held primarily for sale to customers in 
        the ordinary course of such business, and
            ``(4) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such entity is attributable 
        to nonqualified financial property.
    ``(c) Qualified Proprietorship.--For purposes of this section, the 
term `qualified proprietorship' means, with respect to any taxable 
year, any qualified business carried on by an individual as a 
proprietorship if for such year--
            ``(1) at least 35 percent of such employees are residents 
        of an empowerment zone,
            ``(2) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such individual which is 
        used in such business is attributable to collectibles (as 
        defined in section 408(m)(2)) other than collectibles that are 
        held primarily for sale to customers in the ordinary course of 
        such business, and
            ``(3) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such individual which is 
        used in such business is attributable to nonqualified financial 
        property.
For purposes of this subsection, the term `employee' includes the 
proprietor.''.
            (2) Conforming amendments.--
                    (A) Subsection (e) of section 1400 is amended by 
                striking ``subsections (b)(6) and (c)(5)'' and 
                inserting ``subsections (b)(2) and (c)(1)''.
                    (B) Paragraph (2) of section 1400B(c) is amended by 
                inserting ``(as in effect on the day before the date of 
                the enactment of the Upstate Works Act)'' after 
                ``1397C''.
    (b) Modification of Employment Requirement for Businesses Located 
in Areas With Lower Population Density.--
            (1) Definition of qualified business entity.--Section 1397C 
        is amended by adding at the end the following new subsection:
    ``(g) Modification of Employment Requirement for Businesses Located 
in Areas With Lower Population Density.--
            ``(1) In general.--In the case of businesses located in a 
        lower-density empowerment zone, subsections (b)(2) and (c)(1) 
        shall be applied by treating employees as residents of the 
        empowerment zone if they are residents of a census tract--
                    ``(A) which is an area of pervasive poverty, 
                unemployment, and general distress (within the meaning 
                of section 1400E(c)(3)(A)), and
                    ``(B) any point on the boundary of which is within 
                50 miles of any point on the boundary of the 
                empowerment zone.
            ``(2) Lower-density empowerment zone.--For purposes of 
        paragraph (1), the term `lower density empowerment zone' means 
        any empowerment zone the average population of population 
        census tracts within such zone is less than 3,000.''.
            (2) Employment credit.--Paragraph (1) of section 1396(d) is 
        amended by adding at the end the following new flush sentence:
        ``In the case of businesses located in a lower-density 
        empowerment zone (as defined in section 1397C(g)(2)), 
        subparagraph (B) shall be applied by treating employees as 
        residents of the empowerment zone if they are residents of a 
        census tract which is an area of pervasive poverty, 
        unemployment, and general distress (within the meaning of 
        section 1400E(c)(3)(A)), and any point on the boundary of such 
        tract is within 50 miles of any point on the boundary of the 
        empowerment zone.''.
    (c) Expansion of Eligible Business Activities.--
            (1) Renting real or personal property permitted.--
                    (A) In general.--Subsection (d) of section 1397C is 
                amended by striking paragraphs (2) and (3).
                    (B) Recovery zone property.--Paragraph (2) of 
                section 1400U-3(c) is amended to read as follows:
            ``(2) Qualified business.--The term `qualified business' 
        means any trade or business except that such term shall not 
        include any trade or business consisting of the operation of 
        any facility described in section 144(c)(6)(B).''.
                    (C) Conforming amendment.--Paragraph (3) of section 
                45D(d) is amended by striking ``; except that'' and all 
                that follows and inserting a period.
            (2) Developing or holding intangibles permitted.--
                    (A) In general.--Subsection (d) of section 1397C is 
                amended by striking paragraph (4).
                    (B) Conforming amendment.--Clause (iii) of section 
                1394(b)(3)(B) is amended by striking ``, (4),''.
    (d) Empowerment Zone Employment Credit To Apply to Employees at 
Certain Additional Businesses and to Employees Who Are Family 
Members.--Subparagraph (D) of section 1396(d)(2) (defining qualified 
zone employee) is amended--
            (1) by striking subparagraph (A),
            (2) by redesignating subparagraphs (B), (C), (D), and (E) 
        as subparagraphs (A), (B), (C), and (D), respectively, and
            (3) by striking ``any facility described in section 
        144(c)(6)(B)'' in subparagraph (C), as so redesignated, and 
        inserting ``any excluded facility (as defined in section 
        1397C(d)(5))''.
    (e) Certain Businesses May Be Financed With Gulf Opportunity Zone 
Bonds.--
            (1) In general.--Subparagraph (E) of section 1400N(a)(2) is 
        amended by striking ``any property described in section 
        144(c)(6)(B)'' and inserting ``any excluded facility (as 
        defined in section 1397C(d)(5))''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to obligations issued after the date of the 
        enactment of this Act.

