Administering Enterprise Zones

Abstract

Enterprise zones, although simple in concept, may not necessarily be simple to administer. Enactment of enterprise zone legislation will confront the federal government with a series of administrative tasks. These include (I) defining the selection criteria and managing the competition among jurisdictions for federal designation, (2) designing and implementing procedures for activating the main federally conferred benefits-regulatory relief and tax incentives, (3) monitoring state and local jurisdictions' performance with respect to follow-through on their promised contributions, and (4) planning for the evaluation of program results. Potential problem areas include the cumbersome process by which state and local jurisdictions must petition individual federal agencies for regulatory relief in zones. In addition, the impracticality of applying the zone revocation penalty leaves federal officials without effective sanctions in dealing with nonperforming zone jurisdictions.