Urban Enterprise Zone

Urban Enterprise Zones (UEZs), also known as Enterprise Zones, encourage business development in key blighted neighborhoods by offering tax and regulatory relief entrepreneurs and investors if they start a company in the area. The “zone” is a neighborhood where companies can locate to gain special advantages, free of certain local, state and Federal taxes and restrictions.

The primary goal of the EZ program is to improve the economies in areas with high poverty and/or unemployment rates. The program does this by enhancing opportunities for private investment in areas that have been identified as Enterprise Zones. The philosophy behind providing tax incentives for establishing a business in an Enterprise Zone is that by offering credits and other enticements, business owners will be encouraged and motivated to invest in the area. It is expected that these credits will stimulate economic growth and job development in impoverished regions as these new businesses begin to redefine the neighborhood in a positive way.

Although the UEZ concept was first brought to Congress in the late 1960s, no action was taken. When the concept was re-introduced in the United States by Stuart Butler of the Heritage Foundation about 10 years later in 1979, it caught the attention of then-Rep. Jack Kemp, who co-sponsored legislation in Congress with then-Democratic Rep. Robert Garcia based on Butler’s idea.

Originally sponsored only at the federal level, UEZs have become increasingly popular with state governments as well. Louisiana was the first state to adopt such legislation in 1981, and was followed by seven other states in 1982 and seven more in 1983.