SEC. 503. MODIFICATIONS PERMITTING EXPANSION OF DESIGNATED AREAS.

    (a) Authority to Expand Boundaries of Zones and Communities.--
            (1) Empowerment zones and enterprise communities.--Section 
        1391 is amended by adding at the end the following new 
        subsection:
    ``(i) Authority To Expand Boundaries of Designated Areas.--
            ``(1) In general.--At the request of all governments which 
        nominated an area as an empowerment zone or enterprise 
        community, the appropriate Secretary may expand the area of 
        such zone or community to include 1 or more contiguous or 
        noncontiguous areas if such governments establish to the 
        satisfaction of the appropriate Secretary that such expansion 
        furthers the purposes of the designation of the initial area as 
        such a zone or community.
            ``(2) Rural areas.--With respect to any empowerment zone or 
        enterprise community located in a rural area, at the request of 
        the nominating local government, the appropriate Secretary 
        shall expand the area of such zone or community to include the 
        entire area of such nominating local government, but only if--
                    ``(A) either--
                            ``(i) the poverty rate and the unemployment 
                        rate for such entire area as determined by the 
                        data from the most recent census was at least 
                        110 percent of such rate for the United States, 
                        or
                            ``(ii) during the period beginning with the 
                        decennial census immediately preceding the most 
                        recent decennial census and ending with the 
                        most recent decennial census, such entire area 
                        has a net out migration of inhabitants of at 
                        least 10 percent of the population of such 
                        area, and
                    ``(B) such entire area meets 1 or more of the 
                following criteria determined by data from the most 
                recent decennial census:
                            ``(i) Median household income is not more 
                        than 70 percent of such income for the United 
                        States.
                            ``(ii) Per capita income is not more than 
                        75 percent of such income for the United 
                        States.
                            ``(iii) The percentage of such area's 
                        population which is disabled is at least 130 
                        percent of such percentage for the United 
                        States.''.
            (2) Renewal communities.--Section 1400E is amended by 
        adding at the end the following new subsection:
    ``(h) Authority To Expand Boundaries of Designated Areas.--
            ``(1) In general.--At the request of all governments which 
        nominated an area as a renewal community, the Secretary of 
        Housing and Urban Development may expand the area of such 
        community to include 1 or more noncontiguous areas if such 
        governments establish to the satisfaction of such Secretary 
        that such expansion furthers the purposes of the designation of 
        the initial area as a renewal community.
            ``(2) Rural areas.--With respect to any renewal community 
        located in a rural area, at the request of the nominating local 
        government, the Secretary of Housing and Urban Development 
        shall expand the area of such community to include the entire 
        area of such nominating local government, but only if--
                    ``(A) either--
                            ``(i) the poverty rate and the unemployment 
                        rate for such entire area as determined by data 
                        from the most recent decennial census was at 
                        least 110 percent of such rate for the United 
                        States, or
                            ``(ii) during the period beginning with the 
                        decennial census immediately preceding the most 
                        recent decennial census and ending with the 
                        most recent decennial census, such entire area 
                        has a net out migration of inhabitants of at 
                        least 10 percent of the population of such 
                        area, and
                    ``(B) such entire area meets 1 or more of the 
                following criteria determined by data from the most 
                recent census:
                            ``(i) Median household income is not more 
                        than 70 percent of such income for the United 
                        States.
                            ``(ii) Per capita income is not more than 
                        75 percent of such income for the United 
                        States.
                            ``(iii) The percentage of such area's 
                        population which is disabled is at least 130 
                        percent of such percentage for the United 
                        States.''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on the date of the enactment of this Act.
    (b) Modification of Requirement for Expanding Designated Area Based 
on 2000 Census.--
            (1) In general.--Clause (ii) of section 1400E(g)(1)(A) is 
        amended to read as follows:
                            ``(ii) such tract has a poverty rate using 
                        2000 census data--
                                    ``(I) which is at least 20 percent, 
                                or
                                    ``(II) which exceeds the poverty 
                                rate for such tract using 1990 census 
                                data.''.
            (2) Effective date.--The amendment made by this subsection 
        shall take effect on the date of the enactment of this Act.
    (c) Repeal of Exclusion of Central Business District From 
Eligibility as Designated Area.--
            (1) In general.--Paragraph (3) of section 1392(a) is 
        amended by adding ``and'' at the end of subparagraph (B), by 
        striking ``, and'' at the end of subparagraph (C) and inserting 
        a period, and by striking subparagraph (D).
            (2) Effective date.--The amendments made by this subsection 
        shall take effect on the date of the enactment of this Act.

SEC. 504. EXPANDED USE OF TAX-EXEMPT BONDS.

    (a) Enterprise Facility Bond Limit for Small Cities To Be the Same 
as for Larger Cities.--Subparagraph (B) of section 1394(f)(2) is 
amended by adding ``and'' at the end of clause (i), by striking clause 
(iii), and by amending clause (ii) to read as follows:
                            ``(ii) $230,000,000 if such zone is in an 
                        urban area.''.
    (b) Zone Employment Requirement Need Not Be Met After Testing 
Period Under Zone Facility Bond Rules.--
            (1) In general.--Clause (iii) of section 1394(b)(3)(B) is 
        amended by striking ``if at least 35 percent of the employees 
        of such business for such year are residents of an empowerment 
        zone or an enterprise community''.
            (2) Conforming amendment.--Subsection (a) of section 1400A 
        is amended by striking ``and section 1394(b)(3)(B)(iii) shall 
        be applied without regard to the employee residency 
        requirement''.
    (c) Zone Facility Bonds for Small Businesses May Be Guaranteed.--
            (1) In general.--Subsection (d) of section 1394 is amended 
        to read as follows:
    ``(d) Special Rules.--
            ``(1) Acquisition of land and existing property 
        permitted.--The requirements of sections 147(c)(1)(A) and 
        147(d) shall not apply to any bond described in subsection (a).
            ``(2) Bonds for small business may be guaranteed.--Section 
        149(b) shall not apply to any bond issued as part of an issue 
        95 percent or more of the net proceeds (as defined in section 
        150(a)(3)) of which are to be used to provide any enterprise 
        zone facility the principal user of which is a small employer 
        (as defined in section 221(c)(4)).''.
            (2) Qualified gulf opportunity zone bonds.--Paragraph (5) 
        of section 1400N(a) is amended by adding at the end the 
        following new subparagraph:
                    ``(H) Section 149(b) shall not apply to any 
                qualified Gulf Opportunity Zone Bond issued as part of 
                an issue 95 percent or more of the net proceeds (as 
                defined in section 150(a)(3)) of such issue are to be 
                used for qualified project costs for nonresidential 
                real property (including fixed improvements associated 
                with such property) the principal user of which is a 
                small employer (as defined in section 221(c)(4)).''.
            (3) Recovery zone facility bonds.--Subsection (d) of 
        section 1400U-3 is amended by adding at the end the following 
        new sentence: ``Section 149(b) shall not apply to any recovery 
        zone facility bond issued as part of an issue 95 percent or 
        more of the net proceeds (as defined in section 150(a)(3)) of 
        such issue are to be used for recovery zone property the 
        principal user of which is a small employer (as defined in 
        section 221(c)(4)).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 505. OTHER MODIFICATIONS.

    (a) Nonrecognition of Gain To Apply to Real Property and 
Intangibles.--Paragraph (2) of section 1397B(b) is amended to read as 
follows:
            ``(2) Gain taxed as ordinary income not eligible for 
        rollover.--This section shall not apply to any gain which is 
        treated as ordinary income for purposes of this subtitle.''.
    (b) Election of Financing Arrangement in Lieu of Tax Benefits.--
            (1) In general.--Section 1396 is amended by adding at the 
        end the following new subsection:
    ``(e) Election of Financing Arrangement in Lieu of Tax Benefits.--
            ``(1) In general.--At the election of any significant 
        empowerment zone business, for the payment period of the debt 
        obligation designated in such election (or as an amendment to 
        such election) by such business--
                    ``(A) such business--
                            ``(i) shall not be allowed an empowerment 
                        zone employment credit described in subsection 
                        (a), and
                            ``(ii) shall not be allowed any deduction 
                        for depreciation under section 168 with respect 
                        to qualified zone property that provides a cost 
                        recovery benefit described in paragraph (2), 
                        and
                    ``(B) the Secretary shall make the payments 
                described in paragraph (2) to a trustee designated by 
                the electing business to accept such payments on behalf 
                of such holders).
            ``(2) Payments.--
                    ``(A) In general.--At the beginning of each year of 
                the payment period, the Secretary shall pay (out of any 
                money in the Treasury not otherwise appropriated) to 
                the trustee designated by such business an amount equal 
                to--
                            ``(i) the empowerment zone employment 
                        credit computed for such year under this 
                        section as if the election was not made under 
                        this subsection, and
                            ``(ii) except as provided in paragraph 
                        (4)(A), the amount equal to the cost recovery 
                        benefit divided by the number of years in the 
                        payment period described in subparagraph (C).
                    ``(B) Cost recovery benefit.--For purposes of 
                subparagraph (A), the cost recovery benefit shall be an 
                amount equal to 25 percent of--
                            ``(i) the cost of any tangible property 
                        which is qualified zone property (including 
                        improvements to such tangible property) 
                        incurred by the significant empowerment zone 
                        business before the end of the first 5 full 
                        calendar years beginning after the date the 
                        election is made under this subsection, and
                            ``(ii) any such cost for which a binding 
                        contract for financing the acquisition of such 
                        tangible property (including improvements to 
                        such tangible property) has been made by such 
                        business and which under the terms of the 
                        financing is to be incurred within the first 5 
                        full calendar years beginning after the date of 
                        the election made under this subsection.
                    ``(C) Payment period.--The payment period is the 
                period of 15 calendar years beginning with the earlier 
                of--
                            ``(i) the calendar year specified by the 
                        significant empowerment zone business as the 
                        1st year of the payment period without regard 
                        to the date the property is placed in service, 
                        or
                            ``(ii) the 5th calendar year beginning 
                        after the date that the election under this 
                        subsection is made.
            ``(3) Significant empowerment zone business.--For purposes 
        of this subsection, the term `significant empowerment zone 
        business' means any trade or business operating in an 
        empowerment zone if--
                    ``(A) such business is nominated by the chief 
                executive or the legislative body of the State or a 
                local government in which the zone property is located, 
                and
                    ``(B) the Secretary of Housing and Urban 
                Development determines that--
                            ``(i) it is a facility for qualified 
                        research as defined in section 41(d) which is 
                        reasonably anticipated to make at least 
                        $50,000,000 of capital expenditures within the 
                        first 3 years of the payment period, or
                            ``(ii) with respect to any other business, 
                        it is reasonably anticipated that such business 
                        will increase employment in such zone by the 
                        end of the first 3 years of the payment period 
                        by at least the lesser of--
                                    ``(I) 1,000 full-time employees or 
                                equivalents, or
                                    ``(II) 10 percent of the number of 
                                full-time employees estimated to have 
                                been employed in such zone on the date 
                                of its designation.
            ``(4) Special rules.--
                    ``(A) Adjustment to cost recovery benefit.--In the 
                event that the significant empowerment zone business 
                does not incur a cost within the period described in 
                paragraph (2)(B) and for which a cost recovery benefit 
                payment is made under this subsection, the Secretary 
                shall reduce future recovery benefit payments to 
                recover 110 percent of the overpayments in equal 
                installments over the remaining payment period. In the 
                event that a cost described in paragraph (2)(B)(i) is 
                incurred, or a contract described in paragraph 
                (2)(B)(ii) is entered into, after the beginning of the 
                payment period, the Secretary shall increase future 
                recover benefit payments to recover 100 percent of the 
                cost recovery benefit associated with such costs or 
                contracts in equal installments over the remaining 
                payment period.
                    ``(B) Basis adjustment.--For purposes of this 
                subtitle, if a cost recovery payment is made under this 
                subsection with respect to any property, the basis of 
                such property shall be reduced by the amount of such 
                payment.
            ``(5) Treatment of payments.--Any payment made under this 
        subsection shall not be treated as a Federal Government 
        guarantee for purposes of section 149(b).''.
            (2) Conforming amendment.--Section 1016(a), as amended by 
        this Act, is amended by striking ``and'' at the end of 
        paragraph (37), by striking the period at the end of paragraph 
        (38) and inserting ``, and'', and by adding at the end the 
        following new paragraph:
            ``(39) to the extent provided in section 1396(e)(4)(B).''.

SEC. 506. GRANTS FOR AWARENESS OF ZONE BENEFITS AND TECHNICAL 
              ASSISTANCE TO SMALL BUSINESS.

    (a) In General.--Chapter 77 is amended by adding at the end the 
following new section:

``SEC. 7529. GRANTS FOR AWARENESS OF ZONE BENEFITS AND TECHNICAL 
              ASSISTANCE TO SMALL BUSINESS.

    ``(a) In General.--The Secretary may make grants to State or local 
governments, or nonprofit organizations, for the purpose of making 
businesses aware of the benefits available under--
            ``(1) subchapter U of chapter 1 (relating to designation 
        and treatment of empowerment zones, enterprise communities, and 
        rural development investment areas),
            ``(2) subchapter W of chapter 1 (relating to District of 
        Columbia enterprise zone),
            ``(3) subchapter X of chapter 1 (relating to renewal 
        communities), and
            ``(4) subchapter Y of chapter 1 (relating to short-term 
        regional benefits).
    ``(b) Technical Assistance Grants.--The Secretary may make grants 
to provide technical assistance to small businesses eligible for any 
benefits referred to in subsection (a).''.
    (b) Clerical Amendment.--The table of sections for such chapter is 
amended by adding at the end the following new item:

``Sec. 7529. Grants for awareness of zone benefits and technical 
                            assistance to small business.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 507. EFFECTIVE DATE.

    Except as otherwise provided in this Act, the amendments made by 
this title shall apply to taxable years beginning after the date of the 
enactment of this Act.
                                 <all>